I. Accounting Policies:
a) The financial statements for the year had been compiled/prepared in
accordance with the historical cost convention and as an on-going
concern. The basis adopted materially complied with the requirements as
provided In the accounting standards.
b) Consequent upon the collapse of the operating office located at B
Wing, III Floor, Poonam Chambers, Dr. Annie Besant Road, Worli, Mumbai
400 018 on 16th September, 1997, the company lost all fixed assets,
current assets and all records. The company had to rely on available
documents from outside agencies for compiling the accounts for the year
1997-98 and the same had to relied upon for continuity and inclusion In
subsequent accounts/annual reports.
c) Having lost all the fixed and current assets located at the
operating office due to collapse of the building, the company shown the
balances outstanding in the books prior to the collapse as Claim
Receivable based on legal opinion. This Claim Receivable has been
classified separately in the current assets schedule. The releasability
of the claim is depended upon the out come of the legal proceedings.
d) No provision has been made in the accounts for the interest
due/payable to the Institutions/Banks for the year under review since
16th September, 1997.
e) No lease rentals has been provided as the assets leased has been
taken in possession by the Lessors.
f) Expenditure which are of a capital nature are capitalized at
Acquisition Cost, which comprises of purchase price (Net of Rebates and
Discount) levies and any directly attributable cost of bringing the
assets to its working condition for the intended use.
g) No depreciation has been provided as the Fixed Assets which are
Capital Work in Progress.
h) The company lost all Inventories as on 16th September, 1997 due to
collapse of the operating office and based on legal opinion, the
balances outstanding in the books have been included under Claim
Receivable and this has been classified under Current Assets.
Subsequent to 16th September, 1997 any inventory acquired/generated has
been valued at cost or market price/realizable value whichever is
i) The net worth of the company would have been lower than 50% of its
peak net worth but for the claims receivable/lodged as shown under
Current Assets. Under the circumstances and based on the legal opinion,
the company did not make any reference to BIFR as was required for a
sick company within the meaning of Section 3 (1)(O) of the Sick
Industrial Companies (Special Provision) Act, 1985.
j) Prior Period Adjustments shown in the Profit and Loss Account
represents Provision for the doubtful debts related to period prior to
16th September, 1997.