1. Basis for preparation of Financial Statement
The Financial Statements have been prepared under the historical cost
convention, in accordance with the generally accepted accounting
principles, applicable accounting standards and the provisions of the
Companies Act, 1956 as adopted consistently by the Company.
2. Recognition of Income/Expenditure
a.) The Company generally follows mercantile system of accounting and
recognize significant items of Income and expenditure on accrual basis.
b.) Income from Lease Rental, Hire Purchase and interest on loans is
accounted for on accrual basis. However, no income is accounted for in
cases where the same is considered doubtful of recovery by the
management. The delayed payment charges, wherever applicable, are
accounted for, on settlement with the parties, on cash basis.
3. Fixed Assets
Fixed Assets are valued at cost less accumulated depreciation.
Share to be held for less than 1 year is valued at lower of cost or
market price. Cost is arrived on FIFO basis. Cost of bonus shares
acquired is taken as Nil.
5. Hire Purchase Debtors
Hire Purchase installments which become due but remain unpaid are shown
under sundry debtors as overdue installments.
Depreciation is provided on SLM basis at the rate prescribed under
Schedule XIV of the Companies Act.
Dividend is accounted for on receipt basis.
Investments are classified into current and long-term investments.
Current investments are carried at the lower of cost and quoted/fair
value, computed category wise. Long Term investments are stated at
cost. Provision for diminution in the value of long-term investment is
made only if, such a decline is other than temporary in the opinion of
The current charge for income tax is calculated in accordance with the
relevant tax regulations applicable to the company.
Deferred tax is recognized, subject to the consideration of prudence,
on timing differences being the difference between taxable incomes and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods.
Deferred tax assets are not recognized on unabsorbed depreciation &
carry forward of losses unless there is virtual certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized and are reviewed at each balance
sheet date to reassure the realization.
Deferred tax assets & Liabilities are measured using the tax rate and
tax laws that have been enacted or substantively enacted at the balance
10. Intangible Assets
Computer software is capitalized on the date of installation and is
amortized over a period of 3 years.