1.1 (a) BASIS OF PREPARATION
The Financial Statements are prepared under the historical cost
convention, in accordance with the Indian Generally Accepted Accounting
Principles (GAAP) and mandatory Accounting Standards issued by
the Institute of Chartered Accountants of India (ICAI) and the
provisions of the Companies Act, 1956. All income and expenditure
having a material bearing on the financial statements are recognized on
the accrual basis.
(b) USE OF ESTIMATES
The preparation of Financial Statements in conformity with GAAP
requires management to make estimates and assumptions that effect the
reported amounts of assets and liabilities, disclosures of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
1.2. REVENUE RECOGNITION
a) All Income & Expenditure are accounted for on accrual basis.
b) Commodities and Securities are capitalized at cost inclusive of
brokerage, Service Tax, Education Cess, Depository Charges, Securities
Transaction Charges and other miscellaneous transaction charges.
c) Interest on deployment of funds is recognized on accrual basis.
Expenses are accounted for on accrual basis and provisions are made for
all known losses and liabilities.
1.4 FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. The cost
of assets comprises of purchase price and directly attributable cost of
bringing the assets to working condition.
1.5 DEPRECIATION / AMORTIZATION
Depreciation on Fixed Assets has been provided on straight line method
(S.L.M.) on pro-rata basis at the rates and in the manner specified in
Schedule XIV of the Companies Act, 1956. Individual assets acquired for
less than Rs.5000/- are entirely depreciated in the year of
Intangible Assets are amortized over their respective individual
estimated useful lives on straight - line basis. The Management
estimates the useful live of Software as three Years.
Goodwill generated on Amalgamation has been amortized on straight -line
basis over a period of five years as recommended in Accounting Standard
- 14 - Accounting for Amalgamations
Inventories are valued at cost or Net Realizable Value, whichever is
less on FIFO method. Cost includes purchase price, taxes and other
incidental expenses, wherever applicable.
1.7. FOREIGN CURRENCY TRANSACTIONS
The transactions in foreign currency are accounted at the exchange rate
prevailing on the date of transaction. Any exchange gains or losses
arising out of the subsequent fluctuations are accounted for in the
Profit & Loss account.
1.8. TAX ON INCOME
Current tax are measured at the amounts expected to be paid using the
applicable tax rates and tax laws. Deferred tax assets and liabilities
are measured using tax rates and tax laws that have been enacted or
substantively enacted by the balance sheet date. The effect on deferred
tax assets and liabilities of a change in tax rates is recognized in
the profit & loss account in the year of change. Deferred tax assets
and deferred tax liabilities are recognized for the future tax
consequences attributable to differences between the financial
statements carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss carry forwards.
Investments are classified into Long term and Current Investment based
on the intent of the management at the time of the acquisition. Long
term investments are stated at cost less provision, if any, for
diminution in value of such investment other than temporary diminution.
Current investments are stated at lower of cost or fair value.
1.10 EARNING PER SHARE
Basic Earning per share is computed using Weighted Average Number of
Equity Share Outstanding during the year. Diluted Earning per share is
computed using weighted Average Number of Equity and Dilutive Equity
equivalent share outstanding during the year end.
1.11 RETIREMENT BENEFITS
i) Company''s contribution paid/ payable during the year to provident
fund, are charged to Profit & Loss Account.
ii) Leave Encashment and Gratuity are defined benefit plans. The
Company has provided for the liability at the year end as per
provisions of respective Act(s).