a) Basis of Preparation of Financial Statement
The financial statements have been prepared under the historical cost
convention in accordance with generally accepted Accounting principles.
GAAP comprises mandatory accounting standards as prescribed by the
companies (Accounting Standards) Rules, 2006. The company follows
mercantile system of accounting as required under section 209(3)(b) of
the Companies Act, 1956.
The company adopts the accrual basis in the preparation of accounts
except insurance claims and sales tax refunds.
b) Use of estimates
The preparation of financial statements in accordance with the
generally accepted accounting principles requires the Management to
make estimates and assumptions that affect the reported amount of
assets and liabilities as of the date of financial statements and the
reported amount of expenses of the year. Actual results could differ
from these estimates. Any revision to such accounting estimates is
recognized in the accounting period in which such revision takes place.
b) Fixed Assets
Fixed assets are stated at cost of acquisition or construction, less
accumulated depreciation/ amortization and impairment loss, if any cost
includes inward freight, duties, taxes and all incidental expenses
incurred to bring the assets to their present location and condition.
Depreciation has been provided as per SLM as per the rates prescribed
by Schedule XIV to the companies Act, 1956 on all the fixed assets.
Depreciations on additions made to fixed assets during the year are
provided on pro-rata basis from the date of such additions.
Long Term Investments are carried at cost less provision recorded to
recognize any decline, other than of a temporary nature, in the
carrying value of each investment. Current investments are valued at
cost or fair value whichever is lower and the resultant decline, if
any, are charged to statement of Profit & Loss
e) Borrowing Cost
Borrowing cost that are attributable to the acquisition or construction
of qualifying assets are capitalised as part of the cost of such
assets. A qualifying asset is one that necessarily takes a substantial
period of time to get ready for its intended use or sale. All other
borrowing cost are charged to revenue.
f) Revenue Recognition
Revenue/Income and Cost/ Expenditure are generally accounted on accrual
as they are earned or incurred except in case of significant
- Dividend is accounted when the right to receive payment is
- Interest and other Income are accounted on accrual basis.
- Revenue figures excluded tax component.
- Provision of gratuity, if any, is accounted as and when- the same -~:
arises and become payable.
Items of inventory are measured at net realizable value at the time of
finalisation of accounts and not as on the date of the balance sheet.
Cost of inventory comprises of all cost of purchases and direct cost
incurred in bringing them to tEeir respective present -location and
h) Income Taxes
In view of the losses incurred during the year, the company has not
made any provision for Income Tax for current year.
Deferred Tax is recognised on timing difference between the accounting
income & the taxable income for the year and quantified using the tax
rates and loss enacted or substantively enacted as on the balance sheet
date. However, there is no Deferred Tax Liability during the year. The
provision of deferred tax assets has not been made in view of
i) Contingent liabilities
Contingent Liability nor provided for are disclosed in notes to the