1. System of Accounting:
The financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the
historical cost convention except where impairment is made on the
accrual basis. GAAP comprises mandatory accounting standards as
specified in the Companies (Accounting Standards) Rules, 2006 and
guidelines issued by the Securities and Exchange Board of India.
Accounting policies have been consistently applied except where a newly
issued accounting standard is initially adopted or a revision to an
existing accounting standard requires a change in the accounting policy
hitherto in use. Management evaluates all recently issued or revised
accounting standards on an on-going basis
2 Presentation and disclosure of financial Statement
During the year ended 31st March, 2012, the Revised Schedule VI under
the Companies Act, 1956, has become applicable to the company, for the
preparation and presentation of its financial statements. The adoption
of Revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it has significant impact on presentation and disclosures made in the
financial statements. The company has also reclassified the previous
year figures in accordance with the requirements applicable in the
3. Use of Estimates:
The presentation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognised in the period in
which the results are known/ materialised.
4. Revenue Recognition:
Trading revenues and other revenues are recognized on the basis of
Interest on deployment of funds is recognized on accrual basis.
5. Cash and Cash Equivalent:
Cash and cash equivalents for the purpose of Cash Flow Statement
comprise cash at bank, in hand (including cheques in hand) and short
term investment with an original maturity of three months or less.
Investments in Subsidiary Company is long term and are valued at cost.
The dividends if any declared by such subsidiaries are recognized as
income. Provision is made to recognise any diminution other then
temporary in the value of such investments. Current investments are
carried at lower of cost or fair value.
7. Borrowing Cost:
Interest accrued on loan for acquiring assets is capitalised till the
date the assets are put to use.
8. Provision for Current and Deferred Tax.
Provision for current tax is made after taking into consideration
benefits admissible under the provisions of the Income Tax Act, 1961.
Deferred tax resulting from timing difference between book and
taxable profit is accounted for using the tax rates and laws that have
been enacted or substantively enacted as on the Balance Sheet date. The
deferred tax assets is recognised and carried forward only to the
extent that there is a reasonable certainty that the asset will be
realised in future.
9. Earnings per Share
In determining earnings per share, the company considers the net profit
after tax and includes the post-tax effect of any extra-ordinary items.
The number of shares used in computing basic earnings per share is the
weighted average number of shares outstanding during the period. The
number of shares used in computing diluted earnings per share comprises
the weighted average shares considered for deriving basic earnings per
share and also the weighted average number of equity shares that could
have been issued on the conversion of all dilutive potential equity
10. Impairment of Assets:
At the end of each accounting period, the Company determines whether a
provision should be made for impairment loss on fixed assets by
considering the indications that an impairment loss may have occurred
in accordance with AS -28 on Impairment of Assets issued by the
ICAI. An impairment, loss is charged to the Profit and Loss account in
the period in which, as asset an asset is identified as impaired, when
the carrying value of the asset exceeds its recoverable value. The
impairment loss recognised in the prior accounting periods is reversed
if there has been a change in the estimate of recoverable amount.
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
embodying economic benefit will be required to settle the obligation,
in respect of which a reliable estimate can be made. Provisions are not
discounted to its present value and are determined based on best
estimate required to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimates. A contingent liability is disclosed, unless
the possibility of an outflow of resources embodying the economic
benefit is remote.