A Basis of Accounting:
The financial statements are prepared under the historical cost
convention, on going concern concept and in compliance with the
Accounting Standards issued by the Companies (Accounting standard),
B Use of Estimates:
The preparation of financial statements in conformity with Generally
Accepted Accounting Principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities and
disclosure of contingent liabilities on the financial statements and
the reported amounts of revenues and expenses during the reporting
period. Differences between actual and estimated results are recognized
in the period in which the results are materialized.
C Recognition of income and expenditure
The Company follows the accrual method of accounting for its income &
D Revenue Recognition
In respect of other heads of income, the Company follows the practice
of accounting on accrual basis.
E Fixed Assets:
Fixed Assets are stated at actual cost less accumulated depreciation.
Cost comprises the purchase price and any attributable cost of bringing
the asset to its working condition for its intended use.
Depreciation on Fixed Assets is being provided on ''Written Down Value
Method'' in the manner and at the rates prescribed in Schedule XIV of
the Companies Act, 1956. However during the year no depreciation had
been provided on Fixed assets as the same to discarded and not to put
Long term investments are stated at cost. Provision for diminution in
the value of investment is made only if such decline is other than
temporary in the opnion of the management.
H Foreign Currency Transactions :
I) The transactions in foreign currencies are stated at the rate of
exchange prevailing on the date of transactions.
ii) The difference on account of fluctuation in the rate of exchange
prevailing on the date of transaction and the date of realization is
charged to the Profit and Loss Account.
iii) Differences on translations of Current Assets and Current
Liabilities remaining unsettled at the year-end are recognized in the
Profit and Loss Account.
I Accounting for Taxes of Income:-
Provision for current income-tax is recognized in accordance with the
provisions of Indian Income- tax Act, 1961 and is made annually based
on the tax liability after taking credit for tax allowances and
J Deferred Taxes
Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to timing differences that result between the
profits offered for income taxes and the profits as per the financial
statements. Deferred tax assets and liabilities are measured using the
tax rates and the tax laws that have been enacted or substantially
enacted at the balance sheet date. Deferred tax Assets are recognized
only to the extent there is reasonable certainty that the assets can be
realized in the future. Deferred Tax Assets are reviewed as at each
Balance Sheet date.
K Employee Benefits :
i) Short-term employee benefit are recognized as an expense at the
undiscounted amount in the Profit and Loss Account of the year in which
the related service is rendered.
ii) The Company make contributions towards Provident Fund to defined
contribution retirement benefit plan for qualifying employee. The
provident fund plan is operated by the Regional Provident fund
Commissioner. Under the scheme the company is required to contribute a
specified percentage of payroll cost to reirement benefit scheme to
fund the benefits.
L Provisions and Contingent Liabilities:
I) Provisions are recognized in terms of Accounting Standard 29-
Provisions, Contingent Liabilities and Contingent
Assets issued by The Institute of Chartered Accountants of India
(ICAI), when there is a present legal or statutory obligation as a
result of past events where it is probable that there will be outflow
of resources to settle the obligation and when a reliable estimate of
the amount of the obligation can be made.
ii) Contingent Liabilities are recognized only when there is a possible
obligation arising from past events due to occurrence or non-occurrence
of one or more uncertain future events not wholly within the control of
the company or where reliable estimate of the obligation cannot be
made. Obligations are assessed on an ongoing basis and only those
having a largely probable outflow of resources are provided for.