a. BASIS OF ACCOUNTING
The Financial Statements are prepared under the historical cost
convention and on accrual basis of accounting subject to Note 2(iii)
below regarding non provision of interest on unsecured loans of !
Rs.175 lacs from Premier Finance & Trading Co. Ltd. and in accordance
with generally accepted i accounting principles in India and comply in
material aspect with the measurement and recognition principles of
Accounting Standards referred to in Section 211 (3C) of the Companies
Act 1956 of !'' India (the Act) read with Companies (Accounting
Standards) Rules 2006 to the extent applicable. i: All assets and
liabilities have been classified as current or non-current as per the
Company''s normal operating cycle and other criteria set out in the
Schedule VI to the Companies Act 1956 ! Based on the nature of
products provided and the time between the acquisition of assets and
their I realization in cash and cash equivalents'' the Company has
ascertained its operating cycle as 12 months for the purpose of
current-non current classification of assets and other liabilities !;
b. USE OF ESTIMATES I
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 financial statements and the ! reported
amount of revenue and expenses during the reporting period. Difference
between the '' actual results and estimates are recognized in the period
in which results are known/materialized.
c. REVENUE RECOGNITION
i. Income from operations is recognized on Billing to customers
ii. Interest Income on Advances and Deposits is recognized on accrual
d. TANGIBLE FIXED ASSETS
Fixed Assets are stated at cost less accumulated depreciation. Cost for
this purpose includes I purchase price'' non refundable taxes or levies
and other directly attributable cos''s of brlging the !: asset to its
working condition for its intended use. waging me ''
There are no Intangible Assets held by the Company.
g. FOREIGN CURRENCY TRANSACTIONS
h. EMPLOYEE BENEFITS
The Company has an obligation towards gratuity. However due provision
for the same has been made in the Balance Sheet.
i. TAXES ON INCOME
i. Current tax is determined as per amount of tax payable in respect
of taxable income for the year.
ii. Provisions for taxation for the period are ascertained on the
basis of assessable profits computed in accordance with the provisions
of the Income Tax Act'' 1961
j. Balances of Trade Payables'' Trade Receivables'' Loans & Advances and
Banks are subject to confirmation & reconciliation.
k. In the opinion of the directors Current Assets have a value on
realization in the ordinary course of business at least equal to the
value at which these have been stated in foreaoina Balance Sheet.
l. Labour cases are pending against the company in the courts. The
total approx liabilitv against the company is to the tune of
The company has borrowed a sum of Rs. 175 lacs on interest payable @
16% on quarterly rests. Due to a dispute no interest has been provided
on this loan amounting to Rs 1 63 29 858/ for the year ended
31.03.2012. In addition to this total interest of Rs.7 86 37 967/-''
oertainina to year 31.03.2001 to 31.03.2011 have not been provided for.
Hence loss during the yTa? s understated by Rs. 1''63''29''858/-.
The company has incurred huge financial losses during the current
financial year It has neither sold nor acquired any fixed assets during
the financial year 2011-12.
m. CONTINGENT LIABILITIES
Contingent liabilities are not provided for in the accounts and are
shown separately in notes.