1 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Company follows the Mercantile System of Accounting and the
accounts have been prepared on historical cost convention. The
Financial Statements are prepared in accordance with the accounting
standards specified in the Companies(Accounting Standards)Rules, 2006
notified by the Central Government in terms of section 211(3C) of the
Companies Act, 1956.
2 FIXED ASSETS AND DEPRECIATION
a Fixed Assets are stated at cost except Brady House at Mumbai, which
is revalued on the basis of the market value as at 1 st November 2006
as certified by an approved valuer. Interest paid on loans taken for
acquisition of Fixed Assets is capitalized upto the date of
installation / put to use.
b Depreciation is provided on Written Down Value Method at the rates
prescribed under Schedule XIV to the Companies Act, 1956 as amended. As
stated in Para 11.2 to Note 11, depreciation relating to increase in
the value of Brady House on account of revaluation is not charged to
Profit & Loss Account but charged to Revaluation Reserve.
3 FOREIGN CURRENCY TRANSACTIONS
All assets and liabilities remaining unsettled at the year-end are
translated at the closing exchange rate. Any income or expenses on
account of exchange difference either on settlement or on translation
is recognized in the relevant head of the Profit & Loss account except
in case where they relate to acquisition of Fixed Assets in which case
they are adjusted in the carrying cost of such assets/capital work in
progress and the relevant loan account.
a Quoted Investments are stated at book value based on market value as
at 31.03.1995 as per practice followed. Investments acquired upto
31.03.1995 are stated at book value except in a case where shares are
cancelled, the same are taken at face value and those acquired after
31.03.1995, at cost in conformity with Accounting Standard (AS) 13
Accounting for Investments issued by the Institute of Chartered
Accountants of India.
b Unquoted Investments in the Shares which have no realizable value are
stated at token value of Re.1 each by writing down the value of the
Investments. However other Investments are stated at cost.
These are valued as under: -
i Finished goods
ii Trading Stock in Process
iii Stores, Spares and Loose Tools
iv Goods in transit
v Trading Goods
At lower of cost or net realizable value
6 REVENUE RECOGNITION
Revenue is recognized only when it can be reliably measured and it is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, services, commission & rent. Dividend income is
recognized when right to receive is established. Interest income is
recognized on time proportion basis taking into account the amount
outstanding and rate applicable.
7 EMPLOYEE BENEFITS
a Contribution for incremental liability of Gratuity to approved
gratuity fund is accounted on the basis of actuarial valuation.
b The liability in respect of unavailed privilege leave of employees is
accounted on the basis of Actuarial valuation Certificate.
8 PROVISION FOR CURRENT AND DEFERRED TAX
Tax on Income taxes are accounted for in accordance with Accounting
Standard 22 on Accounting for Taxes on Income, AS (22) issued by
The Institute of Chartered Accountants of India. Tax expenses comprise
both, current & deferred tax. Current tax is measured at the amount
expected to be paid to / recovered from the tax authorities using the
applicable tax rates. Deferred tax assets and liabilities are
recognized for future tax consequences attributable to timing
differences between taxable income and accounting income that are
capable of reversal in one or more subsequent periods and are measured
using enacted tax rates.
9 PROVISIONS & CONTINGENT LIABILITIES
Provisions are recognized for present obligation of uncertain timing or
amount as a result of a past event where a reliable estimate can be
made and it is probable that an outflow of resources embodying economic
benefits will be required to settle the obligation. Where it is not
possible that an outflow or resources embodying economic benefits will
be required or the amount cannot be estimated reliably, the obligation
is disclosed as contingent liability, unless the probability of outflow
or resources embodying economic benefits is remote.
Possible obligations whose existence will only be confirmed by the
occurrence or non-occurrence of one or more uncertain events are also
disclosed as contingent liabilities unless the probability of outflow
of resources embodying economic benefit is remote.
Contingent Liabilities are not provided for and are disclosed by way of