The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year except as specifically stated otherwise.
1.2 Use of Estimate
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
1.3 Revenue Recognition
Revenue is recognized to the extent that it is probable that economic
benefits will flow to the Company and the revenue can be reliably
measured. The Following specific recognition criteria must also be met
before revenue is recognized:-
Professional Fees for rendering architecture service is recognized on
completion of Service and as per the terms of the Arrangement.
Brokerage Income is recognized on completion of service. The Company
collects service tax on behalf of the Government and, therefore, it is
not an economic benefit flowing to the Company. Hence, it is excluded
Profit on Sale of Investments is recognized on execution of transfer
Revenue from interest is recognized on a time proportion basis taking
into account the amount outstanding and the rate applicable.
1.4 Provisions and Contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the 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. Contingent liabilities
are disclosed in the Notes.
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
1.6 Employee Benefits
The Statutory enactments relating to payment of Provident Fund, ESIC
and Gratuity to employees are not applicable to the company. The
company does not have any scheme for retirement benefits for its
employee and as such no provision towards retirement benefits to
employees is considered necessary. Short term employee benefits in the
form of leave encashment and Bonus is provided on accrual basis.
1.7 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash and cash equivalents comprise cash and cash on deposit with banks
1.8 Cash Flow Statements
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.9 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognized for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
1.10 Earning Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.