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Accounting Policies of Magna Colors Ltd. Company

Mar 31, 2011

1. General

i) The Accounts have been prepared on historical cost basis ignoring Changes, if any in the purchasing power of money.

ii) All revenue and expenses are accounted on accrual basis.

2. Taxation

i) Provision for current tax is made after taking into consideration benefits admissible under the provision of the Income Tax Act, 1961.

ii) Deferred Tax resulting from timing difference between book and taxable profit is accounted for using tax rates and law that have been enacted as on the Balance Sheet Date. Deferred Tax Asset, if any, is recognized and carried forward only to the extent that there is a reasonable certainly that the assets will be realized in future.

3. Borrowing Cost.

Borrowing cost directly attributable to the acquisition or construction of fixed asset are capitalized as part of the cost of the asset, up to the date the asset is put to use, Other borrowing costs are changed to the profit & loss account in the year in which they are incurred.

4. Investment

Long term investments are stated at cost. Provision for diminution in value of long term investment is made only if such a decline is other than temporary.

5. Income Recognition

Income earned during the year is from Consultancy fees and is shown in the Profit & Loss Account.

2) In the opinion of the Directors:

a) The current assets, Loans and advances are approximately of the value stated, if realized in the ordinary course of business.

b) The provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

V. Deferred Tax

The company has not created deferred tax assets in respect of brought forward losses on prudence basis in accordance with Accounting Standard-22 Accounting for taxes on Income as no certainty in respect of future profitability of the company.

VI. Depreciation.

The company does not have any fixed assets during the year under audit.

Additional information required under Para 3, 4-C and 4-D in part II of schedule VI of the Companies Act, 1956. (As certified by the managing Director and upon by the Auditors) is NIL.

Previous years figures have been regrouped and rearranged wherever considered necessary to make them comparable with the current year figures.

 
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