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Accounting Policies of Powersoft Global Solutions Ltd. Company

Jun 30, 2001

A. System of Accounting : The financial statements are prepared under the historical cost convention in accordance with applicable accounting standards. The Company adopts the accrual basis in the preparation of its financial statements.

b. Fixed Assets : Expenditure which are of capital nature are capitalised at cost which comprises of net purchase price, import duties, levies and directly attributable cost of bringing the asset to its working condition for its intended use, Revenue Expenses incurred for the period prior to commencement of commercial production/installation are capitalised as part of cost,

c. Depreciation : Depreciation on fixed assets are provided as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 under straight line method.

d. Investments are stated at cost (refer note 5 below),

e. Inventories are valued at lower of cost of net realisable value.

f. Foreign currency conversion : Foreign Currency Assets and liabilities covered by forward contracts are stated at forward contract rates. Foreign currency assets and liabilities not covered by forward contracts are stated at rates prevailing at the year end.

Exchange differences relating to fixed assets are adjusted in the cost of the asset. Any other exchange differences are dealt with in the Profit & Loss Account.

g. Research & Development: Expenditure on research and development is accounted according with the accounting standard for accounting research and development issued by the institute of Chartered Accountants of India.

h. Retirement Benefits: No provision for Gratuity has been made as none of the employee have completed five years of continuous service as contemplated in the payment of gratuity act.

i. All know liabilities are provided in the accounts except liabilities of contingent in nature which have been adequately disclosed in the accounts.

j. Sales & Services : Sales includes sale of goods and is net of returns.


Mar 31, 2000

A. Sysem of Accounting : The financial statements ore prepared under the historical cost convention in accordance with applicable accounting standards. The company adopts the accrual basis in the preparation of its finan- cial statements.

b. Fixed Assets : Expenditure which are of capital nature are capitalised at cost which comprises of net purchase price, import duties, levies and di- rectly attributable cost of bringing the asset to its working condition for its intended use. Revenue Expenses incurred for the perriod prior to com- mencement of commercial production/instalation are capitalised as part of cost.

c. Depreciation : Depreciation on fixed assets are provded as pei ihe rates and in the manner prescribed in Schedule XIV to the companies Act. 1956 under straight line method.

d. Investments are stated at cost.

e. Inventories are valued at lower of cost or net realisable value.

f. Foreign currency conversion : Foreign Currency Assets and liabilities cov- ered by forward contracts are stated at forward contract rates.

Foreign currency assets and liabilites not covered by forward contracts are stated at rates prevailing at the year end.

Exchange differences relating to fixed assets are adjusted in the cost of the asset. Any other exchange differences are dealt with in the Profit & Loss Account.

g. Kesearch & Development: Expenditure on research and development is accounted according with the accounting standard for accounting for re- search and development issued by the institute of chartered accountants of India.

h. Retirement Benefits : No provision for Gratuity has been made as none of the employee have completed five years of continuous service as con- templated in the payment of gratuity act.

i. All know liabilities are provided for in the accounts except liabilites of con- tingent in nature which have been adequately disclosed in the accounts. j. Sales & Services : Sales includes sale of goods and is net of returns.

k. Premilinary and Public issue expenses are amortised over a period of 10 years,



 
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