Accounting Policies of Equilateral Enterprises Ltd. Company

Mar 31, 2025

Note 1 - Significant Accounting Policies and Notes to Accounts

1. Corporate information

EQUILATERAL ENTERPRISES LIMITED ("the company") is a limited company domiciled in India and incorporated under the provisions of the Companies Act, 2013. Corporate Identity Number: L36912UP1988PLC010285, the registered office of the company is located at B-9, Industrial Estate, Partapur, Meerut, Uttar Pradesh, 250103, India.

2. Basis of preparation

The Financial Statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards notified under Section 133 of Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 2013 ("the 2013 Act").

The accounting policies adopted in the preparation of Financial Statements are consistent with those of previous period.

3. Use of estimates

The preparation of Financial Statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income, expenses and disclosures of contingent liabilities at the date of these Financial Statements. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

4. Revenue Recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

Interest

Interest income is recognized on the Accrual basis determined by the amount outstanding and the rate applicable and where no significant uncertainty as to measurability or collectability exists.

5. Tangible fixed assets

Fixed assets are stated at cost, less accumulated depreciation and impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

6. Depreciation

Depreciation on fixed assets is provided on Written Down Value Method basis in the manner and at the rates prescribed in Schedule II to the Companies act 2013.

7. Impairment

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An assets recoverable amount is higher of an assets or Cash generating unit''s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets.

Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discontinued to their present value using a pre-tax discount rate that reflects current market assessments of time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is adopted.

8. Employee benefit expenses

Short-term employee benefits are recognized as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Defined contribution plans

Retirement benefit in the form of provident fund is considered as defined contribution scheme and the contributions are charged to the statement of profit and loss of the year when the contributions to respective funds are due. There are no other obligations other than the contribution payable to the respective fund.

9. Taxation:

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India. The tax rates and tax Laws used to compute the amounts are those that are enacted, at the reporting date.

Deferred Taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets including the unrecognized deferred tax assets, if any, at each reporting date, are recognized for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date and are adjusted for its appropriateness.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The company recognizes MAT credit available as an asset only to the extent there is convincing evidence that the company will pay normal income tax during the specified period, i.e., the period for which MAT Credit is allowed to be carried forward. In the year in which the Company recognizes MAT Credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of Profit and Loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT Credit Entitlement" asset at each reporting date and writes down the asset to the extent the company does not have convincing evidence that it will pay normal tax during the sufficient period.

10. Investment

Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the Financial Statements at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

11. Contingent Liabilities

A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the

concurrency or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the

obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. However, there is no Contingent Liability.

12. Provisions

A provision is recognized when the company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

13. Cash and cash equivalent

The bank balances in India include INR accounts. The Cash & Cash Equivalent comprises Cash and balance in current and deposit accounts stood at Rs. 28,05,279/- as at March 31, 2025.

14. Earning per share

Basic earnings per share are 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.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effect of all potentially dilutive equity share.

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Mar 31, 2024

a. Statement of compliance:

The financial statements have been prepared in accordance with Indian Accounting Standards (‘Ind AS’)
notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies
(Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act..

For the year ended 31st March, 2024, the financial statements of the Company have been prepared in
compliance with the Indian Accounting Standards (Ind AS) noticed under Section 133 of Companies Act, 2013
read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies
(Accounting Standards) Amendment Rules, 2016.

b. Basis of preparation of financial statements

The Company has prepared the Financial Statements which comprise the Balance Sheet as at 31st March,
2024, the Statement of Profit and Loss, the Statement of Cash Flows and the Statement of Changes in Equity
for the year ended 31 st March, 2024, and a summary of the significant accounting policies and other explanatory
information (together hereinafter referred to as “Financial Statements.

These financial statements have been prepared and presented under the historical cost convention, on accrual
basis of accounting except for certain financial assets and financial liabilities that are measured at fair values
at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies
have been applied consistently over all the periods presented in these financial statements

The financial statements are presented in Indian Rupees (‘INR’) and all values are rounded to the nearest
INR”, except otherwise indicated.

c. Use of estimates and judgements

The preparation of the financial statements requires that the Management to make estimates and assumptions
that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the
financial statements and the reported amounts of revenue and expenses during the reporting period. The
recognition, measurement, classification or disclosure of an item or information in the financial statements is
made relying on these estimates.

The estimates and judgements used in the preparation of the financial statements are continuously evaluated
by the Company and are based on historical experience and various other assumptions and factors (including
expectations of future events) that the Company believes to be reasonable under the existing circumstances.
Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively
in current and future periods.

d. Presentation of Financial Statements

The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed
in the Schedule III to the Companies Act, 2013 (“the Act”). The Statement of Cash Flows has been prepared
and presented as per the requirements of Ind AS 7 “Statement of Cash flows”. The disclosure requirements
with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III
to the Act, are presented by way of notes forming part of the financial statements along with the notes required
to be disclosed under the notified Accounting Standards and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (as amended).

e. Revenue Recognition

Revenue is recognized based to the extent it is probable that the economic benefit will flow to the company
and revenue can be reliably measured regardless of when the payment is being made. Revenue is measured
at the fair value of the consideration received or receivable, taking into account contractually defined terms of
payment, and excludes taxes & duties collected on behalf of the Government and is reduced for estimated
customer returns, rebates and other similar allowances.

Interest Income is recorded using the Effective Interest Rate (EIR). EIR is the rate that exactly discounts the
estimated future cash receipts over the expected life of the financial instrument or a shorter period, where
appropriate, to the gross carrying amount of the financial asset.

The Company recognizes revenue when the amount of revenue can be reliably measured, it is probable that
future economic benefits will flow to the company and significant risk and reward incidental to sale of products
is transferred to the buyer, usually on delivery of the goods.

Other items of income are accounted as and when the right to receive such income arises and it is probable
that the economic benefits will flow to the company and the amount of income can be measured reliably.

f. Inventories

Inventories are valued at the lower of cost and net realizable value (NRV). At cost or Net Realizable value
whichever is lower.

g. Cash Flow Statement

Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of change in value.

For the purpose of the statement of cash flows, cash and cash equivalents includes cash on hand, term
deposits and other short term highly liquid investments, net of bank overdrafts as they are considered an
integral part of the Company’s cash management. Bank overdrafts are shown within short term borrowing in
balance sheet.

h. Tangible fixed assets

Fixed assets are stated at cost, less depreciation and impairment losses, if any. The cost comprises purchase
price, borrowing costs if capitalization criteria are met and directly attributable cost of bringing the asset to its
working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase
price.

i. Depreciation

Depreciation on fixed assets is provided on a written down value basis using the rates arrived at based on the
useful lives estimated by the management, or those prescribed under the Schedule II to the Companies Act,
2013, whichever is higher. However Management has not estimated the useful lives of assets and rate is used
as per the Companies Act, 2013.

j. Borrowing

Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged,
cancelled or expired.

k. Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which
necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost
of those assets, until such time as the assets are substantially ready for their intended use or sale. In the

current year, the custom duty paid on acquisition of Fixed asset has been capitalized as the duty paid is not
refundable.

All other borrowing costs are recognized in Statement of Profit and Loss in the period in which they are
incurred.

l. Retirement and other employee benefits

Retirement benefit in the form of provident fund is a defined contribution scheme. The company has no
obligation, other than the contribution payable to the provident fund. The company recognizes contribution
payable to the provident fund scheme as expenditure, when an employee renders the related service.

m. Income taxes

Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to
be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India. The tax rates and
tax Laws used to compute the amounts are those that are enacted, at the reporting date.

Deferred Taxes reflect the impact of timing differences between taxable income and accounting income
originating during the current year and reversal of timing differences for the earlier years. Deferred tax is
measured using the tax rates and the tax laws enacted at the reporting date.

Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets including the
unrecognized deferred tax assets, if any, at each reporting date, are recognized for deductible timing differences
only to the extent that there is reasonable certainty that sufficient future taxable income will be available
against which deferred tax assets can be realized.

The carrying amount of deferred tax assets are reviewed at each reporting date and are adjusted for its
appropriateness.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and deferred tax assets and deferred taxes relate to the same taxable
entity and the same taxation authority.

Minimum Alternate Tax (MAT) paid in a year is charged to the Statement of Profit and Loss as current tax. The
company recognizes MAT credit available as an asset only to the extent there is convincing evidence that the
company will pay normal income tax during the specified period, i.e., the period for which MAT Credit is
allowed to be carried forward. In the year in which the Company recognizes MAT Credit as an asset in
accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternate Tax
under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of Profit and Loss
and shown as “MAT Credit Entitlement.” The Company reviews the “MAT Credit Entitlement” asset at each
reporting date and writes down the asset to the extent the company does not have convincing evidence that
it will pay normal tax during the sufficient period.

n. Earnings per share

Basic earnings per share is computed by dividing the profit/(loss) for the year by the weighted average number
of equities shares outstanding during the year. The weighted average number of equity shares outstanding
during the year is adjusted for treasury shares, bonus issue, bonus element in a rights issue to existing
shareholders, share split and reverse share split (consolidation of shares).

Diluted earnings per share is computed by dividing the profit/(loss) for the year as adjusted for dividend,
interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential
equity shares, by the weighted average number of equity shares considered for deriving basic earnings per
share and the weighted average number of equity shares which could have been issued on the conversion of
all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to
equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive
equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at
a later date.

o. Cash flow statement

Cash Flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of
transaction of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments
and item of income and expenses associated with investing or financing cash flows. The cash flows from
operating, investing and financing activities of the company are segregated.

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Mar 31, 2015

(a) Basis for Accounting

i) The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted Accounting principles, as per Section 211(3C) of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th of September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and other Accounting Principles generally accepted in India.

ii) During the year the company has reclassified the previous year figures where ever found applicable.

(b) Revenue Recognition:

i) Revenue from sale of goods is recognized on transfer of ownership to the buyer. Sale of goods is recognized net of sales tax and value added tax.

ii) Revenue from services rendered is recognized on transfer of services to buyer.

(c) Investments:

Current Investment are stated at lower of cost or market value.

(d) Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Cost of acquisition of fixed assets is inclusive of freight, duties, taxes and incidental expenses thereto.

(e) Provision for Current and Deferred Tax

i) Provision for current income tax has been made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961; however current tax liability is NIL due to past losses.

ii) Deferred Tax resulting from timing difference between taxable and accounting income has not been recognized due to uncertainty of profit in future.

(f) Contingent liabilities and commitments

Contingent liabilities and commitments have not been accounted for but have been disclosed by note if any.

(g) Excise Duty & Sales Tax

Excise Duty & Sales Tax liability was accounted for on the basis of Excise Duty & sales tax return filed by the company in the years where the company was in operation. Additional liabilities on finality of the assessment are being taken into account in the year of finalization. In the opinion of board of directors there was no such liability as on 31.03.2015.

(i) Earnings per Share:

The earning considered in ascertaining the company's earnings per share comprises net profit after tax. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the year.

(j) Gratuity:

No provision for gratuity has been made as no employee has put in qualifying period of service for entitlement of this benefit.

(k) Paid up amount on 30,02,100 forfeited Equity shares i.e. Rs. 1,50,10,500/- which have not been re-allotted have been shown under the head "Share Capital"

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Mar 31, 2014

(a) Basis for Accounting

(I) The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted Accounting principles, Accounting Standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof.

(ii) During the year the company has reclassified the previous year figures whereever found applicable.

(b) Revenue Recognition

(I) Revenue from sale of goods is recognised on transfer of ownership to the buyer. Sale of goods is recognised net of sales tax and value added tax. However there are no such activity during the year.

(ii) Revenue from services rendered is recognised on transfer of services to buyer.

(c) Investments

Current Investment are stated at cost or market value whichever is less

(d) Provision for Current and Deferred Tax

(I) Provision for current income tax has been made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961., however current tax liability is NIL due to past losses.

(ii) Deferred Tax resulting from timing difference between taxable and accounting income and Deferred tax assets has not been recognised due to uncertainity of profit in future.

(e) Contingent liabilities and commitments

Contingent liabilities and commitments have not been accounted for but have been disclosed by note if any.

(f) Excise Duty & Sales Tax

Excise Duty & Sales Tax ability was accounted for on the basis of Excise Duty & sales tax return filed by the company in the years where the company was in operation. Additional liability on finality of the assess ment are being taken into account in the year of finalisation. In the opinion of board of directors there were no such liability as on 31.03.2014.

(g) Paid up amount on 3002100 forfeited Equity shares i.e. Rs.15010500/- which have not been re-allotted have been shown under the head "Share Capital"

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Jun 30, 2013

(i) Revenue from sale of goods is recognised on transfer of ownership to the buyer. Sale of goods is recognised net of sales tax and value added tax. However there are no such activity during the year.

(ii) Revenue from services rendered is recognised on transfer of services to buyer.

(c) Fixed Assets

(i) Fixed Assets are stated at cost net of recoverable taxes less accumulated depreciation. All cost, including financing costs till commencement of commercial production attributable to fixed assets are capitalised.

(ii) The interest free security deposit paid to lessor of land Rs.3868200/- which had been shown under the head "Land" upto 30.06.2012 has been returned by lessors and they have paid compensation to company for Rs.2.30 crores on cancellation of lease of land.

(d) Depreciation and Amortisation

Depreciation on fixed assets has been provided using W.D.V. method at rates prescribed in Schedule XIV to the Companies Act, 1956

(e) Inventories

Inventories of the company have been valued as under -

(i) Finished goods/scrap : At market price

(ii) Work in progress : At estimated cost

(iii) Raw Material, stores, spares and consumable : At cost or market value whichever is less Cost of Inventories is generally ascertained on FIFO method taking into account cost of purchase and related overheads incurred in bringing them to their respective present location and condition. However there were no inventories as on 30.06.2013.

(f) Investments

(i) Long Term Investment are stated at cost minus provision for diminution other than temporary. However there are no such investment as at 30.06.2013.

(ii) Current Investment are stated at cost or market value whichever is less

(g) Employee Benefits

(i) Short term employee benefits are recognised as an expense in the profit and loss account of the year in which the related service is rendered.

(ii) There are no post employment and / or long term employee benefits or retirement benefit

(h) Provision for Current and Deferred Tax

(i) Provision for current income tax has been made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961., however current tax liability is NIL due to past losses.

(ii) Deferred Tax resulting from timing difference between taxable and accounting income and Deferred tax assets has not been recognised due to uncertainity of profit in future.

(i) Borrowing Costs

Borrowing costs are charged to profit and loss account. Amount paid to UPFC & PICUP under OTS over and above settled amount has been written off as interest paid to them.

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Jun 30, 2012

(a) Basis for Accounting

(i) The financial statements are prepared under the historical cost convention on an accrual basis of accounting in accordance with the generally accepted Accounting principles, Accounting Standards notified under section 211 (3C) of the Companies Act, 1956 and the relevant provisions thereof.

(ii) During the year, Revised schedule VI notified under the Companies Act, 1956 has become applicable to the company for preparation and presentation of its financial statements. The company has reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Revenue Recognition

(i) Revenue from sale of goods is recognised on transfer of ownership to the buyer. Sale of goods is recognised net of sales tax and value added tax.

(ii) Revenue from services rendered is recognised on transfer of services to buyer.

(c) Fixed Assets

(i) Fixed Assets are stated at cost net of recoverable taxes less accumulated depreciation. All cost, including financing costs till commencement of commercial production attributable to fixed assets are capitalised.

(ii) The interest free security deposit paid to lessor of land Rs.3868200/- has been shown under the head "Land".

(d) Depreciation and Amortisation

Depreciation on fixed assets has been provided using W.D.V. method at rates prescribed in Schedule XIV to the Companies Act, 1956

(e) Inventories

Inventories of the company have been valued as under -

(i) Finished goods/scrap : At market price

(ii) Work in progress : At estimated cost

(iii) Raw Material, stores, spares and consumable : At cost or market value whichever is less

Cost of Inventories is generally ascertained on FIFO method taking into account cost of purchase and related overheads incurred in bringing them to their respective present location and condition.

(f) Investments

(i) Long Term Investment are stated at cost minus provision for diminution other than temporary

(ii) Current Investment are stated at cost or market value whichever is less

(g) Employee Benefits

(i) Short term employee benefits are recognised as an expense in the profit and loss account of the year in which the related service is rendered.

(ii) There are no post employment and / or long term employee benefits or retirement benefit

(h) Provision for Current and Deferred Tax

(i) Provision for current income tax has been made after taking into consideration benefits admissible under the provisions of the Income Tax Act, 1961., however current tax liability is NIL due to past losses.

(ii) Deferred Tax resulting from timing difference between taxable and accounting income and Deferred tax assets has not been recognised due to uncertainity of profit in future.

(i) Borrowing Costs

Borrowing costs are charged to profit and loss account

(j) Contingent liabilities and commitments

Contingent liabilities and commitments have not been accounted for but have been disclosed by note if any.

(k) Sales Tax

(i) Sales Tax liability was accounted for on the basis of sales tax return filed by the company in the years where the company was in operation. Additional liability on finality of the assessment are being taken into account in the year of finalisation.

(ii) With the amount of VAT purchase cost of material has been reduced.

(l) Paid up amount on 3002100 forfeited Equity shares i.e. Rs.15010500/- which have not been reallotted have been shown under the head "Share Capital".

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Jun 30, 2011

A) Basis of accounting

The financial statements are prepared under historical cost convention, on a going concern basis and in accordance with the applicable accounting standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central government, in consultation with the National Advisory Committee on Accounting Standards and relevant provisions of the Companies act, 1956 subject to the remark that Part of Plant & Machineries of tyre division have been sold resulting non-production of Automotive tyres and tubes in total but production on job work basis using balance of machineries is still going on. Besides this establishment of Lamination division is under active consideration. Considering realizable value of Land & Building which is more than liabilities of financial institutions directors are of the opinion that going concern basis is unaffected.

b) Revenue Recognition

All the items of cost/expenses and revenue/income have been accounted for on accrual basis, except insurance claims, which are accounted for on receipt basis in view of the uncertainty involved in ascertaining the final claim.

c) Fixed Assets and Depreciation

i) Fixed Assets have been stated at cost/revalued figures less depreciation on assets. Cost comprises the purchase price and any attributable cost of bringing the assets to working condition for its intended use including expenses and IDCP up to the date of commissioning of project. The fixed assets have been reduced by the modvat entitlement.

ii) The interest free security deposit paid to lesser of land Rs.3868200/- has been shown under the head "Land".

iii) The company has provided depreciation using WDV Method at rates prescribed by Schedule XIV to the Companies Act, 1956 on book values/WDV including increase due to revaluation. However additional depreciation for the year amounting to Rs.0.00 (Previous year Rs.6782.50) on increase in values of Fixed Assets due to revaluation has been transferred to profit & loss account from revaluation reserve created out of revaluation done on 30.09.1994. Revalued Portion on sold assets has been written off.

d) Inventories

Inventories of the company have been valued as under:

Finished Goods/Scrap At market price/Net realisable value whichever is less.

Raw Material At cost or market value whichever is less.

e) Investments

Long Term Investments have been valued at cost of acquisition after deducting provision, if any in cases where the fall in market value has been considered of permanent nature.

f) Sales Tax

i) Sales Tax liability was accounted for on the basis of sales tax return filed by the company in the years where the company was in operation. Additional liabilities on finality of the assessment are being taken into account in the year of finalisation.

ii) With the amount of VAT purchase cost of material has been reduced.

g) Excise Duty

Excise duty payable on finished goods and customs duty payable on raw materials, stores, spares and components are accounted for on clearance of goods from the factory premises/bonded warehouses, however there is no such activity during the year. h) Paid up amount on 3002100 forfeited Equity shares i.e. Rs. 15010500/- which have not been re-allotted have been shown under the head "Share Capital".

h) Contingent liabilities have not been accounted for

i) Taxes on Income

No Income Tax provision for the period has been made in the accounts due to losses incurred during the year. Deferred tax assets/liabilities has not been recognized considering the uncertainty of profits in future periods.