Mar 31, 2014
A) Basis of preparation of financial statements
The financial statements are prepared in accordance with Generally
Accepted Accounting Principles ("GAAP") in India under the historical
cost convention, on accrual basis. GAAP comprises mandatory Accounting
Standards issued by the Companies (Accounting Standards) Amendment
Rules, 2008 and the relevant provisions of the Companies Act, 1956. The
accounting policies have been consistently applied by the Company and
are consistent with those used in the previous year.
b) Use of Estimates
The Preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates. Any revision to the accounting estimates is
recognized prospectively.
c) Revenue recognition
1. Income from Operation is recognised upon transfer of significant
risks and rewards of ownership to the buyer.
2. Other Income 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.
3. Dividend is recognised when the shareholders'' right to receive
payment is established at the balance sheet date.
d) Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Borrowing costs relating to acquisition of fixed
assets which takes substantial period of time to get ready for its
intended use are also included to the extent they relate to the period
till such assets are ready to be put to use. Capital work in progress
includes expenditure incurred till the assets are put into intended
use.
e) Depreciation
Depreciation is provided using the Straight Line Method at the rates
and in the manner as prescribed under schedule XIV of the Companies
Act, 1956. In case of Software, the same is amortized over a period of
five years.
f) Impairment of assets
The carrying amounts of assets are reviewed at each balance sheet dates
and if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset''s net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital. If at
the balance sheet date, there is an indication that a previously
assessed impairment loss no longer exists, then such loss is reversed
and the asset is restated to extent of the carrying value of the asset
that would have been determined (net of amortization / depreciation),
had no impairment loss been recognized.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
g) Investments
Investments that are readily realizable and intended to be held for not
more than one year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost or fair value determined on
individual investment basis. Long-term investments are carried at cost.
However, provision for diminution in value is made to recognize a
decline other than temporary decline in the value of the investments.
h) Taxation
Tax expense comprises of current income tax and deferred income tax.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflects the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognised only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realised. In situations where the company has unabsorbed
depreciation or carry forward tax losses, all deferred tax assets are
recognised only if there is virtual certainty supported by convincing
evidence that they can be realised against future taxable profits. At
each balance sheet date, the Company re-assesses unrecognised deferred
tax assets. It recognizes unrecognized deferred tax assets to the
extent that it has become reasonably certain, as the case may be, that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. Minimum Alternative Tax (MAT)
credit is recognised as an asset and carried forward only if there is a
reasonable certainty of it being set off against regular tax payable
within the stipulated statutory period.
i) Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders (after deducting
preference dividends and attributable taxes) by the weighted average
number of equity shares outstanding during the year. The weighted
average number of equity shares outstanding during the year is adjusted
for events of bonus issue, bonus element in a rights issue to existing
shareholders, share split and reverse share split (consolidation of
shares).
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
j) Provisions, Contingent Liabilities and Contingent Assets
A provision is recognized when an enterprise has a present obligation
as a result of past event 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 are not discounted to its
present value and are determined based on 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.
Possible future obligations or present obligations that may but will
probably not require outflow of resources or where the same cannot be
reliably estimated, is disclosed as contingent liabilities in the notes
to accounts of financial statements.
Contingent Assets are neither recognized nor disclosed in the financial
statements.
k) Cash Flow Statement
Cash flow statement has been prepared under the ''Indirect Method''. Cash
and cash equivalents, in the cash flow statement comprise unencumbered
cash and bank balances.