Mar 31, 2012
A. Basis of Preparation of Financial Statements
The accompanying financial statements are prepared in accordance with Indian Generally Accepted Accounting Principles (GAAP) under historical cost convention on accrual basis and comply with relevant statutory enactments. Indian GAAP comprises mandatory accounting standards issued by Institute of Chartered Accountants of India (ICA1) and the provisions of the Companies Act, 1956. The Accounting policies have been consistently applied by the Company.
Accounting Policies not specifically referred to, are in consistent with generally accepted accounting practices and Accounting Standards as specified in the Companies (accounting Standards) Rules, 2006.
b. Use of Estimates
The preparation of financial statements in conformity with Indian General Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the report amounts of assets liabilities, disclosures relating to contingent assets & the financial statements and reported amount of income and expenses during the period. Differences between the actual results and estimates arc recognized in the period in which the results are known /materialized.
c. Revenue Recognition
* Revenue is recognized when it is earned and no significant uncertainty exists as to its realization or collection.
* Interest and other dues are accounted on accrual basis.
Investments are classified into current and non - current investments. Investments which are intended to be held for one year or more arc classified as non - current investments and investments which are intended to be held for less than one year are classified as current investments. Non - current investments are accounted at cost and any decline in the carrying value other than temporary in is provided for. Current investments are valued at lower of cost or market value/fair value.
(i) Tax expense comprises of Current and Deferred, Current Income Tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws.
(ii) Deferred tax is recognized subject to consideration of prudence on timing differences, being difference between taxable and accounting income that originate in one period and are capable of reversal one or more subsequent periods. Deferred Tax is measured based on the tax rates and the tax laws enacted or substantially ma@ia:at the Balance Sheet date. Deferred tax assets are recognize only to the extent there is reasonable certainty that sufficient future taxable income will be available against which these assets can be realized in future whereas in case of existence of carry forward of losses or unabsorbed depreciation , deferred tax assets are recognized only if there is virtual certainty of realization backed by convincing evidence . Deferred Tax assets are reviewed at each Balance Sheet date.
f. Provisions & Contingent Liabilities
Provisions are recognized when the Company has a present obligation as a result of past events and it is more likely that an outflow of resources will be required to settle the obligations and the amount has been reliably estimated. Provision is not discounted to its present value and is determined based on the best estimate required to settle the obligation at the yearend date. These are reviewed at each year end date and adjusted to reflect the best current estimate.
Liabilities, though contingent are provided for if there are reasonable prospects of such liabilities maturing. Other contingent liabilities, barring frivolous claims, not acknowledged as debt, are disclosed by way of notes.
g. Change in accounting policy:
Presentation and disclosure of financial statements: During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI docs not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.
h. Earnings per Share:
The Company reports basic and diluted earnings per share in accordance with AS-20, 'Earnings per Share'. Earning per shares is computed by dividing Net profit after tax by the weighted average number of equity share outstanding at the end of the year.