| A. Basis of Presentation
a. The financial statements have been prepared under the historical
cost convention and on the basis of going concern, in accordance with
the generally accepted accounting principles and provisions.
b. The Company generally follows mercantile system of accounting and
recognises significant items of income and expenditure on accrual
basis. Insurance and other claims are accounted for as and when
admitted by the appropriate authorities.
B. Fixed Assets:
Fixed Assets are recorded at cost before depreciation. The company
capitalises all direct costs relating to the acquisition and
installation of fixed assets.
C. Depreciation:
Depreciation is charged on fixed assets as per the Straight Line Method
at the rates and in the manner prescribed under Schedule XIV to the
Companies Act,1956.
D. Deferment of Taxes:
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognised, subject to
the consideration of prudence, on timing differences, being the
difference between taxable income and accounting income that originate
in one period and are capable of reversal in one or more subsequent
periods.
During the year a Deferred Tax Assets of Rs. NIL has been utilized for
carried forward unabsorbed losses of the company. However looking to
the business circumstances it is less probable that the company will be
able to earn sufficient profits in future to absorb the huge unabsorbed
losses to this extent the deferred tax assets should not be recognized
by the company.
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