| 1.1 Basis of Preparation of Financial Statements: The Financial
Statements have been prepared under the historical cost convention on
accrual basis. The mandatory applicable accounting standards in India
and the provisions of Companies Act, 1956 have been followed in
preparation of these financial statements.
All assets and liabilities have been classified as current or
non-current as per the operating cycle criteria set out in the Revised
Schedule VI to the Companies Act, 1956.
1.2 Fixed Assets:
Fixed assets are stated at cost less accumulated depreciation. Cost
comprises of freight, duties, taxes, interest and other incidental
expenses related to acquisition & installation.
1.3 Depreciation and Amortisation:
i) Leasehold land is amortised over the period of lease ii) Buildings
(including Roads & Drains) is provided under straight line method at
the rates specified in Schedule XIV of the Companies Act, 1956.
1.4 Investments:
Investments are stated at cost less provision for diminution in value
other than temporary, if any. 1.5 Retirement Benefits:
i) Since during the year there were no employees in the company
therefore there is no liability in respect of Gratuity.
ii) Since during the year there were no employees in the company
therefore there is no liability in respect of Leave Benefits. 1.6
Taxation:
i) Current Tax:
Provision for current income tax is made on the taxable income using
the applicable tax rates and tax laws as per the provisions of Income
Tax Act, 1961.
ii) Deferred Tax:
The Deferred tax charge or credit is recognised using prevailing
enacted tax rate. Where there is unabsorbed depreciation or carry
forward losses, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets. Other deferred tax
assets are recognized only to the extent there is reasonable certainty
of realization in future. Deferred tax assets / liabilities are
reviewed as at each balance sheet date based on developments during the
period and available case law to reassess realization / liabilities.
iii) Minimum Alternate Tax (MAT) credit:
MAT is recognised as an asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during
the period specified. In the year in which the MAT credit becomes
eligible to be recognised as an asset in accordance with the
recommendations contained in the Guidance Note issued by the ICAI, the
said asset is created by way of accredit to the statement of Profit and
Loss and is shown as MAT Credit Entitlement. The Company reviews the
same at each Balance sheet date and writes down the carrying amount of
MAT Credit Entitlement to the extent there is no longer convincing
evidence to the effect that Company will pay normal Income Tax during
the specified period.
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