3. Significant Accounting Policies
The Company has consistently applied the following accounting policies to all periods presented in these financial statements
3.1 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. The following specific recognition criteria are met before revenue is recognized:
3.2 Interest
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable
interest rate. Interest income is included under the head "Revenue from Operations" in the statement of profit and loss.
3.3 Dividend
Dividend income is recognized when the company's right to receive dividend is established by the reporting date.
3.4 Other Income
Other items of revenue are recognized in accordance with the Accounting Standard (AS-9) "Revenue Recongnition".
3.5 Financial Instrument
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions
of the instruments. The classification of financial instruments depends on the objective of the business model for which it
is held. Management determines the classification of its financial instruments at recognition
3.6 Inventories
Inventories are valued at lower of cost or net realizable value. Net realizable value is the estimated selling prince in the
ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
3.7 Investments:
Investments are measured at the Market Value at the end of each reporting financial year, with any gains or losses
arising on remeasurement is recognised in Statement of Profit and Loss account under Other Comprehensive income.
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.
3.8 Earnings Per Share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders
(after deducting preference dividends and attributable taxes) by the weighted average number of equity shares
outstanding during the period. Partly paid equity shares are treated as fraction of an equity share to the extent that they
are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The Weighted
average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus
element in a rights issue, share spilit, and reverse share split (consolidation of shares) that have changed the number of
equity shares outstanding, without a corresponding change in resources.
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 effects of all
dilutive potential equity shares.
3.9 Income Taxes
Current Taxes
Provision for current income-tax is recognized in accordance with the provisions of Indian Income- tax Act, 1961 and is
made annually based on the tax liability after taking credit for tax allowances and exemptions.
Deferred Taxes
Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that
result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets
and liabilities are measured using the tax rates and the tax laws that have been enacted or substantially enacted at the
balance sheet date. Deferred tax Assets are recognized only to the extent there is reasonable certainty that the assets
can be realized in the future. Deferred Tax Assets are reviewed as at each Balance Sheet date.
3.10 Contingent Liabilities
A contingent liability is a possible obligation that arise from past events whose existence will be confirmed by the
occurence 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. The company does not recognize a contingent liability but discloses its existence
in the financial statements.
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