Note 3- Significant Accounting Policies
3.1) Method of accounting:
The accounts are prepared on the basis of historical cost convention, in accordance with the applicable
accounting standards and on the accounting principles of a going concern. All expenses and income to the
extent ascertainable with reasonable certainty are accounted for on accrual basis.
3.2) Use of estimates:
The preparation of financial statements in conformity with the generally accepted accounting principles which
requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the
date of financial statements and the reported amount of revenues and expenses during the reporting period.
Differences between the actual results and estimates are recognised in the period in which the results are
known or materialized.
3.3) The Company follows the Mercantile System of accounting.
3.4) INVESTMENTS
Investment of the company comprises of long term investment only. There is no decline other than temporary
decline in the value of investment. Investments in quoted shares are valued at fair market value and
investments in unquoted shares are valued at cost.
3.5) INVENTORIES
Inventories of stock in trade are valued at fair market value.
3.6) REVENUE RECOGNITION:
Shares Trading & Consultancy Income shall be recognised on the basis of bills issued by share
brokers/parties.
Dividend income shall be recognised when the shareholders right to receive payment is established.
Interest income is recognized on time proportion basis (on mercantile system of accounting) taking into
account the amount outstanding from time to time & rate applicable.
3.7) PROVISION FOR CURRENT & DEFERRED INCOME TAX:
Provision for current tax is made on the basis of estimated taxable income for the current accounting year in
accordance with the Income Tax Act, 1961.
The deferred tax liability for timing differences between the book and tax profits for the year is accounted for,
using the tax rates and laws that have been substantively enacted as of the balance sheet date. Deferred tax
assets arising from timing differences are recognised to the extent there is reasonable certainty that this would
be realised in future.Net of assets minus liability is provided in books as deferred tax liability. In case, if net
result is asset, then it is provided only if there is reasonable certainty that this would be realised in future.
The company has not created deferred tax Assets on its unabsorbed long term capital loss as the
management is of the opinion that same will not be reversable in future.
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