1.a Basis of Preparation
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles (GAAP) under the historical
cost convention on the accrual basis. GAAP comprises mandatory
accounting standards as prescribed by the Companies (Accounting
Standards) Rules, 2006, the provisions of the Companies Act, 1956 and
guidelines issued by the Securities and Exchange Board of India (SEBI).
1.b Use of Estimates
The preparation of the financial statements in conformity with GAAP
requires estimates and assumptions that affect the reported balances of
assets and liabilities and disclosures relating to contingent
liabilities as at the date of the financial statements and reported
amounts of income and expenses during the period.
Accounting estimates could change from period to period. Actual results
could differ from those estimates. Appropriate changes in estimates are
made as the Management becomes aware of changes in circumstances
surrounding the estimates. Changes in estimates are reflected in the
financial statements in the period in which changes are made and, if
material, their effects are disclosed in the notes to the financial
1.c Own Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation. Direct
costs are capitalized until fixed assets are ready for use.
1.d Depreciation and Amortisation
Depreciation on Tangible Assets is provided to the extent of
depreciable amount on written down value method (WDV) at the rates and
in the manner prescribed in Schedule XIV of the Companies Act 1956 of
their useful lives of assets estimated by the Management.
1.e Impairement of Assets
The assets is treated as impaired when the carring cost of the assets
exceeds its recoverable value. The Company assesses at each balance
sheet date whether there is any indication that an asset may be
impaired. If any such indication exists, the Company estimates the
recoverable amount of the asset. If such recoverable amount of the
asset or the recoverable amount of cash generating unit to which the
asset belongs is less than its carrying amount, the carrying amount is
reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognized in the profit and loss account. If at
the balance sheet date there is an indication that if a previously
assessed impairment loss no longer exists, the recoverable amount is
reassessed and the asset is reflected at the recoverable amount.
Investments are classified as long-term based on Management's intention
at the time of purchase. Long term investments are carried at cost.
Inventories includes the Traded Goods available for Sale i.e. quoted
equity shares. Value of Inventories includes the Cost of Procuring
Goods and Services, Borrowing Cost (if permitted by AS-16 - "Borrowing
Cost") and any other expenditure incurred in relation to the inventory
necessary to bring that in the Present and Saleable Condition.
Inventory are managed using First in First Out basis as suggested by
Accounting Standard - 2 and valued at Cost or Market Price which ever
1.h Cash & Cash Equivalents.
Cash and cash equivalents comprise cash and cash on deposit with banks
and corporations. The Company considers all highly liquid investments
with a remaining maturity at the date of purchase of three months or
less and that are readily convertible to known amounts of cash to be
1.i Provision for Contingent Liabilities
A provision is recognized if, as a result of a past event, the Company
has a present legal obligation that can be estimated reliably, and it
is probable that an outflow of economic benefits will be required to
settle the obligation. Where no reliable estimate can be made, a
disclosure is made as contingent liability. A disclosure for a
contingent liability is also made when there is a possible obligation
or a present obligation that may, but probably will not, require an
outflow of resources. Where there is a possible obligation or a present
obligation in respect of which the likelihood of outflow of resources
is remote, no provision or disclosure is made.
1.j Revenue Recognition
The company derives its revenue from Interest and Trading of Shares.
Sales of Shares are recognized in accordance with the settlement cycle
of stock exchange. The revenue in respect of Interest Income is
recognized on accrual basis.Rentals are recognized ratably on a
straight line basis over the balance sheet period.
In Statement of Profit & Loss, comapny has taken the income as the
difference between the value of sale and purchase of shares.
1.k Employee Benefit
Short-term employee benefits are recognised as an expense at the
undiscounted amount in the Statement of Profit and Loss of the year in
which the related service is rendered.
1.l Provision for Current & Deferred Tax
Income taxes are accrued in the same period that the related revenue
and expenses arise. A provision is made for income tax annually, based
on the tax liability computed, after considering tax allowances and
exemptions. Provisions are recorded when it is estimated that a
liability due to disallowances or other matters is probable. Minimum
alternate tax (MAT) credit is recognized as an asset only when and to
the extent there is convincing evidence that the Company will pay
normal income tax during the specified period. In the year in which the
Minimum Alternative tax (MAT) credit becomes eligible to be recognized
as an asset in accordance with the recommendations contained in
guidance Note issued by the Institute of Chartered Accountants of
India, the said asset is created by way of a credit to the profit and
loss account and shown as MAT Credit Entitlement paid in accordance
with the tax laws, which gives rise to future economic benefits in the
form of tax credit against future income tax liability, is recognized
as an asset in the Balance Sheet if there is convincing evidence that
the Company will pay normal tax after the tax holiday period and the
resultant asset can be measured reliably.
Deferred Tax resulting from timing difference between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the date of balance sheet
1.m Earning per share
Basic earnings per share is computed by dividing the net profit after
tax by the weighted average number of equity shares outstanding during
the period. Diluted earnings per share is computed by dividing the
profit after tax by the weighted average number of equity shares
considered for deriving basic earnings per share and also the weighted
average number of equity shares that could have been issued upon
conversion of all dilutive potential equity shares.