Board of Directors - Opto Circuits

NOTES FORMING PART OF ACCOUNTS (CONTINUED)
Significant Accounting Policies
1) System of Accounting
The Financial statements have been prepared to comply in all material respects with the mandatory Accounting standards issued by the
Institute of Chartered Accountants of India ('ICAI') and the relevant provisions of the Companies Act, 1956. The financial statements have
been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company
and are consistent with those applied in the previous year.
2) Revenue Recognition
Revenue from sale of products are recognized on dispatch of goods to customers and are net of sales tax, discounts, rebates for price
adjustments, rejections and shortage in transit.
1) Fixed assets
Fixed assets are stated at cost, less accumulated depreciation. Cost in prices includes purchase price, duties, levies and any other cost relating to
the acquisition and installation of the assets. Interest and financial charges on borrowed funds, if any, used to finance the acquisition of fixed
assets, until the date the assets are ready for use are capitalized and included in the cost of the asset.
2) Depreciation
Depreciation is provided on the straight line method at the rates specified under schedule XIV of the Companies Act, 1956 and on prorata
basis on the additions made during the year.
3) Inventories
Valuation of inventories is at the lower of cost or market value as certified by the management.
4) Retirement benefits to employees
The company's liability towards retirement benefit in the form of provident fund is fully funded and charged to revenue expenditure. The
company contributes to the employee provided fund maintained under the employees provident scheme run by the Central Government. The
company will be accounting the Gratuity liability on cash basis.
5) Investments
The investments are stated at cost.
6) Deferred Tax
Deferred Tax Assets & Liabilities are recognized for the estimated future tax consequences of temporary differences between the carrying value
of the assets & liabilities and their respective tax bases. Deferred Tax Asset in the nature of unabsorbed depreciation and loses are recognized
only if there is virtual certainty of realization. Other deferred tax assets are recognized if there is reasonable certainty of realization. The effect
on Deferred Tax Asset & Liabilities of a change in rates is recognized in the income statement in the period of enactment of the change.
7) Foreign currency transactions
Foreign currency transactions are recorded at the rates of exchange prevailing on the date of transaction. Foreign currency of assets & liabilities
and realized gains and losses on foreign exchange transactions, other than those relating to fixed assets are recognized in the profit and loss
account. Exchange difference arising on liabilities incurred for the purpose of acquiring fixed assets are adjusted in the carrying value of the
respective fixed assets.
8) Provisions
Provision for income tax is provided by the company, after considering the exemption U/s 10B of the Income Tax Act.
9) Earnings per share
The basic earning per share is computed by dividing net profit after tax by the number of equity shares outstanding for the period. Diluted
earnings per share have not been computed, as the company has not issued any Dilutive Potential Equity Shares.
As per our report of even date
For & on behalf of the Board of Directors For ANAND SHENOY & CO.,
Chartered Accountants
sd/- sd/- sd/- sd/-
VINOD RAMNANI USHA RAMNANI ROSE CHINTAMANI G.C.SOMADAS
Chairman & Executive Director Company Secretary Partner
Managing Director M.No.: 18636
Place:Bangalore
th
Date : 13 June 2006.
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