Accounting Policies of Fact Enterprise Ltd. Company

Mar 31, 2012

A) Basis of preparation

The financial statements are prepared under the historical cost convention on the accrual basis. The accounting policies have been consistently applied by the Company except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The financial statements have been prepared to comply in all material respects with the Notified accounting standards as prescribed by the Companies (Accounting Standards) Rules, 2006 and the provisions of the Companies Act, 1956.

b) Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and reported amounts of income and expenses during the period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.

c) Fixed Assets

Fixed Assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condtion, less accumulated depreciation.

d) Depreciation

The company provides depreciation on Fixed Assets on "Straight Line Basis" at the rate and manner specified in Schedule XIV to the Companies Act, 1956.

e) Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. Ali other investments are classified as long term investments. Current investments are carried at lower of cost and fair value determined on an individual investment basis. Long term investments are carried at cost less provisions recorded to recognise any decline, other than temporary, in the carrying value of each investment.

f) 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.

Turnover

Turnover comprises sales of goods, net of sales returns, discount and rebate. Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer.

Interest

Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

Dividends

Revenue is recognised when the shareholders' right to receive payment is established by the balance sheet date.

g) Foreign Currency Transaction

Transactions in foreign currency are accounted at the exchange rate prevailing on the date of transaction. Any exchange gain or losses out of subsequent transaction of actual payment is accounted for in Foreign Exchange Rate Difference Account. The exchange difference arising on the Foreign Currency Transaction are recognised as income or expenses in the period in which they arise. Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

Monetary Current Assets & Monetary Current Liabilities, that are denominated in Foreign Currency are translated at exchange rate prevailing at date of Balance Sheet and the resulting difference is also recorded in the Profit & Loss account for year.

h) Taxes on Income

Current Tax is the tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred Tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. 36

Deferred Tax Assets in respect of unabsorbed depreciation any carry forward of losses are recognised if there is virtual certainty that there will be sufficient future taxable income availabe to realise such losses. Other Deferred Tax Assets are recognised if there is reasonable certainty that there will be sufficient future taxable income to realise such assets. Deferred tax assets are reviewed at each balance sheet date for their readability.

i) Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period.

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.

j) Provisions. Contingent Liabilities & Contingent Assets

A provision is recognised, as a result of 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. Provisions are determined by the best estimate of the outflow of economic benefits required to settle the obligation at the reporting date. 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.

h) Cash and Cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short term investments with an original maturity of three months or less and that are readily convertible to known amounts of cash to be cash equivalents.

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Mar 31, 2011

A. ACCOUNTING CONVENTION

These accounts have been prepared in accordance with historical cost convention, applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies Act, 1956.

B. SYSTEM OF ACCOUNTING

The Company has adopted the accrual concept in the preparation of the accounts. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the Financial Statements are prudent and reasonable. Future results could differ from these estimates.

C. INFLATION

Assets and liabilities are recorded at historical cost to the Company. These costs are not adjusted to reflect the changing value in the purchasing power of money.

D. FIXED ASSETS

Fixed Assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation.

E. DEPRECIATION

The Company provides depreciation on Fixed Assets on “Straight line basis", at the rate and manner specified in Schedule XIV to the Companies Act, 1956.

F. INVESTMENTS

Long Term Investments are stated at cost inclusive of related expenses. Provision for diminution in value is made if the decline in value is other than temporary in the opinion of the management. There are no Current Investments.

G. INVENTORIES/DEBTORS

As decided by the management, Work In Progress and Sundry Debtors have been written off during the year as mentioned in the Schedule to the Balance Sheet.

H. TAXATION

The accounting treatment for income tax in respect of the Company's income is based on the Accounting Standard 22 on “Accounting for Taxes on Income" as notified by the Companies (Accounting Standards) Rules, 2006. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year, arising on account of timing differences, are recognized in the Profit and Loss Account and the cumulative effect thereof is reflected in the Balance Sheet.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax asset is recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized. In situations where the Company has unabsorbed depreciation or carried forward losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that the same can b realized against future taxable profits.

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Mar 31, 2010

A. ACCOUNTING CONVENTION

These accounts have been prepared in accordance with historical cost convention, applicable Accounting Standards notified by the Companies (Accounting Standards) Rules, 2006 and relevant provisions of the Companies Act, 1956.

B. SYSTEM OF ACCOUNTING

The Company has adopted the accrual concept in the preparation of the accounts. The preparation of financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities as of the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the Financial Statements are prudent and reasonable. Future results could differ from these estimates.

C. INFLATION

Assets and liabilities are recorded at historical cost to the Company. These costs are not adjusted to reflect the changing value in the purchasing power of money.

D. FIXED ASSETS

Fixed Assets are stated at cost of acquisition, including any cost attributable for bringing the asset to its working condition, less accumulated depreciation.

E. DEPRECIATION

The Company provides depreciation on Fixed Assets on "Straight line basis", at the rate and manner specified in Schedule XIV to the Companies Act, 1956.

F. INVESTMENTS

Long Term Investments are stated at cost inclusive of related expenses. Provision for diminution in value is made if the decline in value is other than temporary in the opinion of the management. There are no Current Investments.

G. INVENTORIES

Project Expenses are taken as Stock-in-Trade.

H. TAXATION

The accounting treatment for income tax in respect of the Companys income is based on the Accounting Standard 22 on "Accounting for Taxes on Income" as notified by the Companies (Accounting Standards) Rules, 2006. The provision made for income-tax in the accounts comprises both, the current tax and the deferred tax. The deferred tax assets and liabilities for the year, arising on account of timing differences, are recognized in the Profit and Loss Account and the cumulative effect thereof is reflected in the Balance Sheet.