NOTES FORMING PART OF THE ACCOUNTS FOR THE YEAR ENDED ON 31ST MARCH, 2014 SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting :

The financial statements are brpared under historical cost convention and comply with applicable accounting standards issued by the Institute of Chartered Accountants of India and relavant provisions of the Companies Act, 1956.

AS 1 Accounting Convention

The accounts have been brpared under the historical cost convention. The Company follows the mercantile system of accounting and recognises income and expenditure on accrual basis. The scope of audit covers all aspects of principal, standard accounting policies.

AS 2 Valuation of Inventories

The Company is engaged in the business of Trading of General Merchandise and allied items alongwith finance and investment based activities. The Valuation is based on lower of Cost or Realisable Value. However the company was holding no stock at the year end.

AS 3 Cash Flow Statements

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

AS 4 Contingencies and events occurring after Balance Sheet Date:

There are no contingencies and events occurring after the Balance Sheet date affecting the financial position of the Company.

AS 5 Prior Period And Extra Ordinary Items

There are no material changes or credit which arises in current period, on account of errors or omissions in the brparation of financial statements for one or more prior periods.

AS 6 -Debrciation:

Debrciation on fixed assets is provided on Written Down Value method in respect of Fixed Assets at rates brscribed under Schedule XIV the Companies Act 1956 as amended.

AS 9: Revenue Recognition:

All revenues are generally recognised on accrual basis.

AS 10: Accounting for Fixed Assets:

Fixed assets are stated at cost of acquisition. Acquisition cost includes taxes, duties, freight, insurance and other incidental expenses related to acquisition and installation where applicable. Revenue expenses incidental and related to projects are capitalized along with the related fixed assets, where appropriate. Fixed Assets are stated at cost less accumulated debrciation.

AS 11 : The effect of Changes in Foreign Exchange Rates: Earning in Foreign Exchange is Rs. NIL (Previous Year Rs. NIL) Expenditure in Foreign Currency is Rs. NIL (Previous Year Rs. NIL)

AS 13: Accounting for Investments

Investments are shown at Cost as the Investment being Non Current Asset. The Investments made are in the nature of Unquoted Equity Instruments Rs. 5,01,600/-

The Provision for increase or decrease in value of Shares is not provided as it is considered temporary.

AS15 - Retirement Benefits:

The Provisions of the Employees State Insurance Act are not applicable to the company. Therefore no provision for Gratuity is made or provided for.

AS16 - Borrowing Costs:

Borrowing costs include interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss.

AS 17 Segment Reporting:

The Company's operations consist of Trading and Finance Based Activities. Hence, there are no reportable segments under Accounting Standard - 17. During the year under report, the Company has engaged in business in India only and not in any other Country. The conditions brvailing in India being uniform, no separate geographical disclosures are considered necessary. As 18: Related Party Transactions:

The disclosure pertaining to the related party transactions as required by the accounting standard 19(AS-18) by the Institute of Chartered Accountants of India as applicable are indicated below : List of related parties with whom transactions have been taken place during the year. Transactions with Key Management Personnel -Remuneration To Directors :

Shri Chetan Dogra Rs. 250,000/- (Previous year Rs. 300,000/-) Shri Viren Vora Rs. NIL (Previous year Rs. 180,000/-) Shri Kirti Savla Rs. 120,000/- (Previous year Rs. 120,000/-)

AS 22 Taxes on Income.

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Provision for Taxation:

Provision for Income Tax Rs.45,0000/-(Previous year Rs.75,000/-) is provided for as per the provisions of the Income Tax Act,1961.

Provision for Deferred Taxation:

Deferred tax is recognized on timing difference, being the difference between taxable income and accounting income that originate between in one period and are capable of being reversed in one or more subsequent periods. Deferred tax assets are recognized on unabsorbed debrciation and carry forward losses unless there is virtual uncertainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.

AS 28 Impairment of Assets

In view of Accounting Standard required by AS-28 Impairment of Assets issued by ICAI, the Company has reviewed its fixed assets and does not expect any loss as on 31st March 2014 on account of impairment in addition to the provision already made in the books.

AS 29 Contingent Liabilities:

Since there are no contingent liabilities in brparation of accounts, the company has not made any provisions for the same. Demand for Rs. 460,270/- for A.Y. 2007-08 towards Income Tax vide order passed u/s 143(3) against which Rs. 150,000/- have been paid and brferred an appeal with relevant authorities and is pending before ITAT. Similarly in respect of AY 2009-10 the Demand for Rs. 370,480/- towards Income Tax vide order passed u/s 143(3) against which the appeal with relevant authorities has been brferred & is pending before CIT(Appeals). As per the information and explanation given to us, there are no amounts remaining unpaid to any Micro, small and Medium enterprise under Micro, Small & Medium Enterprise Act, 2006. Provision for Bad and doubtful debts:

The management reviews on a periodical basis, the loans or debts outstanding with a view to determining whether the loans and or debts are good, bad, or doubtful. After taking into consideration all the relevant aspects including the financial condition of the borrowers, the management determines whether the loan asset is doubtful or bad, wholly or in part. On the basis of such review and in pursuance of other prudent financial considerations, the Board of Directors determines the extent of provision required to be created in respect of loan assets. No Provision for the same has been considered necessary for the year.

The deductions are settled from time to time and written off accordingly in the books of accounts. The supporting evidence or confirmatory documents are not maintained.

In the opinion of the Board, current assets and loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provisions for all known and determined liabilities are adequate and not in the excess of the amount reasonably necessary.

Supporting Evidence of debits & Credits:

Wherever supporting and evidences are not available they are taken as appearing in the books of accounts and certified by the management as exclusively and necessary for the business purposes. The balances of sundry debtors, creditors, loans and advances & other liabilities are subject to confirmation and reconciliation, if any.

The Revised schedule VI to the Companies Act 1956 has become effective from 1st April 2011 for the brparation of financial statements. This has significantly impacted the disclosure & brsentation made in the financial statements. Previous years' figures have been regrouped / reclassified wherever necessary to correspond with the current years' classification /disclosure

For J. K. SHAH & ASSOCIATES

For ROSE MERC. LIMITED

CHARTERED ACCOUNTANTS

J. K. SHAH  

PROPRIETOR

VIREN VORA  

DIRECTOR

KIRTISAVLA

DIRECTOR

Place : MUMBAI

Dated : 14th August, 2014.