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Accounting Policies of Greencrest Financial Services Ltd. Company
Mar 31, 2024
BRIEF PROFILE
The company is incorporated on 15th February 1993 at Calcutta, West Bengal, India. It is a Public limited company by its shares. The company is one of the RBI registered Non-Deposit taking Company NBFC and is into the business of Finance and Investments. The activities of the company includes financing, investing in shares & other securities, Government and Non-Government Bonds, Fixed Deposits, Commodities and other related activities of capital market.
The Registered Office of the Company is situated at 8, Ganesh Chandra Avenue, Saha Court, 1st Floor, Kolkata-700 013.
1. SIGNIFICANT ACCOUNTING POLICIES1.1 Statement of compliance
The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 read with sub-section (1) of section 210A of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied along with compliance with other statutory promulgations require a different treatment.
The financial statements for the year ended March 31, 2024 of the Company is the first financial statements prepared in compliance with Ind AS. The date of transition to Ind AS is April 1, 2017. The financial statements upto the year ended March 31, 2018, were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ("Previous GAAP") and other relevant provisions of the Act. The figures for the year ended March 31, 2018 have now been restated under Ind AS to provide comparability. Refer relevant Note to Accounts for the details of first-time adoption exemptions availed by the Company.
The financial statements have been prepared on the historical cost basis except for certain financial instruments that are measured at fair values at the end of each reporting period.
Fair value measurements under Ind AS are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at reporting date
⢠Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the valuation of assets or liabilities
1.3 Presentation of financial statements:
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Division III to Schedule III to the Companies Act, 2013 ("the Act") applicable for Non-Banking Finance Companies ("NBFC"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Amounts in the financial statements are presented in Indian Rupees rounded off to zero decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupee to two decimal places.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured and there exists reasonable certainty of its recovery. Revenue is measured at the fair value of the consideration received or receivable as reduced for estimated customer credits and other similar allowances.
Income from arbitrage comprises profit / loss on sale of securities held as stock-in-trade and profit / loss on equity derivative instruments is accounted as per following:
i. Interest income is recognised in the Statement of Profit and Loss and for all financial instruments except for those classified as held for trading or those measured or designated as at fair value through profit or loss (FVTPL) is measured using the effective interest method (EIR).
The calculation of the EIR includes all fees and points paid or received between parties to the contract that are incremental and directly attributable to the specific lending arrangement, transaction costs, and all other premiums or discounts. For financial assets at FVTPL transaction costs are recognised in profit or loss at initial recognition.
The interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortised cost of the financial asset before adjusting for any expected credit loss allowance). For credit-impaired financial assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired financial assets (i.e. the gross carrying amount less the allowance for expected credit losses (ECLs)). For financial assets originated or purchased credit-impaired (POCI) the EIR reflects the ECLs in determining the future cash flows expected to be received from the financial asset.
ii. Dividend income is recognised when the Company''s right to receive dividend is established by the reporting date and no significant uncertainty as to collectability exists.
iii. Fee and commission income and expense include fees other than those that are an integral part of EIR. The fees included in the Company statement of profit and loss include among other things fees charged for servicing a loan, non-utilisation fees relating to loan commitments when it is unlikely that these will result in a specific lending arrangement and loan advisory fees.
iv. Profit / loss on sale of securities are determined based on the FIFO cost of the securities sold.
v. Profit / loss on FNO Segment and Commodity transactions is accounted for as explained below:
Initial and additional margin paid over and above initial margin for entering into contracts for Equity Index / Stock Futures / Commodity Spot Trading/ Currency Futures and or Equity Index / Stock Options / Currency Options, which are released on final settlement / squaring-up of underlying contracts, are disclosed under "Other current assets". Mark-to-market margin-Equity Index / Stock Futures / Currency Futures representing the amounts paid in respect of mark to market margin is disclosed under "Other current assets".
"Equity Index / Stock Option / Currency Option Premium Account" represents premium paid or received for buying or selling the Options, respectively.
On final settlement or squaring up of contracts for Equity Index / Stock Futures / Currency Future, the realized profit or loss after adjusting the unrealized loss already accounted, if any, is recognized in the Statement of Profit and Loss. On settlement or squaring up of Equity Index / Stock Options / Currency Option, before expiry, the premium prevailing in "Equity Index / Stock Option / Currency Option Premium Account" on that date is recognized in the Statement of Profit and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealised Profit / (Loss) on all outstanding arbitrage portfolio comprising of Securities and Equity / Currency Derivatives positions is determined on scrip basis with net unrealized losses on scrip basis being recognized in the Statement of Profit and Loss and the net unrealized gains on scrip basis are ignored.
vi. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract.
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Direct expenses and administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets.
Intangible assets not ready for the intended use on the date of Balance Sheet are disclosed as "Intangible assets under development".
Intangible assets are amortised on the written down value method over the estimated useful life. The method of amortisation and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis.
An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset are recognised in profit or loss when the asset is derecognised.
1.6 Property, Plant and Equipments
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation less impairment loss, if any. Historical cost comprises of purchase price, including nonrefundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to statement of profit or loss during the reporting period in which they are incurred.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separated items (major components) of property, plant and equipment.
Depreciation methods, estimated useful lives and residual value:
Depreciation is provided on a pro-rata basis on the written down value method over the estimated useful lives of the assets which in certain cases may be different than the rate prescribed in Schedule II to the Companies Act, 2013, in order to reflect the actual usages of the assets.
The asset''s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset''s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
|
Class of Assets |
Useful life as prescribed in Schedule II of Companies Act, 2013 (in years) |
Useful life as followed by the Company (in year) |
|
Computers |
3 |
3 |
|
Furniture & Fixtures |
10 |
10 |
|
Office Equipments |
5 |
5 |
|
Motor Car |
8 |
8 |
The assets'' residual values, useful lives and method of depreciation are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognized as income or expense in the statement of profit and loss.
1.7 Impairment of Tangible and Intangible Assets other than Goodwill
As at the end of each accounting year, the Company reviews the carrying amounts of its PPE and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined in the case of an individual asset, at the higher of the net selling price and the value in use.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is
recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss.
i. Short term Employee Benefits:
Employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
ii. Post-Employment Benefits:
a) Defined contribution plans: The Company''s superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/ payable under the schemes is recognised during the period in which the employee renders the related service.
b) Defined benefit plans: The employees'' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss.
Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Company recognizes related restructuring costs or termination benefits.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognise the obligation on a net basis.
iii. Long term Employee Benefits:
The obligation recognised in respect of long term benefits such as long term compensated absences is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii) (b) above.
iv. Termination Benefits:
Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company''s offer of the termination benefit is accepted or when the Company recognises the related restructuring costs whichever is earlier.
Financial assets and financial liabilities are recognised in the Company''s balance sheet when the Company becomes a party to the contractual provisions of the instrument.
Recognised financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.
A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously.
Loans and debt securities are written off when the Company has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a de-recognition event. The Company may apply enforcement activities to financial assets written off. Recoveries resulting from the Company''s enforcement activities will result in impairment gains.
The Company recognises loss allowances for ECLs on the following financial instruments that are not measured at FVTPL:
o Loans and advances to customers; o Debt investment securities; o Trade and other receivable; o Lease receivables;
o Irrevocable loan commitments issued; and o Financial guarantee contracts issued.
Credit-impaired financial assets
A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred to as Stage 3 assets. Evidence of credit impairment includes observable data about the following events:
o significant financial difficulty of the borrower or issuer; o a breach of contract such as a default or past due event;
o the lender of the borrower, for economic or contractual reasons relating to the borrower''s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
o the disappearance of an active market for a security because of financial difficulties; or o the purchase of a financial asset at a deep discount that reflects the incurred credit losses.
It may not be possible to identify a single discrete event instead; the combined effect of several events may have caused financial assets to become credit-impaired. The Company assesses whether debt instruments that are financial assets measured at amortised cost or FVTOCI are credit-impaired at each reporting date. To assess if corporate debt instruments are credit impaired, the Company considers factors such as bond yields, credit ratings and the ability of the borrower to raise funding.
A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in the borrower''s financial condition, unless there is evidence that as a result of granting the concession the risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators of impairment. For financial assets where concessions are contemplated but not granted the asset is deemed credit impaired when there is observable evidence of credit-impairment including meeting the definition of default. The definition of default (see below) includes unlikeliness to pay indicators and a back-stop if amounts are overdue for 90 days or more.
Cash and bank balances also include fixed deposits, margin money deposits, earmarked balances with banks and other bank balances which have restrictions on repatriation. Short term and liquid investments being subject to more than insignificant risk of change in value, are not included as part of cash and cash equivalents.
1.13 Securities Premium Account:
i. Securities premium includes:
⢠The difference between the face value of the Equity Shares and the consideration received in respect of shares issued pursuant to Stock Option Scheme.
⢠The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme.
ii. The issue expenses of securities which qualify as equity instruments are written off against securities premium account.
Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.
Borrowing costs net of any investment income from the temporary investment of related borrowings, that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
1.15 Accounting and Reporting of Information for Operating Segments:
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.
i. The functional currency and presentation currency of the Company is Indian Rupee. Functional currency of the Company and foreign operations has been determined based on the primary economic environment in which the Company and its foreign operations operate considering the currency in which funds are generated, spent and retained.
ii. In currencies other than the Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise.
iii. Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows -
A. Assets and Liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B. Income and Expenses for each ncome statement are translated at average exchange rates; and
C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations.
Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profit will be available against which those deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets in respect of unutilized tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable of such unutilized tax credits will get realized.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.
Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.
1.18 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised only when:
i. an Company entity has a present obligation (legal or constructive) as a result of a past event; and
ii. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
iii. a reliable estimate can be made of the amount of the obligation
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of:
i. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and
ii. a present obligation arising from past events, when no reliable estimate is possible.
Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision.
Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:
i. changes during the period in operating receivables and payables transactions of a non-cash nature;
ii. non-cash items such as depreciation, provisions, deferred taxes, unrealised gains and losses; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
1.21 Key source of Estimation:
The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the
reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, expected credit loss on loan books, future obligations in respect of retirement benefit plans, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.
1.22 Changes in Accounting Standard and recent accounting pronouncements (New Accounting Standards issued but not effective):
On March 30, 2021, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2019, notifying Ind AS 116 on Leases. Ind AS 116 would replace the existing leases standard Ind AS 17. The standard sets out the principles for the recognition, measurement, presentation and disclosures for both parties to a contract, i.e. the lessee and the lessor. Ind AS 116 introduces a single lease accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Currently for operating lease, rentals are charged to the statement of profit and loss. The Company is currently evaluating the implication of Ind AS 116 on the financial statements.
The Companies (Indian Accounting Standards) Amendment Rules, 2019 notified amendments to the following accounting standards. The amendments would be effective from April 1, 2019
a) Ind AS 12, Income taxes â Appendix C on uncertainty over income tax treatments
b) Ind AS 19â Employee benefits
c) Ind AS 23 - Borrowing costs
d) Ind AS 28â investment in associates and joint ventures
e) Ind AS 103 and Ind AS 111 â Business combinations and joint arrangements
f) Ind AS 109 â Financial instruments
The Company is in the process of evaluating the impact of such amendments.
Inventories have been valued at the method prescribed in the Accounting Standards.
Interest on Loan is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to receive the payment is established.
Purchase is recognized on passing of ownership in share based on broker''s purchase note.
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments. Investments are classified into current and long-term investments.
Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as noncurrent investments.
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related party relationships are covered:
i. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
ii. Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
iii. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
iv. Key management personnel (KMP) and relatives of such personnel; and
v. Enterprises over which any person described in (iii) or (iv) is able to exercise significant influence.
Shares are valued at cost or market value, whichever is lower. The comparison of Cost and Market value is done separately for each category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is lower. Net asset value of units declared by mutual funds is considered as market value for non-exchange traded Mutual Funds.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
1.31 Financial Risk Management Objectives and Policies:
The Company''s activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Market risk, Credit risk and Liquidity risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises mainly three types of risk, foreign currency risk, Interest rate risk and other price risk such as Equity price risk and Commodity Price risk.
ii. Foreign Currency Risk & :
There are no Foreign Currency transactions during the financial year.
iii. Foreign Currency Sensitivity:
There are no Foreign Currency transactions during the financial year.
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Customer credit risk is managed based on company''s established policy, procedures and controls. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss and the same, if any, is provided as per its respective customer''s credit risk as on the reporting date.
vi. Liquidity Risk:
Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
1.32 Summary of Significant Accounting Policies General
⢠Contingent Liabilities & Commitments - Nil (Refer accompanied Note No. 30 of the Report)
⢠Additional Information disclosed as per Part II of the Companies Act, 2013 - Nil
1.33 Cash and cash Equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.34 Earnings/(loss) per Share
i. Basic earnings/ (loss) per Share
Basic earnings / (loss) per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠by the weighted average number of Equity Shares outstanding during the financial year.
ii. Diluted earnings / (loss) per Share
Diluted earnings / (loss) per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after income tax effect of interest and other financing costs associated with dilutive potential Equity Shares, and
⢠the weighted average number of additional Equity Shares that would have been outstanding assuming the conversion of all dilutive potential Equity Shares.
2. Critical Estimates and Judgments
In the application of the company''s accounting policies, which are described in note 1, the management is required to make judgment, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other process. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future period if the revision affects both current and future period.
The following are the critical estimates and judgments that have the significant effect on the amounts recognised in the financial statements.
Critical Estimates and Judgments
i. Estimation of Current Tax Expense and Deferred Tax
The calculation of the company''s tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax in the period in which such determination is made.
Recognition of Deferred Tax Assets / Liabilities
The recognition of deferred tax assets is based upon whether it is probable that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, reference is made to the approved budgets of the company. Where the temporary differences are related to losses, local tax law is considered to determine the availability of the losses to offset against the future taxable profits as well as whether there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the company. Significant items on which the Company has exercised accounting judgment include recognition of deferred tax assets in respect of losses. The amounts recognised in the financial statements in respect of each matter are derived from the Company''s best estimation and judgment as described above.
ii. Estimation of Provisions and Contingent Liabilities
The company exercises judgment in measuring and recognising provisions and the exposures to contingent liabilities, which is related to pending litigation or other outstanding claims. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement.
Because of the inherent uncertainty in this evaluation process, actual liability may be different from the originally estimated as provision. Although there can be no assurance of the final outcome of the legal proceedings in which the company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.
iii. Estimation of useful life of Property, Plant and Equipment and Intangible Assets
Property, Plant and Equipment and Intangible assets represent a significant proportion of the asset base of the company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The useful lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
iv. Estimation of Provision for Inventory
The company writes down inventories to net realisable value based on an estimate of the realisability of inventories. Write downs on inventories are recorded where events or changes in circumstances indicate that the balances may not realised. The identification of write-downs requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the periods in which such estimate has been changed.
v. Impairment of Trade Receivable
The impairment provisions for trade receivable are based on assumptions about risk of default and expected loss rates. The company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2018
1. SIGNIFICANT ACCOUNTING POLICIES
b) Basis of accounting and preparation of financial statements
These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other counting principles generally accepted in India, to the extent applicable.
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
c) Advances
The advances are classified as standard, substandard and doubtful assets as per companies policy approved by the board. The rates applied for making provisions on NPA are higher than those require by the relevant RBI guidelines. Interest on NPA is transferred to the Interest suspense account and not recognised in the statement of profit and loss account until received.
d) General
The company follows the accrual method of accounting. The financial statements have been prepared in accordance with the historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known liabilities and losses.
e) Use of Estimates
The preparation of the financial statements in conformity with the generally accepted principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon managementâs evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from that estimates and assumptions used in preparing the accompanying financial statements. Any differences of actual results to such estimates are recognized in the period in which the results are known / materialized.
f) Cash Flow Statement :
As required by Accounting Standard-3 âCash Flow Statementâ issued by âThe Institute of Chartered Accountants of Indiaâ the Cash Flow for the period is reported using indirect method. The Cash and Cash Equivalent of the Company comprises of Cash in hand and Current account with Scheduled Banks.
g) Fixed Assets & Depreciation on Tangible Assets
All assets held with the intention of being used for the purpose of providing services and not for sale in the normal course of business are recognized as Fixed Assets and are stated at cost less accumulated depreciation after considering lease adjustment account. All costs including finance cost attributable to fixed assets till assets are ready for intended use are capitalized.
Depreciation is provided on a pro-rata basis using written down value method using the estimated life as prescribed under Schedule II to the Companies Act, 2013 with the exception of the following:
i. assets costing Rs. 5,000 or less are fully depreciated in the year of purchase.
h) Intangible Assets & Amortisation
Depreciation on tangible assets is calculated on a pro-rata basis. Depreciation is charged over the estimated useful life of the fixed assets on a Written Down Value Method prescribed under Schedule II to the Companies Act, 2013 with the exception of the following:-
i) Inventories
The company has converted its investments into its stock-in-trade on the first date of the financial year. The inventories have been valued at the method prescribed in the Accounting Standards.
j) Revenue Recognition
Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.
a) Income from arbitrage comprises profit / loss on sale of securities held as stock-in-trade and profit / loss on equity derivative instruments is accounted as per following:
i. Profit / loss on sale of securities are determined based on the FIFO cost of the securities sold.
ii. Profit / loss on FNO Segment and Commodity transactions is accounted for as explained below:
Initial and additional margin paid over and above initial margin for entering into contracts for Equity Index / Stock Futures / Commodity Spot Trading/ Currency Futures and or Equity Index / Stock Options / Currency Options, which are released on final settlement / squaring-up of underlying contracts, are disclosed under âOther current assetsâ. Mark-to-market margin-Equity Index / Stock Futures / Currency Futures representing the amounts paid in respect of mark to market margin is disclosed under âOther current assetsâ.
âEquity Index / Stock Option / Currency Option Premium Accountâ represents premium paid or received for buying or selling the Options, respectively.
On final settlement or squaring up of contracts for Equity Index / Stock Futures / Currency Future, the realized profit or loss after adjusting the unrealized loss already accounted, if any, is recognized in the Statement of Profit and Loss. On settlement or squaring up of Equity Index / Stock Options / Currency Option, before expiry, the premium prevailing in âEquity Index / Stock Option / Currency Option Premium Accountâ on that date is recognized in the Statement of Profit and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealised Profit / (Loss) on all outstanding arbitrage portfolio comprising of Securities and Equity / Currency Derivatives positions is determined on scrip basis with net unrealized losses on scrip basis being recognized in the Statement of Profit and Loss and the net unrealized gains on scrip basis are ignored.
k) Other Income Recognition
Interest on Loan is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to receive the payment is established.
l) Purchases
Purchase is recognized on passing of ownership in share based on brokerâs purchase note.
m) Expenditure
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
n) Employees Benefit Gratuity
The liability for gratuity has not been provided as per the provisions of Payment of Gratuity Act, 1972 since no employee of the company is eligible for such benefits during the year.
Provident Fund
The provisions of the Employees Provident Fund are not applicable to the company since the numbers of employees employed during the year were less than the minimum prescribed for the benefits.
Leave Salary
In respect of Leave Salary, the same is accounted as and when the liability arises in accordance with the provision of law governing the establishment.
o) Loan Origination Cost
Brokerage, commission, incentive to employee etc. paid (if any) at the time of acquisition of loans are charged to revenue
p) Provision on receivable on Financing Activities
The company assesses all receivable for their revocability and accordingly recognised provision for non-performing and doubtful assets as per approved companies policy and guidelines. The company ensures the provision made or not lower than as stipulated by RBI guidelines
q) Foreign Currency Transactions:
F oreign currency transactions are recorded in the books at exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the period are recognized as income or expense in the statement of profit and loss of the same period.
Foreign currency assets and liabilities are translated at the period end rates and the resultant exchange differences, are recognized in the statement of profit and loss.
r) Investments
Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments. Investments are classified into current and long-term investments.
Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.
s) Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.
t) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimated recoverable value.
u) Provisions, Contingent Liabilities & Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are disclosed when the company has possible obligation or a present obligation and it is probable that a cash flow will not be required to settle the obligation. Contingent Assets are neither recognised nor disclosed in the financial statements.
v) Borrowing Cost
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. All other borrowing costs are charged off to revenue.
w) Related Parties
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 âRelated Party Disclosureâ only following related party relationships are covered:
i. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
ii. Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
iii. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
iv. Key management personnel (KMP) and relatives of such personnel; and
v. Enterprises over which any person described in (iii) or (iv) is able to exercise significant influence.
x) Stock In Trade
Shares are valued at cost or market value, whichever is lower. The comparison of Cost and Market value is done separately for each category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is lower. Net asset value of units declared by mutual funds is considered as market value for non-exchange traded Mutual Funds.
The fair value of financial assets and liabilities are included at the amount at which instruments could be exchanged in a current transaction between the willing parties. The following methods and assumptions were used to estimate the fair value:
i. The Company has opted to fair value its unquoted equity instruments at its Net Asset Value through Retained Earnings.
ii. The fair values of cash and cash equivalents, other bank balances, trade receivables, loans, other financial assets, short term borrowings, trade payables, and other financial liabilities approximates their carrying amounts largely due to the short-term maturities of these instruments. Company has adopted Effective Interest Rate Method (EIR) for fair valuation of long term borrowings.
z) Fair Value Hierarchy
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
Mar 31, 2017
-Basis of accounting and preparation of financial statements
These financial statements have been prepared to comply in all material aspects with applicable accounting principles in India, the applicable Accounting Standards prescribed under Section 133 of the Companies Act, 2013 (âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extent notified) and other counting principles generally accepted in India, to the extent applicable.
All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current/non-current classification of assets and liabilities.
1.2 General
The company follows the accrual method of accounting. The financial statements have been prepared in accordance with the historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known liabilities and losses.
1.3 Use of Estimates
The preparation of the financial statements in conformity with the generally accepted principles requires the management to make estimates and assumptions that affect the reported amount of assets, liabilities, revenues and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon managementâs evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from that estimates and assumptions used in preparing the accompanying financial statements. Any differences of actual results to such estimates are recognized in the period in which the results are known / materialized.
1.4 Cash Flow Statement :
As required by Accounting Standard-3 âCash Flow Statementâ issued by âThe Institute of Chartered Accountants of Indiaâ the Cash Flow for the period is reported using indirect method. The Cash and Cash Equivalent of the Company comprises of Cash in hand and Current account with Scheduled Banks.
1.5 Fixed Assets & Depreciation on Tangible Assets
All assets held with the intention of being used for the purpose of providing services and not for sale in the normal course of business are recognized as Fixed Assets and are stated at cost less accumulated depreciation after considering lease adjustment account. All costs including finance cost attributable to fixed assets till assets are ready for intended use are capitalized. Depreciation is provided on a pro-rata basis using written down value method using the estimated life as prescribed under Schedule II to the Companies Act, 2013 with the exception of the following:
i. assets costing Rs. 5,000 or less are fully depreciated in the year of purchase.
1.6 Intangible Assets & Amortisation
Intangibles assets are stated at cost less accumulated amortisation. These are being amortised over the estimated useful life, as determined by the management. Leasehold land is amortised over the primary period of the lease.
1.7 Inventories
The company has converted its investments into its stock-in-trade on the first date of the financial year. The inventories have been valued at the method prescribed in the Accounting Standards.
1.8 Revenue Recognition
Revenue is recognized to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized.
a) Income from arbitrage comprises profit / loss on sale of securities held as stock-in-trade and profit / loss on equity derivative instruments is accounted as per following:
i. Profit / loss on sale of securities are determined based on the FIFO cost of the securities sold.
ii. Profit / loss on FNO Segment and Commodity transactions is accounted for as explained below:
Initial and additional margin paid over and above initial margin for entering into contracts for Equity Index / Stock Futures / Commodity Spot T rading/ Currency Futures and or Equity Index / Stock Options / Currency Options, which are released on final settlement / squaring-up of underlying contracts, are disclosed under âOther current assetsâ. Mark-to-market margin-Equity Index / Stock Futures / Currency Futures representing the amounts paid in respect of mark to market margin is disclosed under âOther current assetsâ.
âEquity Index / Stock Option / Currency Option Premium Accountâ represents premium paid or received for buying or selling the Options, respectively.
On final settlement or squaring up of contracts for Equity Index / Stock Futures / Currency F uture, the realized profit or loss after adj usting the unrealized loss already accounted, if any, is recognized in the Statement of Profit and Loss. On settlement or squaring up of Equity Index / Stock Options / Currency Option, before expiry, the premium prevailing in âEquity Index / Stock Option / Currency Option Premium Accountâ on that date is recognized in the Statement of Profit and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealised Profit / (Loss) on all outstanding arbitrage portfolio comprising of Securities and Equity / Currency Derivatives positions is determined on scrip basis with net unrealized losses on scrip basis being recognized in the Statement of Profit and Loss and the net unrealized gains on scrip basis are ignored.
1.9 Other Income Recognition
Interest on Loan is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to receive the payment is established.
1.10 Purchases
Purchase is recognized on passing of ownership in share based on brokerâs purchase note.
1.11 Expenditure
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
1.12 Employees Benefit Gratuity
The liability for gratuity has not been provided as per the provisions of Payment of Gratuity Act, 1972 since no employee of the company is eligible for such benefits during the year. Provident Fund
The provisions of the Employees Provident Fund are not applicable to the company since the numbers of employees employed during the year were less than the minimum prescribed for the benefits.
Leave Salary
In respect of Leave Salary, the same is accounted as and when the liability arises in accordance with the provision of law governing the establishment.
1.13 Foreign Currency Transactions:
Foreign currency transactions are recorded in the books at exchange rates prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the period are recognized as income or expense in the statement of profit and loss of the same period.
Foreign currency assets and liabilities are translated at the period end rates and the resultant exchange differences, are recognized in the statement of profit and loss.
1.14 Investments
Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognise a decline, other than temporary, in the value of long-term investments. Investments are classified into current and long-term investments.
Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as non-current investments.
1.15 Cash & Cash Equivalents
The Company considers all highly liquid financial instruments, which are readily convertible into cash and have original maturities of three months or less from the date of purchase, to be cash equivalents.
1.16 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. An impairment loss is charged to Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there is a change in the estimated recoverable value.
1.17 Provisions, Contingent Liabilities & Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are disclosed when the company has possible obligation or a present obligation and it is probable that a cash flow will not be required to settle the obligation. Contingent Assets are neither recognised nor disclosed in the financial statements.
1.18 Borrowing Cost
Borrowing costs attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. All other borrowing costs are charged off to revenue.
1.19 Related Parties
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/ or operating decisions.
As required by AS-18 âRelated Party Disclosureâ only following related party relationships are covered:
i. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
ii. Associates and j oint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
iii. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
iv. Key management personnel (KMP) and relatives of such personnel; and
v. Enterprises over which any person described in (iii) or (iv) is able to exercise significant influence.
1.20 Earnings per Share
Earnings per share is calculated by dividing the profit/(loss) attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. The number used in calculating the basic and diluted earnings per share are stated below:
1.21 Stock In Trade
Shares are valued at cost or market value, whichever is lower. The comparison of Cost and Market value is done separately for each category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is lower. Net asset value of units declared by mutual funds is considered as market value for non-exchange traded Mutual Funds.
1.22 Taxes on Income
Provision for current Income T ax is made on the taxable income using the applicable tax rates and tax laws. Deferred tax assets or liabilities arising on account of timing differences between book and tax profits, which are capable of reversal in one or more subsequent years is recognized using tax rate and tax laws that have been enacted or subsequently enacted. Deferred tax asset in respect of unabsorbed depreciation and carry forward losses are not recognized unless there is sufficient assurance that there will be sufficient future taxable income available to realize such losses.
Mar 31, 2016
COMPANY INFORMATION AND REGISTERED OFFICE
The company is incorporated on 15th February 1993 at Calcutta, West
Bengal, India. It is a Public limited company by its shares. The
company is one of the RBI registered NBFC and the Company is into the
business of Finance and Investments. The activities of the company
includes financing, investing in shares & other securities, Commodities
and other related activities of capital market.
The Registered Office of the Company is situated at 8, Ganesh Chandra
Avenue, Saha Court, 1st Floor, Kolkata-700 013
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, the applicable
Accounting Standards prescribed under Section 133 of the Companies Act,
2013 (''Act'') read with Rule 7 of the Companies (Accounts) Rules, 2014,
the provisions of the Act (to the extent notified) and other counting
principles generally accepted in India, to the extent applicable.
All assets and liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between acquisition of assets
for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current/non-current classification of assets and
liabilities.
GENERAL
The company follows the accrual method of accounting. The financial
statements have been prepared in accordance with the historical cost
convention and in accordance with. Expenses are accounted on their
accrual with necessary provision for all known liabilities and losses.
USE OF ESTIMATES
The preparation of the financial statements in conformity with the
generally accepted principles requires the management to make estimates
and assumptions that affect the reported amount of assets, liabilities,
revenues and expenses and disclosure of contingent assets and
liabilities. The estimates and assumptions used in the accompanying
financial statements are based upon management''s evaluation of the
relevant facts and circumstances as of the date of the financial
statements. Actual results may differ from that estimates and
assumptions used in preparing the accompanying financial statements.
Any differences of actual results to such estimates are recognized in
the period in which the results are known / materialized.
CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The Institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand and Current account with
Scheduled Banks.
FIXED ASSETS & DEPRECIATION ON TANGIBLE ASSETS
All assets held with the intention of being used for the purpose of
providing services and not for sale in the normal course of business
are recognized as Fixed Assets and are stated at cost less accumulated
depreciation after considering lease adjustment account. All costs
including finance cost attributable to fixed assets till assets are
ready for intended use are capitalized.
Depreciation is provided on a pro-rata basis using written down value
method using the estimated life as prescribed under Schedule II to the
Companies Act, 2013 with the exception of the following:
ii. assets costing Rs. 5,000 or less are fully depreciated in the year
of purchase.
INTANGIBLE ASSETS & AMORTISATION
Intangibles assets are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life, as determined
by the management. Leasehold land is amortised over the primary period
of the lease.
INVENTORIES
The company has converted its investments into its stock-in-trade on
the first date of the financial year. The inventories have been valued
at the method prescribed in the Accounting Standards.
REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the Company and the revenue can be reliably
measured. The following specific recognition criteria must also be met
before revenue is recognized.
a) Income from arbitrage comprises profit / loss on sale of securities
held as stock-in-trade and profit / loss on equity derivative
instruments is accounted as per following: i. Profit / loss on sale of
securities are determined based on the FIFO cost of the securities
sold. ii. Profit / loss on FNO Segment and Commodity transactions is
accounted for as explained below:
Initial and additional margin paid over and above initial margin for
entering into contracts for Equity Index / Stock Futures / Commodity
Spot Trading/ Currency Futures and or Equity Index / Stock Options /
Currency Options, which are released on final settlement / squaring-up
of underlying contracts, are disclosed under "Other current assets".
Mark-to-market margin-Equity Index / Stock Futures / Currency Futures
representing the amounts paid in respect of mark to market margin is
disclosed under "Other current assets".
"Equity Index / Stock Option / Currency Option Premium Account"
represents premium paid or received for buying or selling the Options,
respectively.
On final settlement or squaring up of contracts for Equity Index /
Stock Futures / Currency Future, the realized profit or loss after
adjusting the unrealized loss already accounted, if any, is recognized
in the Statement of Profit and Loss. On settlement or squaring up of
Equity Index / Stock Options / Currency Option, before expiry, the
premium prevailing in "Equity Index / Stock Option / Currency Option
Premium Account" on that date is recognized in the Statement of Profit
and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealised Profit /
(Loss) on all outstanding arbitrage portfolio comprising of Securities
and Equity / Currency Derivatives positions is determined on scrip
basis with net unrealized losses on scrip basis being recognized in the
Statement of Profit and Loss and the net unrealized gains on scrip
basis are ignored.
OTHER INCOME RECOGNITION
Interest on Loan is booked on a time proportion basis taking into
account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to
receive the payment is established.
PURCHASES
Purchase is recognized on passing of ownership in share based on
broker''s purchase note.
EXPENDITURE
Expenses are accounted for on accrual basis and provision is made for
all known losses and liabilities.
EMPLOYEES BENEFIT
Gratuity
The liability for gratuity has not been provided as per the provisions
of Payment of Gratuity Act, 1972 since no employee of the company is
eligible for such benefits during the year.
Provident Fund
The provisions of the Employees Provident Fund are not applicable to
the company since the numbers of employees employed during the year
were less than the minimum prescribed for the benefits.
Leave Salary
In respect of Leave Salary, the same is accounted as and when the
liability arises in accordance with the provision of law governing the
establishment.
INVESTMENTS
Current investments are stated at the lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Investments are classified into current and
long-term investments.
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as non-current investments.
CASH & CASH EQUIVALENTS
The Company considers all highly liquid financial instruments, which
are readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalents.
IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to
Statement of Profit and Loss in the year in which an asset is
identified as impaired. The impairment loss recognized in prior
accounting period is reversed if there is a change in the estimated
recoverable value.
PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are disclosed when the company has possible
obligation or a present obligation and it is probable that a cash flow
will not be required to settle the obligation. Contingent Assets are
neither recognised nor disclosed in the financial statements.
BORROWING COST
Borrowing costs attributable to the acquisition or construction of
qualifying assets are capitalized as a part of such assets. All other
borrowing costs are charged off to revenue.
Mar 31, 2015
BASIS OF PREPARATION OF FINANCIAL STATEMENTS
These financial statements have been prepared to comply in all material
aspects with applicable accounting principles in India, the applicable
Accounting Standards prescribed under Section 133 of the Companies Act,
2013 ('Act') read with Rule 7 of the Companies (Accounts) Rules, 2014,
the provisions of the Act (to the extent notified) and other counting
principles generally accepted in India, to the extent applicable.
All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule III to the Companies Act, 2013. Based
on the nature of products and the time between acquisition of assets
for processing and their realisation in cash and cash equivalents, the
Company has ascertained its operating cycle as 12 months for the
purpose of current/non-current classification of assets and liabilities.
USE OF ESTIMATES
The preparation of the financial statements in conformity with the
generally accepted principles requires the management to make estimates
and assumptions that effect the reported amount of assets, liabilities,
revenues and expenses and disclosure of contingent assets and
liabilities. The estimates and assumptions used in the accompanying
financial statements are based upon management's evaluation of the
relevant facts and circumstances as of the date of the financial
statements. Actual results may differ from that estimates and
assumptions used in preparing the accompanying financial statements. Any
differences of actual results to such estimates are recognized in the
period in which the results are known / materialized.
CASH FLOW STATEMENT
Cash flow statement has been prepared in accordance with the "indirect
method" as explained in the AS-3 issued by the Institute of Chartered
Accountants of India.
FIXED ASSETS & DEPRECIATION ON TANGIBLE ASSETS
Tangible assets are stated at acquisition cost, net of accumulated
depreciation and accumulated impairment losses, if any. Subsequent
expenditures related to an item of tangible asset are added to its book
value only if they increase the future benefits from the existing asset
beyond its previously assessed standard of performance.
Items of fixed assets that have been retired from active use and are
held for disposal are stated at the lower of their book value and net
realisable value and are shown separately in the financial statements
under Other Current Assets. Losses arising from the retirement of, and
gains or losses arising from disposal of fixed assets which are carried
at cost are recognised in the profit and loss account.
Depreciation is provided on a pro-rata basis using written down method
using the estimated life as prescribed under Schedule II to the
Companies Act, 2013 with the exception of the following: i. assets
costing Rs. 5,000 or less are fully depreciated in the year of
purchase.
INTANGIBLE ASSETS & AMORTISATION
Intangibles assets are stated at cost less accumulated amortisation.
These are being amortised over the estimated useful life, as determined
by the management. Leasehold land is amortised over the primary period
of the lease.
REVENUE RECOGNITION
Revenue is recognized to the extent it is probable that the economic
benefits will flow to the Company and the revenue can be reliably
measured. The following specific recognition criteria must also be met
before revenue is recognized.
a) Income from arbitrage comprises profit / loss on sale of securities
held as stock-in-trade and profit / loss on equity derivative
instruments is accounted as per following:
i. Profit / loss on sale of securities are determined based on the FIFO
cost of the securities sold.
ii. Profit / loss on FNO Segment and Commodity transactions is
accounted for as explained below:
Initial and additional margin paid over and above initial margin for
entering into contracts for Equity Index / Stock Futures / Commodity
Spot Trading/ Currency Futures and or Equity Index / Stock Options /
Currency Options, which are released on final settlement / squaring-up
of underlying contracts, are disclosed under "Other current assets".
Mark-to-market margin-Equity Index / Stock Futures / Currency Futures
representing the amounts paid in respect of mark to market margin is
disclosed under "Other current assets".
"Equity Index / Stock Option / Currency Option Premium Account"
represents premium paid or received for buying or selling the Options,
respectively.
On final settlement or squaring up of contracts for Equity Index / Stock
Futures / Currency Future, the realized profit or loss after adjusting
the unrealized loss already accounted, if any, is recognized in the
Statement of Profit and Loss. On settlement or squaring up of Equity
Index / Stock Options / Currency Option, before expiry, the premium
prevailing in "Equity Index / Stock Option / Currency Option Premium
Account" on that date is recognized in the Statement of Profit and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealised Profit /
(Loss) on all outstanding arbitrage portfolio comprising of Securities
and Equity / Currency Derivatives positions is determined on scrip
basis with net unrealized losses on scrip basis being recognized in the
Statement of Profit and Loss and the net unrealized gains on scrip basis
are ignored.
OTHER INCOME RECOGNITION
Interest on Loan and Investments is booked on a time proportion basis
taking into account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to
receive the payment is established.
PURCHASES
Purchase is recognized on passing of ownership in share based on
broker's purchase note.
EXPENDITURE
Expenses are accounted for on accrual basis and provision is made for
all known losses and liabilities.
INVESTMENTS
Current investments are stated at the lower of cost and fair value.
Long-term investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of
long-term investments. Investments are classified into current and
long-term investments.
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as non-current investments.
CASH & CASH EQUIVALENTS
The Company considers all highly liquid financial instruments, which are
readily convertible into cash and have original maturities of three
months or less from the date of purchase, to be cash equivalents.
IMPAIRMENT OF ASSETS
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. An impairment loss is charged to
Statement of Profit and Loss in the year in which an asset is identified
as impaired. The impairment loss recognized in prior accounting period
is reversed if there is a change in the estimated recoverable value.
TAXES ON INCOME
Provision for current Income Tax is made on the taxable income using
the applicable tax rates and tax laws. Deferred tax assets or
liabilities arising on account of timing differences between book and
tax profits, which are capable of reversal in one or more subsequent
years is recognized using tax rate and tax laws that have been enacted
or subsequently enacted. Deferred tax asset in respect of unabsorbed
depreciation and carry forward losses are not recognized unless there
is sufficient assurance that there will be sufficient future taxable
income available to realize such losses.
EARNINGS PER SHARE
Basic earning per share is calculated by dividing the net profit for the
period attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
The weighted average number of equity shares outstanding during the
period and for all periods presented is adjusted for events, such as
bonus shares, other than the conversion of potential equity shares that
have changed the number of equity shares outstanding, without a
corresponding change in resources. For the purpose of calculating
diluted earnings per share, the net profit for the period attributable
to equity shareholders and the weighted average number of shares
outstanding during the period is adjusted for the effects of all
dilutive potential equity shares.
STOCK IN TRADE
Shares are valued at cost or market value, whichever is lower. The
comparison of Cost and Market value is done separately for each
category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is
lower. Net asset value of units declared by mutual funds is considered
as market value for non-exchange traded Mutual Funds.
CONTINGENT LIABILITIES & PROVISIONS
A provision is recognised when there is a present obligation as a
result of a past event, it is probable that an outflow of resources will
be required to settle the obligation and in respect of which reliable
estimate can be made. Provision is not discounted to its present value
and is determined based on the best estimate required to settle the
obligation at the yearend date.
These are reviewed at each year end date and adjusted to reflect the
best current estimate.
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will be
confirmed only by the occurrence or non occurrence of one or more
uncertain future events not wholly within the control of the Company or
a present obligation that arises from past events where it is either
not probable that an outflow of resources will be required to settle or
a reliable estimate of the amount cannot be made.
OTHER NOTES & ADDITIONAL INFORMATION FORMING PART OF FINANCIAL
STATEMENTS
In the opinion of the management, current assets, loans and advances
and other receivables have realizable value of at least the amounts at
which they are stated in the accounts.
Mar 31, 2014
A. BASIS OF PREPARATION
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) in compliance with the Accounting Standards notified
under the Companies (Accounting Standards) Rules, 2006 (as amended) and
the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention. Futher in view of the revised schedule VI of the
Companies Act, the company has also reclassified the previous year
figures in accordance with the requirements applicable for the current
year
b. GENERAL
The company follows the accrual method of accounting. The financial
statements have been prepared in accordance with the historical cost
convention and in accordance with. Expenses are accounted on their
accrual with necessary provision for all known liabilities and losses.
c. USE OF ESTIMATES
The preparation of financial statements requires estimates and
assumptions to be made that affect the required amount of assets and
liabilities on the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period.
Difference between the actual amounts and the estimates are recognised
in the period in which the results are known/materialised.
d. FIXED ASSETS
Fixed assets are stated at cost including taxes, duties, freight,
insurance etc. related to acquisition and installation.
e. DEPRECIATION
Depreciation is provided on Written Down Value basis as per the
Schedule of the Income Tax Act, 1961. For additions and deletions,
depreciation is provided considering the days the asset has been put to
use. Assets put to use after 30th Septmeber has been charged at half
rate.
f. INVENTORIES
Inventories were valued at lower of Cost or NRV
g. REVENUE RECOGNITION
Revenue is recognized and expenditure is accounted for on their
accrual.
h. PROVISIONS, CONTINGENT LIABILITIES & CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are disclosed when the company has possible
obligation or a present obligation and it is probable that a cash flow
will not be required to settle the obligation. Contingent Assets are
neither recognised nor disclosed in the financial statements.
i. INVESTMENTS
Investments that are readily realizable and intended to be held for not
more than one year, are classified as current investments. All other
investments are classified as long-term investments.
Current Investments are stated at lower of cost or market rate on
individual investment basis. Long Term Investments are considered "at
cost", unless there is other than temporary decline in value thereof,
in which case, adequate provision is made against such diminution in
the value of investments.
j. EMPLOYEE BENEFITS
i. Gratuity:
The liability for gratuity has not been provided as per the provisions
of Payment of Gratuity Act, 1972 since no employee of the company is
eligible for such benefits during the year.
ii. Provident Fund:
The provisions of the Employees Provident Fund are not applicable to
the company since the number of employees employed during the year were
less than the minimum prescribed for the benefits.
iii. Leave Salary:
In respect of Leave Salary, the same is accounted as and when the
liability arises in accordance with the provision of law governing the
establishment.
k. TAXATION
Taxes on Income are accrued in the same period as the revenue and the
expenses to which they relate. Deferred tax assets are recognized to
the extent there is a virtual certainty of its realization. l.
IMPAIRMENT OF ASSETS
As at Balance Sheet Date, the carrying amount of assets is tested for
impairment so as to determine:
"a. Provision for Impairment Loss, if any, required orb. The reversal,
if any, required of impairment loss recognized in previous periods."
Impairment Loss is recognized when the carrying amount of an asset
exceeds its recoverable amount.
m. BORROWING COST
Borrowing cost attributable to the acquisition or construction of
qualifying assets are capitalized as a part of such assets. All other
borrowing costs are charged off to revenue.
A qualifying asset is an asset that necessarily requires a substantial
period of time to get ready for its intended use or sale.
n. DEFERRED REVENUE EXPENDITURE
Miscelleanous Expenditure are written off uniformly over a period of 5
years.
o. INCOME TAX
Current Tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognized, subject to
the prudence, of timing differences, being the difference between
taxable incomes and accounting income that originate in one period and
are capable of reversal in one or more periods.
Mar 31, 2013
1.1 Basis of Preparation of Financial Statements
Financial Statements have been prepared under the historical cost
convention and in accordance with the provisions of Companies Act,
1956. Accounting Policies not referred to otherwise are consistent and
are in accordance with the generally accepted accounting Principles in
India.
1.2 Use of Estimates
The preparation of Financial Statements are in confirmity with
generally accepted accounting principles requires estimates and
assumptions to be made to that effect the reported amount of Assets and
Liabilities on the date of financial statements and the reported amount
of revenue and expenses during the reporting period. Difference between
the actual results and estimates are recognized in the period in which
the results are known/materialized.
1.3 Fixed Assets
The Company is not having any Fixed Assets during the year under
review.
1.4 Depreciation
Since the Company is not having any Fixed Assets, Provision of
Depreciation is not applicable to the Company.
1.5 Investments
Investments which are readily realisable and intended to be held for
less than one year are classified as Current Investments. All 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. Provision for diminution in the value of long tem investments is
made only if such a decline is other than temporary in nature in the
opinion of the management.
1.6 Inventories
Stock-in-trade has been valued at cost or market price whichever is
lower.
1.7 Taxes on Income
Provision for Taxation is made on the basis of estimated taxable income
for the period at current rates. Tax expenses comprises of both Current
Tax and Deferred Tax at the applicable enacted or substantively enacted
rates. Current Tax represents the amount of Income Tax payable
/recoverable in respect of taxable income/loss for the reporting
period. Deferred Tax represents the effect of timing difference between
taxable income and accounting income for the reporting period that
originates in one year and are capable of reversal in one or more
subsequent years.
1.8 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outfolow of resources.
Contingent Liabilities are not recognized but are disclosed in the
Notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
1.9 Revenue Recognition
Items of Income and Expenditure are recognized and accounted for on
Accrual basis.
1.10 Contingent Liability, if any, are disclosed by way of Notes.
Mar 31, 2012
A) Convention : The accounts has been prepared on the accrual basis
under historical cost convention in accordance with the applicable
accounting standards and relevant disclosure requirements of the
Companies Act, 1956.
b) Revenue Recognition : Income and expenditure are recognized and
accounted on accrual basis, except in case of significant
uncertainties.
c) Current Investments are valued at lower of cost of fair market
value. Long Term investments are stated at cost less permanent
diminution, if any, in value.
d) Share Issue Expenses : Share Issue Expenses have been amortised over
a period of ten years.
Mar 31, 2010
A) The financial statements have been prepared under the historical
cost convention, in accordance with generally accepted principles,
following accounting standards and other provisions of the Companies
Act and going concern concept.
b) Generally- Mercantile System of accounting is followed except
dividend, unascertained items, filing fees.
c) Items of Income & Expenditure are recognized on accrual basis
generally.
d) Depreciation on fixed assets i.e. ,on Capital Work In Progress has
not been charged as the same is not completed and as per the
managements perception the value is not diminished
e) There is no investment during the year.
f) Stock in trade are valued at cost, hence no provision for erosion
has been taken into account though there is substantial difference
between cost & market value of shares.
g) Provision for Gratuity has not been made in the accounts, as there
is no such liability.
h) Provision for Income Tax has been made as per provision of the
Income Tax Act and Mile made there under.
i) Contingent liabilities are not provided for-Rs. Nil
ii) Segmental Reporting
The Companys major business trading in Shares & Securities and all the
other activities of the Company revolve around the main business and as
such there is no separate reportable segments as per the Accounting
Standards (AS-17) as "Segment Reporting" issued by the Institute of
Chartered Accountants of India.
iii) Related Party Disclosures
Disclosures as required by the Accounting Standard 18 "Related Party
Disclosures" issued by the Institute of Chartered Accountants of India,
Mar 31, 2009
A) The financial statements have been. prepared under the historical
cost convention, in accordance with generally accepted principles,
following accounting stadards and other provisions of the Companies Act
and going concern concept.
b) Generally Mercantile System of accounting is followed except
dividend, unascertained items, filing fees.
c) Items of Income & Expenditure are recognized on accrual basis
generally,
d) Depreciation on fixed assets i.e. ,on Capital Work In Progress has
not been charged as the same is not completed and as per the
managements perception the value is, not diminished.
e) There is no investment during the year.
f) Stock in trade are valued at cost, hence no provision for erosion
has been taken into account though there is substantial difference
between cost & market value of shares.
g) Provision for Gratuity has not been made in the accounts, as there
is no such liability.
h) Provision for Income Tax and Provision for FBT have been made us per
provision of the Income Tax Act and rule made there under.
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