Accounting Policies of Rajkot Investment Trust Ltd. Company

Mar 31, 2024

3 SIGNIFICANT ACCOUNTING POLICIES
1 INCOME

1 Interest Income

a) Interest Income from loan transactions is accounted for by applying the interest rate implicit in
such contracts.

b) Service charges, documentation charges and other fees on loan transactions are recognized at the
commencement of the contract.

c) Delayed payment charges, fee-based income and interest on trade advances, are recognized when
they become measurable and when it is not unreasonable to expect their ultimate collection.

d) Income on business assets classified as Non-performing Assets, is recognized strictly in accordance
with the guidelines issued by The Reserve Bank of India for Non Banking Financial Companies.
Unrealized Interest recognized as income in the previous period is reversed in the month in which the
asset is classified as Non-Performing.

ii Dividend Income

Dividend income on equity shares is recognized when the Company''s right to receive dividend is
established.

X v

iii Rental Income

Rental is recognized on straight-line basis over the lease term, except for increase in line with expected
inflatory cost increase.

i_v Fees and Commission

The Company recognizes service and administration charges towards rendering of additional services
to its customers on satisfactory completion of service delivery.

_v Taxes

Income are recognized net of Goods and Services Tax, wherever applicable

2 EXPENDITURES
i. Finance Cost

Borrowing cost on financial liabilities are accounted for by applying the interest rate implicit in such
contracts.

ii Taxes

Expenses are recognized net of Goods and Services Tax, except where credit for the input tax is not
statutorily permitted

3 CASH AND CASH EQUIVALENTS

Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short-term
deposits with an original maturity of three months or less, which are subject to an insignificant risk of
changes in value.

For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short¬
term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integral
part of the Company''s cash management.

₄ FINANCIAL INSTRUMENTS
Initial recognition

The Company recognizes financial assets and financial liabilities when it becomes a party to the
contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value
on initial recognition, except for trade receivables which are initially measured at transaction price.
Transaction costs that are directly attributable to the acquisition or issue of financial assets and
financial liabilities that are not at fair value through Statement of Profit and Loss are added to the fair
value on initial recognition. Regular way purchase and sale of financial assets are accounted for at
trade date.

Subsequent measurement
Non-derivative financial instruments
Financial assets carried at amortized cost

A financial asset is subsequently measured at amortized cost if it is held within a business model
whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms
of the financial asset give rise on specified dates to cash flows that are solely payments of principal
and interest on the principal amount outstanding.

Financial assets at fair value through other comprehensive income

A financial asset is subsequently measured at fair value through other comprehensive income if it is
held within a business model whose objective is achieved by both collecting contractual cash flows
and selling financial assets and the contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Further, in cases where the Company has made an irrevocable election based on its business model,
for its investments which are classified as equity instruments, the subsequent changes in fair value
are recognized in other comprehensive income.

Financial assets at fair value through profit and loss (FVPL)

A financial asset which is not classified in any of the above categories are subsequently fair valued
through Statement of Profit and Loss.

Financial liabilities

For trade and other payables maturing within one year from the Balance Sheet date, the carrying
amounts approximate the fair value due to the short maturity of these instruments.

5 INVESTMENT IN SUBSIDIARIES

Investments in subsidiaries are carried at cost in the financial statements. Company does not have any
subsidiary company.

6 TAXES

i Income Taxes

Income tax expense represents the sum of the tax currently payable and deferred tax.

a. Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid
to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are
enacted or substantively enacted, at the reporting date. Current tax relating to items recognized
outside Profit and Loss is recognized outside Statement of Profit and Loss (either in other
comprehensive income or in equity). Current tax items are recognized in correlation to the underlying
transaction either in OCI or directly in equity.

b. Deferred tax

Deferred tax is recognized on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements. However, deferred tax liabilities are
not recognized if they arise from the initial recognition of goodwill.

Deferred tax is also not accounted for if it arises from initial recognition of an asset or liability in a
transaction other than a business combination that at the time of the transaction affects neither
accounting profit nor taxable profit (tax loss).

Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted
by the end of the reporting period and are expected to apply when the related deferred tax asset is
realized or the deferred tax liability is settled.

Deferred tax assets are recognized for all deductible temporary differences and unused tax losses only
if it is probable that future taxable amounts will be available to utilize those temporary differences
and losses.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset when
the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities
are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously.

Current tax and deferred tax is recognized in Statement of Profit and Loss, except to the extent that it
relates to items recognized in other comprehensive income or directly in equity. In this case, the tax
is also recognized in other comprehensive income or directly in equity, respectively.

c. Minimum Alternate Tax (MAT)

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic
benefits in the form of adjustment to future income tax liability, is considered as an asset if there is
convincing evidence that the entity will pay normal income tax. Accordingly, MAT is recognized as an
asset under Deferred tax asset/ liability in the Balance Sheet when it is highly probable that future
economic benefit associated with it will flow to the entity.

ii Goods and Service Tax

Goods and Service Tax input credit is accounted for in the books of accounts in the period in which
the splly of goods or services received is accounted and when there is no uncertainty in
availing/utilizing the credits.

7 PROPERTY, PLANT AND EQUIPMENTS

i Property, Plants and Equipment''s are carried at historical cost of acquisition less accumulated
depreciation and impairment losses, consistent with the criteria specified in Ind AS Property, Plant
and Equipment''s.

ii Depreciation method, estimated useful lives and residual values

Depreciable amount for assets is the cost of an asset, or other amount substituted for cost, less its
estimated residual value. Depreciation on property, plant and equipment''s is provided using straight
line method over the useful lives of assets estimated by the Management. The Management estimates
the useful lives for the fixed assets as follows:
* For these class of assets, based on internal assessment and independent technical evaluation carried
out by external valuers, taking into account the nature of the asset, the estimated usage of the asset,
the operating conditions of the asset, past history of replacement, the Management believes that the
useful lives as given above best represent the period over which the Management expects to use these
assets. Hence the useful lives for these assets is different from the useful lives as prescribed under
Part C of Schedule II to the Companies Act, 2013.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount.

These are included in Statement of Profit and Loss.

In respect of leasehold building, depreciation has been provided over lower of useful lives or leasable

p^eriod.

8 INVESTMENT PROPERTY

Investment properties are properties held to earn rentals (including property under construction for
such purposes). Investment properties are measured initially at cost, including transaction costs.
Subsequent to initial recognition, investment properties are measured in accordance with Ind AS 16''s
requirements for cost model.

Investment properties are depreciated using written-down value method over the useful lives.
Investment properties generally have a useful life of 58-60 years. The useful life has been determined
based on internal assessment and independent technical evaluation carried out by external valuer,
taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of
the asset, past history of replacement.

For transition to Ind AS, the Company has elected to continue with the carrying value of its investment
property recognized as of April 1, 2016 (transition date) measured as per the previous GAAP and use
that carrying value as its deemed cost as of the transition date.

An investment property is derecognized upon disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from the disposal. Any
gain or loss arising on derecognition of the property (calculated as the difference between the net
disposal proceeds and the carrying amount of the asset) is included in Statement of Profit and Loss in
the period in which the property is derecognized.

9 IMPAIRMENT OF TANGIBLE ASSETS

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). When it is not possible to estimate the
recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash
generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest group of cash-generating units for which a reasonable and consistent
allocation basis can be identified.

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 pre-tax 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 the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized immediately in Statement of Profit and Loss.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating
unit) 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
been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss
is recognized immediately in Statement of Profit and Loss.

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Mar 31, 2013

1 ACCOUNTING POLICIES :

The accounts are prepared in accordance with Accounting Policies and principles generally accepted in India. The Company follow accrual method of Accounting as per the Companies Act, 1956 and complies with the Reserve Bank of India guidelines for Non Banking Financial Companies not holding Public Deposits.

The Company has followed all the prudential norms , to the extent applicable, as prescribed by Reserve Bank of India for Non Banking Financial Companies not Holding Public Deposits.

(a) Fixed Assets:

All fixed assets are stated at cost less depreciation.

(b) Depreciation:

Depreciation is provided under the straight line method at rates provided by Schedule - XIV to the Companies Act, 1956

(c) Inventory:

Stock-in-trade (Shares, Debentures and Bonds) are valued as under :

(1) Quoted Scrips - at lower of market value or cost (FIFO)

(2) Unquoted Scrips - at cost (FIFO)

(d) Recognition of Income & Expenditure :

(i) As in the past, on the prudent basis, Dividend and interest on Shares/Debentures are being accounted for as and when received.

(ii) There are few expenditure (like Insurance, Subscription, which though warranting provision for accounting on accrual basis have not been so provided as the impact of non-provision is not material on the profit/ loss of the year.

(e) Investment:

(i) All Investments are intended to be kept as long term investments as per the guidelines by Reserve Bank of India.

(ii) Investments are stated at cost. The Market Value of Quoted Investments as at 31-3-2013 is Rs.6366024/ - as against Cost of Rs.4098077/-.

(iii) Cost of those shares which are received by the company consequent upon part/full redemption of debentures/bonds as taken at the nominal amount of the redeemed portion of debentures/bonds and the premium if any charged by the issuing company.

(iv) Bonus Shares received on Trading Stocks are considered as Capital Receipt and are treated as Investment.

(f) Taxation

Current Tax

Provision is made for Income-tax on yearly basis, under the tax payable method, based on tax liability, as computed after taking credit for allowances and exemptions.

Deferred Tax

Deferred tax liability or assets is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient taxable income will be available to realize these assets.

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Mar 31, 2012

1 ACCOUNTING POLICIES :

The accounts are prepared in accordance with Accounting Policies and principles generally accepted in India. The Company follow accrual method of Accounting as per the Companies Act, 1956 and complies with the Reserve Bank of India guidelines for Non Banking Financial Companies not holding Public Deposits.

The Company has followed all the prudential norms , to the extent applicable, as prescribed by Reserve Bank of India for Non Banking Financial Companies not Holding Public Deposits.

(a) Fixed Assets:

All fixed assets are stated at cost less depreciation.

(b) Depreciation:

Depreciation is provided under the straight line method at rates provided by Schedule - XIV to the Companies Act, 1956

(c) Inventory:

Stock-in-trade (Shares, Debentures and Bonds) are valued as under :

(1) Quoted Scrips - at lower of market value or cost (FIFO)

(2) Unquoted Scrips - at cost (FIFO)

(d) Recognition of Income & Expenditure :

(i) As in the past, on the prudent basis, Dividend and interest on Shares/Debentures are being accounted for as and when received.

(ii) There are few expenditure (like Insurance, Subscription, which though warranting provision for accounting on accrual basis have not been so provided as the impact of non-provision is not material on the profit/ loss of the year.

(e) Investment:

(i) All Investments are intended to be kept as long term investments as per the guidelines by Reserve Bank of India.

(ii) Investments are stated at cost. The Market Value of Quoted Investments as at 31-3-2012 is Rs.8400972/- as against Cost of Rs.430350/-.

(iii) Cost of those shares which are received by the company consequent upon part/full redemption of debentures/bonds as taken at the nominal amount of the redeemed portion of debentures/bonds and the premium if any charged by the issuing company.

(iv) Bonus Shares received on Trading Stocks are considered as Capital Receipt and are treated as Investment.

(f) Taxation

Current Tax

Provision is made for Income-tax on yearly basis, under the tax payable method, based on tax liability, as computed after taking credit for allowances and exemptions.

Deferred Tax

Deferred tax liability or assets is recognized on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only to the extent that there is virtual certainty that sufficient taxable income will be available to realize these assets. All other deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient taxable income will be available to realize these assets.

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Mar 31, 2011

1 ACCOUNTING POLICIES :

The accounts are prepared in accordance with Accounting Policies and principles generally accepted in India. The Company follow accrual method of Accounting as per the Companies Act, 1956 and complies with the Reserve Bank of India guidelines for Non Banking Financial Companies not holding Public Deposits.

The Company has followed all the prudential norms , to the extent applicable, as prescribed by Reserve Bank of India for Non Banking Financial Companies not Holding Public Deposits.

(a) Fixed Assets:

All fixed assets are stated at cost less depreciation.

(b) Depreciation:

Depreciation is provided under the straight line method at rates provided by Schedule - XIV to the Companies Act, 1956

(c) Inventory:

Stock-in-trade (Shares, Debentures and Bonds) are valued as under :

(1) Quoted Scrips - at lower of market value or cost (FIFO)

(2) Unquoted Scrips - at cost (FIFO)

(d) Recognition of Income & Expenditure :

(i) As in the past, on the prudent basis, Dividend and interest on Shares/Debentures are being accounted for as and when received.

(ii) There are few expenditure (like Insurance, Subscription, which though warranting provision for accounting on accrual basis have not been so provided as the impact of non-provision is not material on the profit/ loss of the year.

(e) Investment:

(i) All Investments are intended to be kept as long term investments as per the guidelines by Reserve Bank of India.

(ii) Investments are stated at cost. The Market Value of Quoted Investments as at 31-3-2013 is Rs.6366024/ - as against Cost of Rs.4098077/-.

(iii) Cost of those shares which are received by the company consequent upon part/full redemption of debentures/bonds as taken at the nominal amount of the redeemed portion of debentures/bonds and the premium if any charged by the issuing company.

(iv) Bonus Shares received on Trading Stocks are considered as Capital Receipt and are treated as Investment.

(f) Taxation

Current Tax

Provision is made for Income-tax on yearly basis, under the tax payable method, based on tax liability, as computed after taking credit for allowances and exemptions.

Deferred Tax

Deferred tax liability or assets is recognised on timing differences being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date.

Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only to the extent that there is virtual certainty that sufficient taxable income will be available to realise these assets. All other deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient taxable income will be available to realise these assets.