1.1 Basis of preparation
The financial statements are prepared under the historical cost
convention on an accrual basis of accounting in accordance with the
generally accepted accounting principles, Accounting Standards notified
under Section 211(3C) of the Companies Act, 1956 and the relevant
provisions thereof along with the applicable guidelines issued by
Reserve Bank of India (RBI).
1.2 Use of estimates
The preparation of financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities, the disclosure of contingent liabilities on the date
of the financial statements and the reported amounts of revenues and
expenses during trie period reported. Actual results could differ from
those estimates. Any revision to accounting estimates is recognised in
accordance with the requirements of the respective accounting standard.
1.3 Revenue Recognition
(a) 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
b) Other Income is recognized to the extent that it is probable that
the economic benefits will flow to the Company and the revenue can be
c) Dividend is accounted when the right to receipt is established.
1.4 Fixed Assets & Depreciation
The Company does not have any Fixed Asset as on 31st March 2013.
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. Current
investments are carried at lower of cost and market value whichever is
All other investments are classified as non current Investments. Non
Current Investments are carried at cost, less provision for diminution
in value other than temporary.
Tax expense comprises of current and deferred. Current income tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act 1961.
1.7 Earnings per Share
The Company reports basic and diluted earnings per share in accordance
with AS-20 Earnings per Share. Basic earnings per share are computed
by dividing the net profit or loss for the period by the weighted
average number of Equity Shares outstanding during the period. Diluted
earnings per share is computed by dividing the net profit or loss for
the period by the weighted average number of Equity Shares outstanding
during the period as adjusted for the effects of all dilutive potential
A provision is recognized when an enterprise has a present obligation
as a result of past event it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current best
1.9 Contingent Liabilities
Contingent Liabilities, if any, are disclosed in the Notes on Accounts.
Provision is made in the accounts in respect of those contingencies
which are likely to materialize into liabilities after the year end
till the approval of the accounts by the Board of Directors and which
have material effect on the position stated in the Balance Sheet.
Advances are classified under four categories i.e. (i) Standard Assets,
(ii) Sub-standard Assets, (iii) Doubtful Assets and (iv) Loss Assets in
accordance with the RBI Guidelines.
Provision on restructured advances is made at in accordance with the
guidelines issued by the RBI. Provision on Standard Assets is made as
per the provisioning policy of the Company subject to minimum as
stipulated in RBI Guidelines or where additional specific risks are
identified by the management, based on such identification.
1.11 Cash Flow Statement
The Cash Flow Statement is prepared in accordance with indirect method
as explained in the Accounting Standard on Cassh Flow Statement (AS) 3
issued by the ICAI.
1.12 Cash and Cash Equivalents
Cash and Bank Balances that have insignificant risk of change in value
including term deposits, which have original durations up to three
months, are included in cash and cash equivalents in the Cash Flow
1.13 Share Issue Expenses
Share issue expense is charged to the statement of Profit & Loss in the
year in which it is incurred.