i. Change in Accounting Policy
Presentation and disclosure of financial statements
During the year ended 31st March 2012, the revised schedule VI notified
under the Companies Act, 1956, has become applicable to the company,
for preparation and presentation of its financial statements. The
adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of Financial
Statements. However, it has significant impact on the presentation and
disclosures made in the financial statements. The company has also
reclassified the previous figures in accordance with the requirements
applicable in the current year.
ii. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
iii. Revenue Recognition
Dividend income is recognized when the shareholders'' right to receive
payment is established by the balance sheet date. Dividend received
from Overseas Companies is accounted for, net of tax deducted at
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
c. Profit on Sale I Redemption of Mutual Fund Units
Profit on Sale / Redemption of Mutual Fund units are accounted for net
of security transaction tax and exit load.
iv. Provisioning on Standard Assets
In terms of Notification No. DNBS.223/CGM(US)-2011 dated 17th January
2011 issued by The Reserve Bank of India, contingent provision @ 0.25%
standard assets are made in the accounts.
v. Provision I Write - Off against Non-Performing Assets
Provision / Write Off against Non Performing Assets are made as per the
guidelines prescribed by Reserve Bank of India for Non-Deposit taking
Finance Companies (NBFC-ND).
vi. Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
Depreciation on Fixed Assets is provided on reducing balance method at
the rates specified in Schedule XIV of the Companies Act, 1956.
Depreciation on fixed assets added / disposed off during the year is
provided on pro-rata basis with reference to the date of
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset''s net selling price 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 risks
specific to the asset.
a) Investments that are readily realizable and intended to be held for
not more than a 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.
b) Long-term investments are valued at cost, i.e. book value of the
investments as reflected in the financial statements as on 31s1 March,
2003 and for subsequent diminution, provision is made by way of
adjustment against Investment Reserve (Created in earlier years by
revaluation of quoted investments) in terms of scheme of Arrangement
sanctioned by the Hon''ble Calcutta High Court during an earlier year.
Provision for diminution in value is made to recognize a decline other
than temporary in the value of the investments.
c) Shares held in Overseas Companies are valued at the exchange rates
prevailing on the date of payment(s).
x. Cash & Cash Equivalents
Cash and cash equivalents in the balance sheet comprise cash at bank
and in hand and short- term investments with an original maturity of
three months or less.
xi. Provision for Retirement benefits
a) Retirement benefits in the form of Provident Fund and Superannuation
are defined contribution schemes and the contributions are charged to
Profit and Loss of the year when the contributions to the respective
funds are due. There are no obligations other than the contribution
payable to the respective funds.
b) Gratuity liability is a defined benefit obligation and is provided
for on the basis of an actuarial valuation on projected unit credit
method made at the end of each financial year.
c) Long term compensated absences are provided for based on actuarial
valuation done under projected unit credit method, made at the end of
each financial year.
d) Actuarial gains/losses are immediately taken to statement of profit
and loss and are not deferred.
xii. Earnings per share
Basic earnings per share is calculated by dividing the net Profit or
Loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year attributable to equity shareholders and the
weighted average number of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares.
xiii. Income Taxes
Tax expense comprises of current and deferred tax. 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. Deferred income taxes
reflect the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
The deferred tax for timing differences between the book and tax
profits for the year is accounted for using the tax rates and laws that
have been substantially enacted as of the Balance Sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. If the company
has carry forward unabsorbed depreciation and tax losses, deferred tax
assets are recognized only to the extent there is virtual certainty
supported by convincing evidence that sufficient taxable income will be
available against which such deferred tax asset can be realized.
At each balance sheet date the Company re-assesses unrecognized
deferred tax assets. It recognizes unrecognized deferred tax assets to
the extent it has become reasonably certain or virtual certain, as the
case may be that sufficient future taxable income will be available
against which such deferred tax asset can be realized.
The carrying amount of deferred tax assets is reviewed at each balance
sheet date. The company writes-down the carrying amount of deferred tax
asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available,
xiv. Foreign Currency Transactions
a) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined. Shares held in Overseas Companies are
valued at the exchange rates prevailing on the date of payment(s).
c) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items are recognized as income or expenses in the year in which they
d) Foreign Exchange Contracts not intended for trading or speculation
purpose The premium or discount arising at the inception of forward
exchange contracts is amortized as expenses or income over the life of
the respective contracts. Exchange differences on such contracts are
recognized in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognized as income or expense
for the year.
xv. Assets acquired under lease Operating lease:
Where the Company is lessee
Leases, where the less or effectively retains substantially all the
risks and benefits of ownership of the leased item, are classified as
operating lease. Operating lease payments are recognized as an expense
in the statement of profit and loss on a straight-line basis over the
lease term. Where the Company is the less or
Leases in which the Company does not transfer substantially all the
rsiks and benefits of ownership of the asset are classified as
operating leases. Assets subject to operating leases are included in
fixed assets. Lease income on an operating lease is recognized in the
statement of profit and loss on a straight-line basis over the lease
term. Costs, including depreciation, are recognized as an expense in
the statement of profit and loss. Initial direct costs such as legal
costs, brokerage costs etc. are recognized immediately in the statement
of profit and loss.
xvi. Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not provable that an outflow of resources will be
required to settle the obligation. Contingent liability also arises in
extremely rare cases where there is a liability that cannot be
recognized because it is not measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
A provision is recognized when an enterprise has a present obligation
as a result of past event and 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