1.1 Basis of accounting and preparation of financial statements:
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards notified under
the Companies (Accounting Standards) Rules, 2006 (as amended) and the
relevant provisions of the Companies Act, 1956. Accordingly, the
Company has complied with the Accounting Standards as applicable to it
.The financial statements have been prepared on accrual basis under the
historical cost convention. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
1.2 Use of estimates:
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
1.3 Fixed Assets (i) Tangible Assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes other
incidental expenses incurred up to the date the asset is ready for its
intended use.. Subsequent expenditure relating to fixed assets is
capitalized only if such expenditure results in an increase in the
future benefits from such asset beyond its previously assessed standard
1.4 Depreciation and amortization: (i) Tangible Assets
Depreciation has been provided on the Straight-Line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 and
wherever applicable on pro rata basis.
1.5 Revenue Recognition: Operating Income: Interest income
Interest income is accounted on accrual basis.
Dividend Income is accounted for when the right to receive it is
Income from Investments in Securities:
Income from Investments is accounted on accrual basis at the time
contract is entered into
1.6 Other income: Rent Income
Rent is accounted on accrual basis as per the Agreement.
Other Income, interest on refund of income tax is accounted for in the
year in which order is passed.
Long-term investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
1.8 Employee benefits:
Employee benefits include provident fund, gratuity fund and compensated
Defined contribution plans:
The Company''s makes contribution to provident fund to Employees
Provident Fund Organization (managed by government) and charged the
same as an expense as they failure based on the amount of contribution
required to be made. .
Defined benefit plans:
For defined benefit plans in the form of gratuity fund, the cost of
providing benefits is determined using the Projected Unit Credit
method, with actuarial valuations being carried out at each Balance
Sheet date. Actuarial gains and losses are recognized in the Statement
of Profit and Loss in the period in which they occur. Past service cost
is recognized immediately to the extent that the benefits are already
vested. The retirement benefit obligation recognized in the Balance
Sheet represents the present value of the defined benefit obligation as
adjusted for unrecognized past service cost, as reduced by the fair
value of scheme assets.
Short-term employee benefits:
The undiscounted amount of short-term employee benefits expected to be
paid in exchange for the services rendered by employees are recognized
during the year when the employees render the service. These benefits
include compensated absences which are expected to occur within twelve
months after the end of the period in which the employee renders the
related service. The cost of such compensated absences is accounted as
(a) in case of accumulated compensated absences, when employees render
the services that increase their entitlement of future compensated
(b) in case of non-accumulating compensated absences, when the absences
1.9 Earnings per share:
Basic Earnings Per Share is computed by dividing the profit / (loss)
after tax by the weighted average number of equity shares outstanding
during the year.
1.10 Taxes on income:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Deferred tax is recognised on timing differences, being the
differences between the taxable income and the accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured using the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets are recognised for timing differences of other
items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
1.11 Provisions and contingencies:
A provision is recognised when the Company has a present obligation as
a result of past events 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 (excluding retirement
benefits) are not discounted to their present value and are determined
based on the 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 estimates. Contingent liabilities
are disclosed in Notes to the Financial Statements.
1.12 Segment Reporting:
The Company is engaged primarily in the business of finance and
accordingly there are no separate reportable segment as per applicable
Accounting Standard dealing with segment reporting.