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Moneycontrol.com India | Accounting Policy > Finance - Leasing & Hire Purchase > Accounting Policy followed by J J Finance Corporation - BSE: 523062, NSE: N.A
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J J Finance Corporation

BSE: 523062|ISIN: INE584C01011|SECTOR: Finance - Leasing & Hire Purchase
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J J Finance Corporation is not listed on NSE
Mar 14
Accounting Policy Year : Mar '15
 1.1 basis of preparation of financial statements
 
 The financial statements have been prepared in accordance with the
 Generally Accepted Accounting Principles (GAAP) in India under the
 historical cost convention on accrual basis.
 
 GAAP comprises applicable Accounting Standards specified under Section
 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
 2014. These financial statements comply in all material aspects with
 the Accounting Standards (Rules) notified under the companies
 (Accounting Standard) Rule, 2006 (as amended), to the extent applicable
 and the terms of  Non-Banking Financial (Non-Deposit Accepting or
 Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007
 issued by Reserve Bank of India.
 
 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.
 
 Accounting policies not specifically referred to otherwise are
 consistent and in accordance with generally accepted accounting
 principles.
 
 1.2 USE OF ESTIMATES
 
 The preparation of financial statements in conformity with the GAAP
 requires estimates and assumptions to be made that affect the reported
 amount of revenues, expenses, assets and liabilities and the disclosure
 of contingent liabilities, at the end of the reporting period. Although
 these estimates are based on the management''s best knowledge of current
 events and actions, uncertainty about the assumptions and estimates
 could result in outcomes different from the estimates. Different
 between actual results and estimates are recognized in the period in
 which the results are known or materialize.
 
 1.3 TANGIBLE FIXED ASSETS
 
 Fixed assets are stated at cost, net of accumulated depreciation. The
 cost comprises purchase price, borrowing costs if capitalization
 criteria are met and directly attributable cost of bringing the asset
 to its working condition for the intended use. Any trade discounts and
 rebates are deducted in arriving at the purchase price.
 
 Subsequent expenditure related to an item of fixed asset is added to
 its book value only if it increases the future benefits from the
 existing asset beyond its previously assessed standard of performance.
 All other expenses on existing fixed assets, including day-to-day
 repair and maintenance expenditure and cost of replacing parts, are
 charged to the statement of profit and loss for the period during which
 such expenses are incurred.
 
 1.4 DEPRECIATION ON TANGIBLE FIXED ASSETS
 
 Depreciation on tangible fixed assets is calculated on the
 straight-line method as per the useful life prescribed in Schedule II
 to the Companies Act, 2013.
 
 1.5 INVESTMENT
 
 Investments, which are readily realizable and 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 long-term investments.
 
 On initial recognition, all investments are measured at cost. The cost
 comprises purchase price and directly attributable acquisition charges
 such as brokerage, fees and duties. If an investment is acquired, or
 partly acquired, by the issue of shares or other securities, the
 acquisition cost is the fair value of the securities issued. If an
 investment is acquired in exchange for another asset, the acquisition
 is determined by reference to the fair value of the asset given up or
 by reference to the fair value of the investment acquired, whichever is
 more clearly evident.
 
 Current investments are carried in the financial statements at lower of
 cost and fair value determined on an individual investment basis.
 Long-term investments are carried at cost. However, provision for
 diminution in value is made to recognize a decline other than temporary
 in the value of the investments.
 
 On disposal of an investment, the difference between its carrying
 amount and net disposal proceeds is charged or credited to the
 statement of profit and loss.
 
 1.6 INVENTORIES
 
 Inventories are valued at lower of cost or net realizable value.
 
 1.7 INCOME & EXPENDITURE RECOGNITION
 
 Income & Expenditure unless otherwise stated, are accounted for on
 accrual basis except income from Dividends which is accounted for as
 and when actually received.
 
 The Company has followed the prudential norms for income recognition
 and provisioning against non performing assets and Provision on
 Standard Assets as prescribed by the Reserve Bank of India for Non
 Banking Financial Companies.
 
 1.8 RETIREMENT AND OTHER EMPLOYEE BENEFITS
 
 Retirement benefit to employees such as Employees'' Provident Funds and
 Miscellaneous Provisions Act, 1952 and The Payment of Gratuity Act,
 1972 are not applicable to the company as number of employee is below
 the Statutory limit as prescribed by the above Acts.
 
 The company does not have the policy of extending leave encashment
 benefits to its employees.
 
 1.9 TAXES ON INCOME
 
 Tax expense comprises current and deferred tax. Current income-tax is
 measured at the amount expected to be paid to the tax authorities in
 accordance with the Income-tax Act, 1961 enacted in India. The tax
 rates and tax laws used to compute the amount are those that are
 enacted or substantively enacted, at the reporting date.
 
 Deferred tax is recognized on timing differences, being the difference
 between taxable income and accounting income that originate in the one
 period and are capable of reversal in one or more subsequent periods.
 Deferred tax assets are recognized only if there is reasonable
 certainty that sufficient future taxable income will be available
 against which such deferred tax asset will be realized. Such assets are
 reviewed as at Balance Sheet date to reassess realizability thereof.
 Deferred tax assets and deferred tax liabilities are offset, if a
 legally enforceable right exists to set-off current tax assets against
 current tax liabilities and the deferred tax assets and deferred taxes
 relate to the same taxable entity and the same taxation authority.
 
 1.10 EARNINGS PER SHARE (EPS)
 
 Basic EPS is calculated by dividing the net profit or loss for the
 period attributable to equity shareholders by the weighted average
 number of equity shares outstanding during the year.
 
 For the purpose of calculating diluted EPS, the net profit or loss for
 the period attributable to equity shareholders and the weighted average
 number of shares outstanding during the period are adjusted for the
 effects of all dilutive potential equity shares, if any.
 
 1.11 PROVISIONS
 
 A provision is recognized when the company has a present obligation as
 a result of past event, it is probable that an outflow of resources
 embodying economic benefits will be required to settle the obligation
 and a reliable estimate can be made of the amount of the obligation.
 Provisions are not discounted to their present value and are determined
 based on the best estimate required to settle the obligation at the
 reporting date. These estimates are reviewed at each reporting date and
 adjusted to reflect the current best estimates.
 
 1.12 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
 
 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 probable that an outflow of resources will be
 required to settle the obligation. A contingent liability also arises
 in extremely rare cases where there is a liability that cannot be
 recognized because it cannot be measured reliably. The company does not
 recognize a contingent liability but discloses its existence in the
 financial statements.
 
 Contingent assets are neither recognized nor disclosed in the financial
 statements.
 
 1.13 CASH AND CASH EQUIVALENTS
 
 Cash and cash equivalents for the purposes of cash flow statement
 comprise cash at bank and in hand and short-term investments with an
 original maturity of three months or less.
 
 
Source : Dion Global Solutions Limited
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