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Accounting Policies of BCL Enterprises Ltd. Company

Mar 31, 2015

Basis of preparation of financial statements

The financial statements of the Company are prepared and presented under the historical cost convention on the accrual basis of accounting, as a going concern and in accordance with the Companies (Accounting Standards) Rules, 2006 notified by the Central Government, which as per clarification issued by the Ministry of Corporate Affairs continue to apply under Section 133 of the Companies Act ,2013 (which has superseded section 211 (3C) of the Companies Act 1956, w.e.f 12 September 2013),the other provisions of the Companies Act 1956 ( including the new notified sections under Companies Act, 2013, to the extent applicable).The financial statements are presented in Indian rupees rounded off to the nearest thousand. The financial statements are presented as per Revised Schedule III to the Companies Act, 2013. 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 Revised Schedule III to the Companies Act, 2013.

a. Current and non- current classification

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 Revised Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of assets and liabilities.

Assets

An asset is classified in to current when it satisfies any of the following criteria:

It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non- current financial assets.

All other assets are classified as non - current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

* It is expected to be settled in the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* The Company does not have unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include the current portion of non- current financial liabilities.

All other liabilities are classified as non - current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

b. Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. The management believes that the estimates made in the preparation of the financial statements are prudent and reasonable.

c. Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost of acquisition is inclusive of freight inward, duties, taxes and other directly attributable expenses incurred to bring the assets to their working condition for intended use.

Intangible fixed assets purchased comprising computer software, are stated at acquisition cost less accumulated amortization and impairment loss, if any. Intangible fixed assets are capitalized where it is expected to provide future enduring economic benefits. Capitalization costs include license fees and cost of implementation/system integration services. The costs are capitalized in the year in which the software is fully implemented for use.

d. Depreciation and amortization

Depreciation on tangible fixed assets is provided on written down value method, at rates specified in Schedule XIV to the Companies Act, 1956.

Depreciation is calculated on pro-rata basis from the date of additions, except in case of assets costing Rs. 5,000 or less, where each such asset is fully depreciated in the year of purchase. Depreciation on assets sold / discarded during the year is provided till the date of such sale / disposal.

e. Revenue recognition

Interest on loans is recognized in the Statement of Profit and Loss on an accrual basis, except in the case of non-performing assets where it is recognized upon realization in accordance with the prudential norms of the RBI

f. Income-tax expense

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities and / or assets are recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainly of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and are written down or written- up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

g. Transactions in foreign currency

Transactions in foreign currency are recorded at the exchange rates prevailing at the date of the transaction. Exchange differences arising on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currencies and remaining unsettled as at the balance sheet date is translated using the closing exchange rates on that date and the resultant net exchange difference is recognized in the Statement of Profit and Loss.

h. Earnings/ (loss) per share

Basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) for the year attributable to equity shareholders by using the weighted average number of equity shares outstanding during the year.

i. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.

j. Provision for Non-Performing Assets

Provision for standard and non-performing assets

* In accordance with Prudential Norms, contingent provision at 0.25% has been created on outstanding standard assets

* In accordance with Para 10 of Prudential Norms, the Company has shown provision for loans under 'Provisions' forming part of 'Current liabilities and provisions'

Provision for non-performing assets is recorded at rates which are equal to or higher than the rates specified by Reserve Bank of India in their guidelines on prudential norms. The rates used by the Company are as follows:

Period of Rates as per Asset Classification Arrears Company (in Months) percentage of Portfolio

Standard 0 - 1 0.25

Substandard 1 - 2 10

Substandard 2 - 3 25

Doubtful 3 - 4 50

Loss Above 4 100

1. As per regulation 6 of NBFC Prudential Norms (Reserve Bank) Directions, 1998 regarding accounting for investment:

a. The company value its current investments in unquoted equity shares at cost or breakup value, whichever is less

b. The Company values its long-term investment in unquoted equity shares in accordance with the accounting standard issued by ICAI. The Institute of Chartered Accountant of India has issued Accounting Standard " AS-13" pertaining to Accounting for investment.


Mar 31, 2012

A. Basis of preparation of financial statements

The financial statements of the Company are prepared and presented under the historical cost convention on the accrual basis of accounting, as a going concern and in accordance with the Companies (Accounting Standards) Rules, 2006 notified by the Central Government, generally accepted accounting principles in India ('GAAP') and the provisions of the Companies Act, 1956, as applicable to the Company and applied consistently.

This is the first year of application of the revised schedule VI to the Companies act, 1956 for the preparation of the financial statements of the Company. The revised schedule VI introduces some significant conceptual changes as well as new disclosures. These include classification of all assets and liabilities into current and non- current. The previous year figures have also undergone a major reclassification to comply with the requirements of revised schedule VI.

b. Current and non- current classification

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 Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current & non-current classification of assets and liabilities.

Assets

An asset is classified in to current when it satisfies any of the following criteria:

* It is expected to be realized in, or is intended for sale or consumption in, the Company's normal operating cycle.

* It is held primarily for the purpose of being traded,

* It is expected to be realized within 12 months after the reporting date; or

* it is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.

Current assets include the current portion of non- current financial assets.

All other assets are classified as non — current.

Liabilities

A liability is classified as current when it satisfies any of the following criteria:

* It is expected to be settled in the Company's normal operating cycle.

* It is held primarily for the purpose of being traded.

* It is expected to be realized within 12 months after the reporting date; or

* The Company does not have unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability could, at the option of the counterparty, result in its settlement by the issue of equity instruments do not affect its classification.

Current liabilities include the current portion of non- current financial liabilities.

All other liabilities are classified as non - current.

Operating cycle

Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.

c. Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods. The management believes that the estimates made in the preparation of the financial statements are prudent and reasonable.

d. Fixed Assets

Tangible fixed assets are stated at cost less accumulated depreciation and impairment loss, if any. Cost of acquisition is inclusive of freight inward, duties, taxes and other directly attributable expenses incurred to bring the assets to their working condition for intended use.

Intangible fixed assets purchased comprising computer softwares, are stated at acquisition cost less accumulated amortization and impairment loss, if any. Intangible fixed assets are capitalized where it is expected to provide future enduring economic benefits. Capitalization costs include license fees and cost of implementation/system integration services. The costs are capitalised in the year in which the software is fully implemented for use.

e. Depreciation and amortisation

Depreciation on tangible fixed assets is provided on written down value method, at rates specified in Schedule XIV to the Companies Act, 1956.

Depreciation is calculated on pro-rata basis from the date of additions, except in case of assets costing Rs. 5,000 or less, where each such asset is fully depreciated in the year of purchase. Depreciation on assets sold / discarded during the year is provided till the date of such sale / disposal.

f. Revenue recognition

Interest on loans is recognised in the Statement of Profit and Loss on an accrual basis, except in the case of non-performing assets where it is recognized upon realization in accordance with the prudential norms of the RBI

g. Income-tax expense

Income-tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax laws) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year). The deferred tax charge or credit and the corresponding deferred tax liabilities and / or assets are recognized using the tax rates that have been enacted or substantively enacted' by the Balance Sheet date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainly of realization of such assets. Deferred tax assets are reviewed as at each Balance Sheet date and are written down or written-up to reflect the amount that is reasonably/ virtually certain (as the case may be) to be realized.

h. Transactions in foreign currency

Transactions in foreign currency are recorded at the exchange rates prevailing at the date of the transaction. Exchange differences, arising on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.

Monetary assets and liabilities denominated in foreign currencies and remaining unsettled as at the balance sheet date is translated using the closing exchange rates on that date and the resultant net exchange difference is recognized in the Statement of Profit and Loss.

i. Earnings/ (loss) per share

Basic earnings/ (loss) per share is computed by dividing the net profit/ (loss) for the year attributable to equity shareholders by using the weighted average number of equity shares outstanding during the year.

j. Provisions, contingent liabilities and contingent assets

The Company recognizes a provision when there is present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.

Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources would be required to settle the obligation, the provision is reversed.

Contingent assets are not recognized in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognized in the period in which the change occurs.

k. Provision for Non-Performing Assets

Provision for standard and non-performing assets

* In accordance with Prudential Norms, contingent provision at 0.25% has been created on outstanding standard assets

* In accordance with Para 10 of Prudential Norms, the Company has shown provision for loans under 'Provisions' forming part of Current liabilities and provisions'

Provision for non-performing assets is recorded at rates which are equal to or higher than the rates specified by Reserve Bank of India in their guidelines on prudential norms. The rates used by the Company are as follows:

Asset Classification Period of Rates as per Arrears Company (in Months) percentage of Portfolio

Standard 0-1 0.25



Substandard 1-2 10

Substandard 2-3 25



Doubtful 3-4 50

Loss Above 4 100

L. As per regulation 6 of NBFC Prudential Norms (Reserve Bank) Directions, 1998 regarding accounting for investment:

a. The company value its current investments in unquoted equity shares at cost or breakup value, whichever is less

b. The Company values its long-term investment in unquoted equity shares in accordance with the accounting standard issued by ICAI. The Institute of Chartered .Accountant of India has issued Accounting Standard " AS-13" pertaining to Accounting for investment



 
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