Accounting Policies of Birla Capital And Financial Services Ltd. Company

Mar 31, 2014

1. Basis of Preparation

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.

1.1 Summary of significant accounting policies

(a) Change in accounting policy

Presentation and disclosure of financial statements

During the year ended 31 March 2014, 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 presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

(b) Use of estimates

The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts 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 these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

(c) Tangible fixed assets

Fixed assets are stated at cost net of accumulated depreciation and accumulated impairment losses, if any. 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 changed to the statement of profit and loss for the period during which such expenses are incurred.

(d) Depreciation Tangible fixed assets.

Depreciation on fixed assets is calculated on a Straight Line method at based on the useful lives estimated by the management, or those prescribed under the Schedule XIV to the Companies Act, 1956, whichever is higher. The company has used the following rates to provide depreciation on its fixed assets.

Rate of Depreciation

Computers & Laptop 16.21%

Office Equipment 6.33%

Furniture & Fixtures 6.33%

(f) Borrowing costs

Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

(g) Impairment of tangible and assets

The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating units (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. 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 the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

(h) 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.

Long-term investments are carried at cost. However, provision for diminution in value is not recognizing 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.

(i) Inventories

The Company has no inventories.

(j) Revenue recognition

Revenue is recognized as per Accounting standard -9"Revenue Recognitions" issued by the ICAI

(k). Accounting for taxes on income

Current Tax

Tax expense comprises of current and deferred taxes. 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. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date.

Deferred Tax

Deferred tax assets and liabilities are recognized for the future tax consequences attributable to timing differences that result between the profits offered for income taxes and the profits as per the financial statements. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted at the balance sheet date. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in the period that includes the enactment date.

Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in the future, however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty, supported by convincing evidence of recognition of such assets. Deferred tax assets are reassessed for the appropriateness of their respective carrying values at each balance sheet date.

(m). Retirement and other employee benefits

(i) Contributions payable by the Company to the concerned government authorities in respect of provident fund, family pension fund and employee state insurance are charged to the profit and loss account if any. Gratuity amounting to Rs.89,192/- Upto March 2014, since the same will be accounted for at the time of settlement of the employees accounts.

(n). 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.

Where the company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

(o). 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.

(p). Measurement of EBITDA

As permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of profit and loss. The company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expense, finance costs and tax expenses.

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Mar 31, 2013

1. BASIS OF ACCOUNTING

The Financial statements are prepared under the historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India , the Institute of Chartered Accountants of India and the provisions of the Companies Act. 1956. The Company follows merchantile system of Accounting.

2. INCOME

The Company follows the practice of accounting all incomes on accrual basis except, in respect of hire purchase agreements, which is accounted applying the interest rate on reducing balance of the amount financed during the period of the agreement.

3. EXPENSES

Expenses are accounted on accrual basis except gratuity and leave encashment.

4. FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation

b) Depreciation

i. Own Assets

Depreciation has been provided as per straight line method under Schedule XIV of the Companies Act, 1956.

ii. Leased Assets

Depreciation is provided as per straight line method, depreciating the entire cost of leased assets over the lease period.

Depreciation on all assets acquired is provided on pro-rata basis from the month in which addition is made.

Aggregate value of the Assets given on lease as on 31st March, 2013 is Nil (Previous year Rs. Nil)

5. INVESTMENTS

Long term Investments are stated at the cost of acquisition. The diminution if any, in the value of investment stated at the cost, is recognized when such diminution is permanent.

6. EMPLOYEES RETIREMENT BENEFITS

Gratuity will be provided on cash basis at the time of settlement of employees account.

7. TAXATION

Deferred Tax is recognized on timing difference between the accounting income and taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted on the balance sheet date.

8. CONTINGENCIES

Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts.

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Mar 31, 2010

BASIS OF ACCOUNTING

The Financial statements are prepared under the historical cost convention, on accrual basis, in accordance with the generally accepted accounting principles in India, the Institute of Chartered Accountants of India and the provisions of The Companies Act, 1956 The Company follows Mercantile system of Accounting.

INCOME

The Company follows the practice of accounting all incomes on accrual basis except; In respect of hire purchase agreements, which is accounted applying the interest rate on reducing balance of the amount financed during the period of the agreement.

EXPENSES

Expenses are accounted on accrual basis except gratuity and leave encashment.

FIXED ASSETS

a) Fixed Assets are stated at cost of acquisition less accumulated depreciation.

b) Depreciation

i. Own Assets

Depreciation has been provided as per straight-line method under Schedule XIV of the Companies Act, 1956.

ii. Leased Assets

Depreciation is provided as per straight-line method, depreciating entire cost of leased assets over the lease period.

Depreciation on all assets acquired is provided on pro-rata basis from the month in which addition is made.

Aggregate value of Assets given on lease as on 31st March, 2010 is Rs. Nil ( Previous year Rs Nil)

INVESTMENTS

Long term Investments are stated at cost of acquisition. The diminution if any, in the value of l Investments stated at cost, is recognized when such diminution is permanent.

EMPLOYEES RETIREMENT BENEFITS

Gratuity will be provided on cash basis at the time of settlement of employees account.

TAXATION

Deferred Tax is recognized on timing difference between the accounting income and taxable income for the year and quantified using the tax rates and laws enacted or substantively enacted on the balance sheet date.

CONTINGENCIES

Liabilities which are material and whose future outcome can not be ascertained with reasonable certainty are treated as contingent and disclosed by way of notes to the accounts.