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Accounting Policies of Chartered Capital & Investment Ltd. Company

Mar 31, 2015

1.1 Basis of Preparation of Financial Statements

a) Basis of Accounting

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] of the Companies Act, 1956 and the other relevant provisions of the Companies Act, 2013.

b) 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, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revisions to accounting estimates are recognised prospectively in current and future periods.

c) Current / Non Current Classification

All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and services and the time between 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 and non- current classification of asset and liabilities.

1.2 Fixed Assets and Depreciation / Amortization

a) Tangible Fixed Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates, less accumulated depreciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use.

Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its previously assessed standard of performance.

Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried at cost are recognised in the Statement of Profit and Loss.

Depreciation on tangible fixed assets of the company is provided using Straight Line Method on pro-rata basis at rates and in manner specified in Schedule II of the Companies Act, 2013.

b) Impairment

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 asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

1.3 Investments

Investments are classified into current and non-current investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments.

Current investments are carried at the lower of cost or fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

Non-current investments are stated at cost. A provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is recognised in the Statement of Profit and Loss.

1.4 Inventories

Securities acquired with the intention of short-term holding and trading position is disclosed as stock-in-trade. Securities held as stock-in-trade are valued at lower of cost or market value.

1.5 Revenue Recognition

Revenue is recognised when there is a reasonable certainty of its ultimate realisation.

Merchant Banking Activities fees are accounted on accrual basis in accordance with the terms and contracts entered into between the company and the counterparty.

Consultation fees are accounted on accrual basis depending upon progress of assignment.

Income from trading in Securities comprises of Profit/loss on sale of securities held as stock-in-trade. Profit/loss on sale of Securities is determined on FIFO Basis.

Profit/Loss on equity/ derivative transactions is accounted for on final settlement or squaring-up of contracts for Equity Index/Stock Futures, the profit or loss is calculated as difference between settlement/squaring-up price and contract price and as on the balance sheet date, the debit balance in the "Mark-to-Market Margin – Equity Index/Stock Futures Account", being anticipated loss, is recognised in the profit and loss account. When the Option contracts are squared-up before expiry of the options, the premium prevailing on that date is recognised in profit and loss account. On expiry of the contracts and on exercising the options, the difference between final settlement price and the strike price is transferred to the profit and loss account.

Dividend Income is recognised when the right to receive payment is established.

Profit/Loss earned on sale of Investments is recognised on trade date basis. Profit/Loss on sale of Investments is determined based on the weighted average cost of the Investments sold.

Interest income is recognised on accrual basis.

1.6 Employee Benefits

a) Short Term Employees Benefit

Employee benefits payable wholly within twelve months of receiving employee services are classified as short- term employee benefits. These benefits include salaries and wages, bonus, short term compensated absences, ex- gratia, etc. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.

b) Post Employment Benefit

Defined Contribution Plans:

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme and Employees' State Insurance Corporation (ESIC) which are a defined contribution plan. The Company's contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans:

The Payment of Gratuity Act is not applicable to company since numbers of eligible employees are less than requisite number.

Termination Benefits:

Termination Benefits are charged to the Statement of Profit and Loss in the year of accrual.

1.7 Borrowing Cost

Borrowing costs attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those assets, upto the date when the assets are ready for their intended use. All other borrowing costs are expensed in the period they occur.

1.8 Provisions and Contingencies

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

A contingent liability exists when there is a possible but not probable obligation or a present obligation that may, but probably will not, require an outflow of resources, or a present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed 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 recognised in the period in which the change occurs.

1.9 Taxes on Income

Income tax expenses comprise current and deferred taxes. Current tax is determined on income for the year chargeable to tax in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws and after considering credit for Minimum Alternate Tax (MAT) available under the said Act. MAT paid in accordance with the tax laws which gives future economic benefits in the form of adjustments to future tax liability, is considered as an asset if there is convincing evidence that the future economic benefit associated with it will flow to the Company resulting in payment of normal income tax.

Deferred tax is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversing in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed depreciation and carry forward losses only to the extent that there is a reasonable certainty that there will be sufficient future taxable income will be available against which these can be realised. However if there are unabsorbed depreciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. 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 realisability.

1.10 Earnings Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders after deducting preference dividends and attributable taxes by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share, 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 Cash and Cash Equivalents

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

1.12 Cash Flow Statement

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

In the matter of IPO of RDB Rasayans Limited, SEBI issued Show Cause Notice ("SCN") dated July 18, 2014 against Chartered Capital And Investment Limited under Regulation 28(1) of Securities and Exchange Board of India (Intermediaries) Regulations, 2008 which Was replied by the Company within the prescribed time. Finally, SEBI has vide its order dated May 13, 2015, disposed off the matter without any further direction against the Company in the matter. It will have no implications on the financial position of the Company.


Mar 31, 2014

1.1 Basis of Preparation of Financial Statements

a) Basis of Accounting

The financial statements of the Company are prepared under the historical cost convention as a going concern on accrual basis and to comply in all material aspects with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government, the relevant provisions of the Companies Act, 1956 ("the Act") 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 Act w.e.f 12 September 2013) and other accounting principles generally accepted in India, to the extent applicable.

b) 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, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management''s evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates and assumptions used in preparing the accompanying financial statements. Any revisions to accounting estimates are recognised prospectively in current and future periods.

c) Current / Non-Current classification

All assets and liabilities have been classified as current and non-current as per the Company''s normal operating cycle and other criteria set out in the Schedule VI of the Companies Act, 1956. Based on the nature of products and services and their realization in cash and cash equivalents. The Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of asset and liabilities.

1.2 Fixed Assets and Depreciation / Amortization

a) Tangible Fixed Assets

Fixed Assets are stated at cost of acquisition/construction (net of recoverable taxes) less Accumulated Depreciation and impairment loss if any. Cost of acquisition includes non refundable taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use. All costs, including financing costs till the asset is put to use and adjustments arising from exchange rate variations attributable to the fixed assets are capitalized.

Depreciation on tangible fixed assets is provided on straight - line method on pro-rata basis at rates and in manner specified in Schedule XIV of the Companies Act, 1956.

b) Impairment

At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in orderto determine the extent of impairment. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risks specific to the asset.

Reversal of impairment loss is recognised as income in the statement of profit and loss.

1.3 Investments

Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as long-term investments. However, that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also presented under "Current Assets" under "Current portion of long term investments" in consonance with the current / non-current classification of revised Schedule VI to the Companies Act, 1956.

Current investments are stated at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments.

Long-term investments are stated at cost. A provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is recognised in the Statement of Profit and Loss.

1.4 Inventories

Securities acquired with the intention of short-term holding and trading position is disclosed as stock-in-trade. Securities held as stock-in-trade are valued at lower of cost or market value.

1.5 Revenue Recognition

Revenue is recognised when there is a reasonable certainty of its ultimate realisation.

Merchant Banking Activities fees are accounted on accrual basis in accordance with the terms and contracts entered into between the company and the counterparty.

Consultation fees are accounted on accrual basis depending upon progress of assignment.

Income from trading in Securities comprises of Profit/loss on sale of securities held as stock-in-trade. Profit/loss on sale of Securities is determined on FIFO Basis.

Profit/Loss on equity/ derivative transactions is accounted for on final settlement or squaring-up of contracts for Equity Index/Stock Futures, the profit or loss is calculated as difference between settlement/squaring-up price and contract price and as on the balance sheet date, the debit balance in the "Mark-to-Market Margin - Equity Index/Stock Futures Account", being anticipated loss, is recognised in the profit and loss account. When the Option contracts are squared-up before expiry of the options, the premium prevailing on that date is recognised in profit and loss account. On expiry of the contracts and on exercising the options, the difference between final settlement price and the strike price is transferred to the profit and loss account.

Dividend Income is recognised when the right to receive payment is established.

Profit/Loss earned on sale of Investments is recognised on trade date basis. Profit/Loss on sale of Investments is determined based on the weighted average cost of the Investments sold.

Interest income is recognised on accrual basis.

1.6 Employee Benefits

a) ShortTerm Employees Benefit

Employee benefits payable wholly within twelve months of receiving employee services are classified as short- term employee benefits. These benefits include salaries and wages, bonus, short term compensated absences, ex-gratia, etc. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees.

Defined Contribution Plans

A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme which is a defined contribution plan. The Company''s contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service.

Defined Benefit Plans

The Payment of Gratuity Act is not applicable to company since number of eligible employees are less than requisite number.

Terminal Benefit

Termination Benefits are charged to Profit and Loss Account in the year of accrual.

1.7 Borrowing 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 are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.8 Provisions and Contingencies

A provision is recognised if, as a result of a past event, the Company has a present obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the present obligation at the balance sheet date. The provisions are measured on an undiscounted basis.

A contingent liability exists when there is a possible but not probable obligation or a present obligation that may, but probably will not; require an outflow of resources, ora present obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed 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 recognised in the period in which the change occurs.

Income tax expense comprises current tax (i.e. amount of tax for the year determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the year).

Provision for current tax is based on the results for the year ended 31st March, in accordance with the provisions of the Income Tax Act, 1961.

The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognised using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognised only to the extent there is reasonable certainty that the assets can be realized in future, however when there is unabsorbed depreciation or carry forward loss under taxation laws, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred tax assets are reviewed as at each balance sheet date and written down or written-up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realized.

Minimum Alternative Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognized as current tax. The credit available under the said act in respect of MAT is recognized as an asset only when there is certainty that the company will pay income tax in future periods and MAT credit can be carried forward to set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance sheet date and written down to the extent the aforesaid certainty no longer exists.

1.10 Earning Per Share

Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders after deducting preference dividends and attributable taxes by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earning per share, 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 Cash and Cash Equivalent

The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents.

1.12 Cash Flow:

Cash flows are reported using the indirect method, whereby profit before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.

2.2 Rights, preferences and restrictions attached to Equity Shares

The company has only one class of equity shares having a par value of Rs. 10 per share. Each share holder of equity shares is entitled to one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company, after distributed of all preferential amounts, in proportion to their shareholding.


Mar 31, 2013

A. ACCOUNTING CONVENTIONS

I) Basis of Preparation of Financial Statements

The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting in all material respects in accordance with the notified Accounting Standards by Companies (Accounting Standards) Rules 2006 (as amended) and the relevant Provisions of the Companies Act,1956. The accounting policies have been consistently applied by the Company during the year.

The presentation of the accounts is based on the revised Schedule VI of the Companies Act, 1956. All assets and liabilities are classified in to current and non-current generally based on criteria of realization / settlement within twelve months period from the balance sheet date.

II) Use of Estimates

The preparation of the financial statements in conformity with Indian Generally Accepted Accounting Practices requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities 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

b. ACCOUNTING FOR FUTURES & OPTIONS

I. Equity Index / Stock - Futures

(i) Equity Index/Stock-Futures are rnarked-to-market on daily basis. Debit or credit balance disclosed under Loans & Advances or Current Liabilities, respectively, in the "Mark-to-Market Margin - Equity Index/Stock Future Account", represents the net amount paid or received on the basis of movement in the prices of index/Stock Futures till the balance sheet date.

(ii) As on the balance sheet date, the profit/loss on open positions in Index/Stock Futures are accounted for as follows:

> Credit balance in the "Mark-to-Market Margin - Equity Index/Stock Future Account", Being anticipated profit, is ignored & no credit is taken in the profit & loss account.

> Debit balance in the "Mark-to-Market Margin - Equity Index/Stock Futures Account", being anticipated loss, is recognised in the profit and loss account.

(iii) On final settlement or squaring-up of contracts for Equity Index/Stock Futures, the profit or loss is calculated as difference between settlement/squaring-up price and contract price. Accordingly, debit or credit balance pertaining to the settled/squared-up contract in "Mark-to-Market Margin - Equity Index/Stock Futures Account" is recognised in the profit and loss account upon expiry or settlement of the contracts. When more than one contract in respect of the relevant series of Equity Index/Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using weighted average method for calculating profit/loss on squaring- up.

(iv) "Initial Margin - Equity Index/Stock Futures Account", representing initial margin paid, and "Margin Deposits", representing additional margin over and above initial margin, for entering into contracts for Equity Index / Stock Futures, which are released on final settlement/squaring-up of underlying contracts, are disclosed under Loans and Advances.

II. Equity Index / Stock - Options

(i) As at the balance sheet date, in the case of long positions, provisions is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet, and in the case of short positions, for the amount by which premium prevailing on the balance sheet date exceeds the premium received for those options, and reflected in "Provisions for Loss on Equity Index/Stock Option Account".

(ii) When the Option contracts are squared-up before expiry of the options, the premium prevailing on that date is recognised in profit and loss account. If more than one option contract in respect of the same index/stock with the same strike and expiry date to which the squared-up contract pertains is outstanding at the time of squaring-up of the contract, weighted average method is followed for determining profit or loss. On expiry of the contracts and on exercising the options, the difference between final settlement price and the strike price is transferred to the profit and loss account. In both the above cases, premium paid or received for buying or selling the options, as the case may be, is recognised in the profit and loss account for all squared-up/settled contracts.

(iii) "Equity Index/Stock options margin account", representing initial margin paid and "Margin Deposit", representing additional margin paid over and above initial margin, for entering into contracts for Equity Index/Stock options, which are released on final settlement/squaring-up of underlying contracts, are disclosed under Loans and advances.

c. FIXED ASSETS

Tangible Assets

Fixed assets are stated at cost of acquisition/construction less Accumulated Depreciation and impairment loss if any. Cost of acquisition includes non refundable taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use.

d. DEPRECIATION ON FIXED ASSETS

Tangible Assets

Depreciation on Fixed Assets is provided on straight-line method on Pro-rata basis at rates and in manner specified in Schedule XIV of the Companies Act, 1956.

e. IMPAIRMENT OF ASSETS

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 asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. An impairment loss recognized in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount.

f. INVESTMENTS

Investments that are readily realisable 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. Long term investments are stated at cost of acquisition. Provision for diminution in value of long term investments is made, only if such decline is other than temporary.

g. REVENUE RECOGNITION

Revenue is recognised when there is a reasonable certainty of its ultimate realisation.

(i) Merchant Banking Activities fees are accounted on accrual basis in accordance with the terms and contracts entered into between the company and the counterparty.

(ii) Consultation fees are accounted on accrual basis depending upon progress of assignment.

(iii) Underwriting Commission is recognised on accrual basis and is exclusive of Service Tax.

(iv) Dividend Income is recognised when the right to receive payment is established.

(v) Profit/Loss earned on sale of Investments is recognised on trade date basis. Profit/Loss on sale of Investments is determined based on the weighted average cost of the Investments sold. Profit/Loss on closed positions of Derivative instruments is recognised on final settlement or squaring up of the contracts. For Profit/Loss on Derivative instruments where the company has open positions at the year-end refer Point 3 below.

(vi) Interest income is recognised on accrual basis.

(vii) Brokerage earned from primary market operations, i.e. procuring subscription from investors for public offerings of companies are recorded on determination of the amount due to the company, once the allotment of securities is completed.

h. EMPLOYEE BENEFITS

(i) Short Term Employees Benefit

Short Term Benefits are recognized as expenditure at the undiscounted value in the Profit and Loss Account of the year in which the related services as rendered.

(ii) Post Employment Benefit

Defined Contribution Plans - Monthly contributions to the Provident Fund which is defined contribution schemes are charged to Profit and Loss Account and deposited with the Provident Fund Authorities on monthly basis.

Defined Benefit Plans - Gratuity to Employees are recognised in Profit and Loss Account as when paid to Employees.

(iii) Terminal Benefit

Termination Benefits are charged to Profit and Loss Account in the year of accrual.

i. BORROWING COST

Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for intended use. All other borrowing costs are charged to revenue.

j. TAXES ON INCOME

Tax expense for a year comprises of current tax and deferred tax.

Current tax are measured at the amount expected to be paid to the tax authorities, after taking into consideration, the applicable deductions and exemptions admissible under the provisions of the Income tax Act, 1961.

Deferred tax reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing difference 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 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 there is unabsorbed depreciation or carry forward of losses under tax laws, deferred tax assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

k. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

I. CASH FLOW STATEMENT

The Cash Flow Statement is prepared by the Indirect Method set out in Accounting Standards on Cash Flow Statement & presents cash flows by operating, investing & financing activities of the Company.

Cash and Cash Equivalent 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.

m. EARNING PER SHARE

Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a right share split and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, 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.

n. CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hand, demand deposits with banks ,other short-term highly Liquid investments with original maturities of three months or less


Mar 31, 2012

A. Accounting convention (a) Basis of Accounting

The financial statements of the Company are prepared under the historical cost convention on accrual basis of accounting in all material respects in accordance with the notified Accounting Standards by Companies (Accounting Standards) Rules 2006 (as amended) and the relevant Provisions of the Companies Act,1956. The accounting policies have been consistently applied by the Company during the year.

(b) Presentation And Disclosure Of Financial Statements

During the year ended 31st March, 2012, the Revised Schedule-VI notified under 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 disclosure made in financial statements. The company has also restated the previous year figures in accordance with the requirements applicable for the current year.

(c) Use of estimates

The preparation of the financial statements in conformity with Indian Generally Accepted Accounting Policies requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent liabilities 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.

B. Revenue recognition

Revenue is recognised when there is a reasonable certainty of its ultimate realisation.

(a) Merchant Banking Activities fees are accounted on accrual basis in accordance with the terms and contracts entered into between the company and the counterparty.

(b) Consultation fees are accounted on accrual basis depending upon progress of assignment.

(c) Underwriting Commission is recognised on accrual basis and is exclusive of Service Tax.

(d) Dividend Income is recognised when the right to receive payment is established.

(e) Profit/Loss earned on sale of Investments is recognised on trade date basis. Profit/Loss on sale of Investments is determined based on the weighted average cost of the Investments sold. Profit/Loss on closed positions of Derivative instruments is recognised on final settlement or squaring up of the contracts. For Profit/Loss on Derivative instruments where the company has open positions at the year-end refer Point 1.3 below.

(f) Interest income is recognised on accrual basis.

(g) Brokerage earned from primary market operations, i.e. procuring subscription from investors for public offerings of companies are recorded on determination of the amount due to the company, once the allotment of securities is completed.

C. Accounting for Futures & Options

i) Equity Index / Stock - Futures

(a) Equity Index/Stock-Futures, are marked-to-market on daily basis. Debit or credit balance disclosed under Loans & Advances or Current Liabilities, respectively, in the "Mark-to-Market Margin,- Equity Index/Stock Future Account", represents the net amount paid or received on the basis of movement in the prices of index/Stock Futures till the balance sheet date.

(b) As on the balance sheet date, the profit/loss on open positions in Index/Stock Futures are accounted for as follows:

- Credit balance in the "Mark*to-Market*Margin - Equity Index/ Stock Future Account", Being anticipated profit, is ignored & no credit is taken in the profit & loss account.

- Debit balance in the "Mark-to-Market Margin - Equity Index/Stock Futures Account", being anticipated loss, is recognised in the profit and loss account.

(c) On final settlement or squaring-up of contracts for Equity Index/Stock Futures, the profit or loss is calculated is difference between settlement/squaring-up price and contract price. Accordingly, debit or credit balance pertaining to the settled/squared-up contract in "Mark-to-Market Margin - Equity Index/Stock Futures Account" is recognised in the profit and loss account upon expiry or settlement of the contracts. When more than one contract in respect of the relevant series of Equity Index/Stock Futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using weighted average method for calculating profit/loss on squaring- up.

(d) "Initial Margin - Equity Index/Stock Futures Account", representing initial margin paid, and "Margin Deposits", representing additional margin over and above initial margin, for entering into contracts for Equity Index / Stock Futures, which are released on final settlement/squaring-up of underlying contracts, are disclosed under Loans and Advances.

ii) Equity Index / Stock- Options

(a) As at the balance sheet date, in the case of long positions, provisions is made for the amount by which the premium paid for those options exceeds the premium prevailing on the balance sheet, and in the case of short positions, for the amount by which premium prevailing on the balance sheet date exceeds the premium received for those options, and reflected in "Provisions for Loss on Equity Index/Stock Option Account".

(b) When the Option contracts are squared-up before expiry of the options, the premium prevailing on that date is recognised in profit and loss account. If more than one option contract in respect of the same index/stock with the same strike and expiry date to which the squared-up contract pertains is outstanding at the time of squaring-up of the contract, weighted average method is followed for determining profit or loss. On expiry of the contracts and on exercising the options, the difference between final settlement price and the strike price is transferred to the profit and loss account. In both the above cases, premium paid or received for buying or selling the options, as the case may be, is recognised in the profit and toss account for all squared-up/settled contracts.

(c) "Equity Index/Stock options margin account", representing initial margin paid and "Margin Deposit", representing additional margin paid over and above initial margin, for entering into contracts for Equity Index/Stock options, which are released on final settlement/squaring-up of underlying contracts, are disclosed under Loans and advances.

D. Fixed Assets Tangible Assets

Fixed assets are stated at cost of acquisition/construction less Accumulated Depreciation and impairment loss if any. Cost of acquisition includes non refundable taxes, duties, freight and other costs that are directly attributable to bringing assets to their working condition for their intended use.

E. depreciation on Fixed Assets - Tangible Assets

Depreciation on Fixed Assets is provided on straight-line method on Pro-rata basis at rates and in manner specified in Schedule XIV of the Companies Act, 1956.

F. Investments

Investments that are readily realisable and intended to be held for not more than a year are classified as current investments. All other investments are classified as lortg term Investments. Long term investments are stated at cost of acquisition. Provision for diminution in value of long term investments is made, only if such decline is other than temporary.

G. Employee Benefits

(a) Short Term Employees Benefit '

Short Term Benefits are recognized as expenditure at the undiscounted value in the Profit and Loss Account of the year in which the related services are rendered.

(b) Post Employment Benefit - Defined Contribution Plans - Monthly contributions to the Prdvident Fund which is defined contribution schemes aie charyed to Profit'and Loss Accounting deposited with the Provident Fund Authorities onmonthly basis. Defined Benefit Piarw - Gratuity, to tmployeesare recognised in Profit and Loss Account as and when paid to Employees.

(c) terminal Sepent ,

Termination Benefits ate changed to Profit and L'oss Account in the year of accrual.

H. Borrowing Cost

Borrowing costs that arc* attributable to the acquisition or construction of qualifying assets are capitalised as part of - the cost of such assets. A qualifying asset K me that necessarity takes substantial period of time to get ready for - interKied'Use. All other fcorrcwmti cgstease,charged to revenue.

I. Taxes on Income ,

Tax expense for a year comprise:; of current tax and deferred tax. Income tax. Act, 1961.

Deferred tax reflects the impact of current year timing differences between taxable income alid accounting income for the year and reversal of timing difference of earlier years. Deferred tax is measured based on the tax rates and the tax , lawsenacted or stjbstsotivuty enacted at the balance sheet date. Deferred tax. assets are recognized. to the extent that there is reasonable certainty that sufficient future taxable .income will be available, against which such deterred tax assets can be realized. If there is unabsorbt'd depreciation or carry forward of losses under tax laws, deferred tax , . assets are recognized only to the extent that there is virtual, certainty supported by convincing evidence that sufficient , future taxable income will be available against which such deferred tax assets can be.realized .

 
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