Mar 31, 2015
I. Basic of preparation of financial statements:
These financial statements have been prepared in accordance with the
Generally Accepted Accounting Principles in India ('Indian GAAP') to
comply with the Accounting Standards specified under Section 133 of the
Companies Act, 2013, read with rule 7 of the Companies (Accounts)
Rules, 2014 and the relevant provisions of the Companies Act, 2013.
The financial statements have been prepared under the historical cost
convention on accrual basis, except for certain financial instruments
which are measured at fair value.
The company complies in all material respects, with the prudential
norms relating to income recognition asset classification and
provisioning for bad and doubtful debts and other matters.
II. Use of estimates:
The preparation of financial statements requires the management of the
Company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expense during the year.
Difference between the actual results and estimates are recognized in
the period in which the results are known /materialized.
III. Revenue Recognition:
i) Interest Income:
Interest income is recognized as it accrues on a time proportion basis
taking into account the amount outstanding and the rate applicable
except in the case of non-performing assets (NPAs') where is
recognized, upon realization.
ii) Dividend Income:
Dividend income is recognized when the right to received payment is
established.
iii) Income from investments:
Profit earned from sale of securities is recognized on trade date
basis. The cost of securities is computed based on weighted average
basis.
iv) Discount on investments:
The Difference between the acquisition cost and face value of debt
instruments are recognized as interest income over the tenor of the
instrument on straight line basis.
v) Loan processing fee income:
Loan processing fee income is recognized as and when it becomes due
vi) Management fee income:
Management fee income towards support services is accounted as and when
it becomes due on contractual terms with the parties.
IV. Provision for Standard Assets:
The company previous provision for standard assets based on the
prudential norms issued by RBI relating to provisioning.
V. Fixed Assets:
Fixed assets are stated at cost, less accumulated
depreciation/amortization. Costs include all expenses incurred to bring
the asset to its present location and condition.
VI. Depreciation:
Depreciation on fixed assets has been provided on straight line method
over the useful life prescribed in schedule II to the companies Act,
2013 after considering salvage value of five percent of original cost.
The company has considered useful life of assets same as prescribed
under the Companies Act, 2013.
Depreciation upto 31.03.2014 was provided on Straight line method at
the rates prescribed in schedule XIV t o the Companies Act, 1956.
Due to transition from schedule XIV to schedule II, depreciation on
assets existing as on 31.03.2014, has been provided in such a way so
that assets should be depreciated after considering salvage value over
useful life of assets as prescribed under schedule II of the Companies
Act, 2013.
Assets of which useful life has already been expired but depreciation
charged till previous financial year was less than 95% of original cost
of the assets, difference of 95% of original cost and depreciation
charged till last year, has been charged to profit and loss account as
depreciation.
VII. Impairment of Assets:
The company assesses at each balance sheet date whether there is any
indication that an asset may be impaired if any such indication exists.
The company estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less than that the carrying amount.
The carrying amount is reduced to its recoverable amount.
The reduction is treated as an impairment loss and is recognized in the
statement of profit and loss if at the balance sheet date there is an
indication that a previously assessed impairment loss no longer exists
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciable historical cost.
VIII. Investments:
Investments are classified as long term or current based on intention
of the management at the time of purchase.
Current investments are valued scrip wise at cost or fair value
whichever is lower.
IX. Repossessed Assets:
Assets repossessed against the settlement of loans are carried in the
balance sheet at outstanding loans amount or market value whichever is
lower. The difference between the outstanding loan amount and the
market value is charged to statement of profit and loss in the year of
repossession of assets.
X. Loan Origination/ Acquisition Cost:
All direct cost incurred for the origination is amortized over the
average tenure of the loan.
XI. Borrowing Cost:
Borrowing cost which are directly attributable to the
acquisition/construction of fixed assets, till the time assets are
ready for intended use, are capitalized as part of the cost of the
assets. Other bor rowing costs are recognized as expenses in the year
in which they are incurred. Borrowing cost directly attributable to
borrowing are expense over the tenure of the borrowing.
XII. Earning Per Share:
The basic earning per shares is computed by dividing the net
profit/loss attributable to the equity shareholders for the period by
the weighted average number of equity shares outstanding during the
reported year. Diluted earning per share reflects the potential
dilution that could occur if securities or other contract to issue
equity shares were exercised or converted during the year. Diluted
earning per share is computed by dividing the net profit after tax by
weighted average number of equity shares and dilutive potential equity
shares outstanding during the year. In computing dilutive earning per
share, only potential equity shares that are dilutive and that reduce
profit/increase loss per share are included.
XIII. Cash and cash equivalents:
Cash and cash equivalents in the financial statements comprise cash in
hand and balance in bank in current accounts, deposit accounts and in
margin money deposits.
XIV. Cash Flow Statement
Cash flow is reported using indirect method. The Cash Flow from
operating, investing and financing activities of the company are
segregated based on the available information.
XV. Taxation:
i) Current Tax:
Provision for current tax made after taking into consideration benefit
admissible under the provision of the income tax act, 1961. Minimum
alternate tax (MAT) credit entitlement is recognized where there is
convincing evidence that the same can be realized in future.
ii) Deferred Tax:
The deferred tax charge or credit and the corresponding deferred tax
liability or assets are recognized using the tax rate 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 liabilities are recognized only if there is virtual
certainty or realization of such assets. Deferred tax liabilities are
reviewed as at each balance sheet date and written down or written up
to reflect the amount that is reasonably/virtual certain (as the case
may be) to be realized.
Mar 31, 2014
A. Basic of preparation of Financial statements:
The accompanying financial statements are prepared and presented under
the historical cost convention on the accrual basis of accounting
unless otherwise stated and comply with the accounting standard
prescribed by the companies (accounting Standards ) Rules, 2006 and the
relevant provisions of the companies Act, 1956 to the extent
applicable.
The company complies in all material respects, with the prudential
norms relating to income recognition asset classification and
provisioning for bad and doubtful debts and other matters.
B. Use of estimates :
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities and disclosure of contingent liabilities on the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period.
Difference between the actual results and estimates are recognized in
the period in which the results are known/materialized.
C. Revenue Recognition:
i) Interest Income:
Interest income is recognized as it accrues on a time proportion basis
taking into account the amount outstanding and the rate applicable
except in the case of non-performing assets (''NPAs'') where is
recognized, upon realization.
ii) Dividend income:
Dividend income is recognized when the right to received payment is
established.
iii) Income from investments:
Profit earned from sale of securities is recognized on trade date
basis. The cost of securities is computed based on weighted average
basis.
iv) Discount on investments:
The Difference between the acquisition cost and face value of debt
instruments are recognized as interest income over the tenor of the
instrument on straight line basis.
v) Loan processing fee income:
Loan processing fee income is recognized as and when it becomes due.
vi) Management fee income:
Management fee income toward support services is accounted as and when
it becomes due on contractual terms with the parties.
D. Fixed Assets :
Fixed assets are stated at cost of acquisition less accumulated
depreciation and impairment loss if any. Cost includes all expenses
incidental to the acquisition of the fixed assets.
E. Depreciation :
Depreciation on straight Line method over the useful life of assets.
F. Impairment Of Assets:
The company assesses at each balance sheet date whether there is any
indication that an asset may be impaired if any such indication exists.
The company estimates the recoverable amount of the asset. If such
recoverable amount of the asset is less that the carrying amount. The
carrying amount is reduced to its recoverable amount.
The reduction is treated as an impairment loss and is recognized in the
statement of profit and loss if at the balance sheet date there is an
indication that a previously assessed impairment loss no longer exits
the recoverable amount is reassessed and the asset is reflected at the
recoverable amount subject to a maximum of depreciable historical cost.
G. Investments:
Investments are classified as long term or current based on intention
of the management at the time of purchase.
Current investments are valued scrip wise at cost or fair value
whichever is lower.
H. Repossessed Assets:
Assets repossessed against the settlement of loans are carried in the
balance sheet at outstanding loans amount or market value whichever is
lower. The difference between the outstanding loan amount and the
market value is charged to statement of profit and loss in the year of
repossession of assets.
I. Loan Origination/Acquisition Cost :
All direct cost incurred for the origination is amortized over the
average tenure of the loan.
K. Borrowing Cost :
Borrowing cost which are directly attributable to the acquisition/
construction of fixed assets, till the time assets are ready for
intended use, are capitalized as part of the cost of the assets. Other
borrowing costs are recognized as expenses in the year in which they
are incurred. Borrowing cost directly attributable to borrowing are
expense over the tenure of the borrowing.
L. Earning Per Share :
The basic earning per shares is computed by dividing the net
profit/loss attributable to the equity shareholders for the period by
the weighted average number of equity shares outstanding during the
reported year. Diluted earning per share reflects the potential
dilution that could occur if securities or other contract to issue
equity shares were exercised or converted during the year. Diluted
earning per share is computed by dividing the net profit after tax by
weighted average number of equity shares and dilutive potential equity
shares outstanding during the year. In computing dilutive earning per
share, only potential equity shares that are dilutive and that reduce
profit/increase loss per share are included.
M. Taxation :
i) Current Tax:
Provision for current tax made after taking into consideration benefit
admissible under the provision of the income tax act, 1961. Minimum
alternate tax (MAT) credit entitlement is recognized where there is
convincing evidence that the same can be realized in future.
ii) Deferred Tax:
The deferred tax charge or credit and the corresponding deferred tax
liability or assets are recognized using the tax rate 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 Liabilities are recognized only if there is virtual
certainty or realization of such assets. Deferred tax Liabilities are
reviewed as at each balance sheet date and written down or written up
to reflect the amount that is reasonably/ virtual certain (as the case
may be) to be realized.
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