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Accounting Policies of Escorts Finance Ltd. Company

Mar 31, 2015

(a) Basis of Preparation

These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP) including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013.

(b) Method of Accounting

Accounts are maintained on an accrual basis and at historical cost.

(c) Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognized in periods in which the results are known/materialised.

(d) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation.

(e) Inventories

Repossessed assets are valued at the year-end at lower of book value or net realizable value as certified by the management of the Company.

(f) Depreciation

Depreciation on fixed assets is provided on straight line method based on the estimated useful life as determined by internal assessment of the assets in terms of Schedule II to the Companies Act, 2013. The useful life of the assets has been reassessed based on the number of years for which the assets have already been put to use and the estimated minimum balance period for which the assets can be used in the Company.

In respect of fixed assets having a balance useful life as on April 1, 2014, the written down value of such assets as on April 1, 2014 is charged off as depreciation, on the straight line method, over such balance useful life after retaining the residual value.

All fixed assets individually costing less than Rs. 5,000/- are fully depreciated in the year of purchase.

(g) Investments

Investments are classified as non-current investments if these are intended to be held for more than one year. Other investments are classified as current investments.

Non-current investments are stated at cost. Provision for diminution in the value of investment, if any, is made if the decline in value is of permanent nature.

Current Investments, other than unquoted, are valued at lower of cost or market value. Unquoted current investments are valued at cost or at break up values determined from the last available Balance Sheets of the investee companies or at one rupee only, where the balance sheet is not available for previous two years.

(h) Revenue Recognition

1) Income is recognized on accrual basis except income related to non-performing assets, which is accounted on cash basis in accordance with prudential norms of Reserve Bank of India.

2) The Company has adopted Implicit Rate of Return (IRR) method of accounting in respect of finance charges income for hire purchase/loan transactions. As per this method, the IRR involved in each hire purchase/loan transaction is recognized and finance charges calculated by applying the same on outstanding principal financed thereby establishing equitable distribution of income over the period of the agreement.

3) Interest on overdue installments is accounted for on receipt basis.

(i) Employees Benefits

1) Defined Contribution Plan

Employees benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Statement of the year when the contributions to the respective funds are due.

2) Defined Benefits Plan

Retirement benefits in the form of Gratuity is considered as defined obligations and are provided for on the basis of actual, as at the date of the Balance Sheet.

3) Other Long Term Benefits

Long term compensated absences are provided for on the basis of actual, as at the date of the Balance Sheet.

(j) Taxes on Income

Tax expenses comprise of current tax expense and deferred taxes. Current tax is measured at the amount expected to be paid to the taxation authorities using the applicable tax rates and tax laws. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted till the Balance Sheet date. Tax effect of the timing difference of the current period is included in the Profit & Loss Statement as a part of the tax expense and as deferred tax liability in the Balance Sheet.




Mar 31, 2014

(a) Basis of Preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(b) Method of Accounting

Accounts are maintained on an accrual basis and at historical cost.

(c) Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognized in periods in which the results are known/materialised.

(d) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation.

(e) Inventories

Repossessed assets are valued at the year-end at lower of book value or net realizable value as certified by the independent valuer.

(f) Depreciation

The Company has provided depreciation on Written Down Value Method as per the rates prescribed under Schedule XIV to the Companies Act, 1956. Assets of the value of Rs. 5000/- or below, where identifiable, are fully charged off in the year of purchase.

(g) Investments

Investments are classified as non-current investments if these are intended to be held for more than one year. Other investments are classified as current investments.

Non-current investments are stated at cost. Provision for diminution in the value of investment, if any, is made if the decline in value is of permanent nature.

Current Investments, other than unquoted, are valued at lower of cost or market value. Unquoted current investments are valued at cost or at break up values determined from the last available Balance Sheets of the investee companies or at one rupee only, where the balance sheet is not available for previous two years.

(h) Revenue Recognition

1) Income is recognized on accrual basis except income related to non-performing assets, which is accounted on cash basis in accordance with prudential norms of Reserve Bank of India.

2) The Company has adopted Implicit Rate of Return (IRR) method of accounting in respect of finance charges income for hire purchase/loan transactions. As per this method, the IRR involved in each hire purchase/loan transaction is recognized and finance charges calculated by applying the same on outstanding principal financed thereby establishing equitable distribution of income over the period of the agreement.

3) Interest on overdue installments is accounted for on receipt basis.

(i) Employees Benefits

1) Defined Contribution Plan

Employees benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Statement of the year when the contributions to the respective funds are due.

2) Defined Benefits Plan

Retirement benefits in the form of Gratuity is considered as defined obligations and are provided for on the basis of actual, as at the date of the Balance Sheet.

3) Other Long Term Benefits

Long term compensated absences are provided for on the basis of actual, as at the date of the Balance Sheet.

(j) Taxes on Income

Tax expenses comprise of current tax expense and deferred taxes. Current tax is measured at the amount expected to be paid to the taxation authorities using the applicable tax rates and tax laws. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted till the Balance Sheet date. Tax effect of the timing difference of the current period is included in the Profit & Loss Statement as a part of the tax expense and as deferred tax liability in the Balance Sheet.


Mar 31, 2012

(a) Basis of Preparation

The financial statements have been prepared to comply in all material aspects with the Notified Accounting Standards by Companies (Accounting Standards) Rules, 2006 and the relevant provisions of the Companies Act, 1956.

(b) Method of Accounting

Accounts are maintained on an accrual basis and at historical cost.

(c) Use of Estimates

The preparation of financial statements in conformity with Indian Generally Accepted Accounting Principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures relating to contingent liabilities as at the date of financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates. Differences between the actual result and estimates are recognized in periods in which the results are known/materialised.

(d) Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation.

(e) Inventories

Repossessed assets are valued at the year-end at lower of book value or net realizable value.

(f) Depreciation

The Company has provided depreciation on Written Down Value Method as per the rates prescribed under Schedule XIV to the Companies Act, 1956. Assets of the value of Rs.5000/- or below, where identifiable, are fully charged off in the year of purchase.

(g) Investments

Investments are classified as non-current investments if these are intended to be held for more than one year. Other investments are classified as current investments.

Non-current investments are stated at cost. Provision for diminution in the value of investment, if any, is made if the decline in value is of permanent nature.

Current Investments, other than unquoted, are valued at lower of cost or market value. Unquoted current investments are valued at cost or at break up values determined from the last available Balance Sheets of the investee companies or at one rupee only, where the balance sheet is not available for previous two years.

(h) Revenue Recognition

1) Income is recognized on accrual basis except income related to non-performing assets, which is accounted on cash basis in accordance with prudential norms of Reserve Bank of India.

2) The Company has adopted Implicit Rate of Return (IRR) method of accounting in respect of finance charges income for hire purchase/loan transactions. As per this method, the IRR involved in each hire purchase/loan transaction is recognized and finance charges calculated by applying the same on outstanding principal financed thereby establishing equitable distribution of income over the period of the agreement.

3) Interest on overdue installments is accounted for on receipt basis.

(i) Employees Benefits

1) Defined Contribution Plan

Employees benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the Year when the contribution to the respective funds are due.

2) Defined Benefits Plan

Retirement benefits in the form of Gratuity is considered as defined obligations and are provided for on the basis of actual, as at the date of the Balance Sheet.

3) Other Long Term Benefits

Long term compensated absences are provided for on the basis of actual, as at the date of the Balance Sheet.

(j) Taxes on Income

Tax expenses comprise of current tax expense and deferred taxes. Current tax is measured at the amount expected to be paid to the taxation authorities using the applicable tax rates and tax laws. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted till the balance sheet date. Tax effect of the timing difference of the current period is included in the profit & loss account as a part of the tax expense and as deferred tax liability in the Balance Sheet.


Mar 31, 2011

1. The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and in conformity with the accounting standards issued by the Institute of Chartered Accountants of India (ICAI) & the applicable provisions of the Companies Act, 1956, and Regulatory Authorities. The Company adopts accrual system of accounting unless otherwise stated.

2. Fixed Assets

Fixed Assets are stated at cost less accumulated depreciation.

3. Inventories

Repossessed assets are valued at the year-end at lower of book value or net realizable value.

4. Depreciation

The Company has provided depreciation on Written Down Value Method as per the rates prescribed under Schedule XIV to the Companies Act, 1956. Assets of the value of Rs.5000/- or below, where identifiable, are fully charged off in the year of purchase.

5. Investments

Investments are classified between long term and current categories in accordance with the guidelines stipulated by the Reserve Bank of India and as per the Accounting Standard issued by the Institute of Chartered Accountants of India.

Long Term investments are stated at cost. Provision for diminution in the value of investment, if any, is made if the decline in value is of permanent nature.

Current Investments, other than unquoted, are valued at lower of cost or market value. Unquoted current investments are valued at cost or at break up values determined from the last available Balance Sheets of the investee companies or at one rupee only, where the balance sheet is not available for previous two years.

6. Revenue Recognition

(a) Income is recognized on accrual basis except income related to non-performing assets, which is accounted on cash basis in accordance with prudential norms of Reserve Bank of India.

(b) The Company has adopted Implicit Rate of Return (IRR) method of accounting in respect of finance charges income for hire purchase/loan transactions. As per this method, the IRR involved in each hire purchase/loan transaction is recognized and finance charges calculated by applying the same on outstanding principal financed thereby establishing equitable distribution of income over the period of the agreement.

(c) Interest on overdue installments is accounted for on receipt basis.

7. Employees Benefits

(a) Defined Contribution Plan

Employees benefits in the form of Provident Fund are considered as defined contribution plan and the contributions are charged to the Profit and Loss Account of the Year when the contribution to the respective funds are due.

(b) Defined Benefits Plan

Retirement benefits in the form of Gratuity is considered as defined obligations and are provided for on the basis of actual, as at the date of the Balance Sheet.

(c) Other Long Term Benefits

Long term compensated absences are provided for on the basis of actual, as at the date of the Balance Sheet.

8. Taxes on Income

Tax expenses comprise of current tax expense and deferred taxes. Current tax is measured at the amount expected to be paid to the taxation authorities using the applicable tax rates and tax laws. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantially enacted till the balance sheet date. Tax effect of the timing difference of the current period is included in the profit & loss account as a part of the tax expense and as deferred tax liability in the Balance Sheet.

 
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