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Accounting Policies of Jayabharat Credit Ltd. Company

Mar 31, 2015

1 Basis of preparation of Financial Statements The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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 accrual basis under the historical cost convention except for categories of fixed assets acquired before 1 April, 2001, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actua1 results and the estimates are recognised in the periods in which the results are known / materialise.

3 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises of cash balances in current account and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

5 Depreciation and amortisation

Effective from 1st April, 2014 the Company has charged depreciation based on the revised remaining useful life of the assets as per the requirement of schedule II of the Companies Act, 2013 further, based on transitional provision provided in note 7(b) of schedule II, an amount of Rs.11,94 Lacs has been adjusted against the Genral Reserves.

6 Revenue recognition

a. Income recognition from Asset Financing activity :-

Income is proportionately accounted on accrual basis over the period of the agreement. Overdue compensation collected is taken to the credit of sundry creditors considered as income on receipts of the total outstanding installments. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

b. Reserve Bank of India Guidelines:

The Company has complied with the guidelines issued by the Reserve Bank of India (RBI) in respect of Prudential Norms for Income Recognition and Provisions for Non-Performing Assets.

7 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

8 Investments

"Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalised and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets."

9 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post-employment medical benefits.

Defined contribution plans

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur."

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period In which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

10 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

11 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

12 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. 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.

13 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

14 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

15 Legal Cases

The Company has ongoing legal cases filed against customers for the recovery of dues amounting to Rs.669/- Lacs in various Courts. Any adjustment required will be done on conclusion of proceedings.

16 Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.

NOTES FORMING PART OF THE FINANCIAL STATEMENTS, 31ST MARCH 2015

Note 1 Corporate information

Jayabharat Cerdit Limited is in the business of Hire Purchase & Leasing and is registered with RBI under the Status of Non-Banking Finance Company (NBFC) with Deposit taking Company. The Company now as an Asset Finance Company. Deposit taking (NBFC) vide Certificate dated 3rd June, 2008.

Note 2

Disclosures under Accounting Standards

Accounting Standard 15: Employee benefit plans

Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 3,61,273/- (Year ended 31 March, 2014 Rs. 3,96,296/-) for Provident Fund contributions in the Statement of Profit and Loss During the year. The contributions payable to these plans by the Company are at rates specified In the rules of the schemes.

Note 3

DISCLOSURES UNDER ACCOUNTING STANDARDS

Accounting Standard 22: Accounting for Taxes on Income

In compliance with Accounting Standard 22 on 'Accounting for Taxes on income', the Company has not accounted for deferred tax assets on Business Loss under the Income Tax Act.1961 as there is no reasonable certainity as to when the assets can be realised, and is carrying forward the amount brought forward from earlier years as this amount is expected to be realised.


Mar 31, 2014

1.1 Basis of preparation of Financial Statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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 accrual basis under the historical cost convention except for categories of fixed assets acquired before 1 April, 2001, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash comprises of cash balances in current account and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Depreciation and amortisation

Depreciation has been provided on the written down value method as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

1.6 Revenue recognition

a. Income recognition from Asset Financing activity :-

Income is proportionately accounted on accrual basis over the period of the agreement. Overdue compensation collected is taken to the credit of sundry creditors considered as income on receipts of the total outstanding installments. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

b. Reserve Bank of India Guidelines:

The Company has complied with the guidelines issued by the Reserve Bank of India (RBI) in respect of Prudential Norms for Income Recognition and Provisions for Non- Performing Assets.

1.7 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.8 Investments

"Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalised and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets."

1.9 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post- employment medical benefits.

Defined contribution plans

The Company''s contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

"The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur."

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.10 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.11 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

1.12 Taxes on income

"Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. 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. "

1.13 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.14 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.

1.15 Insurance claims

Insurance claims are accounted for on the basis of claims admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.


Mar 31, 2012

1.1 The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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 accrual basis under the historical cost convention except for categories of fixed assets acquired before 1 April, 2001, that are carried at revalued amounts. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Cash and cash equivalents (for the purposes of Cash Flow Statement)

Cash comprises cash balances in current accounts and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.

1.4 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.5 Depreciation and amortisation

Depreciation has been provided on the written down value meathod as per the rates prescribed in Schedule XIV to the Companies Act, 1956.

1.6 Revenue recognition

a. Income recognition from Asset Financing activity :-

Income is proportionately accounted on accrual basis over the period of the agreement. Overdue compensation collected is taken to the credit of sundry creditors considered as income on receipts of the total outstanding installments. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

b. Reserve Bank of India Guidelines:

The Company has complied with the guidelines issued by the Reserve Bank of India (RBI) in respect of Prudential Norms for Income Recognition and Provisions for Non- Performing Assets.

1.7 Other income

Interest income is accounted on accrual basis. Dividend income is accounted for when the right to receive it is established.

1.8 Investments

Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

Investment properties are carried individually at cost less accumulated depreciation and impairment, if any. Investment properties are capitalised and depreciated (where applicable) in accordance with the policy stated for Tangible Fixed Assets. Impairment of investment property is determined in accordance with the policy stated for Impairment of Assets.

1.9 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post- employment medical benefits.

Defined contribution plans

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under:

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.10 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.11 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year.

1.12 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originates in one period and is capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. 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.

1.13 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed in the Notes.


Mar 31, 2011

1. Basis of Preparation of Financial Statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles ('GAAP') and in compliance with the Accounting Standards specified in the Companies (Accounting Standards) Rules, 2006 notified by the Central Government and the other provisions of the Companies Act, 1956. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires the management of the Company make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liability and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of fixed assets, provision for doubtful debts/advances, future obligations in respect of retirement benefit plans, etc. Actual results could differ from these estimates. Any revisions to accounting estimates are recognised prospectively in the current and future periods. Wherever changes in presentation are made, comparative figures of the previous year are regrouped accordingly.

3. Fixed Assets

A. On assets related to asset financing business:

The assets are not capitalised on payment to supplier on purchase since the titles and possessions are with the hirer and the same is refected as current assets on entering into an Asset Financing agreement for the said assets.

B. On other assets:

a. Capitalised at acquisition cost including directly attributable cost such as freight, insurance and specific installation charges for bringing the assets to its working condition and use.

b. Expenditure relating to existing fixed assets is added to the cost of the assets where it increases the performance / life of the assets, as assessed earlier.

c. Fixed assets are eliminated from financial statement, either on disposal or when retired from active use and such retired assets are disposed off soon thereafter.

4. Impairment of Assets

a. The carrying amount of assets, other than Stock on hire is reviewed at each balance sheet date, to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated.

b. An impairment loss is recognized, whenever the carrying amount of assets or its cash generating units exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use which is determined based on the estimated future cash flow generated from continuing use of an asset and from its disposal at the end of its useful life, discounted to its present value.

c. An impairment loss is reversed, if there has been a change in the estimates made to determine and recognize the recoverable amount in the earlier year.

5. Investments

a. Long term investments are valued at cost after providing for any diminution in value, if such diminution is of other than temporary in nature.

b. Current investments are carried at lower of cost or market value. The determination of carrying costs such investments is done on the basis of specific identification.

6. Foreign currency transactions:

a. The reporting currency of the Company is Indian Rupee.

b. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of transaction. At each balance sheet, foreign currency monetary items are reported using closing rate. Exchange difference that arises on settlement of monetary items are recognized as income or expense in the period in which they arise in other cases.

7. Revenue Recognition

a. Income recognition from Asset Financing activity:

Income is proportionately accounted on accrual basis over the period of the agreement.

Overdue compensation collected is taken to the credit of sundry creditors considered as income on receipts of the total outstanding installments. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

b. Reserve Bank of India Guidelines:

The Company has complied with the guidelines issued by the Reserve Bank of India (RBI) in respect of Prudential Norms for Income Recognition and Provisions for Non-Performing Assets.

8. Employee benefits

A. Short-term employee benefits

a. All employee benefits payable wholly within twelve months of rendering the services are classified as short term employee benefits. Benefits such as salaries, short term compensated absences etc. and expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

b. The obligation for leave encashment is made on actual basis and the same is not payable on retirement.

B. Defned contribution plan

Company's contributions paid / payable during the year to provident fund are recognized in the profit and loss account.

C. Defned benefit plan

Company's liabilities towards gratuity is determined using the Projected Unit Credit Method, which considers each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to build up the final obligation. Actuarial gain and losses are recognized immediately in the profit and loss account as income or expenses.

9. Depreciation

Depreciation on fixed assets has been provided on written down value method, at the rates and in the manner specified in Schedule XIV of the Companies Act,1956.

10. Securitization transactions

The Company enters into securitisation transaction through direct assignment route, where such portfolios of receivables are assigned directly to the purchaser. Such securitised receivables are de-recognised in the balance sheet when they are sold (true sale criteria) and sale consideration is received from the purchaser.

Gain or loss from the sale of receivables is computed as a difference between sale consideration and book value. Any loss arising on account of the sale is accounted accordingly and refected in the profit and loss account for the period during which the sale is effected and profit/ premium, if any, arising on account of sale is amortised over the life of the securitised receivables. Expenses of securitisation transaction are, however, accounted upfront as required by guidelines issued by the RBI on securitization vide Circular No. DBOD.NO.BP.BC.60/ 21.04.048/ 2005-06 dated 1st February, 2006.

11. Borrowing costs

a. Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalised as part of the cost of such asset till such time as the asset is ready for its intended use or sale.

b. All other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Taxes on income

a Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.

b 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 substantially enacted as on the balance sheet date.

c Deferred tax assets relating to unabsorbed depreciation / business losses/ losses under the head “ capital gains” are recognized and carried forward to the extent there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised.

d Deferred tax assets are recognized and carried forward only to the extend that there is a reasonable certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized.

13. Events occurring after the date of balance sheet

Events occurring after the date of balance sheet are considered upto the date of adoption of the accounts, where material.

14. Provisions and contingent liabilities

a. Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

i) the Company has a present obligation as a result of a past event;

ii) a probable outflow of resource is expected to settle the obligation; and

iii) the amount of the obligation can be reliably estimated.

b. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

c. Contingent liability is disclosed in the case of:

i) a present obligation arising from a past event, when it is not probable that an outflow of resource will be required to settle the obligation; and

ii) a possible obligation, unless the probability of outflow of resource is remote contingent assets are neither recognized nor disclosed.

d. Provisions and contingent liabilities are reviewed at each balance sheet date.


Mar 31, 2010

1. Basis of Preparation of Financial Statements

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with Generally Accepted Accounting Principles (GAAP) and in compliance with the Accounting Standards specifiedin the Companies (Accounting Standards) Rules, 2006 notifed by the Central Government and the other provisions of the Companies Act, 1956. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

2. Use of Estimates

The preparation of financial statements in conformity with GAAP requires the management of the Company make estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liability and the disclosures relating to contingent liabilities as of the date of the financial statements. Examples of such estimates include the useful lives of fixedassets, provision for doubtful debts/advances, future obligations in respect of retirement beneft plans, etc. Actual results could differ from these estimates. Any revisions to accounting estimates are recognised prospectively in the current and future periods. Wherever changes in presentation are made, comparative fgures of the previous year are regrouped accordingly.

3. Fixed Assets

A. On assets related to asset financing business:

The assets are not capitalised on payment to supplier on purchase since the titles and possessions are with the hirer and the same is refected as current assets on entering into an Asset Financing agreement for the said assets.

B. On other assets:

a. Capitalised at acquisition cost including directly attributable cost such as freight, insurance and specifc installation charges for bringing the assets to its working condition and use.

b. Expenditure relating to existing fixedassets is added to the cost of the assets where it increases the performance / life of the assets, as assessed earlier.

c. Fixed assets are eliminated from financial statement, either on disposal or when retired from active use and such retired assets are disposed off soon thereafter.

4. Impairment of Assets

a. The carrying amount of assets, other than Stock on hire is reviewed at each balance sheet date,

to determine whether there is any indication of impairment. If any such indication exists, the recoverable amount of the assets is estimated.

b. An impairment loss is recognized, whenever the carrying amount of assets or its cash generating units exceeds its recoverable amount. The recoverable amount is the greater of the assets net selling price and value in use which is determined based on the estimated future cash flow generated from continuing use of an asset and from its disposal at the end of its useful life, discounted to its present value.

c. An impairment loss is reversed, if there has been a change in the estimates made to determine and recognize the recoverable amount in the earlier year.

5. Investments

a. Long term investments are valued at cost after providing for any diminution in value, if such diminution is of other than temporary in nature.

b. Current investments are carried at lower of cost or market value. The determination of carrying costs such investments is done on the basis of specifc identifcation.

6. Foreign currency transactions :

a. The reporting currency of the Company is Indian Rupee.

b. Foreign currency transactions are recorded on initial recognition in the reporting currency, using the exchange rate at the date of transaction. At each balance sheet, foreign currency monetary items are reported using closing rate. Exchange difference that arises on settlement of monetary items are recognized as income or expense in the period in which they arise in other cases.

7. Revenue Recognition

a. Income recognition from Asset Financing activity :

Income is proportionately accounted on accrual basis over the period of the agreement.

Overdue compensation collected is taken to the credit of sundry creditors considered as income on receipts of the total outstanding installments. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

b. Reserve Bank of India Guidelines:

The Company has complied with the guidelines issued by the Reserve Bank of India (RBI) in respect of Prudential Norms for Income Recognition and Provisions for Non-Performing Assets.

8. Employee benefts

A. Short-term employee benefts

a. All employee Benefitspayable wholly within twelve months of rendering the services are classifed as short term employee benefts. Benefitssuch as salaries, short term compensated absences etc. and expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.

b. The obligation for leave encashment is made on actual basis and the same is not payable on retirement.

B. Defned contribution plan

Companys contributions paid / payable during the year to provident fund are recognized in the profitand loss account.

C. Defned beneft plan

Companys liabilities towards gratuity is determined using the Projected Unit Credit Method, which considers each period of service as giving rise to additional unit of beneft entitlement and measures each unit separately to build up the finalobligation. Actuarial gain and losses are recognized immediately in the profitand loss account as income or expenses.

9. Depreciation

Depreciation on fixedassets has been provided on written down value method, at the rates and in the manner specifiedin Schedule XIV of the Companies Act,1956.

10. Securitization transactions

The Company enters into securitisation transaction through direct assignment route, where such portfolios of receivables are assigned directly to the purchaser. Such securitised receivables are de-recognised in the balance sheet when they are sold (true sale criteria) and sale consideration is received from the purchaser.

Gain or loss from the sale of receivables is computed as a difference between sale consideration and book value. Any loss arising on account of the sale is accounted accordingly and refected in the profitand loss account for the period during which the sale is effected and profit/ premium, if any, arising on account of sale is amortised over the life of the securitised receivables. Expenses of securitisation transaction are, however, accounted upfront as required by guidelines issued by the RBI on securitization vide Circular No. DBOD.NO.BP.BC.60/ 21.04.048/ 2005-06 dated 1st February, 2006.

11. Borrowing costs

a. Borrowing costs that are attributable to the acquisition, construction or production of qualifying

assets are capitalised as part of the cost of such asset till such time as the asset is ready for its intended use or sale.

b. All other borrowing costs are recognized as an expense in the period in which they are incurred.

12. Taxes on income

a Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.

b Deferred tax is recognized on timing difference between the accounting income and taxable income for the year, and quantifed using the tax rates and laws enacted or substantially enacted as on the balance sheet date.

c Deferred tax assets are recognized and carried forward only to the extend that there is a reasonable certainty supported by convincing evidence that suffcient future taxable income will be available against which such deferred tax assets can be realized.

13. Events occurring after the date of balance sheet

Events occurring after the date of balance sheet are considered upto the date of adoption of the accounts, where material.

14. Provisions and contingent liabilities

a. Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if

i) the Company has a present obligation as a result of a past event;

ii) a probable outflowof resource is expected to settle the obligation; and

iii) the amount of the obligation can be reliably estimated.

b. Reimbursement expected in respect of expenditure required to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

c. Contingent liability is disclosed in the case of:

i) a present obligation arising from a past event, when it is not probable that an outflowof resource will be required to settle the obligation; and

ii) a possible obligation, unless the probability of outflowof resource is remote contingent assets are neither recognized nor disclosed.

d. Provisions and contingent liabilities are reviewed at each balance sheet date.

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