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 à capital gainsà 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.