Mar 31, 2015
2.1 Basis of preparation:
The Financial Statements have been prepared in accordance with the
generally accepted accounting principles ('GAAP') applicable in India.
The Company has prepared these financial statements to comply in all
material respects with the provisions of the Companies Act,2013 ('the
Act') and accounting standards notified under Section 133 of the
Companies Act, 2013 read together with paragraph 7 of the companies
(Accounts) Rules, 2014. The financial statements have been prepared on
an accrual basis and under the historical cost convention. The
financial statements are presented in Indian Rupees.
All Assets and Liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in Schedule III of the Companies Act, 2013.
The accounting policies adopted in the preparation of the financial
statements are consistent with those of the previous year.
2.2 Use of Estimates:
The preparation of Financial Statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made by management that affect the reported amount of
assets and liabilities and disclosure of contingent liabilities as on
the date of the financial statements and the reported amount of
revenues and expenses during the reporting period. Differences between
the actual results and estimates are recognized in the period in which
the results are known / materialized.
2.3 Revenue Recognition:
Income and expenditure are recognized and accounted on accrual basis as
and when they are earned or incurred. Revenue from sales transaction is
recognized as and when the significant risk and reward attached to
ownership in goods is transferred to the buyer. However leave with
wages and bonus is accounted on cash basis.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sale price and
the carrying value of the investment. Interest income is accounted on
accrual basis. Dividend income is accounted for when the right to
receive it is established.
Hire purchase and Lease Income is accounted by using the internal rate
of return (IRR) implicit in contracts to provide a constant periodic
rate of return on the net outstanding on those contracts.
Prompt payment rebate and overdue charges are determined and accounted
for on termination of the contracts.
The company follows prudential norms for recognition of Income of Non
Performing Assets as per the directions prescribed by Reserve bank of
India for NBFC.
2.4 Fixed Assets and Depreciation:
Tangible Assets are stated at cost (or revalued amount as the case may
be) less accumulated depreciation and accumulated impairment losses if
any. Cost Comprises purchase price and any other attributable cost of
bringing the asset to its working condition for its intended use.
Subsequent expenditure related to an item of fixed asset are added to
its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Gain or loss arising from de-recognition of assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the assets and are recognized in the statement of profit and loss when
the asset is derecognized.
Depreciation on fixed assets is provided on written down value method
(WDV) at the rates and in the manner prescribed in Schedule II to the
Companies Act, 2013. The residual life of an asset is taken as 5%. The
details of the estimated life of each category of asset are as under
S.no Asset Useful Life (Years)
1 Computer 3
2 Printer 3
3 Furniture & Fixture 10
2.5 Investments
Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments in accordance with the RBI
guidelines and Accounting Standard 13 on 'Accounting for Investments'
as notified under the companies (Accounting Standards) Rules,
2006.Current investments also include current maturities of long- term
investments. All other investments are classified as non- current
investments. Current investments are carried at lower of cost and
market price determined category- wise. All non - current investments
are carried at cost. However, provision for diminution in value, other
than temporary in nature, is made to recognize a decline, on an
individual basis.
Investment in Venture Capital Fund is valued at cost.
2.6 Impairment:
The carrying amounts of assets are reviewed at each balance sheet date
for any indication of impairment based on internal/external factors.
Where the carrying value exceeds the estimated recoverable amount,
provision for impairment is made to adjust the carrying value to the
recoverable amount. The recoverable amount is the greater of the assets
estimated net realizable value and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present
value using an appropriate discounting rate. If at the Balance sheet
date there is an indication that a previously assessed impairment loss
no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to maximum of depreciable
historical cost.
2.7 Borrowing Costs:
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
2.8 Inventories
Stock in trades are valued at cost.
2.9 Derivatives:
Pursuant to the announcement on Accounting for derivatives issued by
the Institute of Chartered Accountants of India (ICAI), the company in
accordance with the principle of prudence as enunciated in Accounting
Standard 1 on 'Disclosure of Accounting Policies' provides for losses
in respect of all outstanding derivative contracts at the Balance Sheet
date by marking them to market. Any gains arising on such mark to
market are not recognized as income.
2.10 Foreign Currency:
Transactions in foreign currencies are recorded at the exchange rates
prevailing on the date of the transaction. Monetary items in foreign
currencies are stated at the closing exchange rate. Gains/losses on
conversion/translation are recognized in the Statement of Profit and
Loss. All forward exchange contracts are backed by underlying
transactions and the premium or discount arising at inception of such a
forward exchange contract is amortized as expense or income over the
life of the contract and the exchange differences on such contracts are
recognized in the statement of profit and loss in the reporting period
in which the exchange rates change.
2.11 Cash Flow Statement:
Cash comprises cash on hand 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.
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
2.12 Employee Benefits:
Short term benefits and post employment benefits are accounted in the
period during which the services have been rendered.
2.13 Taxation:
Current tax is determined as the amount of tax payable in respect of
taxable income for the year computed in accordance with relevant
provisions of Income Tax Act, 1961.
In accordance with the guidance note issued by the Institute of
Chartered Accountants of India ('ICAI') on accounting for credit
available in respect of Minimum Alternate Tax (MAT) under the Income
Tax Act, 1961, the Company recognizes MAT credit as an asset only when
and to the extent there is convincing evidence that the Company will be
liable to pay normal income tax during the specified period.
Deferred tax charge or credit and correspondingly deferred tax liability
or asset is recognized using tax rates that have been enacted or
substantively enacted at the balance sheet date. Deferred tax is
recognized, subject to the consideration of prudence, on timing
differences, being the difference between taxable income and accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. In the event of unabsorbed depreciation or
carried forward loss under taxation laws, deferred tax assets are
recognized only if there is virtual certainty supported by convincing
evidence that sufficient future taxable income will be available against
which such deferred tax assets can be realized. Deferred tax assets are
reviewed at each balance sheet date and written down or written up to
reflect the amount i.e. reasonable/virtually certain (as the case may
be) to be realized.
2.14 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognized only when there is a present obligation as a
result of past events, it is more likely than not that an outflow of
resources will be required to settle the obligation and when a reliable
estimate of the amount of the obligation can be made.
Contingent Liability is disclosed for (i) Possible obligation which
will be confirmed only by future events not wholly within the control
of the company or (ii) Present obligations arising from the past events
where it is not probable that an outflow of resources will be required
to settle the obligation or a reliable estimate of the amount of the
obligation cannot be made.
Contingent Assets are not recognized in the financial statements.
2.15 Earnings per Share:
The basic earnings per share are computed by dividing the net profit
attributable to the equity shareholders for the year by the weighted
average number of equity shares outstanding during the reporting
period. Diluted EPS is computed by dividing the net profit attributable
to the equity shareholders for the year by the weighted average number
of equity and dilutive equity equivalent shares outstanding during the
year, except where the results would be anti-dilutive.
2.16 Provisioning For Standard Assets
The Reserve Bank of India (RBI) vide Notification no. DNBS
223/CGM/(US)-2011 dated January 17, 2011 has issued direction to all
NBFCs to make provision of 0.25% on standard assets. Accordingly, the
company has made provision @0.25% on standard assets in accordance with
RBI directions.
2.17 Segment Reporting:
The generally accepted accounting principles used in the preparation of
the financial statements are applied to record revenue and expenditure
in individual segments.
Segment revenue and segment results include transfers between business
segments. Such transfers are accounted for at the agreed transaction
value and such transfers are eliminated in the consolidation of the
segments.
Expenses that are directly identifiable to segments are considered for
determining the segment result. Expenses, which relate to the company
as a whole and are not allocable to segments, are included under
unallocated corporate expenses.
Segment assets and liabilities include those directly identifiable with
the respective segments. Unallocated corporate assets and liabilities
represent the assets and liabilities that relate to the company as a
whole and not allocable to any segment.
Mar 31, 2014
1.1 Basis of preparation of Financial Statements:
The Financial Statements have been prepared in accordance with the
generally accepted accounting principles (''GAAP'') applicable in India
under the historical cost convention on accrual basis. These financial
statements have been prepared to comply in all material aspects with
the accounting standards notified under Section 211 (3C), Companies
(Accounting Standard) Rules, 2006, as amended from time to time and the
other relevant provisions of the Companies Act, 1956 read with General
Circular 8/2014 dated 04.04.204 issued by the Ministry of Corporate
Affairs and the directives as prescribed by the Reserve Bank of India.
All Assets and Liabilities have been classified as current or
non-current as per the Company''s normal operating cycle and other
criteria set out in Schedule VI of the Companies Act, 1956.
1.2 Investments
Investments which are readily realizable and intended to be held for
not more than one year from the date on which such investments are made
are classified as current investments in accordance with the RBI
guidelines and Accounting Standard 13 on ''Accounting for Investments''
as notified under the companies (Accounting Standards) Rules,
2006.Current investments also include current maturities of long-term
investments. All other investments are classified as non-current
investments. Current investments are carried at lower of cost and
market price determined categorywise. All non-current investments are
carried at cost. However, provision for diminution in value, other than
temporary in nature, is made to recognize a decline, on an individual
basis.
Investment in Venture Capital is valued at cost.
1.3 Use of Estimates:
The preparation of Financial Statements in conformity with GAAP
requires that the management of the Company makes estimates and
assumptions that affect the reported amounts of income and expenses of
the period, the reported balances of assets and liabilities and the
disclosures relating to contingent liabilities as of the date of the
financial statements. Actual results could differ from these estimates.
Difference between the actual results and estimates are recognized in
the period in which the results are known / materialized. Management
believes that the estimates used in preparation of financial statements
are prudent and reasonable.
1.4 Inventories
Stock in trade are valued at cost.
1.5 Cash Flow Statement:
Cash comprises cash on hand 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.
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.
1.6 Tangible Assets:
Tangible Assets are stated at cost (or revalued amount as the case may
be) less accumulated depreciation and accumulated impairment losses if
any. Cost Comprises purchase price and any other attributable cost of
bringing the asset to its working condition for its intended use.
Subsequent expenditure related to an item of fixed asset are added to
its book value only if they increase the future benefits from the
existing asset beyond its previously assessed standard of performance.
Gain or loss arising from de-recognition of assets are measured as the
difference between the net disposal proceeds and the carrying amount of
the assets and are recognized in the statement of profit and loss when
the asset is derecognized.
Depreciation on fixed assets is provided on written down value method
(WDV) at the rates and in the manner prescribed in Schedule XIV of the
Companies Act, 1956 over their useful life. Depreciation of asset sold
/ discarded during the period is proportionately charged. Individual
low cost assets (acquired for less than Rs 5000/-) are depreciated
within a year of acquisition. Intangible assets are amortized over
their estimated useful life on a straight line basis.
1.7 Borrowing Costs :
Borrowing costs that are attributable to the acquisition or
construction of qualifying assets are capitalized as part of the cost
of such assets. A qualifying asset is one that takes necessarily
substantial period of time to get ready for its intended use. All other
borrowing costs are charged to revenue.
1.8 Impairment of assets :
As on Balance Sheet date, the Company reviews the carrying amount of
Fixed Assets to determine whether there are any indications that those
assets have suffered "Impairment Loss". Impairment loss, if any, is
provided to the extent, the carrying amount of assets exceeds their
recoverable amount. Recoverable amount is higher of an asset''s net
selling price and its value in use. Value in use is the present value
of estimated future cash flows expected to arise from continuing use of
an asset and from its disposal at the end of its useful life.
1.9 Revenue Recognition:
Income and expenditure are recognized and accounted on accrual basis as
and when they are earned or incurred. Revenue from sales transaction is
recognized as and when the significant risk and reward attached to
ownership in goods is transferred to the buyer. However leave with
wages and bonus is accounted on cash basis.
Profit on sale of investments is recorded on transfer of title from the
company and is determined as the difference between the sale price and
the carrying value of the investment. Interest income is accounted on
accrual basis. Dividend income is accounted for when the right to
receive it is established.
Hire purchase and Lease Income is accounted by using the internal rate
of return (IRR) implicit in contracts to provide a constant periodic
rate of return on the net outstanding on those contracts.
Prompt payment rebate and overdue charges are determined and accounted
for on termination of the contracts.
The company follows prudential norms for recognition of Income of Non
Performing Assets as per the directions prescribed by Reserve bank of
India for NBFC.
1.10 Employee Benefits:
Short term benefits and post employment benefits are accounted in the
period during which the services have been rendered.
1.11 Foreign Exchange Transactions:
Foreign currency transactions are recorded at the rate of exchange
prevailing on the date of the respective transactions.
Foreign Exchange monetary items in the Balance Sheet are translated at
the year-end rates. Exchange differences on settlement / conversion
are adjusted to Profit and Loss Account.
1.12 Tax Expense:
Tax expenses for the year comprise of current tax and deferred tax.
Current tax is measured after taking into consideration the deductions
and exemptions admissible under the provision of Income Tax Act, 1961
and in accordance with Accounting Standard 22 on "Accounting for Taxes
on Income.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred Tax represents the tax effect of timing differences between
taxable income and accounting income for the reporting period and is
capable of reversal in one or more subsequent periods. Deferred tax are
quantified using the tax rates and laws enacted or substantively
enacted as on the Balance Sheet Date.
Deferred Tax Assets are recognized and carried forward only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. Deferred tax asset on unabsorbed depreciation and
carry forward of losses are not recognized unless there is virtual
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized.
1.13 Contingent Liabilities and Provisions:
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made.
Contingent Liability is disclosed for
a. Possible obligation which will be confirmed only by future events
not wholly within the control of the company or
b. Present obligations arising from the past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation
cannot be made.
c. Contingent Assets are not recognized in the financial statements
since this may result in the recognition of income that may never be
realized.
1.14 Earnings per Share:
In determining the Earnings Per share, the company considers the net
profit after tax including any post tax effect of any extraordinary /
exceptional item. The number of shares used in computing basic earnings
per share is the weighted average number of shares outstanding during
the period.
The number of shares used in computing Diluted earnings per share
comprises the weighted average number of shares considered for
computing Basic Earnings per share and also the weighted number of
equity shares that would have been issued on conversion of all
potentially dilutive shares.
In the event of issue of bonus shares, or share split the number of
equity shares outstanding is increased without an increase in the
resources. The number of Equity shares outstanding before the event is
adjusted for the proportionate change in the number of equity shares
outstanding as if the event had occurred at the beginning of the
earliest period reported.
1.15 Provisioning For Standard Assets
The Reserve Bank of India (RBI) vide Notification no. DNBS
223/CGM/(US)-2011 dated January 17, 2011 has issued direction to all
NBFCs to make provision of 0.25% on standard assets. Accordingly, the
company has made provision @0.25% on standard assets in accordance with
RBI directions.
1.16 Segment Reporting:
The generally accepted accounting principles used in the preparation of
the financial statements are applied to record revenue and expenditure
in individual segments.
Segment revenue and segment results include transfers between business
segments. Such transfers are accounted for at the agreed transaction
value and such transfers are eliminated in the consolidation of the
segments.
Expenses that are directly identifiable to segments are considered for
determining the segment result. Expenses, which relate to the company
as a whole and are not allocable to segments, are included under
unallocated corporate expenses.
Segment assets and liabilities include those directly identifiable with
the respective segments. Unallocated corporate assets and liabilities
represent the assets and liabilities that relate to the company as a
whole and not allocable to any segment.
Mar 31, 2012
A. Change in accounting policy
Presentation and disclosure of financial statements
During the year ended on 31 March 2012 the revised Schedule VI notified
under the Companies Act, 1956, has become applicable to the company,
for preparation and presentation of its financial statements.
The adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosure made in the financial statements. The company has also
reclassified the previous years figures in accordance with the
requirements applicable in the current year.
b. ACCOUNTING METHODS
(i) The Financial statements are prepared under the Historical Cost
convention and on Accrual basis expect as otherwise stated.
(ii) There exists Nil assets as on 31-03-2012 on account of transfer of
the company's business to its sister concern namely M/s Kailash Motors
Finance Pvt. Ltd. during the year which has effected the going concern
concept of the company. However, there has been change in the
management control of the company by purchase of 2616517 nos shares of
the company i.e. 68.74% of the issued capital of the company by M/s
Padma Impex Pvt. Ltd. vide order of the Hon'ble Bombay High Court, in
arbitration petition no. 304 of 2011 dated 22-02-2012. Further, the
company has transferred all its old outstanding debit and credit
balances at book value to one of its sister concern namely M/s Kailash
Motors Finance Pvt. Ltd. Jabalpur. As informed by the management that
the said action will help in improving the operating start and
capabilities. The Management of the view that the company by the above
said change will perform better and fully comply with the statutory
norms.
c. REVENUE
(i) The non banking business of the company under category "A" of
Reserve bank of India has been converted to category "B" i.e. non public
deposit acceptance company w.e.f. 12th Jan 2009.
(ii) Hire Purchase and Lease Income is accounted by using the internal
rate of return (IRR) implicit in contracts to provide a constant
periodic rate of return on the net investment outstanding on those
contracts.
(iii) Prompt payment rebate and overdue charges are determined and
accounted for on termination of the contract.
(iv) The company follows prudential norms for recognition of Income in
respect of Non Performing Assets as per the directions prescribed by
Reserve Bank of India for NBFC.
d. RETIREMENT BENEFITS
The facility towards Gratuity, and Leave Encashment has been computed
and provided for on the assumption of retirement of all the employees
at the end of the year. ln the absense of Actuarial valuation we could
not comment on the reasonbleness of the provision made. However
provision related to Bonus & Gratuity has been transferred to, M/s
Kailash Motors Finance Pvt. Ltd. on the premise that all the employees
of the company are now the employees of M/s Kailash Motors Finance Pvt.
Ltd.
e. DEPRECIATION
Depreciation on the assets is provided at the rates and in the manner
provided in schedule XIV of the companies
Act, 1956:
(i) On assets held for own use - Written Down Method
(ii) On leased asset - Straight Line Method
(iii) Fixed asset as on 31-03-2012 - Nil
f. INVESTMENT Investment are valued at cost. All the investment of the
company during the year had been transferred at book value to M/s
Kailash Motors Finance Pvt. Ltd. Jabalpur to vide assignment agreement
dtd. 13-02-2012. Investment as on 31-03-2012 is Nil.
g. STOCK - Stock in trade and Repossessed stock is valued at cost or
market value whichever is lower. Stock as on 31-03-2012 is Nil.
Mar 31, 2010
1- ACCOUNTING METHODS
(i) The Financial statements are prepared under the Historical Cost
convention and on Accrual basis expect as otherwise stated.
(ii) There exsist Nil assets as on 31-03-2010 on account of transfer of
the companys business to its sister concern namely
M/s Kailash Motors Finance Pvt. Ltd. during the year which has effected
the going concern concept of the company.
However, the management is planning to induct new directors under SEBI
Takeover Code, so as to have fresh funds and operating start and
capabilities. The Management of the view that the company by the above
said change will perform better and fully comply with the statutory
norms.
2- REVENUE
(i) The non banking business of the company under category" A" of
Reserve bank of India has been converted to category "B" i.e.non public
deposit acceptance company w.e.f.12th Jan 2009.
(ii) Hire Purchase and Lease.Income is accounted by using the internal
rate of return (IRR) implicit in contracts to provide a constant
periodic rate of return on the net investment outstanding on those
contracts.
(iii) Prompt payment rebate and overdue chargse are determinded and
accounted for on termination of the contract.
(iv) The company follows prudential norms for recognition of Income in
respect of Non Performing Assets as per the directions prescribed by
Reserve Bank of India for NBFC.
3- RETIREMENT BENEFITS
The facility towards Gratuity, and Leave Encashment has been computed
and provided for on the assumption of retirement of all the employees
at the end of the year. ln the absense of Acutuarial valuation we could
not comment on the reasonbleness of the provision made.
4- DEPRECIATION
Depreciation on the assets is provided at the rates and in the manner
provided in schedule XIV of the companies Act, 1956:
(i) On assets held for own use - Written Down Method
(ii) On leased asset - Straight Line Method
5- INVESTMENT - Investment are valued at cost.
6- STOCK - Stock in trade and Repossessed stock is valued at cost or
market value whichever is lower.
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