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Accounting Policies of Lohia Securities Ltd. Company

Mar 31, 2015

(a) Basis of Preparation

The Financial Statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Accounting Standard notified under the Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

(c) Fixed Assets & Depreciation

(i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation.

(ii) Depreciation on Tangible Fixed Assets has been provided on written down value method. Depreciation is provided based on useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on Tangible Fixed Assets added / disposed of during the year is provided on prorata basis with reference to the date of addition / disposal.

The unamortised carrying value is being depreciated over the revised / remaining useful lives. The written down value of Tangible Fixed Assets whose lives have expired as at 1st April 2014 have been adjusted in the opening balance of Profit & Loss Statement.

(iii) Intangible assets have been amortized over the period of four financial years.

(d) 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 on non-cash nature and any deferrals or accrual of past or future cash receipts or payments.

(e) Cash and Cash Equivalents (for purposes of 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 amount of cash which are subject to insignificant risk of changes in value.

(f) Inventories

Inventories are valued at lower of cost or market price. The costs of the shares are determined on First in & First out Basis. Inventories of unquoted shares are valued at cost as market value is not available for the same.

(g) Investments

Long term Investments are stated at cost less provision for diminution, other than temporary, in the value of Investments.

(h) Revenue Recognition:

(i) Brokerage income is recognized on the trade date of transaction upon confirmation of transactions by the stock exchanges and clients. Income from depository services and late payment charges are recognized on the basis of agreement entered into with clients and when right to receive the income is established. Commission income from financial products distribution is recognized on the basis of agreement entered with principal and when the right to receive the income is established.

(ii) Dividend income is accounted for when the right to receive the income is established.

(iii) Interest Income is accounted on accrual basis.

(i) Retirement Benefit

(i) Defined Contribution Plan:

Company's contribution paid/payable during the year to the Provident Fund is charged to Statement of Profit and Loss. The Company's contribution to Employee's State Insurance Scheme is also charged to Statement of Profit & Loss of the year to which the contributions relate.

(ii) Defined Benefit Plan:

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Statement of Profit & Loss.

As far as company's liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

(j) Derivative Market Trading

(i) In respect of Option Contract, premium for contract expiring beyond the Balance Sheet date has been treated as current asset / current liabilities.

(ii) In respect of Futures Contract for contract expiring beyond the Balance Sheet date, net of Mark to Market Debit balance and Mark to Market Credit balance has been treated as current assets / current liabilities.

(k) Earnings Per Share

Basic and diluted earnings per share are computed in accordance with Accounting Standard 20 "Earnings per Share".

Basic earnings per share is calculated by dividing the net profit or loss after tax for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.

Diluted earnings per share are computed using the weighted average number of equity shares and dilutive potential equity shares outstanding during the year except where the results are anti-dilutive.

(1) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that 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.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI.


Mar 31, 2014

(a) Basis of Preparation

The Financial Statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Accounting Standard notified under the Companies (Accounting Standard) Rules, 2006 (as amended) and the relevant provisions of the Companies Act 1956 read with the General Circular 15/2013 dated 13.9.2013 of the Ministry of Corporate Affairs in respect of Sec 133 of the Companies Act, 2013. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

(c) Fixed Assets & Depreciation

(i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation.

(ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956.

(iii) Intangible assets have been amortized over the period of four financial years.

(d) 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 on non cash nature and any deferrals or accrual of past or future cash receipts or payments.

(e) Cash and Cash Equivalents (for purposes of 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 amount of cash which are subject to insignificant risk of changes in value.

(f) Inventories

Inventories are valued at lower of cost or market price. The costs of the shares are determined on First in & First out Basis. Inventories of unquoted shares are valued at cost as market value is not available for the same.

(g) Investments

Long term Investments are stated at cost less provision for diminution, other than temporary, in the value of Investments.

(h) Revenue Recognition:

(i) Brokerage income is recognized on the trade date of transaction upon confirmation of transactions by the stock exchanges and clients. Income from depository services and late payment charges are recognized on the basis of agreement entered into with clients and when right to receive the income is established. Commission income from financial products distribution is recognized on the basis of agreement entered with principal and when the right to receive the income is established.

(ii) Dividend income is accounted for when the right to receive the income is established.

(iii) Interest Income is accounted on accrual basis.

(g) Retirement Benefit

(i) Defined Contribution Plan:

Company''s contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company''s contribution to Employee''s State Insurance Scheme is also charged to Profit & Loss Account of the year to which the contributions relate.

(ii) Defined Benefit Plan:

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as

determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Statement of Profit & Loss.

As far as company''s liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

(h) Derivative Market Trading

1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any.

2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss statement and Mark-to-Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract.

(i) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that 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.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI.

(j) Foreign Currency Transaction

i) Initial Recognition

Transaction in foreign currencies entered into by the company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transactions.

ii) Conversion

Foreign currency monetary items are reported using the closing rates.

iii) Exchange Difference

Exchange differences arising on the settlement of reporting company''s monetary items at rates different from those at which they were initially recorded during the period are recognized as income or expense.

* Other Bank Balance represent

a) Bank Deposits valuing to Rs. 2,91,00,000/-(P.Y. T 12,74,50,000/-)given as margin money to National Securities Clearing Corporation Limited (NSCCL).

b) Bank Deposits valuing to Nil (P.Y. Rs.7,50,000/-) given as security deposits to The Calcutta Stock Exchange Limited (CSE)

c) Bank Deposits valuing to Rs. 8,00,000 (P.Y. Rs.8,00,000/-) given as margin money and security deposits to MCX Stock Exchange Limited

d) Bank Deposits valuing to T 50,00,000/- (P.Y. Rs. 4,97,50,000/-)pledge with HDFC Bank for obtaining term loan (refer note no 5 (A) (1))

e) Bank Deposits valuing to Rs. 9,30,00,000/-(P.Y. Rs.6,57,65,500/-) pledge with bank for obtaining bank guarantee . The said bank guarantee has been given to the NSCCL and ICCL as margin money.

f) Bank Deposits includes deposits of Rs. 16,00,000 (2012-13:- Rs.32,50,000/-) with maturity of more than 12 months.

*Interest Income includes Rs. 22,07,419.70 for the year 2013-2014 (2012-2013:- Rs. 23,75,836.27)received on account of Fixed Deposits made from the Margin Money received from trading member & clients. The Fixed Deposits were made on the instruction of trading member (on behalf of its client) & clients. As the said margin money was received from trading member and clients, the amount of interest received on the fixed deposits (Margin Money) has been reimbursed to the trading member and clients. Such reimbursement is shown under the head interest expenses in Note No 24.

*Salary & Bonus include Rs.24,00,000/- for the year 2013-14 (2012-13 :- Rs. 24,00,000/-) payment to Director''s towards managerial remuneration under section 198 of the Companies Act, 1956.


Mar 31, 2013

(a) Basis of Preparation

The Financial Statements of the company have been prepared in accordance with the Generally Accepted Accounting Principles in India (GAAP) to comply with the Ac- counting Standard notified under the Companies (Accounting Standard) 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. The accounting policies adopted in the preparation of the financial statements are con- sistent with those followed in the previous year.

(b) Use of Estimates

The preparation of the financial statements in conformity with the accounting stand- ards generally accepted in India requires, the management to make estimates that af- fect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

(c) Fixed Assets & Depreciation

(i) Fixed Assets are stated at their original cost of acquisition less accumulated deprecia- tion.

(ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956.

(iii) Intangible assets have been amortized over the period of four financial years.

(d) 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 on non cash nature and any deferrals or accrual of past or future cash receipts or payments.

(e) Cash and Cash Equivalents (for purposes of 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 amount of cash which are subject to insignificant risk of changes in value.

(f) Inventories

Inventories are valued at lower of cost or market price. The costs of the shares are de- termined on First in & First out Basis. Inventories of unquoted shares are valued at cost as market value is not available for the same.

(g) Investments

Long term Investments are stated at cost less provision for diminution, other than tem- porary, in the value of Investments.

(h) Revenue Recognition:

(i) Brokerage income is recognized on the trade date of transaction upon confirma- tion of transactions by the stock exchanges and clients. Income from depository services and late payment charges are recognized on the basis of agreement en- tered into with clients and when right to receive the income is established. Com- mission income from financial products distribution is recognized on the basis of agreement entered with principal and when the right to receive the income is established.

(ii) Dividend income is accounted for when the right to receive the income is estab-

lished.

(iii) Interest Income is accounted on accrual basis.

(i) Retirement Benefit

(i) Defined Contribution Plan:

Company''s contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company''s contribution to Employee''s State Insurance Scheme is also charged to Profit & Loss Account of the year to which the contributions relate.

(ii) Defined Benefit Plan:

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liabil- ity as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Statement of Profit & Loss

As far as company''s liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

(j) Derivative Market Trading

1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any

2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss statement and Mark-to-Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of

Future & Option contract.

(k) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be availa- ble against which such deferred tax assets can be realized.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasona- bly certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the de- velopments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI.

(l) Foreign Currency Transaction

i) Initial Recognition

Transaction in foreign currencies entered into by the company are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transactions.

ii) Conversion

Foreign currency monetary items are reported using the closing rates.

iii) Exchange Difference

Exchange differences arising on the settlement of reporting company''s monetary items at rates different from those at which they were initially recorded during the period are recognized as income or expense.


Mar 31, 2012

(a) Basis of Preparation

The Financial Statements are prepared under the historical cost convention, on an accrual basis and in accordance with the provision of the Companies Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards) Rules 2006.

(b) Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

(c) Fixed Assets & Depreciation

(i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation.

(ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956.

(iii) Intangible assets have been amortized over the period of four financial years.

(d) Inventories

Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In & First Out Basis. Inventories of unquoted shares are valued at cost as market value is not available for the same.

(e) Investments

Long term Investments are stated at cost less provision for diminution, other than temporary, in the value of Investments.

(f) Revenue Recognition:

(i) Income from Brokerage is recognized on the trade date of transaction.

(ii) Dividend income is recognized when the right to receive the income is established.

(g) Retirement Benefit

(i) Defined Contribution Plan:

Company's contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company's contribution to Employee's State Insurance Scheme are also charged to Profit & Loss Account of the year to which the contributions relate.

(ii) Defined Benefit Plan:

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Profit & Loss Account. As far as company's liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

(h) Derivative Market Trading

1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any

2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss statement and Mark-to-Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract.

(i) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that 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.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI

(j) Foreign Currency Transaction

a) Initial Recognition

Foreign currency monetary items are reported in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Conversion

Foreign currency monetary items are reported using the closing rates.

c) Exchange Difference

Exchange differences arising on the settlement of reporting company's monetary items at rates different from those at which they were initially recorded during the period are recognized as income or expense.


Mar 31, 2011

(a) Basis of Preparation

The Financial Statements are prepared under the historical cost convention, on an accrual basis and in accordance with the provision of the Companies Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards) Rules 2006.

(b) Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

c) Fixed Assets & Depreciation

(i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation.

(ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956.

(iii) Intangible assets have been amortized over the period of four financial years.

(d) Inventory

Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In & First Out Basis.

(e) Investments

Long term Investments are stated at cost less provision for diminution, other than temporary, in the value of Investments.

(f) Revenue Recognition :

(i) Income from Brokerage is recognized on the trade date of transaction.

(ii) Dividend income is recognized when the right to receive the income is established.

(g) Retirement Benefit

(i) Defined Contribution Plan :

Company's contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account.

The Company's contribution to Employee's State Insurance Scheme are also charged to Profit & Loss Account of the year to which the contributions relate.

(ii) Defined Benefit Plan :

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Profit & Loss Account. As far as company's liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

(h) Derivative Market Trading

1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any

2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss Account and Mark-to- Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract.

(i) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that 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.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecognized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI

(j) Foreign Currency Transaction

a) Initial Recognition

Foreign currency monetary items are reported in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Conversion

Foreign currency monetary items are reported using the closing rates.

c) Exchange Difference

Exchange differences arising on the settlement of reporting company's monetary items at rates different from Those at which they were initially recorded during the period are recognized as income or expense.


Mar 31, 2010

A) Basis of Preparation

The Financial Statements are prepared under the historical cost convention, on an accrual basis and in accordance with the Companies Act, 1956, and the Accounting Standards issued under the Companies (Accounting Standards) Rules 2006.

b) Use of Estimates

The preparation of the financial statements in conformity with the accounting standards generally accepted in India requires, the management to make estimates that affect the reported amount of assets & liabilities disclosure of contingent liabilities as at the date of the financial statement and reported amounts of revenue and expenses for the year. Actual results could differ from these estimates.

c) Fixed Assets & Depreciation

i) Fixed Assets are stated at their original cost of acquisition less accumulated depreciation.

ii) Depreciation on fixed assets has been provided under written down value method on pro-rata basis as per rate prescribed under Schedule XIV of the Companies Act, 1956.

iii) Intangible assets have been amortized over the period of four years.

d) Inventory

Inventories are valued at lower of cost or market price. The costs of the shares are determined on First In & First Out Basis.

e) Investments

Long term Investments are stated at cost less provision for diminution ,other than temporary, in the value of Investments.

f) Revenue Recognition:

i) Income from Brokerage is recognized on the trade date of transaction..

ii) Dividend income is recognized when the right to receive the income is established.

g) Retirement Benefit

i) Defined Contribution Plan:

Company’s contribution paid/payable during the year to the Provident Fund is charged to Profit and Loss Account. The Company’s contribution to Employee’s State Insurance Scheme are also charged to Profit & Loss Account of the year to which the contributions relate.

(ii) Defined Benefit Plan:

The Company has opted for a Group Gratuity-cum Life Assurance Scheme of the Life Insurance Corporation of India (LIC), and contribution towards gratuity liability as determined by LIC as required under AS-15 (Revised) i.e under Projected Unit Credit method is charged to the Profit & Loss Account. As far as company’s liabilities towards leave encashment, company has the policy of paying the leave encashment at the end of the financial year.

h) Derivative Market Trading

1. In respect of Option Contract, premium paid for contract expiring beyond the balance sheet date has been treated as current assets, adjusted for loss, if any

2. In respect of Futures Contract, Mark-to-Market debit balance has been recognized in the Profit & Loss Account and Mark-to-Market credit balance has been treated as current liabilities as per the guidance note issued by ICAI on accounting of Future & Option contract.

i) Taxation

Provision of current tax is made with reference to taxable income computed for the accounting period for which the financial statements are prepared by applying the tax rates as applicable. The deferred tax charge is recognized using the enacted tax rate. Deferred Tax Assets are recognized only to the extent that 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.

At each balance sheet date the Company re- assesses unrecognized deferred tax assets. It recognizes unrecog nized deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realized.

Deferred Tax Assets/Liabilities are reviewed as at balance sheet date based on the developments during the year and reassess assets/liabilities in terms of AS-22 issued by ICAI

j) Foreign Currency Transaction

a) Initial Recognition

Foreign currency monetary items are reported in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of transaction.

b) Conversion

Foreign currency monetary items are reported using the closing rates.

c) Exchange Difference

Exchange differences arising on the settlement of reporting company’s monetary items at rates different from those at which they were initially recorded during the period are recognized as income or expense.