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Accounting Policies of Meenakshi Enterprises Ltd. Company

Mar 31, 2014

1. OVERVIEW:

MEENAKSHI ENTERPRISES LIMITED ("the Company") incorporated in Chennai is a non-deposit taking Non-Banking Financial Company ('NBFC) as defined under section 45-IA of the Reserve bank of India (RBI) Act, 1934 and is engaged in the business of financing and trading in securities.

a. GENERAL:

The company follows the accrual method of accounting. The financial statements have been prepared in accordance with the historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known liabilities and losses. The Company is registered with the RBI as a non-deposit taking NBFC and hence all the prudential norms applicable with respect to an NBFC relating to recognition of income and classification of assets etc. have been followed during the year.

b. USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the required amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual amounts and the estimates are recognized in the period in which the results are known / materialized.

c. ADVANCES:

Advances are classified as standard, sub-standard, doubtful and loss assets as per the Company Policy approved by the Board which is more conservative than the relevant RBI guidelines. Interest on non-performing advances is transferred to an interest suspense account and not recognized in the statement of profit and loss until received. Loan assets recognized on disbursement of loan and in case of new asset financing on the transfer of ownership.

d. FIXED ASSETS:

TANGIBLE FIXED ASSETS:

Fixed assets are stated at cost including taxes, duties, freight, insurance etc. related to acquisition and installation less accumulated depreciation and impairment, if any.

e. DEPRECIATION:

Depreciation is provided over the estimated useful life of the fixed asset on written Down Value (WDV) at the rates and manner prescribed in Schedule XIV of the Companies Act, 1956 ("the Act") at written down value Method Rates on pro rata basis for the additions during the year. The rates of depreciation for certain key fixed assets used in arriving at the charge for the year are as under:

f. INVESTMENTS:

Investments expected to mature after twelve months are taken as non-current/ long term investment and stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at lower of cost and quoted/ fair value.

g. INVENTORIES:

The securities held for the purpose of trading are valued at cost or market value whichever is lower.

h. REVENUE RECOGNITION:

Interest income is recognized in the statement of profit and loss on an accrual basis. In case of Non-Performing Assets (NPA) interest is recognized upon realization as per the RBI Guidelines. Interest accrued and not realized before the classification of the asset as an NPA is reversed and credited to the interest suspense account.

Interest on consultancy services and contract services is recognized when there is a right to receive the same as per the terms of engagement. Dividend income is recognized when right to receive is established.

i. EMPLOYEE BENEFITS:

a. GRATUITY:

The liability for gratuity has not been provided as per the provisions of Payment of Gratuity Act, 1972 since no employee of the company is eligible for such benefits during the year.

b. PROVIDENT FUND:

The provisions of the Employees Provident Fund are not applicable to the company since the numbers of employees employed during the year were less than the minimum prescribed for the benefits.

c. LEAVE SALARY:

In respect of Leave Salary, the same is accounted as and when the liability arises in accordance with the provision of law governing the establishment and at each balance sheet date the leave encashment eligibility is determined and provided for.

j. DEFERRED TAX:

Taxes on Income are accrued in the same period as the revenue and the expenses to which they relate. Deferred tax assets are recognized to the extent there is a virtual certainty of its realization.

k. IMPAIRMENT OF ASSETS:

As at Balance Sheet Date, the carrying amount of assets is tested for impairment so as to determine:

a. Provision for Impairment Loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous periods.

Impairment Loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

l. BORROWING COST:

Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. All other borrowing costs are charged off to revenue.

A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale.

m. DEFERRED REVENUE EXPENDITURE:

Share Issue Expenses are written off uniformly over a period of 5 years from the year of incurring the expenditure.

n. INCOME TAX:

Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the prudence, of timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more periods.

o. EARNINGS PER SHARE:

The Company reports basic and diluted earnings per equity share in accordance with AS - 20 on earnings per share issued by the ICAI. Basic earnings per equity share have been computed by dividing net profit /loss attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year. Diluted earnings per equity share have been computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares and dilutive potential equity shares outstanding during the year, except where the results are anti dilutive.

p. PROVSIONING ON RECEIVABLE FROM FINANCING ACTIVITY:

The Company assess all receivables for their recoverability and accordingly recognizes provision for non-performing and doubtful assets as per approved Company Policies and guidelines. The Company ensures provisions made are not lower than as stipulated by RBI guidelines. The Company provides 0.25% on standard assets as stipulated by RBI under the head "Contingent Provision against Standard Assets.

(1) The shares allotted on 14th February, 2014 on preferential basis are subject to lock-in period of 12 months from the date of trading at Madras Stock Exchange i.e, 6th May, 2014. The Company is listed at only Madras Stock Exchange.

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. In the event of the liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity of shares held by the shareholders. The holders of equity shares are entitled to dividends, if any, proposed by the Board of Directors and approved by shareholders at the annual general meeting.

Note:

Loans and advances due by directors or officers of the company or any of them either severally or jointly with others or by firms or private companies respectively in which any director is a partner or a director or member Short term loans and advances are receivables under financing activities and represents principal and accrued interest income outstanding at the close of the year net of amounts written off.


Mar 31, 2013

A. GENERAL

The company follows the accrual method of accounting. The financial statement have been prepared in accordance with the historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known liabilities and losses. The company is registered with the RBI as a non-deposit taking NBFC and hence all the prudential norms applicable with respect to an NBFC relating to recognition of income and classification of assets etc. have been followed during the year.

b. USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the required amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between the actual amounts and the estimates are recognized in the period in which the results are known/ materialized.

c. FIXED ASSETS:

Depreciation is provided to the extent of depreciate amount on written Down Value (WDV) at the rates and manner prescribed in schedule XIV of the companies Act, 1956 ("the Act") at written down

e. INVESTMENTS:

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at atlower of cost and quoted/ fair value.

e. INVENTORIES:

The operations of the company is such that no inventories are generated.

f. REVENUE RECOGNITION

Revenue is recognized and expenditure is accounted for on their accrual. Dividend income i recognized when right to receive is established.

g. EMPLOYEE BENIFITS:

a. Gratuity:

The liability for the gratuity has not been provided as per the provisions of payment of gratuity Act, 1972 since no employee of the company is eligible for such benefits during the year.

b. Provident Fund:

The provisions of the employees provident fund are not applicable to the company since the number of employees employed during the year were less than the minimum prescribed for the benefits.

c. Leave Salary:

In respect of leave salary, the same is accounted as and when the liabilities arises in accordance with the provision of law governing the establishment and at each balance sheet date the leave encashment eligibility is determined and provided for.

h. DEFERRED TAX:

Taxes on income are accrued in the same period as the revenue and the expenses to which they relate. Deferred tax assets are recognized to the extent there is a virtual certainty of its realization.

i. IMPAIRMENT OF ASSETS:

As at Balance Sheet Date, the carrying amount of assets is tested for impairment so as to determine:

a. Provision for Impairment Loss, if any, required or

b. the reversal, if any, required of impairment loss recognized in previous period.

j. BORROWING COST:

Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. All other borrowing costs are charged off the revenue.

A qualifying assets is an assets that necessarily requires a substantial period of time to get ready for its intended use or sale.

k. DEFERRED REVENUE EXPENDITURE:

Share Issue Expenses are written off uniformly over a period of 5 years.

j. INCOME TAX

Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the prudence, of timing differences, being the differences between taxable income and accounting income that originate in one period and are capable of reversal in one or more periods.

Note: (1) The shares allotted during the year on preferential basis are subject to lock-in period of 12 months from the date of allotment (31.03.2012) also subjected to approval from the stock exchanges in which the shares are listed.

Note: Loans and advances due by directors of the company or any of them either severally or jointly with others or by firms are private companies respectively in which any director is a partner or a director or member


Mar 31, 2012

A. GENERAL

The company follows the accrual method of accounting. The financial statements have been prepared in accordance with the historical cost convention and in accordance with. Expenses are accounted on their accrual with necessary provision for all known liabilities and losses. The Company is registered with the RBI as a non-deposit taking NBFC and hence all the prudential norms applicable with respect to an NBFC relating to recognition of income and classification of assets etc. have been followed during the year.

b. USE OF ESTIMATES:

The preparation of financial statements requires estimates and assumptions to be made that affect the required amount of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual amounts and the estimates are recognized in the period in which the results are known/materialized.

c. FIXED ASSETS:

Fixed assets are stated at cost including taxes, duties, freight, insurance etc. related to acquisition and installation.

d. DEPRECIATION:

Depreciation is provided to the extent of depreciable amount on written Down Value (WDV) at the rates and manner prescribed in Schedule XIV of the Companies Act, 1956 ("the Act") at written down value Method Rates on pro rata basis for the additions during the year.

e. INVESTMENTS:

Long term investments are stated at cost. Provision for diminution in the value of long term investments is made only if such a decline is other than temporary. Current investments are stated at at lower of cost and quoted/ fair value.

e. INVENTORIES:

The operations of the company is such that no Inventories are generated.

f. REVENUE RECOGNITION

Revenue is recognized and expenditure is accounted for on their accrual. Dividend income is recognized when right to receive is established.

g. EMPLOYEE BENEFITS:

a. Gratuity:

The liability for gratuity has not been provided as per the provisions of Payment of Gratuity Act, 1972 since no employee of the company is eligible for such benefits during the year.

b. Provident Fund:

The provisions of the Employees Provident Fund are not applicable to the company since the number of employees employed during the year were less than the minimum prescribed for the benefits.

c. Leave Salary:

In respect of Leave Salary, the same is accounted as and when the liability arises in accordance with the provision of law governing the establishment and at each balance sheet date the leave encashment eligibility is determined and provided for

h. DEFERRED TAX:

Taxes on Income are accrued in the same period as the revenue and the expenses to which they relate. Deferred tax assets are recognized to the extent there is a virtual certainty of its realization.

I. IMPAIRMENT OF ASSETS:

As at Balance Sheet Date, the carrying amount of assets is tested for impairment so as to determine:

a. Provision for Impairment Loss, if any, required or

b. The reversal, if any, required of impairment loss recognized in previous periods.

Impairment Loss is recognized when the carrying amount of an asset exceeds its recoverable amount.

j. BORROWING COST:

Borrowing cost attributable to the acquisition or construction of qualifying assets are capitalized as a part of such assets. All other borrowing costs are charged off to revenue.

A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale.

k. DEFERRED REVENUE EXPENDITURE: Share Issue Expenses are written off uniformly over a period of 5 years.

I. INCOME TAX:

Current Tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax is recognized, subject to the prudence, of timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more periods.


Mar 31, 2011

1. Accounting Convention:

The company follows the accrual method of accounting- The financial statements have been prepared in accordance with the historical cost convention and in accordance with Generally Accepted Accounting Principles in India, applicable Accounting Standards issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956. All amounts in the financial statement are presented in Rupees except as otherwise stated.

2. Going Concern and liquidity:

The financial statements of the company have been prepared on a going concern basis, which contemplates the realization of assets and the discharge of the liabilities in the normal course of business for the foreseeable future. The company has accumulated loss to the extent of Rs. 56.21 lakhs as at 31-3-2011 (Previous year: 56.00 Lakhs) which was financed through die shareholders funds & unsecured loan from shareholders and directors, as a result the company's net worth continues to be negative. The management is confident of successfully completing initiatives and commence profitable operations in the nearest foreseeable future.

3. a) Income Recognition: i) Finance charges in respect of Hire Purchase transactions are recognized on the basis of Even Spread Method. Even though no Income has been received during this year and the operations have resulted in substantial loss to the company, the accounts have been prepared on a going concern basis as the directors are confident that some alternative stream of revenue would be found and there would be recovery in due course of time from the Non Performing Assets of the Company.

ii) Dividend income is accounted on receipt basis.

b) All Investments and fixed assets are reflected at cost.

c) Stock of Share is valued at cost or market value whichever is lower.

d) Depreciation is provided on W.D.V. method is respect of owned as well as Leased Assets at the rates given in Schedule XTV of the Companies Act, 1956. Depreciation on assets added/disposed of during the year is being provided on pro-rata basis with reference to the month of addition/ disposal.

 
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