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Accounting Policies of Mega Fin (India) Ltd. Company

Mar 31, 2011

1) Accounting Methodology:

The accounts are being prepared on the Historical Cost basis of accounting. The incomes and expenditures are as accounted as follows :

i) Income:

a) The company follows the practice of accounting for its income on an accrual basis to the extent recoverable. Delayed payment charges are accrued on basis of certainty of collection / realisations.

b) Income from Investments is accounted on receipt basis.

c) In conformity with' the guidelines issued by The Reserve Bank of India, applicable to all registered Non-Banking Finance Companies, the company has adopted the policy of accounting income in respect of Non-Performing Assets (NPA), in the year in which such income is recovered when the Company was registered with RBI as NBFC . The Company has surrender its NBFC Registration certificate to RBI.

ii) Expenses: It is the company's policy to provide for all Expenses on an accrual Basis.

2) Use of, Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires 'management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

3) Fixed Assets:

(i) All Fixed Assets are stated at costs less accumulated depreciation and impairment assets.

5) Investments:

Investments are classified as long term investments and current investments based on the period for which the investments are proposed to be held by the company. Long term investments are stated at cost. Provisions for diminution on global basis, in value of long term investments are made unless the diminution is considered to be temporary in nature.

Government Securities, Bonds etc. invested to comply with the Statutory Liquidity Ratio (SLR) as prescribed by the Reserve Bank of India, for registered Non-Banking Finance Companies are stated at costs. Provisions for diminution in value of quoted. and unquoted "investment have been made as per R.B.I. Directions "Non Banking Financial Companies Prudential Norms. (Reserve Bank) Directions, 1998 when the Company was registered with RBI as NBFC- Profit/Loss on sale of investments are computed with respect to their average costing.

4) Provision for Contingency :

Depending upon availability of profit, it is the company's policy to provide for contingency @ 2% of the gross income per year, but due to the losses for the period under consideration, the same is not provided.

5) Contingent Liability :

Contingent Liabilities are not provided for in the accounts, but are separately stated in the notes to the accounts.

6) Retirement Benefits :

1) Gratuity:

As there was no employee during the year, therefore Company had not made any provision for Gratuity for the year ended 31st March 2011.

2) Leave Encashment:

In terms of the Accounting Standard 15, issued by the Institute of The Chartered Accountants of India, relating to "Accounting of Retirement Benefits and the Financial Benefits of the Employees", applicable for the year 1995-96 and onwards, the company has made necessary provisions for leave encashment liability due to the, employees as all employees retired as on 31st March 1999 and the same is charged to Profit and Loss Account upto 31st March 1999. As during the year' under review there are no employees on payroll of the Company, no provision has been made.

7) Prudential Norms:

The company has followed the guidelines issued by the Reserve Bank of India to registered Non-Banking Finance Companies, regarding Capital Adequacy, Asset Classification; Provisioning for Income Recognition on Non-Performing Assets till the Company was registered with RBI as NBFC.


Mar 31, 2010

1) Accounting Methodology:

The accounts are being prepared on the Historical Cost basis of accounting. The incomes and expenditures are as accounted as follows :

i) Income:

a) The company follows the practice of accounting for its income on an accrual basis to the extent recoverable. Delayed payment charges are accrued on basis of certainty of collection/realisations.

b) Income from Investments is accounted on receipt basis.

c)In conformity with the guidelines issued by The Reserve Bank of India, applicable to all registered Non-Banking Finance Companies, the company has adopted the policy of accounting income in respect of Non-Performing Assets (NPA), in the year in which such income is recovered when the Company was registered with RBI as NBFC . The Company has surrender its NBFC Registration certificate to RBI.

ii) Expenses: It is the companys policy to provide for all Expenses on an accrual Basis.

2) Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities on the date of financial statements. Actual results could differ from those estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.

3) Fixed Assets:

(i) All Fixed Assets are stated at costs less accumulated depreciation and impairment assets.

(ii) Impairment

In accordance with AS-28, with effect from April 1, 2004, where there is an indication of impairment of the Companys asset, the carrying amounts of the Companys assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amounts of the assets are estimated, as impairment of its net selling price and its value in use. An impairment loss is recognized whenever the carrying amount of an asset or a cash generating unit exceeds its recoverable amount. Impairment loss is recognised in the profits and loss account or against revaluation surplus where applicable.

4) Depreciation:

Nature of Fixed Assets Depreciation Method Used

Fixed Assets acquired for own use Straight Line Method at the rate specified in schedule XIV of the Companies Act, 1956.

Fixed Assets acquired and given on Lease

Depreciation on additions is provided on pro-rata basis from the day the asset is put to use and on leased assets the depreciation is provided from the month the said asset is put to use.

5) Investments:

Investments are classified as long term investments and current investments based on the period for which the investments are proposed to be held by the company. Long term investments are stated at cost. Provisions for diminution on global basis, in value of long term investments are made unless the diminution is considered to be temporary in nature.

Government Securities, Bonds etc. invested to comply with the Statutory Liquidity Ratio (SLR) as prescribed by the Reserve Bank of India, for registered Non-Banking Finance Companies are stated at costs.

Provisions for diminution in value of quoted and unquoted investment have been made as per R.B.I. Directions "Non Banking Financial Companies Prudential Norms. (Reserve Bank) Directions, 1998 when the Company was registered with RBI as NBFC. Profit / Loss on sale of investments are computed with respect to their average costing.

6) Provision for Contingency:

Depending upon availability of profit, it is the companys policy to provide for contingency @ 2% of the gross income per year, but due to the losses for the period under consideration, the same is not provided.

7) Contingent Liability:

Contingent Liabilities are not provided for in the accounts, but are separately stated in the notes to the accounts.

8) Retirement Benefits:

1) Gratuity:

As there was no employee during the year, therefore Company had not made any provision for Gratuity for the year ended 31st March 2010.

2) Leave Encashment:

In terms of the Accounting Standard 15, issued by the Institute of The Chartered Accountants of India, relating to "Accounting of Retirement Benefits and the Financial Benefits of the Employees", applicable for the year 1995-96 and onwards, the company has made necessary provisions for leave encashment liability due to the employees as all employees retired as on 31st March 1999 and the same is charged to Profit and Loss Account upto 31st March 1999. As during the year under review there are no employees on payroll of the Company, no provision has been made.

9) Prudential Norms:

The company has followed the guidelines issued by the Reserve Bank of India to registered Non-Banking Finance Companies, regarding Capital Adequacy, Asset Classification, Provisioning for Income Recognition on Non-Performing Assets till the Company was registered with RBI as NBFC.

 
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