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Accounting Policies of Navketan Merchants Ltd. Company

Mar 31, 2015

1. Basis of Preparation of Financial Statements

The Financial Statements of the Company are prepared in accordance with the Generally Accepted Accounting Principles (GAAP) in India.

The Financial Statements have been prepared on accrual basis and under the historical cost convention.

GAAP comprises applicable Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014, other pronouncements of the Institute of Chartered Accountants of India, relevant applicable provisions of the, Companies Act, 2013 to the extent applicable.

Accounting policies have been consistently applied except where a newly issued Accounting Standard is initially adopted or a revision to an existing Accounting Standard requires a change in the accounting policy hitherto in use.

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 to the Companies Act, 2013. The Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

2. Use of estimates

The preparation of the Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets, liabilities and disclosures relating to contingent liabilities as at the date of the Financial Statements and reported amounts of revenue and expenses during the period. Actual results might differ from the estimates. Difference between the actual results and estimates are recognized in the period in which the results are known/ materialize.

3. Fixed Assets and Depreciation

Fixed assets have been stated at cost as increased by attributable direct and indirect expenses less accumulated depreciation / amortization.

Depreciation on tangible fixed assets is provided on WDV so as to charge the cost of the assets or the amount substituted for costs in case of revalued assets less its residual value over the useful life of the respective asset as prescribed under Part C of Schedule II to the Companies Act, 2013.

4. Revenue Recognition

All Income is accounted on accrual basis.

5. Expenses

All the expenses are accounted for on accrual basis.

6. Provisions, contingent liabilities and contingent assets

A provision is recognized in respect of obligations where, based on the evidence available, their existence at the Balance Sheet date is considered probable as a result of a past event, and the Company has a present legal obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are measured by best estimate of the outflow of economic benefits required to settle the obligation at the Balance Sheet date.

Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.

Re-imbursement expected in respect of expenditure to settle a provision is recognized only when it is virtually certain that the reimbursement will be received.

A Contingent Asset is neither recognized nor disclosed in the Financial Statements.

7. Taxes on income

Tax expense for the period comprises of current income tax and deferred tax.

Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961.

Deferred tax is recognized, subject to the consideration of prudence in respect of deferred tax assets, on 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 subsequent periods. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. Deferred tax assets are reviewed at each Balance Sheet date and written down or written up to reflect the amount that is reasonably/virtually certain to be realized.

The deferred tax for timing differences between the book and tax profit for the period is accounted for using the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheet date.

8. Earnings per share

Basic earnings per share are computed by dividing the net profit/ (loss) after tax (including the post-tax effect of extra ordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share are computed by dividing the net profit/ (loss) after tax (including the post-tax effect of extra ordinary items, if any) by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares which could be issued on the conversion of all dilutive potential equity shares. Dilutive potential equity shares are determined as at the end of each period presented.

9. Cash flow statement

Cash flows are reported using the indirect method, whereby profit/loss before tax is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing flows. The cash flows from operating, investing and financing activities of the Company are segregated.

10. Cash and cash equivalents

Cash and cash equivalents include cash on hand, cherubs on hand, balance with banks on current accounts and short term, highly liquid investments with an original maturity of three months or less and which carry insignificant risk of changes in value.

11. Other Disclosures

The Previous year figures have been regrouped/reclassified, wherever necessary to confirm to the current year presentation.


Mar 31, 2014

A. Basis of Preparation of Financial Statement

i. The Financial Statement has been prepared on historical cost of accrual basis and on the accounting principles of a going concern.

ii. Accounting Policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting Principles.

b. Investment being long term in nature valued at cost.

c. Revenue Recognition & Expenditure : All revenues have been recognized on accrual basis.


Mar 31, 2013

A. Basis of Preparation of Financial Statement

i. The Financial Statement has been prepared on historical cost of accrual basis and on the accounting principles of a going concern.

ii. Accounting Policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting Principles.

b. Investment being long term in nature valued at cost.

c. Revenue Recognition & Expenditure:

All revenues have been recognised on accrual basis.


Mar 31, 2012

A. Basis of Preparation of Financial Statement

i. The Financial Statement have been prepared on historical cost of accrual basis and on the accounting principles of a going concern.

ii. Accounting Policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting Principles.

b. Investment being long term in nature valued at cost.

c. Revenue Recognition & Expenditure :

All revenues has been recognised on accrual basis.


Mar 31, 2011

A. Basis of Preparation of Financial Statement

i. The Financial Statement have been prepared on historical cost of accrual basis and on the accounting principles of a going concern.

ii. Accounting Policies not specifically referred to otherwise are consistent and are in consonance with generally accepted accounting Principles.

b. Depreciation

Depreciation is provided on written down value method at rates specified in Schedule XIV of the Companies Act, 1956.

c. Investment

Investment being long term in nature valued at cost.

d. Revenue Recognition & Expenditure

All revenues has been recognized on accrual basis.

e. Contingent Liabilities

Contingent liabilities are generally not provided for and are disclosed by way of notes on accounts.

f. Taxes on Income

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 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. Deferred tax assets are not recognized on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that subsequent future taxable income will be available against which such deferred tax assets can be realized.

 
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