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Accounting Policies of Savani Financials Ltd. Company

Mar 31, 2013

Basis of Accounting

The Financial Statements are prepared on the historical cost convention, in accordance with applicable Accounting Standards and the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule VI to the Companies Act, 1956.

Use of Estimates

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

Revenue Recognition

a) Lease Rentals and Lease Management Fees arising out of Lease Agreements and Hire Charges and Documentation Fees arising out of the Hire Purchase Agreements are recognized as income in accordance with the terms of the agreements entered into with the lessees / hirers or as rescheduled from time to time.

Lease rental income on Lease Agreements executed on or after 1st April, 1995 is recognized on the basis of the implicit rate of return, the difference between the capital recovery and the depreciation being accounted as Lease Adjustment Account.

Hire charges are recognized as income equally over the period of the Hire Purchase Agreements executed on or before 31st March, 1995 and on sum of digits method for agreements executed thereafter.

However, income on non-performing assets identified in accordance with the guidelines issued by the Reserve Bank of India is recognized on realization in cash or in kind.

b) Delayed payment charges are recognised on realisation.

c) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) All other incomes and expenditures are accounted on accrual basis.

Fixed Assets

Tangible Fixed Assets are stated at cost or revalued amounts, as the case may be, less accumulated depreciation, lease adjustment account and provision for impairment, if any. The cost includes expenditure incurred in the acquisition and construction / installation and other related expenses in bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre operational expenses including borrowing costs are also capitalised. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the account and the differential amount is transferred to revaluation reserve.

Depreciation

Depreciation on Tangible Fixed Assets has been provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on prorata basis from the date of additions and/or disposal :

(a) In respect of Owned Assets acquired upto 16th December, 1993, at the rates adopted in earlier years. Depreciation on owned assets acquired thereafter has been calculated at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(b) In respect of leased assets, at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

Provision for Doubtful Debts

All receivables, loans and advances including assets under lease/hire purchase agreements are classified and provision for doubtful debts is made in accordance with the guidelines issued by the Reserve Bank of India.

Income Taxes

Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assests and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent that there is reasonable certainity that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the company has carry forward unabsorbed depreciation and tax losses, deferred Tax assets are recognised only to the extent there is a virtual certainity supported by convincing evidence that sufficient taxable income will be available against which such deferred tax assets can be realised.

Minimum Alternative Tax credit is recognised as an asset only when and to the extent there is convincing evidence that the company will pay normal income tax during the specified period.

Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2012

Basis of Accounting

The Financial Statements are prepared on the historical cost convention, in accordance with applicable Accounting Standards and the relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule VI to the Companies Act, 1956.

Use of Estimates

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

Revenue Recognition

a) Lease Rentals and Lease Management Fees arising out of Lease Agreements and Hire Charges and Documentation Fees arising out of the Hire Purchase Agreements are recognized as income in accordance with the terms of the agreements entered into with the lessees/hirers or as rescheduled from time to time.

Lease rental income on Lease Agreements executed on or after 1st April, 1995 is recognized on the basis of the implicit rate of return, the difference between the capital recovery and the depreciation being accounted as Lease Adjustment Account.

Hire charges are recognized as income equally over the period of the Hire Purchase Agreements executed on or before 31st March, 1995 and on sum of digits method for agreements executed thereafter.

However, income on non-performing assets identified in accordance with the guidelines issued by the Reserve Bank of India is recognized on realization in cash or in kind.

b) Delayed payment charges are recognised on realisation.

c) Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.

d) All other incomes and expenditures are accounted on accrual basis.

Fixed Assets

Tangible Fixed Assets are stated at cost or revalued amounts, as the case may be, less accumulated depreciation, lease adjustment account and provision for impairment, if any. The cost includes expenditure incurred in the acquisition and construction/installation and other related expenses in bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre operational expenses including borrowing costs are also capitalised. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the account and the differential amount is transferred to revaluation reserve.

Depreciation

Depreciation on Tangible Fixed Assets has been provided on Straight Line Method at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 on prorata basis from the date of additions and/or disposal :

(a) In respect of Owned Assets acquired upto 16th December, 1993, at the rates adopted in earlier years. Depreciation on owned assets acquired thereafter has been calculated at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(b) In respect of leased assets, at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

Investments

Investments that are readily realisable and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognise a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.

Provision for Doubtful Debts

All receivables, loans and advances including assets under lease/hire purchase agreements are classified and provision for doubtful debts is made in accordance with the guidelines issued by the Reserve Bank of India.

Income Taxes

Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assests and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognised using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised 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 realised. If the company has carry forward unabsorbed depreciation and tax losses, deferred Tax assets are recognised only to the extent there is a virtual certainty supported by convincing evidence that sufficient taxable income will be available against which such deferred tax assets can be realised.

Provisions and Contingent Liabilities

The Company recognises a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.


Mar 31, 2011

A BASIS OF ACCOUNTS:

The accounts have been prepared on the accrual basis of accounting, under the historical cost convention and in accordance with, the Companies Act, 1956 and the applicable Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government.

B USE OF ESTIMATES :

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts 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 actual results and estimates are recognised in the period in which the results are known/ materialised.

C. INCOME RECOGNITION:

(i) Lease Rentals and Lease Management Fees arising out of Lease Agreements and Hire Charges and Documentation Fees arising out of the Hire Purchase Agreements are recognised as income in accordance with the terms of the agreements entered into with the lessees / hirers or as rescheduled from time to time.

Lease rental income on Lease Agreements executed on or after 1st April, 1995 is recognised on the basis of the implicit rate of return, the difference between the capital recovery and the depreciation being accounted as Lease Adjustment Account.

Hire charges are recognised as income equally over the period of the Hire Purchase Agreements executed on or before 31st March, 1995 and on sum of digits method for agreements executed thereafter. However, income on non-performing assets identified in accordance with the guidelines issued by the Reserve Bank of India is recognised on realisation in cash or in kind.

(ii) Delayed payment charges are recognised on realisation. All other incomes are accounted on accrual basis.

D. EXPENSES:

All expenses are generally accounted for on accrual basis.

E. FIXED ASSETS AND DEPRECIATION:

(i) Fixed Assets including Leased Assets are stated at their historical cost less accumulated depreciation and lease adjustment account.

(ii) Depreciation on Fixed Assets is provided for on Straight Line Method :

(a) in respect of Owned Assets acquired upto 16th December, 1993, at the rates adopted in earlier years. Depreciation on owned assets acquired thereafter has been calculated at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(b) in respect of leased assets, at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(iii) Depreciation on assets acquired or sold, discarded or destroyed during the year is calculated on pro-rata basis from the date of such acquisition or, as the case may be, upto the date on which such asset has been sold, discarded or destroyed. (iv) Profit or loss on sale of assets is recognised on the date of sale.

F. INVESTMENTS:

Investments in securities intended to be traded in and to be held for not more than one year are classified as 'Stock in trade'. All other investments are classified as 'Investments'. Investments in properties are also classified as 'Investments'.

Stock-in-trade is valued at lower of cost or market value for each security individually.

Investments are valued at weighted average cost. Where an investment is acquired in exchange for another asset, the acquisition cost of the investment is determined by reference to the value of the asset given up. Provision for diminution is made to recognise a decline, other than temporary, in the value of each investment individually.

G. PROVISION FOR DOUBTFUL DEBTS :

All receivables, loans and advances including assets under lease/hire purchase agreements are classified and provision for doubtful debts is made in accordance with the guidelines issued by the Reserve Bank of India.

H. TAXES ON INCOME

Provision for Current tax is made in accordance with the Income Tax laws and rules prevailing for the relevant assessment years.

Deferred tax is recognised, 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 reversing in one or more subsequent periods.

Deferred tax assets arising mainly on account of business loss and unabsorbed depreciation under Income Tax laws recognised, only if there is a virtual certainty of its realisation, supported by convincing evidance.


Mar 31, 2010

Accounting Policies A BASIS OF ACCOUNTS :

The accounts have been prepared on going concern basis, under the historical cost convention and in accordance with, the Companies Act, 1956 and the applicable Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 issued by the Central Government.

B. USE OF ESTIMATES:

The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts 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 actual results and estimates are recognised in the period in which the results are known/ materialised.

C. INCOME RECOGNITION:

(i) Lease Rentals and Lease Management Fees arising out of Lease Agreements and Hire Charges and Documentation Fees arising out of the Hire Purchase Agreements are recognised as income in accordance with the terms of the agreements entered into with the lessees / hirers or as rescheduled from time to time.

Lease rental income on Lease Agreements executed on or after 1st April, 1995 is recognised on the basis of the implicit rate of return, the difference between the capital recovery and the depreciation being accounted as Lease Adjustment Account.

Hire charges are recognised as income equally over the period of the Hire Purchase Agreements executed on or before 31st March, 1995 and on sum of digits method for agreements executed thereafter. However, income on non-performing assets identified in accordance with the guidelines issued by the Reserve Bank of India is recognised on realisation in cash or in kind.

(ii) Delayed payment charges are recognised on realisation. All other incomes are accounted on accrual basis.

D. EXPENSES:

All expenses are generally accounted for on accrual basis.

E. FIXED ASSETS AND DEPRECIATION :

(i) Fixed Assets including Leased Assets are stated at their historical cost less accumulated depreciation and lease adjustment account.

(ii) Depreciation on Fixed Assets is provided for on Straight Line Method :

(a) in respect of Owned Assets acquired upto 16th December, 1993, at the rates adopted in earlier years. Depreciation on owned assets acquired thereafter has been calculated at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(b) in respect of leased assets, at the revised rates prescribed by Schedule XIV to the Companies Act, 1956.

(iii) Depreciation on assets acquired or sold, discarded or destroyed during the year is calculated on pro- rata basis from the date of such acquisition or, as the case may be, upto the date on which such asset has been sold, discarded or destroyed.

(iv) Profit or loss on sale of assets is recognised on the date of sale.

F. INVESTMENTS:

Investments in securities intended to be traded in and to be held for not more than one year are classified as Stock in trade. All other investments are classified as Investments. Investments in properties are also classified as Investments.

Stock-in-trade is valued at lower of cost or market value for each security individually.

Investments are valued at weighted average cost. Where an investment is acquired in exchange for another asset, the acquisition cost of the investment is determined by reference to the value of the asset given up.

Provision for diminution is made to recognise a decline, other than temporary, in the value of each investment individually.

G PROVISION FOR DOUBTFUL DEBTS :

All receivables, loans and advances including assets under lease/hire purchase agreements are classified and provision for doubtful debts is made in accordance with the guidelines issued by the Reserve Bank of India.

H. TAXES ON INCOME

Provision for Current tax is made in accordance with the Income Tax laws and rules prevailing for the relevant assessment years.

Deferred tax is recognised, 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 reversing in one or more subsequent periods.

 
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