Mar 31, 2018
ACCOUNTING POLICIES: A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements have been prepared under the historical cost convention method, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 20I3, as adopted consistently by the Company. The Company has followed Mercantile System of Accounting and the accounts have been made consistently on accrual basis as a going concern.
The Company complies with the directions issued by the Reserve Bank of India (RBI) for Non-Banking Financial Company Systemically Important Non Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions, 20I6 and relevant provision of the Companies Act, 20I3 and applicable accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 as amended by Companies (Accounting Standards) Amendment Rules, 20I6 w.e.f. 30th March, 20I6 issued by the Central Government of India and the guidelines issued by the Securities and Exchange Board of India (SEBI) to the extent applicable. The financial statements are presented in Indian rupees rounded off to the nearest rupee.
B. STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being book debts relating to loans, advances to borrowers are valued at book value net of Future Interest including overdue instalments. Stock of shares and debentures are valued at cost or market value whichever is lower.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 âCash Flow Statementâ issued by âThe Institute of Chartered Accountants of Indiaâ the Cash Flow for the period is reported using indirect method. The Cash and Cash Equivalent of the Company comprises of Cash in hand and Current account with Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner and at the useful life specified in Schedule II to the Companies Act, 20I3 and on pro rata basis from the date of installation till the date the assets are sold or disposed off.
E. REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured:
i. Income from lease rentals and interest on loans and advances cases are recognized as revenue as per the terms of the agreements entered into with Lessees/Borrowers. Interest Income are accounted for on accrual basis in accordance with the due dates of instalments of loan and advances.
ii. Late Payment Interest on overdue of instalments from Lessees/Borrowers and allowance of rebate for good and timely payment are accounted for as and when received or allowed because these income and rebates are contingent in nature.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of producing goods or providing services and not for sale in the normal course of business are recognized as Fixed Assets and are stated at cost less accumulated depreciation after considering lease adjustment account. All costs including finance cost attributable to fixed assets till assets are ready for intended use are capitalized.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.
G. INVESTMENTS
In respect of Investments, the following policies have been adopted:
i. Investments that are readily realizable and are intended not to be held for more than one year from the date of acquisition are classified as current investments. All other investments are classified as Long term investments. However, that part of long-term investments which is expected to be realised within I2 months after the reporting date is also presented under âcurrent assetsâ as âcurrent portion of long-term investmentsâ in consonance with the current/non-current classification.
ii. The Company values its Investments based on the Accounting Standard I3 âAccounting for Investmentsâ issued by the Institute of Chartered Accountants of India:
a. Investment held as long-term investments are valued at cost. Provision for diminution in value is made only if there is a permanent decline in their net realizable value.
b. Current investments are valued at lower of cost or net realizable value.
H. EMPLOYEE RETIREMENT BENEFITS
Contributions to Provident Fund and Super annulation fund made during the year, are charged to Statement of Profit and Loss.
Employees Gratuity liability has been calculated on the basis of actuarial valuation made at the end of each financial year and charged to Statement of Profit and Loss as contribution to LIC policy premium
I. BORROWING COSTS
i. Borrowing costs, which are directly attributable to the acquisition /construction of fixed assets, till the time such assets are ready for intended use, are capitalized as a part of the cost of assets.
ii. All borrowing costs other than mentioned above are expensed in the period they are incurred. In case of unamortized identified borrowing cost is outstanding at the year end, it is classified under loans and advances as unamortized cost of borrowings.
iii. I n case any loan is prepaid/ cancelled then the unamortized borrowing cost, if any, is fully expensed off on the date of prepayment/cancellation.
J. RELATED PARTIES
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 âRelated Party Disclosureâ only following related party relationships are covered:
a. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
b. Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
c. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
d. Key management personnel (KMP) and relatives of such personnel; and
e. Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-I9 âAccounting for Leaseâ issued by âThe Institute of Chartered Accountants of Indiaâ.
L. EARNING PER SHARE
The Earning per Share (Basic as well as Diluted) is calculated based on the net profit or loss for the period attributable to equity shareholders i.e. the net profit or loss for the period after deducting Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of equity shares taken are the weighted average number of equity shares outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income-tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the income-tax law)and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets, deferred tax assets/ liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized/incurred.
Provisions of AS-22 âAccounting for Taxes on Incomeâ issued by âThe Institute of Chartered Accountants of Indiaâ have been complied with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25 âInterim Financial Reportingâ issued by âThe Institute of Chartered Accountants of India.â
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned criteria are fulfilled:
a. Asset is identifiable.
b. Control of the enterprise over that asset.
c. It is probable that future economic benefits attributable to the asset will flow to the enterprise.
d. Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure incurred to acquire the asset is recognized as an expense, in the year in which it is incurred.
Intangible assets are initially measured at cost, after initial recognition the intangible asset is carried at its carrying value i.e. cost less any accumulated amortization and accumulated impairment losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any indication that an asset may be impaired, if any such indication exist, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss; if any. Such impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount of the asset is increased to its revised estimate of its recoverable amount. However this increased amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for that asset in prior period. A reversal of an impairment loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value. Further the company being NBFC also complies with provisioning norms specified by RBI. Contingent liabilities are not recognized but are disclosed in the notes on accounts. Contingent assets are neither recognized nor disclosed in the financial statements and will be recognized only when its realization is virtually certain.
R. PROVISIONING FOR SUBSTANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan instalments are overdue for more than 3 months and management is of the opinion that its recovery chances are very remote or negligible, the Company writes off these accounts (Net of Future Interest Charges) as bad debts. In all other cases where loan instalments are overdue for more than 3 months the provisioning for nonperforming assets is made in compliance with Non-Banking Financial Company Systemically Important Non Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions 20I6, as applicable to the company. As per the RBI Directions dated Ist September 20I6 updated as on 23rd February 20I8 Company has made general provision of 0.40% of Standard assets. Other directives of Reserve Bank of India have been duly complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 2I (AS 2I) -âConsolidated Financial Statementâ.
T. USE OF ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements requires the management to make estimates and assumptions considered in the reported amount of Assets and Liabilities (including contingent liabilities) as on the date of the Financial Statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
U. FOREIGN CURRENCY
As prescribed in Accounting Standard II (AS-II) âThe Effects of Changes in Foreign Exchange Ratesâ Transactions in foreign currency are recorded at the rates of exchange prevalent on the date of transaction. Exchange difference, if any, arising from foreign currency transaction are dealt in the Statement of Profit & Loss at year end rates.
Mar 31, 2017
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The Financial Statements have been prepared under the historical cost convention method, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013, as adopted consistently by the Company. The Company has followed Mercantile System of Accounting and the accounts have been made consistently on accrual basis as a going concern.
The Company complies with the directions issued by the Reserve Bank of India (RBI) for Non-Banking Financial Company Systemically Important Non Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions, 2016 and relevant provision of the Companies Act, 2013 and applicable accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 as amended by Companies (Accounting Standards) Amendment Rules, 2016 w.e.f. 30th March, 2016 issued by the Central Government of India and the guidelines issued by the Securities and Exchange Board of India (SEBI) to the extent applicable. The financial statements are presented in Indian rupees rounded off to the nearest rupee.
B. STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being book debts relating to loans, advances to borrowers are valued at book value net of future Interest including overdue installments. Stock of shares and debentures are valued at cost or market value whichever is lower.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by "The Institute of Chartered Accountants of India" the Cash Flow for the period is reported using indirect method. The Cash and Cash Equivalent of the Company comprises of Cash in hand and Current account with Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner and at the useful life specified in Schedule II to the Companies Act, 2013 and on pro rata basis from the date of installation till the date the assets are sold or disposed off.
E. REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured:
i. Income from lease rentals and interest on loans and advances cases are recognized as revenue as per the terms of the agreements entered into with Lessees/Borrowers. Interest Income are accounted for on accrual basis in accordance with the due dates of installments of loan and advances.
ii. Late Payment Interest on overdue of installments from Lessees/Borrowers and allowance of rebate for good and timely payment are accounted for as and when received or allowed because these income and rebates are contingent in nature.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of producing goods or providing services and not for sale in the normal course of business are recognized as Fixed Assets and are stated at cost less accumulated depreciation after considering lease adjustment account. All costs including finance cost attributable to fixed assets till assets are ready for intended use are capitalized.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.
G. INVESTMENTS
In respect of Investments, the following policies have been adopted:
i) Investments that are readily realizable and are intended not to be held for more than one year from the date of acquisition are classified as current investments. All other investments are classified as Long term investments. However, that part of long-term investments which is expected to be realized within 12 months after the reporting date is also presented under ''current assets'' as "current portion of long-term investments" in consonance with the current/non-current classification.
ii) The Company values its Investments based on the Accounting Standard 13 ''Accounting for Investments'' issued by the Institute of Chartered Accountants of India:
a) Investment held as long-term investments are valued at cost. Provision for diminution in value is made only if there is a permanent decline in their net realizable value.
b) Current investments are valued at lower of cost or net realizable value.
H. EMPLOYEE RETIREMENT BENEFITS
Contributions to Provident Fund and Super annotation fund made during the year, are charged to Statement of Profit and Loss.
Employees Gratuity liability has been calculated on the basis of actuarial valuation made at the end of each financial year and charged to Statement of Profit and Loss as contribution to LIC policy premium
I. BORROWING COSTS
i) Borrowing costs, which are directly attributable to the acquisition /construction of fixed assets, till the time such assets are ready for intended use, are capitalized as a part of the cost of assets.
ii) All borrowing costs other than mentioned above are expensed in the period they are incurred. In case of unamortized identified borrowing cost is outstanding at the year end, it is classified under loans and advances as unamortized cost of borrowings.
iii) In case any loan is prepaid/ cancelled then the unamortized borrowing cost, if any, is fully expensed off on the date of prepayment/cancellation.
J. RELATED PARTIES
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related party relationships are covered:
(a) Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19 "Accounting for Lease" issued by "The Institute of Chartered Accountants of India".
L. EARNING PER SHARE
The Earning per Share (Basic as well as Diluted) is calculated based on the net profit or loss for the period attributable to equity shareholders i.e. the net profit or loss for the period after deducting Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of equity shares taken are the weighted average number of equity shares outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income-tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets, deferred tax assets/liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized/incurred.
Provisions of AS-22 "Accounting for Taxes on Income" issued by "The Institute of Chartered Accountants of India" have been complied with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25 "Interim Financial Reporting" issued by "The Institute of Chartered Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned criteria are fulfilled:
a) Asset is identifiable.
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure incurred to acquire the asset is recognized as an expense, in the year in which it is incurred.
Intangible assets are initially measured at cost, after initial recognition the intangible asset is carried at its carrying value i.e. cost less any accumulated amortization and accumulated impairment losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any indication that an asset may be impaired, if any such indication exist, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss; if any. Such impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount of the asset is increased to its revised estimate of its recoverable amount. However this increased amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for that asset in prior period. A reversal of an impairment loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value. Further the company being NBFC also complies with provisioning norms specified by RBI. Contingent liabilities are not recognized but are disclosed in the notes on accounts. Contingent assets are neither recognized nor disclosed in the financial statements and will be recognized only when its realization is virtually certain.
R. PROVISIONING FOR SUBSTANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments are overdue for more than 4 months and management is of the opinion that its recovery chances are very remote or negligible, the Company first treats these overdue and future installments (Net of Future Interest Charges) as bad debts and after this treatment the provisioning for non performing assets is made in compliance with Non-Banking Financial Company Systemically Important Non Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions 2016, as applicable to the company. As per the RBI Directions dated 1st September 2016 Company has made general provision of 0.35% of Standard assets. Other directives of Reserve Bank of India have been duly complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - ''Consolidated Financial Statement''.
T. USE OF ESTIMATES AND JUDGEMENTS
The preparation of Financial Statements requires the management to make estimates and assumptions considered in the reported amount of Assets and Liabilities (including contingent liabilities) as on the date of the Financial Statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
U. FOREIGN CURRENCY
As prescribed in Accounting Standard 11 (AS-11) ''The Effects of Changes in Foreign Exchange Rates'' Transactions in foreign currency are recorded at the rates of exchange prevalent on the date of transaction. Exchange difference, if any, arising from foreign currency transaction are dealt in the Statement of Profit & Loss at year end rates.
No remuneration has been paid to Directors except remuneration to Managing Director and Executive Director. The remuneration paid to Managing Director and Executive Director during the F.Y. 2016-2017 is Rs. 2,71,80,000 (Previous year Rs 5,31,00,000/- including remuneration to Whole Time Director) which is within the limit as specified u/s 197 read with Schedule V of the Companies Act, 2013
Mar 31, 2016
ACCOUNTING POLICIES:
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention method, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013, as adopted consistently by the Company. The Company has followed Mercantile System of Accounting and the accounts have been made consistently on accrual basis as a going concern.
The Company complies with the directions issued by the Reserve Bank of India (RBI) for non-Banking Financial (Non-Deposit Accepting or Holding) Companies (NBFC-ND), relevant provision of the Companies Act, 2013 and applicable accounting Standards prescribed by the Companies (Accounting Standards) Rules, 2006 issued by the Central Government of India and the guidelines issued by the Securities and Exchange Board of India (SEBI) to the extent applicable. The financial statements are presented in Indian rupees rounded off to the nearest rupee.
B. STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being book debts relating to loans, advances to borrowers are valued at book value net of Future Interest including overdue installments. Stock of shares and debentures are valued at cost or market value whichever is lower.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by "The Institute of Chartered Accountants of India" the Cash Flow for the period is reported using indirect method. The Cash and Cash Equivalent of the Company comprises of Cash in hand and Current account with Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner and at the useful life specified in Schedule II to the Companies Act, 2013 and on pro rata basis from the date of installation till the date the assets are sold or disposed off.
E. REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured:
i. Income from lease rentals and interest on loans and advances cases are recognized as revenue as per the terms of the agreements entered into with Lessees/Borrowers. Interest Income are accounted for on accrual basis in accordance with the due dates of installments of loan and advances.
ii. Late Payment Interest on overdue of installments from Lessees/Borrowers and allowance of rebate for good and timely payment are accounted for as and when received or allowed because these income and rebates are contingent.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of producing goods or providing services and not for sale in the normal course of business are recognized as Fixed Assets and are stated at cost less accumulated depreciation after considering lease adjustment account. All costs including finance cost attributable to fixed assets till assets are ready for intended use are capitalized.
Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of profit and loss for the period during which such expenses are incurred.
G. INVESTMENTS
In respect of Investments, the following policies have been adopted :
i) Investments that are readily realizable and are intended not to be held for more than one year from the date of acquisition are classified as current investments. All other investments are classified as Long term investments. However, that part of long-term investments which is expected to be realized within 12 months after the reporting date is also presented under ''current assets'' as "current portion of long-term investments" in consonance with the current/non-current classification.
ii) The Company values its Investments based on the accounting standard 13 "Accounting for Investments" issued by the Institute of Chartered Accountants of India:
a) Investment held as long-term investments are valued at cost. Provision for diminution in value is made only if there is a permanent decline in their net realizable value.
b) Current investments are valued at lower of cost or net realizable value.
H. EMPLOYEE RETIREMENT BENEFITS
Contributions to Provident Fund and Super annotation fund made during the year, are charged to Statement of Profit and Loss.
Employees Gratuity liability has been calculated on the basis of actuarial valuation made at the end of each financial year and charged to Statement of Profit and Loss as contribution to LIC policy premium
I. BORROWING COSTS
i) Borrowing costs, which are directly attributable to the acquisition /construction of fixed assets, till the time such assets are ready for intended use, are capitalized as a part of the cost of assets.
ii) All borrowing costs other than mentioned above are expensed in the period they are incurred. In case of unamortized identified borrowing cost is outstanding at the year end, it is classified under loans and advances as unamortized cost of borrowings.
iii) In case any loan is prepaid/ cancelled then the unamortized borrowing cost, if any, is fully expensed off on the date of prepayment/cancellation.
J. RELATED PARTIES
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related party relationships are covered:
(a) Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19 "Accounting for Lease" issued by "The Institute of Chartered Accountants of India".
L. EARNING PER SHARE
The Earning per Share (Basic as well as Diluted) is calculated based on the net profit or loss for the period attributable to equity shareholders i.e. the net profit or loss for the period after deducting Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of equity shares taken are the weighted average number of equity shares outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income-tax expense comprises of current tax (i.e. amount of tax for the period determined in accordance with the income-tax law) and deferred tax charge or credit (reflecting the tax effects of timing differences between accounting income and taxable income for the period). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets, deferred tax assets/liabilities are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized/incurred.
Provisions of AS-22 "Accounting for Taxes on Income" issued by "The Institute of Chartered Accountants of India" have been complied with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25 "Interim Financial Reporting" issued by "The Institute of Chartered Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned criteria are fulfilled:
a) Asset is identifiable.
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure incurred to acquire the asset is recognized as an expense, in the year in which it is incurred.
Intangible assets are initially measured at cost, after initial recognition the intangible asset is carried at its carrying value i.e. cost less any accumulated amortization and accumulated impairment losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any indication that an asset may be impaired, if any such indication exist, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss; if any. Such impairment loss is charged to the profit and loss account in the year in which an asset is identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount of the asset is increased to its revised estimate of its recoverable amount. However this increased amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for that asset in prior period. A reversal of an impairment loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement are recognized when there is present obligation as a result of past events and it is probable that there will be outflow of resources. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date and are not discounted to its present value. Further the company being NBFC also complies with provisioning norms specified by RBI. Contingent liabilities are not recognized but are disclosed in the notes on accounts. Contingent assets are neither recognized nor disclosed in the financial statements and will be recognize only when its realization is virtually certain.
R. PROVISIONING FOR SUBSTANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has been made in compliance with the directions of Reserve Bank of India. As per decision of the Board of Directors in the cases where loan installments are overdue for more than 5 months and management is of the opinion that its recovery chances are very remote or negligible, the Company first treats these overdue and future installments as bad debts and after this treatment the provisioning for non performing assets is made in compliance with Systemically Important Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2015, as applicable to the company. As per the RBI circular dated 27th March, 2015 Company has made general provision of 0.30% of Standard assets. Other directives of Reserve Bank of India have been duly complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance with Accounting Standard 21 (AS 21) - ''Consolidated Financial Statement''.
T. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the management to make estimates and assumptions considered in the reported amount of assets and liabilities (including contingent liabilities) as on the date of the financial statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Actual results could differ from these estimates. Any revision to accounting estimates is recognized prospectively in current and future periods.
U. FOREIGN CURRENCY
As prescribed in Accounting Standard 11 (AS 11)- ''The Effects of Changes in Foreign Exchange Rates'' Transactions in foreign currency are recorded at the rates of exchange prevalent on the date of transaction. Exchange difference, if any, arising from foreign currency transaction are dealt in the Statement of Profit & Loss at year end rates.
Mar 31, 2015
A. Basis of Preparation of Financial Statements
The financial statements have been prepared under the historical cost
convention method, in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 2013, as adopted
consistently by the Company. The Company has followed Mercantile System
of Accounting and the accounts have been made consistently on accrual
basis as a going concern.
The Company complies with the directions issued by the Reserve Bank of
India (RBI) for Non-Banking Financial (Non-Deposit Accepting or
Holding) Companies (NBFC-ND), relevant provision of the Companies Act,
2013 and applicable accounting Standards prescribed by the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government of
India and the guidelines issued by the Securities and Exchange Board of
India (SEBI) to the extent applicable. The financial statements are
presented in Indian rupees rounded off to the nearest rupee.
B. Stock In Trade/Assets Held For Sale
Inventories being book debts relating to loans, advances to borrowers
are valued at book value net of Future Interest including overdue
installments. Stock of shares and debentures are valued at cost.
C. Cash Flow Statement
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The Institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand and Current account with
Scheduled Banks.
D. Depreciation
Till last financial year Depreciation has been provided on
straight-line method in the manner and at the rates specified in
Schedule XIV to the Companies Act, 1956. Depreciation for current
financial year has been provided on straight-line method in the manner
and at the rates specified in Schedule II to the Companies Act, 2013
and on pro rata basis from the date of installation till the date the
assets are sold or disposed off.
E. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured:
i. Income from lease rentals and interest on loans and advances cases
are recognized as revenue as per the terms of the agreements entered
into with Lessees/Borrowers. Interest Income are accounted for on
accrual basis in accordance with the due dates of installments of loan
and advances. ii. Late Payment Interest on overdue of installments
from Lessees/Borrowers and allowance of rebate for good and timely
payment are accounted for as and when received or allowed because these
income and rebates are contingent.
F . Fixed Assets
All assets held with the intention of being used for the purpose of
producing goods or providing services and not for sale in the normal
course of business are recognized as Fixed Assets and are stated at cost
less accumulated depreciation after considering lease adjustment
account. All costs including finance cost attributable to fixed assets
till assets are ready for intended use are capitalized.
G. Investments
Investments are recognized as recommended in AS 13. Accordingly
following policies have been adopted in respect of Investments made:
i) Investments that are readily realizable and are intended not to be
held for more than one year from the date of acquisition are classified
as current investments. All other investments are classified as Long
term investments. ii) The Company values its Investments based on the
accounting standard issued by the Institute of Chartered Accountants of
India:
a) Investment held as long-term investments are valued at cost.
Provision for diminution in value is made only if there is a permanent
decline in their net realizable value.
b) Current investments are valued at lower of cost or net realizable
value.
c) Investments in shares are valued at cost or market value whichever
is less.
H. Employee Retirement Benefits
Contributions to Provident Fund and Super annotation fund made during
the year, are charged to Statement of Profit and Loss for the period.
Employees Gratuity liability has been calculated on the basis of
actuarial valuation made at the end of each financial year and charged
to Statement of Profit and Loss as contribution to LIC policy premium
I. Borrowing Costs
i) Borrowing costs, which are directly attributable to the acquisition
/construction of fixed assets, till the time such assets are ready for
intended use, are capitalized as a part of the cost of assets. ii) All
borrowing costs other than mentioned above are expensed in the period
they are incurred. In case of unamortized identified borrowing cost is
outstanding at the year end, it is classified under loans and advances
as unamortized cost of borrowings. iii) In case any loan is prepaid/
cancelled then the unamortized borrowing cost, if any, is fully
expensed off on the date of prepayment/cancellation.
J. Related Parties
Parties are considered to be related if at any time during the
reporting period one party has the ability to control the other party
or exercise significant influence over the other party in making
financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related
party relationships are covered:
(a) Enterprises that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding
Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the
investing party or venture in respect of which the reporting enterprise
is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise, and relatives of any such
individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able
to exercise significant influence.
K. Lease Assets
Assets taken on lease are accounted for in accordance with AS-19
"Accounting for Lease" issued by ''The Institute of Chartered
Accountants of India".
L. Earnings Per Share
The Earning per Share (Basic as well as Diluted) is calculated based on
the net profit or loss for the period attributable to equity
shareholders i.e. the net profit or loss for the period after deducting
Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of
equity shares taken are the weighted average number of equity shares
outstanding during the period.
M. Provision for Current Tax and Deferred Tax
Income-tax expense comprises of current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognized only if there is virtual
certainly of realization of such assets, deferred tax
assets/liabilities are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be
realized/incurred.
Provisions of AS-22 "Accounting for Taxes on Income" issued by "The
Institute of Chartered Accountants of India"
have been complied with to all possible extent.
N. Interim Financial Report
Interim Financial Reports are prepared in accordance with AS-25
''Interim Facial Reporting" issued by "The Institute of Chartered
Accountants of India."
O. Intangible Assets
Intangible assets are recognized only when four of below mentioned
criteria are fulfilled:
a) Asset is identifiable.
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the
asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure
incurred to acquire the asset is recognized as an expense, in the year
in which it is incurred.
Intangible assets are initially measured at cost, after initial
recognition the intangible asset is carried at its carrying value i.e.
cost less any accumulated amortization and accumulated impairment
losses.
P. Impairment of Assets
An asset is treated as impaired, when carrying cost of asset exceeds
its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any
indication that an asset may be impaired, if any such indication exist,
the recoverable amount of the asset is estimated in order to determine
the extent of impairment loss; if any. Such impairment loss is charged
to the profit and loss account in the year in which an asset is
identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount
of the asset is increased to its revised estimate of its recoverable
amount. However this increased amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for that asset in prior period. A reversal of an impairment
loss is recognized as income immediately in the Profit & Loss Account.
Q. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be outflow of resources.
Provisions are measured at the best estimate of the expenditure
required to settle the present obligation at the Balance Sheet
date and are not discounted to its present value. Further the company
being NBFC also complies with provisioning norms specified by RBI.
Contingent liabilities are not recognized but are disclosed in the
notes on accounts. Contingent assets are neither recognized nor
disclosed in the financial statements
R. Provisioning for Substandard/Doubtful/Loss Assets
Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has
been made in compliance with the directions of Reserve Bank of India.
As per decision of the Board of Directors in the cases where loan
installments are overdue for more than 6 months and management is of the
opinion that its recovery chances are very remote or negligible, the
Company first treats these overdue and future installments as bad debts
and after this treatment the provisioning for non performing assets is
made in compliance with Systemically Important Non-Banking Financial
(Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve
Bank) Directions, 2015, as applicable to the company. As per the RBI
circular dated 27th March, 2015 Company has made general provision of
0.25% of Standard assets. Other directives of Reserve Bank of India
have been duly complied with.
S. Consolidated Financial Statement
The Consolidated Financial Statements have been prepared in accordance
with Accounting Standard 21 (AS 21) - ''Consolidated Facial
Statement''.
T. Use of Estimates and Judgments
The preparation of financial statements requires the management to make
estimates and assumptions considered in the reported amount of assets
and liabilities (including contingent liabilities) as on the date of
the financial statements and the reported income and expenses during
the reporting period. Management believes that the estimates used in
the preparation of the financial statements are prudent and reasonable.
Actual results could differ from these estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
U. Foreign Currency
As prescribed in Accounting Standard 11 (AS 11)- ''The Effects of
Changes in Foreign Exchange Rates'' Transactions in foreign currency are
recorded at the rates of exchange prevalent on the date of transaction.
Exchange difference, if any, arising from foreign currency transaction
are dealt in the Statement of Profit & Loss at year end rates.
Mar 31, 2014
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention method, in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, as adopted
consistently by the Company. The Company has followed Mercantile System
of Accounting and the accounts have been made consistently on accrual
basis as a going concern.
The Company complies with the directions issued by the Reserve Bank of
India (RBI) for Non-Banking Financial (Non-Deposit Accepting or
Holding) Companies (NBFC-ND), relevant provision of the Companies Act,
1956 and applicable accounting Standards prescribed by the Companies
(Accounting Standard) Rules, 2006 issued by the Central Government of
India and the guidelines issued by the Securities and Exchange Board of
India (SEBI) to the extent applicable. The financial statement are
presented in Indian rupees rounded off to the nearest rupees.
B. STOCK IN TRADE / ASSETS HELD FOR SALE
Inventories being finance, loans and advances stocks are valued at book
value net of future interest including overdue installments. Book debts
and stock of shares and debentures are valued at cost or market value
whichever is less.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The Institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand and Current account with
Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner
and at the rates specified in Schedule XIV to the Companies Act, 1956
and on pro rata basis from the date of installation till the date the
assets are sold or disposed off.
E. REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
i. Income from lease rentals and interest on loans and advances cases
are recognized as revenue as per the terms of the agreements entered
into with Lessees/Borrowers. Interest Income are accounted for on
accrual basis in accordance with the due dates of installments of loans
and advances.
ii. Late Payment interest income of installments from Lessees/
Borrowers and allowance of rebate for good and timely payment are
accounted for as and when received or allowed because these income and
rebates are contingent.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in
the normal course of business are accounted as Fixed Assets and are
stated at cost less accumulated depreciation after considering lease
adjustment account. All costs including finance cost attributable to
acquisition of fixed assets till assets are ready for intended use are
capitalized.
G. INVESTMENTS
Investments in shares are valued at cost or market value which ever is
less.
H. EMPLOYEE RETIREMENT BENEFITS
Company''s contribution to Provident Fund and Superannuation Fund are
charged to profit and loss account. Gratuity benefits are charged to
profit and loss account on the basis of actuarial valuation as
I. BORROWING COSTS
Borrowing costs which are directly attributable to the acquisition/
construction of fixed assets, till the time such assets are ready for
intended use, are capitalized as part of the cost of the assets. Other
borrowing costs are recognized as an expense in the year in which they
are incurred.
J. RELATED PARTIES
Parties are considered to be related if at any time during the
reporting period one party has the ability to control the other party
or exercise significant influence over the other party in making
financial and/ or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related
party relationships are
(a) Enterprises that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding
Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the
investing party or venture in respect of which the reporting enterprise
is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise, and relatives of any such
individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able
to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19
"Leases" issued by "The Institute of Chartered Accountants of India".
L. EARNING PER SHARE
The Earning per Share (Basic as well as Diluted) is calculated based on
the net profit or loss for the period attributable to equity
shareholders i.e. the net profit or loss for the period after deducting
Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of
equity shares taken are the weighted average number of equity shares
outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income-tax expense comprises of current tax (i.e. amount of tax for the
period determined in accordance with the income-tax law) and deferred
tax charge or credit (reflecting the tax effects of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or carried forward loss under taxation
laws, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets, deferred tax assets/
liabilities are reviewed as at each balance sheet date and written down
or written up to reflect the amount that is reasonably / virtually
certain (as the case may be) to be realized/ incurred.
Provisions of AS-22 "Accounting for Taxes on Income" issued by "The
Institute of Chartered Accountants of India" have been complied with to
all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25
"Interim Financial Reporting" issued by "The Institute of Chartered
Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned
criteria are fulfilled: Â
a) Asset is identifiable.
b) Control of the enterprise over that asset.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure
incurred to acquire the asset is recognized as an expense, in the year
in which it is incurred.
Intangible assets are initially measured at cost, after initial
recognition the intangible asset is carried at its carrying value i.e.
cost less any accumulated amortization and accumulated impairment
losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds
its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any
indication that an asset may be impaired, if any such indication exist,
the recoverable amount of the asset is estimated in order to determine
the extent of impairment loss; if any. Such impairment loss is charged
to the profit and loss account in the year in which an asset is
identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount
of the asset is increased to its revised estimate of its recoverable
amount. However this increased amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for that asset in prior period. A reversal of an impairment
loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes on accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
R. PROVISIONING FOR SUB-STANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Sub-standard Assets/ Doubtful Assets/ Loss Assets has
been made in compliance with the directions of the Reserve Bank of
India. As per decision of the Board of Directors in the cases where
loan installments are overdue for more than 6 months the company first
treats these overdue and future installments (net of future interest)
as bad debts on quarterly basis and after this treatment the
provisioning for non performing assets is made in compliance with Non
Banking Financial Companies Prudential Norms (Reserve Bank) Directions
2007, as applicable to the company. As per the RBI circular dated 17th
January 2011 Company has made general provision of 0.25% of Standard
assets. Other directives of the Reserve Bank of India have been duly
complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance
with Accounting Standard 21 (AS 21) - ''Consolidated Financial
Statement''.
T. USE OF ESTIMATES AND JUDGEMENTS
The preparation of financial statements requires the management to make
estimates and assumptions considered in the reported amount of assets
and liabilities (including contingent liabilities) as on the date of
the financial statements and the reported income and expenses during
the reporting period. Management believes that the estimates used in
the preparation of the financial statements are prudent and reasonable.
Actual results could differ from these estimates. Any revision to
accounting estimates is recognized prospectively in current and future
periods.
Mar 31, 2012
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention method, in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, as adopted
consistently by the Company. The Company has followed Mercantile System
of Accounting and the accounts have been made consistently on accrual
basis as a going concern.
B. STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being hire purchase stocks are valued at book value net of
Hire Charges/Finance Charges including overdue installments. Book debts
and stock of shares and debentures are valued at cost or market value
whichever is less.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand and Current account with
Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner
and at the rates specified in Schedule XIV to the Companies Act, 1956
and on pro rata basis.
E. REVENUE RECOGNITION
Income from Hire charges and lease rentals and interest on loans, and
advances cases are recognized as revenue as per the terms of the
agreements entered into with Hirers/Lessees/Borrowers. Hire
charges/finance charges are accounted for on accrual basis on
outstanding balances in accordance with the due dates of installments
of hire money/loan money and hire charges/finance charges. However
interest income on loans and advances under daily collection scheme are
recognized as revenue on receipt basis. Overdue charges of installments
from Hirers/Lessees/Borrowers and allowance of rebate for good and
timely payment are accounted for as and when received or allowed
because these charges and rebates are contingent.
Initial lumpsum future interest & Processing charges in respect of the
hire purchase cases/loans and advances cases carry hire/finance charges
in addition to the same has been apportioned on the basis of period of
contracts on accrual basis and in hire purchase cases/loan and advances
where hire/finance charges are inherent in initial lumpsum interest the
same also has been apportioned on the basis of period of contracts on
accrual basis.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in
the normal course of business are accounted as Fixed Assets and are
stated at cost less accumulated depreciation after considering lease
adjustment account. All costs including finance cost attributable to
fixed assets till assets are ready for intended use are capitalized.
G. INVESTMENTS
Investments in shares are valued at cost less advance money received
under specific contracts against such investments.
H. EMPLOYEE RETIREMENT BENEFITS
Company's contribution to Provident Fund and Superannuation Fund are
charged to profit and loss account. Gratuity benefits are charged to
profit and loss account on the basis of actuarial valuation as
contribution to Life Insurance Corporation of India Policy premium.
I. BORROWING COSTS
Borrowing costs which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the cost of the
assets. Other borrowing costs are recognized as an expense in the year
in which they are incurred.
J. RELATED PARTIES
Parties are considered to be related if at any time during the
reporting period one party has the ability to control the other party
or exercise significant influence over the other party in making
financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related
party relationships are covered:-
(a) Enterprises that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding
Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the
investing party or venture in respect of which the reporting enterprise
is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise, and relatives of any such
individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able
to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19
"Leases" issued by "The institute of Chartered Accountants of India".
L. EARNINGS PER SHARE
The Earning per share (Basic as well as Diluted) is calculated based on
the net profit or loss for the period attributable to equity
shareholders i.e. the net profit or loss for the period after deducting
Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of
equity shares taken are the weighted average number of equity shares
outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income tax expenses comprise current tax (i.e. amount of tax for the
period determined in accordance with the Income tax law) and deferred
tax charge or credit (reflecting the tan effect of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or earned forward loss under taxations
laws, deferred tax assets are recognized only if there is virtual
certainty of realization of such assets, deferred tax
assets/liabilities are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be
realized/incurred. Provisions of AS-22 "Accounting for Taxes on Income"
issued by "The Institute of Chartered Accountants of India" have been
compiled with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25
"Interim Financial Reporting" issued by "The Institute of Chartered
Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned
criteria are fulfilled:-
a) Asset is identifiable
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the
asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure
incurred to acquire the asset arecognized as an expense, in the year in
which it is incurred.
Intangible assets are initially measured at cost, after initial
recognition the intangible asset is carried at its carrying value i.e.
cost less any accumulated amortization and accumulated Impairment
losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds
its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any
Indication that an asset may be impaired, if any such indication exist,
the recoverable amount of the asset is estimated in order to determine
the extent of impairment loss; if any, Such Impairment loss is charged
to the profit and loss account in the year in which an asset is
identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount
of the asset is increased to its revised estimate of its recoverable
amount. However this increased amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for that asset in prior period. A reversal of impairment
loss is recognized as income Immediately in I he Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes on accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
R. PROVISIONING FOR SUBSTANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Substandard Assets/Doubtful Assets/loss Assets has
been made in compliance with the directions of Reserve Bank of India As
per decision of the Board of Directors in the cases where hire
installments are overdue for more than 32 months and to an installments
are overdue for more than 6 months the company first treats these
overdue and future Installments as bad debts and after this treatment
the provisioning for non performing assets is made in compliance with
Non Banking Financial Companies Prudential Norms (Reserve Bank)
Directions 2007, as applicable to the company. As per the RBI circular
dated 17th January, 2011 Company has made general provision of 0.25% of
Standard assets. Other directives of Reserve Bank of India have been
duly complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statements have been prepared in accordance
with Accounting Standard 21 (AS 21) - 'Consolidated Financial
Statement'.
Mar 31, 2011
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention method, in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, as adopted
consistently by the Company. The Company has followed Mercantile System
of Accounting and the accounts have been made consistently on accrual
basis as a going concern.
B. STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being hire purchase stocks are valued at book value net of
Hire Charges/Finance Charges including overdue installments. Book debts
and stock of shares and debentures are valued at cost or market value
whichever is less.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The Institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand and Current account with
Scheduled Banks.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner
and at the rates specified in Schedule XIV to the Companies Act, 1956
and on pro rata basis.
E. REVENUE RECOGNITION
Income from Hire charges and lease rentals and interest on loans and
advances cases are recognized as revenue as per the terms of the
agreements entered into with Hirers/Lessees/Borrowers. Hire
charges/finance charges are accounted for on accrual basis on
outstanding balances in accordance with the due dates of installments
of hire money/loan money and hire charges/finance charges. However
interest income on loans and advances under daily collection scheme are
recognized as revenue on receipt basis. Overdue charges of installments
from Hirers/Lessees/Borrowers and allowance of rebate for good and
timely payment are accounted for as and when received or allowed
because these charges and rebates are contingent.
Initial lumpsum future interest & Processing charges in respect of the
hire purchase cases/loans and advances cases which carry hire/finance
charges in addition to the same has been apportioned on the basis of
period of contracts on accrual basis and in hire purchase cases/loan
and advances cases where hire/finance charges are inherent in initial
lumpsum interest the same also has been apportioned on the basis of
period of contracts on accrual basis.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in
the normal course of business are accounted as Fixed Assets and are
stated at cost less accumulated depreciation after considering lease
adjustment account. All costs including finance cost attributable to
fixed assets till assets are ready for intended use are capitalized.
G. INVESTMENTS
Investments in shares are valued at cost less advance money received
under specific contracts against such investments.
H. EMPLOYEE RETIREMENT BENEFITS
Company's contribution to Provident Fund and Superannuation Fund are
charged to profit and loss account. Gratuity benefits are charged to
profit and loss account on the basis of actuarial valuation as
contribution to Life Insurance Corporation of India Policy premium.
I. BORROWING COSTS
Borrowing costs which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the cost of the
assets. Other borrowing costs are recognized as an expense in the year
in which they are incurred.
J. RELATED PARTIES
Parties are considered to be related if at any time during the
reporting period one party has the ability to control the other party
or exercise significant influence over the other party in making
financial and/or operating decisions. As required by AS-18 "Related
Party Disclosure" only following related party relationships are
covered:Ã
(a) Enterprises that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding
Companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the
investing party or venture in respect of which the reporting enterprise
is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise, and relatives of any such
individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able
to exercise significant influence.
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19
"Leases" issued by "The Institute of Chartered Accountants of India".
L. EARNING PER SHARE
The Earning per Share (Basic as well as Diluted) is calculated based on
the net profit or loss for the period attributable to equity
shareholders i.e. the net profit or loss for the period after deducting
Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of
equity shares taken are the weighted average number of equity shares
outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income tax expenses comprise current tax (i.e. amount of tax for the
period determined in accordance with the Income tax law) and deferred
tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or carried forward loss under
taxations laws, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets, deferred tax
assets/liabilities are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be
realized/incurred. Provisions of AS-22 "Accounting for Taxes on Income"
issued by "The Institute of Chartered Accountants of India" have been
complied with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25
"Interim Financial Reporting" issued by "The Institute of Chartered
Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned
criteria are fulfilled:Ã
a) Asset is identifiable.
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the
asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure
incurred to acquire the asset is recognized as an expense, in the year
in which it is incurred.
Intangible assets are initially measured at cost, after initial
recognition the intangible asset is carried at its carrying value i.e.
cost less any accumulated amortization and accumulated impairment
losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds
its recoverable amount.
At each Balance Sheet Date, it is seen that whether there is any
indication that an asset may be impaired, if any such indication exist,
the recoverable amount of the asset is estimated in order to determine
the extent of impairment loss; if any. Such impairment loss is charged
to the profit and loss account in the year in which an asset is
identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount
of the asset is increased to its revised estimate of its recoverable
amount. However this increased amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for that asset in prior period. A reversal of an impairment
loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes on accounts. Contingent assets are neither recognized nor
disclosed in the financial statements.
R. PROVISIONING FOR SUBSTANDARD/DOUBTFUL/LOSS ASSETS
Provisioning for Substandard Assets/Doubtful Assets/Loss Assets has
been made in compliance with the directions of Reserve Bank of India.
As per decision of the Board of Directors in the cases where hire
installments are overdue for more than 12 months and loan installments
are overdue for more than 6 months the company first treats these
overdue and future installments as bad debts and after this treatment
the provisioning for non performing assets is made in compliance with
Non Banking Financial Companies Prudential Norms (Reserve Bank)
Directions 2007, as applicable to the company. As per the RBI circular
dated 17th January 2011 Company has made general provision of 0.25% of
Standard assets. Other directives of Reserve Bank of India have been
duly complied with.
S. CONSOLIDATED FINANCIAL STATEMENT
The Consolidated Financial Statement have been prepared in accordance
with Accounting Standard 21 (AS 21) Ã 'Consolidated Financial
Statement'.
1. No remuneration has been paid to directors except remuneration to
Managing Director, Whole time Director and Executive Director. The
remuneration paid to Managing Director, Whole time Director and
Executive Director during the F.Y. 2010- 2011 is Rs. 14,301,590/- (last
year 10,373,552/- ) which is less than that permitted under Section 309
read with Schedule XIII of the Companies Act, 1956.
In the above stamp duty matter, for which the Company has filed writ
petition against the Union of India & Ors, Hon'ble Delhi High Court has
directed that in absence of any specific provision for charging the
stamp duty on increase of authorized share capital of a Company, it
would not be open to the Registrar of Companies or any other concerned
authority to insist upon payment of stamp duty on such increase of
authorized share capital.
Mar 31, 2010
A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost
convention method, in accordance with the generally accepted accounting
principles and the provisions of the Companies Act, 1956, as adopted
consistently by the Company.
The Company has followed Mercantile System of Accounting and the
accounts have been made consistently on accrual basis as a going
concern.
B.STOCK IN TRADE/ASSETS HELD FOR SALE
Inventories being hire purchase stocks are valued at book value net of
Hire Charges including overdue installments. Book debts and stock of
shares and debentures are valued at cost or market value whichever is
less.
C. CASH FLOW STATEMENT
As required by Accounting Standard-3 "Cash Flow Statement" issued by
"The Institute of Chartered Accountants of India" the Cash Flow for the
period is reported using indirect method. The Cash and Cash Equivalent
of the Company comprises of Cash in hand, Current account with
Scheduled Banks, amount lying with foreign bank and amount in transit.
D. DEPRECIATION
Depreciation has been provided on straight-line method in the manner
and at the rates specified in Schedule XIV to the Companies Act, 1956
and on pro rata basis.
Depreciation on Assets acquired in Amalgamation is charged in the same
manner, as it would have been had no amalgamation taken place.
E. REVENUE RECOGNITION
Income from Hire charges and lease rentals and interest on loans and
advances cases are recognized as revenue as per the terms of the
agreements entered into with Hirers/Lessees/Borrowers. Hire
charges/finance charges are accounted for on accrual basis on
outstanding balances in accordance with the due dates of installments
of hire money/loan money and hire charges/finance charges. However
interest income on loans and advances under daily collection scheme are
recognized as revenue on receipt basis. Overdue charges of
installments from Hirers/Lessees/Borrowers and allowance of rebate for
good and timely payment are accounted for as and when received or
allowed because these charges and rebates are contingent.
Initial lumpsum future interest & Processing charges in respect of the
hire purchase cases/loans and advances cases which carry hire/finance
charges in addition to the same has been apportioned on the basis of
period of contracts on accrual basis and in hire purchase cases/loan
and advances cases where hire/finance charges are inherent in initial
lumpsum interest the same also has been apportioned on the basis of
period of contracts on accrual basis.
F. FIXED ASSETS
All assets held with the intention of being used for the purpose of
producing or providing goods or services and is not held for sale in
the normal course of business are accounted as Fixed Assets and are
stated at cost less accumulated depreciation after considering lease
adjustment account. All costs including finance cost attributable to
fixed assets till assets are ready for intended use are capitalized.
G. INVESTMENTS
Investments in shares are valued at cost less advance money received
under specific contracts against such investments.
H. EMPLOYEE RETIREMENT BENEFITS
Companys contribution to Provident Fund and Superannuation Fund are
charged to profit and loss account. Gratuity benefits are charged to
profit and loss account on the basis of actuarial valuation as
contribution to Life Insurance Corporation of India Policy premium.
I. BORROWING COSTS
Borrowing costs which are directly attributable to the
acquisition/construction of fixed assets, till the time such assets are
ready for intended use, are capitalized as part of the cost of the
assets. Other borrowing costs are recognized as an expense in the year
in which they are incurred.
J. RELATED PARTIES
Parties are considered to be related if at any time during the
reporting period one party has the ability to control the other party
or exercise significant influence over the other party in making
financial and/or operating decisions.
As required by AS-18 ÃRelated Party Disclosureà only following related
party relationship are covered:Ã
(a) Enterprises that directly, or indirectly through one or more
intermediaries, control, or are controlled by, or are under common
control with, the reporting enterprise (this includes holding
companies, subsidiaries and fellow subsidiaries);
(b) Associates and joint ventures of the reporting enterprise and the
investing party or venturer in respect of which the reporting
enterprise is an associate or a joint venture;
(c) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise, and relatives of any such
individual;
(d) Key management personnel (KMP) and relatives of such personnel; and
(e) Enterprises over which any person described in (c) or (d) is able
to exercise significant influence.K
K. LEASE ASSETS
Assets taken on lease are accounted for in accordance with AS-19
"Leases" issued by "The Institute of Chartered Accountants of India".
L. EARNING PER SHARE
The Earning Per Share (Basic as well as Diluted) is calculated based on
the net profit or loss for the period attributable to equity
shareholders i.e. the net profit or loss for the period after deducting
Proposed Preference Dividend and any attributable tax thereto.
For the purpose of calculating (Basic and Diluted EPS), the number of
equity shares taken are the weighted average number of equity shares
outstanding during the period.
M. PROVISION FOR CURRENT TAX AND DEFERRED TAX
Income tax expenses comprise current tax (i.e. amount of tax for the
period determined in accordance with the Income tax law) and deferred
tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognized only to the extent there is reasonable
certainty that the assets can be realized in future; however, where
there is unabsorbed depreciation or carried forward loss under
taxations laws, deferred tax assets are recognized only if there is
virtual certainty of realization of such assets, deferred tax
assets/liabilities are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is
reasonably/virtually certain (as the case may be) to be
realized/incurred. Provisions of AS-22 ÃAccounting for Taxes on IncomeÃ
issued by ÃThe Institute of Chartered Accountants of Indiaà have been
complied with to all possible extent.
N. INTERIM FINANCIAL REPORT
Interim Financial Reports are prepared in accordance with AS-25
"Interim Financial Reportingà issued by ÃThe Institute of Chartered
Accountants of India."
O. INTANGIBLE ASSETS
Intangible assets are recognized only when four of below mentioned
criteria are fulfilled:-
a) Asset is identifiable.
b) Control of the enterprise over that asset.
c) It is probable that future economic benefits attributable to the
asset will flow to the enterprise.
d) Cost of the asset can be measured reliably.
If any of the above four criteria is not fulfilled the expenditure
incurred to acquire the asset is recognized as an expense, in the year
in which it is incurred.
Intangible assets are initially measured at cost, after initial
recognition the intangible asset is carried at its carrying value i.e.
cost less any accumulated amortization and accumulated impairment
losses.
P. IMPAIRMENT OF ASSETS
An asset is treated as impaired, when carrying cost of asset exceeds
its recoverable amount.
At each balance sheet date, it is seen that whether there is any
indication that an asset may be impaired, if any such indication exist,
the recoverable amount of the asset is estimated in order to determine
the extent of impairment loss; if any. Such impairment loss is charged
to the profit and loss account in the year in which an asset is
identified as impaired.
When an impairment loss is subsequently reversed, the carrying amount
of the asset is increased to its revised estimate of its recoverable
amount. However this increased amount does not exceed the carrying
amount that would have been determined had no impairment loss been
recognized for that asset in prior period. A reversal of an impairment
loss is recognized as income immediately in the Profit & Loss Account.
Q. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Provisions involving substantial degree of estimation in measurement
are recognized when there is present obligation as a result of past
events and it is probable that there will be outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
R. PROVISIONING FOR SUBSTANDARD/LOSS/DOUBTFUL ASSETS
Provisioning for substandard assets/Loss assets/doubtful assets has
been made in compliance with the directions of Reserve Bank of India.
As per decision of the Board of Directors in the cases where hire
installments are overdue for more than 12 months and loan installments
are overdue for more than 6 months the company first treats these
overdues and future installments as bad debts and after this treatment
the provisioning for non performing assets is made in compliance with
Non Banking Financial Companies Prudential Norms (Reserve Bank)
Directions 2007, as applicable to the company. Other directives of
Reserve Bank of India have been duly complied with.
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