Mar 31, 2023
1. CORPORATE INFORMATION
Choice International Limited (hereinafter referred to as ââthe Company'''') is a public limited company domiciled in India and incorporated under the provisions of the Companies Act 1956. The registered office of the Company is located at Sunil Patodia Tower, 156-158 Chakravorty Ashok Society, J.B. Nagar, Andheri (E) Mumbai Maharashtra 400099, India. The Company''s shares are listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).
The board of directors approved the standalone financial statements for the year ended March 31, 2023 and authorized for issue on May 04, 2023.
The main business of the Company is to provide business support services to the subsidiaries and other group companies
2. SIGNIFICANT ACCOUNTING POLICIES
This note provides a list of the significant accounting policies adopted in the preparation of these standalone financial statements. These accounting policies have been consistently applied to all the years presented by the Company unless otherwise stated.
Basis of preparation and Reclassification of Financial Statements
i. Statement of compliance
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (âInd AS'') notified under Section 133 of the Companies Act, 2013 ( âthe Act'') read with rule 3 of the Companies ( Indian Accounting Standards) Rules, 2015 as amended from time to time and other relevant provisions of the Act.
Accordingly the Company has prepared these Standalone Financial Statements which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss for the year ended March 31, 2023, the Statement of Cash Flows for the year ended March 31, 2023 and the Statement of Changes in Equity for the year ended as on that date and accounting policies and other explanatory information (together hereinafter referred to as âStandalone Financial Statements â.
The accounting policies are applied consistently to all the periods presented in the standalone financial statements.
New and Amended Standards adopted by the Company
No new standards as notified by Ministry of Corporate Affairs (âMCAâ), through Companies (Indian Accounting Standards) Amendment Rules, 2022 and Companies
(Indian Accounting Standards) Second Amendment Rules are effective for the current year.
The Company has applied the following amendments to Ind AS for the first time for their annual reporting period commencing April 1, 2021:
⢠Extension of COVID-19 related concessions -amendments to Ind AS 116
⢠Interest rate benchmark reform - amendments to Ind AS 109, Financial Instruments, Ind AS 107, Financial Instruments: Disclosures, Ind AS 104, Insurance Contracts and Ind AS 116, Leases.
There is no impact on the Company due to the application of the above amendments.
New amendments issued but not effective
The Ministry of Corporate Affairs has vide notification dated March 23, 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 which amends certain accounting standards, and are effective April 1, 2023. These amendments are not expected to have a material impact on the Company in the current or future reporting periods and on foreseeable future transactions.
Reclassification as per requirement of Schedule III
As per the requirements of Schedule III of Companies Act 2013, to increase the transparency and provide additional disclosure to users of financial statements, The Company has reclassified comparative amounts to conform with current year presentation as per requirements of Ind AS 1. The impact of such reclassification is summarized below:
(Rs. in lakhs) |
|||
Balance Sheet (extract) |
March 31, 2022 (as previously reported) |
Increase/ (Decrease) |
March 31, 2022 (restated) |
Other Current Assets |
84.72 |
(50.75) |
33.97 |
Other Current Financial Assets |
- |
50.74 |
50.75 |
Borrowings |
2482.50 |
(12.19) |
2494.69 |
Other Current Liabilities |
32.55 |
(12.19) |
20.36 |
Trade Payables |
35.77 |
(0.16) |
35.61 |
Other Financial Liabilities |
17.02 |
0.16 |
17.18 |
ii. Functional and presentation currency
The Company''s presentation and functional currency is Indian Rupees. All figures appearing in the Standalone financial statements are in Indian rupees in lakh rounded off to two decimal places as permitted by Schedule III to the Act. Per share data are presented in Indian Rupee to two decimal places.
iii. Basis of measurement
The standalone financial statements have been prepared on Historical cost convention on the accrual basis as per the provisions of the Companies Act, 2013 (âthe Actâ)â except for certain financial assets and liabilities are measured at fair value as explained in the accounting policy Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Further assets and liabilities are classified as per the normal operating cycle (determined as 12 months).
iv. Fair value measurement
Fair value is the price that would be received on sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Company has access at that date.
The best estimate of the fair value of a financial instrument on initial recognition is normally the transaction price. If the Company determines that the fair value on initial recognition differs from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability nor based on a valuation technique that uses only data from observable markets, then the financial instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial recognition and the transaction price. Subsequently that difference is recognised in Statement of Profit and Loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorised within the fair value hierarchy described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1 - Valuation using quoted market price in active markets: The fair value for financial instruments traded in active markets at the reporting date is based on their quoted market price, without any deduction for transaction costs. A market is regarded as active, if transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.
⢠Level 2 - Valuation using observable inputs: If there is no quoted price in an active market, then the Company uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates most of the factors that market participants would take into account in pricing a transaction.
⢠Level 3 - Valuation with significant unobservable inputs: The valuation techniques are used only when fair value cannot be determined by using observable inputs. The Company regularly reviews significant unobservable inputs and valuation adjustments. Level 3 assets are typically very illiquid, and fair values can only be calculated using estimates.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
v. Use of judgment and Estimates The preparation of the standalone financial statements requires the management to make judgments, estimates and assumptions in the application of accounting policies that affects the reported amount of assets, liabilities and the accompanying disclosures along with contingent liabilities as at the date of standalone financial statements and revenue & expenses for the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes different from the estimates. Difference between actual results and estimates are recognised in the year in which the results are known or materialise i.e. prospectively
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The key areas involving estimation uncertainty higher degree of judgement or complexity, or areas where assumptions are significant to the standalone financial statements include:
i. Impairment of financial assets
ii. Estimation of fair value measurement of financial assets and liabilities
iii. Provisions and Contingencies
iv. Useful life and expected residual value of assets
v. Tax position for current tax and recognition of deferred tax assets/liabilities
vi. Measurement of Defined Benefit Obligations and actuarial assumptions
vii. Share Based Payments
viii. Measurement of Expected Credit Loss allowance for Trade receivables
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES1. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current /non-current classification.
An asset is treated as current when it is:
⢠Expected to be realized or intended to be sold or consumed in normal operating cycle.
⢠Held primarily for the purpose of trading
⢠Expected to be realized within twelve months after the reporting date, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
Based on the nature of products and services offered by the Company, operating cycle determined is 12 months for the purpose of current and non-current classification of assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents,
Revenue is measured at the fair value of the consideration received or receivable. 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 and there exists reasonable certainty of its recovery.
Sale of services
The Company recognizes revenue on accrual basis when the significant terms of the arrangement are enforceable, services have been delivered and the collectability is reasonably assured. The method of recognizing the revenues and costs depends on the nature of the services rendered. Revenue is recognized when no significant uncertainty exists as to its realization or collection.
The Company recognizes income from Business Support Service on account of providing administrative services'' to its Subsidiaries and Group companies. The
term administrative services will be as per the terms of agreement made between the Company with its subsidiaries and Group Companies
Interest Income
Interest income from financial assets is recognized when it is probable that economic benefits will flow to the company and the amount of income can be measured reliably. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial assets to that asset''s net carrying amount on initial recognition.
Dividend Income
Dividend income from investments is recognised when the shareholder''s right to receive payment has been established (provided that it is probable that the economic benefits will flow to the company and the amount of income can be measured reliably).
3. Property, Plant and Equipment
Land and buildings held for use in the supply of services, or for administrative purposes, are stated in the Balance Sheet at cost less accumulated depreciation and accumulated impairment losses. Freehold land is not depreciated.
All items of property, plant and equipment are initially recorded at cost. The cost of property, plant and equipment comprises its purchase price net of any trade discounts and rebates, any import duties and other taxes (other than those subsequently recoverable from the tax authorities), any directly attributable expenditure on making the asset ready for its intended use, including relevant borrowing costs for qualifying assets and any expected costs of decommissioning. Expenditure incurred after the property, plant and equipment have been put into operation, such as repairs and maintenance, are charged to the Statement of Profit and Loss in the year in which the costs are incurred.â The cost of an item of property, plant and equipment is recognized as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.
All items of property, plant and equipment having cost more than Rs. 5000/- are recognized as an asset.
Properties in the course of construction for production, supply or administrative purposes are carried at cost, less any recognized impairment loss. Cost includes professional fees and, for qualifying assets, borrowing costs capitalized in accordance with the company''s accounting policy. Such properties are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use. Depreciation of these assets, on the same basis as other property assets, commences when the assets are ready for their intended use.
Capital Work in Progress and Capital Advances Capital work-in-progress are property, plant and equipment which are not yet ready for their intended use. Advances given towards acquisition of fixed assets outstanding at each reporting date are shown as other non-financial assets.
Depreciation is not recorded on capital work-in progress until construction and installation is completed and assets are ready for its intended use.
Subsequent to recognition, property, plant and equipment (excluding freehold land) are measured at cost less accumulated depreciation and accumulated impairment losses. When significant parts of property, plant and equipment are required to be replaced in intervals, the company recognizes such parts as individual assets with specific useful lives and depreciation respectively. Likewise, when a major inspection is performed, its cost is recognized in the carrying amount of the plant and equipment as a replacement cost only if the recognition criteria are satisfied. All other repair and maintenance costs are recognized in the Statement of Profit and Loss as incurred.
Depreciation is recognised so as to write off the cost of assets less their residual values over the useful lives as prescribed in Schedule II of to the Companies Act, 2013, using the straight- line method (âSLMâ). Residual value is considered nil case of Computers, Server and network and 5% is considered in case of other assets.
Description of Asset |
Useful Life |
Buildings |
60 Years |
Computers and Printers, including |
3 Years |
Computer Peripherals |
|
Office Equipments |
5 Years |
Furniture & Fixtures |
10 Years |
Motor Vehicles (Motor Car) |
8 Years |
Solar Plant |
25 Years |
Electric Installation |
10 Years |
Server & Network |
6 Years |
Water Pumps and Borewell |
5 Years |
The cost of property, plant and equipment at April 01, 2018, the Company''s date of transition to Ind AS, was determined with reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.
The carrying values of property plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The residual values, useful life and depreciation method are reviewed at each financial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on disposal or retirement of an item of property, plant and equipment is determined as the difference between sale proceeds and the carrying amount of the asset and is recognised in profit or loss.
Investment properties are properties that is held for longterm rentals yields or for capital appreciation (including property under construction for such purposes) or both, and that is not occupied by the Company, is classified as investment property. Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated impairment loss, if any. Though the Company measures investment property using cost based measurement, the fair value of investment property is disclosed in the notes. Investment properties are derecognised either when they have been disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from their disposal. The difference between the net disposal proceeds and the carrying amount of the asset is recognised in profit or loss in the period of derecognition.
The cost Intangible assets at April 01, 2018, the Company''s date of transition to Ind AS, was determined with reference to its carrying value recognised as per the previous GAAP (deemed cost), as at the date of transition to Ind AS.
Intangible asset including intangible assets under development are stated at cost, net of accumulated amortisation and accumulated impairment losses, if any Intangible assets acquired separately are measured on initial recognition at cost. The amortization period and the amortisation method are reviewed at the end of each financial year. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with infinite lives is recognised in the statement of profit and loss unless such expenditure forms part of carrying value of another asset.
Useful life in case of Intangible assets is considered as 6.17 year.
6. Foreign exchange transactions and translations
a. Initial recognition: Transactions in foreign currencies are recognised at the prevailing exchange rates between the reporting currency and a foreign currency on the transaction date.
b. Conversion: Transactions in currencies other than Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies are generally recognised in Statement of Profit and Loss.
Non-monetary assets and liabilities are carried at historical cost using exchange rates as on the date of the respective transactions and are not retranslated at the reporting date.
The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses."
Current taxes
The tax currently payable is based on taxable profit for the year. Taxable profit differs from âprofit before tax'' as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible.
Current income tax is recognized at the amount expected to be paid to or recovered from the tax authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. The Company offsets, on a year to year basis, the current tax assets and liabilities, where it has legally enforceable right to do so and where it intends to settle such assets and liabilities on a net basis.
Income tax expense is recognized in net profit in the statement of profit and loss except to the extent that it relates to items recognized directly in other comprehensive income or equity, in which case it is recognized in other comprehensive income or equity respectively.
The promulgated Taxation Law (Amendment) Ordinance 2019 has inserted section 115BBA in the Income Tax Act, 1961 providing existing domestic companies with an option to pay tax at a concessional rate of 22% plus applicable surcharge and cess. The Company has irreversibly opted for the new tax rate i.e. 25.17%.
Deferred taxes
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the standalone financial statements and the corresponding tax bases used in the computation of taxable profit and are accounted for using the balance sheet approach. Deferred tax liabilities are generally recognized for all taxable temporary differences, and deferred tax assets are generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset is realised, based on the tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax relating to items recognised outside the profit and loss is recognised outside profit and loss (either in other comprehensive income or in equity)
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Minimum Alternate Tax (MAT) credit entitlement (i.e. excess of MAT paid for a year over normal tax liability for that year) eligible for set off in subsequent years is recognised as an asset in accordance with Ind AS 12, Income Taxes, if there is convincing evidence of it''s realisation.
MAT credit is created by way of credit to the Statement of Profit and Loss. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income tax during the specified period.
8. Impairment of Non-Financial Assets
At the end of each reporting period, the company reviews the carrying amounts of its property, plant and equipment, investment property and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cashgenerating units for which a reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized in the statement of profit and loss.
When an impairment loss subsequently reverses, the carrying amount of the asset ( or a cash-generating unit) is increased to the revised estimate of its recoverable amount, so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset ( or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in statement of profit and loss.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
a. Initial recognition and measurement
All financial assets are recognised initially at fair value. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
On initial recognition, a financial asset is measured at:
⢠Amortised cost
⢠Fair Value through Other Comprehensive Income -debt instruments
⢠Fair Value through Other Comprehensive Income -equity instruments
⢠Fair Value Through Profit and Loss
Amortised cost - The Company''s business model is not assessed on an instrument-by-instrument basis, but at a higher level of aggregated portfolios being the level at which they are managed. The financial asset is held with the objective to hold financial asset in order to collect contractual cash flows as per the contractual terms that give rise on specified dates to cash flows that are solely payment of principal and interest (SPPI) on the principal amount outstanding. Accordingly the Company measures Bank balances, Loans, Trade receivables and other financial instruments at amortised cost.
FVOCI - debt instruments - The Company measures its debt instruments at FVOCI when the instrument is held within a business model, the objective of which is achieved by both collecting contractual cash flows and selling financial assets; and the contractual terms of the financial asset meet the SPPI test.
FVOCI - equity instruments - The Company subsequently measures all equity investments at fair value through profit or loss, unless the Company''s management has elected to classify irrevocably some of its equity instruments at FVOCI, when such instruments meet the definition of Equity under Ind AS 32 Financial Instruments and are not held for trading.
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
All financial assets not classified as measured at amortised cost or FVOCI are measured at FVTPL. This includes all derivative financial assets.
Financial assets at amortised cost are subsequently measured at amortised cost using effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in Statement of Profit and Loss. Any gain and loss on derecognition is recognised in Statement of Profit and Loss.
Debt investment at FVOCI are subsequently measured at fair value. Interest income under effective interest method, foreign exchange gains and losses and impairment are recognised in Statement of profit and loss. Other net gains and losses are recognised in OCI.
On derecognition, gains and losses accumulated in OCI are reclassified to Statement of Profit and Loss.
For equity investments, the Company makes selection on an instrument-by-instrument basis to designate equity investments as measured at FVOCI. These selected investments are measured at fair value with gains and losses arising from changes in fair value recognised in other comprehensive income and accumulated in the reserves. The cumulative gain or loss is not reclassified to Statement of profit and loss on disposal of the investments. These investments in equity are not held for trading. Dividend income received on such equity investments are recognised in Statement of Profit and Loss. Equity investments that are not designated as measured at FVOCI are designated as measured at FVTPL and subsequent changes in fair value are recognised in Statement of Profit and Loss. Financial assets at FVTPL are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in Statement of Profit and Loss.
c. De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognised (i.e. removed from the company balance sheet) when:
The rights to receive cash flows from the asset have expired, or
The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a âpassthrough'' arrangement; and either (a) the company has transferred substantially all the risks and rewards of the asset, or (b) the company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the company continues to recognise the transferred asset to the extent of the company''s continuing involvement. In that case, the company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the company could be required to repay.
d. Impairment of financial assets
The Company recognises impairment loss applying the expected credit loss (ECL) model on the financial assets measured at amortised cost, debt instruments at FVTOCI, lease receivables, trade receivables, other contractual right to receive cash or other financial asset and financial guarantee not designated as at FVTPL.
The Company measures the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. If the credit risk on a financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12 months expected credit losses.
For trade receivables or any contractual right to receive cash or other financial assets that result from transactions that are within the scope of Ind AS 115, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
Further, for the purpose of measuring lifetime expected credit loss allowance for trade receivables, the Company applies âsimplified approach'' permitted by Ind AS 109 Financial Instruments. This expected credit loss allowance is computed based on a provision matrix which takes into account historical credit loss experience and adjusted for forward-looking information.
In view of the fact that the entire trade receivables are from its subsidiaries and other group companies, there is no lifetime credit losses expected by the Company.
Write offs - The gross carrying amount of a financial asset is written-off (either partially or in full) to the extent that there is no reasonable expectation of recovering the asset in its entirety or a portion thereof. This is generally the case when the Company determines that the vendor does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off and when there is no reasonable expectation of recovery from the collaterals held. However, financial assets that are written-off could still be subject to enforcement activities in order to comply with the Company''s procedures for recovery of amounts due.
Presentation of allowance for ECL in the Balance Sheet - Loss allowances for ECL are deducted from the gross carrying amount of financial assets measured at amortised cost.
Financial Liabilities
a. Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind-AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments.
Gains or losses on liabilities held for trading are recognised in the profit or loss.
Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied. For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit risk is recognized in OCI. These gains/ loss are not subsequently transferred to P&L. However, the company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss. The Company has not designated any financial liability as at fair value through profit and loss.
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
A financial liability is derecognised when and only when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the effective interest rate amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. Such amortisation is included as finance costs in the statement of profit and loss.
The Company has adopted Ind AS 116 âLeases'' with the date of initial application being April 1, 2019. The Company''s lease asset classes primarily consist of leases for Premises. The Company, at the inception of a contract, assesses whether the contract is a lease or not lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a time in exchange for a consideration. This policy has been applied to contracts existing and entered into on or after April 1, 2018.
The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116.
The Company as a lessee
The Company assesses, whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract involves- a) the use of an identified asset, b) the right to obtain substantially all the economic benefits from use of the identified asset, and c) the right to direct the use of the identified asset.
The Company at the inception of the lease contract recognises a Right-of-Use (RoU) asset at cost and a corresponding lease liability, for all lease arrangements in which it is a lessee, except for leases with term of less than twelve months (short term) and low-value assets (assets of less than Rs. 10 Lakhs in value). Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The cost of the ROU assets comprises the amount of the initial measurement of the lease liability, any
lease payments made at or before the inception date of the lease plus any initial direct costs, less any lease incentives received. Subsequently, the right-of-use assets is measured at cost less any accumulated depreciation and accumulated impairment losses, if any. The ROU assets is depreciated using the straightline method from the commencement date over the shorter of lease term or useful life of ROU assets.
ROU assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
For lease liabilities at inception, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate is readily determined, if that rate is not readily determined, the lease payments are discounted using the incremental borrowing rate.
The Company recognises the amount of the remeasurement of lease liability as an adjustment to the ROU assets. Where the carrying amount of the ROU assets is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the remeasurement in the Statement of Profit and Loss.
For short-term and low value leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the lease term.
The Company as a lessor
Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term unless the receipts are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases. The respective leased assets are included in the balance sheet based on their nature.
Finance costs include interest expense computed by applying the effective interest rate on respective financial instruments measured at amortised cost. Financial instruments include debt and borrowing, Finance costs are charged to the Statement of Profit and Loss.
12. Dividend distribution to equity holders of the Company
The Company recognises a liability to make distributions to equity holders of the Company when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the Act, final dividend is authorised when it is approved by the shareholders and interim dividend is authorised when it is approved by the Board of Directors of the Company.
Provisions are recognised only when:
⢠an entity has a present obligation (legal or constructive) as a result of a past event; and
⢠it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
⢠a reliable estimate can be made of the amount of the obligation
These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
Further, long term provisions are determined by discounting the expected future cash flows specific to the liability. The unwinding of the discount is recognised as finance cost. A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
Contingent liability is disclosed in case of:
⢠a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and
⢠a present obligation arising from past events, when no reliable estimate is possible.
Contingent Assets:
Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, an entity discloses the contingent asset.
Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:
⢠estimated amount of contracts remaining to be executed on capital account and not provided for;
⢠uncalled liability on loan sanctioned and on investments partly paid; and
⢠other non-cancellable commitments, if any to the extent they are considered material and relevant in the opinion of management.
Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account
⢠The after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
⢠Weighted average number of equity shares that would have been outstanding assuming the conversion of all the dilutive potential equity.
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), and highly liquid time deposits that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
Statement of Cash Flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:
i. changes during the period in inventories and operating receivables and payables transactions of a noncash nature;
ii. non-cash items such as depreciation, provisions, deferred taxes, unrealised foreign currency gains and losses, and undistributed profits of associates and joint ventures; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
Short term employee benefits
Employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Long Term employee benefits
Company''s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods.
Post-employment benefits
a. Defined contribution Plans
Provident fund: Contributions as required under the statute, made to the Provident Fund (Defined Contribution Plan) are recognised immediately in the Statement of Profit and Loss. There is no obligation other than the monthly contribution payable to the Regional Provident Fund Commissioner.
ESIC and Labour welfare fund: The Company''s contribution paid/payable during the year to Employee state insurance scheme and Labour welfare fund are recognised in the Statement of Profit and Loss.
Gratuity liability is defined benefit obligation and is provided on the basis of an actuarial valuation performed by an independent actuary based on projected unit credit method, at the end of each financial year.
Defined benefit costs are categorised as follows:
i. Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements)
ii. Net interest expense or income
iii. Re-measurement
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized in OCI, net of taxes. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation
at the beginning of the annual period to the net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognized in Statement of Profit and Loss.
The Company''s net obligation in respect of gratuity (defined benefit plan), is calculated by estimating the amount of future benefit that the employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The retirement benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in the company''s defined benefit plans. Any surplus resulting from this calculation is recognised as an asset to the extent of present value of any economic benefits available in the form of refunds from the plans or reductions in the future contribution to the plans.
Share based payment arrangements
The cost of equity settled transactions is determined
by the fair value at the grant date. The fair value of the
employee share options is based on the Black Scholes
model.
The grant-date fair value of equity-settled share-based payment granted to employees is recognized as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market
performance conditions are expected to be met, such that the amount ultimately recognized is based on the number of awards that meet the related service and nonmarket performance conditions at the vesting date. For share-based payment awards with market performance conditions and non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.
Choice International Limited grants options to eligible employees of the Company under Choice Employee Stock Option Scheme 2022. The options vest over a period of four years. In case of Group equity-settled share-based payment transactions, where the Company grants stock options to the employees of its subsidiaries, the transactions are accounted by increasing the cost of investment in subsidiary with a corresponding credit in the equity.
The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share.
19. Investment in Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the relevant activities of the entity.
Investment in subsidiaries are measured at cost less accumulated impairment, if any.
Mar 31, 2018
a) Basis of Accounting & preparation of Standalone Financial Statements:
The Standalone Financial Statements of the Company have been prepared in accordance with the Gene rally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013 and the relevant provisions of the Companies Act, 2013 ("the 2013 Act") and Guidelines issued by Reserve Bank of India. The Standalone Financial Statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the Standalone Financial Statements are consistent with those followed in the previousyear.
b) Use of estimates:
The preparation of Standalone Financial Statements requires the managementto make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) as of the date of the Standalone Financial Statements and the reported income and expenses during the reporting period. Management believes that the estimates used in the preparation of the Standalone Financial Statements are prudent and reasonable. Actual results could differ from these estimates. Any change in the estimates is recognised prospectively in current and future period.
c) Revenue Recognition:
Revenue is recognised to the extent it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. In addition, the following criteria must be met before revenue is recognised:
(i) Interest and other dues on Lending is recognised on accrual basis, except in case of Non-Performing Assets (NPA''s), wherein income is recognized on realisation of the same. NPA''s are determined in accordance with the Guidelines issued by the Reserve Bankof India.
(ii) Income on services provided in the nature of Business Support Services ("BSS") is recognised on an accrual basis on completion of services as enumerated in the BSS policy of the Company.
(iii) Profit or Loss on sale of investments is determined based on weighted average cost of investments and is recognized on trade date basis.
(iv) Interest on fixed deposits are recognised on accrual basis.
(v) Dividend income is recognised once the unconditional right to receive dividend is established.
d) Property, Plant & Equipment
Tangible assets:
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred upto that date.
Intangible assets:
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended useand netofanytradediscountsand rebates.
Revaluation of Assets:
Land is accounted for using revaluation model as per Revised Accounting Standard - 10. The fair value of the Company''s freehold land as at March 31, 2018 have been arrived at on the basis of a valuation carried out by an independent registered appraiser not related to the Company with appropriate qualifications and relevant experience in the valuation of land at relevant locations. The Fair value was determined based on a Sales Comparison Method. Revaluation Surplus is credited to revaluation surplus in Shareholder''s equity. Subsequently, such Land will be carried atfairvalue based on periodic valuations by an independent registered appraiser.
During the current year, pursuant to the revaluation model adopted as aforesaid, the land of the Company has increased by Rs.41 7,022,090 and correspondingly the Reserves & Surplus have also increased bythatamount.
e) Depreciation & Amortization:
Depreciation has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 201 3. In respect of computer software which are amortized over a period of five years in accordance with the Accounting Standard 26 "Accounting for Intangible Assets". Depreciation on addition to fixed assets is provided on a pro-rata basis from the date of addition.
The estimated useful life of intangible assets and the amortization period are reviewed at the end of each financial year and amortization method is revised to reflect the changed pattern.
f) Inventories:
Inventories of share & securities are valued at cost (on FIFO basis) or the net realizable whichever is lower, by taking the value of all the scripts of the shares cumulatively. Cost includes all incidental cost of acquisition.
g) Cash & Cash Equivalent:
Cash comprise cash on hand and demand deposits with banks. Cash equivalents are short term balances, highly liquid investments that are readily convertible in cash and which are subjected to insignificant risk of change in value.
h) Finance Cost:
Interest cost is recognised as expenses in the period in which the cost is incurred. Otherfinance Charges includes origination fees and other ancillary costs with respect to funds mobilised by the Company which are amortised over the tenure of such borrowings.
i) Employees Benefits:
(i) Short-term: Short-term employee benefits are recognised as an expense at the undiscounted amount expected to be paid overthe period of services rendered by the employeesto the Company. These includes Salary, Compensated leave encashment, Bonus, etc.
(ii) Long-term:The Company has both defined-contribution and defined-benefit plans. The defined contribution plans are financed by the company and in the case of some defined contribution plans by the Company along with its employees.
- Defined-contribution Plans
These are plans in which a company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. These comprise of contributions to the Employees'' Provident Fund and Family Pension Fund. The Company''s payments to the defined contribution plans are reported as expenses in the period in which the employees perform the services that the payment covers.
- Defined-benefit Plans
Expenses for defined-benefit plans are calculated as at the balance sheet date by independent actuary. These commitments are valued at the present value of the expected future payments, with consideration for calculated future salary increases, using a discount rate corresponding to the interest rate estimated by the actuary having regard to the interest rate on government bonds with a remaining term that is almost equivalent to the average balance working period of employees. Incremental liability based on the projected unit credit method as at the reporting date, is charged to the Statement of Profit and Loss. The actuarial gains / losses are accounted in the Statement of Profit and Loss.
j) Investments:
Investments, which are readily realizable and intended to be held for not more than one yearfrom the date on which such investments are made, are classified as current investments, all other investments are classified as non-current investments. Investments are valued in accordance with the RBI guidelines and Accounting Standard-13 on "Accounting for investments".
Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.
Quoted current investments are valued at lower of cost and market value of investments on a category basis. Unquoted current investments are valued at lower of cost and breakup value/fair value of investments in accordance with RBI Guidelines.
k) ImpairmentofAssets:
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their presentvalue based on an appropriate discountfactor.Whenthere is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.
I) Accounting For Taxes On Income:
Current tax is the amount of tax payable on the taxable income for the yearas determined in accordance with the provisions of the Income TaxAct, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flowto the Company.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carryforward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. The effect on Deferred Tax Assets and Liabilities of a change intax rates is recognised in the Statement of Profitand Loss in the year of substantive enactment of the change. Deferred tax assets are reviewed at each Balance Sheetdatefor theirreliability.
m) Provisions, contingent liabilities & assets:
A Provision is recognised when the Company has a present legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which reliable estimate can be made. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure as specified in Accounting Standard 29 -"Provisions, Contingent Liabilities and Contingent Assets" is made. Contingent Assets are neither recognised nor disclosed in the Standalone Financial Statements.
n) Provisioning under Prudential Norms:
(i) NPAs are identified and categorised according to the Guidelines issued by the Reserve Bank of India (RBI). Provisions are made against sub-standard, doubtful and loss assets at the rates prescribed in the RBI guidelines, unless an accelerated provision / write-off is warranted on a case to case basis where additional risks are identified by the Management.
(ii) Provisioning for NPAs is dependent upon, inter alia, whether the NPA is secured or unsecured. Loans are considered as secured, where the Company has valid recourse to assets / recovery by Pledge of shares, units, othersecurities.
(iii) Provision for Standard Assets is made at 0.25% on the outstanding standard assets in accordance with RBI guidelines.
(iv) Impairment in the investment portfolio is provided, as per the Guidelines issued by the RBI, unless an accelerated provision /write-off is warranted on a casetocase basis.
o) Cash Flow Statement:
Cash flow are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of the transactions on noncash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flow from operating, investing and financing activities of the company a re segregated based on available information.
For the purpose of Cash Flow Statement, cash and cash equivalents includes fixed deposits which are freely remissible but excludes interestaccrued on fixed deposits.
p) Earnings Per Share
Basic earnings per share is calculated by dividing the Net Profit /(Loss) for the period attributable to equity shareholders of the Company by weighted average number of equity shares outstanding during the period.
Diluted earnings per share is calculated by dividing the Net Profits / (Loss) for the period attributable to equity shareholders of the Company by weighted average number of equity shares determined by assuming conversion on exercise of conversion rights for all potential dilutivesecurities.
Mar 31, 2016
a) Basis of Accounting & preparation of Financial Statements:
These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared in compliance with all material aspects of the accounting standards notified under section 133 and the other relevant provisions of the Companies Act, 2013. All assets and liabilities have been classified as current or non-current as per the criteria set out in Schedule III to the Act, 2013.
b) Use of estimates:
The preparation of financial statement in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that effect the reported amount of assets and liabilities & disclosure of contingent liabilities at the date of financial statement and result of the operations during the reporting period end. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. difference between the actual results and an estimate is recognized in the period in which the results are known.
c) Revenue Recognition:
Revenue and cost are generally recognized and accounted on accrual basis as they are earned / incurred except in cases of significant uncertainty.
1. Operational and other income are accounted for on accrual basis.
2. Revenue does not includes service tax and other tax component, if any
3. Dividend income is recognized when the right to receive is established
4. Profit /loss in dealing of shares & securities are recognized on the day of settlement of the transaction.
5. Profit /loss on equity derivative transactions are account for as explained below:
Initial and additional margin paid over and above Initial margin, for entering into contracts for Equity Stock/Index Futures which are released on final settlement/squaring-up of underlying contracts are disclosed under Other Current Assets. "Mark-to-market margin-Equity Stock/Index Futures" representing the amounts paid in respect of mark to market margin is disclosed under Other Current Assets.
On final settlement or squaring up of contracts for equity stock/index futures, the realized profit or loss after adjusting the unrealized loss already accounted, if any, is recognized in the statement of Profit and Loss. When more than one contract in respect of the relevant series of equity stock/index futures contract to which the squared-up contract pertains is outstanding at the time of the squaring-up of the contract, the contract price of the contract so squared-up is determined using the weighted average cost method for calculating the profit/loss on squaring-up.
As at the balance sheet date, the mark to market on all transactions comprising of Equity Derivatives positions is determined on a portfolio basis with net unrealized losses being recognized in the Profit and Loss Account. Unrealized gains (on portfolio basis) are not recognized in the Profit and Loss Account on grounds of prudence as enunciated in Accounting Standard - 1, Disclosure of Accounting Policies.
In respect of other transactions, the unrealized losses on equity derivatives determined on scrip-basis are recognized in Profit and Loss Account and unrealized gains are ignored; and in case of securities (shares, etc) the net unrealized losses are recognized in Profit and Loss Account and net unrealized gains are ignored.
d) Fixed Assets Tangible assets:
Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date.
Intangible assets:
Intangible assets are recognized when it is probable that the future economic benefits that are attributable to the assets will flow to the enterprise and the cost of the assets can be measured reliably. Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates.
e) Depreciation & Amortization:
Depreciation has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013. In respect of computer software which are amortized over a period of five years in accordance with the Accounting Standard 26 "Accounting for Intangible Assets". Depreciation on addition to fixed assets is provided on a pro-rata basis from the date of addition.
The estimated useful life of intangible assets and the amortization period are reviewed at the end of each financial year and amortization method is revised to reflect the changed pattern.
f) Inventories:
Inventories of share & securities are valued at cost (on FIFO basis) OR the net realizable whichever is lower, by taking the value of all the scripts of the shares cumulatively. Cost includes all incidental cost of acquisition.
g) Cash & Cash Equivalent:
Cash comprise cash on hand and demand deposits with banks. Cash equivalents are short term balances, highly liquid investments that are readily convertible in cash and which are are subjected to insignificant risk of change in value
h) Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds to the extent related / attributed to the acquisition / construction of qualifying fixed assets are capitalized up to the date when such assets are ready for its intended use and other borrowing costs are charged to profit & loss account.
i) Employees Retirement Benefits:
All employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits. The benefits like salary, short term compensated absences, etc. and the expected cost of bonus, ex-gratia are recognized in the period in which the employee renders the related service.
The Company has a Defined Benefit Plan viz. Gratuity, for all its employees. Gratuity liability is unfunded. Liability for the defined benefit plan of Gratuity is determined on the basis of an actuarial valuation by an independent actuary at the year end, which is calculated using projected unit credit method. Actuarial gains and losses, which comprise experience adjustment and the effect of changes in actuarial assumptions, are recognized in the Statement of Profit and Loss.
j) Investments:
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments, all other investments are classified as non-current investments. Investments are valued in accordance with the RBI guidelines and Accounting Standard-13 on "Accounting for investments".
Long-term investments (excluding investment properties), are carried individually at cost less provision for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and fair value. Costs of investments include acquisition charges such as brokerage, fees and duties.
k) Impairment of Assets:
The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognized, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit and Loss, except in case of revalued assets.
1) Accounting For Taxes On Income:
Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.
m) Provisions, contingent liabilities & assets:
A provision is recognized when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or a present obligation but the likelihood of outflow of resources is remote, no provision or disclosure as specified in Accounting Standard 29 -"Provisions, Contingent Liabilities and Contingent Assets" is made. Further provision is also made as per the norms prescribed in Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007.
n) Cash Flow Statement:
Cash flow are reported using the indirect method, whereby profit (loss) before extra ordinary items is adjusted for the effects of the transactions on non cash nature. The cash flow from operating, investing and financing activities of the company are segregated based on available information.
For the purpose of Cash Flow Statement, cash and cash equivalents includes fixed deposits which are freely remissible but excludes interest accrued on fixed deposits.
o) Earnings Per Share
The Earning considered in ascertaining the Company''s earning per Shares (EPS) comprise of the net profit after tax to equity shares holders. Basic earnings per share are calculated by dividing the Net Profit or Loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profits attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares, if any.
Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.
Mar 31, 2015
A) Basis of Accounting & preparation of Financial Statements:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared in compliance with all material aspects of the accounting
standards notified under section 133 and the other relevant provisions
of the Companies Act, 2013. All assets and liabilities have been
classified as current or non-current as per the criteria set out in
Schedule Ill to the Act.
b) Use of estimates:
The preparation of financial statement in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that effect the reported amount of assets and
liabilities & disclosure of contingent liabilities at the date of
financial statement and result of the operations during the reporting
period end. Although these estimates are based upon management's best
knowledge of current events and actions, actual results could differ
from these estimates. difference between the actual results and an
estimate is recognized in the period in which the results are known.
c) Revenue Recognition:
Revenue and cost are generally recognized and accounted on accrual
basis as they are earned / incurred except In cases of significant
uncertainty.
1. Operational and other income are accounted for on accrual basis.
2. Revenue does not includes service tax and other tax component, if
any
3. Dividend income is recognized when the right to receive is
established
4. Profit/loss in dealing of shares insecurities are recognized on the
day of settlement of the transaction.
5. Profit/loss on equity derivative transactions are account for as
explained below:
* Initial and additional margin paid over and above Initial margin, for
entering into contracts for Equity Stock/lndex Futures which are
released on final settlement/squaring -up of underlying contracts are
disclosed under Other Current Assets. "Mark-to- market margin- Equity
Stock/lndex Futures" representing the amounts paid in respect of mark
to market margin is disclosed under Other Current Assets.
* On final settlement or squaring up of contracts for equity
stock/index futures, the realized profit or loss after adjusting the
unrealized loss already accounted, if any, is recognized in the
statement of Profit and Loss. When more than one contract in respect of
the relevant series of equity stock/lndex futures contract to which the
squared-up contract pertains is outstanding at the time of the
squaring-up of the contract, the contract price of the contract so
squared-up is determined using the weighted average cost method for
calculating the profit/loss on squaring-up.
* As at the balance sheet date, the mark to market on all transactions
comprising of Equity Derivatives positions is determined on a portfolio
basis with net unrealized losses being recognized in the Profit and
Loss Account. Unrealized gains (on portfolio basis) are not recognized
in the Profit and Loss Account on grounds of prudence as enunciated in
Accounting Standard -1, Disclosure of Accounting Policies.
* In respect of other transactions, the unrealized losses on equity
derivatives determined on scrip-basis are recognized in Profit and Loss
Account and unrealized gains are ignored; and In case of securities
(shares, etc) the net unrealized losses are recognized in Profit and
Loss Account and net unrealized gains are Ignored.
d) Fixed Assets
Tangible assets:
Fixed assets are carried at cost less accumulated depredation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred upto that date.
Intangible assets:
Intangible assets are recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to the
enterprise and the cost of the assets can be measured reliably.
Intangible assets are carried at cost less accumulated amortization and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates.
e) Depredation & Amortization:
Depreciation has been provided on the straight-line method as per the
useful life prescribed in Schedule II to the Companies Act, 2013. In
respect of computer softwares which are amortised over a period of five
years in accordance with the Accounting Standard 26 "Accounting for
Intangible Assets". Depredation on addition to fixed assets is provided
on a pro-rata basis from the date of addition The estimated useful life
of intangible assets and the amortization period are reviewed at the
end of each financial year and amortization method Is revised to
reflect the changed pattern.
f) Inventories:
Inventories are valued at cost (on FIFO basis) OR the net realizable
whichever is lower, by taking the value of all the scripts of the
shares cumulatively. Cost includes all incidental cost of acquisition.
g) Cash & Cash Equivalent:
Cash comprise cash on hand and demand deposits with banks. Cash
equivalents are short term balances, highly liquid investments that are
readily convertible in cash and which are are subjected to
insignificant risk of change in value
h) Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
profit & loss account.
I) Employees Retirement Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salary, shortterm compensated absences, etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
The Company has a Defined Benefit Plan viz. Gratuity, for all its
employees. Gratuity liability is unfunded. Liability for the defined
benefit plan of Gratuity is determined on the basis of an actuarial
valuation by an independent actuary at the year end, which is
calculated using projected unit credit method. Actuarial gains and
losses, which comprise experience adjustment and the effect of changes
in actuarial assumptions, are recognized in the Statement of Profit and
Loss.
j) Investments:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments, all other investments are
classified as non-current investments. Investments are valued in
accordance with the RBI guidelines and Accounting Standard-13 on
"Accounting for investments". Long-term Investments (excluding
investment properties), are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Costs of investments include acquisition charges such as
brokerage, fees and duties.
k) Impairment of Assets:
The carrying values of assets/cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
l) Accounting For Taxes On Income:
Current taxis the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carryforward of losses
are recognized only if there is virtual certainty that there will be
sufficient future taxable Income available to realize such assets.
Deferred tax assets are recognized for timing differences of other
items only to the extent that reasonable certainty exists that
sufficient future taxable Income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if
such items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
m) Provisions, contingent liabilities & assets:
A provision is recognized when there is a present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation but the likelihood of outflow of resources is
remote, no provision or disclosure as specified in Accounting Standard
29- "Provisions, Contingent Liabilities and Contingent Assets" Is made.
Further provision is also made as per the norms prescribed in
Non-Banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank) Directions, 2007.
n) Cash Flow Statement:
Cash flow are reported using the indirect method, whereby profit (loss)
before extra ordinary items is adjusted for the effects of the
transactions on non cash nature. The cash flow from operating,
investing and financing activities of the company are segregated based
on available information. For the purpose of Cash Flow Statement, cash
and cash equivalents includes fixed deposits which are freely
remissible but excludes interest accrued on fixed deposits.
o) Earnings Per Share
The Earning considered in ascertaining the Company's earning per Shares
(EPS) comprise of the net profit after tax to equity shares holders.
Basic earnings per share are calculated by dividing the Net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. For the
purpose of calculating diluted earnings per share, the net profits
attributable to equity shareholders and the weighted average number of
shares outstanding during the period are adjusted for the effects of
all dilutive potential equity shares. If any. Diluted earnings per
share is computed by dividing the profit / (loss) after tax (Including
the post tax effect of extraordinary items, if any) as adjusted for
dividend, interest and other charges to expense or income relating to
the dilutive potential equity shares, by the weighted average number of
equity shares considered for deriving basic earnings per share and the
weighted average number of equity shares which could have been issued
on the conversion of all dilutive potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date.
Mar 31, 2014
A) Basis of Accounting & preparation of Financial Statements:
The financial statements are prepared in accordance with the historical
cost convention & applicable accounting standards as referred in the
(Companies Accounting Standards) Rules 2006 & Generally Accepted
Accounting Principles. The company follows mercantile system of
accounting unless specified specifically & recognizes income &
expenditure on accrual basis.
Accounting policies not specifically referred to otherwise are
consistent and in consonance with Generally Accepted Accounting
Principles
b) Use of estimates:
The preparation of financial statement in conformity with Generally
Accepted Accounting Principles requires management to make estimates
and assumptions that effect the reported amount of assets and
liabilities & disclosure of contingent liabilities at the date of
financial statement and result of the operations during the reporting
period end.
Although these estimates are based upon management''s best knowledge of
current events and actions, actual results could differ from these
estimates.diffrence between the actual results and an estimate is
recognized in the period in which the results are known.
c) Revenue Recognition:
Revenue and cost are generally recognized and accounted on accrual
basis as they are earned / incurred except in cases of significant
uncertainty.
1. Operational and other income are accounted for on accrual basis.
2. Revenue does not includes service tax and other tax component, if
any
3. Dividend income is recognized when the right to receive is
established
4. Profit/loss in dealing of shares & securities are recognized on the
day of settlement of the transaction.
5. Profit /loss on equity derivative transactions are account for as
explained below:
* Initial and additional margin paid over and above Initial margin, for
entering into contracts for Equity Stock/Index Futures which are
released on final settlement/squaring-up of underlying contracts are
disclosed under Other Current Assets. "Mark-to-market margin- Equity
Stock/lndex Futures" representing the amounts paid in respect of mark
to market margin is disclosed under Other Current Assets.
* On final settlement or squaring up of contracts for equity
stock/index futures, the realized profit or loss after adjusting the
unrealized loss already accounted, if any, is recognized in the
statement of Profit and Loss. When more than one contract in respect of
the relevant series of equity stock/index futures contract to which the
squared-up contract pertains is outstanding at the time of the
squaring-up of the contract, the contract price of the contract so
squared-up is determined using the weighted average cost method for
calculating the profit/loss on squaring-up.
* As at the balance sheet date, the mark to market on all transactions
comprising of Equity Derivatives positions is determined on a portfolio
basis with net unrealized losses being recognized in the Profit and
Loss Account. Unrealized gains (on portfolio basis) are not recognized
in the Profit and Loss Account on grounds of prudence as enunciated in
Accounting Standard - 1, Disclosure of Accounting Policies.
* In respect of other transactions, the unrealized losses on equity
derivatives determined on scrip-basis are recognized in Profit and Loss
Account and unrealized gains are ignored; and in case of securities
(shares, etc) the net unrealized losses are recognized in Profit and
Loss Account and net unrealized gains are ignored.
d) Fixed Assets Tangible assets:
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date.
Intangible assets:
Intangible assets are recognized when it is probable that the future
economic benefits that are attributable to the assets will flow to the
enterprise and the cost of the assets can be measured reliably.
Intangible assets are carried at cost less accumulated amortization and
impairment losses, if any.
The cost of an intangible asset comprises its purchase price, including
any import duties and other taxes (other than those subsequently
recoverable from the taxing authorities), and any directly attributable
expenditure on making the asset ready for its intended use and net of
any trade discounts and rebates.
e) Depreciation & Amortization:
Depreciation has been provided on the straight line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 except in
respect of computer software''s which are amortized over a period of
6.17 years. Computer software is amortized in accordance with the
Accounting Standard 26 "Accounting for Intangible Assets".
Depreciation on addition to fixed assets is provided on a pro-rata
basis from the date of addition. The estimated useful life of
intangible assets and the amortization period are reviewed at the end
of each financial year and amortization method is revised to reflect
the changed pattern.
f) Inventories:
Inventories are valued at cost (on FIFO basis) OR the net realizable
whichever is lower, by taking the value of all the scripts of the
shares cumulatively. Cost includes all incidental cost of acquisition.
g) Cash & Cash Equivalent:
Cash comprise cash on hand and demand deposits with banks. Cash
equivalents are short term balances, highly liquid investments that are
readily convertible in cash and which are are subjected to
insignificant risk of change in value
h) Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalized up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
profit & loss account.
i) Employees Retirement Benefits:
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salary, short term compensated absences, etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
The Company has a Defined Benefit Plan viz. Gratuity, for all its
employees. Gratuity liability is unfunded. Liability for the defined
benefit plan of Gratuity is determined on the basis of an actuarial
valuation by an independent actuary at the year end, which is
calculated using projected unit credit method. Actuarial gains and
losses, which comprise experience adjustment and the effect of changes
in actuarial assumptions, are recognized in the Statement of Profit and
Loss.
j) Investments:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments, all other investments are
classified as non-current investments. Investments are valued in
accordance with the RBI guidelines and Accounting Standard-13 on
"Accounting for investments".
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Costs of investments include acquisition charges such as
brokerage, fees and duties.
k) Impairment of Assets:
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
I) Accounting For Taxes On Income:
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognized for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized only if there is virtual certainty
that there will be sufficient future taxable income available to
realize such assets.
Deferred tax assets are recognized for timing differences of other
items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
m) Provisions, contingent liabilities & assets:
A provision is recognized when there is a present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources.
Where there is a possible obligation or a present obligation but the
likelihood of outflow of resources is remote, no provision or
disclosure as specified in Accounting Standard 29 - "Provisions,
Contingent Liabilities and Contingent Assets" is made. Further
provision is also made as per the norms prescribed in Non-Banking
Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms
(Reserve Bank) Directions, 2007.
n) Cash Flow Statement:
Cash flow are reported using the indirect method, whereby profit (loss)
before extra ordinary items is adjusted for the effects of the
transactions on non cash nature. The cash flow from operating,
investing and financing activities of the company are segregated based
on available information.
For the purpose of Cash Flow Statement,
cash and cash equivalents includes fixed deposits which are freely
remissible but excludes interest accrued on fixed deposits.
o) Earnings Per Share
The Earning considered in ascertaining the Company''s earning per Shares
(EPS) comprise of the net profit after tax to equity shares holders.
Basic earnings per share are calculated by dividing the Net Profit or
Loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profits attributable to equity shareholders and the weighted average
number of shares out-standing during the period are adjusted for the
effects of all dilutive potential equity shares, if any.
Diluted earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive
potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date.
Mar 31, 2013
A. A Basis of accounting and preparation of financial statements
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) [Companies (Accounting
Standards) Rules, 2006, as amended] and the other relevant provisions
of the Companies Act, 1956 (the "Act"). All assets and liabilities have
been classified as current or non-current as per the criteria set out
in the Revised Schedule VI to the Act.
B. Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation
of the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognised in the periods in which
the results are known / materialise.
C. Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances, highly liquid investments that are
readily convertible into known amounts of cash and which are subject to
insignificant risk of changes in value.
D. Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information. For the purpose of
CasFlow
Statement, cash and cash equivalents includes fixed deposits which are
freely remissible but excludes interest accrued on fixed deposits.
E. Inventories
Inventories are valued at cost (on FIFO basis) OR the net realisable
whichever is lower cumulatively for all shares. Cost includes all
incidental cost of acquisition.
F. Revenue recognition
- Revenue and cost are generally accounted on accrual basis as they are
earned/incurred, except in case significant uncertainties.
- Interest and other income is accounted on accrual basis.
- Profit/loss on sale of investments are recognised on the day of
confirmation of transaction.
- Revenue figures excludes tax component.
- Dividend is accounted when the right to receive payment is
established.
- Profit/loss from dealing in shares & securities are recognised on the
day of settlement of transaction.
- Profit/loss on equity derivative transactions are accounted for as
explained below -
- Initial and additional margin paid over and above Initial margin,
for entering into contracts for Equity Stock/Index Futures which are
released on final settlement/squaring-up of underlying contracts are
disclosed under Other Current Assets. "Mark-to-market margin- Equity
Stock/ Index Futures" representing the amounts paid in respect of mark
to market margin is disclosed under Other Current Assets.
- On final settlement or squaring up of contracts for equity
stock/index futures, the realized profit or loss after adjusting the
unrealized loss already accounted, if any, is recognized in the
Statement of Profit and Loss. When more than one contract in respect of
the relevant series of equity stock/ index futures contract to which
the squared-up contract pertains is outstanding at the time of the
squaring-up of the contract, the contract price of the contract so
squared-up is determined using the weighted average cost method for
calculating the profit/loss on squaring-up.
- As at the balance sheet date, the mark to market on all transactions
comprising of Equity Derivatives positions is determined on a Portfolio
basis with net unrealized losses being recognized in the Profit and
Loss Account. Unrealized gains (on portfolio basis) are not recognized
in the Profit and Loss Account on grounds of prudence as enunciated in
Accounting Standard - 1, Disclosure of Accounting Policies.
- In respect of other transactions, the unrealized losses on equity
derivatives determined on scrip-basis are recognized in Profit and Loss
Account and unrealized gains are ignored; and in case of securities
(shares, etc) the net unrealized losses are recognized in Profit & Loss
Account and net unrealized gains are ignored.
G. Employee benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefitslike salary, short term compensated absences, etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
The Company has a Defined Benefit Plan viz. Gratuity, for all its
employees. Gratuity liability is unfunded. Liability for the defined
benefit plan of Gratuity is determined on the basis of an actuarial
valuation by an independent actuary at the year end, which is
calculated using projected unit credit method. Actuarial gains and
losses, which comprise experience adjustment and the effect of changes
in actuarial assumptions, are recognised in the Statement of Profit and
Loss.
H. Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year.
Diluted earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) as adjusted for dividend, interest and other charges to expense or
income relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive
potential equity shares.
Potential equity shares are deemed to be dilutive only if their
conversion to equity shares would decrease the net profit per share
from continuing ordinary operations. Potential dilutive equity shares
are deemed to be converted as at the beginning of the period, unless
they have been issued at a later date.
I. Fixed assets
Tangible assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date.
Intangible assets
Intangible assets are recognised when it is probable that the future
economic benefits that are attributable to the assets will flow to the
enterprise and the cost of the assets can be measured reliably.
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates.
J. Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognised on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred
tax liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there is virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if
such items relate to taxes on income levied by the same governing tax
laws and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
K. Depreciation and amortisation
Depreciation has been provided on the straight line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956 except in
respect of computer softwares which are amortised over a period of 6.17
years, computer software is amortised in accordance with the Accounting
Standard 26 "Accounting for Intangible Assets". Depreciation on
addition to fixed assets is provided on a pro-rata basis from the date
of addition.
The estimated useful life of intangible assets and the amortisation
period are reviewed at the end of each financial year and amortisation
method is revised to reflect the changed pattern.
L. Provision and Contingencies
A provision is recognised when there is a present obligation as a
result of a past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of the obligation. A
disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. Where there is a possible obligation
or a present obligation but the likelihood of outflow of resources is
remote, no provision or disclosure as specified in Accounting Standard
29 - "Provisions, Contingent Liabilities and Contingent Assets" is
made. Further provision is also made as per the norms prescribed in
Non-Banking Financial (Non-Deposit Accepting or Holding) Companies
Prudential Norms (Reserve Bank) Directions, 2007.
M. Investments
Investments, which are readily realisable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments, all other investments are
classified as non-current investments. Investments are valued in
accordance with the RBI guidelines and accounting standard 13 on
"Accounting for investments". Long-term investments (excluding
investment properties), are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Current investments are carried individually, at the lower of cost and
fair value. Cost of investments include acquisition charges such as
brokerage, fees and duties.
N. Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of impairment
exists, the recoverable amount of such assets is estimated and
impairment is recognised, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognised for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognised in the Statement of Profit and Loss,
except in case of revalued assets.
O. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the underlying service received is accounted and when there is no
uncertainty in availing / utilising credits.
P. Foreign currency transactions and translations
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions. Exchange differences, if
any, arising out of transactions settled during the year are recognised
in the statement of profit and loss. Monetary assets and liabilities
denominated in foreign currencies as at the balance sheet date are
reported using the closing rates, the exchange differences, if any, are
recognised in the statement of profit and loss and related assets and
liabilities are accordingly restated in the balance sheet.
Q. Borrowing cost
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for its intended use and other borrowing costs are charged to
profit & loss account.
Mar 31, 2012
A Basis of accounting and preparation of financial statements
The financial statements are prepared and presented under the
historical cost convention, on the accrual basis of accounting and in
accordance with the provisions of the Companies Act, 1956 ('the
Act'), and the accounting principles generally accepted in India and
comply with the accounting standards prescribed in the Companies
(Accounting Standards) Rules, 2006 issued by the Central Government, in
consultation with the National Advisory Committee on Accounting
Standards, to the extent applicable.
B Use of estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (including
contingent liabilities) and the reported income and expenses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future results
could differ due to these estimates and the differences between the
actual results and the estimates are recognized in the periods in which
the results are known / materialize.
C Inventories
Inventories are valued at cost (on FIFO basis) OR the net realizable
whichever is lower cumulatively for all shares. Cost includes all
incidental cost of acquisition.
D Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
E Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non- cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information. For the purpose of Cash
Flow Statement, cash and cash equivalents includes fixed deposits which
are freely remissible but excludes interest accrued on fixed deposits.
F Depreciation and amortization
Depreciation has been provided on the straight-line method as per the
rates prescribed in Schedule XIV to the Companies Act, 1956.
Depreciation on addition to fixed assets is provided on a pro-rata
basis from the date of addition.
The estimated useful life of the intangible assets and the amortization
period are reviewed at the end of each financial year and the
amortization method is revised to reflect the changed pattern. Computer
software's are amortized over a period of 6.17 years being the useful
life thereof.
G Revenue recognition
Revenue and cost are generally accounted on accrual basis as they are
earned/incurred, except in case significant uncertainties.
? Fees are recognized when reasonable right of recovery is
established and the revenue can be reliably measured and on accrual
basis, the performance of services is measured under the proportionate
completion method which relates the revenue to the work accomplished.
? Profit/Loss from dealing in shares and securities are recognized on
the day of settlement of transaction.
? Dividend is accounted when the right to receive payment is
established.
? Interest and other income is accounted on accrual basis.
? Profit/loss on equity derivative transactions is accounted for as
explained below:
Initial and additional margin paid over and above Initial margin, for
entering into contracts for Equity Stock/ Index Futures which are
released on final settlement/ squaring-up of underlying contracts are
disclosed under Other Current Assets. "Mark-to-market margin- Equity
Stock/Index Futures" representing the amounts paid in respect of mark
to market margin is disclosed under Other Current Assets.
On final settlement or squaring up of contracts for equity stock/index
futures, the realized profit or loss after adjusting the unrealized
loss already accounted, if any, is recognized in the Statement of
Profit and Loss. When more than one contract in respect of the
relevant series of equity stock/index futures contract to which the
squared-up contract pertains is outstanding at the time of the
squaring-up of the contract, the contract price of the contract so
squared-up is determined using the weighted average cost method for
calculating the profit/loss on squaring-up.
As at the balance sheet date, the mark to market on all transactions
comprising of Equity Derivatives positions is determined on a Portfolio
basis with net unrealized losses being recognized in the Profit and
Loss Account. Unrealized gains (on portfolio basis) are not recognized
in the Profit and Loss Account on grounds of prudence as enunciated in
Accounting Standard - 1, Disclosure of Accounting Policies.
In respect of other transactions, the unrealized losses on equity
derivatives determined on scrip-basis are recognized in Profit and Loss
Account and unrealized gains are ignored; and in case of securities
(shares, etc) the net unrealized losses are recognized in Profit & Loss
Account and net unrealized gains are ignored.
H Fixed assets Tangible assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses, if any. The cost of fixed assets includes interest
on borrowings attributable to acquisition of qualifying fixed assets up
to the date the asset is ready for its intended use and other
incidental expenses incurred up to that date.
Intangible assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses, if any. The cost of an intangible asset comprises
its purchase price, including any import duties and other taxes (other
than those subsequently recoverable from the taxing authorities), and
any directly attributable expenditure on making the asset ready for its
intended use and net of any trade discounts and rebates.
I Foreign currency transactions and translations
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions. Exchange differences, if
any, arising out of transactions settled during the year are recognized
in the statement of profit and loss. Monetary assets and liabilities
denominated in foreign currencies as at the balance sheet date are
reported using the closing rates, the exchange differences, if any, are
recognized in the statement of profit and loss and related assets and
liabilities are accordingly restated in the balance sheet.
J Investments
The company is regulated as Non-Banking Finance Company (NBFC) by the
RBI. Accordingly, investments are classified under two categories viz.
Current and Long Term and are valued in accordance with the RBI
Guidelines and Accounting Standard 13 on "Accounting for
Investments".
Long-term investments (excluding investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties.
K Employee benefits
All employee benefits falling due wholly within twelve months of
rendering the service are classified as short term employee benefits.
The benefits like salary, short term compensated absences, etc. and the
expected cost of bonus, ex-gratia are recognized in the period in which
the employee renders the related service.
The present value of the obligation under employees gratuity fund
scheme is determined based on actuarial valuation using the Projected
Unit Credit Method. The obligation is measured at the present value of
the estimated future cash flows. The discount rate used for determining
the present value of the obligation is based on the market yield on
government securities of a maturity period equivalent to the weighted
average maturity profile of the related obligations at the balance
sheet date.
L Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the
profit / (loss) after tax (including the post tax effect of
extraordinary items, if any) as adjusted for dividend, interest and
other charges to expense or income relating to the dilutive potential
equity shares, by the weighted average number of equity shares
considered for deriving basic earnings per share and the weighted
average number of equity shares which could have been issued on the
conversion of all dilutive potential equity shares. Potential equity
shares are deemed to be dilutive only if their conversion to equity
shares would decrease the net profit per share from continuing ordinary
operations.
Potential dilutive equity shares are deemed to be converted as at the
beginning of the period, unless they have been issued at a later date.
M Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognized as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Company.
Deferred tax is recognized on timing differences, being the differences
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
periods. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognized for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognized only if there is virtual certainty that there
will be sufficient future taxable income available to realize such
assets. Deferred tax assets are recognized for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realized. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
readability.
N Impairment of assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for impairment. If any indication of
impairment exists, the recoverable amount of such assets is estimated
and impairment is recognized, if the carrying amount of these assets
exceeds their recoverable amount. The recoverable amount is the greater
of the net selling price and their value in use. Value in use is
arrived at by discounting the future cash flows to their present value
based on an appropriate discount factor. When there is indication that
an impairment loss recognized for an asset in earlier accounting
periods no longer exists or may have decreased, such reversal of
impairment loss is recognized in the Statement of Profit and Loss,
except in case of revalued assets.
O Provision and Contingencies
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provisions (excluding retirement
benefits) are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
Balance Sheet date. These are reviewed at each Balance Sheet date and
adjusted to reflect the current best estimates. Contingent liabilities
are disclosed in the Notes.
Mar 31, 2011
A. Basis of Preparation of Financial Statements
The financial statements are prepared under the historical cost
convention on a going concern and accrual basis of accounting in
accordance with the Generally Accepted Accounting Principles,
Accounting Standards notified Under Section 211(3C) of the Companies
Act, 1956 and the relevant provisions thereof and the applicable
guidelines issued by the Reserve Bank of India.
B. Use of Estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent liabilities as on the
date of financial statements and the reported amount of income and
expenses during the reporting period. Management believes that the
estimates used in preparation of financial statements are prudent and
reasonable, future results could differ from these estimates. Any
revision to accounting estimates is recognised prospectively in the
current and future periods.
C. Revenue Recognition
Revenue/Income and Cost/Expenditure are generally accounted on accrual
as they are earned or incurred, except in case of significant
uncertainties.
- Fees are recognised when reasonable right of recovery is established
and the revenue can be reliably measured and on accrual basis. The
performance of services is measured under the proportionate completion
method which relates the revenue to the work accomplished.
- Profit/Loss from dealing in Shares & Securities are recognised on the
day of confirmation of transaction.
- Dividend is accounted when the right to receive payment is
established.
- Interest and Other Income are accounted on accrual basis.
- Revenue figures exclude Service Tax component, if recoverable.
D. Fixed Assets
All Fixed Assets are stated at cost of acquisition net of recoverable
taxes and includes any amount attributable for bringing the asset to
its present location and working condition, less accumulated
depreciation and impairment loss, if any. All costs, including
borrowing costs till the assets are ready for their intended use,
attributable to the fixed assets are capitalised.
E. Depreciation
Depreciation on fixed assets is provided on Straight Line Method at the
rates prescribed by schedule XIV of the Companies Act, 1956.
Depreciation on additions to fixed assets is provided on pro-rata basis
from the date of addition.
F. Inventories
Shares and Securities are valued at cost or net realisable value
whichever is lower cumulatively for all shares. Cost is taken on FIFO
basis and cost includes all incidental cost of acquisition.
G. Investments
The company is regulated as Non-Banking Finance Company (NBFC) by the
RBI. Accordingly, investments are classified under two categories viz.
Current and Long Term and are valued in accordance with the RBI
Guidelines and Accounting Standard 13 on "Accounting for Investments".
- Long Term Investments are carried at cost of acquisition including
incidental charges less provision for permanent diminution, if any, in
value of such investments.
- Current Investments are carried at cost of acquisition or net
realisable value, whichever is lower.
H. Provisions, Contingent Liabilities and Contingent Assets
Provisions are recognised when the company has a present obligation as
a result of past events, for which it is probable that a cash outflow
will be required and reliable estimate can be made of the amount of
obligation. Provisions are not discounted to their present value and
are determined, based on estimate required to settle the obligation on
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to refect current management estimates. A disclosure for a
Contingent Liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow
of resources. Contingent Assets are neither recognized nor disclosed in
the financial statements.
I. Provision for Current and Deferred Tax
Provision for Current Tax is made after taking into consideration
benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred Tax Assets/ Liabilities represents timing differences between
accounting income and taxable income are accounted for using the tax
rates and laws that are enacted as on the balance sheet date, and are
recognised to the extent considered capable of being reversed in
subsequent years. Deferred tax assets are recognised only to the extent
there is reasonable certainty that sufficient future taxable income
will be available, except that deferred tax assets arising due to
unabsorbed depreciation and losses are recognised if there is virtual
certainty that sufficient future taxable income will be available to
realise the same.
J. Earning Per Share
Basic Earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Diluted
Earning per share refect the potential dilution that could occur if
contracts to issue equity shares were exercised or converted during the
year. Diluted earning per equity share is computed using the weighted
average number of equity shares and dilutive potential equity shares
outstanding during the year, except where the results are
Anti-Dilutive.
K. Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted for the effects of transactions of a non-cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the company are segregated. Cash
and cash equivalents include cash in hand, balances with banks and
money at call and short notice but does not include interest accrued on
fixed deposits.
L. Impairment of Assets
The carrying amount of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its estimated recoverable amount. The recoverable
amount is greater of the asset's net selling price or value in use. In
assessing the value in use, the estimated future cash flows are
discounted to the present value using the weighted average cost of
capital. After impairment, depreciation is provided on the revised
carrying amount of the assets over its remaining useful life.
Previously recognised impairment loss is further provided or reversed
depending on changes in circumstances.
M. Employee Benefits
Short-Term Employee Benefits are recognised as an expense at the
undiscounted amount in the profit and loss account for the year in
which the related service is rendered. Long Term Employee Benefits and
Post Employment Benefits, both funded and unfunded, are recognised as
an expense in the profit and loss account for the year in which the
employee has rendered services based on acturial valuation at the end
of the year using the Projected Unit Credit Method.
N. Foreign Currency Transactions
Foreign currency transactions are recorded at the rates of exchange
prevailing on the date of the transactions. Exchange differences, if
any, arising out of transactions settled during the year are recognised
in the profit and loss account. Monetary assets and liabilities
denominated in foreign currencies as at the balance sheet date are
reported using the closing rates, the exchange differences, if any, are
recognised in the profit and loss account and related assets and
liabilities are accordingly restated in the balance sheet.
Mar 31, 2010
A. Basis for accounting
The financial statements are prepared under the historical cost
convention on a going concern and accrual basis of accounting in
accordance with the generally accepted accounting principles,
accounting standards notified under section 211(3C) of the Companies
Act, 1956 and the relevant provisions thereof and the applicable
guidelines issued by the Reserve Bank of India.
B. Use of estimates
The preparation of financial statements requires the management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and disclosures of contingent liabilities as on the
date of financial statements and the reported amount of income and
expenses during the reporting period. Management believes that the
estimates used in preparation of financial statements are prudent and
reasonable, future results could differ from these estimates. Any
revision to accounting estimates is recognised prospectively in the
current and future periods.
C. Revenue recognition
Revenue/Income and Cost/Expenditure are generally accounted on accrual
as they are earned or incurred, except in case of significant
uncertainties.
Fees are recognised when reasonable right of recovery is established
and the revenue can be reliably measured and on accrual basis. The
performance of services is measured under the proportionate completion
method which relates the revenue to the work accomplished.
Profit/Loss from dealing in shares & securities are recognised on day
of confirmation of transaction.
Dividend is accounted when the right to receive payment is established.
Interest and other income are accounted on accrual basis.
Revenue figures excludes service tax component.
D. Fixed assets
All fixed assets are stated at cost of acquisition, including any cost
attributable for bringing the asset to its working condition, less
accumulated depreciation.
E. Depreciation
Depreciation on fixed assets is provided on straight line method at the
rates prescribed by schedule XIV of the Companies Act, 1956.
Depreciation on additions to fixed assets is provided on pro-rata basis
from the date of addition.
F. Inventories
Shares and securities are valued at cost or net realisable value
whichever is lower cumulatively for all shares. Cost is taken on FIFO
basis and cost includes all incidental cost of acquisition. The company
has changed its policy in regards to inventory valuation from exclusive
of acquisition expenses viz. brokerage, stamp duty, transaction
charges, etc. to inclusive of acquisition expenses, but this change in
policy does not have a material impact on the financials of the
company.
G. Investments
The company is regulated as Non-Banking Finance Company (NBFC) by the
RBI. Accordingly, investments are classified under two categories viz.
current and long term and are valued in accordance with the RBI
guidelines and accounting standard 13 on "Accounting for investments".
à Long term investments are carried at cost of acquisition including
incidental charges less provision for permanent diminution, if any, in
value of such investments.
à Current investments are carried at cost of acquisition or net
realisable value, whichever is lower.
H. Provisions and contingent liabilities
Provisions are recognised when the company has a present obligation as
a result of past events, for which it is probable that a cash outflow
will be required and reliable estimate can be made of the amount of
obligation. Provisions are not discounted to their present value and
are determined, based on estimate required to settle the obligation on
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect current management estimates. Adisclosure for a
contingent liability is made when there is a possible obligation or a
present obligation that may, but probably will not, require an outflow
of resources.
I. Income tax
Income tax is accounted in accordance with accounting standard 22
"Accounting for taxes on income" which includes current and deferred
taxes. Deferred tax assets/liabilities represents timing differences
between accounting income and taxable income recognised to the extent
considered capable of being reversed in subsequent years. Deferred tax
assets are recognised only to the extent there is reasonable certainty
that sufficient future taxable income will be available, except that
deferred tax assets arising due to unabsorbed depreciation and losses
are recognised if there is virtual certainty that sufficient future
taxable income will be available to realise the same.
J. Basis for accounting
Basic earning per share is calculated by dividing the net profit or
loss for the year attributable to equity shareholders by the weighted
average number of equity shares outstanding during the year. Diluted
earning per share reflect the potential dilution that could occur if
contracts to issue equity shares were exercised or converted during the
year. Diluted earning per equity share is computed using the weighted
average number of equity shares and dilutive potential equity shares
outstanding during the year, except where the results are
anti-dilutive.
K. Cash flow statement
Cash flows are reported using the indirect method, whereby net profit
before tax is adjusted forthe effects of transactions of a non- cash
nature, any deferrals or accruals of past or future operating cash
receipts or payments and item of income or expenses associated with
investing or financing cash flows. The cash flows from operating,
investing and financing activities of the company are segregated. Cash
and cash equivalents include cash in hand, balances with banks and
money at call and short notice but does not include interest accrued on
fixed deposits.
L. Impairment of assets
The carrying amount of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal / external
factors. An impairment loss is recognised whenever the carrying amount
of an asset exceeds its estimated recoverable amount. The recoverable
amount is greater of the assets net selling price or value in use. In
assessing the value in use, the estimated future cash flows are
discounted to the present value using the weighted average cost of
capital. After impairment, depreciation is provided on the revised
carrying amount of the assets over its remaining useful life.
Previously recognised impairment loss is further provided or reversed
depending on changes in circumstances.
M. Employee benefits
Employee benefits of short term nature are recognised as expense as and
when it accrues. Long term employee benefits and post employment
benefits, both funded and unfunded, are recognised as expense based on
acturial valuation at the end of the year using the projected unit
credit method. The company has changed its policy in regards to
employee benefits from cash basis to accrual basis, but this change in
policy does not have a material impact on the financials of the
company.
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