Accounting Policies of Shikhar Leasing & Trading Ltd. Company

Mar 31, 2013

Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. Accounting Policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. All income and expenditure items having a material bearing on the financial statements are generally recognised on accrual basis, material known liabilities are provided for on the basis of available information/ estimation, however certain claims and income which are not ascertainable/ acknowledged by customers are not taken into accounts, further, the company follows prudential norms for income recognition and provisioning for non-performing assets as prescribed by the reserve bank of India for non-banking financial companies.

Vse of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

Reyenue recognition

i. General:

The company follows the accrual method of accounting for its income and expenditure except delayed payment charges, fee based income and interest on trade advance, which on account of uncertainty of ultimate collection are accounted on receipt basis, also in accordance with the guidelines issued by the reserve bank of India for non-banking financial companies, income on business assets classified as non-performing assets, is recognised on receipt basis, financial companies, income on business assets classified as non-performing assets, is recognised on receipt basis.

ii. Income from loan;

Income from loan transactions is accounted for by applying the interest rate implicit in such term sheet

Tangible Fixed Assets

Fixed Assets are valued at cost of acquisition or construction inclusive of duties ( net of cenvat/Vat), taxes, incidental expenses, erecting expenses & interest cost etc. up to the date asset is put / ready to use. They are stated at historical costs or other amounts substituted for historical costs. Cenvat/Vat credit availed on purchase of fixed assets are reduced from the purchase cost of Fixed Assets.(whenever and wherever required)

Method of Depreciation

Depreciation on fixed assets is provided on the written down value of the assets at the rates prescribed under Schedule XIV to the

Companies Act, 1956.

Assets below Rs.5000/- are depreciated @100% in the year of purchase.

Impairment of Assets:

An assets is treated as impaired when carrying cost of assets exceeds its recoverable value. An Impairment loss is charged to the Profit & Loss A/c. in the year in which an assets are identified as impaired.

Investments:

Long Term Investments are shown at cost However, when there is a decline, other than temporary, in the value of a long term investment the carrying amount is reduced to recognise the decline.

Provisions and contingencies

A provision is recognised 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 ttnODtepe Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. ContingencMjMies are disclosed in the Notes.

---

Mar 31, 2012

Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. Accounting Policies not specifically referred to otherwise are consistent and in consonance with generally accepted accounting principles. All income and expenditure items having a material bearing on the financial statements are generally recognised on accrual basis, material known liabilities are provided for on the basis of available information/ estimation, however certain claims and income which are not ascertainable/ acknowledged by customers are not taken into accounts, further, the company follows prudential norms for income recognition and provisioning for non-performing assets as prescribed by the reserve bank of India for non-banking financial companies.

Presentation and disclosure of financial statements

During the year ended 31, March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and .presentation of its financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

Use of estimates

The preparation of financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognized in the period in which the results are known / materialized.

Revenue recognition

i. General:

The company follows the accrual method of accounting for its income and expenditure except delayed payment charges, fee based income and interest on trade advance, which on account of uncertainty of ultimate collection are accounted on receipt basis, also in accordance with the guidelines issued by the reserve bank of India for non-banking financial companies, income on business assets classified as non-performing assets, is recognised on receipt basis, financial companies, income on business assets classified as non- performing assets, is recognised on receipt basis.

ii. Income from loan:

Income from loan transactions is accounted for by applying the interest rate implicit in such term sheet Tangible Fixed Assets

Fixed Assets are valued at cost of acquisition or construction Inclusive of duties (net of cenvat/Vat), taxes, incidental expenses, erecting expenses & interest cost etc. up to the date asset is put / ready to use. They are stated at historical costs or other amounts substituted for historical costs. Cenvat/Vat credit availed on purchase of fixed assets are reduced from the purchase cost of Fixed Assets. (whenever and wherever required)

Method of Depreciation

Depreciation on fixed assets is provided on the written down value of the assets at the rates prescribed under Schedule XIV to the Companies Act, 1956.

Assets below Rs.5000/- are depreciated @100% in the year of purchase.

Valuation of Investments:

Long Term Investments are shown at cost unless there is a permanent decline in value thereof, in which case, adequate provision is made in the accounts.

Provisions and contingencies

A provision is recognised 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, 2010

A) GENERAL:-

I. The accounts are prepared on the historical cost basis and on the accounting principles of a going concern.

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

III. All income and expenditure items having a material bearing on the financial statements are generally recognised on accrual basis, material known liabilities are provided for on the basis of available information/ estimation, however certain claims and income which are not ascertainable/ acknowledged by customers are not taken into accounts.

b) USE OF ESTIMATES: -

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

c) FIXED ASSETS & DEPRECIATION:-

Fixed Assets are stated at historical cost less accumulated depreciation, if any. The depreciation has been provided on the written down value basis at the rates and in the manner prescribed in the schedule XIV of the Companies Act, 1956.

d) IMPAIRMENT OF ASSETS :-

An Assets is treated as impaired when carrying cost of assets exceeds its recoverable value. An Impairment loss is charged to the Profit & Loss A/c in the year in which an asset is identified as impaired.

e) INVESTMENTS:-

Long term Investments are shown at cost unless there is permanent decline in value there of, in which case there is a adequate provision is made in the accounts.

f) DEBTORS:-

Debtors are stated at book value after making provision for doubtful debts.

g) PROVISION. CONTINGENT LIABILITIES AND CONTINGENT ASSETS:-

Provisiohs involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an out flow of resources. Contingent liabilities are not recognised but disclosed at their estimated value in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

h) REVENUE RECOGNITION.:

Income from Operation is accounted on accrual basis. Revenue is recoganised only when it is reasonably certain that the ultimate collection will made.

i) LEASE ACCOUNTING:

Leases where substantially all the risks and benefits of ownership are retained by the lessor, are classified as operating leases. Operating lease Income/ Expenses is recognized in the Profit and Loss Account on a straight line basis over lease term.

j) EARNING PER SHARES :

Basic earning per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year.

Diluted earning per share is computed by dividing the net profit after tax attributable to equity shareholders for the year by the weighted average number of equity shares outstanding during the year as adjusted for the effects of all dilutive potential equity shares, if any.

k) EMPLOYEE BENEFITS:-

I. Retirements benefits in the form of Provident Fund is charged to Profit & Loss Account in the year when such contribution is payable.

II. Leave encashment accruing to the employees is charged to Profit & Loss Account.

l) TAXES ON INCOME;-

In accordance with the Accounting Standards (AS-22) - Accounting for Taxes on Incomg issued by the Institute of Chartered Accountants of India, the deferred tax for timing differences between the book and tax profits for the year is accounted for using tax rates and laws that have been enacted or substantively enacted as of the balance sheet date.

Deferred tax assets arising from timing differences are recognized to the extent it is more likely that future taxable profits will be available against which the asset can be utilized.