Accounting Policies of Sunshine Capital Ltd. Company

Mar 31, 2016

Note 21: SIGNIFICANT ACCOUNTING POLICIES

a) Basis for Preparation of Accounts:

The financial Statement have been prepared inconformity with generally accepted accounting principle to comply in all material respect with the notified accounting standards ( ‘AS’ ) under Companies (Accounting Standards) Amendment Rules, 2016, the relevant provisions of the companies Act, 2013 ( ‘the Act’ ) and the guidelines issued by the Reserve Bank of India (RBI) as applicable to an Non - Banking Finance Company ( ‘NBFC’ ). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year. The company adopts accrual system of accounting unless otherwise stated.

Based on the nature of its activities, the Company has determined its operating cycle as 12 months for the purpose of classification of its Assets and Liabilities as current and non current

b) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management’s best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future years

c) Fixed Assets:

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible Assets expected to provide future enduring economic benefits are carried at cost less accumulated amortization and impairment losses, if any. Cost comprises of purchase price and directly attributable expenditure on making the asset ready for its intended use.

d) Depreciation & Impairment of Assets:

Depreciation on fixed assets is provided on Written down Value method, over the useful lives and in the manner prescribed in Schedule II to the Companies Act, 2013.

e) Statutory/ Special reserve

The Company creates Statutory / Special Reserve every year twenty per cent of its net profit every year as disclosed in the profit and loss account and before any dividend is declared.

f) Investment:

Long-term investments are stated at cost. Provision of diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. As in case of Sunshine Capital Limited such decline is presumed to be temporary hence no provision has been created.

g) Loan Income:

a. In respect of loan agreements, the income is accrued by applying the implicit rate in the transaction on declining balance on the amount financed for the period of the agreement.

b. Dividend income on investments is accounted for as and when the right to receive the same is established.

c. No income is recognized in respect of Non-Performing assets, if any, as per the prudential norms for income recognition introduced for Non Banking Financial Corporation by Reserve Bank of India vide its notification DFC.No.119/DG/ (SPT)-98 date 31-01-1998 and revised notification no. DNBS.192/DG (VL)-2007 dated 22/02/2007.

h) Employee Benefits

Company do not follow the provision of the accounting Standard-15 “Employee benefits” as the company do not have employee more than 10 personnel’ s. So it is the policy of the company that any kind of provision mentioned in the AS -15 will not be entertained. And the company does not make provision for gratuity also.

In case the company’ s employee limits goes beyond the prescribed limits then AS-15 for Employee benefits will be taken into consideration.

i) Provisioning of Assets:

The Company makes provision for Standard and Non-Performing Assets as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms Reserve Bank) Directions, 2007, as amended from time to time. The Company also makes additional provision towards loan assets, to the extent considered necessary, based on the management’ s best estimate.

Loan assets which as per the management are not likely to be recovered are considered as bad debts and written off.

Provisions on standards assets are made as per the notification DNBS.PD.CC.No. 002/03.10.001/2014-15 DATED NOV 10, 2014 issued by Reserve Bank of India.

j) Provision, Contingent Liabilities and Contingent Assets:

(i) A provision is recognized when the company has a present obligation as a result of past event and it is probable that outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on 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.

In respect of Non-Banking Finance Companies the provision for non-performing assets/investments and contingent provision against standard assets has been made as per prudential norms and Circular No. DNBR (PD) CC.No. 002/ 03.10.001/ 2014-15 dated November 10, 2014 as prescribed by the Reserve Bank of India.

(ii) Contingent Liabilities are disclosed separately by way of note to financial statement after careful evaluation by the management of the facts and legal aspects of the matter involved in case of :

a. A present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b. A possible obligation, unless the probability of outflow of resources is remote. k) Taxation

Provision for current tax is made in accordance with and at the rates specified under the Income-Tax Act, 1961, in accordance with Accounting Standard 22 -‘Accounting for taxes on Income’ , issued by the Institute of Chartered Accountant of India.

l) Earnings per share:

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares

m) Cash and Cash equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and highly liquid investments that are readily convertible into known amount of cash.

---

Mar 31, 2015

A) Basis for Preparation of Accounts :

The financial Statement have been prepared inconformity with generally accepted accounting principle to comply in all material respect with the notified accounting standards ('AS') under companies accounting standards Rules, as amended, the relevant provisions of the companies Act, 2013 ('the Act') and the guidelines issued by the Reserve Bank of India (RBI) as applicable to an Non — Banking Finance Company ('NBFC'). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the company and are consistent with those used in the previous year. The company adopts accrual system of accounting unless otherwise stated.

b) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future years

c) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible Assets expected to provide future enduring economic benefits are carried at cost less accumulated amortization and impairment losses, if any. Cost comprises of purchase price and directly attributable expenditure on making the asset ready for its intended use.

d) Depreciation & Impairment of Assets:

Depreciation on fixed assets is provided on Written down Value method, over the useful lives and in the manner prescribed in Schedule 11 to the Companies Act, 2013.

e) Investment:

Long-term investments are stated at cost. Provision of diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. As in case of Sunshine Capital Limited such decline is presumed to be temporary hence no provision has been created.

f) Loan Income:

a. In respect of loan agreements, the income is accrued by applying the implicit rate in the transaction on declining balance on the amount financed for the period of the agreement.

b. Dividend income on investments is accounted for as and when the right to receive the same is established.

c. No income is recognized in respect of Non-Performing assets, if any, as per the prudential norms for income recognition introduced for Non Banking Financial Corporation by Reserve Bank of India vide its notification DFC.No.119/DG/ (SPT)- 98 date 31-01-1998 and revised notification no. DNBS.192/DG (VL)-2007 dated 22/02/2007.

g) Employee Benefits

Company do not follow the provision of the accounting Standard-15 "Employee benefits" as the company do not have employee more than 10 personnel's. So it is the policy of the company that any kind of provision mentioned in the AS -15 will not be entertained. And the company does not make provision for gratuity also.

In case the company's employee limits goes beyond the prescribed limits then AS-15 for Employee benefits will be taken into consideration.

h) Provisioning of Assets:

The Company makes provision for Standard and Non-Performing Assets as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms Reserve Bank) Directions, 2007, as amended from time to time. The Company also makes additional provision towards loan assets, to the extent considered necessary, based on the management's best estimate.

Loan assets which as per the management are not likely to be recovered are considered as bad debts and written off.

i) Provision Contingent Liabilities and Contingent Assets :

(i) A provision is recognized when the company has a present obligation as a result of past event and it is probable that outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on 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.

In respect of Non-Banking Finance Companies the provision for non-performing assets/investments and contingent provision against standard assets has been made as per prudential norms and Circular No.

DNBS.PD.CC.No.207/03.02.2002/2010-11 as prescribed by the Reserve Bank of India.

(ii) Contingent Liabilities are disclosed separately by way of note to financial statement after careful evaluation by the management of the facts and legal aspects of the matter involved in case of :

a . A present obligation arising from the past event, when it is not probable that an outflow of resources will be required t o settle t he o obligation.

b. A possible obligation, unless the probability of outflow of resources is remote.

j) Taxation

Provision for current tax is made in accordance with and at the rates specified under the Income-Tax Act, 1961, in accordance with Accounting Standard 22 -'Accounting for taxes on Income', issued by the Institute of Chartered Accountant of India.

k) Earnings per share :

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares

I) Cash and Cash equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and highly liquid investments that are readily convertible into known amount of cash.

---

Mar 31, 2014

A) Basis fur Preparation of Accounts:

The financial statements have been prepared in conformity with generally accepted accounting principles to comply in all material respects with the notified Accounting Standards ('AS') under Companies Accounting Standard Rules, 2006, as amended, the relevant provisions of the Companies Act 1956 ('the Act') and the guidelines issued by the Reserve Bank of India ('RBI') as applicable to a Non Banking Finance Company ('NBFC'). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The company adopts accrual system of accounting unless otherwise stated.

b) Use of estimates:

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future years

c) Fixed Assets :

Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible Assets expected to provide future enduring economic benefits are carried at cost less accumulated amortization and impairment losses, if any. Cost comprises Of purchase price and directly attributable expenditure on making the asset ready for its intended use.

d) Depreciation & Impairment of Assets:

Depreciation on fixed assets is provided on Written down Value method, at the rates and in the maimed prescribed in Schedule XIV to the Companies Act, 1956.

e) Investment:

Long-term investments are stated at cost, provision of diminution in the value of long- term investments is made only if such a decline is other than temporary in the opinion of the management As in case of Sunshine Capital Limited such decline is presumed to be temporary hence no provision has been created.

f) Loan Income:

a. In respect of loan agreements, the income is accrued by applying the implicit rate in the transaction on declining balance on the amount financed for the period of the agreement.

b. Dividend income on investments is accounted for as and when the right to receive the same is established.

c. No income is recognized in respect of Non-Performing assets, if any, as per the prudential norms for income recognition introduced for Non Banding Financial Corporation by Reserve Bank of India vide its notification DFC. No. l 19/DG/ (SPT)-9S date 31-01-1998 and revised notification no. DNBS.192/DG (VL>200T dated 22/02/2007.

g) Provisioning of Assets:

The Company makes provision for Standard and Non-Performing Assets as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms Reserve Bank) Directions, 2007, as amended from time to time. The Company also makes additional provision towards loan assets, to the extent considered necessary, based on the management's best estimate.

Loan assets which as per the management are not likely to be recovered are considered as bad debts and written off.

Provision. Contingent Liabilities and Contingent Assets ;

i) A provision is recognized when the company has a present obligation as a result of past event and it is probable that outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on 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,

In respect of Non-Banking Finance Companies the provision for non-performing assets/investments and contingent provision against standard assets has been made as per prudential norms and Circular No. DNBS.PD.CC.No.207/03.02.2002/2010-11 as prescribed by the Reserve Bank of India.

(ii) Contingent Liabilities are disclosed separately by way of note to financial statement after careful evaluation by management of the facts and legal aspects of the matter involved in case of

a. A present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

b. A possible obligation, unless the probability of outflow of resources is remote.

There is a pending Tax demand of Rs. 35,13, 80,053/- against the company. The above demand was raised by Department in A.Y. 2008-09 as the company has raised share capital of Rs. 100 crore in A.Y, 2008-09. The same has been added by the Assessing Officer. The Company has filed an appeal with 1TAT. The demand of appeal is pending before ITAT ail date. The Company is hopeful to get relieved from ITAT.

Contingent Assets

The company has filed suit for recovery of amount from Sunder deep Educational Society. The company has issued a notice in response of the same on 20th December, 2012 to the Sunder deep Educational Society, 35, "Nyay Ganj, Sunder Deep Nagar, NH-24, Ghaziabad-201001 and to Mr. Manoj Kumar Gupta Secretary of Sunder Deep Educational Society for recovery of Principal Amount of Rs. 17,00,000/- along with interest of Rs. 4,01,095/- i.e. a total sum of Rs. 21,01,095/-. The case is pending before Honorable High Court and the company is hopeful of recovery.

h) Taxation

Provision for current tax is made in accordance with and at the rates specified under the Income-Tax Act, 1961, in accordance with Accounting Standard 22 -'Accounting for taxes on Income', issued by the Institute of Chartered Accountant of India.

i) Earning seer share :

Basic earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss for the year attributable to equity shareholders and the weighted average number of snares outstanding during the year are adjusted for the effects of all dilutive potential equity shares

j) Cash and Cash equivalents:

Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and highly liquid investments that are ireudly convertible into known amount of cash. A/ l

---

Mar 31, 2013

A, Rate for Preparation of Accounts : The financial statements have been prepared in conformity with generally accepted accounting principles to comply in all material respects with the notified Accounting Standards ASI under Companies Accounting Standard Rules, 2006, as amended, the relevant provisions of the Companies Act, 1956 ('the Act') and the guidelines issued by the Reserve Bank of India ('RBI') as applicable to a Non Banking Finance Company ('NBFC'). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year. The company adopts accrual system of accounting unless otherwise stated.

b) Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date ot the financial statements and the results of operations during the reporting year end Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future years

c] Rived Assets : Fixed assets are stated at cost less accumulated depreciation. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Intangible Assets expected to provide future enduring economic benefits are carried at cost less accumulated amortization and impairment losses, if any. Cost comprises of purchase price and directly attributable expenditure on making the asset ready for its intended use.

dl derivation impairment of Assets : Depreciation on fixed assets is provided on Written Down Value method, at the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956.

e) Investment : Long-term investments are stated at cost Provision of diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. As in case of Sunshine Capital Limited such decline is presumed to be temporary hence no provision has been created.

f) Loan Income: In respect of loan agreements, the income is accrued by applying the implicit rate in the transaction on declining balance on the amount financed for the period of the agreement.

g) Dividend income on investments is accounted for as and when the right to receive the same is established.

h] No income is recognized in respect of Non-Performing assets, if any, as per the prudential norms for income recognition introduced for Non Banking Financial Corporation by Reserve Bank of India vide its notification DFC.No.119/DG/ (SPT)-98 date 31-01-1998 and revised notification no. DNBS.192/DG (VL)-2007 dated 22/02/2007.

i) Expense Accounting: All expenditures including the interest costs are accounted for on accrual basis.

j) Provisioning of Assets: The Company makes provision for Standard and Non-Performing Assets as per the Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms Reserve Bank) Directions, 2007, as amended from time to time. The Company also makes additional provision towards loan assets, to the extent considered necessary, based on the management's best estimate.

k) Loan assets which as per the management are not likely to be recovered, are considered as bad debts and written off.

1) Provision. Contingent Liabilities and Contingent Assets :

Provision

A provision is recognized when the company has a present obligation as a result of past event and it is probable that outflow of resources will be required to settle the obligation and in respect of which a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on 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.

In respect of Non-Banking Finance Companies the provision for non-performing assets/investments and contingent provision against standard assets has been made as per Prudential norms and Circular No.

DNBS.PD.CC.No.207/03.02.2002/2010-11 as prescribed by the Reserve Bank of India

Contingent Liabilities

Contingent Liabilities are disclosed separately by way of note to financial statement after careful evaluation by the management of the facts and legal aspects of the matter involved in case of :

(i) a present obligation arising from the past event, when it is not probable that an outflow of resources will be required to settle the obligation.

(ii) a possible obligation, unless the probability of outflow of resources is remote.

There is a pending Tax demand of Rs. 35, 33, 80,053/- against the company. The above demand was raised by Department in A.Y. 2008-09 as the company has raised share capital of Rs. 100 crore in A.Y. 2008-09. The same has been added by the Assessing Officer. The Company has filed an appeal with CIT (A). The demand of appeal is pending before CIT (A) till date. The Company is hopeful to get relieved from CIT (A).

Contingent Assets

The company has filed suit for recovery of amount from Sunderdeep Educational Society. The company has issued a notice in response of the;

same on 20th December, 2012 to the Sunderdeep Educational Society, 35, Nyay Ganj, Sunder Deep Nagar, NH-24, Ghaziabad-201001 and to Mr. Manoj Kumar Gupta Secretary of Sunder Deep Educational Society for recovery of Principal Amount of Rs. 17,00,000/- along with interest of Rs. 4,01,095/- i.e. a total sum of Rs 21,01,095/-. The case is pending before Honorable High Court and the company is hopeful of recovery.

m] Taxation

(i) Provision for current tax is made in accordance with and at the rates specified under the Income-Tax Act, 1961.

(ii) In accordance with Accounting Standard 22 -'Accounting for taxes on Income', issued by the Institute of Chartered Accountant of India.

n) Performances per share : Basic earnings per station profit or loss for the year attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of city shares outstanding during the year.

For the purpose of calculating diluted earnings per share, the net profit or V loss for the year attributable to equity shareholders and the weighted average number of shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares Dl cash and cash Equivalents: Cash and cash equivalents in the cash flow statement comprise cash at bank and in hand and highly liquid investments that are readily convertible into known amount of cash.

---

Mar 31, 2012

(A) GENERAL: -

(a) The Financial Statements are drawn up in ACCORDANCE WITH HISTORIEL COST and on the going concern concept income and expenses are accounted to accrual basis except where otherwise indicated.

(B) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

(B) INCOME FROM INVESTMENTS & LOANS

Income from Investments in interest bearing securities, Loans and Advances is Sentence for on accrual basis. Dividend income from investments in shares is recounted accruing as income of that year in which dividend is received by the company.

(C) INVESTMENTS IN JEWELLARY

The company has made invest in jewellery during the year and the same has shown as investment in jewellary during the year.

(D) FIXED ASSETS :

Private Assets are stated at their original cost of acquisition less accumulated depression till date Cost of acquisition is inclusive of freight, taxes & other incidental expenses.

Investment in Properties Amounting to Rs.15,155,125/- has been transferred to Fixed Assets.

(E) DEPRIVATION

Depreciation is provided as per rates of depreciation specified in Schedule XIV of the Companies Act, 1956 on WDV method.

(F) INVESTMENTS

moments (Long Term) are valued a acquisition cost (Including Brokerage & Transfer Expenses) No. vision is made for diminution in the value of long term investments.

As in the opinion of the management the diminution is temporary and not permanent.

(G) DEFFERRED TAXATION

(a) Tax Liability of the company is estimated considering the provisions of the Income Tax Act, 1961,

(b) Deferred Tax is recognized subject to the consideration of prudence on timing deference being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one more subsequent period.

---

Mar 31, 2011

(A) GENERAL;-

(a) The Financial Statements are drawn up in accordance with historical cost convention and on the going concern concept income and expenses are accounted for on accrual basis except where otherwise indicated.

(b) Accounting policies not specifically referred to otherwise are consistent with generally accepted accounting principles followed by the company.

(B) INCOME FROM INVESTMENTS & LOANS

Income from Investments in interest bearing securities, Loans and Advances is account ed for on accrual basis. Dividend income from investments in shares is recognized accruing as income of that year in which dividend is received by the company.

(C) INVESTMENT IN PROPERTY

In the previous year the Company has paid to DDA as advance against property. During the year the full amount has been paid to DDA by the company. The DDA has make registry in favor of the Company during the year.

(D) INVESTMENTS IN JEWELLERY

The company has make invest in jewellery during the year and the same has shown as investment in jewellery during the year.

(E) INVESTMENTS

Investments (Long Term) are valued a acquisition cost (Including Brokerage & Transfer Expenses). No Provision is made for diminution in the value of long term investments. As in the opinion of the management the diminution is temporary and not permanent.

(F) DEFFERRED TAXATION

(a) Tax Liability of the company is estimated considering the provisions of the Income Tax Act, 1961, Deferred Tax is recognized subject to the consideration of prudence, on timing deference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one more subsequent periods.

(b) As informed to us by the management, Sundry Creditors does not include any amount of payable to small scale industrial units. (c) As informed to us by the management, a sundry creditor does not include any amount payable to small scale industrial units.