A. SIGNIFICANT ACCOUNTING POLICIES 1. Basis of Accounting and brparation of Financial Statements. The Financial Statements have been brpared under the historical cost convention, in accordance with the Indian Generally Accepted Accounting Principles (GAAP) and the provisions of the Companies Act, 1956. All Income and Expenditure, having a material bearing on the Financial Statements, are recognized on accrual basis. 2. Use of Estimates The brsentation of financial statements requires estimates and assumption to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Difference between the actual results and estimates are recognized in which the results are known / materialized. 3. Fixed Assets. Fixed Assets of the Company are valued at cost which includes allocation / apportionment of direct and indirect expenses incurred in relation to such Fixed Assets. 4. Debrciation. Debrciation on fixed assets is provided on Written down Method in accordance with the provisions of Section 123(2) of The companies Act 2013 which was made effective from 01-04-2014. 5. Investment (Long Term) a) Quoted Investment: Long term investments are valued scrip wise at cost (including expenses & STT incurred there on) unless there is a permanent diminution in the value of securities, in which event, the same has been valued at nominal value of Rs.1/- per company. b) Unquoted investment has been valued at lower of cost or breakup value. Where the break value is negative or where the annual accounts are not available, the same has been valued at a nominal value of Re. 1/- per company. 6. Stock in Trade (Inventories) Shares : Quoted shares are valued scrip wise at lower of carrying cost or market value (includes the expenses & STT incurred there on). 7. Revenue Recognition a) Transactions in respect of Investment / Dealing in Securities are recognised on trade dates b) Dividend/interest on debenture, income is accounted for on cash basis. c) Profit / Loss on sale of securities are accounted for on weighted average method and is recognized on settlement date. Profit on sale of securities is netted with the loss on sale of securities, if any. 8. Expenditure Expenses are in general accounted on accrual basis except for ex-gratia, leave encashment. Adequate provisions have been made in the accounts for all known losses and liabilities. 9. Retirement benefit of Employees. i) Gratuity - In accordance with the Indian laws, the Company provides for gratuity, a defined benefit plan covering all employees, who have completed more than 5 years. ii) Leave Encashment - Encashment of un-availed leaves credit is being done at the year-end. 10. Provision, Contingent Liabilities and Contingent Assets Provisions involving substantial degree of estimation in measurement are recognized when there is a brsent obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 11. Tax 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 Income Tax Act, 1961. Deferred tax is recognized, on timing differences, being the difference between taxable incomes and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets in respect of unabsorbed debrciation and carry forward losses are recognized if there is virtual certainty that there will be sufficient future taxable income available to realize such losses. 12. Earning Per Share The Company reports basic and diluted Earnings per Share (EPS) in accordance with Accounting Standard-20 on Earning per Share. Basic EPS is computed by dividing the net profit or loss for the year by the weighted average number of shares outstanding during the year. 13. Impairment of Assets An asset is treated as impaired, when carrying cost of assets exceeds its recoverable amount. An impairment loss is charged to the Profit and Loss Account in the year in which an asset is identified as impaired. Reversal of impairment loss recognized in prior year is recorded when there is an indication that impairment loss recognized earlier for the assets no longer exists or has decreased. 14. Miscellaneous Expenditure Preliminary/ br-operative/ Share Issue Expenses have been amortized equally over a period of ten years. 15. Money received against share warrants At The Extraordinary General Meeting Held on 07-04-2014 , the consent of the Company was accorded to the issuance of 26,00,000 equity warrants each convertible into one Equity Share of Re10/- each at the option of holders within a period of eighteen months from the date of allotment at a price ("CONSIDERATION") of Rs 113.30( which includes brmium of Rs 103.30) on brferential allotment basis in keeping with related SEBI Regulations. As per terms of issue, 25% of the consideration is payable by the applicants before allotment of Equity warrants and the balance 75% of consideration will e payable before conversion of such Warrants into Equity Shares. In case the conversion option is not excerised within the stipulated time,the amount paid at the time of application (being 25 % of the consideration ) shall be forfeited.The aforesaid Equity Warrant issue has been subscribed upto 20,00,000/- and the Company has received application money of Rs 92885755/- on 21-04-2014 (Previous Year :- Nil B. Notes on account 1) a) Contingent liabilities not provided for, in respect of i) In respect of a penalty claim of Rs.1.75 Lacs from SEBI u/s 15A of SEBI ACT.( Prev Year Rs 1.75 Lacs) b) Claim against the Company not acknowledged as Debts 6.35 Lacs (Prev. Year- 6.35 Lacs) 2) Disclosure in terms of Accounting Standards (AS) issued by the institute of Chartered Accountants of India b. Segment reporting (AS-17) In the opinion of the Management, the company operates in one segment i.e. dealing in purchase and sales of securities and also rendering related services. As such, there are no other reportable segments. c. Tax on Income (AS-22) The Company has substantial unabsorbed debrciation and carried forward losses under Tax laws. However, in view of the uncertainty future taxable income and prudent method, the tax effect of timing difference as per AS 22 of ICAI has not been assessed and accordingly deferred tax assets (net of the deferred tax liabilities) has not been recognized in the books as on 31st March 2014. d. Earnings Per Share (AS - 20) Basic earnings per share are calculated by dividing the profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year . The Company has not issued any potential equity shares, and accordingly, the basic earnings per share and diluted earnings per share are the same. 5. Disclosure as required under section 22 of The Micro, Small and Medium Enterprises Development Act, 2006 is nil in respect of all the items specified therein. 6. In the opinion of the management, fall in the market value of Investment is temporary in nature .Therefore no provision for diminution in value of Securities has been considered by the company. 7. Gratuity In accordance with the Indian laws, the Company provides for gratuity, a defined benefit plan covering all employees, who have completed more than 5 years. There is no employee in the company who has completed 5 years of services. In view thereof, no provision has been created. Leave Encashment - Encashment of un-availed leaves credit, if any, is being done at the year-end. Accordingly, no provision is created at the year-end. 8. The company has made a petition with SEBI for the refund of deposit lying with OTCEI which is under process. However, the exchange has demanded due of Rs. 6,85 lakh which has been contested and has not been provided for in the accounts. 9. Debtors are subject to confirmation and reconciliation. In certain cases, the company has filed the civil cases against defaulted parties for recovery of old dues. Which have been decided in the favour of the company? However, in the opinion of the Management, all the debts and advances, including suit filed cases and deposit with OTCEI, are considered good for recovery. Further, balances of Sundry parties, debit or credit, are subject to confirmation / reconciliation. In the opinion of the Management, the Current Assets, Loans and Advances have a value of realization in the ordinary course of the business at least equal to the amount at which they were stated in the Balance Sheet. 12. Cash Flow Statement : The Cash Flow Statement is brpared by the "Indirect Method " set out un Accounting Standard on " Cash Flow Statement " and brsents the Cash Flow by operating , investing and financing Activities. 13. Previous year's figures have been rearranged / regrouped wherever necessary. Notes 1 to 12 forms an integral part of Balance Sheet and Profit & Loss Account For Mahesh Tejwani For and behalf of the Board Chartered Accountants Pro Fin Capital Services Ltd. Mahesh Tejwani Proprietor Membership No. 37194 Mg. Director Jt Mg. Director Independent Director Place : Mumbai Dated : 29-05-2015 |