1. Significant Accounting Policies: 1.1 Basis of Preparation of Financial Statements a) Basis of Accounting These financial statements have been brpared in accordance with the generally accepted accounting principles in India under historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum thereto are brscribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been brpared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] of the Companies Act, 1956 and the other relevant provisions of the Companies Act, 2013. b) Use of Estimates The brparation of financial statements in conformity with Generally Accepted Accounting Principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and disclosure of contingent assets and liabilities. The estimates and assumptions used in the accompanying financial statements are based upon management evaluation of the relevant facts and circumstances as on the date of the financial statements. Actual results may differ from the estimates and assumptions used in brparing the accompanying financial statements. Any revisions to accounting estimates are recognised prospectively in current and future periods. c) Current / Non Current Classification All assets and liabilities have been classified as current and non-current as per the Company's normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and services and the time between acquisition of assets for processing and their realization in cash and cash equivalents, The Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of asset and liabilities. 1.2 Fixed Assets and Debrciation / Amortization a) Tangible Fixed Assets Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates, less accumulated debrciation and impairment loss, if any. The cost of Tangible Assets comprises its purchase price, borrowing cost and any cost directly attributable to bringing the asset to its working condition for its intended use. Subsequent expenditures related to an item of tangible asset are added to its book value only if they increase the future benefits from the existing asset beyond its brviously assessed standard of performance. Losses arising from the retirement of, and gains or losses arising from disposal of tangible assets which are carried at cost are recognised in the Statement of Profit and Loss. Debrciation on tangible fixed assets of the company is provided using Straight Line Method on pro-rata basis at rates and in manner specified in Schedule II of the Companies Act, 2013. b) Impairment The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/external factors. An asset is impaired when the carrying amount of the asset exceeds the recoverable amount. An impairment loss is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. An impairment loss recognised in prior accounting periods is reversed if there has been change in the estimate of the recoverable amount. 1.3 Investments Investments are classified into current and non-current investments. Investments that are readily realizable and intended to be held for not more than a year from the date of acquisition are classified as current investments. All other investments are classified as non-current investments. Current investments are carried at the lower of cost or fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Non-current investments are stated at cost. A provision for 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. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is recognised in the Statement of Profit and Loss. 1.4 Inventories Securities acquired with the intention of short-term holding and trading position is disclosed as stock-in-trade. Securities held as stock-in-trade are valued at lower of cost or market value. 1.5 Revenue Recognition Revenue is recognised when there is a reasonable certainty of its ultimate realisation. Merchant Banking Activities fees are accounted on accrual basis in accordance with the terms and contracts entered into between the company and the counterparty. Consultation fees are accounted on accrual basis depending upon progress of assignment. Income from trading in Securities comprises of Profit/loss on sale of securities held as stock-in-trade. Profit/loss on sale of Securities is determined on FIFO Basis. Profit/Loss on equity/ derivative transactions is accounted for on final settlement or squaring-up of contracts for Equity Index/Stock Futures, the profit or loss is calculated as difference between settlement/squaring-up price and contract price and as on the balance sheet date, the debit balance in the "Mark-to-Market Margin - Equity Index/Stock Futures Account", being anticipated loss, is recognised in the profit and loss account. When the Option contracts are squared-up before expiry of the options, the brmium brvailing on that date is recognised in profit and loss account. On expiry of the contracts and on exercising the options, the difference between final settlement price and the strike price is transferred to the profit and loss account. Dividend Income is recognised when the right to receive payment is established. Profit/Loss earned on sale of Investments is recognised on trade date basis. Profit/Loss on sale of Investments is determined based on the weighted average cost of the Investments sold. Interest income is recognised on accrual basis. 1.6 Employee Benefits a) Short Term Employees Benefit Employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus, short term compensated absences, ex-gratia, etc. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees. b) Post Employment Benefit Defined Contribution Plans: A defined contribution plan is a post-employment benefit plan under which an entity pays specified contributions to a separate entity and has no obligation to pay any further amounts. The Company makes specified monthly contributions towards employee provident fund to Government administered provident fund scheme and Employees' State Insurance Corporation (ESIC) which are a defined contribution plan. The Company's contribution is recognised as an expense in the Statement of Profit and Loss during the period in which the employee renders the related service. Defined Benefit Plans: The Payment of Gratuity Act is not applicable to company since numbers of eligible employees are less than requisite number. Termination Benefits: Termination Benefits are charged to the Statement of Profit and Loss in the year of accrual. 1.7 Borrowing Cost Borrowing costs attributable to the acquisition, construction or production of qualifying assets, are added to the cost of those assets, upto the date when the assets are ready for their intended use. All other borrowing costs are expensed in the period they occur. 1.8 Provisions and Contingencies A provision is recognised if, as a result of a past event, the Company has a brsent obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are recognised at the best estimate of the expenditure required to settle the brsent obligation at the balance sheet date. The provisions are measured on an undiscounted basis. A contingent liability exists when there is a possible but not probable obligation or a brsent obligation that may, but probably will not, require an outflow of resources, or a brsent obligation whose amount cannot be estimated reliably. Contingent liabilities do not warrant provisions, but are disclosed unless the possibility of outflow of resources is remote. Contingent assets are neither recognised nor disclosed in the financial statements. However, contingent assets are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the asset and related income are recognised in the period in which the change occurs. 1.9 Taxes on Income Income tax expenses comprise current and deferred taxes. Current tax is determined on income for the year chargeable to tax in accordance with the applicable tax rates and the provisions of the Income Tax Act, 1961 and other applicable tax laws and after considering credit for Minimum Alternate Tax (MAT) available under the said Act. MAT paid in accordance with the tax laws which gives future economic benefits in the form of adjustments to future tax liability, is considered as an asset if there is convincing evidence that the future economic benefit associated with it will flow to the Company resulting in payment of normal income tax. Deferred tax is recognised on timing differences; being the difference between taxable income and accounting income that originate in one period and are capable of reversing in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets are recognised for timing differences of items other than unabsorbed debrciation and carry forward losses only to the extent that there is a reasonable certainty that there will be sufficient future taxable income will be available against which these can be realised. However if there are unabsorbed debrciation and carry forward of losses and items relating to capital losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that there will be sufficient future taxable income available to realise the assets. 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. 1.10 Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders after deducting brference dividends and attributable taxes by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earning per share, the net profit or loss for the period 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. 1.11 Cash and Cash Equivalents The Company considers all highly liquid financial instruments, which are readily convertible into known amount of cash that are subject to an insignificant risk of change in value and having original maturities of three months or less from the date of purchase, to be cash equivalents. 1.12 Cash Flow Statement Cash flows are reported using the indirect method, whereby 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. 2. Segment Reporting: The company is engaged in the business of providing consultancy services and merchant banking services in India and there are no separate reportable primary or secondary segments as per Accounting Standard 17 Segment Reporting issued by the ICAI. 3. Details of dues to micro and small enterprises as defined under the MSMED Act,2006There are no Micro, Small and Medium Enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company. 4. Activity in foreign currency: Expenditure & Income in foreign currencies - Nil 5. Investments of the Company have been considered by the management to be of long-term nature and hence they are valued at cost of acquisition. In respect of quoted investments where the market value is lower than the acquisition cost, provision is made for diminution in the value of such investments, since in the opinion of the board it is a other than temporary phenomenon and provision is necessary. 6. The company has been exempted from registration with Reserve Bank of India under Section 45 IA of Reserve Bank of India Act, 1934. 7. Previous year's figures have been rearranged and reclassified wherever necessary to correspond with the current year. As per our report of even date attached For Mayank Shah & Associates Chartered Accountants Firm Registration No. 106109W (M.S.SHAH) PARTNER M. No. 44093 For AND ON BEHALF OF THE BOARD (M.N. Khericha) Managing Director DIN:00010365 (A.L.Sanghvi) Vice Chairman DIN:00010733 (Manojkumar Ramrakhyani) Company Secretary (Javedmehdi S. Saiyed) Chief Financial Officer Ahmedabad May 29,2015 |