SIGNIFICANT ACCOUNTING POLICIES & NOTES TO ACCOUNTS FOR THE YEAR 2014-2015 Corporate information The company is carrying on the business of financing activity The principal place of business of the company is the same as registered office of the company. A. Significant Accounting Policies 1. Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Generally Accepted Accounting Principles in India 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 The financial statements have been brpared on accrual basis under the historical cost convention. The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. The company follows the directions brscribed by the Reserve bank of India for Non Banking Financial Companies 2. Use of estimates The brparation 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 brparation 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. 3. Non Performing Assets Income recognition, assets classification, and provisioning in respect of NPA have been done in accordance with RBI directives. 4 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. 5. 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 6 Debrciation and amortisation Debrciation has been provided on the written down value methods as per the rates brscribed in Schedule II to the Companies Act. 2013 and are on pro-rata basis with respect to the date of addition/ installation/its put to use 7. Revenue recognition (a) Income is accounted on accrual basis except for dividend income which is accounted on receipt basis (b) Further Interest income on NPA accounts are accounted for on realization basis as per RBI Guideline 8 Tangible fixed assets Fixed assets are carried at cost less accumulated debrdation 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 Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance 9 Investments Long-term investments are carried individually at cost Current investments are carried individually, at the lower of cost and fair value. Cost of investments includes acquisition charges such as brokerage, fees and duties. Any permanent diminution in the value in recognized in accounts. 10 Employee benefits (a) The company has only few employees and the provision for gratuity has been made on estimated basis as per the payment of Gratuity Act 1971 but not on actuarial basis 11 Segment reporting The company is involved in the business of Financing activity only as such there is only one reportable segment Further the company is operating in India only. Therefore, the reporting requirements as brscribed under AS-17 are not applicable. 12. Taxes on income Current tax is determined with respect to the income calculated 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 13 Deferred Tax 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 liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed debrciation 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 readability. 14 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. 15. Provisions and contingencies A provision is recognised when the Company has a brsent 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 there brsent value and are determined based on the best estimate require to settle 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. B. Notes to Accounts 16 Contingent Liabilities (a) As on 31st march 2015, contingent liabilities not provided for in the books of accounts is Rs. NIL (Previous Rs. NIL) 17. Claims against the Company not acknowledged as Debts - Rs. Nil (Previous Year Rs. Nil). 18 Pending Capital Commitments remaining to be executed - Rs. Nil (Previous Year Rs. Nil). 19. Company has filed suits for recovery of Rs.1,702,500 from various trade debtor in district of Delhi which are pending for Disposal as on 31st March 2015. However, Keeping in mind the recovery of balance Management of the Company has classified the said receivables as doubtful and provision has been made accordingly. 20. Managenal Remuneration Rs.2,65,000 (Previous Year Rs 2,04,000) 21 Based on the Information received from all the vendor regarding their statues under Micro, Small & Medium Enterprises Developments Act, 2006 and hence disclosure relating to amount unpaid as at year end together with interest paid / payable under this Act on the basis of the information available with the company is Rs. Nil. 22. The company has not proposed any dividend to be distributed to Equity Shareholders for the pehod 1st April, 2014 to 31st March. 2015. (Previous year Rs. Nil). 23. Value of Imports Calculated on CIF Basis Rs Nil (Previous Year Rs. Nil) 24. As per the Notification No. S O 447 (E) dated 28.02.2011 read with amendment Notification S.0.653 (E) dated 30.03.2011 issued by ministry of corporate affairs, financial Statements of the company for the financial year ended on 31" March, 2015 & Previous year ended on 31- March. 2014 have been brpared/ redrafted according to provisions set out in the Revised Schedule VI of Companies Act. 1956. 25. Notes no. 1 to 31 form an integral part of the Financial Statements for the year ended on 31" March, 2015 For Saxena & Saxena Chartered Accountants (Firm Regn No. 006103N) D.K. Saxena Partner (M No. 082118) For and on behalf of the Board of Directors Sanjay Jain Director Shyam Kumar Sharma Whole-Time Director Place: New Delhi Date: 30-05-2015 |