NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016 NOTE NO.1 SIGNIFICANT ACCOUNTING POLICIES 1.1 Presentation and disclosure (a) Use of estimates The brparation of interim financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. (b) The accounts have been brpared primarily on historical cost convention and on accrual basis. 1.2 Tangible Fixed Assets and Debrciation Fixed assets are stated at cost of acquisition less accumulated debrciation. Debrciation is provided on Written Down Value method in the manner and at the rates specified in Schedule II to the Companies Act, 2013. 1.3 Intangible Assets and Amortisation Intangible Assets are stated at cost less amortisation. Amortisation is provided on straight line method as per AS-26 issued by ICAI. Considering the level of technological changes in software, the management has ascertained the useful life of the Intangible Assets to be five years. 1.4 Investments Investments that are intended to be held for not more than a year are classified as current investments and all other investments as long term investments. Current investments are carried at lower of cost and fair value computed category wise. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in nature in value of such investments. 1.5 Employee Benefits 1.5.1 Company's contributions to Provident Fund are charged to Profit and Loss Account. 1.5.2 The provision for leave encashment and provision for gratuity is made on actuarial valuation. 1.6 Revenue Recognition Revenue is recognized as per Accounting Standard 9 of ICAI. Dividend income on investments is accounted for when the right to receive the payment is established. 1.7 Income Taxes 1.7.1. Tax expense includes current and deferred tax measured in accordance with the Income Tax Act, 1961 as is brvailing or substantively enacted as at the reporting date. Current income tax relating to items, recognized directly in equity, are adjusted against such equity and not through statement of profit and loss. 1.7.2. The Deferred Tax Assets and Liabilities arising on account of timing difference are recognised in the statement of profit and loss. Deferred tax assets have been recognized only to the extent there is virtual certainty of realization of assets in future. 1.8 Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. 1.9 Provisions A provision is recognized when the Company has a brsent obligation as a result of past event, and a probable outflow of resources based on a reliable estimates will be required to settle the obligation, which are not discounted to its brsent value. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates. 1.10 Revenue from operation and Mutual Fund Expenses Mutual Fund Expenses and corresponding Management Fees are accounted for in the books of the Company. 2. The Scheme Risk Guardian'95 has been wound up, effective 7th July 2000 and the three tax saving schemes Tax Guardian'95, Tax Guardian'96, Tax Guardian'97 have been wound up with effect from April 30, 2001 and Interval Fund 97 effective December 01, 2001, with the approval of SEBI. For the unclaimed redemption money of these schemes the company has been following the provisions laid down under Regulation 59 of SEBI (Mutual Funds) Regulations, 1996. Further, as the unclaimed redemption money being managed by the Company is very small amounting to Rs. 369,913/-, it has been decided not to charge asset management fees from April 01, 2004 to Shriram Mutual Fund with regard to the old schemes as mentioned above. 3. Contingent Liabilities not provided for:- The Company received an order dated March 26, 2015 from CIT(A) for A.Y. 2010-11, in which the decision of the A.O to treat interest income of Rs. 1,15,19,591/- as income from other sources was upheld. The company being aggrieved had filed an appeal with ITAT against the said order on June 23, 2015. The Company received an Order dated 10.03.2013 U/S 143 (3) of the IT Act along with a demand notice of Rs. 2,159,460/- and paid Rs. 200,000/- on protest for A.Y 2010-11 for sundry disallowances. The Company had already filed an appeal with the CIT(A) against the order. 4. As regards A.Y. 2007-08, the Company has received a favourable order from ITAT allowing bad debts amounting to Rs. 2,710,000/- in respect of dues from Ahmedabad Urban Co-operative Bank Ltd., which was brviously disallowed by CIT (A). However, the giving effect order is awaited from the Department, there will be a refund due to the Company based on such Order. 5. The Company operates in only one segment. Hence segment reporting under AS17 is not applicable to the Company. 6. The Company does not have 'suppliers' registered under the Micro, Small and Medium Enterprises Development ("MSMED") Act, 2006. Accordingly, no disclosure relating to amounts unpaid as at the year end, together with interest paid / payable are required to be furnished. 7. No dividend is proposed on 14,00,000 (Fourteen Lakhs) (0.01%) RNCPS of Rs. 100/- each fully paid up in view of loss incurred by the Company. 8. Previous year's figures have been re-grouped and re-arranged, wherever considered necessary. As per our report of even date attached FOR K.S.AIYAR & CO. CHARTERED ACCOUNTANTS FIRM REGISTRATION NO.100186W S.GHOSH PARTNER MEMBERSHIP NO.050927 Place : Kolkata Date : April 28, 2016 FOR SHRIRAM ASSET MANAGEMENT COMPANY LIMITED AKHILESH KUMAR SINGH MANAGING DIRECTOR DIN No.00421577 REENA YADAV COMPANY SECRETARY R.SUNDARA RAJAN DIRECTOR DIN No.00498404 CHANDANA DUTT CHIEF FINANCIAL OFFICER Place : Mumbai Date : April 28, 2016 |