Notes to the Financial Statements Note 1 1. Significant Accounting Policies a) Basis of Preparation These financial statements have been brpared in accordance with the generally accepted accounting principles in India under the historical cost convention on accural basis. Pursuant to section 133 of the Companies Act, 2013 (the . Act.) 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], the other relevant provisions of the Act and to the extent applicable, with the provisions of Non- Banking Financial (Non- Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007 [NBFC Directions]. All assets and liabilities have been classified as current or non-current as per the criteria set out in the Schedule III to the Companies Act, 2013. Considering its nature of business, the Company has ascertained its operating cycle as 12 months for the purpose of current - non current classification of assets and liabilities. b) Tangible Assets Tangible assets are stated at cost of acquisition net of accumulated debrciation and accumulated impairment losses, if any. An impairment loss is recognized where applicable when the carrying value of tangible asset exceeds their net realisable value or value in use, whichever is higher. Profit or loss on disposal of tangible assets is recognised in the Statement of Profit and Loss. c) Debrciation Debrciation on tangible assets (other than Land- Freehold) is provided on pro-rata basis on reducing balance method over the estimated useful lives of the assets as specified in Schedule II to the Act. Also refer to the Note 1(m) below. d) Investments Investments which are of long term nature are stated at cost less amounts written off/provided for when the directors are of the opinion that diminutions other than temporary, in their carrying values have taken place. e) Revenue Recognition Operating Revenue : Dividend income is recognized when right to receive dividend is established. Interest income is generally recognised on a time proportion basis taking into account the amount outstanding and the rate applicable, when there is reasonable certainty as to realisation and guided by NBFC Directions. Other operating revenue is recognised when there is reasonable certainity as to its realisation. Service Income is accounted for based on business arrangements in existence on rendering of services. Lease rental income under operating lease is recognised in the Statement of Profit and Loss. f) Employee Benefits Short term employee benefits : These are recognised at the undiscounted amount in the Statement of Profit and Loss for the year in which the related service is rendered . Post Employment Benefit Plans : Contributions under Defined Contribuition Plans are recognised on accrual basis as expenses for the year. In case of Defined Benefit Plans, the cost of providing the benefit is determined on the basis of actuarial valuation using the Projected Unit Credit Method at each Balance Sheet date. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss . The retirement benefit obligation provided in the Balance Sheet rebrsents the brsent value of defined benefit obligations. g) Foreign Currency Transactions Foreign Currency transactions are recorded at the rate of exchange brvailing on the date of the respective transactions. All foreign currency monetary items are restated at the year-end at the closing rate. Exchange differences arising on settlement /reinstatement are recognised in the Statement of Profit and Loss. h) Borrowing Cost Borrowing costs relating to acquisition/ construction of qualifying assets, if any, are added to the cost of such assets until such time as the assets are substantially ready for their intended use. All other borrowing costs are charged to the Statement of Profit and Loss. i) Lease The Company has leased certain tangible assets and such leases where the Company has substantially retained all the risks and rewards of ownership are classified as operating leases. Lease income on such operating leases are recognised in the Statement of Profit and Loss on a straight line basis over the lease term which is rebrsentative of the time pattern in which benefit derived from the use of the leased asset is diminished. Initial direct costs are recognised as an expense in the Statement of Profit and Loss in the period in which they are incurred. j) Taxes on Income Current tax is determined as the amount of tax payable in respect of taxable income for the period as per the applicable tax rates and laws. Deferred tax is recognised, subject to the consideration of prudence in respect of deferred tax assets, 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 carry forward losses and/or unabsorbed debrciation are recognised only when its virtually certain that sufficient future taxable income will be available against which such deferred tax assets will be realised. Deferred tax assets and liabilities are measured using the tax rates and the tax laws that have been enacted or substantively enacted by the Balance Sheet date. k) Provision and Contingent Liabilities Provisions : Provisions are recognised when there is a brsent obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the brsent obligation at the Balance Sheet date and are not discounted to its brsent value. Contingent Liabilities : Contingent liabilities are disclosed when there is a possible obligation arising from past event, the existence of which will be confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company or a brsent obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made. l) Use of Estimates: The brparation of financial statements in conformity with generally accepted accounting principles followed in India 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 management.s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in outcomes requiring a material adjustment to the carrying amounts of assets and liabilities in future periods. m) Revision in useful lives of Tangible Assets: Effective 1st April 2014, the Company has started charging debrciation in keeping with the requirements of Schedule II to the Act and as a result of which the estimated useful lives of certain tangible assets have been revised. Pursuant to the transitional provision set out in the said Schedule II, the carrying amount (after retaining the residual values) aggregating Rs. Nil (31st March, 2015 : Rs. 110 thousand) relating to tangible amounts where the revised useful lives are Nil as at 1st April, 2014 had been debited to General Reserve (Refer Note 3). Further the related tax impact on such adjustment amounting to Rs. Nil (31st March, 2015: Rs. 38 thousand) had also been credited to General Reserve. Accordingly the debrciation expense for the year ended 31st March, 2016 is higher and the Loss before Tax for said year is higher by Rs. Nil (31st March, 2015 : Rs. 852 thousand). n) Cash & Cash Equivalents : In the Cash flow statement, cash & cash equivalents includes cash in hand, Demand Deposits with banks, other short term highly liquid investments with original maturities of 3 months or less. NOTE 2 Operating Lease The Company has leasing arrangements in the nature of operating leases in respect of its brmises for a period of 3 to 9 years which are cancellable and are usually renewable by mutual consent on mutually agreeable terms. The aggregate of such lease rentals are recognised as rental income under Note 19. NOTE 3 There are no parties registered under the Micro, Small and Medium Enterprises Development Act, 2006 based on information available with the Company. NOTE 4 SEGMENT REPORTING The Company is registered as a Non-Banking Financial Company and is primarily engaged in holding shares in its group companies. The company does not have any reportable segment as envisaged in Accounting Standard (AS)-17 on .Segment Reporting.. NOTE 5 Exceptional Item comprises recovery of arrear rent, service charges and electricity charges aggregating Rs. Nil (31st March 2015 : Rs 72,276 thousand) pursuant to settlement of a litigation during the brvious year. NOTE 6 Based on Notification no. DNBS.223/CGM(US)-2011 dated 17th January, 2011, provision has been made for standard assets at 0.25 percent of the balance of such assets as at 31st March, 2016 which has been disclosed separately as .Contingent Provision against Standard Assets. in Note 10. NOTE 7 Pursuant to the requirements of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007, the Company had made an application to the Reserve Bank of India (RBI) seeking extension for regularization of the requirements relating to concentration of investments and exposure norms in a phased manner. In the meantime RBI vide its Notification No. DNBS(PD)CC. No. 197/03.10.001/2010-11 dated 12th August, 2010 and No. DNBS(PD)CC. No. 206/03.10.001/2010-11 dated 5th January, 2011 has come out with a new category of NBFC which is known as Systemically Important Core Investment Company. The Company had filed an application with RBI for the conversion of its status from Systemcally Important Non Deposit Taking Non Banking Financial Company to Systemically Important Non Deposit Taking Core Investment Company as a result of which the Company would not be required to dilute its exposure in terms of Investments and loans as mentioned above. In response to the Company.s aforesaid application, RBI had advised the Company in February, 2013 to resubmit the application afresh just after attaining the stipulated criteria for a CIC-NDSI but not later than 31st March, 2015 and the Company submitted the application afresh based on audited accounts of Financial Year 2013-14 within the stipulated time as provided by the RBI. However RBI has returned the said application advising the Company to refurnish the application afresh based on latest Financials after meeting all the criterion of being a CIC- NDSI. The Company has already filed the application in the financial year 2015-16 with RBI and the matter is under consideration of RBI. NOTE 8 brVIOUS YEAR FIGURES The brvious year figures have been reclassified and regrouped wherever necessary. For Lovelock & Lewes Firm Registration No. 301056E Chartered Accountants (Pradip Law) Partner Membership No. 51790 A. Khaitan - Vice Chairman R. S. Jhawar - Director Tuladri Mallick - Manager & CFO H. U. Sanghavi - Company Secretary Place : Kolkata Date : 30th May, 2016 |
