Accounting Policies of Mazda Properties Ltd. Company

Mar 31, 2014

A) BASIS OF ACCOUNTING

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects 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 prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b) USE OF ESTIMATES

The preparation and presentation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised prospectively in the period in which results are known or materialised.

c) TANGIBLE FIXED ASSETS

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost including related internal costs of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

d) DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and the manner prescribed under the Schedule XIV to the Companies Act, 1956. Fixed assets individually costing Rs. 5,000 or less are fully depreciated in the year of acquisition.

e) INVESTMENTS

Investments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as Current Investments. All other investments are classified as Long Term Investments.

Current Investments are carried in the Financial Statement at lower of cost or fair value determined on an individual investment basis. Long Term Investments are stated at cost, except where there is a diminution in value other than temporary, in which case requisite provision is made to write down the carrying value to recognize such decline.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

f) BORROWING COSTS

Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalized as a part of the cost of the respective assets up to the date, when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred.

g) RECOGNITION OF INCOME AND EXPENSES :

The income and expenses are accounted on accrual basis. This is in conformity with the provisions of Section 209 (3) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988.

h) ACCOUNTING OF THE PROFIT FOR THE PROJECTS :

Revenue is recognised only when " Letter of Possession" is issued to the purchaser of flat, shop, bungalow, row house, plot etc.

i) PROVISION FOR CURRENT AND DEFERRED TAX

i. Current tax

Provision for Current Tax is made after taking into consideration benefits admissable under the provisions of the Income Tax Act, 1961. Provision for taxation has not been made in the absence of taxable income.

ii. Deferred Tax

In terms of Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is a net deferred tax assets for the past years as well as for the current year after adjusting carry forward losses of the past years. In compliance with the provisions of the Accounting Standard and based on General Prudence, the Company has not recognised the said deferred tax assets Rs.5,48,074/- while preparing the accounts for the year under audit (Previous year Rs.4,59,790/-).

k) EARNINGS PER SHARE

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

l) PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements since this may result in the recognition of income that may never be realised.

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Mar 31, 2013

A) BASIS OF ACCOUNTING

The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects 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 prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

b) USE OF ESTIMATES

The preparation and presentation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Differences between the actual results and estimates are recognised prospectively in the period in which results are known or materialised.

c) TANGIBLE FIXED ASSETS

Fixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalization criteria are met and directly attributable cost including related internal costs of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the Statement of Profit and Loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.

d) DEPRECIATION ON TANGIBLE FIXED ASSETS

Depreciation on Fixed Assets is provided on Straight Line Method at the rates and the manner prescribed under the Schedule XIV to the Companies Act, 1956. Fixed assets individually costing Rs. 5,000 or less are fully depreciated in the year of acquisition.

e) INVESTMENTS

Investments, which are readily realisable and intended to be held for not more than one year from the date on which such

investments are made, are classified as Current Investments. All other investments are classified as Long Term Investments.

Current Investments are carried in the Financial Statement at lower of cost or fair value determined on an individual investment basis. Long Term Investments are stated at cost, except where there is a diminution in value other than temporary, in which case requisite provision is made to write down the carrying value to recognize such decline.

On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.

f) BORROWING COSTS

Borrowing Costs that are directly attributable to the acquisition of qualifying assets are capitalized as a part of the cost of the respective assets up to the date, when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of Profit and Loss in the year in which they are incurred.

g) RECOGNITION OF INCOME AND EXPENSES :

The income and expenses are accounted on accrual basis. This is in conformity with the provisions of Section 209 (3) of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 1988.

h) ACCOUNTING OF THE PROFIT FOR THE PROJECTS :

Revenue is recognised only when " Letter of Possession" is issued to the purchaser of flat, shop, bungalow, row house, plot etc.

i) PROVISION FOR CURRENT AND DEFERRED TAX i. Current tax

Provision for Current Tax is made after taking into consideration benefits admissable under the provisions of the Income Tax Act, 1961. Provision for taxation has not been made in the absence of taxable income.

ii. Deferred Tax

In terms of Accounting Standard (AS 22) on "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, there is a net deferred tax assets for the past years as well as for the current year after adjusting carry forward losses of the past years. In compliance with the provisions of the Accounting Standard and based on General Prudence, the Company has not recognised the said deferred tax assets Rs.4,59,790/- while preparing the accounts for the vear under audit (Previous vear Rs. 1.40.851/-).

k) EARNINGS PER SHARE

Basic earnings per share are computed by dividing the net profit after tax by the weighted average number of equity shares outstanding during the period. Diluted earnings per share is computed by dividing the net profit after tax by the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.

1) PROVISIONS. CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Provisions are recognised only when there is a present obligation as a result of past events and when a reliable estimate of the amount of the obligation can be made. Contingent liability is disclosed for (i) Possible obligations which will be confirmed only by future events not wholly within the control of the company or (ii) Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation can not be made. Contingent Assets are not recognised in the financial statements since this mav result in the recoanition of income that mav never be realised.