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Accounting Policies of Padam Cotton Yarns Ltd. Company
Mar 31, 2025
Corporate Information
Padam Cotton Yarns Limited ( "the Company") ( CIN: L17112HR1994PLC033641) is a public company domicilled and Incoporated in India . The registered office is situated at 196, Ist Floor, G.T.Road, Kamal-132001, Haryana, India. The Company''s shares are listed on BSE limited, ( Bombay Stock Exchange).
The Company''s main business was tocarry on the business as manufacturers, dealers, distributors, agents, buyers and sellers, exporteres and importers, commission agents in wool tops, worsted yarn, woolen yar, cotton yarn, synthetic yarn and other allied woollen, textile and handloom products. The company during the Financial year 2024-25 has carried out the business of trading in yarns and textile products and also carried out the financing . The management and the Board of directors have assessed the impact of such events and transactions including its new business of lending and investments and firmly beleives the Company''s ability to continue as a going concern.
The financial statements for the year ended 31st March, 2025 were approved for issue by the Board of Directors of the Company in their meeting held on April 11, 2024 and is subject to the adoption and approval by the shareholders in the ensuing Annual General Meeting.
1 Basis of Preparaation, Measurement and Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these standalone financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
1.1 Basis of Preparations and Measurement Compliance with Ind AS
These financial statements comply in all material aspects with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, the Companies (Indian Accounting Standards) Rules, 2016 and other relevant provisions of the Act.
The financial statements have been prepared on accrual and going concern basis. All assets and liabilities have been classified as current or non-current as per the Companyâs normal operating cycle and other criteria as set out in the Division II of Schedule III to the Companies Act, 2013. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose ofcurrent or non-current classification of assets and liabilities.
Historical Cost Convention
The financial statements have been prepared under the historical cost convention on the accrual basis of accounting except for the following -
⢠Certain financial assets and liabilities which are measured at fair value;
⢠Defined benefit plans - plan assets measured at fair value.
1.2 Current / Non-Current Classification
Any asset or liability is classified as current if it satisfies any of the following conditions:
a) the asset/liability is expected to be realized/settled in the Companyâs normal operating cycle;
b) the asset is intended for sale or consumption;
c) the asset/liability is held primarily for the purpose of trading;
d) the asset/liability is expected to be realized/settled within twelve months after the reporting period;
e) the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;
f) in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
1.2 For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets and inventories for processing and their realization in cash and cash equivalents.
1.3 Summary of significant accounting policies
(a) Revenue Recognition
Revenue is measured at the Fair value of the consideration received or receveiable. Amount disclosed as revenue are net of returns, trade allowances, rebates, goods and service tax (GST) and amounts collected on behalf of third parties.
The company recognizes revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and specific criteria have been met for each of the companyâs activities as described below. The company bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement
Recognising revenue from major business activities
Revenue from sale of goods is recognised when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is neither continuing managerial involvement with the goods nor effective
control over the goods sold, it is probable that economic benefits will flow to the Company, the costs incurred or to be incurred Revenue from services rendered is recognised in proportion to the stage of completion of the transaction at the reporting date when the outcome of the transaction can be estimated reliably.
Income from export incentives/ government grants are recognised at fair value when there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Interest Income For all financial assets measured at amortised cost, interest income is recorded using the effective interest rate (EIR) i.e. the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial assets. The future cash flows include all other transaction costs paid or received, premiums or discounts if any, etc.
b) Foreign currency translation Functional and presentation currency
The financial statements are presented in Indian Rupee and are rounded to two decimal places of Lakhs, which is also the functional and presentation currency of the Company.
T ransaction and balances
Foreign currency transactions are recorded in the functional currency, by applying to the exchange rate between the functional currency and the foreign currency at the date of the transaction.
Foreign currency monetary items are converted to functional currency using the closing rate on the reporting date. Non monetary items denominated in a foreign currency which are carried at historical cost are reported using the exchange rate at the date ofthe transactions.
Exchange differences arising on monetary items on settlement, or restatement as at reporting date, at rates different from those at which they were initially recorded, are recognized in the statement of profit and loss in the year in which they arise.
c) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized during the period of time that is necessary to complete and prepare the asset for its intended use or sale. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the statement of profit and loss as incurred.
d) Property, plant and equipment:
Recognition and initial measurement
Property, plant and equipment are stated at cost, net of recoverable taxes, trade discount and rebates less accumulated depreciation and impairment losses, if any. Such cost includes purchase price, borrowing cost and any cost directly attributable to bringing the assets to its working condition for its intended use, net charges on foreign exchange contracts and arrangements arising from exchange rate variations attributable to the assets
Subsequent measurement ( Depreciation and useful lives)
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow the entity and the cost can be measured reliably as below:-
|
Asset Category |
Estimated Useful Life |
|
Factory Building |
10-30 Years |
|
Office Building |
60 Years |
|
Plant and Machinery |
9-15 Years |
|
Furniture & Fixture |
10 Years |
|
Office Equipment |
5-10 Years |
|
Motor Vehicles |
8 Years |
|
Computers |
3-5 Years |
|
Electric Equipment & Fittings |
10 Years |
Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for certain items within these classes of assets is different from the useful lives as prescribed under Part C of Schedule II to the Companies Act, 2013.
The residual values, useful lives and method of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or, as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed or replaced.
De-recognition
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognized.
e) Intangible assets:
Recognition and initial measurement
Purchased Intangible assets are stated at cost less accumulated amortisation and impairment, if any.
Computer Software are Technical Know How
All finite-lived intangible assets, are accounted for using the cost model whereby capitalised costs are amortised on a straight line basis over their estimated useful lives. The estimated useful life of an identifiable intangible asset is based on a number of factors including the effects of obsolescence, demand, competition, and other economic factors (such as the stability of the industry, and known technological advances), and the level of maintenance expenditures required to obtain the expected future cash flows from the asset.
Residual values and useful lives are reviewed at each reporting date. The following useful lives are applied:
|
Asset Category |
Estimated Useful Life |
|
Computer Software |
5 Years |
|
T echnical Know How |
5 Years |
f) Leases:
Company as a lessee
The Company enters into an arrangement for lease of land, Building etc. Such arrangements are generally for a fixed period but may have extension or termination options. The Company assesses, whether the contract is, or contains, a lease, at its inception.
A contract is, or contains, a lease if the contract conveys the right to -
(a) control the use of an identified asset,
(b) obtain substantially all the economic benefits from use of the identified asset, and
(c) direct the use of the identified asset.
The Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term.
The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets as below:
i) Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the underlying assets. If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The right-of-use assets are also subject to impairment.
(ii) Lease Liabilities
At the commencement date of the lease, the Company measures the lease liability at the present value of the lease payments that are not paid at that date. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined, the lease payments are discounted using the incremental borrowing rate that the Company would have to pay to borrow funds, Including the consideration of factors such as the nature of the asset and location, collateral, market terms and conditions, as applicable in a similar economic environment. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. The Company recognizes the amount of the re-measurement of lease liability as an adjustment to the Right-of-use assets. Where the carrying amount of measurement of the lease liability, the Company recognizes any remaining amount of the re-measurement in statement of profit and loss. Lease liability payments are classified as cash used in financing activities in the statement of cash flows.
iii) Short-term leases and leases of low-value assets
The Company applies the short-term lease recognition exemption to its short-term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term. âLease liabilityâ and âRight of Useâ asset have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
Company as a lessor
Leases for which the Company is a lessor is classified as finance or operating lease. Lease contracts where all the risks and rewards are substantially transferred to the lessee, the lease contracts are classified as finance leases. All other leases are classified as operating leases. For leases under which the Company is an intermediate lessor, the Company accounts for the head-lease and the sub-lease as two separate contracts. The sub-lease is further classified either as a finance lease or an operating lease by reference to the ROU asset arising from the head-lease. Rental income arising is accounted for on a straight line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
g) Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the relevant instrument and are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities measured at fair value through profit or loss) are added to or deducted from the fair value on initial recognition of financial assets or financial liabilities. Purchase or sale of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date when the Company commits to purchase or sell the asset.
Financial assets
Recognition: Financial assets include Investments, Trade Receivables, Advances, Security Deposits, Cash and Cash equivalents. Such assets are initially recognised at transaction price when the Company becomes party to contractual obligations. The transaction price includes transaction costs unless the asset is being fair valued through the Statement of Profit and Loss. Classification: Management determines the classification of an asset at initial recognition depending on the purpose for which the assets were acquired. The subsequent measurement of financial assets depends on such classification.
Financial assets are classified as those measured at:
(a) amortised cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and/or interest.
(b) fair value through other comprehensive income (FVTOCI), where the financial assets are held not only for collection of cash flows arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in other comprehensive income.
(c) fair value through profit or loss (FVTPL), where the assets are managed in accordance with an approved investment strategy that triggers purchase and sale decisions based on the fair value of such assets. Such assets are subsequently measured at fair value, with unrealised gains and losses arising from changes in the fair value being recognised in the Statement of Profit and Loss in the period in which they arise.
Trade Receivables, Advances, Security Deposits, Cash and Cash equivalents etc. are classified for measurement at amortised cost while investments may fall under any of the aforesaid classes. However, in respect of particular investments in equity instruments that would otherwise be measured at fair value through profit or loss, an irrevocable election at initial recognition may be made to present subsequent changes in fair value through other comprehensive income.
Impairment: The Company assesses at each reporting date whether a financial asset (or a group of financial assets) such as investments, trade receivables, advances and security deposits held at amortised cost and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on evidence or information that is available without undue cost or effort. Expected credit losses are assessed and loss allowances recognised if the credit quality of the financial asset has deteriorated significantly since initial recognition.
Reclassification: When and only when the business model is changed, the Company shall reclassify all affected financial assets prospectively from the reclassification date as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss without restating the previously recognised gains, losses or interest and in terms of the reclassification principles laid down in the Ind AS relating to Financial Instruments.
Derecognition: Financial assets are derecognised when the right to receive cash flows from the assets has expired, or has been transferred, and the Company has transferred substantially all of the risks and rewards of ownership. Concomitantly, if the asset is one that is measured at:
(a) amortised cost, the gain or loss is recognised in the Statement of Profit and Loss;
(b) fair value through other comprehensive income, the cumulative fair value adjustments previously taken to reserves are reclassified to the Statement of Profit and Loss unless the asset represents an equity investment, in which case the cumulative fair value adjustments previously taken to reserves are reclassified within equity.
Income Recognition: Interest income is recognised in the Statement of Profit and Loss using the effective interest method. Dividend income is recognised in the Statement of Profit and Loss when the right to receive dividend is established.
Financial Liabilities
Borrowings, trade payables and other financial liabilities are initially recognised at the value of the respective contractual obligations. They are subsequently measured at amortised cost. Any discount or obligations. They are subsequently measured at amortised cost. Any discount or obligations. They are subsequently measured at amortised cost. Any discount or recognised in the Statement of Profit and Loss as finance cost over the life of the liability using the effective interest method and adjusted to the liability figure disclosed in the Balance Sheet.
Derecognition: Financial liabilities are derecognised when the liability is extinguished, that is, when the contractual obligation is discharged, cancelled or on expiry
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Equity Instruments
Equity instruments are recognised at the value of the proceeds, net of direct costs of the capital issue.
g) Impairment of Financial Assets
All financial assets except for those at FVTPL are subject to review for impairment at each reporting date to identify whether there is any objective evidence that a financial asset or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets carried at amortised cost.
ECL is the weighted average of difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate, with the respective risks of default occurring as the weights. When estimating the cash flows, the Company is required to consider:
⢠All contractual terms of the financial assets (including prepayment and extension) over the expected life of the assets.
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
T rade Receivable
Trade receivables are recognized initially at fair value and subsequent measured at amortized cost using the effective interest method, less provision for impairment.
Other Financial Assets
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If the credit risk has not increased significantly since initial recognition, the Company measures the loss allowance at an amount equal to 12 month expected credit losses, else at an amount equal to the lifetime expected credit losses.
When making this assessment, the Company uses the change in the risk of a default occurring over the expected life of the financial asset. To make that assessment, the Company compares the risk of a default occurring on the financial asset as at the balance sheet date with the risk of a default occurring on the financial asset as at the date
of initial recognition and considers reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial asset has not increased significantly since initial recognition if the financial asset is determined to have low credit risk at the balance sheet date.
h) Impairment of non Financial Assets
For impairment assessment purposes, assets are grouped at the lowest levels for which there are largely independent cash inflows (cash generating units). As a result, some assets are tested individually for impairment and some are tested at cash generating unit level.
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that an asset may be impaired If any such indication exists, the Company estimates the recoverable amount of the asset If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognised in the statement of profit and loss. If, at the reporting date there is an indication that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed which is the higher of fair value less costs of disposal and value-in-use and the asset is reflected at the recoverable amount subject to a maximum of depreciated historical cost. Impairment losses previously recognized are accordingly reversed in the statement of profit and loss.
To determine value-in-use, management estimates expected future cash flows from each cash-generating unit and determines a suitable discount rate in order to calculate the present value of those cash flows. The data used for impairment testing procedures are directly linked to the companyâs latest approved budget, adjusted as necessary to exclude the effects of future individually for each cash-generating unit and re-organisations and asset enhancements. Discount factors are determined reflect current market assessment of the time value of money and asset-specific risk factors.
i) Fair Value Measurement
The Company measures certain financial instruments, such as, investments at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability, or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
j) Inventories
Inventories are stated at the lower of cost and net realisable value. The cost of inventories comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of inventories are computed using the weighted average cost formula. Net realisable value is the estimated selling price in the ordinary course of business less any applicable selling expenses. Provision for obsolescence and slow moving inventory is made based on managementâs best estimates of net realisable value of such inventories.
k) Income T ax
The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. Current tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Deferred tax liabilities are generally recognised in full for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that the underlying tax loss, unused tax credits (Minimum alternate tax credit entitlement) or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Companyâs forecast of future operating results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax Laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity.
Current tax assets and current tax liabilities are offset when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle the asset and liability on a net basis. Deferred tax assets and deferred tax liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities; and the deferred tax assets and the deferred tax liabilities relate to income taxes levied by the same taxation authority
l) Investment in subsidiaries, joint ventures and associates
Investments in subsidiaries, joint ventures and associates are carried at cost less accumulated impairment losses, if any where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of these investments, the difference between net disposal proceeds and the carrying amounts are recognised in the Statement of Profit and Loss.
m) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.
When the Company receives grants for non-monetary assets, the asset and the grant are recorded at fair value amounts and released to profit or loss over the expected useful life in a pattern of consumption of the benefit of the underlying asset i.e. by equal annual installments.
n) Cash and cash equivalent
Cash and cash equivalents comprise cash in hand, demand deposits with banks and short-term highly liquid investments (original maturity less than 3 months) that are readily convertible into known amount of cash and are subject to an insignificant risk of change in value.
o) Post-employment, long term and short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
Other long-term employee benefit obligations
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of expected future payments to be made in respect of services provided by employee up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the appropriate market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Gratuity Obligation
The liability or asset recognized in the balance sheet in respect ofdefined benefit gratuity plans is the present value ofthe defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation denominated in INR is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expenses in the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss as past service cost.
p) Provisions and Contigent assets and contingent liabilities
Provisions are recognised only when there is a present obligation, as a result of past events, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted to reflect its present value using a current pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the obligation. When provisions are discounted, the increase in the provision due to the passage of time is recognised as a finance cost.
Contigent liability is disclosed for
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company or
⢠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 cannot be made.
Contingent assets are not recognised and continuously assessed for recoverability. However, when inflow of economic benefits is probable, related asset is disclosed.
q) Earning per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events including a bonus issue.
For the purpose of calculating diluted earnings 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.
r) Amounts rounding off
All amounts disclosed in the financial statements and the accompanying notes have been rounded off to the nearest lakhs as per the requirement of Schedule III (Division II) of the Companies Act, 2013, unless otherwise stated.
1.4 Key accounting estimates and judgements
The preparation of the Company''s Financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affacted in future periods.
Critical acconting estimates and assumptions
The key assumptions concerning the future and other key sources of estimating uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are described below:
a) Income T axes
The Company''s tax jurisdiction is India. Significant judgements are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for Income taxes, Including amount expected to be paid/ recovered for uncertain tax positions.
b) Property, Plant and equipment
Property, plant and equipment represent a significant proportion of the asset base of the Company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of Company''s assets are determined by the management at the time the asset is acquired and reviewed periodically, including at each financial year end. The lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life such as changes in technical or commercial obsolescence arising from changes or improvements in production or from a change in market demand or the product or service output of the asset.
c) Defined Benefit Obligation
The costs of providing pensions and other post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ''Employee benefits'' over the period during which benefit is derived from the employees'' services. rate, discount rates, expected rate of return on assets and mortality rates. The rate, discount rates, expected rate of return on assets and mortality rates.
Mar 31, 2024
BRIEF PROFILE
The company is incorporated on 28th June 1994 at Cuttack, Orissa, India. It is a Public limited company by its shares. The company is one of the RBI registered Non-Deposit taking Company NBFC and is into the business of Finance and Investments. The activities of the company includes financing, investing in shares & other securities, Commodities and other related activities of capital market.
The Registered Office of the Company is situated at OU-618, 6th Floor, Esplanade One, Rashulgarh, P.O Mancheswar, Dist. Khurda, Bhubaneswar, Orissa - 751 010.
1. SIGNIFICANT ACCOUNTING POLICIES1.1 Statement of compliance
The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) issued by Ministry of Corporate Affairs in exercise of the powers conferred by section 133 read with sub-section (1) of section 210A of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied along with compliance with other statutory promulgations require a different treatment.
The financial statements for the year ended March 31, 2024 of the Company is the first financial statements prepared in compliance with Ind AS. The date of transition to Ind AS is April 1, 2017. The financial statements upto the year ended March 31, 2018, were prepared in accordance with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006 ("Previous GAAP") and other relevant provisions of the Act. The figures for the year ended March 31, 2018 have now been restated under Ind AS to provide comparability.
The financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time and notified under section 133 of the Companies Act, 2013 (the Act) along with other relevant provisions of the Act and the Master Direction - NonBanking Financial Company (Reserve Bank) Directions, 2016 (''the NBFC Master Directions'') issued by RBI. These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies stated out below.
The Financial statements have been prepared on a going concern basis. The Company presents its balance sheet in order of Liquidity.
Accounting policies have been consistently applied except where newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
Fair value measurements under Ind AS are categorized into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
⢠Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at reporting date
⢠Level 2 inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and
⢠Level 3 inputs are unobservable inputs for the valuation of assets or liabilities
1.3 Presentation of financial statements:
The Balance Sheet and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Division III to Schedule III to the Companies Act, 2013 ("the Act") applicable for Non-Banking Finance Companies ("NBFC"). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flows". The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of notes forming part of the financial statements along with the other notes required to be disclosed under the notified accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Amounts in the financial statements are presented in Indian Rupees rounded off to zero decimal places as permitted by Schedule III to the Companies Act, 2013. Per share data are presented in Indian Rupee to two decimal places.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured and there exists reasonable certainty of its recovery. Revenue is measured at the fair value of the consideration received or receivable as reduced for estimated customer credits and other similar allowances.
Income from arbitrage comprises profit / loss on sale of securities held as stock-in-trade and profit / loss on equity derivative instruments is accounted as per following:
i. Interest income is recognised in the Statement of Profit and Loss and for all financial instruments except for those classified as held for trading or those measured or designated as at fair value through profit or loss (FVTPL) is measured using the effective interest method (EIR).
The calculation of the EIR includes all fees and points paid or received between parties to the contract that are incremental and directly attributable to the specific lending arrangement, transaction costs, and all other premiums or discounts. For financial assets at FVTPL transaction costs are recognised in profit or loss at initial recognition.
The interest income is calculated by applying the EIR to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortised cost of the financial asset before adjusting for any expected credit loss allowance). For credit-impaired financial assets the interest income is calculated by applying the EIR to the amortised cost of the credit-impaired financial assets (i.e. the gross carrying amount less the allowance for expected credit losses (ECLs)). For financial assets originated or purchased credit-impaired (POCI) the EIR reflects the ECLs in determining the future cash flows expected to be received from the financial asset.
ii. Dividend income is recognised when the Company''s right to receive dividend is established by the reporting date and no significant uncertainty as to collectability exists.
iii. Fee and commission income and expense include fees other than those that are an integral part of EIR. The fees included in the Company statement of profit and loss include among other things fees charged for servicing a loan, non-utilisation fees relating to loan commitments when it is unlikely that these will result in a specific lending arrangement and loan advisory fees.
iv. Profit / loss on sale of securities are determined based on the FIFO cost of the securities sold.
v. Profit / loss on FNO Segment and Commodity transactions is accounted for as explained below:
Initial and additional margin paid over and above initial margin for entering into contracts for Equity Index / Stock Futures / Commodity Spot Trading/ Currency Futures and or Equity Index / Stock Options / Currency Options, which are released on final settlement / squaring-up of underlying contracts, are disclosed under "Other current assets". Mark-to-market margin-Equity Index / Stock Futures / Currency Futures representing the amounts paid in respect of mark to market margin is disclosed under "Other current assets".
"Equity Index / Stock Option / Currency Option Premium Account" represents premium paid or received for buying or selling the Options, respectively.
On final settlement or squaring up of contracts for Equity Index / Stock Futures / Currency Future, the realized profit or loss after adjusting the unrealized loss already accounted, if any, is recognized in the Statement of Profit and Loss. On settlement or squaring up of Equity Index / Stock Options / Currency Option, before expiry, the premium prevailing in "Equity Index / Stock Option / Currency Option Premium Account" on that date is recognized in the Statement of Profit and Loss.
As at the Balance Sheet date, the Mark to Market / Unrealized Profit / (Loss) on all outstanding arbitrage portfolio comprising of Securities and Equity / Currency Derivatives positions is determined on scrip basis with net unrealized losses on scrip basis being recognized in the Statement of Profit and Loss and the net unrealized gains on scrip basis are ignored.
vi. Other operational revenue represents income earned from the activities incidental to the business and is recognised when the right to receive the income is established as per the terms of the contract.
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost net of tax/duty credits availed, if any, less accumulated amortization and cumulative impairment. Direct expenses and administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalized as a part of the cost of the intangible assets.
Intangible assets not ready for the intended use on the date of Balance Sheet are disclosed as "Intangible assets under development".
Intangible assets are amortised on the written down value method over the estimated useful life. The method of amortization and useful life are reviewed at the end of each accounting year with the effect of any changes in the estimate being accounted for on a prospective basis.
An intangible asset is de-recognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from de-recognition of an intangible asset are recognised in profit or loss when the asset is derecognized.
1.6 Property, Plant and Equipments
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical cost less depreciation less impairment loss, if any. Historical cost comprises of purchase price, including nonrefundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are charged to statement of profit or loss during the reporting period in which they are incurred.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separated items (major components) of property, plant and equipment.
Depreciation methods, estimated useful lives and residual value:
Depreciation is provided on a pro-rata basis on the written down value method over the estimated useful lives of the assets which in certain cases may be different than the rate prescribed in Schedule II to the Companies Act, 2013, in order to reflect the actual usages of the assets.
The asset''s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. The asset''s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
|
Class of Assets |
Useful life as prescribed in Schedule II of Companies Act, 2013 (in years) |
Useful life as followed by the Company (in year) |
|
Computers |
3 |
3 |
|
Furniture & Fixtures |
10 |
10 |
|
Office Equipments |
5 |
5 |
|
Vehicles |
8 |
8 |
The assets'' residual values, useful lives and method of depreciation are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset''s carrying amount is written down immediately to its recoverable amount if the asset''s carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount and are recognized as income or expense in the statement of profit and loss.
1.7 Impairment of tangible and intangible assets other than goodwill
As at the end of each accounting year, the Company reviews the carrying amounts of its PPE and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If such indication exists, the PPE, investment property and intangible assets are tested for impairment so as to determine the impairment loss, if any. Goodwill and the intangible assets with indefinite life are tested for impairment each year.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined in the case of an individual asset, at the higher of the net selling price and the value in use.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pretax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the Statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit), except for allocated goodwill, is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss (other than impairment loss allocated to goodwill) is recognised immediately in the Statement of Profit and Loss.
i. Short term employee benefits:
Employee benefits falling due wholly within twelve months of rendering the service are classified as short term employee benefits and are expensed in the period in which the employee renders the related service. Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
ii. Post-employment benefits:
a) Defined contribution plans: The Company''s superannuation scheme, state governed provident fund scheme, employee state insurance scheme and employee pension scheme are defined contribution plans. The contribution paid/ payable under the schemes is recognised during the period in which the employee renders the related service.
b) Defined benefit plans: The employees'' gratuity fund schemes and employee provident fund schemes managed by board of trustees established by the Company, the post-retirement medical care plan and the Parent Company pension plan represent defined benefit plans. The present value of the obligation under defined benefit plans is determined based on actuarial valuation using the Projected Unit Credit Method.
The obligation is measured at the present value of the estimated future cash flows using a discount rate based on the market yield on government securities of a maturity period equivalent to the weighted average maturity profile of the defined benefit obligations at the Balance Sheet date.
Re-measurement, comprising actuarial gains and losses, the return on plan assets (excluding amounts included in net interest on the net defined benefit liability or asset) and any change in the effect of asset ceiling (if applicable) is recognised in other comprehensive income and is reflected in retained earnings and the same is not eligible to be reclassified to profit or loss.
Defined benefit costs comprising current service cost, past service cost and gains or losses on settlements are recognised in the Statement of Profit and Loss as employee benefit expenses. Interest cost implicit in defined benefit employee cost is recognised in the Statement of Profit and Loss under finance cost. Gains or losses on settlement of any defined benefit plan are recognised when the settlement occurs. Past service cost is recognised as expense at the earlier of the plan amendment or curtailment and when the Company recognizes related restructuring costs or termination benefits.
In case of funded plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans to recognize the obligation on a net basis.
iii. Long term employee benefits:
The obligation recognised in respect of long term benefits such as long term compensated absences is measured at present value of estimated future cash flows expected to be made by the Company and is recognised in a similar manner as in the case of defined benefit plans vide (ii) (b) above.
Termination benefits such as compensation under employee separation schemes are recognised as expense when the Company''s offer of the termination benefit is accepted or when the Company recognises the related restructuring costs whichever is earlier.
Financial assets and financial liabilities are recognised in the Company''s balance sheet when the Company becomes a party to the contractual provisions of the instrument.
Recognised financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in profit or loss.
A financial asset and a financial liability is offset and presented on net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realize the asset and settle the liability simultaneously.
Loans and debt securities are written off when the Company has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a de-recognition event. The Company may apply enforcement activities to financial assets written off. Recoveries resulting from the Company''s enforcement activities will result in impairment gains.
The Company recognizes loss allowances for ECLs on the following financial instruments that are not measured at FVTPL:
o Loans and advances to customers; o Debt investment securities; o Trade and other receivable; o Lease receivables;
o Irrevocable loan commitments issued; and o Financial guarantee contracts issued.
Credit-impaired financial assets
A financial asset is ''credit-impaired'' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Credit-impaired financial assets are referred to as Stage 3 assets. Evidence of credit impairment includes observable data about the following events:
o significant financial difficulty of the borrower or issuer; o a breach of contract such as a default or past due event;
o the lender of the borrower, for economic or contractual reasons relating to the borrower''s financial difficulty, having granted to the borrower a concession that the lender would not otherwise consider;
o the disappearance of an active market for a security because of financial difficulties; or o the purchase of a financial asset at a deep discount that reflects the incurred credit losses.
It may not be possible to identify a single discrete eventâinstead, the combined effect of several events may have caused financial assets to become credit-impaired. The Company assesses whether debt instruments that are financial assets measured at amortised cost or FVTOCI are credit-impaired at each reporting date. To assess if corporate debt instruments are credit impaired, the Company considers factors such as bond yields, credit ratings and the ability of the borrower to raise funding.
A loan is considered credit-impaired when a concession is granted to the borrower due to a deterioration in the borrower''s financial condition, unless there is evidence that as a result of granting the concession the risk of not receiving the contractual cash flows has reduced significantly and there are no other indicators of impairment. For financial assets where concessions are contemplated but not granted the asset is deemed credit impaired when there is observable evidence of credit-impairment including meeting the definition of default. The definition of default (see below) includes unlikeliness to pay indicators and a back-stop if amounts are overdue for 90 days or more.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
1.13 Securities premium account:
i. Securities premium includes:
⢠The difference between the face value of the equity shares and the consideration received in respect of shares issued pursuant to Stock Option Scheme.
⢠The fair value of the stock options which are treated as expense, if any, in respect of shares allotted pursuant to Stock Options Scheme.
ii. The issue expenses of securities which qualify as equity instruments are written off against securities premium account.
Borrowing costs include interest expense calculated using the effective interest method, finance charges in respect of assets acquired on finance lease and exchange differences arising from foreign currency borrowings, to the extent they are regarded as an adjustment to interest costs.
Borrowing costs net of any investment income from the temporary investment of related borrowings, that are attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of cost of such asset till such time the asset is ready for its intended use or sale. A qualifying asset is an asset that necessarily requires a substantial period of time to get ready for its intended use or sale. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
1.15 Accounting and reporting of information for Operating Segments:
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.
i. The functional currency and presentation currency of the Company is Indian Rupee. Functional currency of the Company and foreign operations has been determined based on the primary economic environment in which the Company and its foreign operations operate considering the currency in which funds are generated, spent and retained.
ii. In currencies other than the Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise.
iii. Financial statements of foreign operations whose functional currency is different than Indian Rupees are translated into Indian Rupees as follows -
A. assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that Balance Sheet;
B. income and expenses for each income statement are translated at average exchange rates; and
C. all resulting exchange differences are recognised in other comprehensive income and accumulated in equity as foreign currency translation reserve for subsequent reclassification to profit or loss on disposal of such foreign operations.
Tax on income for the current period is determined on the basis of taxable income (or on the basis of book profits wherever minimum alternate tax is applicable) and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 and based on the expected outcome of assessments/appeals.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the Company''s financial statements and the corresponding tax bases used in computation of taxable profit and quantified using the tax rates and laws enacted or substantively enacted as on the Balance Sheet date.
Deferred tax assets are generally recognised for all taxable temporary differences to the extent that is probable that taxable profit will be available against which those deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets relating to unabsorbed depreciation/business losses/losses under the head "capital gains" are recognised and carried forward to the extent of available taxable temporary differences or where there is convincing other evidence that sufficient future taxable income will be available against which such deferred tax assets can be realized. Deferred tax assets in respect of unutilized tax credits which mainly relate to minimum alternate tax are recognised to the extent it is probable of such unutilized tax credits will get realized.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of reporting period, to recover or settle the carrying amount of its assets and liabilities.
Transaction or event which is recognised outside profit or loss, either in other comprehensive income or in equity, is recorded along with the tax as applicable.
1.18 Provisions, Contingent Liabilities and Contingent Assets:
Provisions are recognised only when:
i. an Company entity has a present obligation (legal or constructive) as a result of a past event; and
ii. it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and
iii. a reliable estimate can be made of the amount of the obligation
Provision is measured using the cash flows estimated to settle the present obligation and when the effect of time value of money is material, the carrying amount of the provision is the present value of those cash flows. Reimbursement expected in respect of expenditure required to settle a provision is recognised only when it is virtually certain that the reimbursement will be received.
Contingent liability is disclosed in case of:
i. a present obligation arising from past events, when it is not probable that an outflow of resources will be required to settle the obligation; and
ii. a present obligation arising from past events, when no reliable estimate is possible.
Contingent assets are disclosed where an inflow of economic benefits is probable. Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date.
Where the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under such contract, the present obligation under the contract is recognised and measured as a provision.
Statement of cash flows is prepared segregating the cash flows into operating, investing and financing activities. Cash flow from operating activities is reported using indirect method adjusting the net profit for the effects of:
i. changes during the period in operating receivables and payables transactions of a non-cash nature;
ii. non-cash items such as depreciation, provisions, deferred taxes, unrealized gains and losses; and
iii. all other items for which the cash effects are investing or financing cash flows.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
The Company presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.
1.21 Key source of estimation:
The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates include useful lives of property, plant and equipment & intangible assets, expected credit loss on loan books, future obligations in respect of retirement benefit plans, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.
1.22 Changes in Accounting Standard and recent accounting pronouncements (New Accounting Standards issued but not effective):
On March 30, 2023, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2019, notifying Ind AS 116 on Leases. Ind AS 116 would replace the existing leases standard Ind AS 17. The standard sets out the principles for the recognition, measurement, presentation and disclosures for both parties to a contract, i.e. the lessee and the lessor. Ind AS 116 introduces a single lease accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. Currently for operating lease, rentals are charged to the statement of profit and loss. The Company is currently evaluating the implication of Ind AS 116 on the financial statements.
The Companies (Indian Accounting Standards) Amendment Rules, 2019 notified amendments to the following accounting standards. The amendments would be effective from April 1, 2019
a) Ind AS 12, Income taxes â Appendix C on uncertainty over income tax treatments
b) Ind AS 19â Employee benefits
c) Ind AS 23 - Borrowing costs
d) Ind AS 28â investment in associates and joint ventures
e) Ind AS 103 and Ind AS 111 â Business combinations and joint arrangements
f) Ind AS 109 â Financial instruments
The Company is in the process of evaluating the impact of such amendments.
Inventories have been valued at the method prescribed in the Accounting Standards.
Interest on Loan is booked on a time proportion basis taking into account the amounts invested and the rate of interest.
Dividend income on investments is accounted for when the right to receive the payment is established.
Purchase is recognized on passing of ownership in share based on broker''s purchase note.
Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
Current investments are stated at the lower of cost and fair value. Long-term investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of long-term investments. Investments are classified into current and long-term investments.
Investments that are readily realizable and are 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 noncurrent investments.
Parties are considered to be related if at any time during the reporting period one party has the ability to control the other party or exercise significant influence over the other party in making financial and/or operating decisions.
As required by AS-18 "Related Party Disclosure" only following related party relationships are covered:
i. Enterprises that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the reporting enterprise (this includes holding Companies, subsidiaries and fellow subsidiaries);
ii. Associates and joint ventures of the reporting enterprise and the investing party or venture in respect of which the reporting enterprise is an associate or a joint venture;
iii. Individuals owning, directly or indirectly, an interest in the voting power of the reporting enterprise that gives them control or significant influence over the enterprise, and relatives of any such individual;
iv. Key management personnel (KMP) and relatives of such personnel; and
v. Enterprises over which any person described in (iii) or (iv) is able to exercise significant influence.
Shares are valued at cost or market value, whichever is lower. The comparison of Cost and Market value is done separately for each category of Shares.
Units of Mutual Funds are valued at cost or market value whichever is lower. Net asset value of units declared by mutual funds is considered as market value for non-exchange traded Mutual Funds.
Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 - Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 - Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
1.31 Financial Risk Management Objectives and Policies:
The Company''s activities are exposed to a variety of Financial Risks from its Operations. The key financial risks include Market risk, Credit risk and Liquidity risk.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises mainly three types of risk, foreign currency risk, Interest rate risk and other price risk such as Equity price risk and Commodity Price risk.
ii. Foreign Currency Risk:
There are no Foreign Currency transactions during the financial year.
iii. Foreign Currency Sensitivity:
There are no Foreign Currency transactions during the financial year.
Credit risk is the risk that counterparty might not honor its obligations under a financial instrument or customer contract, leading to a financial loss. The company is exposed to credit risk from its operating activities (primarily trade receivables).
Customer credit risk is managed based on company''s established policy, procedures and controls. The company assesses the credit quality of the counterparties, taking into account their financial position, past experience and other factors.
Credit risk is reduced by receiving pre-payments and export letter of credit to the extent possible. The Company has a well-defined sales policy to minimize its risk of credit defaults. Outstanding customer receivables are regularly monitored and assessed. The Company follows the simplified approach for recognition of impairment loss and the same, if any, is provided as per its respective customer''s credit risk as on the reporting date.
vi. Liquidity Risk:
Liquidity risk is the risk, where the company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The company''s approach is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due.
1.32 Summary of Significant Accounting Policies General
⢠Contingent Liabilities & Commitments - Nil
⢠Additional Information disclosed as per Part II of the Companies Act, 2013 - Nil
1.33 Earnings/(loss) per share
i. Basic earnings/ (loss) per share
Basic earnings / (loss) per share is calculated by dividing:
⢠the profit attributable to owners of the Company
⢠by the weighted average number of equity shares outstanding during the financial year.
ii. Diluted earnings / (loss) per share
Diluted earnings / (loss) per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after income tax effect of interest and other financing costs associated with dilutive potential equity shares, and
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
1.34 Critical Estimates and Judgments
In the application of the company''s accounting policies, which are described in note 1, the management is required to make judgment, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other process. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future period if the revision affects both current and future period.
The following are the critical estimates and judgments that have the significant effect on the amounts recognised in the financial statements.
1.35 Critical Estimates and Judgments
Estimation of Current Tax Expense and Deferred Tax
The calculation of the company''s tax charge necessarily involves a degree of estimation and judgment in respect of certain items whose tax treatment cannot be finally determined until resolution has been reached with the relevant tax authority or, as appropriate, through a formal legal process. Significant judgments are involved in determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax in the period in which such determination is made.
Recognition of Deferred Tax Assets / Liabilities
The recognition of deferred tax assets is based upon whether it is probable that sufficient and suitable taxable profits will be available in the future against which the reversal of temporary differences can be deducted. To determine the future taxable profits, reference is made to the approved budgets of the company. Where the temporary differences are related to losses, local tax law is considered to determine the availability of the losses to offset against the future taxable profits as well as whether there is convincing evidence that sufficient taxable profit will be available against which the unused tax losses or unused tax credits can be utilised by the company. Significant items on which the Company has exercised accounting judgment include recognition of deferred tax assets in respect of losses. The amounts recognised in the financial statements in respect of each matter are derived from the Company''s best estimation and judgment as described above.
Estimation of Provisions and Contingent Liabilities
The company exercises judgment in measuring and recognising provisions and the exposures to contingent liabilities, which is related to pending litigation or other outstanding claims. Judgment is necessary in assessing the likelihood that a pending claim will succeed, or a liability will arise, and to quantify the possible range of the financial settlement.
Because of the inherent uncertainty in this evaluation process, actual liability may be different from the originally estimated as provision. Although there can be no assurance of the final outcome of the legal proceedings in which the company is involved, it is not expected that such contingencies will have a material effect on its financial position or profitability.
Estimation of useful life of Property, Plant and Equipment and Intangible Assets
Property, Plant and Equipment and Intangible assets represent a significant proportion of the asset base of the company. The charge in respect of periodic depreciation is derived after determining an estimate of an asset''s expected useful life and the expected residual value at the end of its life. The useful lives and residual values of company''s assets are determined by management at the time the asset is acquired and reviewed periodically, including at each financial year end. The useful lives are based on historical experience with similar assets as well as anticipation of future events, which may impact their life, such as changes in technology.
Estimation of Provision for Inventory
The company writes down inventories to net realisable value based on an estimate of the realisability of inventories. Write downs on inventories are recorded where events or changes in circumstances indicate that the balances may not realised. The identification of write-downs requires the use of estimates of net selling prices of the down-graded inventories. Where the expectation is different from the original estimate, such difference will impact the carrying value of inventories and write-downs of inventories in the periods in which such estimate has been changed.
Impairment of Trade Receivable
The impairment provisions for trade receivable are based on assumptions about risk of default and expected loss rates. The company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on the company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Mar 31, 2015
Corporate Information
The company is engaged in the business of providing consultation
relating to textile industry and wholesale trading in Agricultural
Pumping Seles and Implements during the year. The company Is having its
Registered Office at 196,1st Floor. G.T. Road, Opp Road Cross Market,
Karnal- 132001 & Corporate Office At C-5/2A, Rana Pratap Bagh, Opp
Colony, New Delhi
2.1 Accounting Standards
The Company is non-SMC as defined In the General Instructions in
respect of Accounting Standard notified under the companies (Accounting
Standards) Rules, 2006 (as amended) 4 under section 133 of the
Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules.
2014 Accordingly, the Company compiled with accounting Standards as
applicable to a non Small and Medium Sited Company.
2.2 Basis of Accounting and Preparation of financial Statements
The financial statements of the Company have been prepared to comply
with the Generally Accepted Accounting Principles in India (Indian
GAAP) Including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013. The financial statements are
prepared on accrual basis under the historical cost convention. The
accounting policies adopted in the preparation of the financial
statements are consistent with those followed in the previous year
except for adjustments required to compute financial accounts in
accordance with the revised schedule VI.
2.3 Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates, judgments and
assumptions to be made that affect the reporting amounts of assets and
liabilities (including contingent liabilities) on the date of the
financial statements and the reported amount of revenues and expenses
during the reporting period. Difference between the actual results and
estimates are recognised in the period in which the results are
knot/materialised. The Management believes that the estimates used in
preparation 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.
2.4 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 Of payments. The cash flows from
operating, Investing and financing activities of the Company are
segregated based on the available Information.
2.5 Inventor1es
Items of Inventories are valued at the lower of Cost and net realisable
value after providing for. obsolescence. If any, except In case of by
product which arc valued at net realizable value (on FIFO basis). Cost
of inventories comprises or cost of purchase, cost of conversion and
other cost is Including manufacturing overheads Incurred In bringing them
to their respective present location and condition,
2.6 Depreciation and amortisation
Depreciation or. Fixed Assets provided to the Control or depreciable
amount on the wrists down value (WDV) method. Depreciation is provided
based on useful life of the assets as prescribed in Schedule II of the
Companies Act, 2013.
2.7 Revenue Recognition
Sale of Goods
Revenue from operations including Sales of goods, services, service
tax, excise duty and sales art recognised, adjusted net of returns and
trade discounts, and gains on corresponding hedge contracts, on
transfer of significant risks and rewards of ownership to the buyer,
which generally coincides with the delivery or goods to customers.
Sales excludes Central sales. value added tax and TCS
2.8 Tangible fixed asset
Fixed assets, are carried at cost net of recoverable taxes, trade
discounts and rebates and less accumulated depreciation and Impairment
losses, I f any. The cost of Ta table fixed asset com praised Its
purchase price, borrowing cost a any cost directly attributed We
to bringing the asset to Is working conditions for is intended use,
net charges on foreign exchange contracts and adjustments arising from
exchange rate variation attributable to the assets. Subsequent
expenditure related to an item of Tangible Asset are added to Is book
value only If they Increase the future benefits from the existing
assets beyond is previously asset behind is previously assessed
standard or performance. Projects under which assets are not ready or
their Intended use are disclosed under Capital Work-in Progress.
2.9 Intangible fixed assets
Intangible assets are stated at cost of acquisition net of recoverable
taxed less accumulated amortisation/option and impairment loss, If
any. The cost comprises purchase price, borrowing costs, and any cost
directly attributable to bringing the asset to is working condition
for is intended use and net charges on foreign exchange contracts and
adjustments arising from exchange rate variation attributed to the
Intangible assets.
2.11 Employee Benefits
Defined Contribution Plans,
The Company's contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made. These benefits Include performance incentive and
compensated absences.
2.12 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.Deferred tax k 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 is measured using the rates and
the lax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets In respect of unabsorbed depredation and carry
forward of losses are recognised only It there Is virtual certainty
that there will be sufficient future taxable income available to
realise such assets. Deferred lax 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 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 rachis ability 2.1) Impairment of Assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for Impairment. If any indication or 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.
2.14 Other Issues
The Company'* unit tor manufacturing of cotton yam, was destroyed in
fire on 13/06/2001. The Insurance claim of the company was repudiated
by the Insurance Company. The Hon' We National Consumer has decided the
case of issuance of Insurance calm In favour of the company against
which the Insurance company ha, filed an appeal before Hon'ble Supreme
Court. The Company was allowed 50% clam by the Supreme Court against
security, the same Is shown as new current liabilities as the matter is
contingent and is tub Jud iced. The same has not been adjusted against
the insurance claim receivable account, due to is contingent nature
as a matter of abundant precaution and sheer uncertainly of the verdict
of Hon' We Supreme court.
Mar 31, 2014
1.1 Accounting Standards
The Company is non-SMC as defined in the General Instructions in
respect of Accounting Standard notified under the companies (Accounting
Standards)
Rules, 2006 (as amended). Accordingly, the Company has compiled with
accounting Standards as applica ble to a non Small and Medium Sized
Company.
2.2 Basis of Accounting and Preparation of Financial Statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) 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 prepared on accrual basis under the historical
cost convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year except for adjustments required to complile financial
accounts in accordance with the revised shcedule VI.
2.3 Use of Estimates
The preparation 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 preparation 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 wh
ich the results are known / materialise.
2.4 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary item s 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 flow s from
operating, investing and financing activities of the Company are
segregated based on the available information.
2.5Inventories
Inventories are valued at the lower of Cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary
2.6Depreciation and amortisation
Depreciation has been provided on the writted down value method as per
the rates prescribed in Sched ule XIV of the Companies Act, 1956.
Regarding amortisation of MISC. Expenditure, these are being amortised
over a period of 5 year from the commencements of operations of the
company or from the year in which they are incurred whichever is later.
2.7 Revenue Recognition Sale of Goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Sales
excludes Central sales,value added tax and TCS
2.8 Tangilble fixed assets
Fixed assets, are carried at cost less accumulated depreciation and
impairment losses, if any. The c ost 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.
2.9 Intangible fixed assets
Intangible assets are carried at cost less accumulated amortisation and
impairment losses,
2.10 Foreing Exchange Differences Initial Recognition
Transactions in foreign currencies entered into by the Company and its
transactions are accounted at the exchange rates prescribed under
custom exchange rate notification.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net invest ment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end bank
ask rate.
Exchange differences arising out of these translations are charged to
the Statement of Profit and L oss.
2.11 Employee Benefits
Defined Contribution Plans
The Company''s contribution to provident fund and superannuation fund
are considered as defined contr ibution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made. The Company has created a Trust a Life Insurance
Corporation of India under Group Gratuity Schem. The premium paid
towards this scheme is charged to profit and loss account on accrual
basis.
2.12 Segment Reporting
The Company has disclosed its business segment the primary segment as
trading only hence there is no requirement for segment reporting as per
AS 17 issued by ICAI. The company has provided consultancy to Firms
from where it has earned the Income.
2.13 Earning Per Share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the number of equity shares outstanding during the year
2.14 Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accorda nce with the provisions of the Income Tax
Act, 1961.Deferred tax is recognised on timing differences, being the
differences between the taxable inc ome and the accounting income that
originate in one period and are capable of reversal in one or more
subsequent periods. Deferred tax is measured usin g the tax rates and
the tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognized for all timing differences
.Deferred tax assets in respect of unabsorbed depreciation
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 rea sonable
certainty exists that sufficient future taxable income will be
available against which these can be realised. Deferred tax assets and
liabilities a re 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 t ax assets are reviewed
at each Balance Sheet date for their realisability.
2.15 Impairment of Assets
The carrying values of assets / cash generating units at each Balance
Sheet date are reviewed for im pairment. 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.
2.16 Other Issues
The Company''s unit was distroyed in fire on 13/06/2001. The Insurance
claim of the company was repu diated by the Insurance Company. The
Hon''ble National Consumer has decided the case in favour of the company
against which the insurance company has filed an appeal before Hon''ble
Supreme Court. The Company has been allowed 50% claim by the Supreme
Court against security, the same is shown as n on current liabilities
as the matter is contingent and is sub judiced. The same has not been
adjusted against the insurance claim receiveable account. In Our
opinion the Company should have adjusted the insurance claim received
against the claimable amount and therefore, the non current assets and
liab ilites should have been reduced by the amount received from New
India Assurance Co Limited.
Mar 31, 2013
1.1 Accounting Standards
the Company is non-SMC is defined in the General Instruct*Â in respect
of Accounting Standard notified under the companies (Accounting
Standards) Rules, 1006 tas amended). Accordingly, the Company has
compiled with accounting Sundardi at applira ble 1o a non Small and
Medium Sited Company.
1.2 Bails of Accounting and Preparation of Financial Statements
The financial statements of the Company have been prepared in
accordance with the Generally Accept
1.3 Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to mate estimates and assumptions
considered In the reported amounts of duels and (iaMtties (including
contingent liabilities} and the reported Income ano e.penses during the
year. The Management believes that the estimates used in preparation of
the financial statements are prudent and reasonable. Future remits
could differ due to these estimates and the differences between the
actual results and the estimates arc recognised in the periods in which
the results are known / materialise.
1.4 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(toss) before exraordlnary item s and Mi Is adjusted for the effectsof
transactions of non- cash nature and any deferrals o. accruals of past
or future cash receipts or payments. The cash flow s from operating,
investing and flnanctni activities of [he Company are segregated based
on the available Information.
1.5 Inventorles
Inventories are valued at the lower of Cost (on FIFO basis) and the net
realisable value after providing for obsolescence and other tosses,
where considered necessary
1.6 Depreciatlon and amortisation
Depreciation has been provided on thevrrltted down value method as per
the rates prescribeoinScheduleXlvof the Companies Act, 19S6. ftegarding
amortisation of MISC. E.pendllure. these .re being amortised over a
period of S year from the commencements of operations of the company or
from the year In which they are incurred whichever is later.
1.7 Revenue Recognition
Sale of Goods Sales are recognised, net of returns and trade discounts,
on transfer of significant risks and rewards of ownership to the buyer,
which genera* concedes with the delivery of goods to customers. Sales
eidudes Central sales.vakje added tax and TCS
1.8 Tangllble liied assets
Fixed assets are carried at cost less accumulated depreciation and
impairment losses. If any, Thee ost of find assets includes interest on
bo.row.ngs attributahle to acquisition of ou.lifying find assets up to
the date the asset is ready for its Intended use and other incidental
e.penses Incurred up to that date.
1.9 Intangible fixed assets
Inierlbte assets are carried at cost less accumulated amortisation and
impairment losses,
1.10 Forcing Exchange Differences
currencies entered into by the Company and its transactions are
accounted at the ..change rates prescribed under custom exchange rate
notification.
Measurement of foreign currency monetary Items at the Balance Sheet
data
Foreign currency monetary hems (other than derivative contracts) of the
Company and Its net Invest mem in non-lntegral foreign operations
outstanding at the Balance Sheet date are restated at the year-end bank
ask rate.
Exchange differences arising out of these translations are charged to
the Statement of Profit and L oss.
1.11 Employe* Benefits Defined Contribution Plant
The Company1! contribution 10 provident fune and superannuation fund
are considered 11 defined contr ibutiofl plan* in arecharged is an
e>penie at they fan due based on the amount ol contribution required to
be made. The Company hai created » Trull a Life Insurance Corporation
of Inoij under Group Gratuity Schem. Thepremkgm paid towards thh scheme
it charged to profit and lots account on accrual turn.
1.12 Segment Reporting
The Company hai disclosed Its buiinelt segment tht primary segment as
trading only hence there Is no requirement for legment reportingai per
AS 17 issued by ICAI. The company has provided consultancy to firms
from where It hai earned the income.
1.13 Earning Per Shire
Saik earnings cm ihart is competed by dividing the profit / (toss)
after tin (including, tht oou ta> effect of extraordinary Itemi, if
jny( by the number of equity tharet outstanding during the year
1.14 Taxes on Income
Current tax it the amount of ta> payable on the taxable Income for the
year ai determined in accorda nee with the provisions of the Income Ta*
Act. 1961. Defer red 1*1 Is recognised on timing differences, being
the differences between the U.iW* inc ome and tht accounting income
that originate in one period and are capable of reversal kn one or more
subsequent periods. Deferred tan it measured using the tan rates and
the la. laws enacted or substantially enacted ai at the reporting date.
Deferred tai llabilttiet are recognised for an timing difference s.
Deferred ta> assets in respect of unibtorbtd depreciation and carry
forward of losset art recognised oniy If there it virtual certainty
that there wMI be sufficient future taxable Income available to realise
such assets. Deferred tai assets are recognised for timing differences
of other Itemt onhy to the eitent that rea sonable certainty exbtt that
sufficient future taxable income wi» be avaaable against which thttt
can be rtalistd. Deferred la* assets and liabilities are offset if such
rtemt relate 10 law on income levied by the same governing tan laws and
the Company has a legally enforceable right for such set off. Deferred
t a> astetl are reviewed at each Balance Sheet date for their
realisabihty.
1.15 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
eihts, the recoverable amount of tuch assets it estimated and
Impairment ii recognised, if the carrying amount of these assets
eiceeds their recoverable amount.
Mar 31, 2010
A) GENERAL: The Accounts are prepared on the accounting principle of
going concern Accounting policies not specifically referred to
otherwise are consistent with generally accepted accounting polices.
b) REVENUE RECOGNITION: Expenses and Income are considered payable and
receivable on accrual basis. Except where stated otherwise.
c) FIXED ASSETS: There was no Fixed Assets with the Company during the
FY. under audit.
d) INVENTORIES: There was no inventories as at the close of the
Financial Year.
e) RETIREMENT BENEFITS: The Company has created a trust with Life
Insurance Corporation of India under group gratuity scheme. The premium
paid towards this scheme is charged to profit & loss account on accrual
basis.
f) CURRENT ASSETS: Debtors & Loans & Advances are valued on net
realisation basis.
g) PRELIMINARY EXPENSES: Preliminary Expenses are amortized over a
period of 5 years.
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കേന്ദ്രബജറ്റ് സെഷന് 2026: ഇടിവോടെ തുടങ്ങി നിഫ്റ്റിയും സെന്സെക്സും, നിക്ഷേപകര് പ്രതീക്ഷിക്കുന്നതെന്ത്? -
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മികച്ച നേട്ടവുമായി നിഫ്റ്റിയും സെന്സെക്സും; നാളെ എന്ത് പ്രതീക്ഷിക്കാം -
1065 പോയിന്റ് ഇടിഞ്ഞ് സെന്സെക്സ്, നിഫ്റ്റി 25250 ന് താഴെ; ഭാവി പ്രവണതകള് -
2025 ലെ മികച്ച ഓഹരി; കുതിപ്പ് തുടരാൻ ശ്രീറാം ഫിനാൻസ്; ലക്ഷ്യവില ഇങ്ങനെ -
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