2B) Summary of Significant Accounting Policies
The Financial Statements have been prepared using the Accounting Policies and measurement basis summarized
below:
2B.1) Revenue Recognition
Rental income is recognized on the accrual basis as per agreed terms.
Interest income is recognized as other income on a time proportion basis taking into account the amount
outstanding and the applicable interest rate.
On Disposal of investments, the difference between its carrying amounts and net disposal proceeds is charged or
credited to the Statement of Profit and Loss under the head of other income. Gain/Loss on sale of investments is
determined on First in First out cost basis.
2B.2) Property, Plant and Equipment
Property, Plant and Equipment are stated at cost, net of accumulated depreciation and accumulated impairment
losses, if any. The cost comprises purchase price, borrowing costs, if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates
are deducted in arriving at the purchase price. On transition to IndAs, the Company has elected to continue with the
carrying value of all its Property, Plant and Equipment recognized as at 1 April 2016 measured as per the previous
GAAP and use that carrying value as the deemed cost of the Property, Plant and Equipment.
Depreciation on Property, Plant and Equipment is charged on WDV either on the basis of rates arrived at with
reference to the useful life of the assets evaluated & approved by the management or rates arrived at based on
useful life prescribed under Part C of Schedule II of the Companies Act, 2013.
The residual values, useful lives and methods of Depreciation of Property, Plant and Equipment are reviewed at each
financial year end and adjusted prospectively, if appropriate.
Reclassification of Property, Plant, and Equipment to Investment Property:
During the financial year ended 31.03.2024, the Company undertook a reclassification of certain assets from
Property, Plant, and Equipment (PPE) to Investment Property. This change reflects a strategic shift in the use and
intended purpose of these assets.
Details of Reclassification:
• Nature of Assets Reclassified: Office buildings
• Carrying Amount of Reclassified Assets: 1,56,293.37/- (WDV Amount in hundreds)
• Date of Reclassification: 01-04-2023
• Reason for Reclassification: The intended use of these assets has changed. They are now held for rental income
and/or capital appreciation rather than for use in the production or supply of goods or services, or for
administrative purposes.
Impact on Financial Statements:
(i) Valuation Basis: The reclassified assets were transferred at their carrying amount as of the reclassification date.
Any difference between the carrying amount and the fair value of the properties at the time of reclassification
was not recognized in the financial statements.
(ii) Subsequent Measurement: Following the reclassification, the investment properties will be measured at cost
model in accordance with IND AS 40. The choice of measurement model will be consistently applied to all
investment properties.
Effect on Financial Position:
The reclassification has the following effects on the Company's financial position:
• Increase in Investment Property: The balance of investment property on the balance sheet has increased by
1,56,293.37 (Rs. in Hundred) due to the reclassification.
• Decrease in Property, Plant, and Equipment: The balance of PPE has decreased by 1,56,293.37 (Rs. in Hundred),
reflecting the transfer of assets to investment property.
The reclassification of certain assets from Property, Plant, and Equipment to Investment Property aligns with the
Company's revised strategy and provides a more accurate representation of how these assets are currently being
utilized. The change has been made in accordance with IND AS 40 and its impact has been appropriately reflected
and disclosed in the financial statements.
2B.3) Intangible Assets
The management has defined the definite life of 10 years for intangible assets mainly consist of brands/trademarks.
2B.4) Financial Instruments
Financial Assets
Equity Instruments
All investments in equity instruments classified under financial assets are initially measured at Book value, the
Company may, on initial recognition, irrevocably elect to measure the same at FVTOCI. The Company makes such
election on an instrument-by-instrument basis. Fair value changes on an equity instrument is recognised as other
income in the Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI.
Fair value changes excluding dividends, on an equity instrument measured at FVOCI are recognised in OCI. Amounts
recognised in OCI are not subsequently reclassified to the Statement of Profit and Loss. Dividend income on the
investments in equity instruments are recognised as 'other income' in the Statement of Profit and Loss. Details are
disclosed in Note No. 22A.
Investment in Partnership Firm
The company has invested in the Partnership Firm M/s S S Developers the details has been disclosed in the notes
separately.
Financial liabilities
All financial liabilities are recognized initially at fair value, as applicable, and net of directly attributable transaction
costs. The Company's financial liabilities include trade and other payables.
2B.5 Borrowing Costs
The Company does not have any qualifying assets, hence there are no Borrowing costs that are attributable to the
acquisition or construction of qualifying asset.
2B.6 Impairment of Non-financial assets
The Company assesses, at each reporting date, have to check whether there is an indication that an asset may be
impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates
the asset's recoverable amount. No Impairment of assets are made during the period under audit.
2B.7 Inventories
Cost of trading material is generally valued by using first in first out (FIFO) method and Goods in Transit is shown
along with closing inventory when all the risk and rewards have been transferred to company for the respective
material and Purchase value of such Goods in transit is included in the purchase of stock in trade under statement
of profit and Loss, if any. However there is NIL inventory on reporting date.
2B.8 Taxation
(a) Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted, at the reporting date.
Current income tax relating to items recognized outside profit or loss is recognized outside profit or loss. Current tax
items are recognized in correlation to the underlying transaction either in OCI or directly in equity. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations
are subject to interpretation and establishes provisions where appropriate.
(b) Deferred tax
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities
are recognized for all taxable temporary differences, except when it is probable that the temporary differences will
not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits
and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profit will
be available against which the deductible temporary differences, and the carry forward of unused tax credits and
unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is
no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be
utilised. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent
that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
The Company has recognized such temporary difference, details of which are referred in Note No. 13.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset
is realized 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 relating to items recognized outside profit or loss is recognized outside profit or
loss (either in other comprehensive income or in equity). Deferred tax items are recognized in correlation to the
underlying transaction either in OCI or directly in equity.
(c) Defined Benefit Plans
Gratuity is defined benefit obligation and is provided for at year end on the basis of its own calculation in accordance
with the Payment of Gratuity Act. Provision for gratuity is determined on the basis of 15 days last drawn salary for
each completed year of service or part thereof in excess of six months, taking month of 26 days for all employees.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation
authority.
GST, Sales/ value added taxes paid on acquisition of assets or on incurring expenses
Expenses and assets are recognized net of the amount of sales/ value added taxes paid, except:
• When the tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in
which case, the tax paid is recognized as part of the cost of acquisition of the asset or as part of the expense
item, as applicable.
• When receivables and payables are stated with the amount of tax included, the net amount of tax recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Minimum Alternate Tax
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the
form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the
Company will pay normal income tax in future.
Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit
associated with it will flow to the Company. MAT Credit entitlements are reviewed for the appropriates of their
respective carrying value at each balance sheet date.
2B.9 Employee benefit schemes
Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of profit
and loss for the year in which the related service is rendered. Post-employment and other long term employee
benefits are recognized as an expense in the profit and loss account of the year in which the employee has rendered
services and treated as defined benefit plans. The expense is recognized on the assumption that such benefits are
payable at the end of the year to all the eligible employees.
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