The company “Beacon Trusteeship Limited” has been promoted by Mr. Pratapsingh Nathani, an ex-banker.
The company was incorporated on 23rd December 2015. Beacon Trusteeship Limited provides Trusteeship
Services viz. Debenture / Bond Trusteeship, Security Trusteeship, Safe Keeping, Securitization, Management
of Special Purpose Vehicles (SPVs), Managing Trusts and Allied Services. The Company has started its
branch i.e IFSC Branch in the GIFT city, Gujarat. Further the approval for successful conducting the
operations has been received on and from 25th March 2023. The effect of the profit/loss and state of affairs
of the respective IFSC branch has been given in the financial statements.
1. SIGNIFICANT ACCOUNTING POLICIES
(i) Basis of Accounting
The financial statements of the Company have been prepared in accordance with the accounting principles
generally accepted in India (Indian GAAP). The Company has prepared these financial statements to comply
in all material respects with the notified accounting standards notified under Section 133 of the Companies
Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules 2014 and Companies
(Accounting Standards) Amendment Rules, 2016. The financial statements have been prepared on an
accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of
financial statements are consistent with those of previous year.
(ii) Use of estimates
The preparation of financial statements in conformity with Indian GAAP requires the management to make
judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and
liabilities and the disclosure of contingent liabilities at the end of reporting period. Although these estimates
are based upon the management's best knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying
amounts of assets or liabilities in future periods.
(iii) Property Plant and Equipment (Fixed Assets)
Property, Plant and Equipment (including intangible assets) are stated at cost, net of accumulated
depreciation and accumulated impairment losses, if any. The cost comprises the purchase price and any
directly attributable cost of bringing the asset to its working condition for its intended use. Gain or losses
arising from de-recognition of property, plant and equipment (including intangible assets) are measured as
the difference between the net disposal proceeds and the carrying amount of the asset and are recognized
in the statement of profit and loss when the asset is de-recognized.
Individual low cost assets (acquired for less than Rs. 5,000/-) are depreciated in the year of acquisition.
(vi) Intangible Assets
Intangible assets are amortized on a straight line basis over the estimated useful economic life. The company
uses a rebuttable presumption that the useful life of an intangible asset will not exceed five years from the
date when the asset is available for use. If the persuasive evidence exists to the effect that useful life of an
intangible asset exceeds five years, the company amortizes the intangible asset over the best estimate of its
useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment
annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for
impairment whenever there is an indication that the intangible asset may be impaired.
(v) Depreciation
Depreciation on property, plant and equipment is provided using the Written-down value Method (‘WDV’)
using the rates arrived at based on the useful lives estimated by the management. Intangible assets are
amortized on a Written-down value basis over the estimated useful life. The Company has used the
following rates to provide depreciation / amortization on its Property, Plant and Equipment (including
intangible assets):
The management believes that depreciation rates currently used fairly reflect its estimate of the useful lives
and residual values of fixed assets, though these rates in certain cases are different from lives prescribed
under Schedule II of Companies Act, 2013.
(vi) Investments
Investments are classified as long term or current in terms of AS-13. Long Term investments are carried at
cost less provision for diminution, other than temporary. Current Investments are carried lower of cost or
market value.
(vii) Impairment of Asset
The Company assesses at each reporting date 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. An asset’s recoverable amount is the higher of an asset’s net selling price
and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not
generate cash inflows that are largely independent of those from other assets or groups of assets. Where
the carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset. In determining net selling price, recent market
transactions are taken into account, if available. If no such transactions can be identified, an appropriate
valuation model is used.
Other impairment, depreciation/amortization is provided on the revised carrying amount of the asset over its
remaining useful life.
(viii) Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. Annual Fees for trusteeship services and servicing fees are
recognized, on a straight line basis, over the period when services are performed. Initial acceptance fees for
trusteeship services is recognized as and when the ‘Offer / Consent Letter’ for the services to be rendered is
accepted by the customer. Apart from this any documentation and other income related to the trusteeship
services is recognised on basis of probable economic benefits will flow to the the Company.
Under the new SEBI Guidelines dated November 3 & November 12, 2020, the Debenture Trustees (DT) are
mandated to undertake independent assessment of assets being offered as security, periodic monitoring,
and compliance of the ‘security created' or assets on which charge is created along with any applicable
covenants or terms of the issue of listed debt securities incorporated in the debenture trust deed. Considering
the increase in the efforts, the current revenue structure also underwent a change during current financial
year onwards which originates from the manifold increase in the responsibility of the Debenture Trustee (DT)
following the amendments in SEBI regulations relating to DT, ILDS and LODR respectively.
Interest income on fixed deposits is recognized on a time proportion basis taking into account the amount
outstanding and the applicable interest rate. Interest income is included under the head “Other income” in
the statement of profit and loss. Financial and other advisory fees collected is recognised as a part of 'Other
Operating Income' basis to the extent that it is probable that the economic benefits will flow to the Company
and the revenue can be reliably measured. Realized gains and losses on mutual funds are dealt with in the
statement of profit and loss. The cost of units in mutual fund sold are determined on weighted average basis
for the purpose of calculating gains or losses on sale/redemption of such units.
(ix) Leases
Where the company is lessee ; Leases, where the lessor effectively retains substantially all the risks and
benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are
recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
(x) Prior Period Adjustments
Earlier year items, adjustment / claims, arisen/ settled / noted during the year, if material in nature, are
debited/credited to prior period expenses/income or respective heads of Account, if not material in nature.
(xi) Employee Benefits
Liability for employee benefits, both short and long term, for present and past services which are due as per
the terms of employment are recorded in accordance with Accounting Standard-15 (Revised 2005)
"Employee Benefits" issued by the "Institute of Chartered Accountants of India (ICAI)" to the extent
applicable and based on the valuation report.
Retirement benefit in the form of provident fund is a defined contribution scheme to the extent applicable.
The contributions to the provident fund if charged are routed through the Statement of Profit and Loss for
the year when an employee renders the related service. The Company has no obligation, other than the
contribution payable to the provident fund to the extent applicable.
(xi) Foreign Exchange Transactions
Transactions in foreign currencies are recorded in the books by applying the exchange rates prevailing on the
date of the transaction. All monetary items denominated in foreign currency assets and liabilities are
restated at the exchange rate prevailing at the year end. Any income or expense on account of the exchange
difference either on settlement or on transaction is recognized in the profit & loss account.
(xii) Taxes on Income
• Tax expense comprises current tax and deferred tax. Current income tax is measured at the amount
expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India.
The tax rates and the tax laws used to compute the amount are those that are enacted or substantially
enacted, at the reporting date.
• Deferred income taxes reflect the impact of timing differences between taxable income and accounting
income originated during the current year and reversal of timing differences of earlier years. Deferred tax
is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are
recognized for deductible timing differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such deferred tax assets can be realized.
In situations, where the Company has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can
be realized against future taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. It recognizes
unrecognized deferred tax asset to the extent that it has become reasonably certain or virtually certain, as
the case may be that sufficient future taxable income will be available against which such deferred tax
assets can be realized. The carrying amount of deferred tax assets are reviewed at each reporting date. The
Company writes down the carrying amount of a deferred tax asset to the extent that it is no longer
reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be
available against which deferred tax asset can be realized. Any such write-down is reversed to the extent
that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable
income will be available.
(xiii) Cash and cash equivalents
Cash and cash equivalents for the purpose of Cash Flow Statement comprise cash at bank and in hand and
short-term investment with an original maturity of three months or less.
(xiv) Segment information
The Company is engaged primarily in the trusteeship business and its business operations are concentrated
in India. Accordingly there are no separate business segments and geographical segments as per
Accounting Standard 17- Segment Reporting issued by The Institute of Chartered Accountants of India.
(xv) Earnings 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.
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.
|