14 SIGNIFICANT ACCOUNTING POLICIES14.01 STATEMENT OF COMPLIANCE
These financial statements have been prepared in accordance with the Indian Accounting Standards (Ind AS) notified under section 133 of the Companies Act, 2013 ('the Act'), The financial statements have also been prepared in accordance with the relevant preparation requirement of the Companies Act, 2013. The Company has adopted Ind AS from April 1, 2017.
14.02 BASIS OF PREPARATION OF FINANCIAL STATEMENTS
The financial statements are prepared in accordance with historical cost conventions except for certain items that are measured at fair values, as explained in the accounting policies.
Fair Value is the price that would be received to sell an asset or paid to transfer a liability transaction between the market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company considers the asset or liability characteristics at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for the Share-Based Payment transactions which are within the scope of Ind AS 102 - Share-Based Payments; Leasing transactions that are within the scope of Ind AS 116 - Leases; and measurement that have some similarities to fair value but are not fair value such as net realizable value in Ind AS 2 - Inventories or value in use in Ind AS 36 - Impairment of Asset.
14.03 USE OF ESTIMATES
The preparation of the financial statements in conformity with Ind AS requires the Management to make judgments, estimates, and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, disclosures of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision of the accounting estimates are recognised in the period in which the estimate is revised if the estimate affects only that period; they are recognised in the period of revision and future periods if the revision affects both the current and future periods.
14.04 PROPERTY, PLANT, AND EQUIPMENT-TANGIBLE ASSETS
Property, plant, and equipment are stated at the cost of acquisition or construction less accumulated depreciation and impairment, if any. For this purpose, the cost includes deemed costs which represent the carrying value of the property, plant, and equipment recognised as at April 1,2016 measured as per the previous GAAP.
Cost is inclusive of the inward freight, duties and taxes, and incidental expenses related to the acquisition of the fixed asset. Expenses capitalized include borrowing costs, wherever applicable, directly attributable to the acquisition, construction, and production of qualifying assets. All upgrades/enhancements are expensed off as revenue expenditure unless they bring significant additional benefits.
An item of property, plant, and equipment is de-recognised upon disposal or when no future • economic benefits are expected to arise from the continued use of an asset. Any gain or loss arising from the disposal or retirement of an item of property, plant, and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of Profit and Loss.
Depreciation on these assets commences when they are ready for their intended use which is generally on commissioning. Items of property, plant, and equipment are depreciated in a manner that amortizes the cost (or other amount substituted for cost) of the asset after commissioning, less its residual value, over their useful lives as specified in Schedule II of the Companies Act, 2013 on a straight-line basis.
The Management estimates the useful lives for the fixed assets as follows:-
Office Buildings 60 Years
Furniture & Fixtures 10 Years
Office Equipment 3 Years
The residual values and useful lives of the property, plant, and equipment are reviewed at each balance sheet date and changes, if any, are treated as changes in accounting estimates.
14.05 IMPAIRMENT OF ASSETS
Impairment Loss, if any, is provided to the extent the carrying amount of the asset exceeds their recoverable amount. Impairment losses recognised in prior years are reversed when there is an indication that the impairment losses recognised no longer exist or have decreased. Such reversals are recognized as an increase in carrying amounts of the asset to the extent it does not exceed the carrying amounts that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in previous years.
14.06 FINANCIAL ASSETS AND FINANCIAL LIABILITIES
Financial assets and financial liabilities are recorded when the Company becomes a party to the contractual provision of the relevant instrument and are initially measured at fair value. Transactions cost directly attributable to the acquisition or issue of the 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 marketplace (regular way traders) are recognised on trade date i.e. the date when the Company commits to purchase or sell the asset.
• Recognition and De-recognition of Financial Assets:
Financial Assets include Investments, Trade Receivables, Advances, Security Deposits, Cash, and Cash Equivalents. Such assets are initially recognised at the 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.
Financial Assets are de-recognised when the right to receive cash flows from the asset has expired or has been transferred and the Company has transferred substantially all the risks and rewards of ownership.
• Classification / Re-classification of Financial Assets:
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 the collection of cash flows arising from payments of principal and/or interest.
b) Fair value through other comprehensive income (FVTOCI), where the financial asset is held not only for the collection of cash flows arising from payments of principal and/or interest but also from the sale of such asset. Such assets are subsequently measured at fair value, with unrealised gain or losses arising from changes in fair value being recognised in other comprehensive income.
c) Fair value through profit or loss (FVTPL), where the assets are measured in accordance with the 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 gain or losses arising from changes in 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 are classified for measurement at amortised cost while investments may fall under any of the aforesaid classes.
When and only when the business model is changed, the Company shall reclassify all the affected financial assets prospectively from the reclassification date as subsequently measured at amortised cost, fair value through other comprehensive income, fair value through profit or loss without retaining the previously recognised gains, losses and interest and in terms of the reclassification principles laid down in the Ind AS relating to Financial instruments.
• Impairment of Financial Assets:
The Company assesses at each reporting date whether a financial asset (or a group of financial assets) such as investments, trade receivables, advances, security deposits held at amortised costs, and financial assets that are measured at fair value through other comprehensive income are tested for impairment based on information or evidences available without undue cost or effort.
Expected credit losses are assessed and loss allowances are recognised if the credit quality of the financial asset has deteriorated significantly since initial recognition.
• Financial Liabilities:
Borrowings, Trade Payable, 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 premium on redemption or settlement is 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. Financial Liabilities are de-recognised when the liability is extinguished i.e., . when the contractual obligation is discharged, cancelled, and on expiry.
• Offsetting Financial instruments:
Financial Assets and Financial Liabilities are offset and the net amount I included in the Balance Sheet where there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.
14.07 REVENUE RECOGNITION
Interest income is accounted for on a time proportion basis taking into account the amount outstanding and the applicable interest rate.
Other Incomes are accounted for on confirmation provided by the constituents.
14.08 LEASES
Leases are recognised as financial leases whenever the terms of the lease transfer substantially al! the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
Company as Lessee: Assets used under finance lease are recognised as property, plant, and equipment in the Balance Sheet for an amount that corresponds to the lower of fair value and the present value of minimum lease payments determined at the inception of the lease and a liability is recognised for an equivalent amount.
The minimum lease payments are apportioned between finance charges and the reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in the Statement of Profit and Loss
14.09 EMPLOYEE BENEFITS
Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service has been rendered.
Contributions to Provident Fund & other Funds including under the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, will be accounted for on an accrual basis whenever applicable.
Leave encashment benefit, as and when required, will be determined on the basis of actuarial valuation. However, during the previous year as well as in the current year no Actuarial Valuation was considered necessary in view of the resignation of most of the employees.
Provision for Gratuity is not made in accounts and will be accounted for as and when paid.
14.10 TAXES ON INCOME
Taxes on income comprise (a) Current Tax and (b) Deferred Tax,
Current Tax in the Statement of Profit and Loss is provided as the amount of tax payable in respect of taxable income for the period using tax rates and tax laws enacted during the period, together with any adjustment of tax payable in respect of previous years.
Deferred Tax is recognised on account of temporary differences between the carrying amounts of assets and liabilities and the amount used for taxation purposes (tax base), at the tax rates and tax laws enacted or substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for future tax consequences to the extent it is probable that future taxable profits will be available against which the deductible temporary difference can be utilised.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when deferred tax balances are related to the same taxation authority. Current tax assets and liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.
14.11 CLAIMS
Claims against the Company not acknowledged as debt are disclosed after a careful evaluation of facts and legal aspects of the matter involved.
The Company has no ongoing litigations with any regulatory authorities. Where an outflow of funds is believed to be probable and a reliable estimate of the outcome of the dispute can be made based on the Management's assessment of the specific circumstances of each dispute and relevant external advice, Management provides for its best estimate of the liability. Information about such litigations is provided in the Note to the Financial Statements.
14.12 PROVISIONS
Provisions are recognised when as a result of a past event, the Company has a legal or constructive obligation; it is probable that an outflow of resources will be required to settle the obligation; and the amount can be reliably estimated. The amount so recognised is the best estimate of the consideration required to settle the obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
14.13 FINANCIAL AND MANAGEMENT INFORMATION SYSTEM
The Company's Accounting System is designated to unify the financial records, to comply with the relevant provisions of the Companies Act, 2013, and to provide financial information appropriate to the businesses and facilitate internal control.
15 RELATED PARTY DISCLOSURES15.01 Disclosure of transactions between the Company and related entities and the status of outstanding balances as on 31.03.2025: -
List of Key Managerial Personnel (KMP):-
Mr. Pranab Chakraborty Whole-time Director
Mr Sovan Chatterjee Independent Director
Mr Harendra Kumar Baitha Independent Director
Mrs. Simran Saha Woman Independent Director
Mr Shouvik Kundu Chief Financial Officer
Mr. Gunjan Bagla Company Secretary
15.02 Remuneration to Key Managerial Personnel other than MD/Manager/WTD:
(Amount in Rs. hundreds)
Remuneration to Company Secretary Rs.1800 (2024-25) Rs.1800 (2023-24)
16 ADDITIONAL NOTES
1 6.01 The Company was maintaining separate accounts in scheduled banks for dividends declared for the financial years 2002-03, 2003-04, and 2004-05 from which dividends were paid to the shareholders. It is learnt that in respect of stale dividend warrants the scheduled banks transferred the sums to the Reserve Bank of India since long as the accounts have remained inoperative for years. As the Company is not holding any amount in Unclaimed Dividend Account as of now, no amount is transferable to Investor Protection & Education Fund.
16.02 The company, at its Annual General Meeting, held on 20th September, 2024 passed a special resolution for reducing the issued, subscribed and paid up capital from Rs 14,14,14,530/- (Rupees fourteen cores fourteen lakhs fourteen thousand five hundred thirty only) divided into 1,41,41,453/- equity shares of Rs 10/- each to Rs 8,28,200/- (Rupees eight lakh twenty eight thousand two hundred only) divided into 82820 equity shares of Rs 10/- each. A request has been submitted to Bombay Stock Exchange for in-principal approval of such capital reduction. Further, confirmation of NCLT still remains to be obtained.
16.03 There was no manufacturing or trading activity of the Company during the current year or in the previous year and hence disclosure under Segment Reporting does not arise.
16.04 There are no dues outstanding for more than 45 days during the year, payable by the Company to its suppliers of goods and services which are covered by the Micro, Small, and Medium Enterprises Development Act, 2006.
16.05 Previous year's figures have been regrouped/reclassified wherever necessary to correspond with the current year's classification/disclosure.
The accompanying notes 1 to 16 are an integral part of the Financial Statements.
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