i. Background:
Gowra Leasing & Finance Limited (‘The Company') is a company domiciled in India, with its registered office situated at
501, 5th Floor, Gowra Grand, Behind Gowra Plaza, 1-8-384 & 385, S.P Road, Begumpet, Secunderabad, Telangana-
500003..The Company has been incorporated under the provisions of Companies Act applicable in India and its equity
shares are listed on the BSE Ltd. in India. The Company is primarily involved in the business of leasing and finance.
ii. Basis of preparation
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
The Financial Statements are presented in Rupees, which is also the Company's functional currency.
iii. Compliance with Ind AS
The Financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) notified under
the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and other relevant provisions
of the Act.
iv. Method of Accounting
a. The Financial statements have been prepared under the historical cost convention in accordance with the generally
accepted accounting principles and provisions of the Companies Act, 2013.
a. The company generally follows mercantile system of accounting and recognizes significant items of income and
expenditure on accrual basis.
The Company complies in all material aspects, with the prudential norms relating to income recognition, asset
classification and provisioning for bad and doubtful debts and other matters, specified in the directions issued by the
Reserve Bank of India in terms of Non-Banking Financial Companies Prudential Norms (Reserve Bank) Directions, 2007,
as applicable to it.
Property, Plant and Equipment
Property, Plant and Equipment are initially recognized at cost. Cost comprises the purchase price and any directly
attributable cost to bring the asset to its working condition for its intended use.
Depreciation is calculated using the straight-line method to write down the cost of property, plant and equipment to their
residual value over their estimated useful lives. Land is not depreciated. Changes in the expected useful life are
accounted for by changing the amortization period or methodology, as appropriate, and treated as changes in accounting
estimates.
All assets are depreciated on a straight-Line Method (SLM) of depreciation, over the useful life of assets as prescribed
under schedule II of the Companies Act,2013 other than assets specified in a para below.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
the income statement when the asset is derecognized.
The residual values, useful life and methods of depreciation of property, plant and equipment are reviewed at each
financial year and adjusted prospectively, if appropriate.
On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment
recognized as of April 1,2019 measured as per the previous GAAP and use that carrying value as its deemed cost as of
the transition date.
Intangible Assets:
The useful life of Intangible assets is assessed to be either finite or indefinite.
Intangible assets with finite useful life that are acquired separately are carried at cost less accumulated amortization and
accumulated impairment losses. Amortization is recognized on a straight- line basis over their estimated useful life. The
estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any
changes in estimate being accounted for on a prospective basis.
An intangible asset is derecognized on disposal, or when no future economic benefits are expected from use or disposal.
Gains or losses arising from derecognition of an intangible asset, measured at the difference between the net disposal
proceeds and the carrying amount of the asset, and are recognized in profit or loss when the asset is derecognized.
On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment
recognized as of April 1,2019 measured as per the previous GAAP and use that carrying value as its deemed cost as of
the transition date.
Impairment of Tangible and Intangible Assets other than goodwill
The company assesses at each balance sheet date whether there is any indication 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 is less than the carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated
as an impairment loss and is recognised in the profit and loss account. If at the balance sheet date there is an indication
that a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the asset is
reflected at the recoverable amount subject to a maximum of depreciable historical cost.
Revenue Recognition
Revenue (other than for those items to which Ind AS 109 Financial Instruments are applicable) is measured at fair value
of the consideration received or receivable. Revenue is recognised when (or as) as the Company satisfies a performance
obligation by transferring a promised service (i.e., an asset) to a customer. An asset is transferred when (or as) the
customer obtains control of that asset. When (or as) a performance obligation is satisfied, the Company recognizes as
revenue the amount of the service rendered (excluding estimates of variable consideration) that is allocated to that
performance obligation.
The Company applies the five-step approach for recognition of revenue:
a. Identification of contract(s) with customers;
b. Identification of the separate performance obligation in the contract;
c. Determination of transaction price;
d. Allocation of transaction price to the separate performance obligation; and
e. Recognition of revenue when (or as) each performance obligation is satisfied.
Interest Income
The Company recognizes interest income/expense using a rate of return that represents the best estimate of a constant
rate of return over the expected behavioral life of loans given/taken and recognizes the effect of potentially different
interest rates at various stages and other characteristics of the product life cycle (including prepayments and penalty
interest and charges).
Dividend Income
Dividend income (including from FVOCI investments) is recognized when the Company's right to receive the payment is
established, it is probable that the economic benefit associated with the dividend will flow to the entity and the amount of
the dividend can be measured reliably. This is generally when the shareholders approve the dividend.
Investment Income
The gain/losses on sale of investments are recognized in the Statement of Profit and Loss.
Sale of Services
Revenue from services is recognized as per the terms of the contract and on rendering of services.
Investment Property
Investment Properties are properties held to earn rentals and/or for capital appreciation (including property under
construction for such purposes). Investment properties are measured initially at cost, including transaction costs.
Depreciation is recognized using straight line method so as to write off the cost of the investment property less their
residual values over their useful life specified in schedule II to the Companies Act, 2013 or in case of assets where the
useful life was determined by technical evaluation, over the useful life so determined.
An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from
use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the
property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is
included in the profit or loss in the period when the asset is derecognized.
On transition to Ind AS, the Company has elected to continue with the carrying value of its investment property recognized
as of April 1,2019 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition
Employee Benefits:
a. Defined Contribution Plans: The company has defined contribution plans for employees, comprising of Government
administered Employees Provident Fund. The contribution paid/payable to this plan during the year is charged to the
Profit & Loss Account for the year.
b. Defined Benefit Plans:
Gratuity: Provision for gratuity is made on accrual basis, on the basis of completed years of service as prescribed
under the payment of Gratuity Act.
c. Short term Employee Benefits:
All Employee benefits which are wholly due within twelve months of rendering the services are recognised in the
period in which the employee rendered the related services.
Investments
All Investments have been stated at Market value.
Financial Instruments
Recognition of Financial Instruments
Financial assets and financial liabilities are recognized, with exception of borrowing when the Company becomes a
party to the contractual provisions of the financial instruments. Loans and advances and all other regular way
purchases or sales of financial assets are recognized and derecognized on the trade date. Regular way purchases or
sales of financial assets that require delivery of assets within the time frame established by regulation or convention in
the marketplace. The Company recognizes borrowings when funds reach the Company.
Financial Liabilities
A financial liability is any liability that is :
• Contractual Obligation;
• To deliver cash or another financial asset to another entity; or
• To exchange financial assets or financial liabilities with another entity under conditions that are potentially
unfavourably to the entity; or
• A contract that will or may be settled in the entity's own equity instruments
All financial Liabilities are subsequently measured at amortised cost using the effective interest method or at FVTPL.
Company has not designated any financial liabilities at FVTP.
Derecognition of Financial Liabilities
The Company derecognises financial liabilities when, and only when, the company's obligations are discharged,
cancelled or have expired. Where an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing financial liability are substantially modified, such an exchange
or modification is treated as a derecognition of the original financial liability and the recognition of a new financial
liability. The difference between the carrying value of the original financial liability and the consideration paid, including
modified contractual cash flow recognised as new financial liability, would be recognised in profit or loss.
Taxation
Provision for current tax is made on the basis of tax payable in respect of taxable income for the period in accordance
with the provisions of the Income Tax Act, 1961. The deferred tax is calculated for timing difference between the book
profit and tax profit for the year which is accounted for using the tax rates and tax laws that have been enacted or
substantively enacted as at the Balance Sheet date. Deferred Tax Asset arising from the timing difference is
recognized to the extent that there is virtual certainty that the asset will be realized in future.
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