Note No. 1
SIGNIFICANT ACCOUNTING POLICIES
I) CORPORATE INFORMATION
The Company’s main business activities are Management Consulting, providing Debt
Recovery Advise, Consultancy in Financial, Secretarial, Commercial, Legal, Direct
and Indirect Taxation, Other Levies, Statistical,Accountancy and Other Fields. The
Company is having Registered Office / Head Quarter in Mumbai. The Company presently
has no branches.
II) SIGNIFICANT ACCOUNTING POLICIES:
a. BASIS OF PREPARATION:
The financial statements have been prepared in accordance with Indian
Accounting Standards (hereafter referred to as the ‘Ind AS’) as notified by
Ministry of Corporate Affairs pursuant to Section 133 of Companies Act, 2013
(the “Act’) read with Companies (Indian Accounting Standards (Ind AS)) Rules,
2015 and other relevant provisions of the Act.
The financial statements have been prepared on a historical cost convention
and accrual basis, except for certain financial assets and liabilities measured
at fair value.
b. USE OF ESTIMATES
The preparation of the financial statements, in conformity with the recognition
and measurement principles of Ind AS, requires the management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as at the date of financial statements and the results of operation
during the reported period. Although these estimates are based upon
management’s best knowledge of current events and actions, actual results
could differ from these estimates which are recognized in the period in which
they are determined.
c. OPERATING CYCLE FOR CURRENT AND NON-CURRENT
CLASSIFICATION
The Company presents assets and liabilities in the balance sheet based on
current /non-current classification.
All the assets and liabilities have been classified as current or non-current,
wherever applicable, as per the operating cycle of the Company as per the
guidance set out in Schedule III to the Act.
The operating cycle is the time between the acquisition of assets for processing
and their realisation in cash or cash equivalents. Based on the nature of activities
of the Company and the normal time between acquisition of assets and their
realization in cash or cash equivalents, the company has determined its
operating cycle as 12 months for the purpose of classification of its assets and
liabilities as current and non-current.
d. PROPERTY, PLANT AND EQUIPMENT (INCLUDING CAPITAL
WORK-IN-PROGRESS)
Property, Plant and Equipment are stated at cost of acquisition including
attributable interest and finance costs, if any, till the date of acquisition / installation
of the assets less accumulated depreciation and accumulated impairment losses,
if any.
Subsequent expenditure relating to Property, Plant and Equipment is capitalised
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.All
other repairs and maintenance costs are charged to the Statement of Profit and
Loss as incurred. The cost and related accumulated depreciation are eliminated
from the financial statements, either on disposal or when retired from active use
and the resultant gain or loss are recognised in the Statement of Profit and
Loss.
Capital work-in-progress, representing expenditure incurred in respect of assets
under development and not ready for their intended use, are carried at cost.
Cost includes related acquisition expenses, construction cost, related
borrowing cost and other direct expenditure.
e. INVESTMENT PROPERTY
Land or Building held to earn rentals or for capital appreciation or both rather
than for use in the production or supply of goods and services or for administrative
purposes; or sale in the ordinary course of business is recognised as Investment
Property. Investment Property are measured initially at cost, including transaction
costs. Subsequent to initial recognition, investment properties are stated at
cost less accumulated depreciation and accumulated impairment loss, if any.
Though, the Company measures investment property using cost based
measurement, the fair value of investment property is disclosed in Notes.
Investment properties are de-recognised either when they have been disposed
off or when they are permanently withdrawn from use and no future economic
benefit is expected from their disposal. The difference between the net disposal
proceeds and the carrying amount of the asset is recognised in the Statement
of Profit and Loss in the period of de-recognition.
f. DEPRECIATION/AMORTISATION ON FIXED ASSETS
Depreciation on Fixed Assets is provided on straight-line method in accordance
with life of assets specified in Part C of Schedule II to the Companies Act, 2013
as per details given below:
AMORTISATION
Expenses incurred on Computer Software are amortised on straight line basis
over a period of three years.
ASSETS ACQUIRED IN SATISFACTION OF CLAIMS
Assets acquired in satisfaction of claim has been accounted at fair value of the
assets acquired and is marked down by a subsequent reduction in the Net
Realisable Value, if any.
g. IMPAIRMENT OF NON FINANCIAL ASSETS
Non- financial assets other than inventories and non-current assets held for
sale are reviewed at each balance sheet date to determine whether there is any
indication. If any such indication exists or when annual impairment testing for
an asset required, the company estimates the asset’s recoverable amount. The
recoverable amount is higher of assets or cash generating units (CGU) fair
value less cost of disposal and its value in use. Recoverable amount is determined
for an individual asset, unless the asset does not generate cash flow that is
largely independent of those from other assets or group of assets.
When the carrying amount of an assets or CGU exceeds its recoverable amount,
the assets are considered impaired and is written down to its recoverable amount.
h. STOCK IN TRADE / SECURITIES FOR SALE
Stock in trade is valued at weighted average cost or net realisable value
whichever is lower.
i. CASH AND CASH EQUIVALENTS
Cash and cash equivalents for the purpose of cash flow statement comprise
cash in hand, balances in current accounts with scheduled banks and bank
deposits.
j. REVENUE RECOGNITION
Revenue is recognized when there is reasonable certainty of its ultimate
realization / collection. Revenue is net of Goods and Service Tax where recovered.
(i) Income from Operations
Brokerage income is recognized on transactions on which “Settlements’
are completed during the year. In case of Income from Marketing of
Financial Products the same are accounted on cash basis.
(ii) Profits on Sale of Investments
Profit on Sale of Investments is accounted reckoning the average cost
of the investments.
(iii) Other Income
Other Income is accounted on accrual basis except Dividend Income,
Interest on Government Bonds and Interest on Income Tax Refunds which
are accounted on cash basis.
k. BORROWING COST
Borrowing costs that are attributable to the acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets. A qualifying
asset is one that necessarily takes substantial period of time to get ready for
intended use. All other borrowing costs are charged to revenue.
l. RETIREMENT BENEFITS
The Company has dissolved the Provident Fund Trust and is in the process of
closure of the same as there are no employees left other than the two Whole
Time Directors and Chief Financial Officer. The Company’s Superannuation
Fund is administered through Life Insurance Corporation of India and is
recognised by the Income Tax Department. Company’s contribution to
Superannuation Fund for the year is charged against revenue. The Company
has provided for Gratuity in Current Year for the Two Wholetime Directors.
m. LEAVE ENCASHMENT
Provision is made for Leave Encashment on the basis of actual leave to the
credit of the employee.
n. TAXES ON INCOME
Current Tax is determined as per Law. Deferred Tax Asset and Liability are
measured using the tax rates that have been enacted or substantively enacted
at the Balance Sheet date.
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