2. Significant Accounting Policies
(a) Basis of preparation
These standalone Ind AS financial statements
have been prepared in accordance with
Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies
Act, 2013 (“the Act”) read with Companies
(Indian Accounting Standards) Rules, 2015
and other relevant provisions of the Act,
under the historical cost convention on
accrual basis except for certain financial
instruments which are measured at fair
value. These accounting policies have been
applied consistently over all the periods
presented in these standalone Ind AS
financial statements.
The financial statements were prepared in
accordance with the accounting standards
notified under Companies (Accounting
Standard) Rules, 2006 (as amended) under
the Act read with Rule 7 of the Companies
(Accounts) Rules, 2014 (as amended),
the relevant provisions of the Act (to the
extent notified) and guidelines issued by
the Securities and Exchange Board of
India (SEBI) and other generally accepted
accounting principles in India (collectively
referred to as “Indian GAAP”.
(b) Presentation of the financial statements
The Company is covered in the definition of
Non-Banking Financial Company as defined
in Companies (Indian Accounting Standards)
(Amendment) Rules, 2016. As per the format
prescribed under Division III of Schedule III
to the Companies Act, 2013 on 11 October
2013, the Company presents the Standalone
Balance Sheet, the Standalone Statement
of Profit and Loss and the Standalone
Statement of Changes in Equity in the order
of liquidity. A maturity analysis of recovery
or settlement of assets and liabilities within
12 months after the reporting date and more
than 12 months after the reporting date is
presented in Note 55 of the standalone Ind
AS financial statements.
Financial assets and financial liabilities are
generally reported on a gross basis except
when, there is an unconditional legally
enforceable right to offset the recognised
amounts without being contingent on a future
event and the parties intend to settle on a
net basis in the following circumstances:
(i) The normal course of business
(ii) The event of default
(iii) The event of insolvency or bankruptcy of
the Company and/or its counterparties
(c) Use of estimates and judgements
The preparation of financial statements in
conformity with Ind AS requires management
to make estimates, judgments, and
assumptions that affect the application
of accounting policies and the reported
amounts of assets and liabilities (including
contingent liabilities) and disclosures as
of the date of financial statements and the
reported amounts of revenue and expenses
for the reporting period. Actual results could
differ from these estimates. Accounting
estimates and underlying assumptions are
reviewed on an ongoing basis and could
change from period to period. Appropriate
changes in estimates are recognized in the
period in which the Company becomes aware
of the changes in circumstances surrounding
the estimates. Any revisions to accounting
estimates are recognized prospectively in
the period in which the estimate is revised
and future periods. The estimates and
judgments that have significant impact on
carrying amount of assets and liabilities at
each balance sheet date are discussed at
note 2(v) of the standalone Ind AS financial
statements.
(d) Property, Plant and Equipment
Property, plant and equipment (PPE)
are stated at cost of acquisition less
accumulated depreciation and accumulated
impairment, (if any). Such cost includes
purchase price including import duties and
other non-refundable purchase taxes or
levies, borrowing cost and any cost directly
attributable to bringing the assets to its
working condition for its intended use and
adjustments arising from exchange rate
variations attributable to the assets. Any
trade discounts and rebates are deducted
in arriving at the purchase price.
Subsequent expenditure are included in the
asset’s carrying amount or recognized as a
separate asset, as appropriate, 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. The carrying amount of
any component accounted for as a separate
asset is derecognised when replaced. All
other repairs and maintenance are charged
to profit or loss during the reporting period
in which they are incurred.
Property, Plant and Equipment which are
significant to the total cost of that item of
Property, Plant and Equipment and having
different useful life are accounted separately.
Assets costing INR 5,000 or less are fully
depreciated in the year of purchase.
Cost of assets not ready for intended use,
as on the Balance Sheet date, is shown as
capital work in progress. Advances paid
towards the acquisition of property, plant
and equipment outstanding at each balance
sheet date is classified as capital advances
under other non-financial assets.
The carrying amount of an item of property,
plant and equipment is derecognised on
disposal or when no future economic benefits
are expected from its use or disposal. The
date of disposal of an item of property, plant
and equipment is the date the recipient
obtains control of that item in accordance
with the requirements for determining when
a performance obligation is satisfied in Ind
AS 115.
Gains and losses on disposals are determined
by comparing proceeds with carrying amount
and are recognized in the statement of profit
and loss when the asset is derecognised.
Depreciation methods, estimated useful
lives and residual value
Depreciation is provided on a pro-rata
basis on the straight line method based
on estimated useful life prescribed under
Schedule II to the Companies Act, 2013.
Equipment are reviewed at each financial
year end and adjusted prospectively, if
appropriate
(e) Investment Property
Investment property represents property held
to earn rentals or for capital appreciation or
both.
Investment properties 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.
Depreciation on property (Flat) classified as
investment property has been provided on
the straight-line method over a period of 60
years based on the Company’s estimate of
their useful lives taking into consideration
technical factors, which is the same as
the period prescribed in Schedule II to the
Companies Act 2013.
Though the Company initially measures
investment property using cost based
measurement.The said is measured
subsequently at the fair value which are
determined based on an annual evaluation
as per Management’s best estimates.
Investment properties are derecognised
either when they have been disposed of
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 derecognition. The date of disposal of
an item of investment property is the date
the recipient obtains control of that item
in accordance with the requirements for
determining when a performance obligation
is satisfied in Ind AS 115.
(f) Intangible assets and amortization
Intangible assets are stated at cost of
acquisition net of recoverable taxes, trade
discount and rebates less accumulated
amortisation and impairment losses, if any.
Such cost includes purchase price, borrowing
costs, and any cost directly attributable to
bringing the asset to its working condition
for the intended use and adjustments arising
from exchange rate variations attributable to
the intangible assets.
Subsequent costs are included in the
asset’s carrying amount or recognised as a
separate asset, as appropriate, only when
it is probable that future economic benefits
associated with the item will flow to the entity
and the cost can be measured reliably.
Intangible assets are amortised on a
straight-line basis over the estimated useful
economic life,which is the Management’s
estimate of its useful life.
The carrying amount of an intangible asset is
derecognised on disposal or when no future
economic benefits are expected from its use
or disposal. Gains and losses on disposals
are determined by comparing proceeds
with carrying amount and are recognised
in the statement of profit and loss when the
asset is derecognized. The date of disposal
of an item of intangible assets is the date
the recipient obtains control of that item
in accordance with the requirements for
determining when a performance obligation
is satisfied in Ind AS 115.
The residual values, useful lives and
methods of amortisation of intangible assets
are reviewed at each financial year end and
adjusted prospectively, if appropriate.
(g) Investments in subsidiaries and trust
Investments in subsidiaries and trust are
carried at cost less accumulated impairment
losses, if any in the Separate Financial
Statements as permitted under Ind AS 27 -
“Separate financial statements”.
Where an indication of impairment exists,
the carrying amount of the investment is
assessed and written down immediately
to its recoverable amount. On disposal of
investments in subsidiaries and trust, the
difference between net disposal proceeds
and the carrying amounts are recognised in
the Standalone Statement of Profit and Loss.
(h) Impairment of non-financial assets
At each reporting date, the Company
assesses whether there is any indication
based on internal / external factors, that
an asset may be impaired. If any such
indication exists, the Company estimates
the recoverable amount of the asset. The
recoverable amount of asset is the higher
of its fair value or value in use. Value in use
is based on the estimated future cash flows,
discounted to their present value using a
pre-tax discount rate that reflects the current
market assessment of time value of money
and the risks specific to it. If such recoverable
amount of the asset or the recoverable
amount of the cash generating unit to which
the asset belongs is less than its carrying
amount, the carrying amount is reduced to
its recoverable amount and the reduction
is treated as an impairment loss and is
recognised in the statement of profit and
loss. All assets are subsequently reassessed
for indications that an impairment loss
previously recognised may no longer exist.
An Impairment loss is reversed if there
has been a change in estimates used to
determine the recoverable amount. Such
a reversal is made only to the extent that
the assets carrying amount would have
been determined, net of depreciation or
amortization, had no impairment loss been
recognised.
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