3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
3.1 REVENUE RECOGNITION
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Interst Income
Interest Income is recognised by applying effective interest rate to the
gross carrying amount of financial assets other than credit impaired
assests, taking into account principal outstanding and the applicable
interest rate. Interest income is recognised on non performing assets at
net of expected credit loss.
Delayed payment interest levied on customers for delay in repayment/
non payment of contractual cashflows is recognised on realisation.
Dividend Income
Dividend income is recognised when the Company's right to receive
dividend is established by the reporting date and no singnificant
uncertainty as to collectability exists.
Recovery of financial assets
The Company recognises income on recoveries of financial assets written
off on realisation or when the right to receive the same without any
uncertainties of recovery is established.
3.2 Property, Plant & Equipement
Property, plant and equipement are stated in the balance sheet at cost
(net of duty/tax credit if any availed) less accumulated depreciation and
accumulated impairment losses. Cost of acquisition is inclusive of freight,
non refundable duties & taxes and other direcly attributable cost of
bringing the asset to its working condition for the intended use.
Depreciation on Fixed Assets is provided on written down value method
based on useful life of the assets as prescibed in Schedule II to the
Companies Act, 2013.
In case addition/deletion of property,Plat & equipement, depreciation
has been provided on a pro rata basis from the date of such addition or,
as case may be , upto the date of deletion of such asset.
3.3 Investment property
Properties held to earn rental income or for capital appreciation or both
and that is not occupied by the Company is classified as Investment
property. Investment property is measured and reported at cost,
including transaction costs.
Depreciation is not charged on the investment property building.
An Investment property is derecognised upon disposal or when the
investment property is permanently withdrawn from use and no future
benefits are expected from the disposal. Any gain or loss arising on
derecognision of property is recognised in the Statement of profit &
loss in the same period.
3.4 Financial Instruments
i) Financial Assets
Financial assets include cash, or an equity instrument of another
entity, or a contractual right to receive cash or another financial asset
from another entity. Few examples of financial assets are loan
receivables, investment in equity and debt instruments, trade
receivables and cash and cash equivalents.
All financial assets are recognised initially at fair value including
transaction costs that are attributable to the acquisition of financial
assets except in the case of financial assets recorded at FVTPL where
the transaction costs are charged to profit or loss.
Subsequent Measurement
a) Financial assets carried at amortised cost (AC)
A financial asset is measured at amortised cost if it is held within
a business model whose objective is to hold the asset in order to
collect contractual cash flows and the contractual terms of the
financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount
outstanding.
b) Financial assets at fair value through other comprehensive
income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business
model whose objective is achieved by both collecting contractual
cash flows and selling financial assets and the contractual terms of
the financial asset give rise on specified dates to cash flows that are
solely payments of principal and interest on the principal amount
outstanding.
c) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories
are measured at FVTPL.
ii Financial Liabilities
a) Initial recognition and measurement
All financial liabilities are recognized at fair value and in case of
loans, net of directly attributable cost.
Financial liabilities are carried at amortized cost using the effective
interest method. For trade and other payables maturing within one
year from the balance sheet date, the carrying amounts approximate
fair value due to the short maturity of these instruments.
iii Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights
to the cash flows from the financial asset expire or it transfers the financial
asset and the transfer qualifies for derecognition under Ind AS 109.
A financial liability (or a part of a financial liability) is derecognized
from the Company's Balance Sheet when the obligation specified in
the contract is discharged or cancelled or expires.
3.5 Cash & cash equivalents
Cash and cash equivalents include cash on hand, Cheques/Drafts on
hand, balances in current accounts with banks, other short tem, highly
liquid investments with original maturities of three months or less
that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value.
3.6 TAXATION
Current Tax is the amount of tax payable on the taxable income for
the year and determined in accordance with the provisions of the
Income Tax Act,1961.
Deferred tax is recognised on temporary differences between the
carrying amounts of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of taxable
profit.
Deferred tax liabilities and assets are measured at the tax rates that
are expected to apply in the period in which the liability is settled or
the asset realised, based on tax rates (and tax laws) that have been
enacted or substantively enacted by the end of the reporting period.
3.7 IMPAIRMENT OF NON FINANCIAL ASSETS
An assessment is done at each Balance Sheet date to ascertain whether
there is any indication that an asset may be impaired. If any such indication
exists, as estimate of the recoverable amount of asset is determined, If
the carrying value of relevant asset is higher than the recoverable amount,
the carrying value is written down accordingly.
|