(b) Material Accounting Policies
(i) Segment reporting:
Operating segments are reported in a manner
consistent with the internal reporting provided to
the Chief Operating Decision-Maker (CODM).
Manager has been identified as CODM and he is
responsible for allocating resources, assessing
the financial performance of each business i.e.
Trading Activity and Investment Activity.
(ii) Foreign currency translation:
(a) Functional and presentation currency
Items included in the financial statements of
each of the Company entities are measured
using the currency of the primary economic
environment in which the entity operates
('the functional currency'). The financial
statements are presented in 'Indian Rupees'
(INR), which is the Company's functional
and presentation currency.
(b) Transactions and balances
Foreign currency transactions are
translated into the functional currency
using the exchange rates at the dates of the
transactions. Foreign exchange gains and
losses resulting from the settlement of such
transactions and from the translation of
monetary assets and liabilities denominated
in foreign currencies at year end exchange
rates are generally recognized in profit or
loss. They are deferred in equity if they relate
to qualifying cash flow hedges.
(iii) Revenue recognition and other income
recognition:
Dividend Income
Dividends are recognised in profit or loss only
when the right to receive payment is established,
it is probable that the economic benefits
associated with the dividend will flow to the
Company, and the amount of the dividend can be
measured reliably.
Rental Income
Rental income from investment property leased
out under operating leases is recognised in the
statement of profit and loss on a straight-line basis
over the term of the lease or systematic basis.
Sale of Traded Goods
Revenue is generated primarily from sale of
traded goods. Revenue is recognized at the
point in time when the performance obligation is
satisfied and control of the goods is transferred
to the customer upon dispatch or delivery, in
accordance with the terms of customer contracts.
Revenue is recognized at an amount that the
Company expects to receive from customers.
(iv) Income tax:
The income tax expense or credit for the period
is the tax payable on the current period's taxable
income based on the applicable income tax rate
adjusted for changes in deferred tax assets and
liabilities attributable to temporary differences
and unused tax losses. Tax expenses comprises
of current tax and deferred tax.
Current tax
The current income tax charge is calculated on
the basis of the tax laws enacted or substantively
enacted at the end of the reporting period.
Management periodically evaluates positions
taken in tax returns with respect to situations
in which applicable tax regulation is subject to
interpretation. It establishes provisions where
appropriate on the basis of amounts expected to
be paid to the tax authorities.
Current and deferred tax is recognised in
statement of profit and loss, except to the
extent that it relates to items recognised in
Other Comprehensive Income or directly in
equity. In that case, the tax is also recognised
in Other Comprehensive Income or directly in
equity, respectively.
Deferred tax
Deferred tax is recognised on temporary
differences arising between the tax bases of
assets and liabilities and their carrying amounts
in the financial statements at the balance sheet
date. Deferred income tax is determined using
tax rates (and laws) that have been enacted or
substantially enacted by the balance sheet date
and are expected to apply when the related
deferred income tax asset is realised or the
deferred income tax liability is settled.
Deferred tax assets are recognised for all
deductible temporary differences and unused
tax losses only if it is probable that future
taxable amounts will be available to utilise those
temporary differences and losses.
(v) Cash and Cash Equivalents:
Cash and cash equivalents in the balance sheet
comprise cash at bank and on hand. For the
purpose of statement of cashflow cash and cash
equivalent consist of cash at bank and cash on
hand.
(vi) Trade Receivables:
Trade receivables are amounts due from
customers for sale of goods and assets given on
lease in the ordinary course of business. Trade
receivables are recognized initially at the amount
of consideration that is unconditional unless they
contain significant financing components, when
they are recognized at fair value. The Company
holds the trade receivables with the objective to
collect the contractual cash flows and therefore
measures them subsequently at amortised
cost using the effective interest method, less
loss allowance.
(vii) Investments and other financial instruments:
(a) Financial Instruments
Financial assets and financial liabilities are
recognised when the Company becomes
a party to the contractual provisions of
the instruments.
Initial recognition and measurement
Financial assets and financial liabilities
are initially measured at fair value except
for trade receivables which are initially
measured at transaction price. Transaction
costs that are directly attributable to the
acquisition or issue of financial assets
and financial liabilities (other than those
measured at fair value through profit or loss)
are added to or deducted from the fair value
of the financial assets or financial liabilities,
as appropriate, on initial recognition.
Transaction costs directly attributable to the
acquisition of financial assets or financial
liabilities at fair value through profit or loss
are recognised immediately in Profit or loss.
(b) Classification and subsequent
measurement of financial assets
The classification of a financial asset
depends on the entity's business model
for managing the financial assets and the
contractual terms of the cash flows. The
Company classifies its financial assets in
the following measurement categories:
• those to be measured subsequently
at fair value (either through other
comprehensive income, or through
profit or loss), and
• those measured at amortised cost
Financial assets measured at amortised
cost
Financial assets that are held for the
collection of contractual cash flow where
those cash flows represent solely payments
of principal and interest are measured at
amortised cost Interest income from these
financial assets is included in finance income
using the effective interest rate method.
Financial assets measured at fair value
through other comprehensive Income
(FVTOCI)
Assets that are held for the collection of
contractual cash Flows and for selling the
financial assets, where the assets cash flows
represent solely payments of principal and
interest, are measured at fair value through
other comprehensive income (FVTOCI).
Changes in fair value of instrument is taken
to other comprehensive income which are
not reclassified to profit or loss.
Financial assets measured at fair Value
through profit or loss (FVTPL)
Financial assets that do not meet the
criteria for amortised cost or FVTOCI are
measured as fair value through profit or
loss. A gain or loss on a debt investment
that is subsequently measured at fair value
through profit or loss. Dividend income from
these financial assets is included in other
income once the Company's right to receive
the dividend is established and it is probable
that the economic benefits associated with
the dividend will flow to the entity.
Investments in equity instruments at
FVTOCI
On initial recognition, the Company can
make an irrevocable election (on an
instrument-by-instrument basis) to present
the subsequent changes in fair value in other
comprehensive income for investments
in equity instruments. This election is not
permitted if the equity investment is held
for trading. These elected investments
are initially measured at fair value plus
transaction costs. Subsequently, they
are measured at fair value with gains and
losses arising from changes in fair value
recognised in other comprehensive income
and accumulated in the reserve equity
instruments through other comprehensive
income'. The cumulative gain or loss is not
reclassified to profit or loss on disposal
of the investments. Dividends on these
investments in equity instruments are
recognised in the statement of profit and
loss All the equity instruments held by the
Company are measured at FVTOCI.
Impairment of Financial Assets
The Company assesses on a forward-looking
basis the expected credit losses associated
with its assets carried at amortised cost. The
impairment methodology applied depends
on whether there has been a significant
increase in credit risk.
For trade receivables only, the Company
applies the simplified approach permitted
by Ind AS 109- 'Financial Instruments',
which requires expected lifetime losses to
be recognised from initial recognition of
the receivables.
Derecognition of Financial Assets
A financial assets is derecognised only when
the company has transferred the right to
receive cash flows from the financial assets
or retains the contractual rights to receive
the cash flows of the financial assets, but
assumes a contractual obligation to pay
cash flows to one or more recipients.
Where the entity has transferred an asset,
the Company evaluates whether it has
transferred substantially all risks and
rewards of ownership of the financial
asset. In such cases, the financial asset
is derecognised. Where the entity has
not transferred substantially all risks and
rewards of ownership of the financial asset,
the financial asset is not derecognised.
Where the entity has neither transferred
a financial asset nor retains substantially
all risks and rewards of ownership of
the financial asset, the financial asset
is derecognised if the Company has not
retained control of the financial asset.
Where the Company retains control of the
financial asset, the asset is continued to
be recognised to the extent of continuing
involvement in the financial asset.
(c) Financial Liabilities & Equity Instruments
Instruments issued by a company are
classified as either financial liabilities or as
equity in accordance with the substance
of the contractual arrangements and the
definitions of a financial liability and an
equity instrument.
Equity instruments
An equity instrument is any contract that
evidences a residual interest in the assets of
an entity after deducting all of its liabilities.
Equity instruments issued by the Company
are recognised at the proceeds received,
net of direct issue costs. Repurchase of
the Company's own equity instruments is
recognised and deducted directly in equity.
No gain or loss is recognised in Statement
of Profit and Loss on the purchase, sale,
issue or cancellation of the Company's own
equity instruments. Dividend paid on equity
instruments are directly reduced from equity.
Financial Liabilities
Subsequent measurement of financial
liabilities
Financial liabilities measured at
amortised cost
All the financial liabilities are subsequently
measured at amortised cost using the
effective interest rate method. Amortised
cost is calculated by taking into account
any discount or premium on acquisition and
fees or costs that are an integral part of the
EIR. The EIR amortisation is included as
finance costs in the statement of profit and
loss. Company does not owe any financial
liabilities which is held for trading.
Derecognition of Financial Liabilities
A financial liability (or, where applicable,
a part of a financial liability) is primarily
derecognised when, and only when, the
obligation under the liability is discharged or
cancelled or expires.
Effective interest method
The effective interest method is a method of
calculating the amortised cost of a financial
asset or financial liability and of allocating
interest income/ interest expenses over the
relevant period. The effective interest rate
is the rate that exactly discounts estimated
future cash receipts/ payments (including
all fees and points paid or received that form
an integral part of the effective interest rate,
transaction costs and other premiums or
discounts) through the expected life of the
debt instrument, or, where appropriate, a
shorter period, to the net carrying amount
on initial recognition.
(viii) Offsetting Financial Instruments:
Financial assets and liabilities are offset, and the
net amount reported in the balance sheet when
there is a legally enforceable right to offset the
recognised amounts and there is an intention
to settle on a net basis or realise the asset and
settle the liability simultaneously. The legally
enforceable right must not be contingent on
future events and must be enforceable in the
normal course of business and in the event of
default, insolvency or bankruptcy of the Company
or the counterparty.
(ix) Property, plant and equipment:
Freehold land is carried at cost and is not
depreciated. All other items of property, plant
and equipment are stated at historical cost less
depreciation and impairment, if any. Historical
cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs 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 derecognized when replaced.
All other repairs and maintenance are charged to
profit or loss during the reporting period in which
they are incurred.
Depreciation methods, estimated useful lives
and residual value:
Depreciation is calculated using Straight Line
Method (SLM) to allocate their cost, net of their
residual values, over their estimated useful lives.
The useful lives have been determined based on
technical evaluation done by the management,
which is in line with those specified by Schedule II
to the Companies Act, 2013.
The assets' residual values and useful lives are
reviewed, and adjusted if appropriate, at the end
of each reporting period.
An asset's carrying amount is written down
immediately to its recoverable amount if the
asset's carrying amount is greater than its
estimated recoverable amount.
Gains and losses on disposals are determined
by comparing proceeds with carrying amount.
These are included in profit or loss within other
gains/ (losses).
Mobile phones will be depreciated over a period
of 2 years without salvage value
The estimated useful lives of the property, plant
and equipment are as under:
(x) Investment Property
Investment property is property held to earn
rentals and/or for capital appreciation (including
property under construction for such purposes).
Investment property is measured initially at cost,
including transaction costs.
Subsequent to initial recognition, investment
property is measured in accordance with
the requirements Ind AS 16 for cost model.
Investment property represents freehold land.
An investment property is derecognised 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 profit or loss in the period in which the property
is derecognised.
(xi) Trade and other payables:
These amounts represent liabilities for goods and
services provided to the Company prior to the
end of financial year which are unpaid. Trade and
other payables are presented as current liabilities
unless the payment is not due within 12 months
of reporting period. Trade and other payables are
initially recognised at fair value and subsequently
measured at amortized cost using the effective
interest method.
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