(All amounts are in Indian Rupees)
1(a). COMPANY OVERVIEW
M/s Panafic Industrials Limited is a Nonbanking Financial Company incorporated under the provisions of Companies Act, 56 on 0st January, 1985 having its registered office in Delhi, with the objective of carrying on the business of financing industrial enterprises by way of making loans and advances, purchase or otherwise acquire, erect, maintain, sell, give on lease or [ire al kinds of movable or immovable properties, assets, equipments, articles, plants, machineries, factories, furniture, fixtures buildings, goods or things of any description that the Company may deem fit.
1(b). SIGNIFICANT ACCOUNTING POLICIES
(i) Basis of preparation
The Financial Statements are prepared under the historical cost convention on a going concern basis, on the, accrual basis accounting, in accordance with the Generally Accepted Principles (GAAP) in India and comply with the Accounting Standard specified under Section 33 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules 2014, to the extent applicable, as adopted consistently by the Company .
(ii) Current-non-current classification
All Assets and Liabilities have been classified current and noncurrent as per the normal operating cycle and the criteria set of Revised Schedule III to the Companies Act, 203. The Company has ascertained its operating cycle as 12 months for the purpose of current/ noncurrent classification sets and liabilities .
(iii) Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles require management to ma estimate and assumptions that affect the reported amount of assets and liabilities disclosure of contingent assets and liabilities on the date of financial statements and the result of operations during the reporting periods. Although these estimates are upon management’s knowledge of current events and actions, actual record should differ from those estimates and revisions if any, are recognized in the current and the future period.
(iv) Revenue recognition
a) Income from Interest on financing activities is recognized on accrual basis.
b) In respect of other heads of Income & Expenditure, the Company follows the practice of recognizing expenses and inc on accrual basis .
c) Income from trading in securities comprises of Profit/ Loss on sale of securities held as stock in trade and profit equity and derivative instruments. Profit/ Loss on sale of securities are determined based on the FIFO cost of the securities sold and is accounted for on the trade date of transaction.
(v) Impairment
The carrying amounts of assets are reviewed at each Balance sheet date to determine whether there is any indication impairment. If any such indication exists, the recoverable amount of the asset is estimated. For assets that are above yet available use, the recoverable amount is estimated at each Balance Sheet date. A profit and loss is recognized whenever the carrying amount of an asset or cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement Profit and Loss Account. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed carrying amount that would have been determined net of depreciation or amortization, if no impairment loss has been recognized
(vi) Investments
Investments are classified into noncurrent investments and current investments based on intent of management at the time of making the Investment. Investments which are intended to be held for more than one year are classified as noncurrent investment and those which are intended to be held for less than one year classified as current investments. Long term investments are valued at cost unless there is diminution, other than temporary, in their value. Current investments are valued as to low of cost market value .
(vii) Inventories
The Inventories of stock and securities have been valued at lower of cost or mark et value.
(viii) Employee benefits
The Company's obligation towards various employee benefits is recognized as follows :
Short-term employee benefits
a. All employee benefits payable/ available within twelve months of rendering the service are classified as -Strait employee benefits. Benefits such as salaries, wages and bonus etc., are recognized in the Statement of Profit and Loss in t n per year in which the employee renders the related service.
b. Employee entitlements to annual leave are recognized when they accrue to the eligible employees. An accrual is made for tl estimated liability for annual leave as a result of services rendered by the eligible employees up to the Balance Sheet late.
(ix) Current and deferred tax
Income tax expense comprises of current tax (i.e. amount of tax for the period/ year determined in accordance with the Income Tax Law) and deferred tax charge or credit (reflecting the tax effects of timing difference between accounting income and tax income for the period/ year). The deferred tax charge or credit and the corresponding deferred tax liabilities or assets recognized using the tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred Tax Assets recognized only to the extent there is reasonable certainty that the assets can be realized in future; however, where : the unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized hereby virtual certainty of realization of such assets.
Deferred tax assets are reviewed as at each Balance Sheet date and written down value reflect the amount that s reasonably/ virtually certain (as the case may be) to be realized.
(x) Leases
Lease payments under operating lease are recognized as an expense in the Statement of Profit and Loss on a straight line b over the lease term.
(xi) Provision, contingent liabilities and contingent assets
The Company creates provisions only when there is a present obligation as a result of past events that probably re quires outflow of resources and a reliable estimate that can be made of the amount of the obligation. A disclosure for contingent liabilities is made when there is a possible obligate or a present obligation that may, but probably will not require an outflow of resources. When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources do r m provision or disclosure is mad
Provisions are reviewed at each Balance Sheet date and adjusted to reflect the current best estimate. If it is not obligating from an outflow of resources would be required to settle the obligation, the provision is reversed. Contingent assets are not recognized in the financial statements. However, contingent asset are assessed continually and if it is virtually certain that an inflow of economic benefits will arise, the assets and related income are recognized in the various change occurs.
(xii) Earnings per share
Basic earnings per share are computed using weighted average number of equity shares outstanding during the year. Dilute earnings per share are computed using weighted average number of equity and dilutive potential equity equivalent s outstanding during the year, except where the results would be the active.
(xiii) Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are t estimate balances (with an organization maturity of the months or less from the date of acquisition), highly liquid investments that are readily convertible into know amounts of cash and which are subject to insignificant risk of changes in value.
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