Significant Accounting Policies forming part of accounts1) Background
The company was incorporated on 30/07/2008_with CIN L67190MH2008PLC185240 an object to carry on the business of Business Process Outsourcing (BPO)
2) Basis of preparation of financial statement
The financial statement is prepared by Indian Generally Accepted Accounting Principles (“GAAP”) under the historical cost convention on an accrual basis. GAAP comprises mandatory accounting principles generally accepted in India, including the mandatory accounting standard specified under section 133 of the act, read with rule 7 of the Companies (Accounts) Rules, 2014 as amended from time to time and companies Act 2013.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
3) Functional and presentation currency
The Company’s Financial Statements are prepared in Indian Rupees, which is also its functional currency. All the values are rounded off to the nearest Lakhs with two decimals except where otherwise stated.
4) Func Current Non-Current Classification
The company present assets and liabilities in the balance sheet based on current/noncurrent classification.
An asset is treated as current when it is:
A) Expected to be realised or intended to be sold or consumed in normal operating cycle.
B) Held primarily for the purpose of trading.
C) Expected to be realised within twelve months after the reporting period, or
D) Cash and cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non- current.
A liability is current when:
A) It is expected to be settled in normal operating cycle.
B) It is held primarily for the purpose of trading.
C) It is due to be settled within twelve months after the reporting period, or
D) There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
5) Functional and presentation currency Use of Estimates
The preparation of financial statements required estimates and assumption to be made to the affect the reported amount of assets and liabilities on the date of financial statement and reported amount of revenue and expenses during reporting period. Difference between the actual results and estimate are recognized in the period in which the results are known/ materialized.
6) Property, Plant & Equipment Tangible Assets
Tangible Assets are stated at acquisition cost, net of accumulated depreciation & accumulated impairment losses.
Subsequent expenditure related to an item of fixed assets are added to its book value only if they increase the future benefit from the existing asset beyond its previously assessed standard of performance.
Items of fixed assets that have been retired from active use and are held for disposal are stated at the lower of their net book value & net realizable value & are shown separately in the financial statement. Any expected loss is recognized immediately in the statement of Profit & loss.
Losses arising from the retirement of & gain or losses arising from disposal of fixed assets which are carried at cost are recognized in Statement of Profit & loss.
Intangible Assets
Intangible Assets are stated at acquisition cost, net of accumulated Amortization& accumulated impairment losses, if any.
Gain or Losses arising from the retirement or disposal proceeds recognized as Income or expense in Statement of Profit & loss
7) Depreciation& Amortization
Depreciation is provided on Written down Value method (WDV), over the estimated useful life of the assets except in case of Building which is provided on Straight Line Method( SLM) over the estimated useful life of asset.
Effective 1st April 2014, the company depreciates its fixed Assets over the useful life in the manner prescribed in Schedule II of the Act, as against the earlier practice of depreciating at the rates prescribed in Schedule XIV of Companies act, 1956.
Depreciation on the Fixed Assets added during the year has been provided on pro - rata basis with reference to the month of addition.
Intangible assets are amortized on a straight-line basis over their estimated useful life Leasehold Improvement on the leased property, is amortised over the period of the lease
8) Foreign Currency Transaction
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of the transaction. Foreign currency monetary assets and liabilities are translated at year end exchange rates.
Exchange differences arising on settlement of transactions and translation of monetary items are recognized as income or expense in the year in which they arise. Exchange differences considered as borrowing cost are capitalized to the extent these relate to the acquisition / construction of qualifying assets and the balance amount is recognized in the Profit & Loss account.
9) Taxation
(a) Provision for Current Taxation is been made after considering various allowances, deductions and exemptions under the Provisions of Income Tax Act, 1961.
(b) Deferred Income Taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized.
10) Revenue Recognition
Revenue is recognized as per AS- 9 which is issued by ICAI to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. In these case of business the revenue is recognize in the form of commission when the insurance policies accepted by customers.
11) Provision, Contingent Liabilities and Contingent Assets.
Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
12) Employee Benefits
Defined contribution plans:
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the statement of profit or loss in the periods during which the related services are rendered by employees.
Defined benefit plans
Gratuity :
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Company, the recognized asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (‘the asset ceiling’). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements.
Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized in Other Comprehensive Income (OCI).
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (‘past service cost’ or ‘past service gain’) or the gain or loss on curtailment is recognized immediately in the statement of profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Provident Fund
The Company’s contribution to Recognized Provident Fund Paid/ Payable during the year is recognized in the Profit & Loss Account.
Leave Encashment/Entitlement
Liability for leave encashment /entitlement for employees is provided on basis of the actuarial valuation at the year end
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