Note 1 - Material Accounting Policies
la. Corporate Information
Quantum Digital Vision India Limited is a Public Limited Company listed on Bombay Stock
Exchange (BSE) in India and incorporated on 21/04/1980 under the provisions of the
Companies Act, 1956. The company is engaged in the business of manufacturing of Spring
Leaves and assembles polymer bags, TV Serial and trading in Medicine items.
lb. Statement of compliance and Basis of preparation and presentation
i) Statement of compliance
These 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
together with the Companies (Indian Accounting Standards) Rules, 2015 as amended from
time to time, relevant provisions of the Act and other accounting policies generally
accepted in India.
The financial statements have been prepared on a historical cost convention and on an
accrual and going concern basis. The accounting policies are applied consistently to all
the periods presented in the financial statements.
ii) Use of estimates and judgment
The preparation of financial statements in conformity with Ind AS requires management
to make judgments, estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income and expenses. Actual
results may differ from these estimates.
1c Significant accounting policies
i) Property, plant and equipment
Recognition and measurement: Property, plant and equipment are measured at cost less
accumulated depreciation and impairment losses, if any. Cost includes expenditures
directly attributable to the acquisition of the asset.
Depreciation: The Company depreciates property, plant and equipment over the estimated
useful life on WDV Method using the rates arrived at based on the useful lives estimated
by the management. The company has used the following useful life to provide
depreciation on its fixed assets:
Fixed Assets, individually costing less than Rupees Five Thousand- Fully depreciated in
the year of purchase. Depreciation methods, useful lives and residual values are reviewed
at each reporting date.
When parts of an item of property, plant and equipment have different useful lives, they
are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure relating to property, plant and equipment is capitalized only
when it is probable that future economic benefits associated with these will flow to the
Company and the cost of the item can be measured reliably. Repairs and maintenance
costs are recognized in the statement of profit and loss when incurred. The cost and
related accumulated depreciation are eliminated from the financial statements upon sale
or disposition of the asset and the resultant gains or losses are recognized in the statement
of profit and loss. Amounts paid towards the acquisition of property, plant and equipment
outstanding as of each reporting date and the cost of property, plant and equipment not
ready for intended use before such date are disclosed under capital work- in-progress( if
any).
ii) Intangible assets
Intangible assets (if any) are stated at cost less accumulated amortization and impairment.
Intangible assets are amortized over their respective estimated useful lives on a straight-line
basis, from the date that they are available for use. The estimated useful life of an identifiable
intangible asset is based on a number of factors including the effects of obsolescence,
demand, competition and other economic factors (such as the stability of the industry and
known technological advances) and the level of maintenance expenditures required to obtain
the expected future cash flows from the asset.
iii) Leases
i) The Company as a Lessor:
Leases for which the Company is a lessor is classified as a finance or operating lease.
Whenever the terms of the lease transfer substantially all the risks and rewards of ownership
to the lessee, the contract is classified as a finance lease. All other leases are classified as
operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of
the relevant lease.
The Company as a Lessee:
The Company, as a lessee, recognises a right of-use asset and a lease liability for its leasing
arrangements, if the contract conveys the right to control the use of an identified asset. The
contract conveys the right to control the use of an identified asset, if it involves the use of an
identified asset and the Company has substantially all of the economic benefits from use of
the asset and has right to direct the use of the identified asset. The cost of the right-of use
asset shall comprise of the amount of the initial measurement of the lease liability adjusted
for any lease payments made at or before the commencement date plus any initial direct costs
incurred.
The right-of-use assets is subsequently measured at cost less any accumulated depreciation,
accumulated impairment losses, if any and adjusted for any remeasurement of the lease
liability. The right-of-use assets is depreciated using the straight-line method from the
commencement date over the shorter of lease term or useful life of right-of-use asset. The
Company measures the lease liability at the present value of the lease payments that are not
paid at the commencement date of the lease. The lease payments are discounted using the
interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be
readily determined, the Company uses incremental borrowing rate.
For short-term and low value leases, the Company recognises the lease payments as an
operating expense on a straight-line basis over the lease term.
iv) Impairment
Financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for
measurement and recognition of impairment loss. The Company follows ‘simplified approach’
for recognition of impairment loss allowance on trade receivable.
The application of simplified approach does not require the Company to track changes in
credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
v) Employee Benefits
The company is in process to formulate the retirement benefit policy for the employees.
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