2. SIGNIFICANT ACCOUNTING POLICIES:
a) Statement of compliance and basis of preparation and presentation
These standalone or separate financial statements of Ramsons Projects Limited (‘the
Company’) have been prepared in accordance with Indian Accounting Standards as per the
Companies (Indian Accounting Standards) Rules, 2020 as amended and notified under
Section 133 of the Companies Act, 2013 (the ‘Actj and other relevant provisions of the Act.
The Company complies with the prudential norms relating to income recognition, accounting
standards, asset classification, margin pricing and the minimum provisioning for standard,
sub-standard, doubtful debts and loss assets, specified in the directions issued by the RBI in
terms of Master Direction - Reserve Bank of India (Non-Banking Financial Company- Scale
Based Regulation) Directions, 2023 issued by RBI vide notification no.
DoR.FIN.REC.No.45/03.10.119/2023-24 dated October 19, 2023 and as amended from time
to time (herein after referred to as “RBI directions’).
b) Basis of Measurement
The financial statements have been prepared on the historical cost basis except for certain
financial instruments which are measured at fair values.
c) Measurement of fair values
Company's accounting policies and disclosures require the measurement of fair values, for
financial assets. The Company has established policies and procedures with respect to the
measurement of fair values.
Fair values are measured based on Quoted prices (unadjusted) in active markets for such
financial asset.
d) Use of Estimates:
In preparing the Company’s financial statements in conformity with accounting principles
generally accepted in India, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities, incomes and expenses, the
disclosure of contingent assets and contingent liabilities at the date of the financial
statements and notes thereto. Although these estimates are based upon management’s best
knowledge of current events and actions, actual results could differ from these estimates.
Difference between the actual result and estimates are recognized in the period in which the
results are known/ materialized. Any variations to accounting estimates are recognized
prospectively in current and future period.
e) Extraordinary and Exceptional Items:
Extraordinary items are income or expenses that arise from transactions that are clearly
distinct from ordinaiy activities. They are not expected to recur frequently or regularly. The
nature and amounts of extraordinary items are separately disclosed in Statement of Profit
and Loss so that its impact on current profit or loss can be perceived.
However, when items of Income and Expenditure from ordinaiy activities are of such size and
nature that their disclosure is relevant to explain the performance of the enterprises for the
period, the nature and amount of such items is also separately disclosed in the Profit and
Loss account. These items are generally referred as exceptional items.
f) Property, Plant & Equipment and Depreciation:
Property, plant & equipment are stated at cost less accumulated depreciation and impairment
losses if any. Cost comprises the purchase price and any attributable cost of bringing the
asset to its working condition for its intended use.
Depreciation on property, plant & equipment is provided on straight line value method over
the useful life and considering residual value as prescribed in Schedule II of the Companies
Act, 2013.
g) Investments:
Long Term Investments in shares and securities are stated at carrying costs or fair value,
whichever is higher as per IndAS 109.
h) Financial Assets:
Financial assets are measured at fair value (except otherwise stated). For equity investments,
the Company makes an election on an instrument-by-instrument basis to designate equity
investments as measured at Fair Value through Other Comprehensive Income (FVTOCI).
These elected investments are measured at fair value with gains and losses arising from
changes in fair value recognized in other comprehensive income and accumulated in the
reserves. The cumulative gain or loss is not reclassified to profit or loss on disposal of the
investments. These investments in equity are not held for trading. Instead, they are held for
medium or long term strategic purpose. Upon the application of Ind AS 109, the Company
has chosen to designate these investments as at FVTOCI as the Company believes that this
provides a more meaningful presentation for medium or long-term strategic investments, than
reflecting changes in fair value immediately in profit or loss. Dividend income received on
such equity investments are recognized in profit or loss.
Financial assets where no significant increase in credit risk has been observed are considered
to be in ‘stage 1’ and for which a 12 month ECL is recognized. Financial assets that are
considered to have significant increase in credit risk are considered to be in ‘stage 2’ and
those which are in default or for which there is an objective evidence of impairment are
considered to be in ‘stage 3’. Lifetime ECL is recognized for stage 2 and stage 3 financial
assets.
There is no case which will be categorized under Stage 2 and Stage 3 hence ECL is not
recognized during the year.
i) Revenue Recognition
Dividend Income
Dividend from investments is recognized at the time when the right to receive is established
by the reporting date.
Interest and Processing Fee Income on Loans
Interest and processing income is recognized on an accrual basis, by reference to the principal
outstanding of loan portfolio and applicable rate. Further, the interest and processing income
from a financial asset is recognized only when it is reasonably certain that the ultimate
collection will be made.
j) Retirement Benefits:
Provisions of the Payment of Gratuity Act, 1972 and the Employees State Insurance Act, 1948
and Employees Provident Fund and Miscellaneous Provisions Act, 1952 are not applicable to
the Company.
k) Earnings Per Share:
Basic Earnings Per Share is calculated by dividing the net profit/(loss) for the period
attributable to equity shareholders by the weighted average number of Equity share
outstanding during the period.
Diluted Earnings per Share is calculated by dividing the net profit/(loss) attributable to equity
shareholders by the weighted average number of equity shares outstanding during the period
(adjusted for the effects of dilutive options).
l) Taxation:
Tax expense for the year, comprising current tax, income tax earlier years, MAT and deferred
tax are included in determining the net profit/ (loss) for the year.
Current tax assets and liabilities are offset only if there is a legally enforceable right to set off
the recognized amounts, and it is intended to realise the asset and settle the liability on a net
basis or simultaneously.
Minimum alternate tax (‘MAT’) credit entitlement is recognized as an asset only when and to
the extent there is convincing evidence that normal income tax will be paid during the
specified period. In the year in which MAT credit becomes eligible to be recognized as an asset,
the said asset is created by way of credit to the Statement of Profit and Loss and shown as
MAT credit entitlement. This is reviewed at each balance sheet date and the carrying amount
of MAT credit entitlement is written down to the extent it is not reasonably certain that normal
income tax will be paid during the specified period.
m) Segment Reporting
a. Identification of segment
The company’s operating businesses are organized and managed separately according to
the nature of products and services provided, with each segment representing a strategic
business unit that offers different products and serves'different markets. The analysis of
geographical segments is based on the areas in which major operating divisions of the
company operate.
b. Inter-segment Transfers
The company generally accounts for intersegment sales and transfers at cost plus
appropriate margins.
c. Allocation of common costs
Common allocable costs are allocated to each segment according to the relative
contribution of each segment to the total common costs.
d. Unallocated items
Unallocated items include general corporate income and expense items which are not
allocated to any business segment.
e. Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies
adopted for preparing and presenting the financial statements of the company as a whole.
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