2. Significant Accounting Policies
(a) Basis of Preparation
The financial statements comply in all material
aspects with Indian Accounting Standards (Ind
AS) notified under Section 133 of the Companies
Act, 2013 (the Act) read with the Rule 3 of the
Companies (Indian Accounting Standards) Rules,
2015 as amended from time to time and other
relevant accounting principles generally accepted
in India.
(b) Basis of Measurement
The financial statements of the Company have
been prepared using the historical cost basis.
Summary of Significant Accounting Policies
a. Use of Estimates
The preparation of financial statements in
conformity with Indian Accounting Standards
(Ind AS) requires management of the company to
make judgments, estimates and assumptions that
affect the reported amount of revenues, expenses,
assets and liabilities (including disclosure of
contingent liabilities) at the end of the reporting
period.
The management believes that the estimates
used in preparation of the financial statements
are prudent and reasonable. Future results could
differ due to these estimates and the differences
between the actual results and the estimates are
recognized in the periods in which the results
are known/ materialise.
b. Current versus Non-Current Classification
The Company presents assets and liabilities
in the balance sheet based on current/ non
current classification. An asset is treated as
current when it is:
? Expected to be realised or intended to be
sold or consumed in normal operating
cycle
? Held primary for the purpose of trading.
Expected to be realised within twelve
months after the reporting period, or
? Cash or 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 a non
current. A liability is current when:
It is expected to be settled in normal
operating cycle It is held primarily
for the purpose of trading
? It is expected to be settled in normal
operating cycle It is held primarily
for the purpose of trading
? There is no unconditional right to
defer the settlement of the liability
for at least twelve months after the
reporting period.
The Company classifies all other liabilities as
non-current.
The Company classifies all other liabilities as
non-current.
All assets and liabilities have been classified
as current or non-current as per the Company's
normal operating cycle and other criteria set
out in the Schedule HI to the Companies Act,
2013. Based on the nature of products and the
time between the acquisition of assets for
processing and their realisation in cash and
cash equivalents, the Company has
ascertained its operating cycle as 12 months
for the purpose of current/non current
classification of assets and liabilities.
c. Foreign Currencies
The Company's financial statements are presented
in INR lacs, which is also the Company's
functional currency. Functional currency is the
currency of the primary economic environment in
which the entity operates and is normally the
currency in which the entity primarily generates
and expends cash.
Transactions and Balances
Transactions in foreign currencies are initially
recorded by the Company at their respective
functional currency spot rates at the date the
transaction first qualifies for recognition.
Monetary assets and liabilities denominated in
foreign currencies are translated at the
functional currency spot rates of exchange at
the reporting date. Exchange differences
arising on settlement or translation of
monetary items are recognised in profit or loss.
Non-monetary items that are measured in terms
of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions.
d. Revenue Recognition
Revenue is recognised to the extent that it is
probable that the economic benefits will flow
to the Company and the revenue can be
reliably measured, regardless of when the
payment is being made. Revenue is measured
at the fair value of the consideration received
or receivable, taking into account contractually
defined terms of payment and excluding taxes
or duties collected on behalf of the government.
However, Goods and Service Tax (GST) is not
received by the Company on its own account.
Rather, it is tax collected by the seller on behalf
of the government. Accordingly, it is excluded
from revenue.
The specific recognition criteria described below
must also be met before revenue is recognised.
Interest income
Interest income is recognized on time proportion
basis considering the funds deployed and the
applicable interest rates.
Dividend income
Dividend Income is accounted for as income,
when the right to receive dividend is established.
e. Taxes
Current Income Tax
Current income tax assets and liabilities are
measured at the amount expected to be
recovered from or paid to the taxation
authorities.
The tax rates and tax laws used to compute
the amount are those that are enacted or
substantively enacted, at the reporting date.
Current income tax relating to items
recognised outside profit or loss is, recognised
outside profit or loss (either in other
comprehensive income or in equity). Current
tax items are recognised in correlation to the
underlying transaction either in OCI or
directly in equity. Management periodically
evaluates positions taken in the tax returns
with respect to situations in which applicable
tax regulations are subject to interpretation
and establishes provisions where appropriate.
During the year under review the company
has made Income tax provision of Rs. 184.36
Lacs (Previous Year Rs. 123.16 Lacs) under
section 115BAA of the income tax Act.
Deferred Tax
Deferred income tax is provided in full, using
the liability method on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amount in the
financial statement. Deferred income tax is
determined using tax rates (and laws) that
have been enacted or substantially enacted by
the end of the reporting period and are
excepted to apply when the related deferred
income tax assets 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.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority. Current tax assets
and tax liabilities are offset where the
Company has a legally enforceable right to
offset and intends either to settle on a net
basis, or to realize the asset and settle the
liability simultaneously.
Current and deferred tax is recognised in the
Statement of Profit and Loss, except to the
extent that it relates to items recognized
in other comprehensive income or directly in
equity. In this case, the tax is also recognised in
other comprehensive income or directly in equity,
respectively.
During the year under review the company has
created Deferred tax asset of Rs. 0.86 lacs (deferred
tax assets Previous Year Rs. 0.47 lacs).
f. Property, Plant and Equipment
(i). Recognition and Measurement
Property, plant and equipment are tangible items
that are held for use in the production or supply
for goods and services, rental to others or for
administrative purposes and are expected to be
used during more than one period.
The cost of an item of property, plant and
equipment shall be recognised as an asset if and
only if 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.
Freehold lands are stated at cost All other items of
property, plant and equipment are stated at cost,
net of recoverable taxes less accumulated
depredation, and impairment loss, if any.
The cost of an asset indudes the purchase cost of
material, including import duties and non
refundable taxes, and any directly attributable
costs of bringing an asset to the location and
condition of its intended use. Interest on
borrowings used to finance the construction of
qualifying assets are capitalised as part of the cost
of the asset until such time that the asset is ready
for its intended use. The carrying amount of the
replaced part is derecognised. All other repair and
maintenance costs are recognised in the Statement
of Profit and Loss as incurred.
The present value of the expected cost for the
decomrnissioning of an asset after its use, if
any, is included in the cost of the respective
asset if the recognition criteria for a provision
are met. Assets identified and technically
evaluated as obsolete are retired from active
use and held for disposal are stated at the
lower of its carrying amount and fair value
less cost to sell.
An item of property, plant and equipment and
any significant part initially recognised is
derecognised upon disposal or when no future
economic benefits are expected from its use or
disposal. Any gain or loss arising on
derecognition of the asset (calculated as the
difference between the net disposal proceeds
and the carrying amount of the asset) is
included in the income statement when the
asset is derecognised.
(i) Subsequent Expenditure
Subsequent costs are included in the assets
carrying amount only when it is probable that
future economic benefits associated with the
item will flow to the entity and the cost of the
item can be measured reliably.
Depreciation
Depreciation has been provided based on life
assigned to each asset in accordance with
Schedule II of the Companies Act, 2013.
Depreciation on Property, Plant & Equipment
(other than Intangible assets) is provided
based on the following useful life of the
assets:-
Depredation on additions is provided on a
pro-rata basis from the date of such additions.
Similarly, depreciation on assets sold/
disposed off during the year is being provided
upto the date on which the assets are sold/
disposed off.
The residual values, useful lives and methods
of depreciation of property, plant and
equipment are reviewed at each financial year
end and adjusted prospectively, if appropriate.
Modification or extension to an existing asset,
which is of capital nature and which becomes
an integral part thereof is depreciated
prospectively over the remaining useful life of
that asset.
During the year under review and in earlier
financial years, the company has purchased
some assets which are located at the Pandal
taken on rent for commercial purposes/ events.
g. Intangible Assets
(i) Recognition and Measurement
Intangible assets acquired separately are
measured on initial recognition at cost.
Following initial recognition, intangible assets
are carried at cost less any accumulated
amortization and accumulated impairment
losses.
Intangible assets assessed for impairment
whenever there is an indication that the
intangible asset may be impaired. The
amortization period and the amortization
method for an intangible asset with a finite
useful life are reviewed at least at the end of
each reporting period. Changes in the expected
useful life or the expected pattern of
consumption of future economic benefits
embodied in the asset are considered to modify
the amortization period or method, as
appropriate, and are treated as changes in
accounting estimates. The amortization expense
on intangible assets with finite lives is
recognised in the statement of profit and loss
unless such expenditure forms part of carrying
value of another asset.
Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the
carrying amount of the asset and are recognised
in the statement of profit or loss when the asset
is derecognised.
Internally generated intangible assets, excluding
capitalized development costs, are not capitalized
and expenditure is reflected in the statement of
profit and loss in the year in which the
expenditure is incurred.
(ii) Subsequent Expenditure
Subsequent expenditure is capitalised only when
it increases the future economic benefits from the
specific asset to which it relates.
(iii) Amortisation
Intangible Assets is amortised on a straight
line basis over a period of three years, being
the period over which the Company expects
to derive economic benefits from the use of
the Intangible Assets.
h. Borrowing Costs
Borrowing costs directly attributable to the
acquisition of an asset that necessarily takes
a substantial period of time to get ready for
its intended use or sale are capitalised as part
of the cost of the asset. All other borrowing
costs are expensed in the period in which
they occur.
Borrowing costs consist of interest and other
costs that an entity incurs in connection with
the borrowing of funds. Borrowing cost also
includes exchange differences to the extent
regarded as an adjustment to the borrowing
costs.
i. Impairment of Non-Financial Assets
The Company assesses, at each reporting date,
whether there is an indication that an asset
may be impaired. If any indication exists, or
when annual impairment testing for an asset
is required, the Company estimates the asset's
recoverable amount. An asset's recoverable
amount is the higher of an asset's or cash
generating units (CGU) fair value less costs of
disposal and its value in use. Recoverable
amount is determined for an individual asset,
unless the asset does not generate cash inflows
that are largely independent of those from
other assets or groups of assets. When the
carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future
cash flows are discounted to their present
value using a pre-tax discount rate that
reflects current market assessments of the time
value of money and the risks specific to the
asset. For the purpose of impairment testing,
assets that cannot be tested individually are
grouped together into the smallest group of
assets that generates cash inflows from
continuing use that is largely independent of
cash flows of other assets or group of assets
(CGU).
For assets excluding goodwill, an assessment is
made at each reporting date to determine
whether there is an indication that previously
recognised impairment losses no longer exist
or have decreased. If such indication exists, the
Company estimates the asset's or CGU's
recoverable amount. A previously recognised
impairment loss is reversed only if there has
been a change in the assumptions used to
determine the asset's recoverable amount since
the last impairment loss was recognised. The
reversal is limited so that the carrying amount
of the asset does not exceed its recoverable
amount, nor exceed the carrying amount that
would have been determined, net of
depreciation, had no impairment loss been
recognised for the asset in prior years. Such
reversal is recognised in the statement of profit
or loss unless the asset is carried at a revalued
amount, in which case, the reversal is treated as a
revaluation increase.
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