B Significant Accounting Policies
1.1 Basis of Preparation
These financial statements of the Company have been prepared in accordance with Indian
Accounting Standards (Ind ASs) as per the Companies (Indian Accounting Standards) Rules,
2015 as amended and notified under Section 133 of the Companies Act 2013 (the 'Act') and
other relevant provisions of the Act.
These financial Statements are prepared on an accrual basis under the historical cost
convention or amortised cost.
Since the income from financial assets does not constitute more than 50 percent of the gross
total income, the financial statements are prepared on other than Non-Banking Financial
Company and other than Investment Company basis.
These financial statements are presented in Indian Rupees (INR), which is also the Company’s
functional currency and all amounts are rounded off to the nearest lacs (INR'00,000) up to two
decimals, except when otherwise indicated.
Classification of Assets and Liabilities into Current/Non-current:
The Company presents assets and liabilities in the Balance Sheet based on Current/ Non-current
classification.
1.2 Statement of Cash Flows
Cash flows are reported using the indirect method, whereby net profit / (loss) for the period is
adjusted for the effects of transactions of non-cash nature, any deferrals or accruals of past or
future operating cash receipts or payments and items of income or expenses associated with
investing or financing cash flows. The cash flows from operating, investing and financing
activities of the Company are segregated.
For the purpose of presentation in the Statement of Cash Flows, cash and cash equivalents
include cash on hand, cash at banks, other short-term deposits and highly liquid investments
with original maturity of three months or less that are readily convertible into cash and which
are subject to an insignificant risk of changes in value.
1.3 Revenue Recognition
i. Revenue is recognised to the extent that it is probable that the economic benefits of a
transaction 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.
ii. Sale of Goods
Revenue from sale of goods is recognised upon transfer of significant risks and rewards
of ownership of the goods to the buyer, which is on dispatch of goods to buyer.
iii. Interest Income
Interest income from a financial asset is recognised when it is probable that the economic
benefits will flow to the Company and the amount of income can be measured reliably.
iv. Dividends
Dividend income from investments is recognised when the Company's right to receive
dividend is established, which is generally when shareholders approve the dividend.
1.4 Taxes on Income
Income tax expense represents the sum of the tax currently payable and deferred tax.
i. Current tax:
The tax currently payable is based on taxable profit for the year. Taxable profit differs
from 'profit before tax' as reported in the Statement of Profit and Loss because of items
of income or expense that are taxable or deductible in other years and items that are
never taxable or deductible. The Company's current tax is calculated using applicable tax
rates that have been enacted or substantively enacted by the end of the reporting period
and the provisions of the Income Tax Act, 1961 and other tax laws, as applicable.
ii. Deferred tax:
Deferred tax is recognised on temporary differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred tax liabilities are generally recognised for all
taxable temporary differences. Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that it is probable that taxable profits will
be available against which those deductible temporary differences can be utilised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable
right to offset current income tax assets against current income tax liabilities and when
deferred income tax assets and liabilities relate to the income tax levied by the same
taxation authority on either the same taxable entity or different taxable entities where
there is an intention to settle the balances on a net or simultaneous basis.
|