Basis of measurement
The financial statements have been prepared on the historical cost basis except for the following -
- Certain financial assets and liabilities (Shares, Derivative instruments etc) that are measured at fair value
- Share based payments
1.03 Functional and presentation currency
Items included in the financial statements of Company are measured using the currency of the primary
economic environment in which the Company operates ("the functional currency"). Indian rupee is the
functional currency of the Company.
1.04 Use of estimates
The preparation of financial statements in conformity of Ind AS requires management to make judgments,
estimates and assumptions that affect the application of accounting policies and the reported amounts of
assets, liabilities, the disclosures of contingent assets and contingent liabilities at the date of financial
statements, income and expenses during the period. Actual results may differ from these estimates. Estimates
and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in future periods which are affected.
Application of accounting policies that require critical accounting estimates and assumption having the most
significant effect on the amounts recognised in the financial statements are:
Valuation of financial instruments
Valuation of derivative financial instruments
Useful life of property, plant and equipment
Useful life of investment property
Provisions
Recoverability of trade receivables
Summary of significant accounting policies
1.05 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 primarily 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 as 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 due to be settled within twelve months after the reporting period, or
- 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.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and
cash equivalents. The Company has identified twelve months as its operating cycle.
1.06 Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair
value measurement as a whole:
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable.
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company
determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
The Company's Management determines the policies and procedures for both recurring fair value
measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non¬
recurring measurement, such as assets held for distribution in discontinued operations.
At each reporting date, the Management analyses the movements in the values of assets and liabilities which
are required to be remeasured or re-assessed as per the Company's accounting policies. For this analysis, the
Management verifies the major inputs applied in the latest valuation by agreeing the information in the
valuation computation to contracts and other relevant documents.
The Management also compares the change in the fair value of each asset and liability with relevant external
sources to determine whether the change is reasonable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the
basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as
explained above.
This note summarises accounting policy for fair value. Other fair value related disclosures are given in the
relevant notes.
Disclosures for valuation methods, significant estimates and assumptions.
Financial instruments (including those carried at amortised cost).
1.07 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.
Reven ue from sale of goods -
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as
revenue are net of GST, value added taxes, service tax, discounts, rebates and incentives. The Company
recognises revenue when the amount of revenue can be reliably measured and it is probable that future
economic benefits will flow to the Company.
Interest and dividend income -
The interest and dividends are recognised only when no uncertainty as to measurability or collectability exists.
Interest on fixed deposits is recognised on time proportion basis taking into account the amount outstanding
and the rate applicable.
1.08 Inventories
Inventories are valued at the lower of cost or net realisable value.
1.09 Foreign currency transactions and translation
i) Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign currencies are translated in functional currency at
closing rates of exchange at the reporting date.
ii) Exchange differences arising on settlement or translation of monetary items recognised in statement of profit
and loss.
1.10 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 Company determines the tax as per the provisions of Income Tax Act 1961 and
other rules specified thereunder.
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.
1.11 Deferred tax
Deferred tax is provided in full using the liability method on temporary differences between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that
taxable profit will be available against which the deductible temporary differences, and the carry forward of
unused tax credits and unused tax losses can be utilised, except when the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that
is not a business combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that
it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in
other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying
transaction either in OCI or directly in equity .
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
1.12 a) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and where applicable
accumulated impairment losses. Property, plant and equipment and capital work in progress cost include
expenditure that is directly attributable to the acquisition of the asset. The cost of self-constructed assets
includes the cost of materials, direct labour and any other costs directly attributable to bringing the asset to a
working condition for its intended use, and the costs of dismantling and removing the items and restoring the
site on which they are located. Purchased software that is integral to the functionality of the related equipment
is capitalized as part of that equipment.
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 Cost
The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of
the item if it is probable that the future economic benefits embodied within the part will flow to the Company
and its cost can be measured reliably. The carrying amount of the replaced part is de-recognised and charged to
the statement of Profit and Loss. The costs of the day-to-day servicing of property, plant and equipment are
recognised in the Statement of Profit and Loss.
b) Intangible assets
Intangible assets are stated at cost less accumulated amortisation and impairment loss. The system software
which is expected to provide future enduring benefits is capitalised. The capitalised cost includes license fees
and cost of implementation/system integration.
Depreciation and amortisation
The depreciation on tangible assets is provided at the rates and in manner prescribed under Part C of Schedule
II to the Companies Act 2013.
The Company Follow WDV Method For Depreciation.
Computer software is amortised over a period of 5 years.
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.
Derecognition of assets
An item of property plant & 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 is included in the income statement when the asset is derecognised.
1.13 Investment property
Property that is held for long term rental yield or for capital appreciation or both, and that is not occupied by
the Company, is classified as Investment property. Investment properties measured initially at cost including
related transitions cost and where applicable borrowing cost. Subsequent expenditure is capitalised to the
assets carrying amount only when it is probable that future economic benefits associated with the expenditure
will flow to the entity and the cost of the item can be measured reliably. All other repairs and maintainance
costs are expensed when incurred. When part of an investment property is incurred the carrying amount of
replaced part is derecognised.
Investment properties other than land are depreciated using SLM method over the estimated useful life of
assets prescribed by the Schedule II to the Companies Act 2013 i.e. 60 years.
1.14 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production 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.
1.15 Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by
the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company
or a present obligation that is not recognised because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a
liability that cannot be recognised because it cannot be measured reliably. The contingent liability is not
recognised in books of account but its existence is disclosed in financial statements.
1.16 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 unit's
(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 Company's 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.
Company has written off Fixed Assets during the year as according to management all this assets are not in
existense & written off long back in its books and presently standing at zero value.
|