Significant Accounting Policies
1.01 Statement of Compliance:
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind-AS) notified under
Section 133 of Companies Act, 2013. The company has adopted Ind-AS w.e.f. 1st April, 2020.
Upto year ended 31st March, 2020 the company prepared its financial statements in accordance with previous GAAP,
which includes standards notified under Companies (Accounting Standards) Rules, 2006. The Date of Transition to Ind-
AS is 1st April, 2019. Details of exceptions and optional exemptions availed by the company and principal adjustments
along with related reconciliations are part of the financial statement.
1.02 Basis of Preparation :
The financial statements are prepared as per historical cost convemtion, except for certain items that are measured at fair values, as
mentioned in the accounting policies. Fair Value is the price that would be received or paid in an orderly transaction between market
participants at measurement date, regardless of whether the price is directly observable or estimated using valuation technique.
Fair value for measurement and / or disclosure purposes in these financial statements is determined on such a basis, except for
measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 - Inventories or
value in use in Ind AS 36 - Impairment of Assets.
1.03 Use of estimates and judgements and Estimation uncertainity
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and
assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities,the disclosure of
contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during
the year. Actual results could differ from those estimates. The estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that
period; they are recognised in the period of the revision and future periods if the revision affects both current and future periods.
1.04 First-time adoption of Ind AS - mandatory exemptions and optional exemption
Overall principle
The Company has prepared the opening balance sheet as per Ind AS as of 1st April 2019 ("the transition date") by
recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities
which are not permitted by Ind AS, by reclassifying items from Previous GAAP to Ind AS as required under Ind AS, and
applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to certain
exceptions and certain optional exemptions availed by the Company as mentioned below:
Deemed cost for property, plant and equipment and intangible assets : The Company has elected to measure property,
plant and equipment at its Previous GAAP carrying amount and use that Previous GAAP carrying amount as its deemed
cost at the date of transition to Ind AS.
1.05 Property, Plant & Equipment:
Property, Plant & Equipment are stated at cost less accumulated depreciation and impairment losses, if any. All direct expenses
attributable to acquisition and installation of assets are capitalized. The deemed cost of Property, Plant & Equipment as on 1st April,
2019 is the previous GAAP carrying values, as per option given under Para D7AA of Ind-AS 101.
1.06 Depreciation on Tangible Assets:
Depreciation on tangible assets accquired/disposed off is provided as per Straight Line Method on pro rata basis, with reference to
the date of addition or disposal based on useful life specified in Schedule 11 to the Companies Act, 2013.
1.07 Investment in Associate:
Investment in Associate is carried at fair value, if any.
1.08 Financial Instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
relevant instrument and are initially measured at fair value.
Financial Assests:-
Recognition: Financial assets include Investments, Advances, Security Deposits, Cash and cash equivalents. Such assets are initially
recognised at transaction price when the Company becomes party to contractual obligations. The transaction price includes
transaction costs unless the asset is being fair valued through the Statement of Profit and Loss except investment which has been fair
valued through other comprehensive income.
Classification: Management determines the classification of an asset at initial recognition depending on the purpose for which the
assets were acquired. The subsequent measurement of financial assets depends on such classification.
Financial assets are classified as those measured at:
(a) amortised cost, where the financial assets are held solely for collection of cash flows arising from payments of principal and/ or
interest
(b) fair value through other comprehensive income (FVTOCI), where the financial assets are held not only for collection of cash flows
arising from payments of principal and interest but also from the sale of such assets. Such assets are subsequently measured at fair
value, with unrealised gains and losses arising from changes in the fair value being recognised in other comprehensive income.
(c) fair value through profit or loss (FVTPL), where the assets are managed in accordance with an approved assets are managed in
accordance with an approved decisions based on the fair value of such assets. Such assets are subsequently measured at fair value,
with unrealised gains and losses arising from changes in the fair value being recognised in the Statement of Profit and Loss in the
period in which they arise.
Advances, Security Deposits, Cash and cash equivalents etc. are classified for measurement at amortised cost while investments may
fall under any of the aforesaid classes. However, in respect of particular investments in equity instruments that would otherwise be
measured at fair value through profit or loss, an irrevocable election at initial recognition may be made to present subsequent
changes in fair value through other comprehensive income.
Impairment: The Company assesses at each reporting date whether a financial asset (or a group of financial assets) such as
investments, advances at amortised cost and financial assets that are measured at fair value through other comprehensive income are
tested for impairment based on evidence or information that is available without undue cost or effort. Expected credit losses are
assessed and loss allowances recognised if the credit quality of the financial asset has deteriorated significantly since initial
recognition.
Non Performing Assets including loans & advances , receivables are identified as sub-standard, or doubtful or loss assets based on
the duration of delinquency, NPA provisions are not made as the same is not applicable to self registered core investment company.
Financial Liabilities
Borrowings and other financial liabilities are initially recognised at the value of the respective contractual obligations. They are
subsequently measured at amortised cost.
In accordance with the RBI Prudential Norms read with Indian Accounting Standard - 109 issued by the Institute of Chartered
Accountants of fndia notified by Central Government of India, Investments are stated at Fair Value.
Investments Property (if any) as defined in Ind AS-40, (Investment Property), have been accounted for in accordance with cost model
as prescribed.
1.09 Borrowing Costs:
Borrowing costs that are attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such
assets. All other borrowing costs are charged to revenue.
1.10 Taxation t
Provision for tax is made for both current and deferred taxes. Provision for current tax is made at the current tax rates based on
assessable income. Deferred taxes reflect the impact of current year's temporary differences between carrying values of asssets and
liabilties and its tax base, at the tax rates or tax laws enacted or substabtially enacted at the end of reporting period. Deferred tax
assets are recognized only to the extent that future taxable profits will be available against which deductible temporary difference
may be utilised.
1.11 Revenue recognition:
Recognition of interest income on loans Interest income is recognised in Statement of profit and loss using the effective interest
method as applicable for all financial instruments measured at amortised cost. The 'effective interest rate' is the rate that exactly
discounts estimated future cash payments or receipts through the expected life of the financial instrument. The calculation of the
effective interest rate includes transaction costs and fees that are an integral part of the contract. Transaction costs include
incremental costs that are directly attributable to the acquisition of financial asset. If expectations regarding the cash flows on the
financial asset are revised for reasons other than credit risk, the adjustment is recorded as a positive or negative adjustment to the
carrying amount of the asset in the balance sheet with an increase or reduction in interest income. The adjustment is subsequently
amortised through Interest income in the Statement of profit and loss.
Additional interest and interest on advances, are recognised when they become measurable and when it is not unreasonable to
expect their ultimate collection.
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