Accounting Policies of Ugro Capital Ltd. Company
Mar 31, 2022
1. Significant Accounting Policies
(1) Statement of compliance
The financial statements have been prepared in accordance with the provisions of the Companies Act, 2013 and the Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) issued by the Ministry of Corporate Affairs in exercise of the powers conferred by section 133 of the Companies Act, 2013. In addition, the guidance notes/announcements issued by the Institute of Chartered Accountants of India (ICAI) are also applied along with compliance with other statutory promulgations which require a different treatment. Any directions issued by the RBI or other regulators are implemented as and when they become applicable.
Further, the Company has complied with all the directions related to Implementation of Indian Accounting Standards prescribed for Non-Banking Financial Companies (NBFCs) in accordance with the RBI notification no. RBI/2019-20/170 DOR NBFC).CC.PD.No.109/22.10.106/2019-20 dated 13 March 2020.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to the existing accounting standard requires a change in the accounting policy hitherto in use.
(2) Basis of preparation
The financial statements have been prepared on a historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values at the end of each reporting period as explained in the accounting policies below.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company considers the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/ or disclosure purposes in these financial statements is determined on this basis.
Fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety.
⢠Level 1:Level 1 hierarchy includes financial instruments measured using quoted prices.;
⢠Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and place limited reliance on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.; and
⢠Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level.
(3) Application of new and revised Ind AS
All the Ind AS issued and notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorised for issue have been considered in preparing these financial statements.
(4) Presentation of financial statements
The Balance Sheet, the Statement of Changes in Equity and the Statement of Profit and Loss are prepared and presented in the format prescribed in the Division III to Schedule III to the Companies Act, 2013 ("the Actâ) applicable for Non-Banking Financial Companies ("NBFCâ). The Statement of Cash Flows has been prepared and presented as per the requirements of Ind AS 7 "Statement of Cash Flowsâ. The disclosure requirements with respect to items in the Balance Sheet and Statement of Profit and Loss, as prescribed in the Schedule III to the Act, are presented by way of
notes forming part of the financial statements along with the other notes required to be disclosed under the notified accounting Standards and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
(5) Functional and presentation currency
These financial statements are presented in Indian rupees (INR or Rs.) which is also the Company''s functional currency. All accounts are rounded-off to the nearest lakhs with two decimals, unless otherwise stated.
(6) Use of estimates and judgements
The preparation of financial statements in conformity with Ind AS requires management to make estimates, judgements and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities (including contingent liabilities) and disclosures as of the date of the financial statements and the reported amounts of revenue and expenses for the reporting period. Actual results could differ from these estimates. Accounting estimates and underlying assumptions are reviewed on an ongoing basis and could change from period to period. Appropriate changes in estimates are recognised in the periods in which the Company becomes aware of the changes in circumstances surrounding the estimates. Any revisions to accounting estimates are recognised prospectively in the period in which the estimate is revised and future periods.
(7) Property, plant and equipment
Tangible property,plant and equipment are stated at cost less accumulated depreciation and impairment, if any. The cost of an item of property, plant and equipment is recognised if it is probable that future economic benefits associated with the item will flow to the company and the cost thereof can be measured reliably. All property, plant and equipment are initially recognised at cost. Cost comprises the purchase price and any directly attributable cost to bring the asset to its working condition for its intended use. Subsequent expenditure incurred on assets put to use is capitalised only when it increases the future economic benefits/ functioning capability from/ of such assets. Advances paid towards acquisition of property, plant and equipment, outstanding at each balance sheet date is classified as capital advances under other non-financial assets and the cost of assets not put to use before such date are disclosed under Capital work-in-progress.
Depreciation is recognised so as to write-off the cost of assets less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each financial year, with the effect of any changes in estimate accounted for on a prospective basis. Assets purchased during the year are depreciated on the basis of actual number of days the asset has been put to use in the year. Assets individually costing Rs. 5,000/- or less are fully depreciated in the year of purchase.
Estimated useful life of assets is as below:
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category of PPE |
Estimated useful life as assessed by the company |
Estimated useful life under Schedule II to the Act |
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Office Equipments |
5 years |
5 years |
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Computer |
3 years |
3 years |
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Leasehold improvements |
Tenure of lease agreements |
Tenure of the lease agreements |
|
Furniture fixture and fittings |
10 years |
10 years |
The residual values, useful life and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Changes in the expected useful life are accounted for by changing the depreciation period or methodology, as appropriate and treated as changes in accounting estimates.
The Management believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the statement of profit and loss.
(8) Intangible assets
Intangible assets are recognised when it is probable that the future economic benefits that are attributable to the asset will flow to the enterprise and the cost of the asset can be measured reliably. Intangible assets are stated at original cost netof tax/duty credits availed, if any, less accumulated amortisation and cumulative impairment. Direct expenses (including salary costs) and administrative and other general overhead expenses that are specifically attributable to acquisition of intangible assets are allocated and capitalised as a part of the cost of the intangible assets.
Intangible assets not ready for the intended use on the date of the Balance Sheet are disclosed as "Intangible assets under developmentâ.
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each financial year, with the effect of any changes in estimate being accounted for on a prospective basis.
Estimated useful life ofSoftware is 5 years.
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, 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.
(9) Impairment of tangible and intangible assets
The Company assesses at each Balance Sheet date whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. The recoverable amount is the higher of an asset''s net selling price and its value in use. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the Statement of Profit and Loss. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation/amortisation if there were no impairment.
(10) Revenue recognition
Revenue(other than those items to which Ind AS 109 Financial Instruments is applicable) is measured at fair value for the consideration received or receivable. Amounts disclosed as revenue are net of goods and services tax (''GST'') and amounts collected on behalf of third parties. Ind AS 115 Revenue from Contracts with Customers outlines a single comprehensive model of accounting for revenue arising from contracts with customers.
The Company recognizes revenue from contracts with customers based on a five-step model as set out in Ind AS 115:
Step 1: Identify contract(s) with a customer: A contract is defined as an agreement between two or more parties that creates enforceable rights and obligations and sets out the criteria for every contract that must be met.
Step 2: Identify performance obligations in the contract: A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.
Step 3: Determine the transaction price: The transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties.
Step 4: Allocate the transaction price to the performance obligations in the contract: For a contract that has more than one performance obligation, the Company allocates the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Company expects to be entitled in exchange for satisfying each performance obligation.
Step 5: Recognise revenue when(or as) the Company satisfies a performance obligation.
Specific policies for the Company''s different sources of revenue are explained below:
(i) 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. Interest income is accrued on a time
proportionate basis, by reference to the principal outstanding and at the effective interest rate applicable. The effective interest rate is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
The interest income is calculated by applying the Effective Interest Rate (EIR) Method to the gross carrying amount of non-credit impaired financial assets (i.e. at the amortised cost of the financial asset before adjusting for any expected credit loss allowance). For credit-impaired financial assets the interest income is calculated by applying the Effective Interest Rate (EIR) Method to the amortised cost of the credit-impaired financial assets (i.e. the gross carrying amount less the allowance for expected credit losses (ECLs)).
(ii) Other Financial Charges
Cheque bouncing charges, pre- payment charges, foreclosure charges and initial margin moneyetc. are recognised on a point-in-time basis and are recorded when realised, since the probability of collecting such monies is established when the customer pays.
Dividend Income is recognised once the unconditional right to receive the dividend is established (provided that it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably).
(iv) Net gain or fair value change:
Any differences between the fair values of the financial assets classified as fair value through the profit or loss, held by the Company on the balance sheet date is recognised as an unrealised gain/loss in the statement of profit and loss. In cases there is a net gain in aggregate, the same is recognised in "Net gains or fair value changesâ under revenue from operations and if there is a net loss the same is disclosed under "Expensesâ, in the statement of profit and loss.
(v) Advisory Fees and Other Income:
Advisory fees and Other Income are recognised when the company satisfies the performance obligation at fair value of the consideration received or receivable. The Company recognises such revenue from contracts with customers based on a five-step model as set out in Ind AS 115.
(vi) Income from de-recognition of assets:
Gains arising out of de-recognitiontransactions comprise the difference between the interest on the loan portfolio and the applicable rate at which the transaction is entered into with the transferee, also known as the right of excess interest spread (EIS). The future EIS basis the scheduled cash flows on execution of the transaction, discounted at the applicable rate entered into with the transferee is recorded upfront in the statement of profit and loss. EIS is evaluated and adjusted for ECL and expected prepayment.
The Company follows Ind AS 116-Leases for accounting for contracts which are in the nature of leases. Lease liabilities are measured at the present value of the contractual payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the Company''s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate.
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The Company accounts for each lease component within the contract as a lease separately from non-lease components of the contract and allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate stand-alone price of the non-lease components.
The Company recognises right-of-use asset representing its right to use the underlying asset for the lease term at the lease commencement date. The right-of-use assets are depreciated using the straight-line method from the commencement date over the lease term. Right-of-use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognised in the statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of the lease. The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications or to reflect revised in-substance fixed lease payments.
The Company recognises the amount of the re-measurement of lease liability as an adjustment to the right-of-use asset. Where the carrying amount of the right-of-use asset is reduced to zero and there is a further reduction in the measurement of the lease liability, the Company recognises any remaining amount of the re-measurement in the statement of profit and loss.
The Company has elected not to apply the requirements of Ind AS 116 to short-term leases of all assets that have a lease term of 12 months or less and leases for which the underlying asset is of low value. The lease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.
The Company does not have leases that were classified as finance leases. Hence, there is no impact on application of this standard.
The Company does not have any lease agreement in which it is a lessor. Hence, there is no impact on application of this standard.
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current Tax is determined at the amount of tax payable in respect of taxable profit for the year as per the Incometax Act, 1961. Taxable profit differs from ''profit before tax'' as reported in the financial 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 entity''s current tax is calculated using tax rate that has been enacted by the end of the reporting period.
(12.2) 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 tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflect the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set-off the current tax assets against the current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
(12.3) current and deferred tax for the year
Current and deferred tax are recognised in the statement of profit and loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other comprehensive income or directly in equity respectively.
(12.4) Minimum alternate tax (MAT)
Minimum alternate tax (MAT) paid in accordance with the tax laws, is recognised as an asset in the Balance Sheet when it is probable that the future economic benefit associated with it will flow to the Company.
(13) Employee Benefits(13.1) Retirement benefit costs and termination benefitsDefined contribution plans -
Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.
The state governed provident fund scheme, employee state insurance scheme and National Pension Scheme (NPS) are defined contribution plans.
For defined benefit plans in the form of gratuity, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is recognised in the statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows:
⢠service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
⢠net interest expense or income; and
⢠re-measurement
The Company presents the first two components of defined benefit costs in the statement of profit and loss in the line item ''Employee benefits expense''. Curtailment gains and losses are accounted for as past service costs.
The present value of the defined benefit plan liability is calculated using a discount rate which is determined by reference to market yields at the end of the reporting period on government bonds.
(13.2) Short term and other long-term employee benefits
A liability is recognized for benefits accruing to employees in respect of salaries and annual leave in the period, the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related service.
Liabilities recognized in respect of other long-term employee benefits are measured at the present value of estimated future cash outflows expected to be made by the Company in respect of services provided by employees up to the reporting date.
The cost of short-term compensated absences is accounted as under:
(i) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and
(ii) in case of non-accumulating compensated absences, when the absences occur.
(13.3) Compensatory Payments (Loss of Earned Bonus)
The company amortizes the compensatory payments over the period of twelve months, since amount is recoverable if an employee leaves the organization withina year.
The Company recognizes compensation expense relating to share-based payments in the statement of profit and loss using fair value in accordance with Ind AS 102 - Share-based payments. The estimated fair value of the award is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding amount. The Company has switched from Black-Scholes Model to the Binomial Model for assessing the fair value of the options on the grant date during the year. The share price of the Company was simulated using a binomial model. The simulation was done from each valuation date to maturity of the ESOP.
Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company''s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve. If a grant lapses after the vesting period, the cumulative discount recognised as expense in respect of such grant is transferred to the general reserve within equity.
Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.
Finance costs include interest and other ancillary borrowing costs. Ancillary costs include issue costs such as loan processing fee, arranger fee, stamping expense and rating expense etc. The Company recognises interest expense and other ancillary cost on the borrowings as per Effective Interest Rate Method, which is calculated by considering any ancillary costs incurred and any premium payable on its maturity.
Finance costs are charged to the Statement of Profit and Loss.
(15) Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, considering the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (when the effect of the time value of money is material).
A Contingent liability is disclosed unless the possibility of an outflow of resources embodying the economic benefits is remote. Contingent assets are neither recognised nor disclosed in the Financial Statements.
Provisions, contingent liabilities and contingent assets are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.
Commitments are future liabilities for contractual expenditure, classified and disclosed as follows:
(a) estimated amount of contracts remaining to be executed on capital account and not provided for;
(b) uncalled liability on shares and other investments partly paid;
(c) funding related commitment to associate companies; and
(d) other non-cancellable commitments, if any, to the extent they are considered material and relevant in the opinion of management.
(17) Foreign currencies
(i) The functional currency and presentation currency of the Company is Indian Rupee (INR). Functional currency of the Company has been determined based on the primary economic environment in which the Company operates considering the currency in which funds are generated, spent and retained.
(ii) Transactions in currencies other than the Company''s functional currency are recorded on initial recognition using the exchange rate at the transaction date. At each Balance Sheet date, foreign currency monetary items are reported at the prevailing closing spot rate. Non-monetary items that are measured in terms of historical cost in foreign currency are not retranslated.
Exchange differences that arise on settlement of monetary items or on reporting of monetary items at each Balance Sheet date at the closing spot rate are recognised in the Statement of Profit and Loss in the period in which they arise.
(18) Cash and cash equivalents
Cash and cash equivalents include cash at banks and cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to know amounts of cash and which are subject to an insignificant risk of changes in value.
(19) Segment reporting
Operating segments are those components of the business whose operating results are regularly reviewed by the chief operating decision making body in the Company to make decisions for performance assessment and resource allocation. The reporting of segment information is the same as provided to the management for the purpose of the performance assessment and resource allocation to the segments. Segment accounting policies are in line with the accounting policies of the Company.
(20.1) Recognition of financial instruments
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the financial instruments.
(20.2) Initial measurement of financial instruments
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at FVTPL) are added to or deducted from their respective fair value on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at FVTPL are recognised immediately in the statement of profit and loss.
A financial asset and a financial liability is offset and presented on a net basis in the balance sheet when there is a current legally enforceable right to set-off the recognised amounts and it is intended to either settle on net basis or to realise the asset and settle the liability simultaneously.
(20.3) classification and subsequent measurement of financial instruments
All regular way purchases or sales of financial assets are recognised and derecognised on a trade-date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
(20.3.1.1) Financial assets carried at amortised cost (Ac)
A financial asset is measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at amortised cost (except for debt instruments that are designated as at fair value through profit or loss on initial recognition)
⢠the asset is held within a business model whose objective is to hold assets in order to collect contractual cash flows; and
⢠the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Effective Interest Rate Method
The Effective Interest Rate Method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The Effective Interest Rate is the rate that exactly discounts estimated future cash receipts (including all fees that form an integral part of the effective interest rate, transaction costs and premiums or discounts) through the expected life of the instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.
(20.3.1.2) Financial assets at fair value through other comprehensive income (FVTOCI)
A financial asset is measured at FVTOCI if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Debt instruments that meet the following conditions are subsequently measured at fair value through other comprehensive income (except for debt instruments that are designated as at fair value through profit or loss on initial recognition):
⢠the asset is held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets; and
⢠the contractual terms of the instrument give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Movements in the carrying amount of such financial assets are recognised in other comprehensive income (OCI). When the investment is disposed of, the cumulative gain or loss previously accumulated in this reserve is reclassified to the statement of profit and loss.
(20.3.1.3) Financial assets at fair value through profit or loss (FVTPL)
A financial asset which is not classified in any of the above categories is measured at FVTPL.
Debt instruments that do not meet the amortised cost criteria or FVTOCI criteria are measured at FVTPL. In addition, debt instruments that meet the amortised cost criteria or the FVTOCI criteria but are designated at FVTPL are measured at FVTPL.
A financial asset that meets the amortised cost criteria or debt instruments that meet the FVTOCI criteria may be designated at FVTPL upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities or recognising the gains and losses on them on different bases. The Company has not designated any debt instrument at FVTPL.
Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any gains or losses arising on remeasurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ''Revenue from operations'' line item.
(20.4) Impairment of financial asset
The Company applies the expected credit loss model for recognising impairment loss on financial assets measured at amortised cost, debt instruments at FVTOCI and other contractual rights to receive cash or other financial assets.
Expected credit losses are the weighted average of credit losses with the respective risks of default occurring as the weights. Credit loss is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). The Company estimates cash flows by considering all contractual terms of the financial instrument (for example, prepayment, extension, call and similar options) through the expected life of that financial instrument.
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category of financial instrument |
Manner of recognition of loss allowance |
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Financial assets measured at amortised cost |
Recognised in profit or loss with corresponding adjustment in the carrying value through a loss allowance account. |
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Debt investments measured at FVTOCI |
Recognised in profit or loss with corresponding adjustment in OCI. The loss allowance is accumulated in the ''Reserve for debt instruments through OCI'', and is not adjusted with the carrying value of the financial asset |
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Impairment methodology: Overall impairment methodology |
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Particulars |
Stage 1 (Performing) |
Stage 2 (Under-performing) |
Stage 3 (Non-performing) |
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Credit quality |
Not deteriorated significantly since its initial recognition. |
Deteriorated significantly since its initial recognition |
Objective evidence of impairment |
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ECL model |
PD / LGD Model |
PD / LGD Model |
Cash flow model |
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ECL |
12-month ECL |
Life-time ECL |
Life-time ECL |
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ECL Computation |
(PD * LGD * EAD) |
(PD * LGD * EAD) |
Expected Cash Flow basis |
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A) For loans, cash credit and term loans measured at amortised costa) Definition of default:
A default shall be considered to have occurred when any of the following criteria are met:
a) An asset is more than 90 days past due
b) If one facility of borrower is NPA, all the facilities of that borrower are to be treated as NPA.
For the purpose of counting of days past due for the assessment of default, special dispensations in respect of any class of assets, if any (e.g. under COVID-19 relief package of RBI) are applied in line with the notification by the RBI in this regard.
b) Portfolio segmentation:
The entire portfolio is segmented into homogenous risk segments. Common factors for segmentation includes asset classes, internal rating grade, size, geography, product etc.
c) Probability of Default (PD):
12-month PD for all the sectors except Onward Lending to NBFCs:
PD is the likelihood of a borrower defaulting on its obligations within a given interval of time. PD is computed based on the default analysis conducted by external credit bureau for all the sectors (except onward lending) at individual facility level and 12 months default percentage arrived score wise and sector wise for all the sectors.
To compute a 12-month PD for each sector, sector-wise and score-wise default rates as provided by the external credit bureau which is taken as base and calibration model is used to derive the default rates score-wise on the basis of decreasing ranks of scores. The above process is followed for all the sectors to derive score-wise and sector specific default rates which will be used as 12-month PD.
12-month PD for Onward Lending to NBFCs:
For Onward Lending, average of PD above investment grades provided by CRISIL for NBFC specific sector has been considered as PD.
Life-time PD:
Life-time PD is applied for Stage 2 accounts.
Life-time PDs are computed based on survival approach. Survival analysis is statistics for analyzing the expected duration of time until default event happens.
Life-time PD is computed = (1 - (Probability of surviving in year 1) ~ remaining tenure)
d) Loss given default:
Loss given default (LGD) represents recovery from defaulted assets. Foundational-Internal Rating Based (F-IRB) approach is used for the LGD computation.
(20.5) Derecognition of financial assets
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party.
If the Company enters into transactions whereby it transfers assets recognised on its balancesheet but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not de-recognised and the proceeds received are recognised as a collateralised borrowing.
On derecognition of a financial asset in its entirety, the difference between the asset''s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in the statement of profit and loss.
(20.6) Financial liabilities and equity instruments
(20.6.1) classification as debt or equity
Debt and equity instruments issued by the Company are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
(20.6.2) Equity instruments
An Equity Instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
(20.6.3) compound financial instruments
The component parts of compound financial instruments issued by the Company are classified separately as financial liabilities and equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument. A conversion option that will be settled by the exchange of a fixed amount of cash or another financial asset for a fixed number of the Company''s own equity instruments is an equity instrument.
At the date of issue, the fair value of the liability component is estimated using the prevailing market interest rate for similar non-convertible instruments. This amount is recognised as a liability on an amortised cost basis using the effective interest rate method until extinguished upon conversion or at the instrument''s maturity date.
(20.6.4) Financial Liabilities
A financial liability is any liability that is:
⢠Contractual obligation:
⢠to deliver cash or another financial asset to another entity; or
⢠to exchange financial assets or financial liabilities with another entity under conditions that are potentially unfavourable to the entity; or
⢠a contract that will or may be settled in the entity''s own equity instruments
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at FVTPL.
The Company has not designated any financial liabilities at FVTPL.
The Company derecognises financial liabilities when, and only when, the Company''s obligations are discharged, cancelled or have expired. An exchange with a lender of debt instruments with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in the statement of profit and loss.
Loans and debt securities are written-off when the Company has no reasonable expectations of recovering the financial asset (either in its entirety or a portion of it). This is the case when the Company determines that the borrower does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the write-off. A write-off constitutes a de-recognition event. The Company may apply enforcement activities to financial assets written-off. Recoveries resulting from the Company''s enforcement activities will result in impairment gains.
(21) Derivative financial instruments
The Company enters into derivative financial instruments to manage its exposure to interest rate risk and foreign exchange rate risk. Derivatives held include cross currency interest rate swaps.
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each balance sheet date. The resulting gain/loss is recognised in the statement of profit and loss immediately unless the derivative is designated and is effective as a hedging instrument, in which event the resulting gain/loss is recognised through other comprehensive income (OCI). The Company designates certain derivatives as hedges of highly probable forecast transactions (cash flow hedges). A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability.
(22) Hedge accounting policy
The Company makes use of derivative instruments to manage exposures to interest rate and foreign currency. In order to manage particular risks, the Company applies hedge accounting for transactions that meet specific criteria. At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the Company''s risk management objective and strategy for undertaking hedge, the hedging / economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the Company would assess the effectiveness of changes in the hedging instrument''s fair value in offsetting the exposure to changes in the hedged item''s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they were designated.
(23) cash flow hedges
A cash flow hedge is a hedge of the exposure to variability in cash flows that is attributable to a particular risk associated with a recognised asset or liability (such as all or some future interest payments on variable rate debt) or a highly probable forecast transaction and could affect the statement of profit and loss. For designated and qualifying cash flow hedges, the effective portion of the cumulative gain or loss on the hedging instrument is initially recognised directly in OCI within equity (cash flow hedge reserve). The ineffective portion of the gain or loss on the hedging instrument is recognised immediately in Finance Cost in the statement of profit and loss. When the hedged cash flow affects the statement of profit and loss, the effective portion of the gain or loss on the hedging instrument is recorded in the corresponding income or expense line of the statement of profit and loss. When a hedging instrument expires, is sold, terminated, exercised, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss that has been recognised in OCI at that time remains in OCI and is recognised when the hedged forecast transaction is ultimately recognised in the statement of profit and loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in OCI is immediately transferred to the statement of profit and loss.
The Company''s hedging policy only allows for effective hedging relationships to be considered as hedges as per the relevant IndAS. Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Company enters into hedge relationships where the critical terms of the hedging instrument match with the terms of the hedged item, and so a qualitative and quantitative assessment of effectiveness is performed.
(24) Key accounting judgements and key sources of estimation uncertainty
The preparation of financial statements in conformity with Ind AS requires that the management of the Company makes estimates and assumptions that affect the reported amounts of income and expenses of the period, the reported balances of assets and liabilities and the disclosures relating to contingent liabilities as of the date of the financial statements. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimatesinclude useful lives of property, plant and equipment & intangible assets, expected credit loss on loan books, future obligations in respect of retirement benefit plans, fair value measurement etc. Difference, if any, between the actual results and estimates is recognised in the period in which the results are known.
(25) Earnings per share
Basic earnings per share is computed by dividing the profit/ (loss) after tax by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit/ (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date.
(26) cash flow statement
The statement of cash flows shows the changes in cash and cash equivalents arising during the year from operating activities, investing activities and financing activities.
The cash flows from operating activities are determined by using the indirect method. Net income is therefore adjusted by non-cash items, such as measurement gains or losses, changes in provisions, impairment of property, plant and equipment and intangible assets, as well as changes from receivables and liabilities. In addition, all income and expenses from cash transactions that are attributable to investing or financing activities are eliminated.
Cash and cash equivalents (including bank balances) shown in the Statement of Cash Flows exclude items which are not available for general use as on the date of Balance Sheet.
(27) Standards issued but not yet effective
No new standard as notified by Ministry of Corporate Affairs ("MCAâ), through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules are effective for the current year.
2. corporate Information
UGRO Capital Limited (''the Company''), is a public limited company domiciled in India and incorporated under the provisions of Companies Act, 1956. The Company is a systemically important non-deposit taking Non-Banking Financial Company (''NBFC-ND-SI'') as defined under Section 45-IA of the Reserve Bank of India Act, 1934. The Company is registered with effect from March 11, 1998 having Registration No. 13.00325. The Company is engaged in the business of lending and primarily deals in financing MSME sector with focus on Healthcare, Education, Chemicals, Food Processing/FMCG, Hospitality, Electrical Equipment & Components, Auto Components and Light Engineering segments.
Mar 31, 2018
Notes forming part of the financial statements for the year ended March 31, 2018 Note 1
1. SIGNIFICANT ACCOUNTING POLICIES:
A. Basis Of Preparation Of Financial Statements
These financial statements have been prepared to comply with the Generally Accepted Accounting Principles in India (Indian GAAP), including the Accounting Standards notified under the relevant provisions of the Companies Act, 2013. The financial statements are prepared on accrual basis under the historical cost convention.
B. Use Of Estimates
The preparation of financial statements in conformity with Indian GAAP requires judgments, estimates and assumptions to be made that affect the reported amount of assets and liabilities, disclosure of contingent liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known/materialized.
C. Fixed Assets:
Company has no Fixed Assets.
D. Depreciation:
As the Company do not have any Fixed Assets, the question of depreciation does not arise.
E. Investments
There are no current investments in the current financial year. Non Current investments are stated at cost.
F. Taxation:
Income Tax expense comprises of current tax and deferred tax, charge or credit. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realization/liabilities.
G. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
H. Income:
Interest on Loans and Other financial instruments are accounted for on accrual basis.
Recognition of Expenditure:
Revenue Expenditure is accounted for on accrual basis.
I. Provisions, Contingent Liabilities And Contingent Assets
Provision is recognized in the accounts when there is a present obligation as a result of past event(s) and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Contingent liabilities are disclosed unless the possibility of outflow of resources is remote.
Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
A. Basis Of Preparation Of Financial Statements
These financial statements have been prepared to comply with the
Generally Accepted Accounting Principles in India (Indian GAAP),
including the Accounting Standards notified under the relevant
provisions of the Companies Act, 2013. The financial statements are
prepared on accrual basis under the historical cost convention.
B. Use Of Estimates
The preparation of financial statements in conformity with Indian GAAP
requires judgements, estimates and assumptions to be made that affect
the reported amount of assets and liabilities, disclosure of contingent
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known/materialised.
C. Fixed Assets:
Company has no Fixed Assets.
D. Depreciation:
As the Company do not have any Fixed Assets, the question of
depreciation does not arise.
E. Investments
Current investments are carried at lower of cost and quoted/fair value,
computed category-wise. Non Current investments are stated at cost.
Provision for diminution in the value of Non Current investments is
made only if such a decline is other than temporary.
F. Taxation:
Income Tax expense comprises of current tax and deferred tax, charge or
credit. The deferred charge or credit is recognized using current tax
rates. Where there is unabsorbed or carry forward depreciation,
deferred tax assets are recognized only if there is virtual certainty
of realisation of such assets. Other deferred tax assets are recognised
only to the extent there is reasonable certainty of realisation in
future. Deferred tax assets/ liabilities are reviewed as at each
Balance Sheet date based on developments during the year and available
case laws to reassess realization/liabilities.
G. Inventories:
Stocks of shares, securities and commodities have been valued at cost
or market value whichever is lower.
H. Income:
Interest on Loans and Other financial instruments are accounted for on
accrual basis.
I. Recognition of Expenditure:
Revenue Expenditure is accounted for on accrual basis.
J. Provisions, Contingent Liabilities And Contingent Assets
Provision is recognized in the accounts when there is a present
obligation as a result of past event(s) and it is probable that an
outflow of resources will be required to settle the obligation and a
reliable estimate can be made. Provisions are not discounted to their
present value and are determined based on the best estimate required to
settle the obligation at the reporting date. These estimates are
reviewed at each reporting date and adjusted to reflect the current
best estimates. Contingent liabilities are disclosed unless the
possibility of outflow of resources is remote. Contingent assets are
neither recognised nor disclosed in the financial statements.
Mar 31, 2014
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical
cost convention in accordance with the generally accepted accounting
policies, and the provisions of the Companies Act, 1956 as adopted
consistently by the Company.
b) Accounting policies not specifically referred otherwise are
consistent and in consistence with generally accepted accounting
principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the
financial statements are recognized on accrual system.
III. Fixed Assets:
Company has no Fixed Assets.
IV. Depreciation:
Company does not have any Fixed Assets. Therefore, no depreciation is
provided.
V. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit.
The deferred charge or credit is recognized using current tax rates.
Where there is unabsorbed or carry forward depreciation, deferred tax
assets are recognized only if there is virtual certainty of realisation
of such assets. Other deferred tax assets are recognised only to the
extent there is reasonable certainty of realisation in future. Deferred
tax assets/ liabilities are reviewed as at each Balance Sheet date
based on developments during the year and available case laws to
reassess realization/liabilities.
VI Inventories:
Stocks of shares, securities and Commodities have been valued at cost
or market value whichever is lower.
VII. Income:
Interest on Inter Corporate Deposits, Loan and other financial services
are accounted for on accrual basis.
VIII. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
Mar 31, 2013
I. Basis of preparation of financial statements:
The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognized on accrual system.
III. Fixed Assets:
Company does not have any Fixed Assets.
IV. Depreciation:
Company does not have any Fixed Assets. Therefore, no depreciation is provided.
V. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realization/liabilities.
VI. Inventories:
Stocks of shares, securities and Commodities have been valued at cost or market value whichever is lower.
VII. Income:
Interest on Inter Corporate Deposits, Loan and other financial services are accounted for on accrual basis.
VIII. Recognition of Expenditure.
Revenue expenditure is accounted for on accrual basis.
IX. Miscellaneous Expenditure:
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2012
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and , the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognized on accrual system.
III. Fixed Assets:
Company does not have any Fixed Assets.
IV. Depreciation:
Company does not have any Fixed Assets. Therefore, no depreciation is provided.
V. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
VII. Inventories:
Stocks of shares, securities and Commodities have been valued at cost or market value whichever is lower.
VIII. Income:
Interest on Inter Corporate Deposits, Loan and other financial services are accounted for on accrual basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure:
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2011
1. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
2. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognized on accrual system.
3. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
4. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956..
5. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
6. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
7. Income:
Interest on debentures and dividend on shares are accounted for on receipt basis.
8. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
9. Miscellaneous Expenditure: -
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2010
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognized on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method,at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956..
V. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
VI. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income:
Interest on debentures and dividend on shares are accounted for on receipt basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure: -
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2009
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognized on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956. .
V. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognized using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognized only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
VII. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income:
Interest on debentures and dividend on shares are accounted for on receipt basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure: -
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2008
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956.
V. Investments:
Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognised using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
VII. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income: Interest
Interest on debentures and dividend on shares are accounted for on receipt basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure: -
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2007
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956.
V. Investments:
Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognised using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/ liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation / liabilities.
VII. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. incbme: Interest
Interest on debentures and dividend on shares are accounted for on receipt basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure: -
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2006
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956.
V. Investments: Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax deferred tax charge or credit and provision for Fringe Benefit Tax. The deferred charge or credit is recognised using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets.
Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation/liabilities.
VII. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income: Interest
Interest on debentures and dividend on shares are accounted for on receipt basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X) Miscellaneous Expenditure:-
The Company amortizes Miscellaneous Expenditure over a period of ten years.
Mar 31, 2004
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956.
V. Investments:
Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax and deferred tax charge or credit. The deferred charge or credit is recognised using current tax rates. Where there is unabsdrbed or carry forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation/liabilities.
VII. Inventories: -
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income: Interest
Interest on debentures and dividend on shares are accounted for on cash basis.
IX. Recognition of Expenditure:
Revenue expenditure is accounted for on accrual basis.
Miscellaneous Expenditure: -
The Company amortises Miscellaneous Expenditure over a period of ten years.
Mar 31, 2003
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of the Companies Act, 1956.
V. Investments:
Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax and deferred tax charge or credit. The deferred charge or credit is recognised using current tax rates. Where there is unabsorbed or carry forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets are recognised only to the extent there is reasonable certainty of realisation in future. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available case laws to reassess realisation/liabilities.
VII. Inventories:
Stocks of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income:
Interest Interest on debentures and dividend on shares are accounted for on cash basis.
IX. Recognition Of Expenditure:
Revenue expenditure is accounted for on accrual basis.
Miscellaneous Expenditure:
The Company amortises Miscellaneous Expenditure over a period of ten years.
Mar 31, 2002
I. Basis of preparation of financial statements:
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
II. Basis of Accounting:
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
III. Fixed Assets:
Fixed Assets are valued at cost less accumulated depreciation.
IV. Depreciation:
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manner specified in Schedule XIV of me Companies Act, 1956.
V. Investments:
Long term investments are stated at cost.
VI. Taxation:
Income Tax expense comprises current tax and deferred tax charge or- credit. The deferred charge or credit is recognised using current tax rates. Where there is unabsorbed OF cany forward depreciation, deferred tax assets are recognised only if there is virtual certainty of realisation of such assets. Other deferred tax assets-are recognised only to the extent there is reasonable certainty of realisation in fature. Deferred tax assets/liabilities are reviewed as at each Balance Sheet date based on developments during the year and available ease laws to reassess realisation/liabilities.
VII. Inventories;
Stock of shares and securities have been valued at cost or market value whichever is lower.
VIII. Income:
Interest Interest on debentures and dividend on shares are accounted for on cash basis.
IX. Recognition Of Expenditure:
Revenue expenditure is accounted for on accrual basis.
X. Miscellaneous Expenditure:-
The Company amortises Miscellaneous Expenditure over a period of ten years.
Mar 31, 2001
1. Basis of preparation of financial statements :
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
2. Basis of Accounting :
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
3. Fixed Assets :
Fixed Assets are valued at cost less accumulated depreciation except in case of leased assets which had been transferred to owned assets, the same had been valued at the written down value as at the date of transfer.
4. Depreciation :
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manners specified in Schedule XIV of the Companies Act, 1956.
5. Taxation :
Provision for taxation has been calculated in accordance with the Income Tax Act, 1961 and Rules made thereunder applicable for the relevant assessment year.
6. Inventories :
Stock of securities have been valued at cost or market value whichever is lower.
7. Income :
a) Interest
Interest on debentures and dividend on shares are accounted for on cash basis.
b) Lease Income :
No lease rentals have been accounted fro in the case of Jay Agro Chem Limited against whom suits have been filed on account of default in payment.
8. Recognition of Expenditure :
Revenue expenditures accounted on accrual basis.
9. Miscellaneous Expenditure :
The Company amortises Miscellaneous Expenditure over a period of ten years.
CONTINGENY LIABILITIES :
a) Contingent Liabilities on account of contracts remaining to be executed on capital account NIL
b) Claims against the Company not acknowledged as debts NIL.
Mar 31, 1999
1. Basis of preparation of financial statements :
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions to the Companies Act, 1956 as adopted consistently by the Company
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company
2 Basis of Accounting
All income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
3 Fixed Assets :
Fixed Assets are valued at cost less accumulated depreciation except in case of leased assets which had been transferred to owned assets, the same had been valued at the written down value as at the date of transfer.
4 Depreciation :
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manners specified in Schedule XIV of the Companies Act, 1956.
5 Taxation :
Provision for taxation has been calculated in accordance with the Income Tax Laws and Rules prevailing at the time of the relevant assessment year.
6 Inventories :
Stock of securities have been valued at cost or market value whichever is lower
7 Income :
a) Interest
Interest on debentures and dividend on shares are accounted for on cash basis
b) Lease Income :
No Lease rentals have been accounted for in case of Jay Agro Chem Limited against whom suits have been filed on account of default in repayment.
8. Recognition of Expenditure :
Revenue expenditures accounted on accrual basis.
9. Miscellaneous Expenditure
The Company amortises Miscellaneous Expenditure over a period of ten years.
Mar 31, 1998
1. Basis of preparation of financial statements :
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistence with generally accepted accounting principles followed by the Company.
2. Basis of Accounting :
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
3. Investments :
Investments are shown in the Balance Sheet at cost.
4. Fixed Assets :
Fixed Assets are valued at cost less accumulated depreciation except in case of leased assets which had been transferred to owned assets, the same had been valued at the written down value as at the date of transfer.
5. Depreciation :
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manners specified in Schedule XIV of the Companies Act, 1956.
6. Taxation :
Provision for taxation has been calculated in accordance with the Income Tax Laws and Rules prevailing at the time of the relevant assessment year.
7. Inventories :
Stock of securities have been valued at cost or market value whichever is lower.
8. Income :
a) Interest
i) Interest on debentures and dividend on shares are accounted for on cash basis.
ii) Interest on inter-corporate deposits are accounted on accrual basis except in case of undermentioned parties against whom suits have been filed on account of default in repayment.
a) Windfield Finance & Investment Pvt. Ltd.
b) Vidiani Engineers Limited
b) Lease Income :
i) The Company has adopted the recommendations of The Institute of Chartered Accountants of India contained in the Guidance Note on Accounting for Lease. Accordingly, a matching annual charge is made to the Profit and Loss Account representing recovery of net investment of leased assets. The said charge is calculated by deducting Finance Income for the year (arrived at by applying the second method prescribed in the guidance note) from the lease rental in respect of all its leased assets. This annual charge comprises of book depreciation and a lease equalisation charge where the annual lease charge is more than book depreciation. Where the annual lease charge is less than book depreciation, a lease equalisation charge credit is taken. The balance standing in the Lease Adjustment Account has been shown under the head current liabilities.
ii) Lease rentals are accounted on accrual basis except in case of Jay Agro Chem Limited against whom suits have been filed on account of default in repayment.
iii) During the year, the Company has withdrawn the depreciation claimed on assets (furnace) leased to Duckfin International Limited under voluntary Disclosure of Income Scheme, 1997. The original cost of the said assets i.e. Rs. 31,40,000/- and accumulated depreciation of Rs. 9,04,058/- have been transferred to the account of Duckfin International. After adjusting security deposit of Rs. 7,85,000/- and Lease Terminal Adjustment Account of Rs. 1,20,540/-, debit balance standing to said party has been treated as bad debts in the books.
9. Recognition of Expenditure :
Revenue expenditures accounted on accrual basis.
10. Miscellaneous Expenditure :
The Company amortises Miscellaneous Expenditure over a period of ten years.
Mar 31, 1997
SIGNIFICANT ACCOUNTING POLICIES:
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a) The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting policies, and the provisions of the Companies Act, 1956 as adopted consistently by the Company.
b) Accounting policies not specifically referred otherwise are consistent and in consistance with generally accepted accounting principles followed by the Company.
2. BASIS OF ACCOUNTING
All Income and Expenditure items having a material bearing on the financial statements are recognised on accrual system.
3. INVESTMENTS
Investments are shown in the Balance Sheet at cost.
4. FIXED ASSETS
Transfer of leased asset to owned asset have been made at the written down value as at the date of transfer.
5. DEPRECIATION
Depreciation on Fixed Assets is provided on written down value method at the rates provided and in the manners specified in Schedule XIV of the Companies Act, 1956. Depreciation on assets converted from leased to owned asset during the year has been provided on pro rata basis.
8. TAXATION
Provision for taxation has been calculated in accordance with the Income Tax Laws and Rules prevailing at the time of the relevant assessment year.
7. INVENTORIES
Stock of securities have been valued at cost or market value whichever is lower. Cost is arrived at Weighted Average.
8. INCOME
a) Interest
i) Interest on debentures and dividend on shares are accounted for on cash basis
ii) Interest on inter-corporate deposits are accounted on accrual basis except in case of undermentioned parties against whom suits have been filed on account of default in repayment.
a) Windfield Finance & Investment Pvt. Ltd.
b) Vidani Engineers Limited
c) Mesa Consultants Limited
d) Lease Accounting
i) The Company has adopted the recommendations of The Institute of Chartered Accountants of India contained in the Guidance Note on Accounting for Lease. Accordingly, a matching annual charge is made to the Profit and Loss Account representing recovery of net investment of leased assets. The said charge is calculated by deducting Finance Income for the year (arrived at by applying the second method prescribed in the guidance note) from the lease rental in respect of all its leased assets. This annual charge comprises of book depreciation and a lease equalisation charge where the annual lease charge is more than book depreciation. Where the annual lease charge is less than book depreciation, a lease equalisation charge credit is taken. The balance standing in the Lease Adjustment Account has been shown under the head current liabilities.
ii) Lease rentals are accounted on accrual basis except in case of Duckfin International Limited against whom suits have been filed on account of default in repayment.
9. RECOGNITION OF EXPENDITURE
Revenue expenditures accounted on accrual basis.
10. MISCELLANEOUS EXPENDITURE
The Company amortises Miscellaneous Expenditure over a period of ten years.
Sep 30, 1995
1. BASIS OF ACCOUNTING :
The financial statements are prepared under the historic cost conventions and on an accural basis in accordance with normally accepted accounting policies.
2. FIXED ASSETS :
Fixed assets given on lease have been stated at their original cost. Incidental expenses related to acquisition and installation for such assets have been taken only in respect of such fixed assets where the cost is financed by the Company.
3. DEPRECIATION :
Leased assets are depreciated by a method derived from the guidance note issued by The Institute of Chartered Accountants of India under which 100% of the cost of the asset is depreciated over the primary lease period. As per this method the weighted average interest rate implicit in the leases is calculated for each of the accounting periods, applied to the disbursements during the period weighted by the weighted disbursement index for the period to calculate the amount of principal recovery during the period and the principal recovery amount is being provided as depreciation for the period. As per this method, the useful life and the primary lease period of all categories of leased assets is considered to be three years on an average.
4. INVENTORIES :
Stock of Shares are valued at cost; the costs are determined at Average Method.
5. REVENUE RECOGNITION :
Revenue is being recognised as and when there is reasonable certainty of its ultimate realisation/collection. Lease rentals have been considered as accrued as per the terms entered into with the leassees. Lease processing charges or management fees and/or other service charges have been considered as income wherever the agreements have been signed.
6. EXPENSES :
All Significant Expenses are provided on accural basis.
7. PROVISION FOR TAXATION :
Provision for Income-Tax is considered not necessary based on computation of total income for the year ended 30th September, 1995 in accordance with the Income Tax Laws and Rules prevailing at the time of relevant assessment year.
8. INVESTMENTS :
Investments are shown in the Balance Sheet at cost.
9. SHARE ISSUE EXPENSES :
Net share issue expenses are amortised over a period of 10 years.
Sep 30, 1994
No Information Available.
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