Mar 31, 2023
1. Background Information
Tata Investment Corporation Limited referred to as ("The Companyâ or "TICLâ) is a non-banking financial Company ("NBFCâ) registered with the Reserve Bank of India ("RBIâ) under the category of Investment Company. The Company is a Systemically Important Non Banking Financial Company. Pursuant to the Scale Based Classification of NBFCs, introduced by RBI, the Company has received a communication dated 18th April, 2023 from RBI categorising it as a Middle Layer NBFC.
The Company''s activities primarily comprises of investing in listed and unlisted equity shares, debt instruments and mutual funds etc. of companies in a wide range of industries. The shares of Company are listed on the Bombay Stock Exchange and National Stock Exchange. The Company is subsidiary of Tata Sons Private Limited.
The standalone financial statements of the Company as on 31st March, 2023 were approved and authorised for issue by the Board of Directors on 5th May, 2023.
2. Statement of Compliance with Ind AS
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind ASâ) prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules as amended from time to time.
3. Basis of Preparation of Standalone Financial Statements
The standalone financial statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments measured at fair value at the end of each reporting period as explained in accounting policies below.
The standalone financial statements are presented in Indian Rupees (?) and all values are rounded to the nearest lac, except for Note No. 24 relating to disclosures mandated by RBI.
The preparation of standalone financial statements in conformity with the recognition and measurement principles of Ind AS requires management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures including disclosures of contingent assets and contingent liabilities as at the date of financial statements and the reported amounts of revenues and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected.
Key sources of estimation of uncertainty at the date of the standalone financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of: fair valuation of unquoted equity investments, impairment of financial instruments, provisions and contingent liabilities and long term retirement benefits.
5. Significant Accounting policies
(a) Financial Instruments
Classification
A Financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instruments of another entity.
Financial assets, other than equity, are classified into, Financial assets at fair value through other comprehensive income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.
Business Model assessment and Solely payments of principal and interest (SPPI) test
Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including;
- How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity''s key management personnel
- The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed
- How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)
- The expected frequency, value and timing of sales are also important aspects of the Company''s assessment
If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
initial recognition
The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the 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 the fair value of the financial assets or financial liabilities, as appropriate, 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 or loss.
Financial assets and financial liabilities, with the exception of loans, debt securities and deposits are recognised on the trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are recognised when the funds are transferred to the customers account. Trade receivables are measured at the transaction price.
Subsequen t measuremen t Financial assets at amortised cost
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised cost using effective interest method less any impairment losses.
Debt instruments at FVOCi
Debt instruments that are measured at FVOCI have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on principal outstanding and that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. These instruments largely comprise long-term investments made by the Company.
FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value recognised in OCI. Interest income and gains and losses are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. These investments are subjected to impairment under Expected Credit Loss method.
On derecognition, cumulative gains or losses previously recognised in OCI are reclassified from OCI to profit or loss.
Equity instruments at FVOCi
These include financial assets that are equity instruments as defined in Ind AS 32 "Financial Instruments: Presentationâ and are not held for trading and where the Company''s management has elected to irrevocably designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.
Gains and losses on these equity instruments are never recycled to profit or loss. However, on derecognition of an equity instrument, the realised gains or losses (net of taxes) are transferred to retained earnings.
Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the payment has been established.
Fair value through Profit and loss account
Financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in profit or loss.
Derivatives recorded at fair value through profit or loss
The Company transacts in derivative financial instruments which are in the nature of covered call option contracts. Such derivative financial instruments are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently re-measured at their fair value at the end of each reporting period. Derivatives are classified as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of such derivative financial instruments are taken directly to statement of profit and loss and included in net gain on fair value changes. The Company has not designated any derivative instruments as a hedging instrument.
Financial Liabilities and equity instruments Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
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. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Other Financial Liabilities
These are measured at amortised cost using effective interest rate.
Derecognition of Financial assets and Financial liabilities
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate.
Reclassification of Financial assets
The Company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances when the Company changes its business model for managing such financial assets. The Company does not re-classify its financial liabilities.
(b) Determination of fair value
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.
The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method and other valuation models.
(c) Investment in subsidiary and associates
The Company has chosen to carry the Investments in associates and subsidiary at cost less impairment, if any in the separate financial statements.
(d) Foreign currency transactions and translation
The standalone financial statements of the Company are presented in Indian rupees (''), which is the functional currency of the Company and the presentation currency for the financial statements.
I n preparing the standalone financial statements, transactions in currencies other than the Company''s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Exchange differences arising on the retranslation or settlement of monetary items are included in the statement of profit and loss for the period.
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term deposits, as defined above, as they are considered an integral part of the Company''s cash management.
(f) Property plant and equipment and intangible assets
Property, plant and equipment and intangible assets are stated at cost of acquisition less accumulated depreciation / amortisation. Cost includes all expenses incidental to the acquisition of the Property, plant and equipment and intangible assets and any attributable cost of bringing the asset to its working condition for its intended use.
(g) Capital work in progress and Capital advances
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances given towards acquisition of property, plant and equipment outstanding at each Balance Sheet date are disclosed in Other Non-Financial Assets.
(h) Depreciation and amortisation of property, plant and equipment and intangible assets
Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the managements best estimation of getting economic benefits from such assets. Further, assets individually costing '' 5000/ - or less are fully depreciated in the year of purchase.
Tangible Assets |
Useful life in years |
(a) Buildings |
60 |
(b) Plant and Equipment |
15 |
(c) Furniture and Fixtures |
1 |
(d) Office Equipment |
5 |
(e) Leasehold improvements are amortised equitably over the remaining period of the lease. |
Intangible assets - Software is amortised over its estimated useful life of 4 years on straight line method.
The residual values, useful lives and method of depreciation of property, plant and equipment are reviewed at each financial year end. Changes in the expected useful life are accounted by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.
Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the asset is derecognised. The date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requirements for determining when a performance obligation is satisfied in Ind AS 115.
(i) Impairment of non - financial assets
The carrying amounts of the Company''s property, plant & equipment and intangible assets are reviewed at each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset''s recoverable amounts are estimated in order to determine the extent of impairment loss, if any. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The impairment loss, if any, is recognised in the statement of profit and loss in the period in which impairment takes place.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, however subject to the increased carrying amount not exceeding the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior accounting periods. A reversal of an impairment loss is recognised immediately in the Statement of profit and loss.
(j) Employee benefits(i) Short term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, performance incentives, etc., are recognised as an expense at the undiscounted amount in the Statement of profit and loss for the year in which the employee renders the related service.
Post retirement benefits like provident fund, superannuation, gratuity and post retirement medical benefits are provided for as below : Defined Contribution Plans
Contributions under Defined contribution plans i.e. provident fund & superannuation fund are recognised in the Statement of profit and loss in the period in which the employee has rendered the service.
For defined benefit retirement schemes the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each year end balance sheet date. Re-measurement gains and losses of the net defined benefit liability/(asset) are recognised immediately in other comprehensive income. The service cost and net interest on the net defined benefit liability/(asset) is recognised as an expense within employment costs.
Past service cost is recognised as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are recognised, whichever is earlier.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined-benefit obligation as reduced by the fair value of plan assets.
(iii) Other Long term Benefits
Other long term benefits include compensated absences, Long term service benefit, Pension and sick leave. The liability towards other long term benefits is determined by independent actuary at every balance sheet date and service cost, net interest on net defined liability/(asset) and re-measurement gains and losses of net defined liability (assets) are recognised in the Statement of profit and loss.
(k) Accounting for provisions, contingent liabilities and contingent assets
Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Where the time value of money is material, provisions are measured on a discounted basis. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
Constructive obligation is an obligation that derives from an entity''s actions where
(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and
(b) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities
Contingent liabilities are not recognised in the standalone financial statements. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Income tax expense comprises both current and deferred tax. Current and deferred taxes are recognised in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
Current income-tax is recognised at the amount expected to be paid to the tax authorities, using the tax rates and tax laws, enacted or substantially enacted as at the balance sheet date.
Taxable profit differs from net profit as reported in the standalone statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred income tax assets and liabilities are recognised for temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the standalone financial statements and is accounted for using the balance sheet liability method.
Deferred income tax assets are recognised to the extent it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured using tax rates and laws, enacted or substantially enacted as of the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognised as an income or expense in the period that includes the enactment or substantive enactment date.
Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and they are in the same taxable entity, or a Group of taxable entities where the tax losses of one entity are used to offset the taxable profits of another and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.
(m) Recognition of dividend and interest income
Dividend income (including from FVOCI investments) is recognised when the Company''s right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably. This is generally when the shareholders or Board of Directors approve the dividend.
Under Ind AS 109 interest income is recorded using the Effective Interest Rate (EIR) method for all financial instruments measured at amortised cost, debt instrument measured at FVOCI and debt instruments designated at FVTPL. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset.
The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium on acquisition, fees and costs that are an integral part of the EIR.
(n) Dividends on ordinary shares
The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value remeasurement recognised directly in equity. Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
The Company recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost which comprise the initial amount of lease liability adjusted for any lease payments made before the commencement date. The right of use asset is subsequently depreciated using the straight line method of the balance lease term. In addition, the right of use asset is periodically reduced by impairment loss, if any and adjusted for certain remeasurements of lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the implicit rate in the lease or the incremental borrowing rate, if that rate cannot be readily available at the commencement date of the lease for the estimated term of the obligation.
Lease payments included in the measurement of the lease liability comprise the amounts expected to be payable over the period of lease. The lease liability is measured at amortised cost using effective interest rate method. It is remeasured when there is a change in future lease payments arising from change in the index or rate
Lease liability and right of use asset have been separately presented in the Balance Sheet and lease payments (including interest) have been classified as financing cash flows.
The Company is primarily engaged in the business of investment in companies including group companies. As such the Company''s standalone financial statements are largely reflective of the investment business and there is no separate reportable segment.
Pursuant to Ind AS 108 - Operating Segments, no segment disclosure has been made in these standalone financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period except where the results would be antidilutive.
(s) Offsetting of Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
6. Recent Accounting Developments(a) Ind AS 1 - Presentation of Financial Statements
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. The Company is evaluating the impact, if any, in its financial statements.
(c) Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.
Mar 31, 2022
1 Background Information:
Tata Investment Corporation Limited referred to as ("The Companyâ or "TICLâ) is a non-banking financial Company (NBFC) registered with the Reserve Bank of India under the category of Investment Company.
The Company''s activities primarily comprises of investing in listed and unlisted equity shares, debt instruments and mutual funds etc. of companies in a wide range of industries. The shares of Company are listed on the Bombay Stock Exchange and National Stock Exchange. The Company is subsidiary of Tata Sons Private Limited.
The standalone financial statements of the Company as on 31st March, 2022 were approved and authorised for issue by the Board of Directors on 25th April, 2022.
2 Statement of Compliance with IND AS
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (referred to as "Ind ASâ) prescribed under section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules as amended from time to time.
3 Basis of Preparation of Standalone Financial Statements
The standalone financial statements have been prepared on accrual basis under the historical cost convention except for certain financial instruments measured at fair value at the end of each reporting period as explained in accounting policies below.
The standalone financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest lacs, unless otherwise indicated.
The preparation of standalone financial statements in conformity with the recognition and measurement principles of IND AS requires management of the Company to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures including disclosures of contingent assets and contingent liabilities as at the date of financial statements and the reported amounts of revenues and expenses during the period. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in future periods which are affected.
Key sources of estimation of uncertainty at the date of the standalone financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, is in respect of: fair valuation of unquoted equity investments, impairment of financial instruments, impairment of property, plant & equipment, useful lives of property, plant & equipment, provisions and contingent liabilities and long term retirement benefits.
5 Significant Accounting policies
(a) Financial Instruments
Classification
A Financial instrument is any contract that gives rise to a financial asset of one entity and financial liability or equity instruments of another entity.
Financial assets, other than equity, are classified into, Financial assets at fair value through other comprehensive income (FVOCI) or fair value through profit and loss account (FVTPL) or at amortised cost. Financial assets that are equity instruments are classified as FVTPL or FVOCI. Financial liabilities are classified as amortised cost category and FVTPL.
Business Model assessment and Solely payments of principal and interest (SPPI) test:
Classification and measurement of financial assets depends on the business model and results of SPPI test. The Company determines the business model at a level that reflects how groups of financial assets are managed together to achieve a particular business objective. This assessment includes judgement reflecting all relevant evidence including;
- How the performance of the business model and the financial assets held within that business model are evaluated and reported to the entity''s key management personnel
- The risks that affect the performance of the business model (and the financial assets held within that business model) and, in particular, the way those risks are managed
- How managers of the business are compensated (for example, whether the compensation is based on the fair value of the assets managed or on the contractual cash flows collected)
- The expected frequency, value and timing of sales are also important aspects of the Company''s assessment
If cash flows after initial recognition are realised in a way that is different from the Company''s original expectations, the Company does not change the classification of the remaining financial assets held in that business model, but incorporates such information when assessing newly originated or newly purchased financial assets going forward.
Initial recognition:
The classification of financial instruments at initial recognition depends on their contractual terms and the business model for managing the 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 the fair value of the financial assets or financial liabilities, as appropriate, 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 or loss.
Financial assets and financial liabilities, with the exception of loans, debt securities and deposits are recognised on the trade date i.e. when a Company becomes a party to the contractual provisions of the instruments. Loans, debt securities and deposits are recognised when the funds are transferred to the customers account. Trade receivables are measured at the transaction price.
Subsequent measurement:
Financial assets at amortised cost:
Financial assets having contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding and that are held within a business model whose objective is to hold such assets in order to collect such contractual cash flows are classified in this category. Subsequently these are measured at amortised cost using effective interest method less any impairment losses.
Debt Instruments at FVOCI
Debt instruments that are measured at FVOCI have contractual terms that give rise on specified dates to cash flows that are solely payments of principal and interest on principal outstanding and that are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets. These instruments largely comprise long-term investments made by the Company. FVOCI debt instruments are subsequently measured at fair value with gains and losses arising due to changes in fair value recognised in OCI. Interest income and gains and losses are recognised in profit or loss in the same manner as for financial assets measured at amortised cost. On derecognition, cumulative gains or losses previously recognised in OCI are reclassified from OCI to profit or loss.
Equity Instruments at FVOCI
These include financial assets that are equity instruments as defined in IND AS 32 "Financial Instruments: Presentationâ and are not held for trading and where the Company''s management has elected to irrevocably designated the same as Equity instruments at FVOCI upon initial recognition. Subsequently, these are measured at fair value and changes therein are recognised directly in other comprehensive income, net of applicable income taxes.
Gains and losses on these equity instruments are never recycled to profit or loss.
Dividends from these equity investments are recognised in the statement of profit and loss when the right to receive the payment has been established.
Fair value through Profit and loss account:
Financial assets are measured at FVTPL unless it is measured at amortised cost or at FVOCI on initial recognition. The transaction costs directly attributable to the acquisition of financial assets at fair value through profit or loss are immediately recognised in profit or loss.
Derivatives recorded at fair value through profit or loss
The Company transact in derivative financial instruments which are in the nature of covered call option contracts. Such derivative financial instruments are initially recognised at fair value on the date on which the derivative contract is entered into and are subsequently re-measured at their fair value at the end of each reporting period. Derivatives are classified as financial assets when the fair value is positive and as financial
liabilities when the fair value is negative. Any gains or losses arising from changes in the fair value of such derivative financial instruments are taken directly to statement of profit and loss and included in net gain on fair value changes. The Company has not designated any derivative instruments as a hedging instrument.
Financial Liabilities and equity instruments:
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
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. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Other Financial Liabilities:
These are measured at amortised cost using effective interest rate.
Derecognition of Financial assets and Financial liabilities:
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
Impairment of financial assets:
The Company recognizes a loss allowance for expected credit losses on a financial asset that is at amortized cost or fair value through OCI. Loss allowance in respect of financial assets is measured at an amount equal to life time expected credit losses and is calculated as the difference between their carrying amount and the present value of the expected future cash flows discounted at the original effective interest rate.
Reclassification of Financial assets:
The Company does not re-classify its financial assets subsequent to their initial recognition, apart from the exceptional circumstances when the Company changes its business model for managing such financial assets. The Company does not re-classify its financial liabilities.
(b) Determination of fair value:
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.
The fair value of a financial instrument on initial recognition is normally the transaction price (fair value of the consideration given or received). Subsequent to initial recognition, the Company determines the fair value of financial instruments that are quoted in active markets using the quoted bid prices (financial assets held) or quoted ask prices (financial liabilities held) and using valuation techniques for other instruments. Valuation techniques include discounted cash flow method and other valuation models.
(c) Investment in subsidiaries and associates
The Company has chosen to carry the Investments in associates and subsidiaries at cost less impairment, if any in the separate financial statements.
(d) Foreign currency transactions and translation
The standalone financial statements of the Company are presented in Indian rupees (''), which is the functional currency of the Company and the presentation currency for the financial statements.
I n preparing the standalone financial statements, transactions in currencies other than the Company''s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are re-translated at the rates prevailing at the end of the reporting period. Exchange differences arising on the retranslation or settlement of monetary items are included in the statement of profit and loss for the period.
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, that are readily convertible into known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short term deposits, as defined above, as they are considered an integral part of the Company''s cash management.
(f) Property Plant and Equipment and Intangible Assets
Property, plant and equipment and intangible assets are stated at cost of acquisition less accumulated depreciation / amortisation. Cost includes all expenses incidental to the acquisition of the Property, plant and equipment and intangible assets and any attributable cost of bringing the asset to its working condition for its intended use.
(g) Capital work in progress and Capital advances
Cost of assets not ready for intended use, as on the Balance Sheet date, is shown as capital work in progress. Advances given towards acquisition of property, plant and equipment outstanding at each Balance Sheet date are disclosed in Other Non-Financial Assets.
(h) Depreciation and amortisation of property, plant and equipment and intangible assets
Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the managements best estimation of getting economic benefits from such assets. Further, assets individually costing '' 5000/- or less are fully depreciated in the year of purchase.
Tangible Assets Useful life in years
(f) Leasehold improvements are amortised equitably over the remaining period of the lease.
Intangible assets - Software is amortised over its estimated useful life of 4 years on straight line method.
The residual values, useful lives and method of Depreciation of property, plant and equipment are reviewed at each financial year end. Changes in the expected useful life are accounted by changing the amortisation period or methodology, as appropriate, and treated as changes in accounting estimates.
Property plant and equipment is derecognised on disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is recognised in other income / expense in the statement of profit and loss in the year the asset is derecognised. The date of disposal of an item of property, plant and equipment is the date the recipient obtains control of that item in accordance with the requirements for determining when a performance obligation is satisfied in IND AS 115.
(i) Impairment of non - financial assets
The carrying amounts of the Company''s property, plant & equipment and intangible assets are reviewed at each reporting period to determine whether there is any indication of impairment. If any such indication exists, the asset''s recoverable amounts are estimated in order to determine the extent of impairment loss, if any. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. The impairment loss, if any, is recognised in the statement of profit and loss in the period in which impairment takes place.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, however subject to the increased carrying amount not exceeding the carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior accounting periods. A reversal of an impairment
loss is recognised immediately in profit or loss.
(j) Employee benefits(i) Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short-term employee benefits. Benefits such as salaries, performance incentives, etc., are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the year in which the employee renders the related service.
(ii) Post Employment Benefits:
Post retirement benefits like provident fund, superannuation, gratuity and post retirement medical benefits are provided for as below : Defined Contribution Plans:
Contributions under Defined Contribution Plans i.e. provident fund & superannuation fund are recognised in the Statement of Profit and Loss in the period in which the employee has rendered the service.
For defined benefit retirement schemes the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuation being carried out at each year end balance sheet date. Re-measurement gains and losses of the net defined benefit liability/(asset) are recognised immediately in other comprehensive income. The service cost and net interest on the net defined benefit liability/(asset) is recognised as an expense within employment costs.
Past service cost is recognised as an expense when the plan amendment or curtailment occurs or when any related restructuring costs or termination benefits are recognised, whichever is earlier.
The retirement benefit obligation recognised in the balance sheet represents the present value of the defined-benefit obligation as reduced by the fair value of plan assets.
(iii) Other Long term Benefits
Other long term benefits include compensated absences, Long term service benefit, Pension and sick leave. The liability towards other long term benefits is determined by independent actuary at every balance sheet date and service cost, net interest on net defined liability/(asset) and re-measurement gains and losses of net defined liability (assets ) are recognised in profit and loss account.
(k) Accounting for provisions, contingent liabilities and contingent assets
Provisions are recognised in the balance sheet when the Company has a present obligation (legal or constructive) as a result of a past event, which is expected to result in an outflow of resources embodying economic benefits which can be reliably estimated. Each provision is based on the best estimate of the expenditure required to settle the present obligation at the balance sheet date. Where the time value of money is material, provisions are measured on a discounted basis. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
Constructive obligation is an obligation that derives from an entity''s actions where:
(a) by an established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and
(b) as a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities
Contingent liabilities are not recognised in the standalone financial statements. Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount cannot be made.
Income tax expense comprises both current and deferred tax. Current and deferred taxes are recognised in the statement of profit and loss, except when they relate to items credited or debited either in other comprehensive income or directly in equity, in which case the tax is also recognised in other comprehensive income or directly in equity.
Current income-tax is recognised at the amount expected to be paid to the tax authorities, using the tax rates and tax laws, enacted or substantially enacted as at the balance sheet date.
Taxable profit differs from net profit as reported in the Standalone statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible.
Deferred income tax assets and liabilities are recognised for temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the standalone financial statements and is accounted for using the balance sheet liability method.
Deferred income tax assets are recognised to the extent it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow or part of the deferred income tax asset to be utilised.
Deferred tax assets and liabilities are measured using tax rates and laws, enacted or substantially enacted as of the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognised as an income or expense in the period that includes the enactment or substantive enactment date.
Deferred tax assets and liabilities are offset to the extent that they relate to taxes levied by the same tax authority and they are in the same taxable entity, or a Group of taxable entities where the tax losses of one entity are used to offset the taxable profits of another and there are legally enforceable rights to set off current tax assets and current tax liabilities within that jurisdiction.
(m) Recognition of Dividend and Interest income
Dividend income (including from FVOCI investments) is recognised when the Company''s right to receive the payment is established, it is probable that the economic benefits associated with the dividend will flow to the entity and the amount of the dividend can be measured reliably. This is generally when the shareholders or Board of Directors approve the dividend.
Under IND AS 109 interest income is recorded using the Effective Interest Rate (EIR) method for all financial instruments measured at amortised cost, debt instrument measured at FVOCI and debt instruments designated at FVTPL. The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument or, when appropriate, a shorter period, to the net carrying amount of the financial asset.
The EIR (and therefore, the amortised cost of the asset) is calculated by taking into account any discount or premium on acquisition, fees and costs that are an integral part of the EIR.
(n) Dividends on ordinary shares
The Company recognises a liability to make cash or non-cash distributions to equity holders of the parent when the distribution is authorised and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value remeasurement recognised directly in equity. Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of the assets distributed is recognised in the statement of profit and loss.
(o) Leases
The Company recognises a right of use asset and a lease liability at the lease commencement date. The right of use asset is initially measured at cost which comprise the initial amount of lease liability adjusted for any lease payments made before the commencement date. The right of use asset is subsequently depreciated using the straight line method of the balance lease term. In addition, the right of use asset is periodically reduced by impairment loss, if any and adjusted for certain remeasurements of lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the implicit rate in the lease or the incremental borrowing rate, if that rate cannot be readily available at the commencement date of the lease for the estimated term of the obligation.
Lease payments included in the measurement of the lease liability comprise the amounts expected to be payable over the period of lease. The lease liability is measured at amortised cost using effective interest rate method. It is remeasured when there is a change in future lease payments arising from change in the index or rate
Lease liability and ROU asset have been separately presented in the Balance Sheet and lease payments (including interest) have been classified as financing cash flows.
The Company is primarily engaged in the business of investment in companies including group companies. As such the Company''s standalone financial statements are largely reflective of the investment business and there is no separate reportable segment.
Pursuant to IND AS 108 - Operating Segments, no segment disclosure has been made in these standalone financial statements, as the Company has only one geographical segment and no other separate reportable business segment.
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
Basic EPS is computed using the weighted average number of equity shares outstanding during the period. Diluted EPS is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the period except where the results would be anti-dilutive.
6 Recent Accounting Developments
(a) Ind AS 109 - Annual Improvements to Ind AS (2021)
The amendment clarifies which fees an entity includes when it applies the ''10 percent'' test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.
(b) Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract
The amendments specify that that the ''cost of fulfilling'' a contract comprises the ''costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts. The amendment is essentially a clarification and the Company does not expect the amendment to have any significant impact in its financial statements.
(c) Ind AS 16 - Proceeds before intended use
The amendments mainly prohibit an entity from deducting from the cost of property, plant and equipment amounts received from selling items produced while the entity is preparing the asset for its intended use. Instead, an entity will recognise such sales proceeds and related cost in profit or loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its standalone financial statements.
Mar 31, 2018
1.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the applicable guidelines issued by the Reserve Bank of India (âRBIâ). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognised in the period in which the results are known / materialise.
1.3 Fixed Assets, Depreciation and Amortisation
Fixed assets are stated at cost less accumulated depreciation/amortisation provided on the straight line method. The cost of Fixed assets includes taxes, duties and other incidental expenses incurred in relation to their acquisition/ bringing the assets to their intended use.
Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures and computers, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the management best estimation of getting economic benefits from such assets. Further, Assets individually costing Rs.5000/- or less are fully depreciated in the year of purchase.
1.4 Revenue recognition
Income from Dividend is accounted when such dividend has been declared and the Companyâs right to receive payment is established.
Interest income is recognised on a time proportionate basis, taking into account the amount outstanding and the coupon rate applicable.
Income from debentures and bonds is accrued over the maturity of the security, net of amortisation of premium/discount, where intended to be held for a long-term, with reference to the coupon dates.
1.5 Employee benefits
(a) Short-term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.
(b) Contributions under Defined Contribution Plans i.e. provident fund & superannuation fund are recognised in the Statement of Profit and Loss in the period in which the employee has rendered the service.
(c) Companyâs liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognised on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.
1.6 Investments
(a) Long Term investments are accounted for and valued as per Accounting Standard (AS) 13 - âAccounting for Investmentsâ are stated at average cost except where there is a diminution other than temporary, for which provision is made.
(b) Current investments are accounted for and valued as per Accounting Standard (AS) 13 - âAccounting for Investmentsâ and in accordance with the RBI guidelines, are stated at the lower of cost and fair value, by category of investments.
(c) The difference between the holding cost and the face value of the Government securities / Bonds / Debentures is written off / up proportionately over the remaining life of the concerned investment or, till the call option date in case of perpetual debentures.
(d) Inter-class transfer of investments from one category to the other, if any, is done in accordance with the RBI guidelines at the lower of book value and fair value / market value on the date of transfer.
1.7 Taxes on income
Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognised using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence of realisation of such assets. Other deferred tax assets are recognised only to the extent there is a reasonable certainty of realisation in future. Deferred tax assets / liabilities are reviewed at each Balance Sheet date, based on developments during the year and available case laws to reassess realisation / liabilities.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company.
1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.9 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.10 Accounting for provisions, contingent liabilities and contingent assets
In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Company recognises provisions when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Provisions are determined based on management estimate required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
A disclosure of contingent liability is made when there is :
- a possible obligation arising from a past event, the existence of which will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the Company; or
- a present obligation arising from a past event which is not recognised as it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent Assets, if any, are not recognised in the financial statements since this may result in the recognition of income that may never be realized.
1.11 Onerous contracts
Provisions for onerous contracts are recognised when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognises any impairment loss on the assets associated with that contract.
1.12 Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Statement of Profit and Loss to the extent the carrying amount of assets exceeds their estimated recoverable amount.
1.13 Operating Cycle
Based on the nature of activities of the Company and the normal time between acquisition of assets and their realisation in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2017
1.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, and the applicable guidelines issued by the Reserve Bank of India (''RBI''). The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
1.2 Use of estimates
The preparation of the financial statements requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including the contingent liabilities) and the reported income and expenses during the reporting period. The Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. The differences between the actual results and the estimates are recognized in the period in which the results are known / materialize.
1.3 Fixed Assets, Depreciation and Amortization
Fixed assets are stated at cost less accumulated depreciation/amortization provided on the straight line method. The cost of Fixed assets includes taxes, duties and other incidental expenses incurred in relation to their acquisition/ bringing the assets to their intended use.
Depreciation on following tangible fixed assets has been provided on the straight-line method as per the useful life prescribed in Schedule II to the Companies Act, 2013 except in respect of the furniture and fixtures, in which case the life of the assets has been assessed taking into account the nature of the assets, the estimated usage of the asset on the basis of the management best estimation of getting economic benefits from such assets. Further, Assets individually costing Rs. 5000/- or less are fully depreciated in the year of purchase.
Useful life in years
(f) Leasehold improvements are amortized equitably over the remaining period of the lease.
Intangible assets - Software is amortized over its estimated useful life of 4 years on straight line method.
1.4 Revenue recognition
Income from Dividend is accounted when such dividend has been declared and the Company''s right to receive payment is established.
Interest income is recognized on a time proportionate basis, taking into account the amount outstanding and the coupon rate applicable.
Income from debentures and bonds is accrued over the maturity of the security, net of amortization of premium/discount, where intended to be held for a long-term, with reference to the coupon dates.
1.5 Employee benefits
(a) Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.
(b) Contributions under Defined Contribution Plans i.e. provident fund & superannuation fund are recognized in the Statement of Profit and Loss in the period in which the employee has rendered the service.
(c) Company''s liability towards Defined Benefit Plans / Long term compensated absences is determined by an independent actuary using the projected unit credit method. Past service cost is recognized on a straight line basis over the average period until the benefits become vested. Actuarial gains and losses are recognized immediately in the Statement of Profit and Loss as income or expense.
Obligation is measured at the present value of estimated future cash flows using a discount rate that is determined by reference to the market yields at the Balance Sheet date on Government Bonds where the currency and terms of the Government Bonds are consistent with the currency and estimated terms of the defined benefit obligation.
1.6 Investments
(a) Long Term investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments'' are stated at average cost except where there is a diminution other than temporary, for which provision is made.
(b) Current investments are accounted for and valued as per Accounting Standard (AS) 13 - ''Accounting for Investments'' and in accordance with the RBI guidelines, are stated at the lower of cost and fair value, by category of investments. _
(c) The difference between the holding cost and the face value of the Government securities / Bonds / Debentures is written off / up proportionately over the remaining life of the concerned investment or, till the call option date in case of perpetual debentures.
(d) Inter-class transfer of investments from one category to the other, if any, is done in accordance with the RBI guidelines at the lower of book value and fair value / market value on the date of transfer.
1.7 Taxes on income
Income tax expense comprises current tax and deferred tax charge or credit. The current tax is determined as the amount of tax payable in respect of the estimated taxable income for the period. The deferred tax charge or credit is recognized using prevailing enacted or substantively enacted tax rates. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence of realization of such assets. Other deferred tax assets are recognized only to the extent there is a reasonable certainty of realization in future. Deferred tax assets / liabilities are reviewed at each Balance Sheet date, based on developments during the year and available case laws to reassess realization / liabilities.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is highly probable that future economic benefit associated with it will flow to the Company."
1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
1.9 Cash flow statement
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
1.10 Accounting for provisions, contingent liabilities and contingent assets
In accordance with AS-29, Provisions, Contingent Liabilities and Contingent Assets, the Company recognizes provisions when it has a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and when a reliable estimate of the amount of the obligation can be made.
Provisions are determined based on management estimate required to settle the obligation at the balance sheet date, supplemented by experience of similar transactions. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
A disclosure of contingent liability is made when there is :
- a possible obligation arising from a past event, the existence of which will be confirmed by the occurrence or non-occurrence of one or more uncertain future events not within the control of the Company; or
- a present obligation arising from a past event which is not recognized as it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.
When there is a possible obligation or a present obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made.
Contingent Assets, if any, are not recognized in the financial statements since this may result in the recognition of income that may never be realized.
1.11 Onerous contracts
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract.
1.12 Impairment of assets
The Company assesses at each balance sheet date whether there is any indication that an asset may be impaired. Impairment loss, if any, is provided in the Statement of Profit and Loss to the extent the carrying amount of assets exceeds their estimated recoverable amount.
1.13 Operating Cycle
Based on the nature of activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.
Mar 31, 2016
1.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, and the applicable guidelines
issued by the Reserve Bank of India (''RBI''). The financial statements
have been prepared on accrual basis under the historical cost
convention. The accounting policies adopted in the preparation of the
financial statements are consistent with those followed in the previous
year.
1.2 Use of estimates
The preparation of the financial statements requires the Management to
make estimates and assumptions considered in the reported amounts of
assets and liabilities (including the contingent liabilities) and the
reported income and expenses during the reporting period. The
Management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. The differences between
the actual results and the estimates are recognised in the period in
which the results are known / materialise.
1.3 Fixed Assets, Depreciation and amortisation
Fixed assets are stated at cost less accumulated
depreciation/amortisation provided on the straight line method. The
cost of Fixed assets includes taxes, duties and other incidental
expenses incurred in relation to their acquisition/ bringing the assets
to their intended use.
Depreciation on following tangible fixed assets has been provided on the
straight-line method as per the useful life prescribed in Schedule II
to the Companies Act, 2013 except in respect of the furniture and
fixtures, in which case the life of the assets has been assessed taking
into account the nature of the assets, the estimated usage of the asset
on the basis of the management best estimation of getting economic
benefits from such assets. Further, Assets individually costing Rs.
5000/- or less are fully depreciated in the year of purchase.
1.4 Revenue recognition
Income from Dividend is accounted when such dividend has been declared
and the Company''s right to receive payment is established.
Interest income is recognised on a time proportionate basis, taking
into account the amount outstanding and the coupon rate applicable.
Income from debentures and bonds is accrued over the maturity of the
security, net of amortisation of premium/discount, where intended to be
held for a long-term, with reference to the coupon dates.
1.5 Employee benefits
a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the Statement of profit and Loss of the period
in which the related service is rendered.
b) Contributions under Defined Contribution Plans i.e. provident fund &
superannuation fund are recognised in the Statement of profit and Loss
in the period in which the employee has rendered the service.
c) Company''s liability towards Defined Benefit Plans / Long term
compensated absences is determined by an independent actuary using the
projected unit credit method. Past service cost is recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
Statement of profit and Loss as income or expense. Obligation is
measured at the present value of estimated future cash flows using a
discount rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
1.6 Investments
a) Long Term investments are accounted for and valued as per Accounting
Standard (AS) 13 - ''Accounting for Investments''are stated at average
cost except where there is a diminution other than temporary, for which
provision is made.
b) Current investments are accounted for and valued as per Accounting
Standard (AS) 13 - ''Accounting for Investments''and in accordance with
the RBI guidelines, are stated at the lower of cost and fair value, by
category of investments.
c) The difference between the holding cost and the face value of the
Government securities / Bonds / Debentures is written of / up
proportionately over the remaining life of the concerned investment or,
till the call option date in case of perpetual debentures.
d) Inter-class transfer of investments from one category to the other,
if any, is done in accordance with the RBI guidelines at the lower of
book value and fair value / market value on the date of transfer.
1.7 Taxes on income
Income tax expense comprises current tax and deferred tax charge or
credit. The current tax is determined as the amount of tax payable in
respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence of
realisation of such assets. Other deferred tax assets are recognised
only to the extent there is a reasonable certainty of realisation in
future. Deferred tax assets / liabilities are reviewed at each Balance
Sheet date, based on developments during the year and available case
laws to reassess realisation / liabilities.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is highly
probable that future economic benefit associated with it will flow to
the Company.
1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to in significant risk of changes in value.
1.9 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accruals of past
or future cash receipts or payments. The cash flows from operating,
investing and financing activities of the Company are segregated based
on the available information.
1.10 Accounting for provisions, contingent liabilities and contingent
assets
In accordance with AS-29, Provisions, Contingent Liabilities and
Contingent Assets, the Company recognises provisions when it has a
present obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to
settle the obligation and when a reliable estimate of the amount of the
obligation can be made.
Provisions are determined based on management estimate required to
settle the obligation at the balance sheet date, supplemented by
experience of similar transactions. These are reviewed at each balance
sheet date and adjusted to reflect the current management estimates.
A disclosure of contingent liability is made when there is :
- a possible obligation arising from a past event, the existence of
which will be confirmed by the occurrence or non-occurrence of one or
more uncertain future events not within the control of the Company; or
- a present obligation arising from a past event which is not
recognised as it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate of the amount
of the obligation cannot be made.
When there is a possible obligation or a present obligation in respect
of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
Contingent Assets, if any, are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
1.11 Onerous contracts
Provisions for onerous contracts are recognised when the expected
benefits to be derived by the Company from a contract are lower than the
unavoidable costs of meeting the future obligations under the contract.
The provision is measured at the present value of the lower of the
expected cost of terminating the contract and the expected net cost of
continuing with the contract. Before a provision is established, the
Company recognises any impairment loss on the assets associated with
that contract.
1.12 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. Impairment loss, if any, is
provided in the Statement of profit and Loss to the extent the carrying
amount of assets exceeds their estimated recoverable amount.
1.13 Operating Cycle
Based on the nature of activities of the Company and the normal time
between acquisition of assets and their realisation in cash or cash
equivalents, the Company has determined its operating cycle as 12
months for the purpose of classification of its assets and liabilities
as current and non-current.
Mar 31, 2015
1.1 Basis of Preparation of Financial Statements
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India
(Indian GAAP) to comply with the Accounting Standards specified under
Section 133 of the Companies Act, 2013, read with Rule 7 of the
Companies (Accounts) Rules, 2014 and the relevant provisions of the
Companies Act, 2013 ("the 2013 Act") / Companies Act, 1956 ("the 1956
Act"), and the applicable guidelines issued by the Reserve Bank of
India (''RBI''). The financial statements have been prepared on accrual
basis under the historical cost convention. The accounting policies
adopted in the preparation of the financial statements are consistent
with those followed in the previous year except for change in the
accounting policy for depreciation as more described in Note 2.7.1.
1.2 Use of estimates
The preparation of the financial statements requires the Management to
make estimates and assumptions considered in the reported amounts of
assets and liabilities (including the contingent liabilities) and the
reported income and expenses during the reporting period. The
Management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. The differences
between the actual results and the estimates are recognised in the
period in which the results are known / materialise.
1.3 Fixed Assets, Depreciation and amortisation
Fixed assets are stated at cost less accumulated depreciation /
amortisation provided on the straight line method. The cost of Fixed
assets includes taxes, duties and other incidental expenses incurred in
relation to their acquisition / bringing the assets to their intended
use.
Depreciation on following tangible fixed assets has been provided on
the straight-line method as per the useful life prescribed in Schedule
II to the Companies Act, 2013 except in respect of the furniture and
fixtures, in which case the life of the assets has been assessed taking
into account the nature of the assets, the estimated usage of the asset
on the basis of the managements best estimation of getting economic
benefits from such assets. Further, assets individually costing Rs.5000/-
or less are fully depreciated in the year of purchase.
1.4 Revenue recognition
Income from Dividend is accounted when such dividend has been declared
and the Company''s right to receive payment is established.
Interest income is recognised on a time proportionate basis, taking
into account the amount outstanding and the coupon rate applicable.
Income from debentures and bonds is accrued over the maturity of the
security, net of amortisation of premium / discount, where intended to
be held for a long-term, with reference to the coupon dates.
1.5 Employee benefits
a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the Statement of Profit and Loss of the period
in which the related service is rendered.
b) Contributions under Defined Contribution Plans i.e. provident fund &
superannuation fund are recognised in the Statement of Profit and Loss
in the period in which the employee has rendered the service.
c) Company''s liability towards Defined Benefit Plans / Long term
compensated absences is determined by an independent actuary using the
projected unit credit method. Past service cost is recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
Statement of Profit and Loss as income or expense. Obligation is
measured at the present value of estimated future cash flows using a
discount rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
1.6 Investments
a) Long Term investments are accounted for and valued as per Accounting
Standard (AS) 13 - ''Accounting for Investments'' are stated at average
cost except where there is a diminution other than temporary, for which
provision is made.
b) Current investments are accounted for and valued as per Accounting
Standard (AS) 13 - ''Accounting for Investments'' and in accordance with
the RBI guidelines, are stated at the lower of cost and fair value, by
category of investments.
c) The difference between the holding cost and the face value of the
Government securities / Bonds / Debentures is written off / up
proportionately over the remaining life of the concerned investment or,
till the call option date in case of perpetual debentures.
d) Inter-class transfer of investments from one category to the other,
if any, is done in accordance with the RBI guidelines at the lower of
book value and fair value / market value on the date of transfer.
1.7 Taxes on income
Income tax expense comprises current tax and deferred tax charge or
credit. The current tax is determined as the amount of tax payable in
respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, deferred tax assets are recognised only if
there is virtual certainty supported by convincing evidence of
realisation of such assets. Other deferred tax assets are recognised
only to the extent there is a reasonable certainty of realisation in
future. Deferred tax assets / liabilities are reviewed at each Balance
Sheet date, based on developments during the year and available case
laws to reassess realisation / liabilities. Minimum Alternate Tax
(MAT) paid in accordance with the tax laws, which gives future economic
benefits in the form of adjustment to future income tax liability, is
considered as an asset if there is convincing evidence that the Company
will pay normal income tax. Accordingly, MAT is recognised as an asset
in the Balance Sheet when it is highly probable that future economic
benefit associated with it will flow to the Company.
1.8 Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value.
1.9 Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
1.10 Accounting for provisions, contingent liabilities and contingent
assets
In accordance with AS-29, Provisions, Contingent Liabilities and
Contingent Assets, the Company recognises provisions when it has a
present obligation as a result of a past event, it is probable that an
outflow of resources embodying economic benefits will be required to
settle the obligation and when a reliable estimate of the amount of the
obligation can be made.
Provisions are determined based on management estimate required to
settle the obligation at the balance sheet date, supplemented by
experience of similar transactions. These are reviewed at each balance
sheet date and adjusted to reflect the current management estimates.
A disclosure of contingent liability is made when there is:
- a possible obligation arising from a past event, the existence of
which will be confirmed by the occurrence or non-occurrence of one or
more uncertain future events not within the control of the Company; or
- a present obligation arising from a past event which is not
recognised as it is not probable that an outflow of resources will be
required to settle the obligation or a reliable estimate of the amount
of the obligation cannot be made.
When there is a possible obligation or a present obligation in respect
of which the likelihood of outflow of resources is remote, no provision
or disclosure is made.
Contingent Assets, if any, are not recognised in the financial
statements since this may result in the recognition of income that may
never be realized.
1.11 Onerous contracts
Provisions for onerous contracts are recognised when the expected
benefits to be derived by the Company from a contract are lower than
the unavoidable costs of meeting the future obligations under the
contract. The provision is measured at the present value of the lower
of the expected cost of terminating the contract and the expected net
cost of continuing with the contract. Before a provision is
established, the Company recognises any impairment loss on the assets
associated with that contract.
1.12 Impairment of assets
The Company assesses at each balance sheet date whether there is any
indication that an asset may be impaired. Impairment loss, if any, is
provided in the Statement of Profit and Loss to the extent the carrying
amount of assets exceeds their estimated recoverable amount.
1.13 Operating Cycle
Based on the nature of activities of the Company and the normal time
between acquisition of assets and their realisation in cash or cash
equivalents, the Company has determined its operating cycle as 12
months for the purpose of classification of its assets and liabilities
as current and non-current.
Note:
2.7.1 The Company has revised its policy of providing depreciation /
amortisation on fixed assets effective 1st April, 2014. Depreciation is
now provided on a straight line method as against written down value
method and the remaining useful life has also been revised in line with
Schedule II of the Companies Act, 2013 wherever appropriate based on
management''s internal evaluation. The company believes that the change
in the method leads to more appropriate presentation of the financial
statements.
The depreciation expense in the Statement of Profit and Loss for the
year is lower by Rs.16.74 lacs consequent to the above change in the
method of depreciation and change in the useful life of the assets.
On account of these changes depreciation / amortization expenses for
the year and net block of fixed assets as on 31st March, 2015 are not
comparable with previous years.
Mar 31, 2013
1.1 Basis of Preparation of Financial Statements.
The financial statements have been prepared on the historical cost
convention, on an accrual basis and comply in all material respect with
the Accounting Standards notified by Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act, 1956.
1.2 The preparation of the financial statements requires the management
to make estimates and assumptions considered in the reported amounts of
assets and liabilities (including the contingent liabilities) and the
reported income and expenses during the reporting period. The
management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. The differences
between the actual results and the estimates are recognized in the
periods in which the results are known / materialise.
1.3 Fixed assets are stated at cost less accumulated depreciation
provided on the written down value method at the following rates :-
1.4 Income from Dividend is accounted as and when such dividend has
been declared and the Company''s right to receive payment is
established.
Interest income is recognised on a time proportion basis, taking into
account the amount outstanding and the rate applicable. Income from
debentures and bonds is accrued over the maturity of the security, net
of amortisation of premium/ discount, where intended to be held for a
long-term, thereby recognising the implicit yield to maturity, with
reference to the coupon dates.
1.5 a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the Statement of Profit and Loss of the period
in which the related service is rendered.
b) Contributions under Defined Contribution Plans are recognised in the
Statement of Profit and Loss in the period in which the employee has
rendered the service.
c) Company''s liability towards Defined Benefit Plans / Long term
compensated absences is determined by an independent actuary using the
projected unit credit method. Past service cost is recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
Statement of Profit and Loss as income or expense. Obligation is
measured at the present value of estimated future cash flows using a
discounted rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
1.6 a) Long Term investments as per Accounting Standard (AS) 13 -
''Accounting for Investments'' are stated at average cost except where
there is a diminution other than temporary, for which provision is
made.
b) Current investments as per Accounting Standard (AS) 13 - ''Accounting
for Investments'' are stated at the lower of cost and fair value,
considered category wise.
c) The difference between the holding cost and the face value of the
Government securities / Bonds / Debentures is written off / up
proportionately over the remaining life of the concerned investment /
till the call option date in case of perpetual debentures.
1.7 Income tax expense comprises current tax and deferred tax charge or
credit. The current tax is determined as the amount of tax payable in
respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, 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 a
reasonable certainty of realisation in future. Deferred tax assets /
liabilities are reviewed at each Balance Sheet date, based on
developments during the year and available case laws to reassess
realisation / liabilities.
1.8 Current / Non-current:
All assets and liabilities are presented as Current or Non-current as
per the Company''s normal operating cycle and other criteria set out in
the Revised Schedule VI of the Companies Act, 1956. The Company has
considered its operating cycle as 12 months for the purpose of Current
/ Non-current classification of assets and liabilities.
Mar 31, 2012
1.1 Basis of Preparation of Financial Statements.
The financial statements have been prepared on the historical cost
convention, on an accrual basis and comply in all material respect with
the Accounting Standards notified by Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act, 1956.
1.2 The preparation of the financial statements requires the management
to make estimates and assumptions considered in the reported amounts of
assets and liabilities (including the contingent liabilities) and the
reported income and expenses during the reporting period. The
management believes that the estimates used in the preparation of the
financial statements are prudent and reasonable. The differences
between the actual results and the estimates are recognised in the
periods in which the results are known / materialise.
1.3 Income from Dividend is accounted as and when such dividend has
been declared and the Company's right to receive payment is
established.
Interest income is recognised on a time proportion basis, taking into
account the amount outstanding and the rate applicable.
1.4 a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the statement of profit and loss of the period
in which the related service is rendered.
b) Contributions under Defined Contribution Plans are recognised in the
statement of Profit and Loss in the period in which the employee has
rendered the service.
c) Company's liability towards Defined Benefit Plans / Long term
compensated absences is determined by an independent actuary using the
projected unit credit method. Past service cost is recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
statement of profit and loss as income or expense. Obligation is
measured at the present value of estimated future cash flows using a
discounted rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
1.5 a) Long Term investments as per Accounting Standard (AS) 13 -
'Accounting for Investments' are stated at average cost except where
there is a diminution other than temporary, for which provision is
made.
b) Current investments as per Accounting Standard (AS) 13 - 'Accounting
for Investments' are stated at the lower of cost and fair value,
considered category wise.
c) The difference between the holding cost and the face value of the
Government securities/bonds/debentures is written off/up
proportionately over the remaining life of the concerned investment /
till the call option date in case of perpetual debentures.
1.6 Income tax expense comprises current tax and deferred tax charge or
credit. The current tax is determined as the amount of tax payable in
respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, 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 a
reasonable certainty of realisation in future. Deferred tax
assets/liabilities are reviewed at each balance sheet date based on
developments during the year and available case laws to reassess
realisation/liabilities.
b) The holders of 68,88,343 detachable warrants issued with the Zero
Coupon Fully Convertible Bonds of Rs.650/- each were entitled to apply
for and be allotted on payment of Rs.400/- per warrant, one ordinary
share of Rs.10/- each at a premium of Rs.390/-, between 1.4.2011 and
30.4.2011.
c) The Issued, Subscribed and fully paid up ordinary shares increased
on the issue / allotment of 68,58,222 ordinary shares of Rs.10 each at
a premium of Rs.390 per share during the year, to the warrant holders
on exercise of rights.
d) 3,75,41,071 Ordinary shares - 68.14% (Previous Year 3,14,53,660
Ordinary shares - 65.21%) of Rs.10/- each are held by the Holding
Company, Tata Sons Ltd. No other shareholder holds more than 5% of the
ordinary share capital of the company. 8,69,472 Ordinary Shares
(Previous Year 7,60,788) are held by a subsidiary of the holding
company and 6,74,390 Ordinary shares (Previous Year 5,83,060) are held
by associates of the holding company.
e) The Company has only one category of shares with voting rights, viz.
Ordinary Share Capital.
2.1. Trade Payables
None of the parties grouped under Trade Payables have declared
themselves under the Micro, Small and Medium Enterprises Development
Act, 2006.
The above information has been determined to the extent such parties
have been identified on the basis of information available with the
Company. This has been relied upon by the auditors.
2.1.1 Trade Payables include amount payable to the holding company,
Tata Sons Ltd. Rs.195.56 lacs (Previous Year Rs.204.87 lacs)
2.2.1 All the equity investments in Sri Lanka and Pakistan except one
scrip have been written off during the year. Equity Shares held in Sri
Lanka/Pakistan Companies, are at cost less provision for other than
temporary diminution.
2.2.2 All the above investments are fully paid, except where otherwise
indicated.
* Denotes balance less than Rs.500
2.3 Deferred Tax Assets
Deferred Tax Assets have not been recognised, as there is no reasonable
certainty for setting off the same, considering the present tax status
of the Company.
2.4.1 Security deposits includes an amount of Rs.300.00 lacs with
Ewart Investments Ltd. (Previous Year Rs.300.00 lacs), which is a
related party.
2.5.1 Current Investments shown in note 2.11 of Rs.5000.00 lacs
(Previous Year Rs.2501.50 lacs) represents current maturities of Long
Term Investments which as per the Accounting Standard (AS)-13
'Accounting for Investments' are Long Term Investments.
2.6 Trade receivables
All Trade receivables are unsecured and considered good - less than six
months.
2.6.1 Balance with banks on current accounts includes
i) amount kept in Unpaid dividend accounts - Rs. 98.45 lacs (Previous
Year Rs.121.01 lacs).
ii) amount kept in an escrow account towards matured deposits and
interest thereon Rs.1.47 lacs (Previous Year Rs.2.23 lacs).
iii) amount which is subject to exchange control restrictions in Sri
Lanka Rs.1.25 lacs (Previous Year Rs.1.42 lacs).
2.6.2 Balances with banks on deposit accounts includes
i) amount which is subject to exchange control restrictions in Sri
Lanka Rs.25.51 lacs (Previous Year Rs.26.03 lacs).
ii) interest accrued but not due on deposit - Rs. 0.30 lac (Previous
Year Rs.0.19 lac).
2.6.3 Other bank balances on deposit accounts include interest accrued
but not due on deposits - Rs. 865.63 lacs (Previous Year Rs.367.45
lacs).
2.6.4 Other bank balances includes deposits with more than 12 months
maturity, Rs.Nil (Previous Year Rs.7700.00 lacs) and interest accrued
but not due thereon Rs.Nil (Previous Year Rs.68.10 lacs).
3.1 Profit on sale of investments (net)
Profit on sale of investments (net) includes loss of Rs.61.37 lacs on
current investments, as per AS-13 (Previous Year profit of Rs.126.40
lacs).
Mar 31, 2011
(i) Basis of Preparation of Financial Statements.
The financial statements have been prepared on the historical cost
convention, on an accrual basis and comply in all material respect with
the Accounting Standards notified by Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act, 1956.
(ii) The preparation of the financial statements requires the
management to make estimates and assumptions considered in the reported
amounts of assets and liabilities (including the contingent
liabilities) and the reported income and expenses during the reporting
period. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable. The
differences between the actual results and the estimates are recognised
in the periods in which the results are known / materialise.
(iv) Income from Dividend is accounted as and when such dividend has
been declared and the Companys right to receive payment is
established.
Interest income is recognised on a time proportion basis, taking into
account the amount outstanding and the rate applicable.
(v) a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the period in
which the related service is rendered.
b) Contributions under Defined Contribution Plans are recognised in the
Profit and Loss Account in the period in which the employee has
rendered the service.
c) Companys liability towards Defined Benefit Plans / Long term
compensated absences is determined by an inde- pendent actuary using
the projected unit credit method. Past services are recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
statement of Profit and Loss Account as income or expense. Obligation
is measured at the present value of estimated future cash flows using a
discounted rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
(vi) a) Long Term investments are stated at average cost except where
there is a diminution other than temporary, for which provision is
made.
b) Current investments are stated at the lower of cost and fair value,
considered category wise.
(vii) Income tax expense comprises current tax and deferred tax charge
or credit. The current tax is determined as the amount of tax payable
in respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, 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 a
reasonable certainty of realisation in future. Deferred tax
assets/liabilities are reviewed at each balance sheet date based on
developments during the year and available case laws to reassess
realisation/liabilities.
Mar 31, 2010
(i) Basis of Preparation of Financial Statements.
The financial statements have been prepared on the historical cost
convention, on an accrual basis and comply in all material respect with
the Accounting Standards notified by Companies (Accounting Standard)
Rules, 2006 and the relevant provisions of the Companies Act, 1956.
(ii) The preparation of the financial statements requires the
management to make estimates and assumptions considered in the reported
amounts of assets and liabilities (including the contingent
liabilities) and the reported income and expenses during the reporting
period. The Management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable. The
differences between the actual results and the estimates are recognised
in the periods in which the results are known / materialise.
(iii) Income from Dividend is accounted as and when such dividend has
been declared and the Companys right to receive payment is
established.
Interest income is recognised on a time proportion basis, taking into
account the amount outstanding and the rate applicable.
(iv) a) Short-term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the period in
which the related service is rendered.
b) Contributions under Defined Contribution Plans are recognised in the
Profit and Loss Account in the period in which the employee has
rendered the service.
c) Companys liability towards Defined Benefit Plans / Long term
compensated absences is determined by an independent actuary using the
projected unit credit method. Past services are recognised on a
straight line basis over the average period until the benefits become
vested. Actuarial gains and losses are recognised immediately in the
statement of Profit and Loss Account as income or expense. Obligation
is measured at the present value of estimated future cash flows using a
discounted rate that is determined by reference to the market yields at
the Balance Sheet date on Government Bonds where the currency and terms
of the Government Bonds are consistent with the currency and estimated
terms of the defined benefit obligation.
(v) a) Long Term investments are stated at average cost except where
there is a diminution other than temporary, for which provision is
made. b) Current Investments are stated at the lower of cost and fair
value, considered category wise.
(vi) Income tax expense comprises current tax and deferred tax charge
or credit. The current tax is determined as the amount of tax payable
in respect of the estimated taxable income for the period. The deferred
tax charge or credit is recognised using prevailing enacted or
substantively enacted tax rates. Where there is unabsorbed depreciation
or carry forward losses, 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 a
reasonable certainty of realisation in future. Deferred tax
assets/liabilities are reviewed at each balance sheet date based on
developments during the year and available case laws to reassess
realisation/liabilities.
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