Mar 31, 2023
Company Background
Dolat Algotech Ltd. (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. The registered office of the company is located at 1401-1409, Dalal Street Commercial Co-Op Soc. Ltd., Block 53 (Bldg No.53E) Zone-5, Road-5E, Gift City, Gandhinagar - 382355, Gujarat. Its shares are listed on Bombay Stock Exchange Ltd. The company is a trading cum self-clearing member of National Stock Exchange of India Ltd. and carries on the business of securities broking and securities trading.
The financial statements of the company have been prepared in accordance with Indian Accounting Standard (''Ind ASâ) notified under Section 133 of the Companies Act; 2013, read together with the Companies (Indian Accounting Standard) Rules, 2015.
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
Any asset or liability is classified as current if it satisfies any of the following conditions:
i. the asset/liability is expected to be realized/settled in the Companyâs normal operating cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the purpose of trading;
iv. the asset/liability is expected to be realized/settled within twelve months after the reporting period;
v. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;
vi. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories and their realization in cash and cash equivalents.
a) Property, Plant and Equipment
Measurement at recognition:
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses if any.
The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.
The cost of an item of property, plant and equipment comprises of its purchase price including non refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
Depreciation
Depreciation on item of property, plant and equipment is provided on written down value method based on useful life of the assets as prescribed in Schedule II to the Companies Act; 2013.Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date the asset is put to use. Depreciation on sale/deduction from the property, plant and equipment is provided for upto the date of sale/deduction as the case may be. The depreciation is provided as per the useful life of items of property, plant and equipment as prescribed in Schedule II to the Companies Act, 2013. The useful life of items of property, plant and equipment is mentioned below;
Years |
|
Furniture and Fixtures |
10 |
Electric Installation |
10 |
Vehicles |
8 |
Office Equipments |
5 |
Computers |
3 |
Computer Servers |
6 |
Derecognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
b) Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of tangible assets for any possible impairment. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price or estimated future cash flows.
c) Revenue Recognition:
1) Income from Shares & Securities trading is recognized as income or loss on the date of actual trade.
2) Income in respect of derivative contracts are accounted in respect of expired contracts.
3) In respect of option contracts open as on balance sheet date, the net premium paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
4) In respect of futures contracts open as on balance sheet date, the net mark to market paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
5) The dividend income is accounted for when the right to receive the payment is established whereas, interest income and other income is accounted on accrual basis.
d) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement:
The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.
Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.
However, trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
i. The Companyâs business model for managing the financial asset and
ii. The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
iii. Financial assets measured at fair value through profit or loss (FVTPL)
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.
Derecognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''pass-through'' arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Initial recognition and measurement:
The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability. Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
e) Fair Value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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 measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability
⢠In absence of principal market, in the most advantageous market for the asset or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 â quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 â inputs that are unobservable for the asset or liability
f) Investments in subsidiary
The company has elected to recognize its investment in subsidiary at cost in accordance with the option available in Ind AS 27 - ''Separate Financial Statements''. The details of such investment are given in Note 3. The impairment policy on such investment is explained in note1.3(b) above
g) Income Taxes
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by 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.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax income/ expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
h) Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
i) Cash and Cash Equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments.
j) Employees Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
I. Defined Benefit plans:
i. Provident Fund scheme:
Retirement benefit in the form of provident fund is defined contribution scheme. The company has no obligation, other than the contribution payable to the provident fund. The company recognizes contribution payable to provident fund scheme as an expense, when an employee renders the related services.
ii. Gratuity scheme:
The Company operates a defined benefit gratuity plan for employees. The Company contributes to Life Insurance Corporation of India (a fund), towards meeting the Gratuity obligation.
Recognition and measurement of Defined Benefit plans:
The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.
The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.
Other Long Term Employee Benefits:
As per companyâs policy, no encashment of leave to any employee is allowed.
k) Lease Accounting
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless
1) another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or
2) the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessorâs expected inflationary cost increases
l) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
a. Income taxes
The Companyâs tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions .
b. Defined Benefit Obligation
The costs of providing post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ''Employee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates.
Mar 31, 2021
Company Background
Dolat Investments Ltd. (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. The registered office of the company is located at Office No.141, Center Point, Somnath, Daman-396210, Daman & Diu. Its shares are listed on Bombay Stock Exchange Ltd. The company is a trading cum clearing member of National Stock Exchange of India Ltd. and carries on the business of securities broking and securities trading.
1. Significant Accounting Policies and Key Accounting Estimates and Judgments Significant Accounting Policies
1.1 Basis of preparation of financial statements
The financial statements of the company have been prepared in accordance with Indian Accounting Standard (''Ind ASâ) notified under Section 133 of the Companies Act; 2013, read together with the Companies (Indian Accounting Standard) Rules, 2015.
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
1.2 Current / Non-Current Classification
Any asset or liability is classified as current if it satisfies any of the following conditions:
i. the asset/liability is expected to be realized/settled in the Companyâs normal operating cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the purpose of trading;
iv. the asset/liability is expected to be realized/settled within twelve months after the reporting period;
v. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;
vi. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories and their realization in cash and cash equivalents.
1.3 Summary of Significant Accounting Policies
a) Property, Plant and Equipment
Measurement at recognition:
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses if any.
The Company identifies and determines cost of each part of an item of property, plant and equipment
separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.
The cost of an item of property, plant and equipment comprises of its purchase price including non refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
Depreciation
Depreciation on item of property, plant and equipment is provided on written down value method based on useful life of the assets as prescribed in Schedule II to the Companies Act; 2013. Depreciation on addition to property, plant and equipment is provided on pro-rata basis from the date the asset is put to use. Depreciation on sale/deduction from the property, plant and equipment is provided for upto the date of sale/deduction as the case may be. The depreciation is provided as per the useful life of items of property, plant and equipment as prescribed in Schedule II to the Companies Act, 2013. The useful life of items of property, plant and equipment is mentioned below;
Years |
|
Furniture and Fixtures |
10 |
Electric Installation |
10 |
Vehicles |
8 |
Office Equipments |
5 |
Computers |
3 |
Computer Servers |
6 |
Derecognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
b) Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of tangible assets for any possible impairment. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of the asset''s net selling price or estimated future cash flows.
c) Revenue Recognition:
1) Income from Shares & Securities trading is recognized as income or loss on the date of actual trade and is shown net of brokerage expenses.
2) Income in respect of derivative contracts are accounted in respect of expired contracts.
3) In respect of option contracts open as on balance sheet date, the net premium paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments
4) In respect of futures contracts open as on balance sheet date, the net mark to market paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
5) The dividend income is accounted for when the right to receive the payment is established whereas, interest income and other income is accounted on accrual basis.
d) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
Initial recognition and measurement:
The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.
Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.
However, trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
i. The Companyâs business model for managing the financial asset and
ii. The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
iii. Financial assets measured at fair value through profit or loss (FVTPL)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
iii. Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.
Derecognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a âpass-throughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
e) Fair Value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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 measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability
⢠In absence of principal market, in the most advantageous market for the asset or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 â quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 â inputs that are unobservable for the asset or liability
f) Investments in subsidiary
The company has elected to recognize its investment in subsidiary at cost in accordance with the option available in Ind AS 27 - ''Separate Financial Statements''. The details of such investment are given in Note 3. The impairment policy on such investment is explained in note1.3(b) above
g) Income Taxes
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by 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.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax income/ expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
h) Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
i) Cash and Cash Equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments.
j) Employees Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
Post-Employment Benefits:
I. Defined Benefit plans:
i. Provident Fund scheme:
The provisions of The Employeesâ Provident Fund Scheme, 1952 were not applicable in the previous financial years in view of number of employees of the company being less than the prescribed numbers. In the current year the company opted out of the provident fund law provision as the basic PF salary is more than the prescribed limit per month of all the employees during the year.
ii. Gratuity scheme:
The Company operates a defined benefit gratuity plan for employees. The Company contributes to Life Insurance Corporation of India (a fund), towards meeting the Gratuity obligation.
Recognition and measurement of Defined Benefit plans:
The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.
The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.
Other Long Term Employee Benefits:
As per companyâs policy, no encashment of leave to any employee is allowed.
k) Lease Accounting
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless
1) another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or
2) the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessorâs expected inflationary cost increases
l) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.
m) Events after Reporting Date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
1.4 Key accounting estimates and judgments
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
a. Income taxes
The Companyâs tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions
b. Defined Benefit Obligation
The costs of providing post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ''Employee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates.
Mar 31, 2018
Significant accounting policies and notes to financial statements for the year ended 31st March, 2018.
Company Background
Dolat Investments Ltd. (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956. The registered office of the company is located at Office No.141, Center Point, Somnath, Daman - 396210, Daman & Diu. Its shares are listed on Bombay Stock Exchange Ltd. The company is engaged in the trading of shares, securities and the commodities through various stock/commodities exchanges.
1. Significant Accounting Policies and Key Accounting Estimates and Judgments
1.1 Basis of preparation of financial statements
The financial statements of the company have been prepared in accordance with Indian Accounting Standard (''Ind ASâ) notified under Section 133 of the Companies Act; 2013, read together with the Companies (Indian Accounting Standard) Rules, 2015.
For all periods up to and including the year ended 31st March, 2017, the Company had prepared its financial statements in accordance with Accounting Standards notified under the Section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014 (''Previous GAAPâ). Detailed explanation on how the transition from previous GAAP to Ind AS has affected the Companyâs Balance Sheet, financial performance and cash flows is given under Note 29.
These financial statements have been prepared and presented under the historical cost convention, on the accrual basis of accounting except for certain financial assets and financial liabilities that are measured at fair values at the end of each reporting period, as stated in the accounting policies set out below. The accounting policies have been applied consistently over all the periods presented in these financial statements.
1.2 Current / Non-Current Classification
Any asset or liability is classified as current if it satisfies any of the following conditions:
i. the asset/liability is expected to be realized/settled in the Companyâs normal operating cycle;
ii. the asset is intended for sale or consumption;
iii. the asset/liability is held primarily for the purpose of trading;
iv. the asset/liability is expected to be realized/settled within twelve months after the reporting period;
v. the asset is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date;
vi. in the case of a liability, the Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.
All other assets and liabilities are classified as non-current.
For the purpose of current/non-current classification of assets and liabilities, the Company has ascertained its normal operating cycle as twelve months. This is based on the nature of services and the time between the acquisition of assets or inventories and their realization in cash and cash equivalents.
1.3 Summary of Significant Accounting Policies
a) Property, Plant and Equipment
Measurement at recognition:
An item of property, plant and equipment that qualifies as an asset is measured on initial recognition at cost. Following initial recognition, items of property, plant and equipment are carried at its cost less accumulated depreciation and accumulated impairment losses if any.
The Company identifies and determines cost of each part of an item of property, plant and equipment separately, if the part has a cost which is significant to the total cost of that item of property, plant and equipment and has useful life that is materially different from that of the remaining item.
The cost of an item of property, plant and equipment comprises of its purchase price including non-refundable purchase taxes or levies, directly attributable cost of bringing the asset to its working condition for its intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Costs in nature of repairs and maintenance are recognized in the Statement of Profit and Loss as and when incurred.
Derecognition
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the derecognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the Statement of Profit and Loss when the item is derecognized.
b) Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of tangible assets for any possible impairment. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of the assetâs net selling price or estimated future cash flows.
c) Revenue Recognition:
1) Income from Shares & Securities trading is recognized as income or loss on the date of actual trade and is shown net of brokerage expenses.
2) Income in respect of derivative contracts are accounted in respect of expired contracts.
3) In respect of option contracts open as on balance sheet date, the net premium paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
4) In respect of futures contracts open as on balance sheet date, the net mark to market paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
5) The dividend income is accounted for when the right to receive the payment is established whereas, interest income and other income is accounted on accrual basis.
6) In respect of commodities derivative contracts open as on balance sheet date, the net mark to market paid or received is carried forward to the balance sheet as financial assets or financial liabilities. The unrealized gain or loss measured on fair valuation is shown as financial assets or financial liabilities as per IND AS 109 Financial Instruments.
7) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net of returns and excludes freight and other charges and accounted for at time when the invoices are raised.
d) Inventory
Commodities stock held as inventory under current assets are valued at cost or net realizable value, whichever is lower on FIFO basis.
e) Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
Initial recognition and measurement:
The Company recognizes a financial asset in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial assets are recognized initially at fair value, plus in the case of financial assets not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial asset.
Where the fair value of a financial asset at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial asset.
However, trade receivables that do not contain a significant financing component are measured at transaction price.
Subsequent measurement:
For subsequent measurement, the Company classifies a financial asset in accordance with the below criteria:
i. The Companyâs business model for managing the financial asset and
ii. The contractual cash flow characteristics of the financial asset.
Based on the above criteria, the Company classifies its financial assets into the following categories:
i. Financial assets measured at amortized cost
ii. Financial assets measured at fair value through other comprehensive income (FVTOCI)
iii. Financial assets measured at fair value through profit or loss (FVTPL)
i. Financial assets measured at amortized cost:
A financial asset is measured at the amortized cost if both the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is to hold financial assets in order to collect contractual cash flows, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
This category applies to cash and bank balances, trade receivables, loans and other financial assets of the Company. Such financial assets are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash receipts are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial asset over the relevant period of the financial asset to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest income over the relevant period of the financial asset. The same is included under other income in the Statement of Profit and Loss.
The amortized cost of a financial asset is also adjusted for loss allowance, if any.
ii. Financial assets measured at FVTOCI:
A financial asset is measured at FVTOCI if both of the following conditions are met:
a) The Companyâs business model objective for managing the financial asset is achieved both by collecting contractual cash flows and selling the financial assets, and
b) The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
iii. Financial assets measured at FVTPL:
A financial asset is measured at FVTPL unless it is measured at amortized cost or at FVTOCI as explained above. This is a residual category applied to all other investments of the Company. Such financial assets are subsequently measured at fair value at each reporting date. Fair value changes are recognized in the Statement of Profit and Loss.
Derecognition:
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognized (i.e. removed from the Companyâs Balance Sheet) when any of the following occurs:
i. The contractual rights to cash flows from the financial asset expires;
ii. The Company transfers its contractual rights to receive cash flows of the financial asset and has substantially transferred all the risks and rewards of ownership of the financial asset;
iii. The Company retains the contractual rights to receive cash flows but assumes a contractual obligation to pay the cash flows without material delay to one or more recipients under a ''passthroughâ arrangement (thereby substantially transferring all the risks and rewards of ownership of the financial asset);
iv. The Company neither transfers nor retains substantially all risk and rewards of ownership and does not retain control over the financial asset.
In cases where Company has neither transferred nor retained substantially all of the risks and rewards of the financial asset, but retains control of the financial asset, the Company continues to recognize such financial asset to the extent of its continuing involvement in the financial asset. In that case, the Company also recognizes an associated liability. The financial asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
On derecognition of a financial asset, (except as mentioned in ii above for financial assets measured at FVTOCI), the difference between the carrying amount and the consideration received is recognized in the Statement of Profit and Loss.
Financial Liabilities
Initial recognition and measurement:
The Company recognizes a financial liability in its Balance Sheet when it becomes party to the contractual provisions of the instrument. All financial liabilities are recognized initially at fair value minus, in the case of financial liabilities not recorded at fair value through profit or loss (FVTPL), transaction costs that are attributable to the acquisition of the financial liability.
Where the fair value of a financial liability at initial recognition is different from its transaction price, the difference between the fair value and the transaction price is recognized as a gain or loss in the Statement of Profit and Loss at initial recognition if the fair value is determined through a quoted market price in an active market for an identical asset (i.e. level 1 input) or through a valuation technique that uses data from observable markets (i.e. level 2 input).
In case the fair value is not determined using a level 1 or level 2 input as mentioned above, the difference between the fair value and transaction price is deferred appropriately and recognized as a gain or loss in the Statement of Profit and Loss only to the extent that such gain or loss arises due to a change in factor that market participants take into account when pricing the financial liability.
Subsequent measurement:
All financial liabilities of the Company are subsequently measured at amortized cost using the effective interest method.
Under the effective interest method, the future cash payments are exactly discounted to the initial recognition value using the effective interest rate. The cumulative amortization using the effective interest method of the difference between the initial recognition amount and the maturity amount is added to the initial recognition value (net of principal repayments, if any) of the financial liability over the relevant period of the financial liability to arrive at the amortized cost at each reporting date. The corresponding effect of the amortization under effective interest method is recognized as interest expense over the relevant period of the financial liability. The same is included under finance cost in the Statement of Profit and Loss.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in the Statement of Profit and Loss.
f) Fair Value
The Company measures financial instruments at fair value in accordance with the accounting policies mentioned above. 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 measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability
- In absence of principal market , in the most advantageous market for the asset or liability
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy that categorizes into three levels, described as follows, the inputs to valuation techniques used to measure value. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).
Level 1 â quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 â inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly
Level 3 â inputs that are unobservable for the asset or liability
g) Income Taxes
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax:
Current tax is the amount of income taxes payable in respect of taxable profit for a period. Taxable profit differs from ''profit before taxâ as reported in the Statement of Profit and Loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible under the Income Tax Act, 1961.
Current tax is measured using tax rates that have been enacted by the end of reporting period for the amounts expected to be recovered from or paid to the taxation authorities.
Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit under Income Tax Act, 1961.
Deferred tax liabilities are generally recognized for all taxable temporary differences. However, in case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax liabilities are not recognized.
Deferred tax assets are generally recognized for all deductible temporary differences to the extent it is probable that taxable profits will be available against which those deductible temporary difference can be utilized. In case of temporary differences that arise from initial recognition of assets or liabilities in a transaction that affect neither the taxable profit nor the accounting profit, deferred tax assets are not recognized.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow the benefits of part or all of such deferred tax assets to be utilized.
Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted by 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.
Presentation of current and deferred tax:
Current and deferred tax are recognized as income or an expense in the Statement of Profit and Loss, except when they relate to items that are recognized in Other Comprehensive Income, in which case, the current and deferred tax income/ expense are recognized in Other Comprehensive Income.
The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously. In case of deferred tax assets and deferred tax liabilities, the same are offset if the Company has a legally enforceable right to set off corresponding current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same tax authority on the Company.
h) Provisions and contingencies
The Company recognizes provisions when a present obligation (legal or constructive) as a result of a past event exists and it is probable that an outflow of resources embodying economic benefits will be required to settle such obligation and the amount of such obligation can be reliably estimated.
If the effect of time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but probably will not require an outflow of resources embodying economic benefits or the amount of such obligation cannot be measured reliably. When there is a possible obligation or a present obligation in respect of which likelihood of outflow of resources embodying economic benefits is remote, no provision or disclosure is made.
i) Cash and Cash Equivalents
Cash and Cash equivalents for the purpose of Cash Flow Statement comprise cash and cheques in hand, bank balances, demand deposits with banks where the original maturity is three months or less and other short term highly liquid investments.
j) Employees Benefits
Short Term Employee Benefits:
All employee benefits payable wholly within twelve months of rendering the service are classified as short term employee benefits and they are recognized in the period in which the employee renders the related service. The Company recognizes the undiscounted amount of short term employee benefits expected to be paid in exchange for services rendered as a liability (accrued expense) after deducting any amount already paid.
Post-Employment Benefits:
I. Defined Benefit plans:
i. Provident Fund scheme:
The provisions of provident fund laws are not applicable in view of number of employees of the company being less than the prescribed number.
ii. Gratuity scheme:
The Company operates a defined benefit gratuity plan for employees. The Company contributes to Life Insurance Corporation of India (a fund), towards meeting the Gratuity obligation.
Recognition and measurement of Defined Benefit plans:
The cost of providing defined benefits is determined using the Projected Unit Credit method with actuarial valuations being carried out at each reporting date. The defined benefit obligations recognized in the Balance Sheet represent the present value of the defined benefit obligations as reduced by the fair value of plan assets. Any defined benefit asset (negative defined benefit obligations resulting from this calculation) is recognized representing the present value of available refunds and reductions in future contributions to the plan.
All expenses represented by current service cost, past service cost, if any, and net interest on the defined benefit liability / (asset) are recognized in the Statement of Profit and Loss. Remeasurements of the net defined benefit liability / (asset) comprising actuarial gains and losses and the return on the plan assets (excluding amounts included in net interest on the net defined benefit liability/asset), are recognized in Other Comprehensive Income. Such remeasurements are not reclassified to the Statement of Profit and Loss in the subsequent periods.
The Company presents the above liability/(asset) as current and non-current in the Balance Sheet as per actuarial valuation by the independent actuary.
Other Long Term Employee Benefits:
As per companyâs policy, no encashment of leave to any employee is allowed. k) Lease Accounting
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.
In respect of assets taken on operating lease, lease rentals are recognized as an expense in the Statement of Profit and Loss on straight line basis over the lease term unless
1) another systematic basis is more representative of the time pattern in which the benefit is derived from the leased asset; or
2) the payments to the lessor are structured to increase in the line with expected general inflation to compensate for the lessorâs expected inflationary cost increases
l) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Chief Operating Decision Maker (CODM) of the Company. The CODM is responsible for allocating resources and assessing performance of the operating segments of the Company.
m) Events after Reporting Date
Where events occurring after the Balance Sheet date provide evidence of conditions that existed at the end of the reporting period, the impact of such events is adjusted within the financial statements. Otherwise, events after the Balance Sheet date of material size or nature are only disclosed.
n) Recent Accounting Pronouncement
Standards issued but not yet effective
In March 2018, the Ministry of Corporate Affairs notified Ina AS 115, Revenue from Contracts with customers as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. The new standard is effective for accounting period beginning on or after 1st April 2018,
The Ind AS 115 replaces the existing revenue recognition standard Ind AS 11, Construction Contract and Ind AS 18, Revenue.
The Company is evaluating the requirements of the amendment and the effect on the financial statements is being evaluated.
1.4 Key accounting estimates and judgments
The preparation of the Companyâs financial statements requires the management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Critical accounting estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below:
a. Income taxes
The Companyâs tax jurisdiction is India. Significant judgments are involved in estimating budgeted profits for the purpose of paying advance tax, determining the provision for income taxes, including amount expected to be paid/recovered for uncertain tax positions
b. Defined Benefit Obligation
The costs of providing post-employment benefits are charged to the Statement of Profit and Loss in accordance with Ind AS 19 ''Employee benefitsâ over the period during which benefit is derived from the employeesâ services. The costs are assessed on the basis of assumptions selected by the management. These assumptions include salary escalation rate, discount rates, expected rate of return on assets and mortality rates.
Terms/ Rights Attached to Equity Shares:
The company has only one class of equity shares having par value of Re 1 each. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. In the event of liquidation of the company, the holders of the equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The company is engaged in the business of trading in commodities, shares and securities, for the which lever I valuation technique is useful for fair value measurement. The company does not require the hierarchy of level II and level III valuation technique for measurement of financial assets and liabilities.
C. Financial Risk management- Objectives and policies
The Companyâs financial liabilities comprise mainly of trade payables and other payables. The Companyâs financial assets comprise mainly of investments, cash and cash equivalents, other balances with bank, trade receivables and other receivables.
The Company is exposed to Credit risk and Liquidity risk. The board of directors oversees the management of these financial risks. The company is not exposed to any market risk which comprise of interest rate risk, currency risk and other price risk.
a) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Since the company does not have any interest bearing borrowings, there is no exposure of risk of changes in market interest rate.
b) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The company is not exposed to changes in any foreign currency as the company operates mainly in India.
c) Other Price Risk
Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. As the company is into the hedging business of trading in commodities futures and equity futures and options, the other price risk arising from financial assets such as trading in equity instruments and underlying commodities is minimal.
d) Credit Risk
Credit risk refers to risk that counterparty will default on its contractual obligations resulting in financial loss to the Company. Credit risk arises primarily from financial assets such as trade receivables, investment in mutual funds, other balances with banks, and other receivables.
The company is doing trading in commodities futures and equity futures and options through brokers registered with NSE, BSE, NCDEX and MCX. The settlement of trade receivable is done in a day or two, the credit risk arising from the trade receivable is minimal.
Credit risk arising from investment in mutual funds, derivative financial instruments and other balances with banks is limited and there is no collateral held against these because the counterparties are banks and recognised financial institutions with high credit ratings assigned by the international credit rating agencies.
e) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet commitments associated with financial instruments that are settled by delivering cash or another financial asset. Liquidity risk may result from an inability to sell a financial asset quickly at close to its fair value.
The Companyâs exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Company manages the liquidity risk by maintaining adequate funds in cash and cash equivalents.
D. Capital Management
For the purpose of the Companyâs capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value. As at 31st March, 2018, the Company has only one class of equity shares and has no debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for the re-investment into business based on its long term financial plans.
Mar 31, 2016
1. Corporate Information
Dolat Investments Ltd. (the company) is a public company incorporated under Companies Act, 1956. Its shares are listed on Bombay Stock Exchange Ltd. The company is engaged in the trading in shares, securities and the commodities through various stock/commodities exchanges.
2. Significant accounting policies
2.1 Basis of preparations
The financial statements of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) including Accounting Standards notified under the relevant provisions of the Companies Act; 2013.The financial statements have been prepared on an accrual basis and under the historical cost conventions. The accounting policies adopted in the preparation of the financial statements are consistent with those of the previous year.
2.2 Use of Estimates:
The presentation of financial statements in conformity with the GAAP requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual result and estimates are recognized in the period in which the results are known / materialized.
2.3 Revenue Recognition:
a) Income from Shares & Securities trading is recognized as income or loss on the date of actual trade and is shown net of brokerage expenses.
b) Incomes in respect of derivative contracts are accounted in respect of expired contracts.
c) In respect of derivative contracts open as on balance sheet date, treatment is given as per Guidance Note on Accounting for Equity Index and Equity/Stock Futures & Options issued by The Institute of Chartered Accountants of India.
Futures contracts: Amounts received or paid are credited or debited respectively to Mark to Market Margin account and anticipated losses are provided for in the Statement of Profit & Loss.
Options contracts: Premium paid on Option Contracts is carried forward to next financial year. Profits are not considered but provision for loss is made in the Statement of Profit & Loss.
d) The dividend income is accounted for when the right to receive the payment is established whereas, interest income and other income is accounted on accrual basis.
e) In respect of commodities derivative contracts open as on balance sheet date, amounts received and paid are credited and debited respectively to Mark to Market Margin account and anticipated loss are provided for in the Statement of Profit & Loss.
f) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net of returns and excludes freight and other charges and accounted for at time when the invoices are raised.
2.4 Fixed Assets and Depreciation:
a) Tangible fixed assets are stated at cost less accumulated depreciation/impairment losses if any. Cost includes original cost of acquisition, including incidental expenses related to such acquisition and installation.
b) Depreciation on tangible fixed assets is provided on written down value method based on useful life of the assets as prescribed in Schedule II to the Companies Act; 2013. Depreciation on addition to fixed assets is provided on pro-rata basis from the date the asset is put to use. Depreciation on sale/ deduction from the fixed asset is provided for up to the date of sale/deduction as the case may be.
2.5 Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of tangible and intangible assets for any possible impairment. An impairment loss is recognized when the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is higher of the assetâs net selling price or estimated future cash flows.
2.6 Investments:
Investments are either classified as current or long term based on Managements intention at the time of purchase. Investments that are intended to be held for one year or more are classified as long term investments and investments that are intended to be held for less than one year are classified as current investments. Long term investments are carried at cost less provisions recorded to recognize any decline, other than temporary in the carrying value of each investment. Current investments are valued at the lower of cost and fair value of each investment individually.
2.7 Stock in trade
a) The securities acquired with the intention of short term holding and trading are considered as stock-in-trade and shown under current assets.
b) Equity Shares held as stock-in-trade under current assets are valued at cost.
c) Commodities Stock held as stock-in-trade under current assets are valued at cost or market value, whichever is lower on FIFO basis.
2.8 Employee Benefits
a) The Company provides for gratuity, a defined benefit plan covering all employees. The plan provides a lump sum payment to eligible employees at retirement or on termination of employment based on the salary of the respective employee and year of employment with the Company.
Liability for above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the projected unit credit method. The actuarial gains and losses arising during the year are recognized in the Statement of Profit & Loss of the year without resorting to any amortization.
b) The provisions of provident fund laws are not applicable in view of number of employees of the company being less than the prescribed number.
c) As per companyâs policy, no encashment of leave to any employee is allowed.
2.9 Taxes on Income:
a) Income-tax expense comprises current tax (i.e. amount of tax for the period determined in accordance with income tax laws) and deferred tax charge or credit (reflecting the tax effect of timing differences between accounting income and taxable income for the period).
b) The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that the assets can be realized in future.
c) Deferred tax assets are reviewed as at each balance sheet date and written down or written up to reflect the amount that is reasonably / virtually certain (as the case may be) to be realized.
d) Tax credit is recognized in respect of Minimum Alternate Tax (MAT) paid in terms of Section 115JAA of the Income Tax Act, 1961 based on convincing evidence that the Company will pay normal income tax within the statutory time frame and the same is reviewed at each balance sheet date.
2.10 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as results of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in Notes to Accounts, while contingent assets are neither recognized nor disclosed in the financial statements.
2.11 Cash Flow Statements
Cash flow statements are prepared in accordance with the âIndirect Methodâ as explained in the Accounting Standard (AS) 3 - Cash Flow Statements as prescribed under section 133 of the Companies Act 2013.
2.12 Earning Per Shares
Basic Earnings per Share is calculated by dividing the net profit after tax for the year attributable to equity shareholders of the Company by the weighted average number of shares outstanding during the year.
Terms/ Rights Attached to Equity Shares:
The company has only one class of equity shares having par value of Re 1 each. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian Rupees. In the event of liquidation of the company, the holders of the equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date.
Mar 31, 2015
2.1 Basis of preparations
The financial statements of the company have been prepared in
accordance with generally accepted ac- counting principles in India
(Indian GAAP) including Accounting Standards notified under the
relevant provisions of the Companies Act; 2013.The financial statements
have been prepared on an accrual basis and under the historical cost
conventions. The accounting policies adopted in the preparation of the
fi- nancial statements are consistent with those of the previous year.
2.2 Use of Estimates:
The presentation of financial statements in conformity with the GAAP
requires estimates and assump- tions to be made that affect the
reported amount of assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual result and estimates
are recognized in the period in which the results are known /
materialized
2.3 Revenue Recognition:
a) Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and is shown net of brokerage
expenses.
b) Incomes in respect of derivative contracts are accounted in respect
of expired contracts.
c) In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in the Statement of Profit & Loss.
Options contracts: Premium paid on Option Contracts is carried forward
to next financial year. Prof- its are not considered but provision for
loss is made in the Statement of Profit & Loss.
d) The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e) In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Market Margin account and anticipated loss are
provided for in the Statement of Profit & Loss.
f) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net
of returns and excludes freight and other charges and accounted for at
time when the invoices are raised.
2.4 Fixed Assets and Depreciation:
a) Tangible fixed assets are stated at cost less accumulated
depreciation/impairment losses if any. Cost includes original cost of
acquisition, including incidental expenses related to such acquisition
and installation.
b) Depreciation on tangible fixed assets is provided on written down
value method based on useful life of the assets as prescribed in
Schedule II to the Companies Act; 2013.Depreciation on addition to
fixed assets is provided on pro-rata basis from the date the asset is
put to use. Depreciation on sale/deduction from the fixed asset is
provided for upto the date of sale/deduction as the case may be.
2.5 Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and intangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
asset's net selling price or estimated fu- ture cash flows.
2.6 Investments:
Investments are either classified as current or long term based on
Managements intention at the time of purchase. Investments that are
intended to be held for one year or more are classified as long term
invest- ments and investments that are intended to be held for less
than one year are classified as current invest- ments. Long term
investments are carried at cost less provisions recorded to recognize
any decline, other than temporary in the carrying value of each
investment. Current investments are valued at the lower of cost and
fair value of each investment individually.
2.7 Stock in trade
a) The securities acquired with the intention of short term holding and
trading are considered as stock-in-trade and shown under current
assets.
b) Equity Shares held as stock-in-trade under current assets are valued
at cost.
c) Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
2.8 Employee Benefits
a) The Company provides for gratuity, a defined benefit plan covering
all employees. The plan pro- vides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company. Liability for above defined benefit plan is provided on the
basis of valuation, as at the Balance Sheet date, carried out by an
independent actuary. The actuarial method used for measuring the
liability is the projected unit credit method. The actuarial gains and
losses arising during the year are rec- ognized in the Statement of
Profit & Loss of the year without resorting to any amortization.
b) The provisions of provident fund laws are not applicable in view of
number of employees of the company being less than the prescribed
number.
c) As per company*s policy, no encashment of leave to any employee is
allowed.
2.9 Taxes on Income:
a) Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accord- ance with income tax laws) and deferred
tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
b) The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recog- nized using the tax rates that have
been enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that the as- sets can be realized in future.
c) Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
d) Tax credit is recognised in respect of Minimum Alternate Tax (MAT)
paid in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal in- come tax
within the statutory time frame and the same is reviewed at each
balance sheet date.
2.10 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as results of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in Notes to
Accounts, while contingent assets are neither recognized nor disclosed
in the financial statements.
2.11 Cash Flow Statements
Cash flow statements are prepared in accordance with the "Indirect
Method" as explained in the Account- ing Standard (AS) 3 - Cash Flow
Statements as prescribed under section 133 of the Companies Act 2013.
2.12 Earning Per Shares
Basic Earning per Share is calculated by dividing the net profit after
tax for the year attributable to equity shareholders of the Company by
the weighted average number of shares outstanding during the year.
Mar 31, 2014
1.1 Basis of preparations
The financial statements of the company have been prepared in
accordance with gener- ally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respect with the accounting stand- ards notified
under the Companies (Accounting Standards) Rules 2006 (as amended) and
the relevant provision of the Companies Act 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost conventions. The ac- counting policies adopted in the
preparation of the financial statements are consistent with those of
the previous year.
2.2 Use of Estimates:
The presentation of financial statements in conformity with the GAAP
requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual result and estimates
are rec- ognized in the period in which the results are known /
materialized.
2.3 Revenue Recognition:
a) Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and is shown net of brokerage
expenses.
b) Incomes in respect of derivative contracts are accounted in respect
of expired con- tracts.
c) In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in the Statement of Profit & Loss.
Options contracts: Premium paid on Option Contracts is carried forward
to next financial year. Profits are not considered but provision for
loss is made in the State- ment of Profit & Loss.
d) The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e) In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Mar- ket Margin account and anticipated loss
are provided for in the Statement of Profit & Loss.
f) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net
of returns and excludes freight and other charges and accounted for at
time when the in- voices are raised.
2.4 Fixed Assets and Depreciation:
a) Tangible fixed assets are stated at cost less accumulated
depreciation/impairment losses if any. Cost includes original cost of
acquisition, including incidental expens- es related to such
acquisition and installation.
b) Depreciation on tangible fixed assets is provided on written down
value method at the rate specified in Schedule XIV to the Companies
Act, 1956. Depreciation on addition to fixed assets is provided on
pro-rata basis from the date the asset is put to use. Depreciation on
sale/deduction from the fixed asset is provided for upto the date of
sale/deduction as the case may be.
2.5 Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and in- tangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
asset''s net selling price or estimated future cash flows.
2.6 Investments:
Investments are either classified as current or long term based on
Managements inten- tion at the time of purchase. Investments that are
intended to be held for one year or more are classified as long term
investments and investments that are intended to be held for less than
one year are classified as current investments. Long term investments
are carried at cost less provisions recorded to recognize any decline,
other than tem- porary in the carrying value of each investment.
Current investments are valued at the lower of cost and fair value of
each investment individually.
2.7 Stock in trade
a) The securities acquired with the intention of short term holding and
trading are considered as stock-in-trade and shown under current
assets.
Significant accounting policies and notes to financial statements for
the year ended
31 March, 2014
b) Equity Shares held as stock-in-trade under current assets are valued
at cost or market value, whichever is lower on FIFO basis.
c) Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
2.8 Employee Benefits
a) The Company provides for gratuity, a defined benefit plan covering
all employees. The plan provides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company.
Liability for above defined benefit plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial method used for measuring the liability is the
projected unit credit method. The actuarial gains and losses arising
during the year are recognized in the Statement of Profit & Loss of the
year without resorting to any amortization.
b) The provisions of provident fund laws are not applicable in view of
number of em- ployees of the company being less than the prescribed
number.
c) As per company''s policy, no encashment of leave to any employee is
allowed.
2.9 Taxes on Income:
a) Income-tax expense comprises current tax (i.e. amount of tax for the
period deter- mined in accordance with income tax laws) and deferred
tax charge or credit (re- flecting the tax effect of timing differences
between accounting income and taxable income for the period).
b) The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that the assets can be realized in future.
c) Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
d) Tax credit is recognised in respect of Minimum Alternate Tax (MAT)
paid in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal income tax within
the statutory time frame and the same is reviewed at each balance sheet
date.
2.10 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized
when there is a present obligation as results of past events and it is
probable that there
will be an outflow of resources. Contingent Liabilities are not
recognized but are dis- closed in Notes to Accounts, while contingent
assets are neither recognized nor dis- closed in the financial
statements.
2.11 Cash Flow Statements
Cash flow statements are prepared in accordance with the "Indirect
Method" as ex- plained in the Accounting Standard (AS) 3 - Cash Flow
Statements as prescribed under section 211(3C) of the Companies Act
1956.
2.12 Earning Per Shares
Basic Earning per Share is calculated by dividing the net profit after
tax for the year at- tributable to equity shareholders of the Company
by the weighted average number of shares outstanding during the year.
Terms/ Rights Attached to Equity Shares:
The company has only one class of equity shares having par value of Re
1 each.Each holder of eq- uity shares is entitled to one vote per
share. The company delcares and pays dividend in Indian Rupees. In the
event of liquidation of the company, the holders of the equity shares
will be en- titled to receive remaining assets of the company after
distribution of all preferential amounts. The distribution will be in
proportion to the number of equity shares held by the shareholders.
Details of Shareholders Holding more than 5% Shares of the Company:
Agreegate number of bonus shares issued, shares issued for
consideration other than cash and shares bought back during the period
of five years immediately preceding the reporting date. Fully paid up
pursuant to contract(s) without payment
Mar 31, 2013
1.1 Basis of preparations
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respect with the accounting standards notified
under the Companies (Accounting Standards) Rules 2006 (as amended) and
the relevant provision of the Companies Act 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost conventions. The accounting policies adopted in the
preparation of the financial statements are consistent with those of
the previous year.
1.2 Use of Estimates:
The presentation of financial statements in conformity with the GAAP
requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual result and estimates
are recognized in the period in which the results are known /
materialized
1.3 Revenue Recognition:
a) Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and are shown net of brokerage
expenses.
b) Incomes in respect of derivative contracts are accounted in respect
of expired contracts.
c) In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in the Statement of Profit & Loss.
Options contracts: Premium paid on Option Contracts is carried forward
to next financial year. Profits are not considered but provision for
loss is made in the Statement of Profit & Loss.
d) The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e) In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Market Margin account and anticipated loss are
provided for in the Statement of Profit & Loss.
f) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net
of returns and excludes freight and other charges and accounted for at
time when the invoices are raised.
1.4 Fixed Assets and Depreciation:
a) Tangible fixed assets are stated at cost less accumulated
depreciation/impairment losses if any. Cost includes original cost of
acquisition, including incidental expenses related to such acquisition
and installation.
b) Depreciation on tangible fixed assets is provided on written down
value method at the rate specified in Schedule XIV to the Companies
Act, 1956. Depreciation on addition to fixed assets is provided on
pro-rata basis from the date the asset is put to use. Depreciation on
sale/deduction from the fixed asset is provided for upto the date of
sale/deduction as the case may be.
1.5 Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and intangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
asset''s net selling price or estimated future cash flows.
1.6 Investments:
Investments are either classified as current or long term based on
Managements intention at the time of purchase. Investments that are
intended to be held for one year or more are classified as long term
investments and investments that are intended to be held for less than
one year are classified as current investments. Long term investments
are carried at cost less provisions recorded to recognize any decline,
other than temporary in the carrying value of each investment. Current
investments are valued at the lower of cost and fair value of each
investment individually.
1.7 Stock in trade
a) The securities acquired with the intention of short term holding and
trading are considered as stock-in-trade and shown under current
assets.
b) Equity Shares held as stock-in-trade under current assets are valued
at cost or market value, whichever is lower on FIFO basis.
c) Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis
1.8 Employee Benefits
a) The Company provides for gratuity, a defined benefit plan covering
all employees. The plan provides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company.
Liability for above defined benefit plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial method used for measuring the liability is the
projected unit credit method. The actuarial gains and losses arising
during the year are recognized in the Statement of Profit & Loss of the
year without resorting to any amortization.
b) The provisions of provident fund laws are not applicable in view of
number of employees of the company being less than the prescribed
number.
c) As per company''s policy, no encashment of leave to any employee is
allowed
1.9 Taxes on Income:
a) Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with income tax laws) and deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
b) The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that the assets can be realized in future.
c) Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
d) Tax credit is recognised in respect of Minimum Alternate Tax (MAT)
paid in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal income tax within
the statutory time frame and the same is reviewed at each balance sheet
date.
1.10 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as results of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in Notes to
Accounts, while contingent assets are neither recognized nor disclosed
in the financial statements.
1.11 Cash Flow Statement
Cash flow statements are prepared in accordance with the "Indirect
Method" as explained in the Accounting Standard (AS) 3 Â Cash Flow
Statements as prescribed under section 211(3C) of the Companies Act
1956.
1.12 Provisions, Contingent Liabilities and Contingent Assets
Basic Earning per Share is calculated by dividing the net profit after
tax for the year attributable to equity shareholders of the Company by
the weighted average number of shares outstanding during the year.
Mar 31, 2012
1.1 Basis of preparations
The financial statements of the company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respect with the accounting standards notified
under the Companies (Accounting Standards) Rules 2006 (as amended) and
the relevant provision of the Companies Act 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost conventions. The accounting policies adopted in the
preparation of the financial statements are consistent with those of
the previous year.
1.2 Use of Estimates:
The presentation of financial statements in conformity with the GAAP
requires estimates and assumptions to be made that affect the reported
amount of assets and liabilities on the date of the financial
statements and the reported amount of revenues and expenses during the
reporting period. Difference between the actual result and estimates
are recognized in the period in which the results are known /
materialized
1.3 Revenue Recognition:
a) Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and are shown net of brokerage
expenses.
b) Incomes in respect of derivative contracts are accounted in respect
of expired contracts.
c) In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in the Statement of Profit & Loss.
Options contracts: Premium paid on Option Contracts is carried forward
to next financial year. Profits are not considered but provision for
loss is made in the Statement of Profit & Loss.
d) The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e) In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Market Margin account and anticipated loss are
provided for in the Statement of Profit & Loss.
f) Sales
The amount recognized as sale is exclusive of sales tax/VAT and are net
of returns and excludes freight and other charges and accounted for at
time when the invoices are raised.
1.4 Fixed Assets and Depreciation:
a) Tangible fixed assets are stated at cost less accumulated
depreciation/impairment losses if any. Cost includes original cost of
acquisition, including incidental expenses related to such acquisition
and installation.
b) Depreciation on tangible fixed assets is provided on written down
value method at the rate specified in Schedule XIV to the Companies
Act, 1956. Depreciation on addition to fixed assets is provided on
pro-rata basis from the date the asset is put to use. Depreciation on
sale/deduction from the fixed asset is provided for upto the date of
sale/deduction as the case may be.
1.5 Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and intangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
asset's net selling price or estimated future cash flows.
1.6 Investments:
Investments are either classified as current or long term based on
Managements intention at the time of purchase. Investments that are
intended to be held for one year or more are classified as long term
investments and investments that are intended to be held for less than
one year are classified as current investments. Long term investments
are carried at cost less provisions recorded to recognize any decline,
other than temporary in the carrying value of each investment. Current
investments are valued at the lower of cost and fair value of each
investment individually.
1.7 Stock in trade
a) The securities acquired with the intention of short term holding and
trading are considered as stock-in-trade and shown under current
assets.
b) Equity Shares held as stock-in-trade under current assets are valued
at cost or market value, whichever is lower on FIFO basis.
c) Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
1.8 Employee Benefits
a) The Company provides for gratuity, a defined benefit plan covering
all employees. The plan provides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company.
b) Liability for above defined benefit plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial method used for measuring the liability is the
projected unit credit method. The actuarial gains and losses arising
during the year are recognized in the Statement of Profit & Loss of the
year without resorting to any amortization.
c) The provisions of provident fund laws are not applicable in view of
number of employees of the company being less than the prescribed
number.
d) As per company's policy, no encashment of leave to any employee is
allowed.
1.9 Taxes on Income:
a) Income-tax expense comprises current tax (i.e. amount of tax for the
period determined in accordance with income tax laws) and deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
b) The deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognized using the tax rates that have been
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that the assets can be realized in future.
c) Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
d) Tax credit is recognised in respect of Minimum Alternate Tax (MAT)
paid in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal income tax within
the statutory time frame and the same is reviewed at each balance sheet
date.
1.10 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as results of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in Notes to
Accounts, while contingent assets are neither recognized nor disclosed
in the financial statements.
1.11 Cash Flow Statement
Cash flow statements are prepared in accordance with the 'Indierct
Method' as explained in the Accounting Standard (AS) 3 - Cash Flow
Statements as prescribed under section 211(3C) of the Companies Act
1959.
1.12 Provisions, Contingent Liabilities and Contingent Assets
Basic Earning per Share is Calculated by dividing the net profit after
tax for the year attributable to equity shareholders of the Company by
the weighted average number of shares outstanding during the year.
Mar 31, 2011
1. Method of Accounting:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accepted Accounting Standards and
relevant provisions of the Companies Act, 1956.
2. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period.
Difference between the actual result and estimates are recognized in
the period in which the results are known / materialized
3. Revenue Recognition:
a. Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and are shown net of brokerage
expenses.
b. Incomes in respect of derivative contracts are accounted in respect
of expired contracts.
c. In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
-Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in Profit & Loss Account.
-Options contracts: Premium paid on Option Contracts is carried forward
to next financial year. Profits are not considered but provision for
loss is made in Profit and Loss Account.
d. The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e. In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Market Margin account and anticipated loss are
provided for in Profit & Loss Account.
4. Sales
The Sales includes sales tax wherever applicable but excludes freight
and other charges and accounted for at time of settlement or delivery.
5. Fixed Assets and Depreciation:
a. Fixed Assets are stated at cost of acquisition less depreciation.
Cost of asset comprises of purchase price and other attributable costs.
b. Depreciation on fixed assets is provided at the rates and in the
manner laid down in Schedule XIV to the Companies Act, 1956 on the
written down value method.
6. Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and intangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
asset's net selling price or estimated future cash flows.
7. Investments:
Investments are classified into long term investments and current
investments. Investments that are intended to be held for one year or
more are classified as long term investments and investments that are
intended to be held for less than one year are classified as current
investments.
Long term investments are valued at cost. The provision for diminution
in the value of long term investment is made if in the opinion of the
management such a decline is other than temporary.
Current investments are valued at cost or market/fair value, whichever
is lower.
8. Stock in trade :
a. The securities acquired with the intention of short term holding
and trading are considered as stock-in- trade and shown under current
assets.
b. Equity Shares held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
c. Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
9. Employee Benefits
a. The Company provides for gratuity, a defined benefit plan covering
all employees. The plan provides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company.
Liability for above defined benefit plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial method used for measuring the liability is the
Projected Unit Credit method. The actuarial gains and losses arising
during the year are recognized in the profit and loss account of the
year without resorting to any amortization.
b. The provisions of provident fund laws are not applicable in view of
number of employees of the company being less than the prescribed
number.
c. As per company's policy, no encashment of leave to any employee is
allowed.
10. Taxes on Income:
a. Income-tax expense comprises current tax (i.e. amount of tax for
the period determined in accordance with income tax laws) and deferred
tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
b. The deferred tax charge or credit and the corresponding deferred
tax liabilities or assets are recognized using the tax rates that have
been enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that the assets can be realized in future.
c. Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
d. Tax credit is recognised in respect of Minimum Alternate Tax (MAT)
paid in terms of Section 115JAA of the Income Tax Act, 1961 based on
convincing evidence that the Company will pay normal income tax within
the statutory time frame and the same is reviewed at each balance sheet
date.
11 . Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as results of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in Notes to
Accounts, while contingent assets are neither recognized nor disclosed
in the financial statements.
Mar 31, 2010
1. Method of Accounting:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with the accepted Accounting Standards and
relevant provisions of the Companies Act, 1956.
2. Use of Estimates:
The presentation of financial statements in conformity with the
generally accepted accounting principles requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual result and estimates are recognized in the period in
which the results are known / materialized
3. Revenue Recognition:
a. Income from Shares & Securities trading is recognized as income or
loss on the date of actual trade and are shown net of brokerage
expenses.
b. Incomes in respect of derivative contracts are accounted in respect
of expired contracts.
c. In respect of derivative contracts open as on balance sheet date,
treatment is given as per Guidance Note on Accounting for Equity Index
and Equity/Stock Futures & Options issued by The Institute of Chartered
Accountants of India.
- Futures contracts: Amounts received or paid are credited or debited
respectively to Mark to Market Margin account and anticipated losses
are provided for in Profit & Loss Account.
- Options contracts: Premium paid on Option Contracts is carried
forward to next financial year. Profits are not considered but
provision for loss is made in Profit and Loss Account.
d. The dividend income is accounted for when the right to receive the
payment is established whereas, interest income and other income is
accounted on accrual basis.
e. In respect of commodities derivative contracts open as on balance
sheet date, amounts received and paid are credited and debited
respectively to Mark to Market Margin account and anticipated loss are
provided for in Profit & Loss Account.
4. Sales
The Sales includes sales tax wherever applicable but excludes freight
and other charges and accounted for at time of settlement or delivery.
5. Fixed Assets and Depreciation:
a. Fixed Assets are stated at cost of acquisition less depreciation.
Cost of asset comprises of purchase price and other attributable costs.
b. Depreciation on fixed assets is provided at the rates and in the
manner laid down in Schedule XIV to the Companies Act, 1956 on the
written down value method.
6. Impairment of Assets:
At each balance sheet date, the Company reviews the carrying value of
tangible and intangible assets for any possible impairment. An
impairment loss is recognized when the carrying amount of an asset
exceeds its recoverable amount. The recoverable amount is higher of the
assets net selling price or estimated future cash flows.
7. Investments:
Investments are classified into long term investments and current
investments. Investments that are intended to be held for one year or
more are classified as long term investments and investments that are
intended to be held for less than one year are classified as current
investments.
Long term investments are valued at cost. The provision for diminution
in the value of long term investment is made if in the opinion of the
management such a decline is other than temporary.
Current investments are valued at cost or market/fair value, whichever
is lower.
8. Stock in trade :
a. The securities acquired with the intention of short term holding and
trading are considered as stock-in-trade and shown under current
assets.
b. ty Shares held as stock-in-trade under current assets
are valued at cost or market value, whichever is lower on FIFO basis.
c. Commodities Stock held as stock-in-trade under current assets are
valued at cost or market value, whichever is lower on FIFO basis.
9. Employee Benefits
a. The Company provides for gratuity, a defined benefit plan covering
all employees. The plan provides a lump sum payment to eligible
employees at retirement or on termination of employment based on the
salary of the respective employee and year of employment with the
Company.
Liability for above defined benefit plan is provided on the basis of
valuation, as at the Balance Sheet date, carried out by an independent
actuary. The actuarial method used for measuring the liability is the
Projected Unit Credit method. The actuarial gains and losses arising
during the year are recognized in the profit and loss account of the
year without resorting to any amortization.
b. The provisions of provident fund laws are not applicable in view of
number of employees of the company being less than the prescribed
number.
c. As per companys policy, no encashment of leave to any employee is
allowed.
10. Taxes on Income:
a. Income-tax expense comprises current tax (i.e. amount of tax for
the period determined in accordance with income tax laws) and deferred
tax charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the period).
b. The deferred tax charge or credit and the corresponding deferred
tax liabilities or assets are recognized using the tax rates that have
been enacted or substantively enacted at the balance sheet date.
Deferred tax assets are recognized only to the extent that there is
reasonable certainty that the assets can be realized in future.
c. Deferred tax assets are reviewed as at each balance sheet date and
written down or written up to reflect the amount that is reasonably /
virtually certain (as the case may be) to be realized.
11. Provisions. Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as results of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized but are disclosed in Notes to
Accounts, while contingent assets are neither recognized nor disclosed
in the financial statements.