A Oneindia Venture
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Accounting Policies of Quint Digital Ltd. Company
Mar 31, 2025
2.2 Summary of material accounting policies
a) Property, plant and equipment
Recognition and initial measurement
Property, plant and equipment are stated at their
cost of acquisition. The cost comprises purchase
price, borrowing cost if capitalization criteria are
met and directly attributable cost of bringing the
asset to its working condition for the intended use.
Capital expenditure incurred on rented properties
is classified as âLeasehold improvements'' under
property, plant and equipment.
Subsequent measurement
Subsequent costs are included in the asset''s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the item will flow
to the Company and the cost of the item can be
measured reliably. All other repairs and maintenance
are charged to Statement of profit and loss during
the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and
residual value
Depreciation on property, plant and equipment is
provided on the straight-line method, computed
on the basis of useful lives (as set out below) as
prescribed in Schedule II of the Act: -
The assets'' residual values and useful lives are
reviewed and adjusted if appropriate, at the end
of each reporting period. The management basis
technical advice believes that these estimated useful
lives are realistic and reflect fair approximation of the
period over which the assets are likely to be used.
Where, during any financial year, any addition has
been made to any asset, or where any asset has
been sold, discarded, demolished or destroyed,
or significant components replaced; depreciation
on such assets is calculated on a pro rata basis as
individual assets with specific useful life from the
month of such addition or, as the case may be, up
to the month on which such asset has been sold,
discarded, demolished or destroyed or replaced.
De-recognition
An item of property, plant and equipment and any
significant part initially recognized is derecognized
upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain
or loss arising on de-recognition of the asset
(calculated as the difference between the net
disposal proceeds and the carrying amount of the
asset) is included in the income statement when the
asset is derecognized.
b) Intangible assets
Intangible assets are stated at cost of acquisition net
of recoverable taxes, trade discount and rebate less
accumulated amortization/ depletion and impairment
loss, if any. Such cost includes purchase price,
borrowing costs, and any cost directly attributable
to bringing the asset to its working condition for the
intended use.
Subsequent costs are included in the asset''s
carrying amount or recognized as a separate asset,
as appropriate, only when it is probable that future
economic benefits associated with the items will flow
to the Company and cost can be measured reliably.
An intangible asset is derecognized upon disposal (i.e.,
at the date the recipient obtains control) or when no
future economic benefits are expected from its use or
disposal.
Gains or losses arising from derecognition of intangible
asset are measured as the difference between the
net disposal proceeds and the carrying amount of the
asset and are recognized in the Statement of Profit
and Loss when the asset is derecognized.
The Company''s intangible assets comprises assets
with finite useful life which are amortized on a
straight-line basis over the period of their expected
useful life.
Computer Software are being amortized over the
license period.
The amortization period and the amortization method
for Intangible Assets with a finite useful life are reviewed
at each reporting date. Changes in the expected useful
life or the expected pattern of consumption of future
economic benefits embodied in the asset is accounted
for by changing the amortization period or method, as
appropriate and are treated as changes in accounting
estimates. The amortization expense on intangible
assets with finite lives is recognized in the Statement
of Profit and Loss under the head Depreciation and
amortization expense.
*Video costs are being amortized over 4 years for
all videos/ programs produced by the Company
and over the license period for videos/ programs
purchased from others. Based on the estimate of the
management that the video viewership will be over
the life of 4 years, the period is used for amortization
of costs capitalized by the company. Amortization
of video cost is 60% of the cost capitalized in first
year from the date of publishing, 20% of the cost
capitalized in the second year and 10% each in third
and fourth year, on a straight-line basis.
Intangible Assets under development
Expenditure on video costs eligible for capitalization
are carried as intangible assets under development
where such assets are not yet ready for their
intended use or publishing.
c) Leases
The Company, as a lessee, recognizes a right-of-use
asset and a lease liability for its leasing arrangements
on a present value basis, if the contract conveys the
right to control the use of an identified asset. The
contract conveys the right to control the use of an
identified asset, if it involves the use of an identified
asset and the Company has substantially all of the
economic benefits from use of the asset and has
right to direct the use of the identified asset.
At the date of commencement of the lease, the
Company recognizes a right-of-use asset (âROUâ)
and a corresponding lease liability for all lease
arrangements in which it is a lessee, except for
leases with a term of twelve months or less (short¬
term leases) and low value leases. For these short¬
term and low value leases, the Company recognizes
the lease payments as an operating expense on a
straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at
cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or
prior to the commencement date of the lease plus
any initial direct costs less any lease incentives. They
are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are generally depreciated over
the shorter of the asset''s useful life and the lease
term on a straight-line basis. If the Company is
reasonably certain to exercise a purchase option, the
right-of-use asset is depreciated over the underlying
asset''s useful life.
The lease liability is initially measured at amortized
cost at the present value of the future lease payments.
The lease payments are discounted using the interest
rate implicit in the lease or, if not readily determinable,
using the incremental borrowing rates in the country
of domicile of these leases. Lease payments to be
made under reasonably certain extension options
are also included in the measurement of the liability.
Lease liabilities are remeasured with a corresponding
adjustment to the related right of use asset if the
Company changes its assessment if whether it will
exercise an extension or a termination option.
Lease payments are allocated between principal
and finance cost. The finance cost is charged to
profit or loss over the lease period so as to produce
a constant periodic rate of interest on the remaining
balance of the liability for each period. Variable lease
payments that depend on sales are recognised in
profit or loss in the period in which the condition that
triggers those payments occurs.
Payments associated with short-term leases of
equipment and all leases of low-value assets are
recognised on a straight-line basis as an expense in
profit or loss. Short-term leases are leases with a lease
term of 12 months or less. Low-value assets comprise
IT equipment and small items of office furniture.
d) Foreign currency translation
Functional and presentation currency
Items included in the financial statements are
measured using the currency of the primary economic
environment in which the Company operates (âthe
functional currency''). The financial statements
are presented in Indian rupee (INR), which is the
Company''s functional and presentation currency.
Transactions and balances
Transactions in foreign currencies are recorded at the
exchange rate prevailing on the date of transaction.
Monetary assets and liabilities denominated in foreign
currencies are translated at the functional currency''s
closing rates of exchange at the reporting date.
Exchange differences arising on settlement or
translation of monetary items are recognized in the
Statement of Profit and Loss.
Non-monetary items that are measured in terms of
historical cost in a foreign currency are recorded using
the exchange rates at the date of the transaction.
Non-monetary items measured at fair value in a
foreign currency are translated using the exchange
rates at the date when the fair value was measured.
The gain or loss arising on translation of non¬
monetary items measured at fair value is treated in
line with the recognition of the gain or loss on the
change in fair value of the item.
e) Revenue recognition
To determine whether to recognize revenue from
contracts with customers, the Company follows a
5-step process:
1. Identifying the contract with customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the
performance obligations
5. Recognizing revenue when/as performance
obligation(s) are satisfied.
Revenue from contracts with customers represents
sale of services. Revenue from rendering of services
includes advertisement revenue, partner/programmatic
revenue and subscription revenue. Revenue from
rendering of services is recognized over time where
the Company satisfies the performance obligation
over time or point in time where the Company satisfies
the performance obligation at a point in time. Revenue
towards satisfaction of a performance obligation is
measured at the amount of transaction price (net of
estimates variable consideration) that is allocated to
that performance obligation.
Contracts where the performance obligations are
satisfied over time and where there is no uncertainty
as to measurement or collectability of consideration,
is recognized as per the input method or output
method, based on the nature of obligations to be
performed. The Company determines the output
method on the basis of direct measurements of the
value of the services transferred to the customer
till date relative to the value of remaining services
promised under the contract. The Company
determines the input method on the basis of ratio of
costs incurred to date to the total estimated costs at
completion of performance obligation.
The specific recognition criteria described below
must also be met before revenue is recognized:
Revenue from advertisement:
Advertisements Revenue is recognized as and
when advertisement is displayed. Revenue from
advertising is measured based on the transaction
price allocated to that performance obligation, which
is net of variable consideration on account of various
discounts.
Partner/ programmatic revenue
The Company generates revenue by monetization
of videos on various platforms based on viewership.
Revenue from rendering of services is recognized
over time where the Company satisfies the
performance obligation over time or point in time
where the Company satisfies the performance
obligation at a point in time.
Revenue from subscription
The Company earns subscription income from its
website. This income is recognized over the period
of subscription.
Contract Balances
Revenues in excess of invoicing are considered as
contract assets and disclosed as unbilled revenue.
Invoicing in excess ofrevenues is considered as contract
liabilities and disclosed as unearned revenues. When
a customer pays consideration before the Company
transfers goods or services to the customer, a contract
liability is recognized and disclosed as advances
from customers. Contract liabilities are recognized
as revenue when the Company performs under the
contract. Contract assets are transferred to receivables
when the rights become unconditional. Contract assets
are subject to impairment requirements of Ind AS 109
Financial Instruments.
f) Interest Income
Interest income is recognised on time proportion
basis taking into account the amount outstanding and
rate applicable. For all financial assets measured at
amortized cost, interest income is recorded using the
effective interest rate (EIR) i.e., the rate that exactly
discounts estimated future cash receipts through the
expected life of the financial asset to the net carrying
amount of the financial assets. The future cash flows
include all other transaction costs paid or received,
premiums or discounts if any, etc. Interest income
is included under the head âother incomeâ in the
statement of profit and loss.
g) Income taxes
The income tax expense comprises of current and
deferred income tax. The income tax expense or credit
for the period is the tax payable on the current period''s
taxable income based on the applicable income tax
rate for jurisdiction adjusted by changes in deferred
tax assets and liabilities attributable to temporary
differences and to unused tax losses. Income tax is
recognized in the statement of profit and loss, except
to the extent that it relates to items recognized in the
other comprehensive income or directly in equity, in
which case the related income tax is also recognized
in other comprehensive income or equity.
Current tax
Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to
the taxation authorities, on tax rates and laws that
are enacted or substantively enacted at the Balance
Sheet date. The Company has a legally enforceable
right to offset and intends either to settle on a net
basis, or to realise the tax asset and settle the tax
liability simultaneously.
Deferred tax
Deferred tax is measured based on the tax rates
and the tax laws enacted or substantively enacted
at the balance sheet date. Deferred tax assets are
recognised for all deductible temporary differences
and the carry forward of any unused tax losses.
Deferred tax assets are recognised to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry forward of unused tax losses can be
utilised, except when the deferred tax asset relating
to the deductible temporary difference arises from
the initial recognition of an asset or liability in a
transaction that is not a business combination and,
at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets are
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part
of the assets to be recovered. Deferred tax assets
and deferred tax liabilities are offset, if a legally
enforceable right exists to set-off current tax assets
against current tax liabilities and the deferred tax
assets and deferred tax liabilities relate to the same
taxable entity and the same taxation authority.
Current and deferred taxes are recognised in the
Statement of Profit and Loss, except when the
same relate to items that are recognised in other
comprehensive income or directly in equity, in which
case, the current and deferred tax relating to such
items are also recognised in other comprehensive
income or directly in equity, respectively.
h) Trade receivables
Trade receivables are amounts due from customers for
services performed in the ordinary course of business
and reflects the Company''s unconditional right to
consideration (that is, payment is due only on the
passage of time). Trade receivables are recognised
initially at the transaction price as they do not contain
significant financing components. The company holds
the trade receivables with the objective of collecting
the contractual cash flows and therefore measures
them subsequently at amortized cost using the
effective interest method, less loss allowance.
For trade receivables and contract assets, the group
applies the simplified approach required by Ind AS
109, which requires expected lifetime losses to be
recognised from initial recognition of the receivables.
i) Contributed equity
Equity shares are classified as equity. Incremental
costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of
tax, from the proceeds.
j) Dividends
Provision is made for the amount of any dividend
declared, being appropriately authorised and no
longer at the discretion of the entity, on or before the
end of the reporting period but not distributed at the
end of the reporting period.
k) Investments and other financial assets
(i) Classification:
The Company classifies its financial assets in
the following measurement categories:
⢠those to be measured subsequently at fair
value (either through other comprehensive
income, or through profit or loss).
⢠those to be measured at amortised cost.
Investments in Subsidiaries, Joint ventures and
Associates are carried at cost less accumulated
impairment losses, if any. Where an indication
of impairment exists, the carrying amount of
the investment is assessed and written down
immediately to its recoverable amount. On
disposal of investments in Subsidiaries, Joint
ventures and Associates, the difference between
net disposal proceeds and the carrying amounts
are recognised in the statement of profit and loss.
The classification depends on the Company''s
business model for managing the financial assets
and the contractual terms of the cash flows.
For assets measured at fair value, gains and
losses will either be recorded in profit or loss or
other comprehensive income. For investments in
equity instruments that are not held for trading,
this will depend on whether the Company has
made an irrevocable election at the time of
initial recognition to account for the equity
investment at FVOCI. The group reclassifies debt
investments when and only when its business
model for managing those assets changes.
(ii) Recognition:
Regular way purchases and sales of financial
assets are recognised on trade-date, being
the date on which the Company commits to
purchase or sale the financial asset.
(iii) Measurement:
At initial recognition, the Company measures a
financial asset (excluding trade receivables which
do not contain a significant financing component)
at its fair value plus, in the case of a financial asset
not at fair value through profit or loss, transaction
costs that are directly attributable to the acquisition
of the financial asset. Transaction costs of financial
assets carried at fair value through profit or loss
are expensed in Statement of profit and loss.
Financial assets with embedded derivatives,
if any, are considered in their entirety when
determining whether their cash flows are solely
payment of principal and interest.
Debt instruments
Subsequent measurement of debt instruments
depends on the group''s business model
for managing the asset and the cash flow
characteristics of the asset. There are three
measurement categories into which the group
classifies its debt instruments.
Amortised cost: Assets that are held for
collection of contractual cash flows where
those cash flows represent solely payments of
principal and interest are measured at amortised
cost. Interest income from these financial assets
is included in Other Income using the effective
interest rate method. Any gain or loss arising
on derecognition is recognised directly in profit
or loss and presented in other gains/(losses).
Impairment losses are presented as separate
line item in the statement of profit and loss.
Fair value through other comprehensive income
(FVOCI): Assets that are held for collection of
contractual cash flows and for selling the financial
assets, where the assets'' cash flows represent
solely payments of principal and interest, are
measured at FVOCI. Movements in the carrying
amount are taken through OCI, except for the
recognition of impairment gains or losses, interest
income and foreign exchange gains and losses
which are recognised in Statement of profit and
loss. When the financial asset is derecognised,
the cumulative gain or loss previously recognised
in OCI is reclassified from equity to profit or loss
and recognised in other gains/(losses). Interest
income from these financial assets is included
in other income using the effective interest rate
method. Foreign exchange gains and losses are
presented in other gains/(losses) and impairment
expenses are presented as separate line item in
statement of profit and loss.
Fair value through profit or loss: Assets that
do not meet the criteria for amortised cost or
FVOCI are measured at fair value through profit
or loss. A gain or loss on a debt investment that
is subsequently measured at fair value through
profit or loss is recognised in Statement of profit
or loss and presented net within other gains/
(losses) in the period in which it arises. Interest
income from these financial assets is included in
other income.
Equity Instruments:
The Company subsequently measures all equity
investments at fair value. Where the Company''s
management has elected to present fair value
gains and losses on equity investments in other
comprehensive income, there is no subsequent
reclassification of fair value gains and losses to
profit or loss following the derecognition of the
investment. Dividends from such investments
are recognised in profit or loss as other income
when the Company''s right to receive payments
is established.
(iv) Impairment of financial assets
Financial assets, other than those at FVTPL, are
assessed for indicators of impairment at the
end of each reporting period. In case of trade
receivables, the Company follows the simplified
approach permitted by Ind AS 109 - Financial
Instruments - for recognition of impairment
loss allowance. The application of simplified
approach does not require the Company to track
changes in credit risk of trade receivables. The
Company calculates the expected credit losses
on trade receivables, using a provision matrix on
the basis of its historical credit loss experience.
(v) Derecognition of financial assets
A financial asset is derecognised only when the
Company has transferred the rights to receive
cash flows from the financial asset or retains
the contractual rights to receive the cash flows
of the financial asset, but assumes a contractual
obligation to pay the cash flows to one or more
recipients. Where the Company has transferred
an asset, the Company evaluates whether it has
transferred substantially all risks and rewards of
ownership of the financial asset. In such cases,
the financial asset is derecognised. Where the
entity has not transferred substantially all risks
and rewards of ownership of the financial asset,
the financial asset is not derecognised. Where the
Company has neither transferred a financial asset
nor retains substantially all risks and rewards of
ownership of the financial asset, the financial
asset is derecognised if the Company has not
retained control of the financial asset. Where the
Company retains control of the financial asset, the
asset is continued to be recognised to the extent
of continuing involvement in the financial asset.
l) Impairment of non-financial assets
At each reporting date, the Company assesses
whether there is any indication based on internal/
external factors that a non-financial asset may be
impaired. If any such indication exists, the Company
estimates the recoverable amount of the asset. If such
a recoverable amount of the asset or the recoverable
amount of the cash generating unit to which the asset
belongs is less than its carrying amount, the carrying
amount is reduced to its recoverable amount and
the reduction is treated as an impairment loss and
is recognized in the statement of profit and loss. All
assets are subsequently reassessed for indications
that an impairment loss previously recognized may
no longer exist. An impairment loss is reversed if
the asset''s or cash-generating unit''s recoverable
amount exceeds its carrying amount.
m) Offsetting of financial instruments
Financial assets and financial liabilities are offset and
the net amount presented in the balance sheet when,
and only when, the Company currently has a legally
enforceable right to set off the amounts and it intends
either to settle them on a net basis or to realize the
asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on
future events and must be enforceable in the normal
course ofbusiness and in the event ofdefault, insolvency
or bankruptcy of the group or the counterparty.
n) Fair value measurement and hierarchy
In determining the fair value of its financial
instruments, the Company uses following hierarchy
and assumptions that are based on market conditions
and risks existing at each reporting date.
Fair value hierarchy
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; or
⢠In the absence of a principal market, in the most
advantageous market for the asset or liability.
The principal or the most advantageous market must
be accessible by the Company.
The fair value of an asset or a liability is measured
using the assumptions that market participants would
use when pricing the asset or liability, assuming that
market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes
into account a market participant''s ability to generate
economic benefits by using the asset in its highest and
best use, or by selling it to another market participant
that would use the asset in its highest and best use.
All assets and liabilities for which fair value is
measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described
as follows, based on the lowest level input that is
significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is directly or indirectly observable.
Level 3: Valuation techniques for which the lowest
level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognized in
the financial statements on a recurring basis, the
Company determines whether transfers have
occurred between levels in the hierarchy by
reassessing categorization (based on the lowest level
input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
The carrying amounts of trade receivables, trade
payables, payables towards capital goods, other
bank balances and cash and cash equivalents are
considered to be the same as their fair values, due to
their short-term nature.
For the purpose of fair value disclosures, the
Company has determined classes of assets and
liabilities on the basis of the nature, characteristics
and risks of the asset or liability and the level of the
fair value hierarchy as explained above..
o) Cash and and cash equivalents
For the purpose of presentation in the statement of
cash flows, cash and cash equivalents includes cash
on hand, deposit accounts, margin deposit money
and highly liquid investments with original maturities
of three months or less that are readily convertible
to known amounts of cash and which are subject to
an insignificant risk of changes in value, and bank
overdrafts. Bank overdrafts, if any, are shown within
borrowings in current liabilities in the balance sheet.
Cash and cash equivalents comprise cash and cash
on deposit with banks. The Company considers all
highly liquid investments with a remaining maturity
at the date of investment of three months or less
and that are readily convertible to known amounts
of cash to be cash equivalents. The statement of
cashflow is prepared using an indirect method.
p) Cash flow statement
Cash flows are reported using the indirect method,
whereby the net profit before tax is adjusted for
the effects of transactions of a non-cash nature,
any deferrals or accruals of past or future operating
cash receipts or payments and item of income or
expenses associated with investing or financing cash
flows. The cash flows from operating, investing and
financing activities of the Company are segregated.
q) Business Combination
The Company accounts for its business combinations
under acquisition method of accounting. Acquisition
related costs are recognized in the statement of
profit and loss as incurred. The acquiree''s identifiable
assets, liabilities and contingent liabilities that meet
the condition for recognition are recognized at their
fair values at the acquisition date.
Purchase consideration paid in excess of the fair value
of net assets acquired is recognized as goodwill.
Where the fair value of identifiable assets and liabilities
exceed the cost of acquisition, after reassessing the
fair values of the net assets and contingent liabilities,
the excess is recognized as capital reserve.
Business combinations arising from transfers of
interests in entities that are under common control are
accounted at historical cost under pooling of interest
method. The difference between any consideration
given and the aggregate historical carrying amounts of
assets and liabilities of the acquired entity are recorded
in shareholders'' equity.
On acquisition of a business, the Company assesses the
financial assets and liabilities assumed for appropriate
classification and designation in accordance with
the contractual terms, economic circumstances and
pertinent conditions as at the acquisition date.
If a common control transaction is effected through
the acquisition of assets and liabilities constituting
a business under IND AS 103 (from an entity under
common control) rather than by acquiring shares
in that business, then the acquirer accounts for the
transaction in its separate financial statements.
r) Employee benefit
Post-employment, long-term and short-term
employee benefits
i. Defined contribution plans
A defined contribution plan is a post¬
employment benefit plan under which the
Company pays specified contributions towards
Provident Fund and Pension Scheme to publicly
administered provident funds as per local
regulations. The company has no future regular
contribution payment obligations once the
contribution has been paid. The contributions
are accounted for as defined contribution
plans and the contributions are recognised as
employee benefit expense when they are due.
ii. Defined benefit plan (funded)
The Company pays gratuity to the employees
who have completed five years of services
with the Company at the time of resignation/
superannuation. The gratuity is paid last drawn
basic salary per month computed proportionately
for 15 days salary multiplied for the number of
years of service as per the provision of Payment
of Gratuity Act, 1972. The liability in respect of
gratuity and other post-employment benefits
is calculated using the Projected Unit Credit
Method and spread over the period during
which the benefit is expected to be derived from
employees'' services.
iii. Bonus Plans
The Company recognizes a liability and an
expense for a bonus. The Company recognizes
a provision where contractually obliged or
where there is a past practice that has created
a constructive obligation.
iv. Other long-term employee benefits
Long-term compensated absences are
provided for based on actuarial valuation at
year end. The actuarial valuation is done as per
the projected unit credit method.
v. Short-term obligations
Liabilities for wages and salaries, including
non-monetary benefits that are expected to
be settled wholly within 12 months after the
end of the period in which the employees
render the related service are recognised in
respect of employees'' services up to the end
of the reporting period and are measured at the
amounts expected to be paid when the liabilities
are settled. The liabilities are presented as
current employee benefit obligations in the
balance sheet.
vi. Employee share-based payments
The employees of the Company receive
remuneration in the form of share-based
payments in consideration of the services
rendered. Under the equity settled share-
based payment, the fair value on the grant
date of the awards given to employees is
recognized as âemployee benefit expenses''
with a corresponding increase in equity over the
vesting period. The fair value of the options at
the grant date is calculated by an independent
valuer using Black Scholes Model. At the end of
each reporting period, the expense is reviewed
and adjusted to reflect changes to the level
of options expected to vest basis on the no¬
market vesting and service conditions. When
the options are exercised, the Company issues
fresh equity shares. It recognizes the impact
of the revision to original estimates, if any, in
profit or loss, with a corresponding adjustment
to equity. Where shares are forfeited due to a
failure by the employees to satisfy the service
conditions, any expenses previously recognizes
in relation to such shares are reversed effective
from the date of the forfeiture.
s) Earnings per share (EPS)
Basic earnings per share
Basic EPS is calculated by dividing the net profit
or loss for the period attributable to equity
shareholders (after deducting preference dividends
and attributable taxes) by the weighted average
number of equity shares outstanding during the
period. The weighted average number of equity
shares outstanding during the period are adjusted
for events of bonus issue; bonus element in a rights
issue to existing shareholders; share split; and
reverse share split (consolidation of shares) that have
changed the number of equity shares outstanding,
without a corresponding change in resources.
Dilute earnings per share
Diluted earnings per share adjusts the figures used
in the determination of basic earnings per share to
take into account:
⢠the after-income tax effect of interest and
other financing costs associated with dilutive
potential equity shares.
⢠the weighted average number of additional
equity shares that would have been outstanding,
assuming the conversion of all dilutive potential
equity shares.
Mar 31, 2024
1. Company overview
Quint Digital Limited (formerly Quint Digital Media Limited) (âthe Companyâ) is a public limited company domiciled in India, with its registered office situated at 403, Prabhat Kiran, 17 Rajendra Place, New Delhi-110008 and its equity shares are listed on the Bombay Stock Exchange. The Company has been incorporated on 31 May 1985 under the provisions of the Indian Companies Act and was previously known as Gaurav Mercantiles Limited. The name was changed to Quint Digital Media Limited on 21 September 2020 which had been further changed to Quint Digital Limited on 25 October 2023. The Company is primarily engaged in the business of running websites through web, digital or mobile media and which may include various information including current affairs, lifestyle, entertainment etc.
2. Basis of preparation, measurement and material accounting policies2.1 Basis of preparation and measurementi) Statement of compliance
The standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act and guidelines issued by the Securities and Exchange Board of India (SEBI).
The standalone financial statements were approved for issue by the Company''s Board of Directors on 30 May, 2024.
ii) Historical cost convention
The standalone financial statements have been prepared on a historical cost basis, except for the following:
⢠certain financial assets and liabilities that are measured at fair value;
⢠defined benefit plans - plan assets measured at fair value; and
⢠Share based payments - measured at fair value.
iii) New and amended standards adopted by the company
The Ministry of Corporate Affairs (âMCAâ) vide notification dated 31 March 2023 notified the Companies (Indian Accounting Standards) Amendment Rules, 2023, which amended certain accounting standards (see below), and are effective 01 April 2023:
⢠Disclosure of accounting policies - amendments to Ind AS 1
⢠Definition of accounting estimates - amendments to Ind AS 8
These amendments did not have any material impact on the Company. As at 31 March, 2024, MCA has not notified any new standards applicable effective on or after 1 April, 2024 to the Group.
iv) Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on the current/non-current classification.
An asset is treated as current when:
⢠It is expected to be realized or intended to be sold or consumed in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is expected to be realized within twelve months after the reporting period; or
⢠It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
Current assets include the current portion of noncurrent financial assets. The Company classifies all other assets as non-current.
A liability is treated current when:
⢠It is expected to be settled in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is due to be settled within twelve months after the reporting period; or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Current liabilities include current portion of non-current financial liabilities. The Company classifies all other liabilities as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle for the purpose of current/ non-current classification of assets and liabilities.
2.2 Summary of material accounting policiesa) Property, plant and equipmentRecognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly
attributable cost of bringing the asset to its working condition for the intended use. Capital expenditure incurred on rented properties is classified as âLeasehold improvements'' under property, plant and equipment.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives (as set out below) as prescribed in Schedule II of the Act: -
|
Asset category |
Useful life as per Schedule II (in years) |
Estimated Useful life by Management (in years) |
|
Leasehold Improvement |
Lower of useful life or respective lease term |
Lower of useful life or respective lease term |
|
Plant and Equipment |
13 Years |
5 Years |
|
Furniture and fixtures |
10 Years |
10 Years |
|
Computers and hardware |
3 Years |
3 Years |
|
Vehicles |
8 Years |
8 Years |
|
Office equipment |
5 Years |
5 Years |
The assets'' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. The management basis technical advice believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or, as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed or replaced.
An item of property, plant and equipment and any significant part initially recognized is derecognized
upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Intangible assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortization/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal.
Gains or losses arising from derecognition of intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
The Company''s intangible assets comprises assets with finite useful life which are amortized on a straightline basis over the period of their expected useful life.
Computer Software are being amortized over the license period.
The amortization period and the amortization method for Intangible Assets with a finite useful life are reviewed at each reporting date. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss under the head Depreciation and amortization expense.
|
Asset class |
Useful life (in years) |
|
Trademarks |
10 Years |
|
Video Cost (internally generated)1 |
4 Years |
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements on a present value basis, if the contract conveys the right to control the use of an identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful life.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
d) Foreign currency translationFunctional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (âthe functional currency''). The financial statements are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
To determine whether to recognize revenue from contracts with customers, the Company follows a 5-step process:
1. Identifying the contract with customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognizing revenue when/as performance obligation(s) are satisfied.
Revenue from contracts with customers represents sale of services. Revenue from rendering of services includes advertisement revenue, partner/programmatic revenue and subscription revenue. Revenue from rendering of services is recognized over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of estimates variable consideration) that is allocated to that performance obligation.
Contracts where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the input method or output method, based on the nature of obligations to be performed. The Company determines the output method on the basis of direct measurements of the value of the services transferred to the customer till date relative to the value of remaining services promised under the contract. The Company determines the input method on the basis of ratio of costs incurred to date to the total estimated costs at completion of performance obligation.
The specific recognition criteria described below must also be met before revenue is recognized:
Advertisements Revenue is recognized as and when advertisement is displayed. Revenue from
advertisement is measured based on the transaction price allocated to that performance obligation, which is net of variable consideration on account of various discounts.
The Company generates revenue by monetization of videos on various platforms based on viewership. Revenue from rendering of services is recognized over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
The Company earns subscription income from its website. This income is recognized over the period of subscription.
Revenues in excess of invoicing are considered as contract assets and disclosed as unbilled revenue. Invoicing in excess ofrevenues is considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized and disclosed as advances from customers. Contract liabilities are recognized as revenue when the Company performs under the contract. Contract assets are transferred to receivables when the rights become unconditional. Contract assets are subject to impairment requirements of Ind AS 109 Financial Instruments.
Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable. For all financial assets measured at amortized cost, interest income is recorded using the effective interest rate (EIR) i.e., the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial assets. The future cash flows include all other transaction costs paid or received, premiums or discounts if any, etc. Interest income
is included under the head âother incomeâ in the statement of profit and loss.
The income tax expense comprises of current and deferred income tax. The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate for jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses. Income tax is recognized in the statement of profit and loss, except to the extent that it relates to items recognized in the other comprehensive income or directly in equity, in which case the related income tax is also recognized in other comprehensive income or Equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date. The Company has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the tax asset and settle the tax liability simultaneously.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised for all deductible temporary differences and the carry forward of any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.
Current and deferred taxes are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax relating to such items are also recognised in other comprehensive income or directly in equity, respectively.
Trade receivables are amounts due from customers for services performed in the ordinary course of business and reflects company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method, less loss allowance.
For trade receivables and contract assets, the group applies the simplified approach required by Ind AS 109, which requires expected lifetime losses to be recognised from initial recognition of the receivables.
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
k) Investments and other financial assets(i) Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss).
⢠those to be measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI. The group reclassifies debt investments when and only when its business model for managing those assets changes.
Regular way purchases and sales of financial assets are recognised on trade-date, being the date on which the Company commits to purchase or sale the financial asset.
At initial recognition, the Company measures a financial asset (excluding trade receivables which do not contain a significant financing component) at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss.
Financial assets with embedded derivatives, if any, are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the group''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in Other Income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses). Impairment losses are presented as separate line item in the statement of profit and loss.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in other income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/(losses) and impairment expenses are presented as separate line item in statement of profit and loss.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net
within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments are recognised in profit or loss as other income when the Company''s right to receive payments is established.
(iv) Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments - for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk of trade receivables. The Company calculates the expected credit losses on trade receivables, using a provision matrix on the basis of its historical credit loss experience.
(v) Derecognition of financial assets
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset or retains the contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. Where the
Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
l) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that a non-financial asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the statement of profit and loss. All assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment loss is reversed if the asset''s or cash-generating unit''s recoverable amount exceeds its carrying amount.
m) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the group or the counterparty.
n) Fair value measurement and hierarchy
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
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; or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another market participant that would use the asset in its highest and best use.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of each reporting period.
The carrying amounts of trade receivables, trade payables, payables towards capital goods, other bank balances and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. (Refer Note 33).
o) Cash and and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposit accounts, margin deposit money and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts, if any, are shown within borrowings in current liabilities in the balance sheet.
Cash and cash equivalents comprise cash and cash on deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of investment of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. The statement of cashflow is prepared using indirect method.
The Company accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognized in the statement of profit and loss as incurred. The acquiree''s identifiable assets, liabilities and contingent liabilities that meet the condition for recognition are recognized at their fair values at the acquisition date.
Purchase consideration paid in excess of the fair value of net assets acquired is recognized as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the
fair values of the net assets and contingent liabilities, the excess is recognized as capital reserve.
Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost under pooling of interest method. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders'' equity.
On acquisition of a business, the Company assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If a common control transaction is effected through the acquisition of assets and liabilities constituting a business under IND AS 103 (from an entity under common control) rather than by acquiring shares in that business, then the acquirer accounts for the transaction in its separate financial statements.
q) Employee benefitPost-employment, long term and short-term employee benefitsi. Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund and Pension Scheme to publicly administered provident funds as per local regulations. The company has no future regular contribution payment obligations once the contribution has been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.
ii. Defined benefit plan (funded)
The Company pays gratuity to the employees who have completed five years of services with the Company at the time of resignation/ superannuation. The gratuity is paid last drawn basic salary per month computed proportionately
for 15 days salary multiplied for the number of years of service as per the provision of Payment of Gratuity Act, 1972. The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
iv. Other long-term employee benefits
Long term compensated absences are provided for based on actuarial valuation at year end. The actuarial valuation is done as per projected unit credit method. The Company presents the compensated absences as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
vi. Employee share-based payments
The employees of the Company receive remuneration in the form of share-based payments in consideration of the services rendered. Under the equity settled share-based payment, the fair value on the grant date of the awards given to employees is recognized as âemployee benefit expenses'' with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer using Black Scholes Model. At the end of each reporting period, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest basis on the no-market vesting and service conditions. When the options are exercised, the Company issues fresh equity shares. It recognizes the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Where shares are forfeited due to a failure by the employees to satisfy the service conditions, any expenses previously recognizes in relation to such shares are reversed effective from the date of the forfeiture.
Basic earnings per share
Basic EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
Dilute earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares.
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
s) Provisions and Contingent liabilities
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Contingencies
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognized. However, when inflow of economic benefits is probable, related asset is disclosed.
These amounts represent liabilities for services provided to the company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortized cost using the effective interest method.
Financial liabilities are measured at amortised cost using the effective interest method. The Company derecognises financial liabilities when and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and
the consideration paid and payable is recognised in Statement of Profit and Loss.
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other gains/(losses).
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. Other borrowing
costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
All amounts disclosed in the financial statement and notes to accounts have been rounded off to the nearest thousands as per the requirement of Schedule III, unless otherwise stated.
2.3 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which
the estimates are revised and future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements includes:
⢠Measurement of defined benefit obligations (DBO)-refer note 28
⢠Estimation of useful lives of property, plant and equipment and intangible assets- refer note 3
⢠Estimated fair value of investments in unlisted Nonconvertible debentures - refer note 4B
⢠Evaluation of indicators for impairment of non-current investments - refer note 4A
⢠Determination of lease term- refer note 36
⢠Allowance for expected credit loss on trade receivables-refer note 33.1
⢠Measurement of share-based payments - refer note 35
⢠Estimation of current tax expense, current tax payable and uncertain tax position - refer note 26
⢠Capitalization of internally developed intangible assets-refer note 3.2 and 44
Video costs are being amortized over 4 years for all videos/ programs produced by the Company and over the license period for videos/ programs purchased from others. Based on the estimate of the management that the video viewership will be over the life of 4 years, the period is used for amortization of costs capitalized by the company. Amortization of video cost is 60% of the cost capitalized in first year from the date of publishing, 20% of the cost capitalized in the second year and 10% each in third and fourth year, on a straight-line basis.
Intangible Assets under development
Expenditure on video costs eligible for capitalization are carried as intangible assets under development where such assets are not yet ready for their intended use or publishing.
Mar 31, 2023
1. Company overview
Quint Digital Media Limited (âthe Companyâ) is a public limited company domiciled in India, with its registered office situated at 403, Prabhat Kiran, 17 Rajendra Place, New Delhi-110008 and its equity shares are listed on the Bombay Stock Exchange. The Company has been incorporated on 31 May 1985 under the provisions of the Indian Companies Act and was previously known as Gaurav Mercantiles Limited. The name was changed to Quint Digital Media Limited on 21 September 2020. The Company is primarily engaged in the business of running websites through web, digital or mobile media and which may include various information including current affairs, lifestyle, entertainment etc.
2. Basis of preparation, measurement and significant accounting policies2.1 Basis of preparation and measurementi) Statement of compliance
The standalone financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provisions of the Act and guidelines issued by the Securities and Exchange Board of India (SEBI).
The standalone financial statements were approved for issue by the Company''s Board of Directors on 30 May 2023.
ii) Historical cost convention
The standalone financial statements have been prepared on a historical cost basis, except for the following:
⢠certain financial assets and liabilities that are measured at fair value;
⢠defined benefit plans - plan assets measured at fair value; and
⢠Share based payment - measured at fair value.
iii) New and amended standards adopted by the company
All the Ind AS issued and notified by the Ministry of Corporate Affairs (âMCA'') under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) till the financial statements are authorized have been
considered in preparing these financial statements. The Ministry of Corporate Affairs had vide notification dated 23 March 2022 notified Companies (Indian Accounting Standards) Amendment Rules, 2022 which amended certain accounting standards, and are effective 1 April 2022. These amendments did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
iv) New and amended standards issued but not effective
The Ministry of Corporate Affairs (âMCAâ) vide its notification dated 31 March, 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 which amended certain accounting standards, and are effective 1 April, 2023.
Now the Initial Recognition Exemption (IRE) does not apply to transactions that give rise to equal and offsetting temporary differences. Narrowed the scope of IRE (with regard to leases and decommissioning obligations). Accordingly, companies will need to recognize a deferred tax asset and a deferred tax liability for temporary differences arising on transactions such as initial recognition of a lease and a decommissioning provision. The amendments apply to transactions that occur on or after the beginning of the earliest comparative period presented.
The application of this amendment is not expected to have a material impact on the Company''s financial statements.
b) Amendment to Ind AS 1, Ind AS 34 and Ind AS 107
Companies should now disclose material accounting policies rather than their significant accounting policies.
The application of this amendment is not expected to have a material impact on the Company''s financial statements.
Definition of âchange in account estimate'' has been replaced by revised definition of âaccounting
estimate''. As per revised definition, accounting estimates are monetary amounts in the financial statements that are subject to measurement uncertainty.
The amendments listed above will be effective on or after 01 April, 2023 and are not expected to significantly affect the current or future periods.
v) Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on the current/non-current classification.
An asset is treated as current when:
⢠It is expected to be realized or intended to be sold or consumed in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is expected to be realized within twelve months after the reporting period; or
⢠It is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
Current assets include the current portion of noncurrent financial assets. The Company classifies all other assets as non-current.
A liability is treated current when:
⢠It is expected to be settled in normal operating cycle;
⢠It is held primarily for the purpose of trading;
⢠It is due to be settled within twelve months after the reporting period; or 1
Current liabilities include current portion of non-current financial liabilities. The Company classifies all other liabilities as non-current.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle for the purpose of current/ non-current classification of assets and liabilities.
2.2 Summary of significant accounting policiesa) Property, plant and equipmentRecognition and initial measurement
Property, plant and equipment are stated at their cost of acquisition. The cost comprises purchase price, borrowing cost if capitalization criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Capital expenditure incurred on rented properties is classified as âLeasehold improvements'' under property, plant and equipment.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred.
Depreciation methods, estimated useful lives and residual value
Depreciation on property, plant and equipment is provided on the straight-line method, computed on the basis of useful lives (as set out below) as prescribed in Schedule II of the Act: -
|
Asset category |
Useful life as per Schedule II (in years) |
Estimated Useful life by Management (in years) |
|
Leasehold Improvement |
Lower of useful life or respective lease term |
Lower of useful life or respective lease term |
|
Plant and Equipment |
13 Years |
5 Years |
|
Furniture and fixtures |
10 Years |
10 Years |
|
Computers and hardware |
3 Years |
3 Years |
|
Vehicles |
8 Years |
8 Years |
|
Office equipment |
5 Years |
5 Years |
The assets'' residual values and useful lives are reviewed and adjusted if appropriate, at the end of each reporting period. The management basis technical advice believes that these estimated useful lives are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Where, during any financial year, any addition has been made to any asset, or where any asset has been sold, discarded, demolished or destroyed, or significant components replaced; depreciation on such assets is calculated on a pro rata basis as individual assets with specific useful life from the month of such addition or, as the case may be, up to the month on which such asset has been sold, discarded, demolished or destroyed or replaced.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognized.
Intangible Assets are stated at cost of acquisition net of recoverable taxes, trade discount and rebate less accumulated amortization/ depletion and impairment loss, if any. Such cost includes purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Subsequent costs are included in the asset''s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the Company and cost can be measured reliably.
An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal.
Gains or losses arising from derecognition of intangible asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
The Company''s intangible assets comprises assets with finite useful life which are amortized on a straightline basis over the period of their expected useful life.
Computer Software are being amortized over the license period.
The amortization period and the amortization method for Intangible Assets with a finite useful life are reviewed at each reporting date. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortization period or method, as appropriate and are treated as changes in accounting estimates. The amortization expense on intangible assets with finite lives is recognized in the Statement of Profit and Loss under the head Depreciation and amortization expense.
*Video costs are being amortized over 4 years for all videos/ programs produced by the Company and over the license period for videos/ programs purchased from others. Based on the estimate of the management that the video viewership will be over the life of 4 years, the period is used for amortization of costs capitalized by the company. Amortization of video cost is 60% of the cost capitalized in first year from the date of publishing, 20% of the cost capitalized in the second year and 10% each in third and fourth year, on a straight-line basis.
Intangible Assets under development
Expenditure on video costs eligible for capitalization are carried as intangible assets under development where such assets are not yet ready for their intended use or publishing.
c) Leases
The Company, as a lessee, recognizes a right-of-use asset and a lease liability for its leasing arrangements, if the contract conveys the right to control the use of an
|
Asset class |
Useful life (in years) |
|
Trademarks |
10 Years |
|
Video Cost1 |
4 Years |
identified asset. The contract conveys the right to control the use of an identified asset, if it involves the use of an identified asset and the Company has substantially all of the economic benefits from use of the asset and has right to direct the use of the identified asset.
At the date of commencement of the lease, the Company recognizes a right-of-use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are generally depreciated over the shorter of the asset''s useful life and the lease term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset''s useful.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Variable lease payments that depend on sales are recognised in profit or loss in the period in which the condition that triggers those payments occurs.
Payments associated with short-term leases of equipment and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
d) Foreign currency translation
Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates (âthe functional currency''). The financial statements are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
Transactions in foreign currencies are recorded at the exchange rate prevailing on the date of transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency''s closing rates of exchange at the reporting date.
Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are recorded using the exchange rates at the date of the transaction. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was measured.
The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of the gain or loss on the change in fair value of the item.
To determine whether to recognize revenue from contracts with customers, the Company follows a 5-step process:
1. Identifying the contract with customer
2. Identifying the performance obligations
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognizing revenue when/as performance obligation(s) are satisfied.
Revenue from contracts with customers represents sale of services. Revenue from rendering of services includes advertisement revenue, partner/programmatic revenue and subscription revenue. Revenue from rendering of services is recognized over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time. Revenue towards satisfaction of a performance obligation is measured at the amount of transaction price (net of estimates variable consideration) that is allocated to that performance obligation.
Contracts where the performance obligations are satisfied over time and where there is no uncertainty as to measurement or collectability of consideration, is recognized as per the input method or output method, based on the nature of obligations to be performed. The Company determines the output method on the basis of direct measurements of the value of the services transferred to the customer till date relative to the value of remaining services promised under the contract. The Company determines the input method on the basis of ratio of costs incurred to date to the total estimated costs at completion of performance obligation.
The specific recognition criteria described below must also be met before revenue is recognized:
Advertisements Revenue is recognized as and when advertisement is displayed. Revenue from advertisement is measured based on the transaction price allocated to that performance obligation, which is net of variable consideration on account of various discounts.
The Company generates revenue by monetization of videos on various platforms based on viewership. . Revenue from rendering of services is recognized over time where the Company satisfies the performance obligation over time or point in time where the Company satisfies the performance obligation at a point in time.
The Company earns subscription income from its website. This income is recognized over the period of subscription.
Revenues in excess of invoicing are considered as contract assets and disclosed as unbilled revenue. Invoicing in excess of revenues are considered as contract liabilities and disclosed as unearned revenues. When a customer pays consideration before the Company transfers goods or services to the customer, a contract liability is recognized and disclosed as advances from customers. Contract liabilities are recognized as revenue when the Company performs under the contract.
Interest income is recognised on time proportion basis taking into account the amount outstanding and rate applicable. For all financial assets measured at amortized cost, interest income is recorded using the effective interest rate (EIR) i.e., the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the net carrying amount of the financial assets. The future cash flows include all other transaction costs paid or received, premiums or discounts if any, etc. Interest income is included under the head âother incomeâ in the statement of profit and loss.
The income tax expense comprises of current and deferred income tax. Income tax is recognized in the statement of profit and loss, except to the extent that it relates to items recognized in the other comprehensive income or directly in equity, in which case the related income tax is also recognized in Other Comprehensive Income or Equity.
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, on tax rates and laws that are enacted or substantively enacted at the Balance Sheet date. The Company has a legally enforceable right to offset and intends either to settle on a net basis,
or to realise the tax asset and settle the tax liability simultaneously.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised for all deductible temporary differences and the carry forward of any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax losses can be utilised, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
The carrying amount of deferred tax assets are reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the assets to be recovered. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set-off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the same taxable entity and the same taxation authority.
Current and deferred taxes are recognised in the Statement of Profit and Loss, except when the same relate to items that are recognised in other comprehensive income or directly in equity, in which case, the current and deferred tax relating to such items are also recognised in other comprehensive income or directly in equity, respectively.
Trade receivables are amounts due from customers for services performed in the ordinary course of business and reflects company''s unconditional right to consideration (that is, payment is due only on the passage of time). Trade receivables are recognised initially at the transaction price as they do not contain significant financing components. The company holds the trade receivables with the objective of collecting the contractual cash flows and therefore measures
them subsequently at amortized cost using the effective interest method, less loss allowance.
Equity shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
k) Investments and other financial assets
(i) Classification
The Company classifies its financial assets in the following measurement categories:
⢠those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss)
⢠those to be measured at amortised cost.
The classification depends on the Company''s business model for managing the financial assets and the contractual terms of the cash flows.
For assets measured at fair value, gains and losses will either be recorded in profit or loss or other comprehensive income. For investments in equity instruments that are not held for trading, this will depend on whether the Company has made an irrevocable election at the time of initial recognition to account for the equity investment at FVOCI. The group reclassifies debt investments when and only when its business model for managing those assets changes.
(ii) Recognition:
Regular way purchases and sales of financial assets are recognised on trade-date, being the date on which the Company commits to purchase or sale the financial asset.
(iii) Measurement:
At initial recognition, the Company measures a financial asset (excluding trade receivables which do not contain a significant financing component) at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets with embedded derivatives, if any, are considered in their entirety when determining whether their cash flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the group''s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the group classifies its debt instruments.
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in Other Income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/(losses). Impairment losses are presented as separate line item in the statement of profit and loss.
Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the financial assets, where the assets'' cash flows represent solely payments of principal and interest, are measured at FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest income and foreign exchange gains and losses which are recognised in profit and loss. When the financial asset is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains/(losses). Interest income from these financial assets is included in other income using the effective interest rate method. Foreign exchange gains and losses are presented in other gains/ (losses) and impairment expenses are presented as separate line item in statement of profit and loss.
Fair value through profit or loss: Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain or loss on a debt investment that is subsequently measured at fair value through profit or loss is recognised in profit or loss and presented net within other gains/(losses) in the period in which it arises. Interest income from these financial assets is included in other income.
The Company subsequently measures all equity investments at fair value. Where the Company''s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments are recognised in profit or loss as other income when the Company''s right to receive payments is established.
(iv) Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. In case of trade receivables, the Company follows the simplified approach permitted by Ind AS 109 - Financial Instruments - for recognition of impairment loss allowance. The application of simplified approach does not require the Company to track changes in credit risk of trade receivables. The Company calculates the expected credit losses on trade receivables, using a provision matrix on the basis of its historical credit loss experience.
(v) Derecognition of financial assets
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial asset or retains the
contractual rights to receive the cash flows of the financial asset, but assumes a contractual obligation to pay the cash flows to one or more recipients. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the entity has not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised. Where the Company has neither transferred a financial asset nor retains substantially all risks and rewards of ownership of the financial asset, the financial asset is derecognised if the Company has not retained control of the financial asset. Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continuing involvement in the financial asset.
l) Impairment of non-financial assets
At each reporting date, the Company assesses whether there is any indication based on internal/external factors, that a non-financial asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset. If such recoverable amount of the asset or the recoverable amount of the cash generating unit to which the asset belongs is less than its carrying amount, the carrying amount is reduced to its recoverable amount and the reduction is treated as an impairment loss and is recognized in the statement of profit and loss. All assets are subsequently reassessed for indications that an impairment loss previously recognized may no longer exist. An impairment loss is reversed if the asset''s or cash-generating unit''s recoverable amount exceeds its carrying amount.
m) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
The legally enforceable right must not be contingent on future events and must be enforceable in the normal
course of business and in the event of default, insolvency or bankruptcy of the group or the counterparty.
n) Fair value measurement and hierarchy
In determining the fair value of its financial instruments, the Company uses following hierarchy and assumptions that are based on market conditions and risks existing at each reporting date.
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; or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use, or by selling it to another market participant that would use the asset in its highest and best use.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
The carrying amounts of trade receivables, trade payables, payables towards capital goods, other Bank Balances and cash and cash equivalents are considered to be the same as their fair values, due to their short-term nature.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above. (Refer Note 33).
o) Cash and and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposit accounts, margin deposit money and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts, if any, are shown within borrowings in current liabilities in the balance sheet.
Cash and cash equivalents comprise cash and cash on deposit with banks. The Company considers all highly liquid investments with a remaining maturity at the date of investment of three months or less and that are readily convertible to known amounts of cash to be cash equivalents. The statement of cashflow is prepared using indirect method.
The Company accounts for its business combinations under acquisition method of accounting. Acquisition related costs are recognized in the statement of profit and loss as incurred. The acquiree''s identifiable
assets, liabilities and contingent liabilities that meet the condition for recognition are recognized at their fair values at the acquisition date.
Purchase consideration paid in excess of the fair value of net assets acquired is recognized as goodwill. Where the fair value of identifiable assets and liabilities exceed the cost of acquisition, after reassessing the fair values of the net assets and contingent liabilities, the excess is recognized as capital reserve.
Business combinations arising from transfers of interests in entities that are under common control are accounted at historical cost under pooling of interest method. The difference between any consideration given and the aggregate historical carrying amounts of assets and liabilities of the acquired entity are recorded in shareholders'' equity.
On acquisition of a business, the Company assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
If a common control transaction is effected through the acquisition of assets and liabilities constituting a business under IND AS 103 (from an entity under common control) rather than by acquiring shares in that business, then the acquirer accounts for the transaction in its separate financial statements.
q) Employee benefitPost-employment, long term and short-term employee benefitsi. Defined contribution plans
A defined contribution plan is a post-employment benefit plan under which the Company pays specified contributions towards Provident Fund and Pension Scheme to publicly administered provident funds as per local regulations. The company has no future regular contribution payment obligations once the contribution have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due.
ii. Defined benefit plan (funded)
The Company pays gratuity to the employees who have completed five years of services with the Company at the time of resignation/ superannuation. The gratuity is paid last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service as per the provision of Payment of Gratuity Act, 1972. The liability in respect of gratuity and other post-employment benefits is calculated using the Projected Unit Credit Method and spread over the period during which the benefit is expected to be derived from employees'' services.
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
iv. Other long-term employee benefits
Long term compensated absences are provided for based on actuarial valuation at year end. The actuarial valuation is done as per projected unit credit method. The Company presents the compensated absences as a current liability in the balance sheet, to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date.
Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees'' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
vi. Employee share-based payments
The employees of the Company receive remuneration in the form of share-based payments
in consideration of the services rendered. Under the equity settled share-based payment, the fair value on the grant date of the awards given to employees is recognized as âemployee benefit expenses'' with a corresponding increase in equity over the vesting period. The fair value of the options at the grant date is calculated by an independent valuer using Black Scholes Model. At the end of each reporting period, the expense is reviewed and adjusted to reflect changes to the level of options expected to vest basis on the no-market vesting and service conditions. When the options are exercised, the Company issues fresh equity shares. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. Where shares are forfeited due to a failure by the employees to satisfy the service conditions, any expenses previously recognises in relation to such shares are reversed effective from the date of the forfeiture.
Basic earnings per share
Basic EPS is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period are adjusted for events of bonus issue; bonus element in a rights issue to existing shareholders; share split; and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.
Dilute earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account:
⢠the after-income tax effect of interest and other financing costs associated with dilutive potential equity shares
⢠the weighted average number of additional equity shares that would have been outstanding assuming the conversion of all dilutive potential equity shares.
s) Provisions and Contingent liabilities
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the best estimate of the expenditure required to settle the present obligation at the Balance Sheet date. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Contingencies
Contingent liability is disclosed for:
⢠Possible obligations which will be confirmed only by future events not wholly within the control of the Company; or
⢠Present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made. Contingent assets are not recognized. However, when inflow of economic benefits is probable, related asset is disclosed.
These amounts represent liabilities for services provided to the company prior to the end of the financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortized cost using the effective interest method.
Financial liabilities are measured at amortised cost using the effective interest method. The Company derecognises financial liabilities when and only when, the Company''s obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability de-recognised and the consideration paid and payable is recognised in Statement of Profit and Loss.
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortized over the period of the facility to which it relates.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other gains/(losses).
Borrowings are classified as current liabilities unless the company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting period. Where there is a breach of a material provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand on the reporting date, the entity does not classify the liability as current, if the lender agreed, after the reporting period and before the approval of the financial statements for issue, not to demand payment as a consequence of the breach.
Borrowing costs that are directly attributable to the acquisition or construction of qualifying assets are capitalised as part of the cost of such assets. A qualifying asset is one that necessarily takes substantial period of time to get ready for its intended use. All other borrowing costs are charged to the Statement of Profit and Loss in the period in which they are incurred.
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
All amounts disclosed in the financial statement and notes to accounts have been rounded off to the nearest thousands as per the requirement of Schedule III, unless otherwise stated.
2.3 Significant accounting judgements, estimates and assumptions
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial
statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates. Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognized in the period in which the estimates are revised and future periods affected. In particular, information about significant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognized in the financial statements includes:
⢠Measurement of defined benefit obligations (DBO)-refer note 29
⢠Estimation of useful lives of property, plant and equipment and intangible assets- refer note 3
⢠Evaluation of indicators for impairment of Non-current Investments - Refer note 4A
⢠Determination of Lease term- refer note 37
⢠Allowance for expected credit loss on receivables-refer note 34.1
⢠Measurement of share-based payments - refer note 36
⢠Estimation of current tax expense, current tax payable and uncertain tax position - refer note 27
⢠Capitalization of internally developed intangible assets-refer note 3.2 and 46
There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
Mar 31, 2015
1 BASIS Of PREPARATION OF FINANCIAL STATEMENTS
These financial statements are prepared in accordance with Indian
Generally Accepted Accounting Principles {GAAP) under the historical
cost convention on the accrual Loss is except for certain financial
instruments which are measured at fair values, GAAP comprises mandatory
accounting standards as prescribed under Section 133 of the. Companies
Act, 2013 (The Act1) read with Rule 7 of the Companies [Accounts'
Rules, 2014, the provisions of the Act (to the extent notified) and
guidelines issued by the Securities and Exchange Board of India {3E6I).
Accounting policies' and has been consistently applied except where a
newly issued accounting standard is intently adopted or a revision to
an existing accounting standard requires a change in the accounting
Policy with thereto in use.
2 USE OF ESTIMATE
The preparation of financial statements requires management to make
Judgments. estimates and assumptions. That affect the application of
accounting policies' and the reported amounts of assets and liabilities
and disclosures of contingent liabilities at This date of these
financial statement is and the reported amounts of revenues and
expenses for the years percentage Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Provisions to accounting estimates are recognized in the
period in which the estimate is revision and future periods affected.
3 REVENUE RECOGNITION
a. The Company recognizes revenue on the sales of products, act of
discounts. when the products are delivered, risks and rewards of
ownership pass to the dealer / customer.
b. Revenues are recognized when cost electability of the resulting
receivables is reasonably assured.
c. Dividend from investments is recognized when the right to receive
the payments established and when no significant uncertainty as to
measurability or collectivity exists..
d. Interest income is recognized on the time basis determined by the
amount outstanding and the rate applicable and where no significant
uncertainty as to measurability or collectability exists.
4 FIXED ASSETS & DEPRECIATION:
a. Fixed Assets - Tangibles
Fixed Assets are stated at cost of acquisition net of recoverable taxes
and includes amount added on revaluation, less accumulated depreciation
and impairment less, if any All costs, including financing cost till
commencement of commercial production, net charges on foreign exchanges
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
b. Depreciation
Depreciation on the fixed assets has been provided on Straight Line
Method basis as for the provision of Section 123 of the Companies Act,
2013, and in the manner specified in Schedule II to the Companies Act
2013.
5 IMPAIRMENT OF ASSETS
The Company assesses fixed assets at each balance sheet date whether
there is any indication that an asset may be unpaired. If any such
indecision exists, the company estimates the recoverable Amount of the
assets. If such recoverable amount of the asset or the recoverable
amount of the Cash generating unit to Which the assets Lungs, a loss
than the carrying amount. carrying amount is reduced to its recoverable
amount. The radiation is treated as an impairment loss End is
recognized in the profit and loss account. If at the balance sheet date
there is an Indication that previously assessed impairment less or
longer exists, the recoverable amount is reassessed and the asset is
reflected at tine recoverable amount.
G INVESTMENTS:
These are held for long term and valued at cost reduced by diminution
of permanent nature therein any.
7 INVENTORIES:
a. Raw Material
Inventories are valued at cost,
b. Work in Process
Inventories are value at cost. The cost of work In process comprises of
raw material and other direct cost.
8 RETIREMENT BENEFITS:
a. Gratuity
The liability for the gratuity lo employee is determined on the basic
of independent actuarial valuation and charged to the profit & loss
account.
b. Provident Fund
Since Provident Fund is not applicable, no provision for provident and
liability is required
c. Leave Enhancement / Salary
The company is not required to make provision for leave encashment
salary to the employees as the company is making the leave salary
payment curing the year itself.
9 TAXES ON INCOME
a. Currant Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
b. Deferred Tax
Deferred tax is recognized, on timing differences, being the difference
between taxable income and accounting Income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets in respect at unabsorbed depreciation and carry
forward of losses are recognized if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
Deferred tax assets and liabilities are measured based on the tax rate
that are expected to apply in the period when asset is realized or the
liability is settled, based or tax rates and tax laws that have been
enacted of substantially enacted by the balance sheet date.
10 EARNING PER SHARE (EPS)
EPS is calculated by dividing the profit attributable to the equity
Shareholders by the weighted average number of equity Stares
outstanding during the year. Numbers used for calculating basic &
diluted earning per equity shares are as stated below;
Mar 31, 2014
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a. The financial statements are prepared in accordance with the
accounting principles generally accepted in India.
b. The concern generally follows the mercantile system of accounting
and recognizes income & expenditure on an accrual basis except those
with significant uncertainties.
c. The financial statements have been prepared to comply in all
material aspects with the accounting standards notified under Section
211(3C) (which continues to be applicable in terms of General circular
15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013) and other
relevant provisions of the Companies Act, 1956.
d. All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of classification of assets and liabilities into
current and non-current.
2. USE OF ESTIMATE
The preparation of financial statements requires management to make
judgments, estimates and assumptions, that affect the application of
accounting policies and the reported amounts of assets and liabilities
and disclosures of contingent liabilities at the date of these
financial statements and the reported amounts of revenues and expenses
for the years presented. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised and future periods affected.
3. REVENUE RECOGNITION
a. The Company recognizes revenue on the sale of products, net of
discounts, when the products are delivered, risks and rewards of
ownership pass to the dealer / customer.
b. Revenues are recognized when collect ability of the resulting
receivables is reasonably assured.
c. Dividend from investments is recognized when the right to receive
the payment is established and when no significant uncertainty as to
measurability or collect ability exists.
d. Interest income is recognized on the time basis determined by the
amount outstanding and the rate applicable and where no significant
uncertainty as to measurability or collect ability exists.
4. FIXED ASSETS & DEPRECIATION:
a. Fixed Assets - Tangibles
Fixed Assets are stated at cost of acquisition net of recoverable taxes
and includes amount added on revaluation, less accumulated depreciation
and impairment loss, if any. All costs, including financing cost till
commencement of commercial production, net charges on foreign exchange
contracts and adjustments arising from exchange rate variations
attributable to the fixed assets are capitalized.
b. Depreciation
Depreciation on tangible assets has been provided on straight line
method at the rates specified in schedule XIV of the Companies Act,
1956. Depreciation on additions / deductions of assets during the year
is provided on pro-rata basis.
5. INVESTMENTS:
These are held for long term and valued at cost reduced by diminution
of permanent nature therein, if any.
6. INVENTORIES
a. Raw Material Inventories are valued at cost.
b. Work in Process
Inventories are valued at cost. The cost of work in process comprises
of raw material and other direct cost.
7. RETIREMENT BENEFITS:
a. Gratuity
The liability for the gratuity to employee is determined on the basic
of independent actuarial valuation and charged to the profit & loss
account.
b. Provident Fund
Since Provident Fund is not applicable, no provision for provident fund
liability is required.
c. Leave Encashment / Salary
The company is not required to make provision for leave encashment /
salary to the employees as the company is making the leave salary
payment during the year itself.
8. TAXES ON INCOME
a. Current Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
b. Deferred Tax
Deferred tax is recognized, on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses.
Deferred tax assets and liabilities are measured based on the tax rates
that are expected to apply in the period when asset is realized or the
liability is settled, based on tax rates and tax laws that have been
enacted or substantially enacted by the balance sheet date
Mar 31, 2013
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a. The financial statements are prepared in accordance with the
Accounting Principles generally accepted in India.
b. The company has delivered the figure of purchase by adding custom
duty. control and foreign exchange loss along with the purchase value of
Raw Material.
c. The concern generally follows the mercantile system of accounting
and recognizes income and expenditure on an accrual basis except those
with significant uncertainty.
d. All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule VI to the companies act 1956. Based on
the nature of products and the time between the acquisition of assets
for processing and their company has assets for its operating cycle as
12 months for the purpose of current classification of assets and
liabilities.
2 USE OF ESTIMATE
The preparation of financial statements required management and to make
judgment estimates and assumptions. That affect the applications of
accounting principles and the reported amount of assets and liabilities
of those financial statements' and the reported amounts of revenues and
expenditure for the year presented. Accrual results may differ from
these estimates. Estimates and underlying assumption are reviewed an on
ongoing basis revision to accounting estimates are recognized in the
period in which the estimate is revised and further periods affected.
3. REVENUE RECOGNITION
a. The Company recognizes revenue on the sales of products net or
discounts when the products are delivered, risk and rewards of
ownership pass to the customer.
b. Sale of product is presented in financial statements gross of excise
duty wherever applicable and net of the indirect taxes.
c. Revenues are Recognized when collectability of the resulting
receivables Is reasonably
d' Dividend from investments is recognized within the right to receive
the parent is established and when no significant uncertainty as to
measurability exist.
e. Interest income is recognized on the time basis determined by the
amount stand in and the re-applicable and where no significant
uncertainty as to measurability or collectability excise.
4. FIXED ASSETS & DEPRECIATION:
a. Fixed Assets - Tangible assets
Fixed assets are stated at cost of acquisition net of recoverable taxes
and includes amount added an revolution, less accumulated
deprecation and impairment loss if any. All costs including financing
cost till commencement of commercial production, net charge on foreign
exchange contracts and adjustments arising from exchange contacts' and
adjustment arising from exchange rate variations attributable to the
fixed assets are capitalized.
b. Depreciation
Depreciation on tangible assess has been provided on straight line
method in the rates specified in schedule XIV of the companies Act,
1956. Depreciation on additions deductions of assets during the year
is provided on pro-rata basis.
5 INVESTMENTS:
These are held for long term and valued at cost reduced by diminution:
of permanent nature there are if any. profit or losses of subsidence
are accounted for. Fair value of investments in mutual funds is
determined on a portfolio basis.
6. INVENTORIES
a. Raw Material
Inventories are valued at lower of cost or net realizable value.
b. Work In Process
inventories are valued at cost. The cost of work in process comprises
of raw material and other direct cost and related production overheads
as applicable.
7. RETIREMENT BENIFITS:
Expenses & liabilities in respect of employee benefits are recorded in
accordance with the Revised Accounting Stand aid (A3)-15 -Employee
Benefits (revised 2005}
a. Gratuity
The company has not made any provision in respect of liability of
gratuity to employee. Hence we are unable to quantify the impossible on
the profit & loss account of the year Under reporting. However the
company has derived the liability on estimated basis amounting to Rs.
61,731/-
b. Provident Fund; Since Provident Fund Act is not applicable, no
provision for provident fund liability is required.
c. Leave Encashment/Salary
The company is making leave salary payments during the year itself.
Hence no provision is required to be made.
8. TAXES ON INCOME
a Current Tax
Current Tax is determined as the amount of tax payable In respect of
taxable income for the year. %
b. Deferred Taxation
Deferred tax & recognized, on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one of more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized if there is virtual certainty that
there will be sufficient fu Lure taxable income available to realize
such Issus. Deferred tax assets and liabilities' are measured based on
the tax rates that are expected to apply in the period when asset is
realizes or the liability is settled, based on lax rates and tax that
have been enacted or substantially enacted by the balance sheet date
Mar 31, 2012
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
a. The financial statements are prepared in accordance with the
accounting principles generally accepted in India.
b. Purchase includes value of old ship, custom duty, diesel oil,
octopi and foreign exchange loss which are directly related to ship.
c. The concern generally follows the mercantile system of accounting
and recognizes income & expenditure on an accrual basis except those
with significant uncertainties.
d. These financial statements have been prepared to comply in all
material aspect with the accounting standard notified under section
211{3C) [Companies Accounting Standards Rule, 2006, as amended] and the
other relevant provisions of the companies Act, 1956.
e. All assets and liabilities have been classified as current or
non-current as per the Company's normal operating cycle and other
criteria set out in the Schedule VI to the Companies Act, 1956. Based
on the nature of products and the time between the acquisition of
assets for processing and their realization in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current-noncurrent classification of
2. USE OF ESTIMATE
The preparation of financial statements requires management to make
judgments, estimates and assumptions, that affect the application of
accounting policies and the reported amounts of assets and liabilities
and disclosures of contingent liabilities at the date of these
financial statements and the reported amounts of revenues and expenses
for the years presented. Actual results may differ from these
estimates. Estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the
period in which the estimate is revised and future periods affected.
3. REVENUE RECOGNITION
a. The Company recognizes revenue on the sale of products, net of
discounts, when the products are delivered, risks and rewards of
ownership pass to the dealer / customer.
b. Sale of products is presented in financial statement gross of
excise duty where applicable, and net of other indirect taxes.
c. Revenues are recognized when collectability of the resulting
receivables is reasonably assured.
d. Dividend from investments is recognized when the right to receive
the payment is established and when no significant uncertainty as to
measurability or collectability exists.
e. Interest income is recognized on the time basis determined by the
amount outstanding and the rate applicable and where no significant
uncertainty as to measurability or collectability exists.
4. FIXED ASSETS & DEPRECIATION:
a. Fixed Assets - Tangibles
Fixed Assets are stated at cost of acquisition net of recoverable taxes
and includes amount added on revaluation, less accumulated depreciation
and impairment loss, if any All cos- including financing cost till
commencement of commercial production, net charges on formic
b. Depreciation
Depreciation on tangible assets has been provided on straight line
method at the rates Specified in schedule XIV of the companies
Act,1956, Depreciation on additions/deductions for or assets during the
year is provided on pro-rata basis.
5. INVESTMENTS:
These are held for long term and valued at cost reduced by diminution
of permanent nature No profit or losses of subsidiaries are accounted
for. Fair value of investments mutual funds are determined on a
portfolio basis.
6. INVENTORIES
a. Raw Material
Inventories are valued at lower of cost or net realizable value.
b. Work in Process
Inventories are valued at cost. The cost of work in process comprises
of raw material other direct cost and related production overheads as
applicable.
7. RETIREMENT BENEFITS:
Gratuity: Since none of the employee have completed the minimum
specified period for eligibility under the payment of Gratuity Act,
1972, no provision for gratuity has been made.
Leave encashment: Since company is paying leave salary during the year
no provision is required for the same.
Provident Fund: Since Provident Fund Act is not applicable no provision
for provident Fund liability is required.
8. TAXES ON INCOME
a. Current Tax
Current Tax is determined as the amount of tax payable in respect of
taxable income for the year.
b. Deferred Taxation
Deferred tax is recognized, on timing differences, being the difference
between taxable income and accounting income that originate in one
period and are capable of reversal in one or more subsequent periods.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognized if there is virtual certainty that
there will be sufficient future taxable income available to realize
such losses. Deferred tax assets and liabilities are measured or the
tax rates that are expected to apply in the Period when asset is
realized or the liability is settled, based on tax rates and tax laws
that have been enacted or substantially enacted by the balance sheet
date
Mar 31, 2011
A) BASIS OF ACCOUNTING:
The accounts of the Company are prepared under the historical cost
convention and in accordance with applicable accounting standards
except where otherwise stated.
b) INCOME RECOGNITION:
The concern generally follows the mercantile system of accounting and
recognizes income & expenditure on an accrual basis except those with
significant uncertainties.
C) FIXED ASSETS:
Fixed Assets are stated at cost less accumulated depreciation.
D) INVESTMENTS:
Investments are stated at cost. Market Valuation of Shares are based on
Stock Exchange Quotations, If Stock Exchange Quotations are not
available then valued at cost.
E) DEPRECIATION:
Depreciation on fixed assets is provided on straight line value method
as per the rates prescribed in Schedule XIV of the companies Act, 1956.
F) RETIREMENT BENEFITS:
Gratuity: Since none of the employee have completed the minimum
specified period for eligibility under the payment of gratuity Act,
1972, no provision for gratuity has been made.
Leave encashment: Since company is paying leave salary during the year,
no provision is required for the same.
Provident Fund: Since Provident Fund Act is not applicable, no
provision for Provident Fun< liability is required.
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