Accounting Policies of Sindhu Trade Links Ltd. Company
Mar 31, 2021
1 COMPANY INFORMATION_
Sindhu Trade Links Limited (referred as ''STLL'' or âthe Companyâ) engaged in activities of Transportation, Loading & Mining Services and trading of Spares, Fuel and HSD.
The Company is a domestic public limited company incorporated and domiciled in India and is listed on the Bombay Stock Exchange Ltd. [BSE]. The registered office ofthe Company is 129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi-110035, India.
2 (A) Significant Accounting Policies
a) Basis of preparation of Financial Statements Statement of Compliance
The separate financial statements have been prepared to comply in all material aspects with the Accounting Standards notified under Section 133 of Companies Act, 2013 (the âActâ) as per Companies (Indian Accounting Standards (Ind AS)) Rules as amended from time to time and other relevant provisions ofthe Act and rules framed thereunder.
Presentation of Financial Statements
These financial statements have been prepared in Indian Rupee which is the functional currency of the Company.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value or amortised cost at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value ofthe consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities have been classified as current and non-current as per the Companyâs normal operating cycle.
Based on the nature of services rendered to customers and time elapsed between deployment of resources and the realisation in cash and cash equivalents ofthe consideration for such services rendered, the Company has considered an operating cycle of 12 months.
The statement of cash flows have been prepared under indirect method.
Use of Estimates and Judgements
The preparation of these financial statements in conformity with the recognition and measurement principles of Ind AS requires the management ofthe Company to make estimates and assumptions that affect the reported balances of assets and liabilities, disclosures of contingent liabilities as at the date ofthe financial statements and the reported amounts of income and expense for the periods presented.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods are affected.
Key sources of estimation of uncertainty at the date of the financial statements, which may cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are in respect of impairment of investments, useful lives of property, plant and equipment, valuation of deferred tax assets and fair value measurement of financial instruments, these are discussed below. Key sources of estimation of uncertainty in respect of revenue recognition, employee benefits and provisions and contingent liabilities have been discussed in their respective policies.
Useful lives of property, plant and equipment
The Company has taken the useful life of property, plant and equipment as per the life given in the Companies Act, 2013.
Valuation of deferred tax assets
The Company reviews the carrying amount of deferred tax assets at the end of each reporting period. The policy has been explained under note 2(t).
Investment in Subsidiaries, Associates and J oint Ventures
The Company has accounted for its investments in subsidiaries, associates and joint venture at cost less impairment loss (if any). The policy has been further explained under note 2(i).
b) Property, plant and equipment (including Capital work-in-progress)_
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at historical
cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.
Subsequent cost 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. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance expenses are charged to profit or loss during the reporting period in which they are incurred.
Assets acquired but not ready for use are classified under Capital work in progress and are stated at cost comprising direct cost and related incidental expenses.
Property that is held for long-term rental yields or for capital appreciation or both, and that is not used in the production of goods and services or for the administrative purposes is classified as investment property. Investment property is measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure related to investment properties are added to its book value 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. Investment properties are depreciated using the straight line method over the estimated useful lives. The Company''s depreciable investment properties have a useful life of 55 years.
Assets in the course of development or construction and freehold land are not depreciated.
Other property, plant and equipment are stated at cost less accumulated depreciation and any provision for impairment. Depreciation commences when the assets are ready for their intended use.
Depreciation is calculated on the depreciable amount, which is the cost of an asset less its residual value. Depreciation is provided at rates calculated to write off the cost, less estimated residual value, of each asset on a written down value basis over its expected useful life as prescribed under Part C of Schedule II of the Companies Act, 2013.
Individual items of assets costing upto Rs. 5,000 are fully depreciated in the year of acquisition.
Major inspection and overhaul costs are depreciated over the estimated life of the economic benefit derived from such costs. The carrying amount of the remaining previous overhaul cost is charged to the statement of profit and loss if the next overhaul is undertaken earlier than the previously estimated life of the economic benefit.
When significant spare parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.
Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes in estimates, if any, are accounted for prospectively.
The Company has adopted Ind AS 116-Leases using the modified retrospective method. The Company has applied the standard to its leases with the cumulative impact recognised with no impact on retained earnings on the date of initial application (1st April, 2019). Accordingly, previous period information has not been restated.
The Company evaluates each contract or arrangement, whether it qualifies as lease as defined under Ind AS 116. The Company as a lessee, Assesses, whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract involves:-
a) the use of an identified asset,
b) the right to obtain substantially all the economic benefits from use of the identified asset, and
c) the right to direct the use of the identified asset.
At the date of commencement of lease, the Company recognises 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 leases of low value assets. For these short term and leases of low value assets, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease.
The right-of-use assets (it includes prepayment for all the future rentals) are initially recognised 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, if any. Right-of-use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
Costs and expenses are recognised when incurred and have been classified according to their nature. The costs of the Company are broadly categorised in cost of material and services consumed ,employee benefit expenses, cost of equipment and software licences, depreciation and amortisation expense and other expenses. Cost of material and services mailnly includes cost towards transportation charges , FOL, HSD and Spares consumption .Employee benefit expenses include salaries, incentives and allowances, contributions to provident and other funds and staff welfare expenses. Other expenses mainly include fees to external consultants, facility expenses, travel expenses, communication expenses, bad debts and advances written off, allowance for doubtful trade receivable and advances (net) and other expenses. Other expenses is an aggregation of costs which are individually not material such as commission and brokerage, recruitment and training, entertainment, etc.
(i) Financial assets (other than at fair value)
The Company assesses at each date of balance sheet whether a financial asset or a group of financial assets is impaired. Ind AS 109 requires expected credit losses to be measured through a loss allowance. In determining the allowances for doubtful trade receivables, the Company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and allowance rates used in the provision matrix. For all other financial assets, expected credit losses are measured at an amount equal to the 12-months expected credit losses or at an amount equal to the life time expected credit losses if the credit risk on the financial asset has increased significantly since initial recognition.
Tangible and intangible assets
Property, plant and equipment and intangible assets with finite life are evaluated for recoverability whenever there is any indication that their carrying amounts may not be recoverable. If any such indication exists, the recoverable amount (i.e. higher of the fair value less cost to sell and the value-inuse) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs.
If the recoverable amount of an asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount. An impairment loss is recognised in the statement of profit and loss.]
h) Foreign Currencies Transactions and Translation_
Transactions in foreign currencies are recorded at the exchange rate that approximates the prevalent exchange rate on the transaction date. Monetary assets and liabilities in foreign currencies are translated at the year-end rate. Any resultant exchange differences are taken to the statement of profit and loss, except -
a) When deferred, in Other Comprehensive Income as qualifying cash flow hedges; and
b) exchange difference arising from translation of external commercial borrowing is capitalized in terms of para D13AA of IND AS 101.
Non-monetary assets and liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of transaction.
A financial instrument is any contract that gives rise to a financial asset in one entity and a financial liability or equity instrument in another entity.
Financial Assets Initial recognition
In the case of financial assets, not recorded at fair value through profit or loss (FVTPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
(a) Financial Assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance income using the effective interest rate (âEIRâ) method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.
(b) Financial Assets measured at fair value
Financial assets are measured at fair value through other comprehensive income (FVOCI) if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
Financial assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss.
_Impairment of Financial Assets_
In accordance with Ind AS 109, the Company applies the expected credit loss (âECLâ) model for measurement and recognition of impairment loss on financial assets and credit risk exposures.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognised during the period is recorded as expense/ income in the Statement of Profit and Loss.
De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
Equity investments
All equity investments in the scope of Ind AS 109, Financial Instruments, are measured at fair value. For equity instruments, the Company may make an irrevocable election to present the subsequent fair value changes in Other Comprehensive Income (OCI). The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.
There is no recycling of the amounts from OCI to profit or loss, even on sale of investment.
Equity instruments included within the FVTPL (fair value through profit and loss) category are measured at fair value with all changes in fair value recognized in the profit or loss.
_Financial Liabilities_
Initial Recognition
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement Financial liabilities at FVTPL
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation. Amortisation is recognised as finance income in the Statement of Profit and Loss.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of Profit and Loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss. De-recognition of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
The Company measures financial assets and financial liability at fair value at each balance sheet 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:
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 economic best 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. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised 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 - The fair value of financial instruments that are measured on the basis of entity specific valuations using inputs that are not based on observable market data (unobservable inputs).
The Company''s Valuation team determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement.
Consumables,Fuel & HSD, stores and spares are valued at lower of cost and net realisable value; cost is computed on first-in-first out basis. The cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present location and condition. Obsolete, defective, unserviceable and slow/nonmoving stocks are duly provided for. Net realisable value is estimated selling price in ordinary course of business less the estimated cost necessary to make the sale.
In the cash flow statement, cash and cash equivalents includes cash on hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.
Cash flows are reported using indirect method, whereby profit for the year 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 flow. The cash flows from operating, investing & financing activities of the company or segregated. The company considers all highly liquid investments that are readily convertible to know amounts of cash to be cash equivalents.
The Company earns revenue primarily from providing services of transportation, mining and loading as well as trading of fuel and HSD.
The Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The standard is applied retrospectively only to contracts that are not completed as at the date of initial application and the comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18 and Ind AS 11. The impact of the adoption of the standard on the financial statements of the Company is insignificant.
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable excluding taxes or duties collected on behalf of the government and reduced by any rebates and trade discount allowed.
The specific recognition criteria described below must also be met before income is recognised.
i. Income is recognised on accrual basis and provision is made for all known losses and liabilities.
ii. Revenue from sale of goods is recognised net of rebates and discounts on transfer of significant risks and rewards of ownership to the buyer. Sale of goods is recognised net of sales tax, value added tax and GST.
iii. Revenue from services rendered is recognised on prorata basis in proportion to the stage of completion of the
iv. Interest income from debt instruments is recognised using the effective interest rate method. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the gross carrying amount of a financial asset. When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
v. Dividend income is recognised when the right to receive the dividend is established.
vi. Rental income is recognised on a straight-line basis over the period of the lease.
vii. Forex Gain
viii. Share of profit JV
o) Employee benefits Defined contribution plan
The Company''s contribution to Provident Fund and Employees State Insurance Scheme is determined based on a fixed percentage of the eligible employees'' salary and charged to the Statement of Profit and Loss on accrual basis. The Company has categorised its Provident Fund, labour welfare fund and the Employees State Insurance Scheme
as a defined contribution plan since it has no further obligations beyond these contributions.
Defined benefit plan
The Company''s liability towards gratuity, being a defined benefit plan are accounted for on the basis of an independent actuarial valuation based on Projected Unit Credit Method. Gratuity liability is funded by payments to the trust established for the purpose.
Service cost and the net interest cost is included in employee benefit expense in the Statement of profit and loss.
Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognised immediately in ''other comprehensive income'' as income or expense.
General and specific borrowing costs directly attributable to the acquisition/ construction of qualifying assets, which
are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time the assets are substantially ready for their intended use. All other borrowing costs are recognised as an expense in Statement of Profit and Loss in the period in which they are incurred.
q) Borrowings and other financial liabilities
Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred). Difference between the fair value and the transaction proceeds on initial recognition is recognised as an asset / liability based on the underlying reason for the difference.
Subsequently all financial liabilities are measured at amortised cost using the effective interest rate method. Borrowings are eliminated 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. The gain / loss is recognised in other equity in case of transactions with shareholders.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of services rendered in the normal course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment. There was no provision for impairment during
A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. 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 amortised cost using the EIR method. Trade creditors are further classified into MSME & Non MSME . MSME creditors are determined only on the basis of certificate received
i. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
ii. Current Income Tax
Current income tax liabilities and/or assets comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements. Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases.
Deferred tax assets are recognised to the extent it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company''s forecast of future operations results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit.
Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
u) Provisions and Contingent liabilities
Provisions are recognised 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.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Such liabilities are disclosed by way of notes to the financial statements.
The Chief Financial Officer of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, "Operating Segments". Operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The accountingpolicies adopted for segment reporting are in conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis oftheir relationship to the operating activities of the segment. Income / Costs which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under Unallocated Income / Costs. Interest income and expense are not allocated to respective segments (except in case of Financial Services segment).
w) Deferred Revenue and Unbilled Revenue_
Amounts received from customers or billed to customers, in advance of services performed are recorded as deferred revenue under Other Current Liabilities. Unbilled revenue included in Other Financial Assets, represents amounts recognised in respect of services performed in accordance with contract terms, not yet billed to customers as at the year end.
x) Significant management judgements in applying accounting policies and estimation uncertainty
When preparing the financial statements, management makes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
Impairment of non-financial assets
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
Depreciation and useful lives of property, plant and equipment
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking into account their estimated residual value. Management reviews the estimated useful lives and residual values of the assets annually in order to determine the amount of depreciation to be recorded during any reporting period. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant changes from previous estimates.
Recoverability of trade receivable
Judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to mitigate the risk of non-payment.
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing facts and circumstances, which can be subject to change. Since the cash outflows can take place many years in the future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account of changing facts and circumstances.
Defined benefit obligation (DBO)
Management''s estimate of the DBO is based on a number of critical underlying assumptions such as standard rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these assumptions may significantly impact the DBO amount and the annual defined benefit expenses.
Mar 31, 2018
1 COMPANY INFORMATION
Sindhu Trade Links Limited [the ''Company'') is a domestic public limited Company incorporated in India and is listed on the Bombay Stock Exchange Ltd [BSE]. The registered office of the Company is located at 129, Transport Centre, Rohtak Road, Punjabi Bagh, New Delhi India
The Company is engaged in activities Transportation, Loading & Mining Services, company is also running two petrol pumps (IOCL) in Chhattisgarh.
2 Significant Accounting Policies
a) Basis for preparation of financial Statements Compliance with Ind AS
The separate financial statements have been prepared to comply in ail material aspects with the Accounting Standards notified under Section 133 of Companies Act, 2013 (the "Act"] as per Companies (Indian Accounting Standards (Ind AS)} Rules, 2015 and other relevant provisions of the Act and rules framed thereunder.
The financial statements up to year ended 31 March 2017 were prepared in accordance with the Accounting Standards as prescribed under Section 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
These are the first Ind AS financial statements of the Company. Refer note 42 for understanding the transition from previous GAAP to Ind AS and its effect on the Company''s balance sheet, financial performance and cash flows. Historical Cost convention
The financial statements have been prepared on a historical cost convention and accrual basis, except for certaiji financial assets and liabilities measured at fair value and plan assets towards defined benefit plans, which are measured at fair value
Investment in Subsidiaries, Associates and Joint Ventures
The Company has accounted for its investments in Subsidiaries, associates and joint venture at cost less impairment loss (if any).
b) Property, plant and equipment (including Capital work-in-progress)
Freehold land is carried at historical cost All other items of property, plant and equipment are stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisi''.lon of the items.
Subsequent cost 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. The carrying amount of any component accounted for as a separate asseS is derecognised when replaced. All other repairs and maintenance expenses are charged to profit or Jess luring thr reporting period in which they are incurred.
Assets acquired but not ready for use are classified under Capita! work in progress and are stattd at cusf comprising direct cost and related incidental expenses.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognised as at 01 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment
c) Investment Property____________________________
Investment property is the property that is not occupied by the Company, and which is held to earn rentals or for capital appreciation, or both. Upon initial recognition, an investment property is measured at cost, including directly attributable overheads, if any. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment loss, if any. Investment property needs to be valued at Fair value but as an exception, in the instant case, there is a clear evidence that, fair value of investment property is not reliably measurable, as the market for comparable properties is inactive and alternate reliable measurements of fair value cannot be applied.
The Management has in its finance committee dated 19.03.2018 passed a resolution to convert the immovable property held previously as inventory into capital asset, to be recognized/ classified as per INDAS.
Any gain or loss on disposal of an investment property is recognised in profit or loss, unless any other standard specifically requires otherwise.
Company depreciates the investment property using the straight line method over the useful lives of assets as prescribed under PartC of Schedule H of the Company Act,2013.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its investment properties recognised as at 01 April 2016 measured as per the previous GAAP and use that carrying value as the deemed cost of investment properties
d) Depreciation/Amortisation
Assets in the course of development or construction and freehold land are not depreciated.
Other property, plant and equipment are stated at cost less accumulated depreciation and any prov s .jn for impairment. Depreciation commences when the assets are ready for their intended use.
Depreciation is calculated on the depreciable amount, which is the cost of an asset less its residual value. Depreciation is provided at rates calculated to write off the cost less estimated residua! value, of each asset on d written down value basis over its expected useful life (determined by the management bar.ed p.n technical estimates), as follows
The estimated useful lives of assets are as follows:
Buildings 30-60 Years
Plant & Equipment 15-40 Years
Furniture & Fixtures 5-10 Years
Vehicles 8-10 Years
Office Equipmentâs 5 Years
Individual items of assets costing up to Rs. 5,000 are fully depreciated in the yojr of acquisition. Major inspection and overhaul costs are depreciated over the estimated life of the economic benefit derived from such costs. The carrying amount of the remaining previous overhaul cost is charged to the statement of profit and loss if the next overhaul is undertaken earlier than the previously estimated life of the economic benefit When significant spare parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components] of property, plant and equipment
Depreciation methods, useful lives and residual values are reviewed at each financial year end and changes h. estimates, if any, are accounted for prospectively.
e) Leases _________
Leases where the company is a lessee and has substantially al! the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease''s inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost The finance cost is charged to the 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.
Leases in which significant portion of the risk and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payment made under operating lease (net of any incentive received from the lessor] are charged to Statement of Profit and Loss on straight-Hne-basis over the period of the lease unless the payment are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increase.
f) Impairment of assets
Assessment is done at each Balance Sheet date to evaluate whether there is any indication that a non-finial asset may be impaired. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets, is considered as a cash generating unit If any such indication exists, an estimate the recoverable amount of the asset/ cash generating unit is made. Assets whose carrying value exceeds coverable amount are written down to their recoverable amount. Recoverable amount is higher of an assetâs or cash generating unit''s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life. A previously recognised impairment loss is increased or reversed depending on changes in circumstances. However, the carrying value after reversal is not increased beyond the carrying value that would have prevailed by usual depreciation if there was no impairment
g) Foreign Currencies Transactions and Translation
Foreign currency transactions Functional and presentation currency The financial sat;, errant are presented in currency INR, which is the functional and presentation currency of the Company. Foreign currency transactions and balances are accounted as follows:-
i Transactions denominated in foreign currencies are recorded at the exchange rate prevailing at the the transaction.
ii Monetary assets and liabilities denominated in foreign currencies at the year-end are restated at the rate of exchange prevailing on the date of the Balance Sheet
iii Any exchange difference on account of settlement of foreign currency transactions and restatement of monetary assets and liabilities denominated in foreign currency is recognised in the Statement 01 Profit and Loss.
iv Non-monetary items are not retranslated at year-end and are measured at historical cost (translated using the exchange rates at the transaction date), except for non-monetary items measured at fair value which are translated using the exchange rates at the date when fair value was determined.
A financial instrument is any contract that gives rise to a financial asset in one entity and a financial liability or
In the case of financial assets, not recorded at fair value through profit or loss (FVTPL], financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades] are recognised on the trade date,
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income from these financial assets is included in finance Income using the effective interest rate ("EIR"] method. Impairment gains or losses arising on these assets are recognised ict the
Financial assets are measured at fair value through other comprehensive income (FVOC1) these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these financial assets and the contractual terms of the financial asset give rise on specified dates, to cash flows that are solely payments of principal and interest on the principal amount outstanding. Movements In that carrying amount are taken through OCI, except for the recognition of impairment gains or losses, Interest- revenue
Financial assets that do not meet the criteria for amortised cost or FVOCi are measured at fair value through port
In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising
ECL is the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls], discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument The 12-month ECL is a portion of the lifetime ECL which results from default events that are
ECL impairment loss allowance (or reversal] recognised during the period is recorded as expense/ income in the
The Company de-recognises a financial asset only when the contractual rights to the cash Hows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership asset to
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability
If the Company retains substantially all the risks and rewards of ownership of a transferred asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds
All equity investments in the scope of Ind AS 109, Financial Instruments, are For equity instruments, the Company may make an irrevocable election to present the subsequent fair value changes in Other Comprehensive Income (OCI]. The Company makes such election on an -by-intruder basis. The
Equity instruments included within the FVTPL (fair value through profit and loss) category are measured at fair
Company has opted to value it''s unquoted other investment through FVTPL
Financial liabilities are classified, at initial recognition, as financial liabilities at FVTPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and
Financial liabilities at FVTPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when dut- In accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Jnd AS 109 and the amount recognised less cumulative amortisation, Amortisation is
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method, Any difference between the proceeds (net of transaction costs) and the or redemption of borrowings is recognised over the term of the borrowings in the Statement of Profit and Loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of profit
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, or expired. When an existing financial liability is replaced by another from the same Sender on substantially deferent terms, or the terms of an existing liability are substantially modified, such an exchange or modification is i related as de-recognition of the original liability and recognition of a new liability. The difference in the carrying
Financial assets and financial liabilities are offset and the net amount is reported in the balance is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis,
i) Fair value measurement
The Company measures financial assets- and financial liability at fair value at each balance sheet 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:
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 economic best 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. The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised 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 is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring baste, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole the end of each reporting period.
The Company''s Valuation team determines the policies and procedures for both recurring measurement such as derivative instruments and unquoted financial assets measured at fair value, and fur nonrecurring measurement.
j) Inventories
Consumables, stores and spares are valued at lower of cost and net realisable value; cost is computed un out basis. The cost of inventories comprises all costs of purchase and other costs (blurred in bringing the inventories to their present location and condition. Obsolete, defective, unserviceable and slow/non-moving stocks are duly provided for. Net realisable value is estimated selling price in ordinary course of buskinâs the estimated cost necessary to make the sale.
k) Cash and cash equivalents
In the cash flow statement cash and cash equivalents includes cash on hand, demand deposits with bar''-cs, other short-term 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 are shown within borrowings in current liabilities in the balance sheet.
I) Cash flow______________
Cash flows are reported using indirect method, whereby profit for the year 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 flow. The cash flows from operating, investing & financing activities of the company or segregated. The company considers all highly liquid investments that are readily convertible to know amounts of cash to be cash equivalents,
Amendment to Ind AS 7
The Company adopted the amendment to Ind AS 1,which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance sheet for liabilities arising from financing activities to meet the disclosure requirement The adoption of the amendment did not have any material impact on the financial statements.
m) Recognition of Income
Revenue is recognised to the extent it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable excluding taxes or duties collected on behalf of the government and reduced by any rebates and trade discount allowed
The specific recognition criteria described below must also be met before income is recognised.
i. Income is recognised on accrual basis and provision is made for all known losses and liabilities.
ii. Revenue from sale of goods is recognised net of rebates and discounts on transfer of risks and rewards of ownership to the buyer. Sale of goods is recognised net of sales tax, value added tax and GST,
iii. Revenue from services rendered is recognised on basis in proportion to the stage of completion of the related transaction.
iv. Interest income from debt instruments is recognised using the effective interest rate. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the life of the financial asset to the gross carrying amount of a financial asset When calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument but does not consider the expected credit losses.
v. Dividend income is recognised when the right to receive the dividend is established.
vi. Renta) income is recognised on a straight-line basis over the period of the lease
n) Employee benefits
Defined contribution plan
The Company''s contribution to Provident Fund and Employees State Insurance Scheme is determined based on a fixed percentage of the eligible employees'' salary and charged to the Statement of Profit and Loss on accrual basis.
The Company has categorised its Provident Fund, labour welfare fund and the Employees State Insurance Scheme as a defined contribution plan since it has no further obligations beyond these contributions.
Defined benefit plan
The Company''s liability towards gratuity, being a defined benefit plan are accounted for on the basis of an independent actuarial valuation based on Projected Unit Credit Method. Gratuity liability is funded by payments to the trust established for the purpose.
Service cost and the net interest cost is included in employee benefit expense in the Statement and loss. Actuarial gains and losses comprise experience adjustments and the effects of changes In and are recognised immediately in ''other comprehensive income'' as income or expense.
o) Borrowing
General and specific borrowing costs directly attributable to the acquisition/ construction of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time the assets are substantially ready for their intended use. All other borrowing costs are recognised as an expense in Statement of Profit and Loss in the period in which they are incurred.
p) Borrowings and other financial liabilities
Borrowings and other financial liabilities are initially recognised at fair value (net of transaction costs incurred). Difference between the fair value and the transaction proceeds on initial recognition is recognised as an asset / liability based on the underlying reason for the difference.
Subsequently all financial liabilities are measured at amortised cost using the effective interest rate method
Borrowings are eliminated 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 ties assumed, is recognised in profit or loss. The gain / loss is recognised in other equity in case of transactions with shareholders.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
q) Trade receivables
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of services rendered in the normal course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment
r) Trade payables
A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the
end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract Trade and other payables a-e 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 amortised cost using the EIR
s) Taxation
i. Tax expense recognised in profit or loss comprises the sum of deferred tax and current tax not recognised in other comprehensive income or directly in equity.
ii. Current income tax liabilities and/or assets comprise those obligations to, or claims from, fiscal authorities relating to the current or prior reporting periods, that are unpaid at the reporting date. Current tax is payable on taxable profit, which differs from profit or loss in the financial statements, Calculation of current tax is based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. Deferred income taxes are calculated using the liability method on temporary differences between the carrying amounts of assets and liabilities and their tax bases.
iii. Deferred tax assets are recognised to the extent it is probable that the underlying tax loss or deductible temporary difference will be utilised against future taxable income. This is assessed based on the Company''s forecast of future operations results, adjusted for significant non-taxable income and expenses and specific limits on the use of any unused tax loss or credit
iv. Changes in deferred tax assets or liabilities are recognised as a component of tax income or expense in profit or loss, except where they relate to items that are recognised in other comprehensive income or directly in equity, in which case the related deferred tax is also recognised in other comprehensive income or equity, respectively.
v. Tax credit is recognised in respect of Minimum Alternate Tax (MAT) as per the provisions of Section 115JAA of the Income Tax Act, 1961 based on convincing evidence that the Company will pay normal income ax within the statutory time frame and is reviewed at each Balance Sheet date.
t) Provisions and Contingent liabilities
Provisions are recognised 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 wili be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. Such liabilities are disclosed by way of notes to the financial statements.
u) Segment Reporting
The Chief Financial Officer of the Company has been identified as the Chief Operating Decision Maker (CODM) as defined by Ind AS 108, "Operating Segments". Operating segments are reported in a manner consistent with the internal reporting provided to the CODM. The accounting policies adopted for segment reporting are .n conformity with the accounting policies adopted for the Company. Revenue and expenses have been identified to segments on the basis of their relationship to the operating activities of the segment Income / Costs which 10 the Company as a whole and are not allocable to segments on a reasonable basis, have been Included under Unallocated Income / Costs. Interest income and expense are not allocated to respective segments of Financial Services segment).
v) Borrowing Costs
General and specific borrowing costs directly attributable to acquisition or construction of qualifying assets ().&, those Property Plant & Equipmentâs which necessarily take a substantial) period of time to get ready for intended use) are capitalised. Other borrowing costs are recognised as an expense in 1 he period in which they at e incurred,
Amounts received from customers or billed to customers, in advance of services performed are recorded as deferred revenue under Other-Current Liabilities. Unbilled revenue included in Other Financial Assets, represents amounts recognised in respect of services performed in accordance with contract terms, not yet billed to
x) Significant management judgements in applying accounting policies and estimation uncertainty
When preparing the financial statements, management makes a number of judgments, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of
In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to
Property, plant and equipment are depreciated over the estimated useful lives of the assets, after taking Into account their estimated residual value. Management reviews the estimated useful lives and residual values the assets annually in order to determine the amount of depreciation to be recorded during any reporting peril .d. The useful lives and residual values are based on the Company''s historical experience with similar assets and take into account anticipated technological changes. The depreciation for future periods is adjusted if there are significant
judgments are required in assessing the recoverability of overdue trade receivables and determining whether a provision against those receivables is required. Factors considered include the credit rating of the counterparty, the amount and timing of anticipated future payments and any possible actions that can be taken to the
Provisions and liabilities are recognized in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash outflow can be reliably estimated. The timing of recognition and quantification of the liability require the application of judgment to existing Facts and circumstances, which can be subject to change. Since the cash outflows can take place years in future, the carrying amounts of provisions and liabilities are reviewed regularly and adjusted to take account
Management''s estimate of the DBO is based on a number of critical underlying assumptions sue- as rates of inflation, mortality, discount rate and anticipation of future salary increases. Variation in these
Defined contribution plan
A) Amount of Rs, 172.79 Lakh (31 March 2017 Rs.95.78 Lakh) pertaining to employers'' contribution to provident fund, pension fund, labour welfare fund and administration charges is recognized as an expense and included in "Employee benefits " in Note 32.
B) Defined benefit plan:
Gratuity plan:
The Company operates a gratuity plan which provides lump sum benefits linked to the qualifying salary and completed years of service with the Company at the time of separation. Every employee who has completed 5 years of continuous service is entitled to receive gratuity at the time of his retirement or separation from the organization whichever is earlier. However the condition of completion of 5 years of service is not applicable where separation is on account of disability or death of an employee. The gratuity benefit that is payable to any employee, is computed in accordance with the provisions of "The Payment of Gratuity Act, 1972".
The Gratuity fund
The following table sets forth the status of the gratuity plan of the Company and the amounts recognised in the Balance Sheet and Statement of Profit and Loss:
Economic assumptions:
The principal assumptions are the discount rate and salary escalation rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities and the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis. The assumptions used are summarized in the following table;
Sensitivity Analysis:
The key actuarial assumption to which the benefit obligation results are particularly sensitive to discount rate and future salary escalation rate. The following table summarizes the impact on the reported defined benefit ration at the end of the reporting period arising on account of an increase or decrease in the assumption by 50 basis points.
Although the analysis does not take account of the full distribution of cash flows expected lie plan, it does provide an approximation of the sensitivity of the assumptions shown
These sensitivities have been calculated to show the movement in defined benefit obligation in Isolation and assuming there are no other changes in market conditions at the reporting date
The weighted average duration to the payment of defined benefit obligation is 18 years (31 March 2017; 17 years).
Risk Analysis:
The above defined benefit plan expose the Company the following risks:
i) Interest rate risk
The defined benefit obligation calculated uses a discount rate based on government bonds. If bond yields fall, the defined benefit obligation will tend to increase.
ii) Salary inflation risk
Higher than expected increases in salary will increase the defined benefit obligation.
iii) Demographic risk:
This is the risk of variability of results due to unsystematic nature of decrements that include mortality, withdrawal, disability and retirement The effect of these decrements on the defined bandit Obligation is n i straight forward and depends upon the combination of salary increase, discount rate ind vesting criteria, U is important not to overstate withdrawals because in the financial analysis the retirement benefit ol a snort career employee typically costs less per year as compared to a long service employee.
Fair value measurement
Management uses valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument Management bases its assumptions on .servable data as far as possible but this is not always available. In that case management uses best information available, Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at Chef reporting date.
On March. 28, 2018, the Ministry of Corporate Affairs [MCA] has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from Ind AS 115 will supersede the current revenue recognition guidance including (nd AS 10 Revenue, Ind AS 11 Construction Contracts and the related interpretations, Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance
Application of above standards are not expected to have any significant impact on the Company''s Financial All amounts disclosed in the financial statements and notes have been rounded off to the nearest Lakhs a:s per the
b) Terms/rights attached to equity shares
The Company has only one class of equity shares, having a par value of Rs.10 per share. AJI shares rank pair pass with respect to .Lord. voting rights and other terms. Each shareholder is entitled to one vote per share. The dividend proposed, if any, by the Board o: Factors is subject to approval of shareholders in the ensuing Annual Genera! Meeting, except in case of interim dividend. The repayment of equity share capital in the event of liquidation and buy back of shares are possible subject to prevalent regulations, in the event of liquidation, normally the equity shareholders are eligible to receive the remaining assets of the Company after distribution of al] preferential proportion to their shareholding.
* Nature of security for cash credits and working capital demand foans
Cash Credit of Rs. 2,28,04,856 (Prev year; Rs. 4,23,69,235) from ICIC! Bank is secured against Pari passu charge with HDFC Bank on the entire stocks of raw material , stores etc and book- debts receivables etc and Second pari passu charge on the property of M/s Sindhu Realtors Ltd. The facility was taken with a limit of Rs. 5 crores from 1C1C1 Bank carries interest @ 12% pa.
Cash Credit of Rs. 9,98,06,650 (Prev year-. 9,98,06,356) frown lnduslnd Bank is secured through first pari pass charge bv way of hypothecation on the entire current assets of the company along with the other lenders and 2nd charge on the property of the company situated in Tsfra, BiJaspur (C.G.). The facility allows to the company to use Rs. 10 Crores for its working capital requirement on a cost of MCLR 2% (effectively 11%).
iii Cash Credit of Rs. 9,85,06,917/- and invoice discounting of Rs. 40,00,00,000/-from HDFC Bank is secured by way of first |5an passu charge on entire assets of the company along with other lenders i.e. ICICI Bank and Bank and exclusive* charge.'' on land and building of the company situated at rajender Nagar Chowk , link road , and personal guarantee of Mr Satyapa! Sindhu, Mr Rudra Sen Sindhu,and Mr Vrit Pal Sindhu. It carries interest rate at 11.50%.
Mar 31, 2014
1. Basic of Preparation
The financial statements are prepared under the historical cost
convention and the requirements of the Companies Act, 1956.
2. Use of estimates
The preparation of financial statements requires the management of the
company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year. Example of
such estimates include provisions for doubtful debts, employee
retirement benefit plans, provision for income taxes and the useful
lives of fixed assets.
3. Fixed Assets
Fixed Assets are stated at cost, less accumulated depreciation. Costs
include all expenses incurred to bring the assets to its present
location and condition.
4. Impairment of Assets
If the carrying amount of fixed assets exceeds the recoverable amount
on the reporting date, the carrying amount is reduced to the
recoverable amount. The recoverable amount is measured as the higher of
the selling price and the value in the determined by the present value
of estimated future cash flows.
5. Depreciation as per Companies Act 1956
Depreciation is being provided on written down value method as per the
rates provided in schedule VI to the Companies Act, 1956.
6. Investments
Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value. Diminution in value of current investment
is taken to Profit & Loss A/c.
7. Inventories
Inventories are carried out at cost or market value whichever is lower.
8. Revenue Recognition
a) Income is recognised on accrual basis.
b) Penal interest is recognised as income on realisation.
c) Dividend income is accounted on an accrual basis when the company''s
right to receive the dividend is established.
9. Taxes on Income
Tax expense comprises of current and deferred taxes. Current Income Tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred Income Taxes
reflect the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred Income 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 recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. If the Company
has unabsorbed depreciation or carry forward tax losses, deferred tax
assets are recognized only if there is virtual certainty supported by
convincing evidence that such deferred tax assets can be realized
against future taxable profits.
At each Balance Sheet date the Company re-assesses unrecognized
deferred tax assets, if any. It recognizes unrecognized deferred tax
assets to the extent that it has become reasonably certain or virtually
certain, as the case may be, that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes down the carrying amount of a deferred
tax assets to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax assets can be
realized.
10. Segment Reporting
The segments of the company have been identified in line with the
Accounting Standard on segment reporting (AS-17) taking into account
the organization structure as well the differential risks and returns
of these segments.
The company''s reportable operating segments consist of the following
business groups:
a) Finance Operations
b) Oil and Lubricants
c) Transportation
Segment Revenue, Results and Capital Employed include the respective
amounts identifiable to each of the segments. Other unallocable
expenditure/assets/liabilities includes expenses/assets/liabilities
which are not directly identifiable to any business segment.
11. None of the employees of the company was in receipt of remuneration
exceeding Rs. 5,00,000/- per month where employed for part of the year
or Rs. 60,00,000/- p.a. where employed throughout the year.
12. In accordance with the Accounting standard (AS-22) relating to
Accounting for Taxes on Income, provision for differed tax Assets has
been created for Rs.49,05,491/-and the amount has been credited to
Profit & Loss Appropriation Account.
Mar 31, 2013
1. Basic of Preparation
The financial statements are prepared under the historical cost
convention and the requirements of the companies Act, 1956.
2. Use of estimates
The preparation of financial statements requires the management of the
company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year. Example of
such estimates include provisions for doubtful debts, employee
retirement benefit plans, provision for income taxes and the useful
lives of fixed assets.
3. Fixed Assets
Fixed Assets are stated at cost, less accumulated depreciation. Costs
include all expenses incurred to bring the assets to its present
location and condition.
4. Impairment of Assets
If the carrying amount of fixed assets exceeds the recoverable amount
on the reporting date, the carrying amount is reduced to the
recoverable amount. The recoverable amount is measured as the higher of
the selling price and the value in the determined by the present value
of estimated future cash flows.
5. Depreciation as per Companies Act 1956
Depreciation is being provided on written down value method as per the
rates provided in schedule VI to the Companies Act, 1956.
6. Investments
Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value. Diminution in value of current investment
is taken to Profit & Loss A/c
7. Inventories
Inventories are carried out at cost or market value whichever is lower
8. Revenue Recognition
a) Income is recognised on accrual basis.
b) Penal interest is recognised as income on realisation.
c) Dividend income is accounted on an accrual basis when the company''s
right to receive the dividend is established.
9. Taxes on Income
Tax expense comprises of current and deferred taxes. Current Income Tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred Income Taxes
reflect the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred Income 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 recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. If the Company
has unabsorbed depreciation or carry forward tax losses, deferred tax
assets are recognized only if there is virtual certainty supported by
convincing evidence that such deferred tax assets can be realized
against future taxable profits.
At each Balance Sheet date the Company re-assesses unrecognized
deferred tax assets, if any. It recognizes unrecognized deferred tax
assets to the extent that it has become reasonably certain or virtually
certain, as the case may be, that sufficient future taxable income will
be available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes down the carrying amount of a deferred
tax assets to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax assets can be
realized.
10. Segment Reporting
The segments of the company have been identified in line with the
Accounting Standard on segment reporting (AS-17) taking into account
the organization structure as well the differential risks and returns
of these segments. The company''s reportable operating segments consist
of the following business groups:
a) Media Operations
b) Finance Operations
c) Oil and Lubricants
d) Transportation
Segment Revenue, Results and Capital Employed include the respective
amounts identifiable to each of the segments. Other unallocable
expenditure/assets/liabilities includes expenses/assets/liabilities
which are not directly identifiable to any business segment.
11. None of the employees of the company was in receipt of remuneration
exceeding Rs. 5,00,000/- per month where employed for part of the year
or Rs. 60,00,000/- p.a. where employed throughout the year.
12. In accordance with the Accounting standard (AS-22) relating to
Accounting for Taxes on Income, provision for deffered tax Assets has
been created for Rs. 20,28,778 and the amount has been credited to
Profit & Loss Appropriation Account.
Mar 31, 2010
1. Basis of Preparation
The financial statements are prepared under the historical cost
convention and the requirements of the companies Act, 1956.
2. Use of estimates
The preparation of financial statements requires the management of the
company to make estimates and assumptions that affect the reported
balances of assets and liabilities and disclosures relating to the
contingent liabilities as at the date of the financial statements and
reported amounts of income and expenses during the year Example of such
estimates include provisions for doubtful debts, employee retirement
benefit plans, provision for income taxes and the useful lives of fixed
assets.
3. Fixed Assets
Fixed Assets are stated at cost, less accumulated depreciation. Costs
include all expenses incurred to bring the assets to its present
location and condition.
4. Depreciation as per Companies Act 1956
Depreciation is being provided on written down value method as per the
rates provided in schedule VI to the Companies Act, 1956.
5. Investments
Long-term investments are stated at cost, less provision for other than
temporary diminution in value. Current investments are stated at the
lower of cost and fair value.
6. Revenue Recognition
a) Interest income is recognised on accrual basis except in case of
non-performing assets where it is recognised upon realisation as per
RBl Guidelines.
b) Penal interest is recognised as income on realisation.
c) Dividend income is accounted on an accrual basis when the company's
right to receive the dividend is established.
7. Taxes on Income
Current tax is determined as the amount of tax payable in respect of
estimated taxable income for the year.
Deferred tax is recognized, subject to the consideration of prudence in
respect of deferred tax assets, on timing differences, being the
difference between taxable income and accounting income that originate
in the period and are capable of reversal in one or subsequent periods.
8. Segment Reporting
As per Accounting Standards Interpretation (ASI) 20. where an
enterprise which has neither more than one business segment nor more
than one geographical segment then those enterprises is not required to
disclose segment information as per Accounting Standard (AS- 17).
segment reporting.Segment reporting is not applicable to the company.
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