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Accounting Policies of Kalyani Investment Company Ltd. Company
Mar 31, 2025
1. Material Accounting Policies
This note provides a list of the material accounting policies adopted in the preparation of these standalone financial
statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
(i) Compliance with Ind AS
These standalone financial statements of the Company have been prepared in accordance with Indian
Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015
as amended from time to time.
(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.
tiii) Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on 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.
⢠Held primarily for the purpose of trading.
⢠Expected to be realized within twelve months after the reporting period or
⢠Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is 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.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
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.
(b) Interest Income
Interest income from debt instruments is recognized when it is probable that the economic benefits will flow
to the Company and the amount of income can be measured reliably. Interest income is accrued on a timely
basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life of the financial asset to that
asset''s net carrying amount on initial recognition.
(c) Dividends
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable
that the economic benefits associated with the dividend will flow to the company and the amount of the
dividend can be measured reliably.
(d) Taxes
Current tax
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance
with the applicable tax rates and the provisions of the Income tax Act, 1961. The management periodically
evaluates positions taken in returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to
tax authorities.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases
of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except :
⢠When the deferred tax liability arises from the initial recognition of goodwill or 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.
⢠In respect of taxable temporary differences associated with investments in associates, when the timing
of the reversal of the temporary differences can be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax
credits and any unused tax losses. Deferred tax assets are recognized 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 credits and unused tax losses can be utilized, except :
⢠When the deferred tax asset relating to the deductible temporary differences 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.
⢠In respect of deductible temporary differences associated with investments in associates, deferred tax
assets are recognized only to the extent that it is probable that the temporary differences will reverse in
the foreseeable future and taxable profit will be available against which the temporary differences can
be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are
recognized to the extent that it has become probable that future taxable profits will allow the deferred tax
asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when
the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted at the reporting date.
Current and deferred taxes are recognized in the statement of profit and loss, except to the extent that it
relates to items recognized in other comprehensive income or directly in equity.
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 taxes relate to the same taxable entity and the same
taxation authority.
(e) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits
with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term
deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered
an integral part of the Company''s cash management.
(f) Investment in associate
Investment in associate are accounted at cost less accumulated impairment.
(g) Fair value measurement
The Company measures financial instruments at fair value on initial recognition.
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 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, maximizing the use of relevant observable inputs and minimizing
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements
are categorized within the fair value hierarchy, described as follows, based on the lowest level inputs that is
significant to the fair value measurement as a whole :
⢠Level 1 - Quoted (unadjusted) market prices in active markets for identical assets and 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 un-observable.
For assets and liabilities that are recognized in the standalone financial statements on a recurring basis,
the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing
categorization at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as unquoted financial assets. Involvement
of external valuers is decided upon annually by the management. Selection criteria include market knowledge,
reputation, independence and whether professional standards are maintained. The management decides,
after discussions with the Company''s external valuers, which valuation techniques and inputs to use for each
case.
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.
(h) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
(i) Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair
value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories :
⢠Financial assets at amortized cost
⢠Financial assets at fair value through other comprehensive income (FVTOCI)
⢠Financial assets at fair value through profit or loss (FVTPL)
Financial assets at amortized cost
A financial asset is measured at amortized cost if both following conditions are met :
⢠The financial asset is held within a business model whose objective is to hold financial 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the
effective interest rate (EIR) method. Amortized 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 amortization is included
in other income in the statement of profit and loss. The losses arising from impairment are recognized in the
statement of profit and loss.
Financial assets at fair value through other comprehensive income
A financial asset is measured at fair value through other comprehensive income if both of the following criteria
are met :
⢠The financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the 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.
After initial measurement, such financial assets, until they are de-recognized or reclassified, are subsequently
measured at fair value and recognized in other comprehensive income except for interest income, gain / loss
on impairment, gain / loss on foreign exchange which is recognized in the statement of profit and loss.
Financial assets at fair value through profit or loss
A financial asset is measured at fair value through profit or loss unless it is measured at amortized cost or at
fair value through other comprehensive income.
In addition, the Company may elect to classify a financial asset, which otherwise meets amortized cost or
fair value through other comprehensive income criteria, as at fair value through profit or loss. However, such
election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred
to as ''accounting mismatch''). After initial measurement, such financial assets are subsequently measured at
fair value in the statement of profit and loss.
De-recognition of financial assets
A financial asset is de-recognized when :
⢠the contractual rights to receive cash flows from the financial asset have expired or
⢠The Company has transferred its contractual rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party under a
pass-through arrangement and either
(a) The Company has transferred substantially all the risks and rewards of the asset or
(b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset,
but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and
recognition of impairment loss on the following financial assets and credit risk exposure :
⢠Financial assets that are debt instruments and are measured at amortized cost e.g. loans, debt-securities,
deposits, trade receivables and bank balance.
⢠Financial assets that are debt instruments and are measured as at FVTOCI.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather,
it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial
recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that 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 recognizing impairment loss allowance based on 12 month ECL.
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
on a financial instrument that are possible within 12 months after the reporting date.
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 Company expects to receive (i.e. all cash shortfalls), discounted at
the original EIR. When estimating the cash flows, an entity is required to consider :
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options)
over the expected life of the financial instrument. However, in rare cases when the expected life of the
financial instrument cannot be estimated reliably, then the Company is required to use the remaining
contractual term of the financial instrument.
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual
terms.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income / expense in
the statement of profit and loss. This amount is reflected under the head "Other Expenses" in the statement
of profit and loss.
The Balance sheet presentation for various financial instruments is described below :
⢠Financial assets measured as at amortized cost.
ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance
sheet. The allowance reduces the net carrying amount. Until the asset meets write-offs criteria, the Company
does not de-recognize impairment allowance from the gross carrying amount.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e. financial
assets which are credit impaired on purchase / origination.
(j) De-recognition of financial liabilities
A financial liability (or a part of a financial liability) is de-recognized from its balance sheet when and only
when, it is extinguished i.e. when the obligation specified in the contract is discharged or 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 the de-recognition of the original liability and the recognition of an new liability. The difference in
the respective carrying amounts is recognized in the statement of profit and loss.
(k) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there
is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net
basis or 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 company or the counterparty.
(l) Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation
and impairment loss (if any). All directly attributable costs relating to the acquisition and installation of
property, plant and equipment are capitalized. All repair and maintenance costs are recognized in statement
of profit and loss during the reporting period in which they are incurred.
Subsequent costs are included in the asset''s carrying amount as recognized as a standalone 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 a standalone asset is de-recognized when replaced.
The identified components are depreciated over their useful lives, the remaining asset is depreciated over
the life of the principal asset.
Depreciation on additions is provided from the beginning of the month in which the asset is put to use.
Depreciation on assets sold, discarded or demolished during the year is being provided at their respective
rates on pro-rata basis up to the end of the month prior to the month in which such assets are sold, discarded
or demolished.
The useful lives has been determined based on technical evaluation done by the management''s expert which
are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage
of the assets. The residual values are not more than 5% of the original cost of the asset.
Depreciation is charged on the basis of useful life of assets on straight line method.
An item of property, plant and equipment and any significant part initially recognized is de-recognized 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 is included in the standalone statement of profit and loss when the asset is
de-recognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed
at each financial year.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property,
plant and equipment recognized as at April 1, 2017 measured as per the previous GAAP and use that carrying
value as the deemed cost of the property, plant and equipment.
(m) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired.
If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount
is the higher of an asset''s or cash-generating unit''s (CGU) fair vale less costs of disposal and its value in use.
Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows
that are largely independent of those from other assets or group of assets. When the carrying amount of
an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset. In determining fair value less costs of disposal, recent market transactions are taken into account.
If no such transactions can be identified, an appropriate valuation model is used.
Impairment inventories are recognized in the statement of profit and loss.
Previously recognized impairment loss is reversed only if there has been a change in the assumptions used
to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal
is limited so that the carrying amount of asset does not exceed its recoverable amount. Such reversal is
recognized in statement of profit and loss.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of
financial year which are unpaid. Trade and other payables are unsecured and are presented as current
liabilities unless payment is not due within operating cycle determined by the Company after the reporting
period. They are recognized initially at their fair value and subsequently measured at amortized cost using
the effective interest method.
Mar 31, 2024
1. Material Accounting Policies
This note provides a list of the material accounting policies adopted in the preparation of these standalone financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
(i) Compliance with Ind AS
These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time.
(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. tiii) Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on 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.
⢠Held primarily for the purpose of trading.
⢠Expected to be realized within twelve months after the reporting period or
⢠Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is 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.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
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.
(b) Interest Income
Interest income from debt instruments is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a timely basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
(c) Dividends
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company and the amount of the dividend can be measured reliably.
(d) Taxes Current tax
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income tax Act, 1961. The management periodically evaluates positions taken in returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to tax authorities.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except :
⢠When the deferred tax liability arises from the initial recognition of goodwill or 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.
⢠In respect of taxable temporary differences associated with investments in associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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 credits and unused tax losses can be utilized, except :
⢠When the deferred tax asset relating to the deductible temporary differences 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.
⢠In respect of deductible temporary differences associated with investments in associates, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Current and deferred taxes are recognized in the statement of profit and loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity.
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 taxes relate to the same taxable entity and the same taxation authority.
(e) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered an integral part of the Company''s cash management.
(f) Investment in associate
Investment in associate are accounted at cost less accumulated impairment.
(g) Fair value measurement
The Company measures financial instruments at fair value on initial recognition.
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 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, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level inputs that is significant to the fair value measurement as a whole :
⢠Level 1 - Quoted (unadjusted) market prices in active markets for identical assets and 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 un-observable.
For assets and liabilities that are recognized in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as unquoted financial assets. Involvement of external valuers is decided upon annually by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the Company''s external valuers, which valuation techniques and inputs to use for each case.
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.
(h) Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
(i) Financial assets
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories :
⢠Financial assets at amortized cost
⢠Financial assets at fair value through other comprehensive income (FVTOCI)
⢠Financial assets at fair value through profit or loss (FVTPL)
Financial assets at amortized cost
A financial asset is measured at amortized cost if both following conditions are met :
⢠The financial asset is held within a business model whose objective is to hold financial 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized 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 amortization is included in other income in the statement of profit and loss. The losses arising from impairment are recognized in the statement of profit and loss.
Financial assets at fair value through other comprehensive income
A financial asset is measured at fair value through other comprehensive income if both of the following criteria are met :
⢠The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the 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.
After initial measurement, such financial assets, until they are de-recognized or reclassified, are subsequently measured at fair value and recognized in other comprehensive income except for interest income, gain / loss on impairment, gain / loss on foreign exchange which is recognized in the statement of profit and loss.
Financial assets at fair value through profit or loss
A financial asset is measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income.
In addition, the Company may elect to classify a financial asset, which otherwise meets amortized cost or fair value through other comprehensive income criteria, as at fair value through profit or loss. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). After initial measurement, such financial assets are subsequently measured at fair value in the statement of profit and loss.
De-recognition of financial assets
A financial asset is de-recognized when :
⢠the contractual rights to receive cash flows from the financial asset have expired or
⢠The Company has transferred its contractual rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either
(a) The Company has transferred substantially all the risks and rewards of the asset or
(b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure :
⢠Financial assets that are debt instruments and are measured at amortized cost e.g. loans, debt-securities, deposits, trade receivables and bank balance.
⢠Financial assets that are debt instruments and are measured as at FVTOCI.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that 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 recognizing impairment loss allowance based on 12 month ECL.
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 on a financial instrument that are possible within 12 months after the reporting date.
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 Company expects to receive (i.e. all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider :
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the Company is required to use the remaining contractual term of the financial instrument.
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income / expense in the statement of profit and loss. This amount is reflected under the head "Other Expenses" in the statement of profit and loss.
The Balance sheet presentation for various financial instruments is described below :
⢠Financial assets measured as at amortized cost.
ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-offs criteria, the Company does not de-recognize impairment allowance from the gross carrying amount.
The Company does not have any purchased or originated credit-impaired (POCI) financial assets, i.e. financial assets which are credit impaired on purchase / origination.
(j) De-recognition of financial liabilities
A financial liability (or a part of a financial liability) is de-recognized from its balance sheet when and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or 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 the de-recognition of the original liability and the recognition of an new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.
(k) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or 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 company or the counterparty.
(l) Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation and impairment loss (if any). All directly attributable costs relating to the acquisition and installation of property, plant and equipment are capitalized. All repair and maintenance costs are recognized in statement of profit and loss during the reporting period in which they are incurred.
Subsequent costs are included in the asset''s carrying amount as recognized as a standalone 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 a standalone asset is de-recognized when replaced.
The identified components are depreciated over their useful lives, the remaining asset is depreciated over the life of the principal asset.
Depreciation on additions is provided from the beginning of the month in which the asset is put to use.
Depreciation on assets sold, discarded or demolished during the year is being provided at their respective rates on pro-rata basis up to the end of the month prior to the month in which such assets are sold, discarded or demolished.
The useful lives has been determined based on technical evaluation done by the management''s expert which are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset.
Depreciation is charged on the basis of useful life of assets on straight line method.
An item of property, plant and equipment and any significant part initially recognized is de-recognized 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 is included in the standalone statement of profit and loss when the asset is de-recognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
(m) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair vale less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment inventories are recognized in the statement of profit and loss.
Previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of asset does not exceed its recoverable amount. Such reversal is recognized in statement of profit and loss.
(n) Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. Trade and other payables are unsecured and are presented as current liabilities unless payment is not due within operating cycle determined by the Company after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
Mar 31, 2023
Background
Kalyani Investment Company Limited ("the Company") is a public limited company domiciled in India and incorporated in June, 2009 under the provisions of Companies Act, 1956. The equity shares of the Company are listed on two recognized Stock Exchanges in India i.e. the BSE Limited (BSE) and National Stock Exchange of India Limited (NSE). The Company is primarily engaged in the business of making investments in group companies. The registered office of the Company is located at Mundhwa, Pune-411036. The CIN of the Company is L65993PN2009PLC134196.
These standalone financial statements for the year ended March 31, 2023 were approved by the Board of Directors and authorized for issue on April 28, 2023.
1. Significant Accounting Policies
This note provides a list of the significant accounting policies adopted in the preparation of these standalone financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
(a) Basis of preparation
(i) Compliance with Ind AS
These standalone financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time
(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.
(iii) Current versus non-current classification
The Company presents assets and liabilities in the Balance Sheet based on 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.
⢠Held primarily for the purpose of trading.
⢠Expected to be realized within twelve months after the reporting period or
⢠Cash or cash equivalents unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is 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.
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
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.
(b) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the Board of Directors that makes strategic decisions for the Company. Refer Note 33 for segment information presented.
(c) Foreign currency transactions Functional and presentation currency
Items included in the standalone financial statements of the company are measured using the currency of the primary economic environment in which the entity operates (''the functional currency''). The standalone financial statements are presented in Indian rupee (INR), which is the Company''s functional and presentation currency.
Initial Recognition
Foreign currency transactions are recorded in Indian currency, by applying the exchange rate between the Indian currency and the foreign currency at the date of transaction.
Conversion
Monetary items, designated in foreign currencies are revalued at the rate prevailing on the date of Balance Sheet.
Exchange Differences
Exchange differences arising on the settlement and conversion of foreign currency transactions are recognized as income or as expenses in the year in which they arise, except in cases where they relate to the acquisition of qualifying assets, in which cases they were adjusted in the cost of the corresponding asset.
(d) Interest Income
Interest income from debt instruments is recognized when it is probable that the economic benefits will flow to the Company and the amount of income can be measured reliably. Interest income is accrued on a timely basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset''s net carrying amount on initial recognition.
(e) Dividends
Dividends are recognized in profit or loss only when the right to receive payment is established, it is probable that the economic benefits associated with the dividend will flow to the company and the amount of the dividend can be measured reliably.
(f) Taxes Current tax
Current tax is the amount of tax payable based on the taxable profit for the year as determined in accordance with the applicable tax rates and the provisions of the Income tax Act, 1961. The management periodically evaluates positions taken in returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate, on the basis of amounts expected to be paid to tax authorities.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax liabilities are recognized for all taxable temporary differences, except :
⢠When the deferred tax liability arises from the initial recognition of goodwill or 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.
⢠In respect of taxable temporary differences associated with investments in associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred tax assets are recognized for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized 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 credits and unused tax losses can be utilized, except :
⢠When the deferred tax asset relating to the deductible temporary differences 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.
⢠In respect of deductible temporary differences associated with investments in associates, deferred tax assets are recognized only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Current and deferred taxes are recognized in the statement of profit and loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity.
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 taxes relate to the same taxable entity and the same taxation authority.
(g) Leases
The determination of whether a contract is (or contains) a lease is based on the substance of the contract at the inception of the lease. The contract is or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a Lessee
At the commencement date, a lessee shall recognize a right-of-use asset and a lease liability. A lessee shall measure the lease liability at the present value of the lease payments that are not paid at that date. The lease payments shall be discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the lessee shall use the lessee''s incremental borrowing rate.
The Company uses the practical expedient to apply the requirements of Ind AS 116 to a portfolio of leases with similar characteristics if the effects on the financial statements of applying to the portfolio does not differ materially from applying the requirement to the individual leases within that portfolio.
However, when the lessee and the lessor each have the right to terminate the lease without permission from the other party with no more than an insignificant penalty the Company considers that lease to be no longer enforceable. Also according to Ind AS 116, for leases with a lease term of 12 months or less (short-term leases) and for leases for which the underlying asset is of low value, the lessee is not required to recognize right-of-use asset and a lease liability. The Company applies both recognition exemptions.
Right-of-use asset
Right-of-use assets, which are included under property, plant and equipment, are measured at cost less any accumulated depreciation and if necessary, any accumulated impairment. The cost of a right-of-use asset comprises the present value of the outstanding lease payments plus any lease payments made at or before the commencement date less any lease incentives received, any initial direct costs and an estimate of costs to be incurred in dismantling or removing the underlying asset. In this context, the Company also applies the practical expedient that the payments for non-lease components are generally recognized as lease payments.
If the lease transfers ownership of the underlying asset to the lessee at the end of the lease term or if the cost of the right-of-use asset reflects that the lessee will exercise a purchase option, the right-of-use asset is depreciated to the end of the useful life of the underlying asset. Otherwise, the right-of-use asset is depreciated to the end of the lease term.
Lease liability
Lease liabilities, which are assigned to financing liabilities, are measured initially at the present value of the lease payments. Subsequent measurement of a lease liability includes the increase of the carrying amount to reflect interest on the lease liability and reducing the carrying amount to reflect the lease payments made.
Lease modification
For a lease modification that is not accounted for as a standalone lease, the company accounts for the re-measurement of the lease liability by making a corresponding adjustment to the right-of-use asset.
Company as Lessor
A lessor shall classify each of its leases as either an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. A lease is classified as an operating lease if it does not transfer substantially all the risks and rewards incidental to ownership of an underlying asset.
Amounts due from lessees under finance leases are recorded as receivables at the company''s net investment in the leases. Finance lease income is allocated to accounting periods to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
Where the Company is a lessor under an operating lease, the asset is capitalized within property, plant and equipment and depreciated over its useful economic life. However, if there is no reasonable certainty that the company will obtain possession of the asset upon end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Rental income from operating lease is recognized on a straight-line basis over the term of the relevant lease unless the payments to the lessor are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases or another systematic basis is available. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same basis as rental income. Contingent rents are recognized as revenue in the period in which they are earned.
Effective April 1, 2019, the company adopted Ind AS 116 "Leases" for the first time, using the modified retrospective transition method, applied to lease contracts that are ongoing as at April 1, 2019.
(h) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consists of cash and short-term deposits, as defined above, net of outstanding bank overdrafts and cash credit facilities as they are considered an integral part of the Company''s cash management.
(i) Investment in associate
Investment in associate are accounted at cost less accumulated impairment.
(j) Fair value measurement
The Company measures financial instruments at fair value on initial recognition.
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 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, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level inputs that is significant to the fair value measurement as a whole :
⢠Level 1 - Quoted (unadjusted) market prices in active markets for identical assets and 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 un-observable.
For assets and liabilities that are recognized in the standalone financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.
External valuers are involved for valuation of significant assets, such as unquoted financial assets. Involvement of external valuers is decided upon annually by the management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The management decides, after discussions with the Company''s external valuers, which valuation techniques and inputs to use for each case.
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.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Initial recognition and measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in three categories :
⢠Financial assets at amortized cost
⢠Financial assets at fair value through other comprehensive income (FVTOCI)
⢠Financial assets at fair value through profit or loss (FVTPL)
Financial assets at amortized cost
A financial asset is measured at amortized cost if both following conditions are met :
⢠The financial asset is held within a business model whose objective is to hold financial 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.
After initial measurement, such financial assets are subsequently measured at amortized cost using the effective interest rate (EIR) method. Amortized 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 amortization is included in other income in the statement of profit and loss. The losses arising from impairment are recognized in the statement of profit and loss.
Financial assets at fair value through other comprehensive income
A financial asset is measured at fair value through other comprehensive income if both of the following criteria are met :
⢠The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the 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.
After initial measurement, such financial assets, until they are de-recognized or reclassified, are subsequently measured at fair value and recognized in other comprehensive income except for interest income, gain / loss on impairment, gain / loss on foreign exchange which is recognized in the statement of profit and loss.
Financial assets at fair value through profit or loss
A financial asset is measured at fair value through profit or loss unless it is measured at amortized cost or at fair value through other comprehensive income.
In addition, the Company may elect to classify a financial asset, which otherwise meets amortized cost or fair value through other comprehensive income criteria, as at fair value through profit or loss. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). After initial measurement, such financial assets are subsequently measured at fair value in the statement of profit and loss.
De-recognition of financial assets
A financial asset is de-recognized when :
⢠The contractual rights to receive cash flows from the financial asset have expired or
⢠The Company has transferred its contractual rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a pass-through arrangement and either
(a) The Company has transferred substantially all the risks and rewards of the asset or
(b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss on the following financial assets and credit risk exposure :
⢠Financial assets that are debt instruments and are measured at amortized cost e.g. loans, debt-securities, deposits, trade receivables and bank balance.
⢠Financial assets that are debt instruments and are measured as at FVTOCI.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables.
The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that 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 recognizing impairment loss allowance based on 12 month ECL.
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 on a financial instrument that are possible within 12 months after the reporting date.
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 Company expects to receive (i.e. all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider :
⢠All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the Company is required to use the remaining contractual term of the financial instrument.
⢠Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income / expense in the statement of profit and loss. This amount is reflected under the head "Other Expenses" in the statement of profit and loss.
The Balance sheet presentation for various financial instruments is described below :
⢠Financial assets measured as at amortized cost.
ECL is presented as an allowance, i.e. as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-offs criteria, the Company does not de-recognize impairment allowance from the gross carrying amount.
The Company does not have any purchased or originated credit impaired (POCI) financial assets, i.e. financial assets which are credit impaired on purchase / origination.
(m) De-recognition of financial liabilities
A financial liability (or a part of a financial liability) is de-recognized from its balance sheet when and only when, it is extinguished i.e. when the obligation specified in the contract is discharged or 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 the de-recognition of the original liability and the recognition of an new liability. The difference in the respective carrying amounts is recognized in the statement of profit and loss.
(n) Offsetting of financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or 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 company or the counterparty.
(o) Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction net of accumulated depreciation and impairment loss (if any). All directly attributable costs relating to the acquisition and installation of property, plant and equipment are capitalized. All repair and maintenance costs are recognized in statement of profit and loss during the reporting period in which they are incurred.
Subsequent costs are included in the asset''s carrying amount as recognized as a standalone 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 a standalone asset is de-recognized when replaced.
The identified components are depreciated over their useful lives, the remaining asset is depreciated over the life of the principal asset.
Depreciation on additions is provided from the beginning of the month in which the asset is put to use.
Depreciation on assets sold, discarded or demolished during the year is being provided at their respective rates on pro-rata basis up to the end of the month prior to the month in which such assets are sold, discarded or demolished.
The useful lives has been determined based on technical evaluation done by the management''s expert which are higher than those specified by Schedule II to the Companies Act, 2013, in order to reflect the actual usage of the assets. The residual values are not more than 5% of the original cost of the asset.
Depreciation is charged on the basis of useful life of assets on straight line method.
An item of property, plant and equipment and any significant part initially recognized is de-recognized 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 is included in the standalone statement of profit and loss when the asset is de-recognized.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2017 measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
(p) Impairment of non-flnancial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment inventories are recognized in the statement of profit and loss.
Previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset''s recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of asset does not exceed its recoverable amount. Such reversal is recognized in statement of profit and loss.
(q) Trade and other payables
These amounts represent liabilities for goods and services provided to the company prior to the end of financial year which are unpaid. Trade and other payables are unsecured and are presented as current liabilities unless payment is not due within operating cycle determined by the Company after the reporting period. They are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method.
(r) Provisions and contingent liabilities
Provisions are recognized when the Company has a present, legal or constructive obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount of the obligation can be made. Provisions are determined based on the best estimate required to settle the obligation at the Balance Sheet date. Provisions are reviewed at each Balance Sheet date and adjusted to reflect current best estimates.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements. A disclosure for a contingent liability is made where there is a possible obligation arising out of past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly
within the control of the Company or a present obligation arising out of a past event where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
(s) Employee Benefits
(i) Short-term Employee Benefits
The distinction between short term and long term employee benefits is based on expected timing of settlement rather than the employee''s entitlement benefits. All employee benefits payable within twelve months of rendering the service are classified as short term benefits. Such benefits include salaries, wages, bonus, short term compensated absences, awards, ex-gratia, performance pay etc. and are recognized in the period in which the employee renders the related service.
(ii) Long term Employment benefits
The employee''s long term compensated absences are Company''s other long term benefit plans. The present value of the obligation is determined based on the actuarial valuation using the Projected Unit Credit Method as at the date of Balance sheet. In case of funded plans, the fair value of plan asset is reduced from the gross obligation, to recognize the obligation on a net basis.
In regard to other long term employment benefits, the Company recognizes the net total of service costs, net interest on the net defined benefit liability (asset) and re-measurements of the net defined benefit liability (asset) in the statement of profit and loss.
The Company operates single plan for its employees to provide employee benefits in the nature of provident fund.
The Company pays provident fund contributions to publicly administered provident funds as per regulations. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognized as employee benefit expense when they are due.
Eligible employees receive benefits from a provident fund, which is a defined benefit plan. Both the employee and the Company make monthly contributions to the provident fund plan equal to a specified percentage of the covered employee''s salary
(iii) Termination benefits
Termination benefits are payable when employment is terminated by the Company before the normal retirement date or when an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits at the earlier of the following dates : (a) when the Company can no longer withdraw the offer of those benefits; and (b) when the entity recognizes costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of terminations benefits. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to present value.
(t) Paid up 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.
(u) Cash Flow Statement
Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a non cash nature and deferral or accruals of past or future cash receipts or payments. The cash flows from regular operating, investing and financing activities of the Company are segregated.
(v) Dividend liability
The Company recognizes a liability to make cash or non-cash distributions to equity holders of the Company when distribution is authorized and the distribution is no longer at the discretion of the Company. As per the corporate laws in India, a distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
(i) Basic Earnings per Share
Basic earnings per share is calculated by dividing the net profit for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the financial year. Earnings considered in ascertaining the company''s earnings per share is the net profit for the period after deducting any attributable tax thereto for the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.
(ii) Diluted Earnings per Share
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
(x) Rounding of amounts
All amounts disclosed in these standalone financial statements and notes have been rounded off to the nearest Million as per the requirement of Schedule III, unless otherwise stated.
1A. Standards issued but not effective
The Ministry of Corporate Affairs (MCA) on March 31, 2023, vide Notification dated March 31, 2023 has issued the Companies (Indian Accounting Standard) Amendment Rules, 2023 in consultation with the National Financial Reporting Authority (NFRA).
The notification states that these rules shall be applicable from April 1, 2023 and would thus be applicable for the financial year ending March 31, 2024.
The amendments to Ind AS are intended to keep the Ind AS aligned with the amendments made in IFRS.
1. Amendments to Ind AS 1, "Presentation of Financial Statements"
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements.
2. Amendments to Ind AS 8, "Accounting Policies, Changes in Accounting Estimates and Errors"
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are "monetary amounts in financial statements that are subject to measurement uncertainty". Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty.
3. Amendments to Ind AS 12, "Income Taxes"
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the initial recognition exemption so that it does not apply to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.
No significant impact on financial statements of the Company are expected as a result of these amendments.
2. Significant accounting judgements, estimates and assumptions
The preparation of the Company''s standalone financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities. This note provides an overview of the areas that involve a higher degree of judgments or complexities and of items which are more likely to be materially adjusted due to estimates and assumptions turning out to be different than those originally assessed. Detailed information about each of these judgments, estimates and assumptions is mentioned below.
Judgments, estimates and assumptions are continually evaluated. They are based on historical experience and other factors, including expectations of future events that may have a financial impact on the company and that are believed to be reasonable under the circumstances.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. The mortality rate is based on Indian Assured Lives Mortality (2012-14) Ultimate. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and benefit increases are based on expected future inflation rates. Further details about employee benefit obligations are given in Note 26.
2. Fair value measurement of unquoted financial instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 28 for further disclosures.
Mar 31, 2018
1. Company Overview :
The Company is a Non Deposit taking Core Investment Company, as defined in the Core Investment Companies (Reserve Bank) Directions, 2011. Since the Company is not a Systemically Important Non Deposit taking Core Investment Company, it is not required to obtain Certificate of Registration under Section 45-IA of the Reserve Bank of India Act, 1934.
The Company is a subsidiary of Sundaram Trading and Investment Private Limited.
Operating Cycle of the Company is considered to be of 12 months.
2. Statement of Significant Accounting Policies :
2.1 Basis of Accounting and Preparation of Financial Statements :
These accounts have been prepared under historical cost convention and comply with the Accounting Standards, specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. All income and expenses having a material bearing on the financial statements are recognised on the accrual basis.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP requires that the Management makes estimates and assumptions, which affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, as at the date of the financial statements and the reported amounts of revenue and expenses during the year under report. Contingencies are recorded, when it is probable that a liability will be incurred and the amount can be reasonably estimated. Actual results could differ from those estimates.
2.3 Plant, Property and Equipmentâs and Depreciation :
a) Plant, Property and Equipmentâs :
Plant, Property and Equipmentâs are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets. Plant, Property and Equipmentâs are shown net of accumulated depreciation, wherever applicable and amortisation.
b) Depreciation and Amortisation :
i) Depreciation on Plant, Property and Equipmentâs is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management. Depreciation is charged on pro-rata basis for assets purchased / sold during the year.
The Management''s estimate of the useful lives of various fixed assets which is in line with the provisions of Schedule II to the Companies Act, 2013 is given below :
2.4 Investments :
a) Long Term Investments are carried at cost. Provision for diminution is made to recognise a decline other than temporary, in value of investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.5 Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue recognition is postponed in respect of specific items of income, where the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a right to receive is established.
d) Profit / loss on sale of investments is recognised as per the terms of the underlying contracts.
2.6 Employee Benefits :
a) Employee benefits include interalia, amounts paid for the services of the Key Management Personnel on deputation. No separate provisions of retirement benefits or privilege leave benefits of such employees are recognised in the books of the Company. The Company is not liable for payment of gratuity.
b) Privilege leave benefits :
Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave 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. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
2.7 Taxation :
a) Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
b) Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences 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 realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
At each reporting date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised 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 realised.
The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes down the carrying amount of deferred tax asset 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 asset can be realised. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
c) Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset in accordance with the guidance note on "Accounting for Credit Available in respect of Minimum Alternative Tax" under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
2.8 Foreign Currency Translation :
In accordance with the paragraph 46A of the Accounting Standard - 11, "The effects of changes in foreign exchange rates", the Company has exercised the irrevocable option and accordingly, the exchange differences arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, is added to or deducted from the cost of the asset and is depreciated over the balance life of the asset and in other cases, is accumulated in "Foreign Currency Monetary Item Translation Difference Account" in the financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in the statement of profit and loss. Long-term foreign currency monetary item means any asset or liability that is expressed in a foreign currency and has a term of twelve months or more at the date of origination of the asset or liability.
Transactions in foreign currency, other than those covered by long-term foreign currency monetary items are accounted at the exchange rates prevailing on the dates of transactions. Gains / losses arising out of fluctuations in the exchange rates in respect of these transactions are dealt with in the statement of profit and loss in the period in which they arise.
2.9 Impairment :
The management has a policy to review at each balance sheet date, the carrying amounts of its assets to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the asset. Reversal of impairment loss is recognised immediately as income in the statement of profit and loss.
2.10 Earnings per share :
In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of extraordinary / exceptional item, if any. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.
2.11 Provisions, Contingent Liabilities and Contingent Assets :
A provision is recognised when the Company has a present obligation as a result of 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 not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.
Contingent assets are neither recognised nor disclosed.
2.12 Cash flow statement :
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.13 Cash and cash equivalents :
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
(a) Equity Shares of the Company have a par value of '' 10/-. Each holder of Equity Shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive surplus assets of the Company, remaining after distribution of all preferential amounts.
(b) 14% Non-Cumulative Redeemable Preference Shares of the Company, whenever issued shall have a par value of '' 10/-. These shares carry preferential right to be paid a fixed dividend of 14% on the paid up value of the shares, if and when declared by the Company.
These shares carry, in the event of winding up or repayment of capital, a preferential right to be repaid the amount of capital paid up.
(c) The reconciliation of the number of Equity Shares outstanding and the amount of Equity Share Capital as at 31st March, 2018 and 31st March, 2017 is set out below :
Mar 31, 2017
1. Company Overview :
The Company is a Non Deposit taking Core Investment Company, as defined in the Core Investment Companies (Reserve Bank) Directions, 2011. Since the Company is not a Systemically Important Non Deposit taking Core Investment Company, it is not required to obtain Certificate of Registration under Section 45-IA of the Reserve Bank of India Act, 1934.
The Company is a subsidiary of Sundaram Trading and Investment Private Limited.
Operating Cycle of the Company is considered to be of 12 months.
2. Statement of Significant Accounting Policies :
2.1 Basis of Accounting and Preparation of Financial Statements :
These accounts have been prepared under historical cost convention and comply with the Accounting Standards, specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. All income and expenses having a material bearing on the financial statements are recognized on the accrual basis.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP requires that the Management makes estimates and assumptions, which affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, as at the date of the financial statements and the reported amounts of revenue and expenses during the year under report. Contingencies are recorded, when it is probable that a liability will be incurred and the amount can be reasonably estimated. Actual results could differ from those estimates.
2.3 Fixed Assets and Depreciation :
a) Fixed Assets :
Fixed Assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets. Fixed Assets are shown net of accumulated depreciation, wherever applicable and amortization.
b) Depreciation and Amortization :
i) Depreciation on fixed assets is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management. Depreciation is charged on pro-rata basis for assets purchased/ sold during the year.
2.4 Investments :
a) Long Term Investments are carried at cost. Provision for diminution is made to recognize a decline other than temporary, in value of investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.5 Revenue Recognition :
a) The Company recognizes income on accrual basis. However, revenue recognition is postponed in respect of specific items of income, where the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a right to receive is established.
d) Profit / loss on sale of investments is recognized as per the terms of the underlying contracts.
2.6 Employee Benefits :
a) Employee benefits include interalia, amounts paid for the services of the Key Management Personnel on deputation. No separate provisions of retirement benefits or privilege leave benefits of such employees are recognized in the books of the Company. The Company is not liable for payment of gratuity.
b) Privilege leave benefits :
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave 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. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
2.7 Taxation :
a) Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
b) Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences 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. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits. At each reporting date, the Company re-assesses unrecognized deferred tax assets. 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 reporting date. The Company writes down the carrying amount of deferred tax asset 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 asset can be realized. Any such write down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
c) Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the guidance note on "Accounting for Credit Available in respect of Minimum Alternative Tax" under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as "MAT Credit Entitlement." The Company reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
2.8 Foreign Currency Translation :
In accordance with the paragraph 46A of the Accounting Standard 11, "The effects of changes in foreign exchange rates", the Company has exercised the irrevocable option and accordingly, the exchange differences arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, is added to or deducted from the cost of the asset and is depreciated over the balance life of the asset and in other cases, is accumulated in "Foreign Currency Monetary Item Translation Difference Account" in the financial statements and amortised over the balance period of such long term asset or liability, by recognition as income or expense in the statement of profit and loss. Long-term foreign currency monetary item means any asset or liability that is expressed in a foreign currency and has a term of twelve months or more at the date of origination of the asset or liability.
Transactions in foreign currency, other than those covered by long-term foreign currency monetary items are accounted at the exchange rates prevailing on the dates of transactions. Gains/losses arising out of fluctuations in the exchange rates in respect of these transactions are dealt with in the statement of profit and loss in the period in which they arise.
2.9 Impairment
The management has a policy to review at each balance sheet date, the carrying amounts of its assets to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the asset. Reversal of impairment loss is recognized immediately as income in the statement of profit and loss.
2.10 Earnings per share :
In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of extraordinary / exceptional item, if any. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.
2.11 Provisions, Contingent Liabilities and Contingent Assets :
A provision is recognized when the Company has a present obligation as a result of 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 not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are neither recognized nor disclosed.
2.12 Cash flow statement :
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.13 Cash and cash equivalents :
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
Mar 31, 2016
. Company Overview :
The Company is a Non Deposit taking Core Investment Company, as defined in the Core Investment Companies (Reserve Bank) Directions, 2011. Since the Company is not a Systemically Important Non Deposit taking Core Investment Company, it is not required to obtain Certificate of Registration under Section 45-IA of the Reserve Bank of India Act, 1934.
The Company is a subsidiary of Sundaram Trading and Investment Private Limited.
Operating Cycle of the Company is considered to be of 12 months.
2. Statement of Significant Accounting Policies :
2.1 Basis of Accounting and Preparation of Financial Statements :
These accounts have been prepared under historical cost convention and comply with the Accounting Standards, specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. All income and expenses having a material bearing on the financial statements are recognized on the accrual basis.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP requires that the Management makes estimates and assumptions, which affect the reported amounts of assets and liabilities, disclosure of contingent liabilities, as at the date of the financial statements and the reported amounts of revenue and expenses during the year under report. Contingencies are recorded, when it is probable that a liability will be incurred and the amount can be reasonably estimated. Actual results could differ from those estimates.
2.3 Fixed Assets and Depreciation :
a) Fixed Assets :
Fixed Assets are stated at their original cost of acquisition including incidental expenses related to acquisition and installation of the concerned assets. Fixed Assets are shown net of accumulated depreciation, wherever applicable and amortisation.
b) Depreciation and Amortization :
i) Depreciation on fixed assets is calculated on straight-line basis using the rates arrived at based on the useful lives estimated by the management. Depreciation is charged on pro-rata basis for assets purchased / sold during the year.
2.4 Investments :
a) Long Term Investments are carried at cost. Provision for diminution is made to recognize a decline other than temporary, in value of investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.5 Revenue Recognition :
a) The Company recognizes income on accrual basis. However, revenue recognition is postponed in respect of specific items of income, where the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a right to receive is established.
d) Profit / loss on sale of investments is recognized as per the terms of the underlying contracts.
2.6 Employee Benefits :
a) Employee benefits include interlaid, amounts paid for the services of the Key Management Personnel on deputation. No separate provisions of retirement benefits or privilege leave benefits of such employees are recognized in the books of the Company. The Company is not liable for payment of gratuity.
b) Privilege leave benefits :
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains / losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave 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. Where the Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
2.7 Taxation :
a) Tax expense comprises current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
b) Deferred income taxes reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date. Deferred income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
Deferred tax liabilities are recognized for all taxable timing differences. Deferred tax assets are recognized for deductible timing differences 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. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
At each reporting date, the Company re-assesses unrecognized deferred tax assets. 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 reporting date. The Company writes-down the carrying amount of deferred tax asset 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 asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
c) Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognizes MAT credit as an asset in accordance with the guidance note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income Tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as MAT Credit Entitlement. The Company reviews the MAT credit entitlement asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.
2.8 Foreign Currency Translation :
In accordance with the paragraph 46A of the Accounting Standard - 11, "The effects of changes in foreign exchange rates", the Company has exercised the irrevocable option and accordingly, the exchange differences arising on reporting of long-term foreign currency monetary items at rates different from those at which they were initially recorded during the period, or reported in previous financial statements, in so far as they relate to the acquisition of a depreciable capital asset, is added to or deducted from the cost of the asset and is depreciated over the balance life of the asset, and in other cases, is accumulated in "Foreign Currency Monetary Item Translation Difference Account" in the financial statements and amortized over the balance period of such long term asset or liability, by recognition as income or expense in the statement of profit and loss. Long-term foreign currency monetary item means any asset or liability that is expressed in a foreign currency and has a term of twelve months or more at the date of origination of the asset or liability.
Transactions in foreign currency, other than those covered by long-term foreign currency monetary items are accounted at the exchange rates prevailing on the dates of transactions. Gains / losses arising out of fluctuations in the exchange rates in respect of these transactions are dealt with in the statement of profit and loss in the period in which they arise.
2.9 Impairment
The management has a policy to review at each balance sheet date, the carrying amounts of its assets to determine whether there is any indication that those assets were impaired. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of impairment loss. Recoverable amount is the higher of an asset''s net selling price and value in use. In assessing value in use, the estimated future cash flows expected from the continuing use of the asset and from its disposal are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of time value of money and the risk specific to the asset. Reversal of impairment loss is recognized immediately as income in the statement of profit and loss.
2.10 Earnings per share :
In determining earnings per share, the Company considers the net profit after tax and includes the post tax effect of extra-ordinary / exceptional item, if any. The number of shares used in computing basic earnings per share is the weighted average number of shares outstanding during the period.
2.11 Provisions, Contingent Liabilities and Contingent Assets :
A provision is recognized when the Company has a present obligation as a result of 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 not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Contingent assets are neither recognized nor disclosed.
2.12 Cash flow statement :
Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.
2.13 Cash and cash equivalents :
Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
(a) Equity Shares of the Company have a par value of '' 10/-. Each holder of Equity Shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive surplus assets of the Company, remaining after distribution of all preferential amounts.
(b) 14% Non-Cumulative Redeemable Preference Shares of the Company, whenever issued shall have a par value of '' 10/-. These shares carry preferential right to be paid a fixed dividend of 14% on the paid up value of the shares, if and when declared by the Company.
These shares carry, in the event of winding up or repayment of capital, a preferential right to be repaid the amount of capital paid up.
a) Please refer Note No.2.8
b) Upon exercising the irrevocable option as mentioned in Note 2.8 forming part of these financial statements, the Company has held unamortized foreign exchange difference (Gain) amounting to Rs, 361,586/- (Previous Year : Nil) in Foreign Currency Monetary Item Translation Difference Account as at 31st March, 2016. The amount amortized in accordance with the said option during the year is (Gain) Rs, 7,533/- (Previous Year : Nil).
(a) Guarantee amount and balance outstanding include a Corporate Guarantee amount and loan balance expressed in foreign currency, being £ 4,064,084/- (Previous year Rs, 8,133,350/-), equivalent to ? 305,194,387/- (Previous year Rs 549,085,712/-).
(b) The Company has given Corporate Guarantee for External Commercial Borrowing of ⬠10,178,549/- raised by another company within Kalyani Group. The Company''s commitments under the said Guarantee include negative pledge over assets, undertaking not to dispose of assets of value exceeding Rs, 250 Million in a year without prior written consent of the lender, maintenance of ratio of financial indebtedness to tangible net worth not exceeding 0.75 during the tenor of the ECB, undertaking not to sell, transfer, encumber the Company''s existing investments in listed entities of the Kalyani Group or in KSL Holdings Private Limited or any other entity which has paid dividend in any of the past 3 years.
Mar 31, 2015
1.1 Basis of Accounting and Preparation of Financial Statements :
These accounts have been prepared under historical cost convention and
comply with the Accounting Standards, specified under Section 133 of
the Companies Act, 2013, read with Rule 7 of the Companies (Accounts)
Rules, 2014 and the relevant provisions of the Companies Act, 2013. All
income and expenses having a material bearing on the financial
statements are recognised on the accrual basis.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
2.3 Fixed Assets and Depreciation :
a) Fixed Assets :
Fixed Assets are stated at their original cost of acquisition including
incidental expenses related to acquisition and installation of the
concerned assets. Fixed Assets are shown net of accumulated
depreciation, wherever applicable and amortisation.
b) Depreciation and Amortisation :
i) Depreciation on fixed assets is calculated on straight-line basis
using the rates arrived at based on the useful lives estimated by the
management. Depreciation is charged on pro-rata basis for assets
purchased / sold during the year.
The Management's estimate of the useful lives of various fixed assets
which is in line with the provisions of Schedule II to the Companies
Act, 2013 is given below.
Nature of the Asset Estimated Useful Life
Furnitures and Fixtures 10 years
2.4 Investments :
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.5 Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a
right to receive is established.
d) Profit / loss on sale of investments is recognised on the contract
date.
2.6 Employee Benefits :
a) Gratuity :
The Company operates a defined benefits plan for its employees. Payment
for present liability of future payment of gratuity is being made to
approved gratuity funds, which fully cover the same under cash
accumulation policy of the Life Insurance Corporation of India. The
cost of providing benefits under these plans is determined on the basis
of actuarial valuation at each year end. Separate actuarial valuation
is carried out for each plan using the project unit credit method.
Actuarial gains and losses for both defined benefit plans are
recognised in full in the period in which they occur in the statement
of profit and loss.
b) Privilege leave benefits :
Accumulated leave, which is expected to be utilised within the next 12
months, is treated as short-term employee benefit. The Company measures
the expected cost of such absences as the additional amount that it
expects to pay as a result of the unused entitlement that has
accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward
beyond twelve months, as long-term employee benefit for measurement
purposes. Such long-term compensated absences are provided for based on
the actuarial valuation using the projected unit credit method at the
year-end. Actuarial gains / losses are immediately taken to the
statement of profit and loss and are not deferred. The Company presents
the leave 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. Where the Company has the
unconditional legal and contractual right to defer the settlement for a
period beyond 12 months, the same is presented as non-current
liability.
2.7 Taxation :
a) Tax expense comprises current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
b) Deferred income taxes reflect the impact of timing differences
between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date. Deferred income tax
relating to items recognised directly in equity is recognised in equity
and not in the statement of profit and loss.
Deferred tax liabilities are recognised for all taxable timing
differences. Deferred tax assets are recognised for deductible timing
differences 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 realised. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognised only if there is virtual certainty supported
by convincing evidence that they can be realised against future taxable
profits.
At each reporting date, the Company re-assesses unrecognised deferred
tax assets. It recognises unrecognised 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 realised.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset 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 asset can be
realised. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
c) Minimum Alternate Tax (MAT) paid in a year is charged to the
statement of profit and loss as current tax. The Company recognises MAT
credit available as an asset only to the extent that there is
convincing evidence that the Company will pay normal income tax during
the specified period i.e. the period for which MAT credit is allowed to
be carried forward. In the year in which the Company recognises MAT
credit as an asset in accordance with the guidance note on "Accounting
for Credit Available in respect of Minimum Alternative Tax" under the
Income Tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as "MAT Credit Entitlement."
The Company reviews the "MAT credit entitlement" asset at each
reporting date and writes down the asset to the extent the Company does
not have convincing evidence that it will pay normal tax during the
specified period.
2.8 Earnings per share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of extraordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
2.9 Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of accounts.
Contingent assets are neither recognised nor disclosed.
2.10 Cash flow statement :
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
2.11 Cash and cash equivalents :
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
(b) 57,600,000 - 14% Non-Cumulative Redeemable Preference Shares of '
10/- each had been allotted to Kalyani Steels Limited, on 27th April,
2010, without payment being received in cash, in terms of the Composite
Scheme of Arrangement sanctioned by the Honourable High Court of
Judicature at Bombay on 12th March, 2010. The said shares have since
been redeemed.
(c) Equity Shares of the Company have a par value of Rs. 10/-. Each
holder of Equity Shares is entitled to one vote per share. In the event
of liquidation of the Company, the holders of Equity Shares will be
entitled to receive surplus assets of the Company, remaining after
distribution of all preferential amounts.
(d) 14% Non-Cumulative Redeemable Preference Shares of the Company,
whenever issued shall have a par value of Rs. 10/-. These shares carry
preferential right to be paid a fixed dividend of 14% on the paid up
value of the shares, if and when declared by the Company.
These shares carried, in the event of winding up or repayment of
capital, a preferential right to be repaid the amount of capital paid
up.
(e) The reconciliation of the number of Equity Shares outstanding and
the amount of Equity Share Capital as at 31st March, 2015 and 31st
March, 2014 is set out below :
Mar 31, 2014
1. Company Overview :
The Company is a Non Deposit taking Core Investment Company, as defined
in the Core Investment Companies (Reserve Bank) Directions, 2011. Since
the Company is not a Systemically Important Non Deposit taking Core
Investment Company, it is not required to obtain Certificate of
Registration under Section 45-IA of the Reserve Bank of India Act,
1934.
During the financial year covered by these statements, the Company
became a subsidiary of Sundaram Trading and Investment Private Limited.
Operating Cycle of the Company is considered to be of 12 months.
2. Statement of Significant Accounting Policies :
2.1 Basis of Accounting and Preparation of Financial Statements :
These accounts have been prepared under historical cost convention and
comply with the Accounting Standards, as prescribed by the Companies
(Accounting Standard) Rules, 2006, the provisions of the Companies Act,
1956, read with the General Circular Nos. 15/2013 dated 13th September,
2013 and 8/2014 dated 4th April, 2014 issued by the Ministry of
Corporate Affairs, Government of India. All income and expenses having
a material bearing on the financial statements are recognised on the
accrual basis.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
2.3 Investments :
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.4 Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a
right to receive is established.
d) Profit / loss on sale of investments is recognised on the contract
date.
2.5 Taxation :
a) Tax expense comprises current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Income Tax Act, 1961. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively
enacted, at the reporting date.
b) Deferred income taxes reflect the impact of timing differences
between taxable income and accounting income originating during the
current year and reversal of timing differences for the earlier years.
Deferred tax is measured using the tax rates and the tax laws enacted
or substantively enacted at the reporting date. Deferred income tax
relating to items recognised directly in equity is recognised in equity
and not in the Statement of Profit and Loss.
Deferred tax liabilities are recognised for all taxable timing
differences. Deferred tax assets are recognised for deductible timing
differences 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 realised. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognised only if there is virtual certainty supported
by convincing evidence that they can be realised against future taxable
profits.
c) Credit in respect of Minimum Alternate Tax (MAT) paid by the Company
is recognised as an asset only when and to the extent there is
convincing evidence that the Company will pay normal income tax during
period within which it is eligible to claim MAT credit as per the
provisions of the Income Tax Act, 1961.
2.6 Earnings Per Share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of extraordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
2.7 Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of accounts.
Contingent assets are neither recognised nor disclosed.
2.8 Cash Flow Statement :
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
Mar 31, 2013
1.1 Method of Accounting :
a) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b) Financial statements are prepared on historical cost convention.
These costs are not adjusted to reflect the impact of the changes in
the purchasing power of money.
1.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements, and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
1.3 Investments :
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
1.4 Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Interest income is accrued over the period of the loan / investment.
c) Dividend is accrued in the year in which it is declared whereby a
right to receive is established.
d) Profit / loss on sale of investments is recognised on the contract
date.
1.5 Employee Benefits :
a) Post-employment benefits plan :
Contributions to defined contribution retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit method, with actuarial
valuation being carried out at each balance sheet date. Actuarial gains
and losses are recognised in full in the Statement of Profit and Loss
for the period in which they occur. Past service cost is recognised
immediately, to the extent the benefits are already vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service costs, and as reduced by the
fair value of the scheme assets. Any asset resulting from this
calculation is limited to the present value of the available refunds
and reductions in future contributions to the scheme.
b) Short term employee benefits :
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the service.
These benefits include compensated absences such as paid annual leave.
c) Long term employee benefits :
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognised as liability at the present value of
the defined benefit obligation at the balance sheet date, with
actuarial valuation being carried out at each balance sheet date.
1.6 Taxation :
a) Provision for income tax is made on the basis of taxable income for
the current accounting year, in accordance with the provisions of the
Income Tax Act, 1961.
b) Deferred Tax resulting from tuning differences between Book Profits
and Tax Profits is accounted for at the applicable rate of Tax to the
extent the timing differences are expected to crystallise, in case of
Deferred Tax Liabilities with reasonable certainty and in case of
Deferred Tax Assets with virtual certainty that there would be adequate
future taxable income against which Deferred Tax Assets can be
realised.
1.7 Earnings per share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of extraordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
1.8 Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of accounts.
Contingent assets are neither recognised nor disclosed.
1.9 Cash Flow Statement:
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
Mar 31, 2012
2.1 Method of Accounting :
a) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b) Financial statements are prepared on historical cost convention.
These costs are not adjusted to reflect the impact of the changes in
the purchasing power of money.
2.2 Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements, and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
2.3 Investments :
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
2.4 Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Dividend is accrued in the year in which it is declared whereby a
right to receive is established.
c) Profit / loss on sale of investments is recognised on the contract
date.
2.5 Employee Benefits :
a) Post-employment benefits plan :
Contributions to defined contribution retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit method, with actuarial
valuation being carried out at each balance sheet date. Actuarial gains
and losses are recognised in full in the Statement of Profit and Loss
for the period in which they occur. Past service cost is recognised
immediately, to the extent the benefits are already vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service costs, and as reduced by the
fair value of the scheme assets. Any asset resulting from this
calculation is limited to the present value of the available refunds
and reductions in future contributions to the scheme.
b) Short term employee benefits :
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the service.
These benefits include compensated absences such as paid annual leave.
c) Long term employee benefits :
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognised as liability at the present value of
the defined benefit obligation at the balance sheet date, with
actuarial valuation being carried out at each balance sheet date.
2.6 Taxation :
a) Provision for income tax is made on the basis of taxable income for
the current accounting year, in accordance with the provisions of the
Income Tax Act, 1961.
b) Deferred Tax resulting from timing differences of material amounts
between Book Profits and Tax Profits is accounted for at the applicable
rate of Tax to the extent the timing differences are expected to
crystallise, in case of Deferred Tax Liabilities with reasonable
certainty and in case of Deferred Tax Assets with virtual certainty
that there would be adequate future taxable income against which
Deferred Tax Assets can be realised.
2.7 Earnings per share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of extra-ordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
2.8 Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of accounts.
Contingent assets are neither recognised nor disclosed.
2.9 Cash Flow Statement :
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
Mar 31, 2011
1. Method of Accounting :
a) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b) Financial statements are prepared on historical cost convention.
These costs are not adjusted to reflect the impact of the changes in
the purchasing power of money.
2. Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
3. Investments :
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
4. Revenue Recognition :
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Dividend is accrued when it is declared whereby a right to receive
is established.
c) Profit / loss on sale of investments is recognised on the contract
date.
5. Employee Benefits :
a) Post-employment benefits plan :
Contributions to defined contribution retirement benefit schemes are
recognised as an expense when employees have rendered services
entitling them to contributions.
For defined benefit schemes, the cost of providing benefits is
determined using the Projected Unit Credit method, with actuarial
valuation being carried out at each balance sheet date. Actuarial gains
and losses are recognised in full in the profit and loss account for
the period in which they occur. Past service cost is recognised
immediately, to the extent the benefits are already vested.
The retirement benefit obligation recognised in the balance sheet
represents the present value of the defined benefit obligation as
adjusted for unrecognised past service costs, and as reduced by the
fair value of the scheme assets. Any asset resulting from this
calculation is limited to the present value of the available refunds
and reductions in future contributions to the scheme.
b) Short term employee benefits :
The undiscounted amount of short term employee benefits expected to be
paid in exchange for the services rendered by the employees is
recognised during the period when the employee renders the service.
These benefits include compensated absences such as paid annual leave
and performance incentives.
c) Long term employee benefits :
Compensated absences which are not expected to occur within twelve
months after the end of the period in which the employee renders the
related services are recognised as liability at the present value of
the defined benefit obligation at the balance sheet date, with
actuarial valuation being carried out at each balance sheet date.
6. Taxation:
a) Provision for income tax is made on the basis of taxable income for
the current accounting year/period, in accordance with the provisions
of the Income Tax Act, 1961.
b) Deferred Tax resulting from timing differences of material amounts
between Book Profits and Tax Profits is accounted for at the applicable
rate of Tax to the extent the timing differences are expected to
crystallise, in case of Deferred Tax Liabilities with reasonable
certainty and in case of Deferred Tax Assets with virtual certainty
that there would be adequate future taxable income against which
Deferred Tax Assets can be realised.
7. Earnings per share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of any extra-ordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
8. Share Issue Expenses :
Share Issue Expenses are fully written off in the year in which those
are incurred.
9. Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of account.
Contingent assets are neither recognised nor disclosed.
Mar 31, 2010
1. Method of Accounting :
a) The Company follows mercantile system of accounting and recognises
income and expenditure on accrual basis.
b) Financial statements are prepared on historical cost convention.
These costs are not adjusted to reflect the impact of the changes in
the purchasing power of money.
2. Use of Estimates :
The preparation of the financial statements in conformity with the GAAP
requires that the Management makes estimates and assumptions, which
affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities, as at the date of the financial statements and
the reported amounts of revenue and expenses during the year under
report. Contingencies are recorded, when it is probable that a
liability will be incurred and the amount can be reasonably estimated.
Actual results could differ from those estimates.
3. Investments:
a) Long Term Investments are carried at cost. Provision for diminution
is made to recognise a decline other than temporary, in value of
investments.
b) Short Term Investments are carried at lower of cost and fair value.
4. Revenue Recognition:
a) The Company recognises income on accrual basis. However, revenue
recognition is postponed in respect of specific items of income, where
the ultimate collection, thereof is uncertain.
b) Dividend is accrued in the year in which it is declared whereby a
right to receive is established.
c) Profit / loss on sale of investments is recognised on the contract
date.
5. Taxation:
a) Provision for income tax is made on the basis of taxable income for
the current accounting year / period, in accordance with the provisions
of the Income Tax Act, 1961.
b) Deferred Tax resulting from timing differences of material amounts
between Book Profits and Tax Profits is accounted for at the applicable
rate of Tax to the extent the timing differences are expected to
crystallise, in case of Deferred Tax Liabilities with reasonable
certainty and in case of Deferred Tax Assets with virtual certainty
that there would be adequate future taxable income against which
Deferred Tax Assets can be realised.
6. Earnings per share :
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of any extra-ordinary /
exceptional item, if any. The number of shares used in computing basic
earnings per share is the weighted average number of shares outstanding
during the period.
7. Preliminary Expenses / Share Issue Expenses :
Preliminary Expenses and Share Issue Expenses are fully written off in
the year in which those are incurred.
8. Provisions, Contingent Liabilities and Contingent Assets :
Provisions are made for present obligations arising out of past events,
which are likely to result in an outflow of resources embodying
economic benefits at an amount, which can be reliably estimated.
Items not classified as provisions as envisaged above are treated as
contingent liabilities, which are disclosed by way of a note and are
not provided for in the books of account.
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