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Accounting Policies of Optiemus Infracom Ltd. Company
Mar 31, 2025
2. Material Accounting Policies
2.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind
AS) notified under Companies (Indian Accounting Standards) Rules 2015, read with Section 133
of Companies Act 2013.
These financial statements have been prepared on historical cost basis, except for certain
financial instruments which are measured at fair value at the end of each reporting period, as
explained in the accounting policies below. Historical cost is generally based on the fair value of
the consideration given in exchange for goods and services. Fair value is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date.
2.2 Summary of Material Accounting Policies
2.2.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS recognition and measurement
principles and, in particular, making the critical accounting judgments require the use of estimates
and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses.
Management reviews its estimates on an ongoing basis using currently available information.
Changes in facts and circumstances or obtaining new information or more experience may result
in revised estimates, and actual results could differ from those estimates.
2.2.2 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as
separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to be sold or consumed in the normal operating cycle, or
⢠held primarily for the purpose of trading, or
⢠expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the normal operating cycle, or
⢠it is held primarily for the purpose of trading, or
⢠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
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are
classified as non-current assets and liabilities.
2.2.3 Business combination and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition
is measured as the aggregate of the consideration transferred measured at acquisition date
fair value and the amount of any non-controlling interests in the acquiree. For each business
combination, the Company elects whether to measure the non-controlling interests in the acquiree
at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-
related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized
at their acquisition date fair values. For this purpose, the liabilities assumed include contingent
liabilities representing present obligation and they are measured at their acquisition fair values
irrespective of the fact that outflow of resources embodying economic benefits is not probable.
However, the following assets and liabilities acquired in a business combination are measured at
the basis indicated below:
Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit
arrangements are recognized and measured in accordance with Ind AS 12 Income Tax and Ind
AS 19 Employee Benefits respectively.
When the Company acquires a business, it assesses the financial assets and liabilities assumed
for appropriate classification and designation in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition date. This includes the separation of
embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-measured
at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI,
as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at
fair value at the acquisition date. Contingent consideration classified as an asset or liability that
is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured
at fair value with changes in fair value recognised in profit or loss. If the contingent consideration
is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS.
Contingent consideration that is classified as equity is not re-measured at subsequent reporting
dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration
transferred and the amount recognized for non-controlling interests, and any previous interest
held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net
assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses
whether it has correctly identified all of the assets acquired and all of the liabilities assumed
and reviews the procedures used to measure the amounts to be recognised at the acquisition
date. If the reassessment still results in an excess of the fair value of net assets acquired over
the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in
equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity
recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Company cash-generating units that are expected to
benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units.
Cash generating unit to which goodwill has been allocated is tested for impairment annually,
or more frequently when there is an indication that the unit may be impaired. If the recoverable
amount of the cash generating unit is less than its carrying amount, the impairment loss is
allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the
other assets of the unit pro rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised
for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cash¬
generating unit and part of the operation within that unit is disposed of, the goodwill associated
with the disposed operation is included in the carrying amount of the operation when determining
the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the
relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period
in which the combination occurs, the Company reports provisional amounts for the items for
which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill during the measurement period, or
additional assets or liabilities are recognized, to reflect new information obtained about facts and
circumstances that existed at the acquisition date that, if known, would have affected the amounts
recognized at that date. These adjustments are called as measurement period adjustments. The
measurement period does not exceed one year from the acquisition date.
2.2.4 Revenue Recognition
The Company derives revenues primarily from sale of mobile handsets and mobile accessories.
Sale of Products:
Revenue from sale of goods is recognized when control of the products is being sold is transferred
to our customer and when there are no longer any fulfilled obligations. The performance obligations
in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance
depending on customer terms.
Revenue is measured on the basis of contracted price, after deduction of any trade discounts,
volume rebates and any taxes or duties collected on behalf of the Government such as goods and
services tax, etc. Accumulated experience is used to estimate the provision for such discounts
and rebates. Revenue is only recognized to the extent that it is highly probable a significant
reversal will not occur.
Our customers have the contractual right to return goods only when authorized by the Company.
An estimate is made of the goods that will be returned and a liability is recognized for this amount
using a best estimate based on accumulated experience.
The Company uses the percentage-of-completion method in accounting for its fixed price
contracts. The use of percentage-of-completion method required the Company to estimate the
efforts or costs expended to date as a proportion of the total efforts or costs to be expended.
Efforts or costs expended have been used to measure progress towards completion as there
is direct relationship between input and productivity. Provision for estimated losses, if any, on
uncompleted contracts are recorded in the period in which such losses become probable based
on the expected contract estimates at the reporting period.
2.2.5 Interest Income
Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly
discounts the estimated future cash payments or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to the gross carrying amount of the financial
asset. When calculating the effective rate, the company estimates the expected cash flows
by considering all the contractual terms of the financial instrument (for example, prepayment,
extension) but does not consider the expected credit losses, interest income is included in other
income in the standalone financial statement of profit and loss.
2.2.6 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment.
Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to
the total cost of the item is depreciated separately using written down value method.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized,
while repairs and maintenance are expensed as incurred. Where a property, plant and equipment
comprises major components having different useful lives, these components are accounted for
as separate items. The depreciation expense is recognized in the statement of profit or loss in the
expense category consistent with the function of the property, plant and equipment.
Depreciation is provided for property, plant and equipment on written down value basis so as to
expense the written down value over their estimated useful lives based on a technical evaluation.
The estimated useful lives and residual values are reviewed at the end of each reporting period,
with the effect of any change in estimate accounted for on a prospective basis.
The estimated useful lives are as mentioned below:
Gains or losses arising from de-recognition of a property, plant and equipment are measured as
the difference between the net disposal proceeds and the carrying amount of the asset and are
recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each
reporting date and adjusted if expectations differ from previous estimates. Depreciation methods
applied to property, plant and equipment are reviewed at each reporting date and changed if there
has been a significant change in the expected pattern of consumption of the future economic
benefits embodied in the asset.
2.2.7 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets, excluding capitalized development
costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it
is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over
their useful economic lives and assessed for impairment whenever there is an indication that
the intangible asset may be impaired. The amortization period and the amortization method are
reviewed at least at the end of each reporting period. Changes in the expected useful life or the
expected pattern of consumption of future economic benefits embodied in the asset are accounted
for by changing the amortization period or method, as appropriate, and are treated as changes in
accounting estimates. The amortization expense is recognized in the statement of profit or loss in
the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in
the statement of profit or loss when the asset is derecognized.
Research and Development (R&D)
It involves specific guidelines for recognizing, measuring, and disclosing research and development
costs as per the guidance of Ind AS -38 Intangible asset. Key aspects of the policy are:
a) Research Phase
Expenditure on research (or on the research phase of an internal project) shall be recognized
as an expense when it is incurred. Research costs cannot be capitalized as an intangible
asset. Research activities are original and planned investigation undertaken with the prospect
of gaining new scientific or technical knowledge and understanding.
b) Development Phase
An intangible asset arising from the development (or from the development phase of an
internal project) shall be recognized if, and only if, an entity can demonstrate all of the
following:
1. Technical Feasibility: The technical feasibility of completing the intangible asset so
that it will be available for use or sale.
2. Intention to Complete: The intention to complete the intangible asset and use or sell
it.
3. Ability to Use or Sell: The ability to use or sell the intangible asset.
4. Future Economic Benefits: How the intangible asset will generate probable future
economic benefits. Among other things, the entity can demonstrate the existence of
a market for the output of the intangible asset or the intangible asset itself or, if it is
to be used internally, the usefulness of the intangible asset.
5. Availability of Resources: The availability of adequate technical, financial, and
other resources to complete the development and to use or sell the intangible asset.
6. Ability to Measure Expenditure Reliably: The ability to measure reliably the
expenditure attributable to the intangible asset during its development.
If these conditions are not met, development expenditure should be recognized as an expense
when it is incurred.
2.2.8 Investment property
Recognition and Measurement
Investment properties are properties (land or buildings or both) held to earn rentals or for capital
appreciation or both, rather than for:
⢠Use in the production or supply of goods or services or for administrative purposes, or
⢠Sale in the ordinary course of business
Investment properties are measured initially at cost, including transaction costs. The cost of
a purchased investment property comprises its purchase price and any directly attributable
expenditure (such as professional fees for legal services, property transfer taxes, and other
transaction costs).
Subsequent Measurement
After initial recognition, investment properties are measured at cost less accumulated depreciation
and any accumulated impairment losses. The Company uses the cost model for subsequent
measurement as prescribed by Ind AS 40.
Depreciation
Depreciation on investment property is provided on a straight-line basis over the estimated useful
life. The useful lives and residual values are reviewed at each reporting date and adjusted, if
necessary. The useful life of buildings is determined based on the period over which they are
expected to be available for use by the Company.
Transfers
Transfers to or from investment property are made when, and only when, there is a change in use,
evidenced by:
⢠Commencement of owner-occupation, for a transfer from investment property to owner-
occupied property;
⢠Commencement of development with a view to sale, for a transfer from investment property
to inventories;
⢠End of owner-occupation, for a transfer from owner-occupied property to investment property;
or
⢠Commencement of an operating lease to another party, for a transfer from inventories to
investment property.
Disposal
An investment property is derecognized on disposal or when the investment property is
permanently withdrawn from use and no future economic benefits are expected from its disposal.
Any gain or loss arising on derecognition of the property (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the
period in which the property is derecognized.
Fair Value Disclosure
The fair value of investment properties in the financial statements (based on valuation by an
independent valuer who holds a recognised and relevant professional qualification and has recent
experience in the location and category of the investment property being valued) for the fair value
disclosure as encouraged by Ind AS 40 has not been undertaken by the company.
Impairment
The Company assesses at each reporting date whether there is any indication that an investment
property may be impaired. If any such indication exists, the Company estimates the recoverable
amount of the investment property. An impairment loss is recognized for the amount by which the
carrying amount of the investment property exceeds its recoverable amount.
Presentation and Disclosure
Investment properties are presented as a separate line item in the balance sheet. Detailed
disclosures about investment properties are made in accordance with Ind AS 40, including the
amounts recognized in profit or loss, restrictions on the realizability of investment property, and
contractual obligations to purchase, construct, or develop investment properties or for repairs,
maintenance, or enhancements.
2.2.9 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is required,
the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the
higher of an assetâs or Cash Generating Unit (CGU)âs fair value less costs of disposal and its
value in use. It is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or company of assets. Where 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. These calculations are corroborated by valuation multiples, quoted
share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are
prepared separately for each of the Companyâs CGU to which the individual assets are allocated.
These budgets and forecast calculations are generally covering a period of five years. A long-term
growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories
consistent with the function of the impaired asset.
2.2.1U 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
Financial assets are classified, at initial recognition, as financial assets at fair value
through profit or loss, fair value through OCI or at amortized cost as appropriate. The
Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at
fair value through profit or loss, transaction costs that are attributable to the acquisition of
the financial asset.
The Company has the following financial assets in its statement of financial position
⢠Investments
⢠Cash
⢠Bank Balances
⢠Trade Receivables
⢠Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as
described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading
and financial assets designated upon initial recognition at fair value through profit or loss.
Financial assets are classified as held-for-trading if they are acquired for the purpose of
selling or repurchasing in the near term. Financial assets at fair value through profit and
loss are carried in the statement of financial position at fair value with net changes in fair
value presented as finance income (positive net changes in fair value) or finance costs
(negative net changes in fair value) in the statement of profit or loss. The Company has
not designated any financial assets upon initial recognition as at fair value through profit
or loss.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value
changes on the instrument, excluding dividends, are recognized in the OCI. There is no
recycling of the amounts from OCI to P&L, even on sale of investment. However, the
company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables,
Loans and Advances fall under this category. After initial measurement, such financial
assets are subsequently measured at amortised cost using the effective interest rate
(EIR) method, less impairment. Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are an integral part of the EIR.
The EIR amortisation is included in finance income in the statement of profit or loss. The
losses arising from impairment are recognised in the statement of profit or loss in finance
costs for loans and in cost of sales or other operating expenses for receivables. This
category generally applies to trade and other receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of
similar financial assets) is derecognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its 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 âpass-throughâ arrangement, and eitherthe Company has
transferred substantially all the risks and rewards of the asset or transferred control
of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise
lifetime expected credit losses for all financial instruments for which there have been
significant increases in credit risk since initial recognition â whether assessed on an
individual or collective basis - considering all reasonable and supportable information,
including that which is forward-looking.
Credit Losses are 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 effective interest rate (or
credit-adjusted effective interest rate for purchased or originated credit-impaired financial
assets). Expected Credit Losses are the weighted average of credit losses with the
respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset
that is measured at amortized cost at each reporting date, at an amount equal to the
lifetime expected credit losses if the credit risk on that financial instrument has increased
significantly since initial recognition. When making the assessment, the company uses the
change in the risk of a default occurring over the expected life of the financial instrument
instead of the change in the amount of expected credit losses. To make that assessment,
the company compares the risk of a default occurring on the financial instrument as at
the reporting date with the risk of a default occurring on the financial instrument as at the
date of initial recognition and consider reasonable and supportable information, that is
available without undue cost or effort, that is indicative of significant increases in credit
risk since initial recognition. The Company assumes that the credit risk on a financial
instrument has not increased significantly since initial recognition if it is determined to
have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased
significantly since initial recognition, the company measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit losses. For Trade
receivables the company always measure the loss allowance at an amount equal to
lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a company of debtors
is experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation
and where observable data indicate that there is a measurable decrease in the estimated
future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
For financial assets carried at amortised cost, the Company first assesses whether
impairment exists individually for financial assets that are individually significant,
or collectively for financial assets that are not individually significant. If the Company
determines that no objective evidence of impairment exists for an individually assessed
financial asset, whether significant or not, it includes the asset in a company of financial
assets with similar credit risk characteristics and collectively assesses them for impairment.
Assets that are individually assessed for impairment and for which an impairment loss is,
or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that
reflects an unbiased and probability-weighted amount that is determined by evaluating a
range of possible outcomes, the time value of money; and the reasonable and supportable
information that is available without undue cost or effort at the reporting date about past
events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account
and the amount of the loss is recognised in the statement of profit or loss. Interest income
continues to be accrued on the gross carrying amount using the effective rate of interest
unless the financial instrument is credit-impaired in which case the interest income is
recognised on reduced carrying amount. The interest income is recorded as part of
finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic
prospect of future recovery and all collateral has been realised or has been transferred
to the Company. If, in a subsequent year, the amount of the estimated impairment
loss increases or decreases because of an event occurring after the impairment was
recognised, the previously recognised impairment loss is increased or reduced by
adjusting the allowance account. If a write-off is later recovered, the recovery is credited
to profit or loss.
ii. Financial Liabilities
The Company has the following financial liabilities in its statement of financial position
⢠Lease liability
⢠Trade payables
⢠Other financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value
through profit or loss, loans and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and
borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-
trading and financial liabilities designated upon initial recognition as at fair value through
profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose
of selling in the near term. Gains or losses on liabilities held-for-trading are recognised
in the statement of profit or loss. Financial liabilities designated upon initial recognition at
fair value through profit or loss are designated at the initial date of recognition, and only
if the criteria in Ind AS109 are satisfied. The Company has not designated any financial
liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial
liabilities are subsequently measured at amortised cost using the effective interest rate
method. Gains and losses are recognised in the statement of profit or loss when the
liabilities are derecognised as well as through the effective interest rate method (EIR)
amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the
consolidated statement of financial position only if there is a current enforceable legal
right to offset the recognised amounts and an intent to settle on a net basis, or to realise
the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
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
values of the financial instruments are not materially different at the reporting date.
2.2.11 Cash and Bank Balances
Cash and Bank Balances in the statement of financial position comprise cash at banks and on
hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at
bank and on hand and short-term deposits with original maturity of less than 3 months, net of
outstanding bank overdrafts as they are considered an integral part of the Companyâs cash
management.
2.2.12 Leases
Company as a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement
date. The right of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the shorter of the end of the useful life of the right of- use asset or the
end of the lease term. The estimated useful lives of right-of-use assets are determined on the
same basis as those of property and equipment. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease
liability.
The lease liability is initially measured at the present value of the lease payments that are not
paid at the commencement date, discounted using the interest rate implicit in the lease or, if that
rate cannot be readily determined, and the Companyâs incremental borrowing rate. Generally, the
Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments,
including in substance fixed payments; the lease liability is measured at amortised cost using the
effective interest method.
The Company uses number of practical expedients when applying Ind AS 116: - Short-term
leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low value assets. The company
recognises the lease payments associated with these leases as an expense on a straight-line
basis over the lease term. The company applied a single discount rate to a portfolio of leases of
similar assets in similar economic environment with a similar end date.
The Companyâs leases mainly comprise land and buildings and Plant and equipment. The
Company leases land and buildings for warehouse facilities. The Company also has leases for
equipment.
Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee,
the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the
relevant lease.
2.2.13 Borrowing Cost
Borrowing costs consist of interest and other costs that an entity incurs in connection with
the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or
production of an asset that necessarily takes a substantial period of time to get ready for its
intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing
costs are expensed in the period in which they occur.
Mar 31, 2024
1. Corporate Information
Optiemus Infracom Limited (âthe Companyâ) is a public company incorporated on June 17, 1993; equity shares of the company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is primarily engaged in the trading of mobile handsets and mobile accessories. The company is a public limited company incorporated and domiciled in India and has its registered office at New Delhi.
These financial statements are authorized for issue in accordance with a resolution of the board on May 29, 2024.
2. Material Accounting Policies2.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules 2015, read with Section 133 of Companies Act 2013.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
2.2 Summary of Material Accounting Policies2.2.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
2.2.2 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to be sold or consumed in the normal operating cycle,or
⢠held primarily for the purpose of trading,or
⢠expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the normal operating cycle, or
⢠it is held primarily for the purpose of trading, or
⢠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
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.2.3 Business combination and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
⢠Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity
recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cashgenerating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
The Company derives revenues primarily from sale of mobile handsets and mobile accessories. Sale of Products:
Revenue from sale of goods is recognized when control of the products is being sold is transferred to our customer and when there are no longer any fulfilled obligations. The performance obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
Revenue is measured on the basis of contracted price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur.
Our customers have the contractual right to return goods only when authorized by the Company. An estimate is made of the goods that will be returned and a liability is recognized for this amount using a best estimate based on accumulated experience.
The Company uses the percentage-of-completion method in accounting for its fixed price contracts. The use of percentage-of-completion method required the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is direct relationship between input and productivity. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting period.
Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective rate, the company estimates the expected cash flows by considering all the contractual terms of the financial instrument (for example, prepayment, extension) but does not consider the expected credit losses, interest income is included in other income in the standalone financial statement of profit and loss.
2.2.6 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately using written down value method.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Depreciation is provided for property, plant and equipment on written down value basis so as to expense the written down value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
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The estimated useful lives are as mentioned below: |
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Type of Asset |
Useful Lives |
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Buildings |
60 years |
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Plant & Equipment |
12 - 15 years |
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Computer Equipment |
3 years |
|
Vehicles |
8 - 10 years |
|
Office Equipment |
5 years |
|
Furniture and Fixtures |
10 years |
Property, plant and equipment under construction is recorded as capital work- in-progress unti it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
Research and Development (R&D)
It involve specific guidelines for recognizing, measuring, and disclosing research and development costs as per the guidance of Ind AS -38 Intangible asset. Key aspects of the policy are:
a) Research Phase
Expenditure on research (or on the research phase of an internal project) shall be recognized as an expense when it is incurred. Research costs cannot be capitalized as an intangible asset. Research activities are original and planned investigation undertaken with the prospect of gaining new scientific or technical knowledge and understanding.
b) Development Phase
An intangible asset arising from the development (or from the development phase of an internal project) shall be recognized if, and only if, an entity can demonstrate all of the following:
1. Technical Feasibility: The technical feasibility of completing the intangible asset so that it will be available for use or sale.
2. Intention to Complete: The intention to complete the intangible asset and use or sell it.
3. Ability to Use or Sell: The ability to use or sell the intangible asset.
4. Future Economic Benefits: How the intangible asset will generate probable future economic benefits. Among other things, the entity can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset.
5. Availability of Resources: The availability of adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset.
6. Ability to Measure Expenditure Reliably: The ability to measure reliably the expenditure attributable to the intangible asset during its development.
If these conditions are not met, development expenditure should be recognized as an expense when it is incurred.
Recognition and Measurement
Investment properties are properties (land or buildings or both) held to earn rentals or for capital appreciation or both, rather than for:
⢠Use in the production or supply of goods or services or for administrative purposes, or
⢠Sale in the ordinary course of business.
Investment properties are measured initially at cost, including transaction costs. The cost of a purchased investment property comprises its purchase price and any directly attributable expenditure (such as professional fees for legal services, property transfer taxes, and other transaction costs).
Subsequent Measurement
After initial recognition, investment properties are measured at cost less accumulated depreciation and any accumulated impairment losses. The Company uses the cost model for subsequent measurement as prescribed by Ind AS 40.
Depreciation
Depreciation on investment property is provided on a straight-line basis over the estimated useful life. The useful lives and residual values are reviewed at each reporting date and adjusted, if necessary. The useful life of buildings is determined based on the period over which they are expected to be available for use by the Company.
Transfers to or from investment property are made when, and only when, there is a change in use, evidenced by:
⢠Commencement of owner-occupation, for a transfer from investment property to owner-occupied property;
⢠Commencement of development with a view to sale, for a transfer from investment property to inventories;
⢠End of owner-occupation, for a transfer from owner-occupied property to investment property; or
⢠Commencement of an operating lease to another party, for a transfer from inventories to investment property.
An investment property is derecognized on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the period in which the property is derecognized.
Fair Value Disclosure
The fair value of investment properties in the financial statements (based on valuation by an independent valuer who holds a recognised and relevant professional qualification and has recent experience in the location and category of the investment property being valued) for the fair value disclosure as encouraged by Ind AS 40 has not been undertaken by the company.
The Company assesses at each reporting date whether there is any indication that an investment property may be impaired. If any such indication exists, the Company estimates the recoverable amount of the investment property. An impairment loss is recognized for the amount by which the carrying amount of the investment property exceeds its recoverable amount.
Investment properties are presented as a separate line item in the balance sheet. Detailed disclosures about investment properties are made in accordance with Ind AS 40, including the amounts recognized in profit or loss, restrictions on the realizability of investment property, and contractual obligations to purchase, construct, or develop investment properties or for repairs, maintenance, or enhancements.
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Unit (CGU)âs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or company of assets. Where 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. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Companyâs CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A longterm growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
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
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position ⢠Investments
⢠Cash
⢠Bank Balances
⢠Trade Receivables
⢠Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of profit or loss.The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is derecognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its 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 âpass-throughâ arrangement, and eitherthe Company has transferred substantially all the risks and rewards of the asset or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition - whether assessed on an individual or collective basis - considering all reasonable and supportable information, including that which is forwardlooking.
Credit Losses are 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 effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to expected credit losses. For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
The Company has the following financial liabilities in its statement of financial position
⢠Borrowings
⢠Trade payables
⢠Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows: Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
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 values of the financial instruments are not materially different at the reporting date.
Cash and Bank Balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash at bank and on hand and short-term deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
2.2.12 Leases Company as a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the shorter of the end of the useful life of the right of- use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, and the Companyâs incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in substance fixed payments; the lease liability is measured at amortised cost using the effective interest method.
The Company uses number of practical expedients when applying Ind AS 116: Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The company applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
The Companyâs leases mainly comprise land and buildings and Plant and equipment. The Company leases land and buildings for warehouse facilities. The Company also has leases for equipment.
Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
General provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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 a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits includes short-term employee benefits, postemployment benefits and other long-term employee benefits
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid as an expense. Accumulated leave, which is expected to be utilized within the next twelve 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.
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates funded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
2.2.16 Employee Stock Option Plan (ESOP)
The company recognizes compensation expense relating to share-based payments in the net profit based on estimated fair-values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in the statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.
Optiemus Employee Stock Option Scheme, 2016 (the 2016 Plan):
The Optiemus Employee Stock Option Scheme, 2016, was approved and recommended by the Board of Directors of the company on December 05, 2016 and approved by the members of the company on December 30, 2016. Under this scheme the board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2016 Plan. The maximum number of options under the 2019 plan shall not exceed 42,90,709 each convertible into equal number of equity shares of the Company. The stock options granted shall vest based on achievement of defined performance parameters as determined by the administrator (Nomination and Remuneration Committee). The vesting shall commence after 1 (one) year from the date of grant of Options and shall take place over a period of 3(Three) years from the date of grant. The administrator (Nomination and Remuneration Committee) has the power to modify the vesting schedule on a case-to-case basis subject to the minimum gap of 1(One) year between the grant and first vesting.
The equity settled stock options would vest generally in a graded manner i.e. Year 01: 20%; Year 02: 30% and Year 03: 50% and shall be exercisable within a period of 30 (Thirty) days from the respective date of vesting or as may be determined by the Nomination and Remuneration Committee (NRC) in special circumstances. The exercise price will be based upon the Market Price of the shares one day before the date of vesting of options or such higher price as may be decided by the Committee subject to a discount of up to 50% as may deem fit by the Committee for the finalization of the Exercise Price.
During the year ended March 31,2024, the Company has granted Nil (March 31,2023 - 1,29,000) employee stock options to its employees to be vested in a graded manner as specified above. Since, the exercise price for such options is based on the market price prevailing on the stock exchanges one day before the date of respective vesting, and can be determined at the respective dates of vesting only. Therefore, in the absence of exercise price on grant date, the fair value of awards granted cannot be reliably measured on the grant date using the popular option valuation strategies/models/ methodologies. Hence, the company is unable to record any expenditure for such ESOPâs granted over the vesting period as laid down in Ind AS - 102 (Share Based Payments) for the year ended March 31,2024 and following such inherent limitation, has opted/ adopted to record the entire employee stock compensation expense in the books of accounts of the company at the date of respective vestingâs only.
NRC meeting was held on July 26, 2023, where it was decided to annul the remaining unvested ESOPs which were surrendered to the Company which were not exercised. Therefore no effect on diluted EPS will arise for the year ended March 31, 2024,
The final dividend on shares is recorded as a liability on the date of approval by the shareholders and Interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.
The company declares and pays dividends in Indian Rupees. Companies are required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
The Companyâs financial statements are presented in Indian Rupees (INR), which is also the companyâs functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
Tax expense comprises of current tax 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable
temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost isdetermined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their presentlocation and condition. Cost is determined on first in, first out basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.2.21 Segment Reporting Identification of segments
The Companyâs operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
2.3 Recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31,2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Mar 31, 2023
1. Corporate Information
Optiemus Infracom Limited (âthe Companyâ) is a public company incorporated on June 17, 1993; equity shares of the company are listed on Bombay Stock Exchange and National Stock Exchange. The Company is primarily engaged in the trading of mobile handsets and mobile accessories. The company is a public limited company incorporated and domiciled in India and has its registered office at New Delhi.
These financial statements are authorized for issue in accordance with a resolution of the directors on May 26, 2023.
2. Significant Accounting Policies2.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules 2015, read with Section 133 of Companies Act 2013.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
2.2 Summary of Significant Accounting Policies2.2.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
2.2.2 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to be sold or consumed in the 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 equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the 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
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.2.3 Business combination and goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interests in the acquiree. For each business combination, the Company elects whether to measure the non-controlling interests in the acquiree at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
⢠Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognized and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognized for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
Cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cashgenerating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
The Company derives revenues primarily from sale of mobile handsets and mobile accessories. Sale of Products:
Revenue from sale of goods is recognized when control of the products is being sold is transferred to our customer and when there are no longer any fulfilled obligations. The Performance Obligations in our contracts are fulfilled at the time of dispatch, delivery or upon formal customer acceptance depending on customer terms.
Revenue is measured on the basis of contracted price, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the Government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognized to the extent that it is highly probable a significant reversal will not occur.
Our customers have the contractual right to return goods only when authorized by the Company. An estimate is made of the goods that will be returned and a liability is recognized for this amount using a best estimate based on accumulated experience.
The Company uses the percentage-of-completion method in accounting for its fixed price contracts. The use of percentage-of-completion method required the Company to estimate the efforts or costs expended to date as a proportion of the total efforts or costs to be expended. Efforts or costs expended have been used to measure progress towards completion as there is direct relationship between input and productivity. Provision for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the expected contract estimates at the reporting period.
Interest income is recorded using the effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset. When calculating the effective rate, the company estimates the expected cash flows by
considering all the contractual terms of the financial instrument (for example, prepayment, extension) but does not consider the expected credit losses, Interest income is included in other income in the standalone financial statement of profit and loss.
2.2.6 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately using written down value method.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Depreciation is provided for property, plant and equipment on written down value basis so as to expense the written down value over their estimated useful lives based on a technical evaluation. The estimated useful lives and residual values are reviewed at the end of each reporting period, with the effect of any change in estimate accounted for on a prospective basis.
The estimated useful lives are as mentioned below:
|
Type of Asset |
Useful Lives |
|
Buildings |
60 years |
|
Plant & Equipment |
12 - 15 years |
|
Computer Equipment |
3 years |
|
Vehicles |
8 - 10 years |
|
Office Equipment |
5 years |
|
Furniture and Fixtures |
10 years |
Property, plant and equipment under construction is recorded as capital work-in-progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is de-recognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is de-recognized.
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Unit (CGU)âs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or company of assets. Where 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. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Companyâs CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A longterm growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
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
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position
⢠Investments
⢠Cash
⢠Bank Balances
⢠Trade Receivables
⢠Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of profit or loss. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is de-recognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its 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 âpass-throughâ arrangement, and either the Company has transferred substantially all the risks and rewards of the asset or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition-whether assessed on an individual or collective basis-considering all reasonable and supportable information, including that which is forwardlooking.
Credit Losses are 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 effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial re-organisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect
of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
The Company has the following financial liabilities in its statement of financial position
⢠Borrowings
⢠Trade payables
⢠Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows: Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
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 values of the financial instruments are not materially different at the reporting date.
Cash and Bank Balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
2.2.11 Leases Company as a lessee
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, and the Companyâs incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in substance fixed payments; the lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116: - Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Group applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
The Companyâs leases mainly comprise land and buildings and Plant and equipment. The Company leases land and buildings for warehouse facilities. The Company also has leases for equipment.
Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
General Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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 a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits includes short-term employee benefits, postemployment benefits and other long-term employee benefits.
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid and as an expense. Accumulated leave, which is expected to be utilized within the next twelve 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.
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
2.2.15 Employee Stock Option Plan (ESOP)
The company recognizes compensation expense relating to share-based payments in the net profit based on estimated fair-values of the awards on the grant date. The estimated fair value of awards is recognized as an expense in the statement of profit and loss on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.
Optiemus Employee Stock Option Scheme, 2016 (the 2016 Plan):
The Optiemus Employee Stock Option Scheme, 2016, was approved and recommended by the Board of Directors of the company on December 05, 2016 and approved by the members of the company on December 30, 2016. Under this scheme the board has been authorized to introduce, offer, issue and provide share-based incentives to eligible employees of the Company and its subsidiaries under the 2016 Plan. The maximum number of options under the 2019 plan shall not exceed 42,90,709 each convertible into equal number of equity shares of the Company. The stock options granted shall vest based on achievement of defined performance parameters as determined by the administrator (Nomination and Remuneration Committee). The vesting shall commence after 1 (one) year from the date of grant of Options and shall take place over a period of 3(Three) years from the date of grant. The administrator (Nomination and Remuneration Committee) has the power to modify the vesting schedule on a case-to-case basis subject to the minimum gap of 1(One) year between the grant and first vesting.
The equity settled stock options would vest generally in a graded manner i.e. Year 01: 20%; Year 02: 30% and Year 03: 50% and shall be exercisable within a period of 30 (Thirty) days from the respective date of vesting or as may be determined by the Nomination and Remuneration Committee (NARC) in special circumstances. The exercise price will be based upon the Market Price of the shares one day before the date of vesting of options or such higher price as may be decided by the Committee subject to a discount of up to 50% as may deem fit by the Committee for the finalization of the Exercise Price.
During the year ended March 31,2023, the Company has granted Nil (March 31,2022 - 1,29,000) employee stock options to its employees to be vested in a graded manner as specified above. Since, the exercise price for such options is based on the market price prevailing on the stock exchanges one day before the date of respective vesting, and can be determined at the respective dates of vesting only. Therefore, in the absence of exercise price on grant date, the fair value of awards granted cannot be reliably measured on the grant date using the popular option valuation
strategies/models/ methodologies. Hence, the company is unable to record any expenditure for such ESOPâs granted over the vesting period as laid down in Ind AS - 102 (Share Based Payments) for the year ended March 31,2023 and following such inherent limitation, has opted/ adopted to record the entire employee stock compensation expense in the books of accounts of the company at the date of respective vestingâs only.
The final dividend on shares is recorded as a liability on the date of approval by the shareholders and Interim dividends are recorded as a liability on the date of declaration by the Companyâs Board of Directors. Income tax consequences of dividends on financial instruments classified as equity will be recognized according to where the entity originally recognized those past transactions or events that generated distributable profits.
The company declares and pays dividends in Indian rupees. Companies are required to pay/ distribute dividend after deducting applicable taxes. The remittance of dividends outside India is governed by Indian law on foreign exchange and is also subject to withholding tax at applicable rates.
The Board of Directors in their meeting held on May 26, 2023, declared an interim dividend of '' 1.50/- (15.00%) per equity share for the financial year ended March 31,2023 that would result in net cash outflow of approximately '' 1,287.86 Lakhs.
The Companyâs financial statements are presented in Indian Rupees (INR), which is also the companyâs functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
Tax expense comprises of current tax 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that
taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.2.20 Segment Reporting Identification of segments
The Companyâs operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect
of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
2.3 Recent accounting pronouncements
Ministry of Corporate Affairs (âMCAâ) notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31,2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 01, 2023. The Company has evaluated the amendment and the impact of the amendment is insignificant in the standalone financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of âaccounting estimatesâ and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 01,2023. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 01,2023. The Company has evaluated the amendment and there is no impact on its standalone financial statement.
Mar 31, 2018
1.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules 2015, read with Section 133 of Companies Act 2013.
For all periods, up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with the Companies (Accounts) Rules 2014, read with Section 133 of Companies Act, 2013 (Previous GAAP). These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. The transition from Previous GAAP to the Ind AS has been done in accordance Ind AS 101, First Time Adoption of Indian Accounting Standards. Refer Note No 2.3 for information on how the Company has adopted Ind AS.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
These financial statements are authorized for issue in accordance with a resolution of the directors on 30th May, 2018.
1.2 Summary of Significant Accounting Policies
1.2.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
1.2.2 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
- expected to be realized or intended to be sold or consumed in the 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 equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
- it is expected to be settled in the 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
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1.2.3 Business combination and goodwill
In accordance with Ind AS 101 provisions related to first time adoption, the Company has elected to apply Ind AS accounting for business combinations prospectively from 1 April 2016. As such, Indian GAAP balances relating to business combinations entered into before that date, including goodwill, have been carried forward with minimal adjustment (please refer note 2.3).
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any noncontrolling interests in the acquiree. For each business combination, the Company elects whether to measure the noncontrolling interests in the acquiree at fair value or at the proportionate share of the acquireeâs identifiable net assets. Acquisition-related costs are expensed as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their acquisition date fair values. For this purpose, the liabilities assumed include contingent liabilities representing present obligation and they are measured at their acquisition fair values irrespective of the fact that outflow of resources embodying economic benefits is not probable. However, the following assets and liabilities acquired in a business combination are measured at the basis indicated below:
- Deferred tax assets or liabilities, and the assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with Ind AS 12 Income Tax and Ind AS 19 Employee Benefits respectively.
When the Company acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, any previously held equity interest is re-measured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss or OCI, as appropriate. Any contingent consideration to be transferred by the acquirer is recognised at fair value at the acquisition date. Contingent consideration classified as an asset or liability that is a financial instrument and within the scope of Ind AS 109 Financial Instruments, is measured at fair value with changes in fair value recognised in profit or loss. If the contingent consideration is not within the scope of Ind AS 109, it is measured in accordance with the appropriate Ind AS. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and subsequent its settlement is accounted for within equity.
Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interests, and any previous interest held, over the net identifiable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the Company re-assesses whether it has correctly identified all of the assets acquired and all of the liabilities assumed and reviews the procedures used to measure the amounts to be recognised at the acquisition date. If the reassessment still results in an excess of the fair value of net assets acquired over the aggregate consideration transferred, then the gain is recognised in OCI and accumulated in equity as capital reserve. However, if there is no clear evidence of bargain purchase, the entity recognises the gain directly in equity as capital reserve, without routing the same through OCI.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.
A cash generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.
Any impairment loss for goodwill is recognised in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. Where goodwill has been allocated to a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete.
Those provisional amounts are adjusted through goodwill during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date. These adjustments are called as measurement period adjustments. The measurement period does not exceed one year from the acquisition date.
1.2.4 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fairvalue of the consideration received or receivable, considering contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
However, sales tax/ value added tax (VAT)/goods and service tax (GST) is not received by the company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
The Company derives revenues primarily from sale of mobile handsets and mobile accessories, and rental of immoveable properties.
Sale of goods
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as sales tax, value added tax, and Goods & Service Tax.
Rental income
Rental income is recognized on a straight-line basis over the terms of the lease.
Interest income
For all financial assets measured at amortized cost interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset or a shorter period, where appropriate, to the net carrying amount of the financial asset.
Others
Other incomes are recognized on accrual basis.
1.2.5 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Except for land, property, plant and equipment is depreciated using the straight-line method over the useful lives of the related assets as presented in Schedule 2 of Companies Act, 2013.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Property, plant and equipment under construction is recorded as capital work- in-progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
1.2.6 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
1.2.7 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or Cash Generating Unit (CGU)âs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or company of assets. Where 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. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Companyâs CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A longterm growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
1.2.8 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
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position
- Investments
- Cash
- Bank Balances
- Trade Receivables
- Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of profit or loss.The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is derecognised when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its 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 âpass-throughâ arrangement, and eitherthe Company has transferred substantially all the risks and rewards of the asset or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition â whether assessed on an individual or collective basis â considering all reasonable and supportable information, including that which is forward-looking.
Credit Losses are 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 (ie all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit
Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
ii. Financial Liabilities
The Company has the following financial liabilities in its statement of financial position
- Borrowings
- Trade payables
- Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss.Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
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 values of the financial instruments are not materially different at the reporting date.
1.2.9 Cash and Bank Balances
Cash and Bank Balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Companyâs cash management.
1.2.10 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Company as a lessee
Finance leases that transfer to the Company substantially all of the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between financecharges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit or loss.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Company does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income from operating lease is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income.
Leases are classified as finance leases when substantially all of the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from lessees under finance leases are recorded as receivables at the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
1.2.11 Borrowing Cost
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
1.2.12 Provisions
General Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. 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 a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
1.2.13 Employee Benefits
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits include: short-term employee benefits, postemployment benefits and other long-term employee benefits
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid and as an expense. Accumulated leave, which is expected to be utilized within the next twelve 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.
Defined Contribution Plan
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined Benefit Plan
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
1.2.14 Foreign Currencies
The Companyâs financial statements are presented in Indian Rupees (INR), which is also the companyâs functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
1.2.15 Income Tax
Tax expense comprises of current tax 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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
1.2.16 Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their presentlocation and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion ofmanufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost isdetermined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their presentlocation and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completionand the estimated costs necessary to make the sale.
1.2.17 Segment Reporting Identification of segments
The Companyâs operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
1.2.18 Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
1.2.19 Contingent Liabilities
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
Mar 31, 2017
1.1 Use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the difference between the actual results and the estimates are recognised the periods in which the results are materialise.
1.2 Inventories
Inventories are valued at the lower of cost (FIFO basis) and the net realisable value after providing for obsolescence and other losses, where considered necessary.
Costs included all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs necessary to make the sale.
1.3 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.
1.4 Cash flow Statement
Cash flows are reported using the indirect method, where by Profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accrual of past or future cash receipts or payments. The cash flows from operating, investing and financial activities of the company are segregated based on the available information.
1.5 Depreciation on tangible fixed assets
Depreciation has been provided on the written down value method over the useful lives of assets as prescribed in schedule II of the Companies Act 2013.
Depreciation on additions to Fixed Assets is provided from the date of acquisition of the Asset. Depreciation on Assets sold/scrapped during the period is provided for up to date of sale/scrap as the case may be. The management estimates the useful lives for the other fixed assets as follows:
1.8 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, Intangible assets are carried at cost less accumulated amortisation and impairments losses, if any. The cost of intangible assets comprises its purchase price, including any imports duties and other taxes and any directly attributable expenditure on making the assets ready for its intended use and net of any trade discounts and rebates.
Intangible assets are amortized on a straight-line basis over the estimated useful economic life. The company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the affect that useful life of an intangible asset exceeds ten years, the company amortizes the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.
The amortization period and the amortization method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortization period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortization method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
1.9 Foreign currency transactions
Foreign currency transactions and balances
(i) Initial recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.
(iii) Exchange differences
Exchange difference arising on the settlement of monetary items or on restatement of the Companyâs monetary items at rates different from those at which they were initially recorded during the year, or reported in previous financial statements, are recognised as income or as expenses in the year in which they arise.
(iv) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability
The premium or discount arising at the inception of forward exchange contract is amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the period.
1.10 Investments
Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties. If an investment is acquired, or partly acquired, by the issue of shares or other securities, the acquisition cost is the fair value of the securities issued. If an investment is acquired in exchange for another asset, the acquisition is determined by reference to the fair value of the asset given up or by reference to the fair value of the investment acquired, whichever is more clearly evident.
Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
1.11 Retirement and other Employee benefits Provident Fund
The eligible employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan, in which both employees and the company make monthly contributions at a specified percentage of the covered employeesâ salary (currently 12% of employeesâ salary). The provident fund contributions, as specified under the law, are paid to Employees State Insurance Fund (Defined Contribution Schemes), administrated by the Central Government of India. The contribution paid during the year are charged to Profit and Loss account.
Gratuity
The Company has an obligation towards gratuity, a defined benefit retirement plan covering eligible employees. The plan provides for a lump sum payment to vested employees at retirement, death while in employment or on termination of employment. Vesting occurs upon completion of five years of service. The Company makes annual contribution to Life Insurance Corporation of India. The Company accounts for the liability for gratuity benefits payable in future based on actuarial valuation.
1.12 Borrowing Costs
Borrowing costs including processing fee that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of that asset. Borrowing costs are capitalized as part of the cost of a qualifying asset when it is probable that they will result in future economic benefits to the enterprise and the costs can be measured reliably. Other borrowing costs are recognized as an expense in the period in which they are incurred.
1.13 Segment reporting
The Company identifies primary segments based on the dominant sources, nature of risks and returns and the internal organisation and management structure. The operating segments are the segments for which separate financial information is available and for which operating profit and loss amounts are evaluated regularly by the executive Management.
The accounting policies adopted for segment reporting are in line with the accounting of the company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segment on the basis of their relationship to the operating activities of the segments.
Revenue, expenses, assets and liabilities which relate to the company as a whole and are not allocable to segment on reasonable basis have been included under âUnallocated revenue/expenses/ assets/liabilities.
1.14 Earning per share
Basic Earnings per share is computed by dividing the profit after tax (including the post tax effect of extraordinary items if any) by the weighted average number of equity shares outstanding during the year.
Diluted earnings per share is computed by dividing the profit after tax (Including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expenses or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity share which could have been issued on the conversion of all dilutive potential equity shares.
1.15 Income Taxes
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 enacted in India and tax laws prevailing in the respective tax jurisdictions where the company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Current income tax relating to items recognized directly in equity is recognized in equity and not in the statement of profit and loss.
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 asset 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
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to setoff current tax assets against current tax liabilities and the deferred tax assets and deferred taxes relate to the same taxable entity and the same taxation authority.
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 âMAT Credit Entitlement.â The company reviews the âMAT credit entitlementâ 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.
1.16 Provisions
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.
1.17 Contingent Liabilities
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.
1.18 Insurance claims
Insurance claims are accounted for on the basis of claim admitted / expected to be admitted and to the extent that there is no uncertainty in receiving the claims.
1.19 Operating Leases
Where the company is lessee
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term.
Where the company is the lessor
Leases in which the company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognized in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognized as an expense in the statement of profit and loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognized immediately in the statement of profit and loss
1.20 Derivative instruments
In accordance with the ICAI announcement, derivative contracts, other than foreign currency forward contracts covered under AS 11, are marked to market on a portfolio basis, and the net loss, if any, after considering the offsetting effect of gain on the underlying hedged item, is charged to the statement of profit and loss. Net gain, if any, after considering the offsetting effect of loss on the underlying hedged item, is ignored.
Mar 31, 2016
NOTE:1 SIGNIFICANT ACCOUNTING POLICIES
1. Nature of Operations
The Company is primarily engaged in the trading of mobile handset and mobile accessories and renting of Immovable property. etc. The company is a public limited company incorporated and domiciled in India and has its registered office at New Delhi. The company has its primary listing on the BSE Limited.
2. Basis of accounting and preparation of financial statement
These financial statements are prepared in accordance with Indian Generally Accepted accounting principles in India (GAAP) to comply with the accounting standard as prescribed under section 133 of the Companies Act 2013 (the Act) read with Rule 7 of the Companies (Accounts) Rules, 2014, the provisions of the Act (to the extend notified) and guidelines issued by the Securities and Exchange Board of India (SEBI). The financial statements have been prepared on accrual basis under the historical costs convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.
3. Use of Estimates
The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (Including Contingent liabilities) and the reported income and expenses during the year. The management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the difference between the actual results and the estimates are recognized the periods in which the results are materialize.
4. Inventories
Inventories are valued at the lower of cost (FIFO basis) and the net realizable value after providing for obsolescence and other losses, where considered necessary. Costs included all charges in bringing the goods to the point of sale, including octroi and other levies, transit insurance and receiving charges.
5. Cash and Cash equivalents (For purposes of cash Flow Statements)
Cash comprises cash on hand and fixed deposits with banks. Cash equivalents are short-term (with an original maturity of three months or less from the date of acquisition), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risks of changes in value.
6. Cash flow Statement
Cash flows are reported using the indirect method, whereby Profit before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accrual of past or future cash receipts or payments. The cash flows from operating, investing and financial activities of the company are segregated based on the available information.
7. Depreciation
Depreciation has been provided on the written down value method over the useful lives of assets estimated by the management at the method prescribed in schedule II of the Companies Act 2013. Depreciation on additions to Fixed Assets if provided from the date of acquisition of the Asset. Depreciation on Assets sold/scrapped during the period is provided for up to date of sale/scrap as the case may be. The management estimates the useful lives for the other fixed assets as follows:
8. Revenue Recognition Sale of Goods
Sales are recognized, net of returns, on transfer of significant risks and rewards of ownership to the buyer, which generally coincides with the delivery of goods to customers. Sales exclude sales tax and value added tax.
Income from services
Revenue from service contracts are recognized pro-rata over the period of the contract as and when services are rendered.
Other Income
Interest Income is accounted on accrual basis. Dividend income is accounted for when the right to receive is established.
9. Tangible Fixed Assets
Fixed assets are stated at cost, less accumulated depreciation/amortization and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. However the expenses incurred on Fixed Assets which takes substantial time to bring the assets for its intended use are capitalized in Capital Work in Progress. Fixed Assets not exceeding Rs.5,000/- is charged to the profit and loss account.
Borrowing costs relating to acquisition and fit outs of fixed assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to the period till such assets are ready for its intended use.
Fixed Assets retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately in the Balance sheet
10. Intangible Assets
Intangible assets are carried at cost less accumulated amortization and impairments losses, if any. The cost of intangible assets comprises its purchase price, including any imports duties and other taxes and any directly attributable expenditure on making the assets ready for its intended use and net of any trade discounts and rebates.
11. Foreign currency transactions
Income and expenses in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.
Monetary current assets and current liabilities are reinstated at period-end exchange rates and the profit/loss so determined and also the realized exchange gains/losses are recognized in the Profit & Loss Account.
Initial recognition
Transactions in foreign currencies entered into by the Company and its integral foreign operations are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet date
Foreign currency monetary items (other than derivatives contracts) of the Company and its net investment in non-integral foreign operations outstanding at the Balance sheet date are restated at the year-end rates.
In the case of integral operations, assets and liabilities (Other Than Monetary items), are translated at the exchange rate prevailing on the Balance Sheet date. Non-monetary items are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year.
Exchange differences arising out of these translations are charged to the statement of profit and loss.
The Company has only one class of equity shares having a par value of Rs. 10 per share. Each Holder of equity share is entitled to one vote per share.
In the event of liquidation of the Company, the total proceeds from such liquidation after discharging the liability of the Company will be distributed among the holders of the shares of the Company.
Mar 31, 2015
1. Nature of Operations
The Company is primarily engaged in the trading of mobile handset and
mobile accessories and construction of road and highways business etc.
2. Basis of accounting and preparation of financial statement
The financial statements of the company have been prepared in accordance
with the Generally Accepted accounting principles in India (Indian
GAAP) to comply with the accounting standard notifed under the
Companies (Accounting Standard) Rules, 2006 (As amended) and the
relevant provisions of the Companies Act , 2013. The financial
statements have been prepared on accrual basis under the historical
costs convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
3. use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (Including
Contingent liabilities) and the reported income and expenses during the
year. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the difference
between the actual results and the estimates are recognised the periods
in which the results are materialise.
4. Inventories
Inventories are valued at the lower of cost (On FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Costs included all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges.
5. Cash and Cash equivalents (For purposes of cash Flow Statements)
Cash comprises cash on hand and fixed deposits with banks. Cash
equivalents are short-term (with an original maturity of three months
or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risks of changes in value.
6. Cash flow Statement
Cash flows are reported using the indirect method, whereby Profit before
extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accrual of past or future cash
receipts or payments. The cash flows from operating, investing and
financial activities of the company are segregated based on the
available information.
7. Depreciation
Depreciation has been provided on the written down value method at the
method prescribed in schedule II of the Companies Act 2013.
Depreciation on additions to Fixed Assets if provided from the date of
acquisition of the Asset.
Depreciation on Assets sold/scrapped during the period is provided for
up to date of sale/scrap as the case may be.
8. Revenue Recognition
Sale of Goods
Sales are recognised, net of returns , on transfer of significant risks
and rewards of ownership to the buyer, which generally coincides with
the delivery of goods to customers. Sales exclude sales tax and value
added tax.
Income from services
Revenue from service contracts are recognised pro-rata over the period
of the contract as and when services are rendered.
Other Income
Interest Income is accounted on accrual basis. Dividend income is
accounted for when the right to receive is established.
9. Tangible Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. However the expenses
incurred on Fixed Assets which takes substantial time to bring the
assets for its intended use are capitalised in Capital Work in
Progress. Fixed Assets not exceeding Rs.5,000/- is charged to the Profit
and loss account.
Borrowing costs relating to acquisition and ft outs of fixed assets
which takes substantial period of time to get ready for its intended
use are also included to the extent they relate to the period till such
assets are ready for its intended use.
Fixed Assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance sheet
10. Intangible Assets
Intangible assets are carried at cost less accumulated amortisation and
impairments losses, if any. The cost of intangible assets comprises its
purchase price, including any imports duties and other taxes and any
directly attributable expenditure on making the assets ready for its
intended use and net of any trade discounts and rebates.
11. Foreign currency transactions
Income and expenses in foreign currencies are recorded at the exchange
rates prevailing on the date of transaction.
Monetary current assets and current liabilities are reinstated at
period-end exchange rates and the Profit/loss so determined and also the
realized exchange gains/losses are recognized in the Profit & Loss
Account.
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction. measurement of
foreign currency monetary items at the Balance Sheet date Foreign
currency monetary items (other than derivatives contracts) of the
Company and its net investment in non-integral foreign operations
outstanding at the Balance sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (Other Than
Monetary items), are translated at the exchange rate prevailing on the
Balance Sheet date. Non-monetary items are carried at historical cost.
Revenue and expenses are translated at the average exchange rates
prevailing during the year.
Exchange differences arising out of these translations are charged to
the statement of Profit and loss.
Treatment of Exchange differences
Exchange differences arising on settlement/restatement of short term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expenses in the
statement of Profit and loss. The Exchange differences on
restatement/settlement of loans to non-integral foreign operations that
are considered as net investment in such operations are accumulated in
a Foreign Currency monetary item translation difference account
Accounting of forward contracts
Premium or discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance sheet date.
12. Investments
Investments are classified into current investments and long term
investments.
Current investments are carried at market value. Any reduction/increase
in carrying amount are charged or credited to the Profit & Loss Account.
Long Term Investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Cost of investments include acquisition charges such as brokerage, fees
and duties
13. Retirement and other Employee benefits
provident Fund and Superannuation
The eligible employees of the Company are entitled to receive benefits
under the provident fund, a defined contribution plan, in which both
employees and the company make monthly contributions at a specified
percentage of the covered employees' salary (currently 12% of
employees' salary). The provident fund contributions, as specified under
the law, are paid to Employees State Insurance Fund (Defined
Contribution Schemes), administrated by the Central Government of
India. The contribution paid during the year are charged to Profit and
Loss account.
Gratuity
The Company has an obligation towards gratuity, a defined benefit
retirement plan covering eligible employees. The plan provides for a
lump sum payment to vested employees at retirement, death while in
employment or on termination of employment. Vesting occurs upon
completion of five years of service. The Company makes annual
contribution to Life Insurance Corporation of India through Group
Gratuity Trust established by it. The Company accounts for the
liability for gratuity benefits payable in future based on actuarial
valuation provided by LIC of India.
14. Borrowing Costs
Borrowing costs including processing fee that are directly attributable
to the acquisition, construction or production of a qualifying asset
are capitalized as part of the cost of that asset. Borrowing costs are
capitalized as part of the cost of a qualifying asset when it is
probable that they will result in future economic benefits to the
enterprise and the costs can be measured reliably. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
15. Segment reporting
The Company identifies primary segments based on the dominant sources,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
Profit and loss amounts are evaluated regularly by the executive
Management.
The accounting policies adopted for segment reporting are in line with
the accounting of the company.
Segment revenue, segment expenses, segment assets and segment
liabilities have been identified to segment on the basis of their
relationship to the operating activities of the segments.
Revenue, expenses, assets and liabilities which relate to the company
as a whole and are not allocable to segment on reasonable basis have
been included under " Unallocated revenue/ expenses/assets/
liabilities.
16. Earning per share
Basic Earning per share is computed by dividing the Profit after tax
(including the post tax effect of extraordinary items if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed by dividing the Profit after tax
(Including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expenses or income
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earning
per share and the weighted average number of equity share which could
have been issued on the conversion of all dilutive potential equity
shares.
17. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax is recognised on timing differences, being the difference,
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
period. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there in virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
reliability.
18. provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a liable
estimate can be made. Provision (excluding retirement benefits) are not
discounted to their present value and are determined based on the best
estimate require to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to refect
the current best estimation. Contingent liabilities are disclosed in
Notes.
19. provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates possible future incident based on
corrective actions on product failures.
The timing of outflow will vary as and when warranty claim will
arise-being typically upto three years.
As per the terms of the contract, the Company provides post-contract
services / warranty support to some of its customer. The Company
accounts for the post-contract support / provision for warranty on the
basis of the information available with the Management duly taking into
account the current and past technical estimation.
20. Insurance claims
Insurance claims are accounted for on the basis of claim admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
21. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the understanding service received is accounted and when there is
no uncertainty in availing / utilising the credits.
22. previous period Comparatives
i) Previous period's figures have been regrouped where necessary to
confirm to current period's Classification
ii) Notes 1 to 29 form an integral part of the Balance Sheet as on 31st
March 2015 and the Profit and Loss account for the year ended 31st March
2015.
Mar 31, 2014
1. Nature of Operations
The Company is primarily engaged in the trading of mobile handset and
mobile accessories and construction of road and highways business etc.
2. Basis of accounting and preparation of financial statement
The financial statements of the company have been prepared in
accordance with the Generally Accepted accounting principles in India
(Indian GAAP) to comply with the accounting standard notified under the
Companies (Accounting Standard) Rules, 2006 (As amended) and the
relevant provisions of the Companies Act , 1956. The financial
statements have been prepared on accrual basis under the historical
costs convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
3. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (Including
Contingent liabilities) and the reported income and expenses during the
year. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the difference
between the actual results and the estimates are recognised the periods
in which the results are materialise.
4. Inventories
Inventories are valued at the lower of cost (On FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Costs included all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges.
5. Cash and Cash equivalents (For purposes of cash Flow Statements)
Cash comprises cash on hand and fixed deposits with banks. Cash
equivalents are short-term (with an original maturity of three months
or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risks of changes in value.
6. Cash flow Statement
Cash flows are reported using the indirect method, whereby Profit
before extraordinary items and tax is adjusted for the effects of
transactions of non-cash nature and any deferrals or accrual of past or
future cash receipts or payments. The cash flows from operating,
investing and financial activities of the company are segregated based
on the available information.
7. Depreciation
Depreciation has been provided on the written down value method at the
rates prescribed in schedule XIV to the Companies Act 1956.
Depreciation on additions to Fixed Assets if provided from the date of
acquisition of the Asset.
Depreciation on Assets sold/scrapped during the period is provided for
up to date of sale/scrap as the case may be.
8. Revenue Recognition Sale of Goods
Sales are recognised, net of returns , on transfer of significant risks
and rewards of ownership to the buyer, which generally coincides with
the delivery of goods to customers. Sales exclude sales tax and value
added tax.
Income from services
Revenue from service contracts are recognised pro-rata over the period
of the contract as and when services are rendered.
Other Income
Interest Income is accounted on accrual basis. Dividend income is
accounted for when the right to receive is established.
9. Tangible Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. However the expenses
incurred on Fixed Assets which takes substantial time to bring the
assets for its intended use are capitalised in Capital Work in
Progress. Fixed Assets not exceeding Rs. 5,000/- is charged to the
profit and loss account.
Borrowing costs relating to acquisition and fit outs of fixed assets
which takes substantial period of time to get ready for its intended
use are also included to the extent they relate to the period till such
assets are ready for its intended use.
Fixed Assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance sheet
10. Intangible Assets
Intangible assets are carried at cost less accumulated amortisation and
impairments losses, if any. The cost of intangible assets comprises its
purchase price, including any imports duties and other taxes and any
directly attributable expenditure on making the assets ready for its
intended use and net of any trade discounts and rebates.
11. Foreign currency transactions
Income and expenses in foreign currencies are recorded at the exchange
rates prevailing on the date of transaction.
Monetary current assets and current liabilities are reinstated at
period-end exchange rates and the profit/loss so determined and also
the realized exchange gains/losses are recognized in the Profit & Loss
Account.
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivatives contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (Other Than
Monetary items), are translated at the exchange rate prevailing on the
Balance Sheet date. Non-monetary items are carried at historical cost.
Revenue and expenses are translated at the average exchange rates
prevailing during the year.
Exchange differences arising out of these translations are charged to
the statement of profit and loss.
Treatment of Exchange differences
Exchange differences arising on settlement/restatement of short term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expenses in the
statement of profit and loss. The Exchange differences on
restatement/settlement of loans to non-integral foreign operations that
are considered as net investment in such operations are accumulated in
a Foreign Currency monetary item translation difference account
Accounting of forward contracts
Premium or discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance sheet date.
12. Investments
Investments are classified into current investments and long term
investments.
Current investments are carried at market value. Any reduction/increase
in carrying amount are charged or credited to the Profit & Loss
Account.
Long Term Investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Cost of investments include acquisition charges such as brokerage, fees
and duties
13. Retirement and other Employee benefits Provident Fund and
Superannuation
The eligible employees of the Company are entitled to receive benefits
under the provident fund, a defined contribution plan, in which both
employees and the company make monthly contributions at a specified
percentage of the covered employees'' salary (currently 12% of
employees'' salary). The provident fund contributions, as specified
under the law, are paid to Employees State Insurance Fund (Defined
Contribution Schemes), administrated by the Central Government of
India. The contribution paid during the year are charged to Profit and
Loss account.
Gratuity
The Company has an obligation towards gratuity, a defined benefit
retirement plan covering eligible employees. The plan provides for a
lump sum payment to vested employees at retirement, death while in
employment or on termination of employment. Vesting occurs upon
completion of five years of service. The Company makes annual
contribution to Life Insurance Corporation of India through Group
Gratuity Trust established by it. The Company accounts for the
liability for gratuity benefits payable in future based on actuarial
valuation provided by LIC of India.
14. Borrowing Costs
Borrowing costs including processing fee that are directly attributable
to the acquisition, construction or production of a qualifying asset
are capitalized as part of the cost of that asset. Borrowing costs are
capitalized as part of the cost of a qualifying asset when it is
probable that they will result in future economic benefits to the
enterprise and the costs can be measured reliably. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
15. Segment reporting
The Company identifies primary segments based on the dominant sources,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
profit and loss amounts are evaluated regularly by the executive
Management.
The accounting policies adopted for segment reporting are in line with
the accounting of the company.
Segment revenue, segment expenses, segment assets and segment
liabilities have been identified to segment on the basis of their
relationship to the operating activities of the segments.
Revenue, expenses, assets and liabilities which relate to the company
as a whole and are not allocable to segment on reasonable basis have
been included under " Unallocated revenue/ expenses/assets/
liabilities.
16. Earning per share
Basic Earning per share is computed by dividing the profit after tax
(including the post tax effect of extraordinary items if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed by dividing the profit after tax
(Including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expenses or income
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earning
per share and the weighted average number of equity share which could
have been issued on the conversion of all dilutive potential equity
shares.
17. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax is recognised on timing differences, being the difference,
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
period. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there in virtual certainty that there
will be sufficient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
18. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a eliable
estimate can be made. Provision (excluding retirement benefits) are not
discounted to their present value and are determined based on the best
estimate require to settle the obligation at the Balance Sheet date.
These are reviewed at each Balance Sheet date and adjusted to reflect
the current best estimation. Contingent liabilities are disclosed in
Notes.
19. Provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates possible future incident based on
corrective actions on product failures.
The timing of outflow will vary as and when warranty claim will
arise-being typically upto three years.
As per the terms of the contract, the Company provides post-contract
services / warranty support to some of its customer. The Company
accounts for the post-contract support / provision for warranty on the
basis of the information available with the Management duly taking into
account the current and past technical estimation.
20. Insurance claims
Insurance claims are accounted for on the basis of claim admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
21. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the understanding service received is accounted and when there is
no uncertainty in availing / utilising the credits.
22. Previous Period Comparatives
i) Previous period''s figures have been regrouped where necessary to
confirm to current period''s Classification
ii) Notes 1 to 32 form an integral part of the Balance Sheet as on 31st
March 2014 and the profit and Loss account for the year ended 31st
March 2014.
Mar 31, 2013
1. Nature of Operations
The Company is primarily engaged in the trading of mobile handset and
mobile accessories and construction of road and highways business etc.
2. Basis of accounting and preparation of fnancial statement
The fnancial statements of the company have been prepared in accordance
with the Generally Accepted accounting principles in India (Indian
GAAP) to comply with the accounting standard notifed under the
Companies (Accounting Standard) Rules, 2006 (As amended) and the
relevant provisions of the Companies Act , 1956. The fnancial
statements have been prepared on accrual basis under the historical
costs convention. The accounting policies adopted in the preparation of
the fnancial statements are consistent with those followed in the
previous year.
3. Use of Estimates
The preparation of the fnancial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (Including
Contingent liabilities) and the reported income and expenses during the
year. The management believes that the estimates used in the
preparation of the fnancial statements are prudent and reasonable.
Future results could differ due to these estimates and the difference
between the actual results and the estimates are recognised the periods
in which the results are materialise.
4. Inventories
Inventories are valued at the lower of cost (On FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Costs included all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges.
5. Cash and Cash equivalents (For purposes of cash Flow Statements)
Cash comprises cash on hand and fxed deposits with banks. Cash
equivalents are short-term (with an original maturity of three months
or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignifcant risks of changes in value.
6. Cash fow Statement
FCash fows are reported using the indirect method, whereby Proft before
extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accrual of past or future cash
receipts or payments. The cash fows from operating, investing and
fnancial activities of the company are segregated based on the
available information.
7. Depreciation
Depreciation has been provided on the written down value method at the
rates prescribed in schedule XIV to the Companies Act 1956.
Depreciation on additions to Fixed Assets if provided from the date of
acquisition of the Asset. Depreciation on Assets sold/scrapped during
the period is provided for up to date of sale/scrap as the case may be
8. Revenue Recognition
Sale of Goods
Sales are recognised, net of returns , on transfer of signifcant risks
and rewards of ownership to the buyer, which generally coincides with
the delivery of goods to customers. Sales exclude sales tax and value
added tax.
Income from services
Revenue from service contracts are recognised pro-rata over the period
of the contract as and when services are rendered.
other Income
Interest Income is accounted on accrual basis. Dividend income is
accounted for when the right to receive is established.
9. Tangible Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. However the expenses
incurred on Fixed Assets which takes substantial time to bring the
assets for its intended use are capitalised in Capital Work in
Progress. Fixed Assets not exceeding Rs.5,000/- is charged to the proft
and loss account.
Borrowing costs relating to acquisition and ft outs of fxed assets
which takes substantial period of time to get ready for its intended
use are also included to the extent they relate to the period till such
assets are ready for its intended use.
Fixed Assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance sheet
10. Intangible Assets
Intangible assets are carried at cost less accumulated amortisation and
impairments losses, if any. The cost of intangible assets comprises its
purchase price, including any imports duties and other taxes and any
directly attributable expenditure on making the assets ready for its
intended use and net of any trade discounts and rebates.
11. Foreign currency transactions
Income and expenses in foreign currencies are recorded at the exchange
rates prevailing on the date of transaction.
Monetary current assets and current liabilities are reinstated at
period-end exchange rates and the proft/loss so determined and also the
realized exchange gains/losses are recognized in the Proft & Loss
Account.
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivatives contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (Other Than
Monetary items), are translated at the exchange rate prevailing on the
Balance Sheet date. Non-monetary items are carried at historical cost.
Revenue and expenses are translated at the average exchange rates
prevailing during the year. Exchange differences arising out of these
translations are charged to the statement of proft and loss.
Treatment of Exchange differences
Exchange differences arising on settlement/restatement of short term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expenses in the
statement of proft and loss. The Exchange differences on
restatement/settlement of loans to non-integral foreign operations that
are considered as net investment in such operations are accumulated in
a Foreign Currency monetary item translation difference account
Accounting of forward contracts
Premium or discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance sheet date.
12. Investments
Investments are classifed into current investments and long term
investments.
Current investments are carried at market value. Any reduction/increase
in carrying amount are charged or credited to the Proft & Loss Account.
Long Term Investments are carried individually at cost less provision
for diminution, other than temporary, in the value of such investments.
Cost of investments include acquisition charges such as brokerage, fees
and duties
13. Retirement and other Employee benefts
Provident Fund and Superannuation
The eligible employees of the Company are entitled to receive benefts
under the provident fund, a defned contribution plan, in which both
employees and the company make monthly contributions at a specifed
percentage of the covered employees'' salary (currently 12% of
employees'' salary). The provident fund contributions, as specifed under
the law, are paid to Employees State Insurance Fund (Defned
Contribution Schemes), administrated by the Central Government of
India. The contributions paid during the year are charged to Proft and
Loss account.
Gratuity
The Company has an obligation towards gratuity, a defned beneft
retirement plan covering eligible employees. The plan provides for a
lump sum payment to vested employees at retirement, death while in
employment or on termination of employment. Vesting occurs upon
completion of fve years of service. The Company makes annual
contribution to Life Insurance Corporation of India through Group
Gratuity Trust established by it. The Copmpany accounts for the
liability for gratuity benefts payable in future based on actuarial
valuation provided by LIC of India.
14. Borrowing Costs
Borrowing costs including processing fee that are directly attributable
to the acquisition, construction or production of a qualifying asset
are capitalized as part of the cost of that asset. Borrowing costs are
capitalized as part of the cost of a qualifying asset when it is
probable that they will result in future economic benefts to the
enterprise and the costs can be measured reliably. Other borrowing
costs are recognized as an expense in the period in which they are
incurred.
15. Segment reporting
The Company identifes primary segments based on the dominant sources,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate fnancial information is available and for which operating
proft and loss amounts are evaluated regularly by the executive
Management.
The accounting policies adopted for segment reporting are in line with
the accounting of the company. Segment revenue, segment expenses,
segment assets and segment liabilities have been identifed to segment
on the basis of their relationship to the operating activities of the
segments.
Revenue, expenses, assets and liabilities which relate to the company
as a whole and are not allocable to segment on reasonable basis have
been included under " Unallocated revenue/ expenses/assets/
liabilities.
16. Earning per share
Basic Earning per share is computed by dividing the proft after tax
(including the post tax effect of extraordinary items if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed by dividing the proft after tax
(Including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expenses or income
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earning
per share and the weighted average number of equity share which could
have been issued on the conversion of all dilutive potential equity
shares.
17. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax is recognised on timing differences, being the difference,
between the taxable income and the accounting income that originate in
one period and are capable of reversal in one or more subsequent
period. Deferred tax is measured using the tax rates and the tax laws
enacted or substantially enacted as at the reporting date. Deferred tax
liabilities are recognised for all timing differences. Deferred tax
assets in respect of unabsorbed depreciation and carry forward of
losses are recognised only if there in virtual certainty that there
will be suffcient future taxable income available to realise such
assets. Deferred tax assets are recognised for timing differences of
other items only to the extent that reasonable certainty exists that
suffcient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
18. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outfow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provision (excluding retirement benefts)
are not discounted to their present value and are determined based on
the best estimate require to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted to
refect the current best estimation. Contingent liabilities are
disclosed in Notes.
19. Provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates possible future incident based on
corrective actions on product failures. The timing of outfow will vary
as and when warranty claim will arise-being typically upto three years.
As per the terms of the contract, the Company provides post-contract
services / warranty support to some of its customer. The Company
accounts for the post-contract support / provision for warranty on the
basis of the information available with the Management duly taking into
account the current and past technical estimation.
20. Insurance claims
Insurance claims are accounted for on the basis of claim admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
21. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the understanding service received is accounted and when there is
no uncertainty in availing / utilising the credits.
22. Previous Period Comparatives
i) Previous period''s fgures have been regrouped where necessary to
confrm to current period''s Classifcation
ii) Notes 1 to 32 form an integral part of the Balance Sheet as on 31st
March 2013 and the proft and Loss account for the year ended 31st March
2013.
Mar 31, 2012
1. Nature of Operations
The Company is primarily engaged in the trading of mobile handset and
mobile accessories and construction of road and highways business etc.
2. Basis of accounting and preparation of financial statement
The financial statements of the company have been prepared in accordance
with the Generally Accepted accounting principles in India (Indian
GAAP) to comply with the accounting standard notified under the
Companies (Accounting Standard) Rules, 2006 (As amended) and the
relevant provisions of the Companies Act , 1956. The financial
statements have been prepared on accrual basis under the historical
costs convention. The accounting policies adopted in the preparation of
the financial statements are consistent with those followed in the
previous year.
3. Use of Estimates
The preparation of the financial statements in conformity with Indian
GAAP requires the Management to make estimates and assumptions
considered in the reported amounts of assets and liabilities (Including
Contingent liabilities) and the reported income and expenses during the
year. The management believes that the estimates used in the
preparation of the financial statements are prudent and reasonable.
Future results could differ due to these estimates and the difference
between the actual results and the estimates are recognised the periods
in which the results are materialise.
4. Inventories
Inventories are valued at the lower of cost (On FIFO basis) and the net
realisable value after providing for obsolescence and other losses,
where considered necessary. Costs included all charges in bringing the
goods to the point of sale, including octroi and other levies, transit
insurance and receiving charges.
5. Cash and Cash equivalents (For purposes of cash Flow Statements)
Cash comprises cash on hand and fixed deposits with banks. Cash
equivalents are short-term (with an original maturity of three months
or less from the date of acquisition), highly liquid investments that
are readily convertible into known amounts of cash and which are
subject to insignificant risks of changes in value.
6. Cash flow Statement
Cash flows are reported using the indirect method, whereby Profit before
extraordinary items and tax is adjusted for the effects of transactions
of non-cash nature and any deferrals or accrual of past or future cash
receipts or payments. The cash flows from operating, investing and
financial activities of the company are segregated based on the
available information.
7. Depreciation
Depreciation has been provided on the written down value method at the
rates prescribed in schedule XIV to the Companies Act 1956.
8. Revenue Recognition
Sale of Goods
Sales are recognised, net of returns , on transfer of significant risks
and rewards of ownership to the buyer, which generally coincides with
the delivery of goods to customers. Sales exclude sales tax and value
added tax.
Income from services
Revenue from service contracts are recognised pro-rata over the period
of the contract as and when services are rendered.
Other Income
Interest Income is accounted on accrual basis. Dividend income is
accounted for when the right to receive it is established.
9. Tangible Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. Borrowing costs relating to
acquisition of fixed assets which takes substantial period of time to
get ready for its intended use are also included to the extent they
relate to the period till such assets are ready for its intended use
are also included to the extent they relate to the period till such
assets are ready to be put to use.
Fixed Assets retired from active use and held for sale are stated at
the lower of their net book value and net realisable value and are
disclosed separately in the Balance sheet
10. Intangible Assets
Intangible assets are carried at cost less accumulated amortisation and
impairments losses, if any. The cost of intangible assets comprises its
purchase price, including any imports duties and other taxes and any
directly attributable expenditure on making the assets ready for its
intended use and net of any trade discounts and rebates.
11. Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivatives contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance sheet date are restated at the year-end
rates.
In the case of integral operations, assets and liabilities (Other Than
Monetary items), are translated at the exchange rate prevailing on the
Balance Sheet date. Non-monetary items are carried at historical cost.
Revenue and expenses are translated at the average exchange rates
prevailing during the year. Exchange differences arising out of these
translations are charged to the statement of Profit and loss.
Treatment of Exchange differences
Exchange differences arising on settlement/restatement of short term
foreign currency monetary assets and liabilities of the Company and its
integral foreign operations are recognised as income or expenses in the
statement of Profit and loss. The Exchange differences on
restatement/settlement of loans to non- integral foreign operations
that are considered as net investment in such operations are
accumulated in a Foreign Currency monetary item translation difference
account
Accounting of forward contracts
Premium or discount on forward exchange contracts, which are not
intended for trading or speculation purposes, are amortised over the
period of the contracts if such contracts relate to monetary items as
at the Balance sheet date.
12. Investments
Long-Term investments (Excluding investment properties) , are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value.
Cost of investments include acquisition charges such as brokerage, fees
and duties
13. Retirement and other Employee benefits
The Company's contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expenses as they fall due based on the amount of contribution required
to be made.
Provident Funds and Employees State Insurance Fund (defined Contribution
Schemes) are administrated by the Central Government of India and
Contribution to the said funds are charges to Profit and loss account on
accrual basis.
For defined benefit plans in the form of gratuity fund and
post-employment medical benefits, the cost providing benefits is
determined using the projected unit credit method with actuarial
valuation being carried out at the each Balance sheet date. Actuarial
gains and losses are recognised in the statement of Profit and Loss in
the period in which they occur.
14. Borrowing Costs
Borrowing costs include interest amortisation of ancillary costs
incurred and exchange difference arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the
interest costs. Costs in connection with the borrowing of funds to the
extent not directly related to acquisition of qualifying assets are
charged to the Profit and Loss over the tenure of the loan. Borrowing
costs, allocated to and utilised for qualifying assets, pertaining to
the period from commencement of activities relating to construction or
cost of the assets. Capitalisation of borrowing costs is suspended and
charged to the statement of Profit and Loss during extended periods when
active development activity on the qualifying assets is interrupted.
15. Segment reporting
The Company identifies primary segments based on the dominant sources,
nature of risks and returns and the internal organisation and
management structure. The operating segments are the segments for which
separate financial information is available and for which operating
Profit and loss amounts are evaluated regularly by the executive
Management.
The accounting policies adopted for segment reporting are in line with
the accounting policies of the company. Segment revenue, segment
expenses, segment assets and segment liabilities have been identified to
segment on the basis of their relationship to the operating activities
of the segments
Revenue, expenses, assets and liabilities which relate to the company
as a whole and are not allocable to segment on reasonable basis have
been included under " Unallocated revenue/ expenses/assets/
liabilities.
16. Earning per share
Basic Earning per share is computed by dividing the Profit after tax(
including the post tax effect of extraordinary items if any) by the
weighted average number of equity shares outstanding during the year.
Diluted earning per share is computed by dividing the Profit after tax
(Including the post tax effect of extraordinary items, if any) as
adjusted for dividend, interest and other charges to expenses or income
relating to the dilutive potential equity shares, by the weighted
average number of equity shares considered for deriving basic earning
per share and the weighted average number of equity share which could
have been issued on the conversion of all dilutive potential equity
shares.
17. Taxes on Income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961.
Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which
gives future economic benefits in the form of adjustment to future
income tax liability, is considered as an asset if there is convincing
evidence that the Company will pay normal income tax. Accordingly, MAT
is recognised as an asset in the Balance Sheet when it is probable that
future economic benefit associated with it will flow to the Balance Sheet
when it is probable that future economic benefit associated with it will
flow to the Company.
Deferred tax is recognised on timing differences, being the difference,
being the between the taxable income and the accounting income that
originate in one period and are capable of reversal in one or more
subsequent period. Deferred tax is measured using the tax rates and the
tax laws enacted or substantially enacted as at the reporting date.
Deferred tax liabilities are recognised for all timing differences.
Deferred tax assets in respect of unabsorbed depreciation and carry
forward of losses are recognised only if there in virtual certainty
that there will be sufficient future taxable income available to realise
such assets. Deferred tax assets are recognised for timing differences
of other items only to the extent that reasonable certainty exists that
sufficient future taxable income will be available against which these
can be realised. Deferred tax assets and liabilities are offset if such
items relate to taxes on income levied by the same governing tax laws
and the Company has a legally enforceable right for such set off.
Deferred tax assets are reviewed at each Balance Sheet date for their
realisability.
Current and deferred taxes relating to items directly recognised in
equity are recognised in equity and not in the Statement of Profit and
Loss
18. Research and development expenses
Revenue expenditure pertaining to research is charged to the Statement
of the Statement of Profit and Loss. Development costs of product are
also charged to the Statement of Profit and Loss unless a product's
technological feasibility has been established, in which case such
expenditure is capitalised. The amount capitalised comprise
expenditure that can be directly attributed or allocated on a
reasonable and consistent basis to creating, producing and making the
asset ready for its intended use. Fixed assets utilised for research
and development are capitalised and depreciated in accordance with the
policies stated for Tangible Fixed Assets and Intangible Asset.
19. Provisions and Contingencies
A provision is recognised when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of which a
reliable estimate can be made. Provision (excluding retirement benefits)
are not discounted to their present value and are determined based on
the best estimate require to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted to
refect the current best estimation. Contingent liabilities are
disclosed in Notes.
20. Provision for warranty
The estimated liability for product warranties is recorded when
products are sold. These estimates are established using historical
information on the nature, frequency and average cost of warranty
claims and management estimates possible future incident based on
corrective actions on product failures The timing of outflow will
vary as and when warranty claim will arise-being typically upto
three years.
As per the terms of the contract, the Company provides post-contract
services / warranty support to some of its customer. The Company
accounts for the post-contract support / provision for warranty on the
basis of the information available with the Management duly taking into
account the current and past technical estimation.
21. Insurance claims
Insurance claims are accounted for on the basis of claim admitted /
expected to be admitted and to the extent that there is no uncertainty
in receiving the claims.
22. Service tax input credit
Service tax input credit is accounted for in the books in the period in
which the understanding service received is accounted and when there is
no uncertainty in availing / utilising the credits.
23. Previous Period Comparatives
i) Previous period's figures have been regrouped where necessary to
confirm to current period's Classification
II) Schedule VI of the Companies act 1956 is revised with effect from
1st April'2011 and the adoption of such revised schedule VI has
significantly impacted the presentation and disclosers in the Current
financial statements.
iii) Notes 1 to 32 form an integral part of the Balance Sheet as on
31st March 2012 and the Profit and Loss account for the year ended 31st
March 2012.
iv) Part IV of Schedule VI of the Companies Act, 1956 is attached
herewith.
Mar 31, 2011
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies Accounting
Standard Rules, 2006 (as amended), and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except otherwise
stated.
b) Use of estimates
The preparation of financial statements is in conformity with generally
accepted accounting principles which requires management to make
estimates and assumptions that effect the reported amounts of assets
and liabilities and disclosure of contingent liabilities at the date of
the financial statements and the results of operations during the
reporting period end. Although these estimates are based upon
management's best knowledge of current events and actions, actual
results could differ from these estimates.
c) Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. Borrowing costs relating to
acquisition of fixed assets which takes substantial period of time to
get ready for its intended use are also included to the extent they
relate to the period till such assets are ready to be put to use.
d) Depreciation / Amortisation
i) Depreciation is provided using the written down value method at the
rates prescribed under Schedule XIV of the Companies Act, 1956.
ii) Leasehold improvements are depreciated over the primary lease
period or its useful life whichever is lower.
e) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the asset's net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
f) Leases
Where the Company is the lessee
Leases, where the lessor effectively retains substantially all risks
and benefits of ownership of the leased item, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss Account on a straightà line basis over the lease
term.
Where the Company is lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognized in the Profit and Loss Account on a straightÃline
basis over the lease term. Costs, including depreciation are recognized
as an expense in the Profit and Loss Account. Initial direct costs such
as legal costs, brokerage costs, etc. are recognized immediately in the
Profit and Loss Account.
g) Investments
Investments that are readily realisable and intended to be held for not
more than one year are classified as current investments. All other
investments are classified as longÃterm investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. LongÃterm investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
h) Inventories
Inventories are valued at lower of cost or net realizable value. Cost
is computed on the basis of cost of purchase inclusive of freight etc.
i) Revenue Recognition
(i) On Contracts
The Company follows the "Percentage of completion method " of
accounting for all contracts in accordance with " Accounting standard
7" Ã " Accounting for Construction Contract " issued by the Institute
of Chartered Accountants of India. The revenue from the execution of
contracts is recognised proportionately with the degree of completion
achieved under each contracts , matching revenue with expenses incurred
and after considering the total contracts value and associated costs.
- Contract prices are either fixed or subject to price escalation
clause. Amounts due in respect of price escalation and/or variation in
contract work approved by the customers are recognised as revenue only
when there are conditions in the contracts for such claims or
variations and/or evidence of the acceptability of the same customers.
- Uncertified work-in- progress is recognised as revenues and is valued
at the lower of cost and net realisable up to the stage of completion.
Cost includes direct material, labour cost, and appropriate overheads.
- Site development including initial expenses (shown in work in
progress) thereon is charged off proportionately within the stipulated
period of contract from the date of revenue recognition.
(ii) On Others
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, which coincides with
their delivery to the customers.
Revenue from Maintenance Contracts
Revenues from maintenance contracts are recognised proÃrata over the
period of the contract as and when services are rendered.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
j) Foreign Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
NonÃmonetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
(iii) Exchange Differences
As per accounting standard Ã11 issued by the Institute of Chartered
Accountants of India, Exchange differences arising on the settlement of
monetary items or on reporting Company's monetary items at rates
different from those at which they were initially recorded during the
year or reported in previous financial statements, are recognised as
income or as expenses in the year in which they arise.
(iv) Forward exchange contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognised as income or as expense for the
year.
k) Retirement and other employee benefits
Provident Funds and Employees State Insurance Fund (Defined
Contribution Schemes) are administered by Central Government of India
and contribution to the said funds are charges to Profit and Loss
Account or accrual basis.
l) Income Taxes
As per accounting standard-22 issued by the Institute of Chartered
Accountants of India tax expense comprises of current and deferred tax.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflect the impact of current year's timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years / period. Deferred
tax is measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set off current tax assets against current tax liabilities
and the deferred tax assets and deferred tax liabilities relate to the
taxes on income levied by same governing taxation laws. Deferred tax
assets are recognised 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 of tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that such deferred tax
assets can be realised against future taxable profits. At each balance
sheet date, the Company reassesses unrecognised deferred tax assets. It
recognises unrecognised deferred tax assets to the extent that it has
become reasonably 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 balance
sheet date. The Company writesÃdown the carrying amount of a 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 writeÃdown 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.
m) Earnings Per Share
As per accounting standard-20 issued by the Institute of Chartered
Accountants of india Basic earnings per share are calculated by
dividing the net profit or loss for the year / period attributable to
equity shareholders by the weighted average number of equity shares
outstanding during the year / period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year / period attributable to equity
shareholders and the weighted average number of shares outstanding
during the year / period are adjusted for the effects of all dilutive
potential equity shares.
n) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and are adjusted to reflect the current best
estimates.
o) Warranty
Warranty costs are provided on accrual basis on the total sales under
warranty on the following basis:
Telecommunications
Warranty costs are provided on an accrual basis, taking into account
the past trend of warranty claims received by the Company, to settle
the obligation at the balance sheet date.
Information Technology
Warranty costs are provided at the specific rates agreed with the
authorised service providers.
p) Segment Reporting Policies
Identification of segments
The Company's operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on geographical location of the customers.
Intersegment Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
The unallocated items include general corporate income and expense
items which are not allocated to any business segment.
q) Cash and cash equivalents
Cash and cash equivalents in the cash flow statement comprise cash at
bank and cash in hand and short term investments with the original
maturity of three months or less.
r) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the year they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
Mar 31, 2010
A) Basis of Preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified by Companies Accounting
Standard Rules, 2006 (as amended), and the relevant provisions of the
Companies Act, 1956. The financial statements have been prepared under
the historical cost convention on an accrual basis except otherwise
stated.
b) Use of estimates
The preparation of financial statements is in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that effect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period end. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates.
c) Fixed Assets
Fixed assets are stated at cost, less accumulated
depreciation/amortisation and impairment losses, if any. Cost comprises
the purchase price and any attributable cost of bringing the asset to
its working condition for its intended use. Borrowing costs relating to
acquisition of fixed assets which takes substantial period of time to
get ready for its intended use are also included to the extent they
relate to the period til such assets are ready to be put to use.
d) Depreciation / Amortisation
i) Depreciation is provided using the written down value method at the
rates prescribed under Schedule XIV of the Companies Act, 1956.
ii) Leasehold improvements are depreciated over the primary lease
period or its useful life whichever is lower.
e) Impairment
The carrying amounts of assets are reviewed at each balance sheet date
if there is any indication of impairment based on internal/external
factors. An impairment loss is recognized wherever the carrying amount
of an asset exceeds its recoverable amount. The recoverable amount is
the greater of the assets net selling price and value in use. In
assessing value in use, the estimated future cash flows are discounted
to their present value at the weighted average cost of capital.
f) Leases
Where the Company is the lessee
Leases, where the lessor effectively retains substantialy all risks and
benefits of ownership of the leased item, are classified as operating
leases. Operating lease payments are recognized as an expense in the
Profit and Loss Account on a straight- line basis over the lease term.
Where the Company is lessor
Assets subject to operating leases are included in fixed assets. Lease
income is recognized in the Profit and Loss Account on a straight-line
basis over the lease term. Costs, including depreciation are recognized
as an expense in the Profit and Loss Account. Initial direct costs such
as legal costs, brokerage costs, etc. are recognized immediately in the
Profit and Loss Account.
g) Investments
Investments that are readily realizable and intended to be held for not
more than one year are classified as current investments. All other
investments are classified as long-term investments. Current
investments are carried at lower of cost and fair value determined on
an individual investment basis. Long-term investments are carried at
cost. However, provision for diminution in value is made to recognise a
decline other than temporary in the value of the investments.
h) Inventories
Inventories are valued at lower of cost or net realizable value. Cost
is computed on the basis of cost of purchase inclusive of freight etc.
i) Revenue Recognition
(i) On Contracts
The Company follows the "Percentage of completion method " of
accounting for all contracts in accordance with " Accounting standard
7" - " Accounting for Construction Contract " issued by the institute
of chartered accountants of India. The revenue from the execution of
contracts is recognised proportionately with the degree of completion
achieved under each contracts , matching revenue with expenses incurred
and after considering the total contracts value and associated costs.
Discloser as required under Accounting Standard-7 for the contracts is
given below:
(Amounts Rs000)
S.No Particulars As on 31.03.2010
I Contract Revenue Recognised as revenue in 148804
the period
II Contract costs Recognised as expenses in the 148455
period
III Recognised Profits 349
IV Income Billed But not Due* 2100
V Progress Billing in the period 148804
VI Amounts Due from Customers 169649
(Amounts Receivable Bill)
"Working for Income Billed But Not Due during the Financial 2009-10
"Particulars Amounts (Rs in Crs)
Contract Value 84.30
Revised Contract costs 83.33
Cost Incurred Til date as on 31/03/2010 80.33
Total Revenue up to 31/03/2010 81.27
Less: Revenue recognised up to 31/03/2009 66.38
Revenue to be recognised for the year (2009-10) 14.89
Less: Revenue Receipts during the year 2009-10 15.10
Income Billed but not due during the year 2009-10 -0.21
- Contract prices are either fixed or subject to price escalation
clause. Amounts due in respect of price escalation and/or variation in
contract work approved by the customers are recognised as revenue only
when there are conditions in the contracts for such claims or
variations and/or evidence of the acceptability of the same customers.
- Uncertified work-in- progress is recognised as revenues and is valued
at the lower of cost and net realisable up to the stage of completion.
Cost includes direct material , labour cost, and appropriate overheads.
- Site development including initial expenses (shown in work in
progress) thereon is charged off proportionately within the stipulated
period of contract from the date of revenue recognition.
(ii) On Others
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sale of Goods
Revenue is recognised when the significant risks and rewards of
ownership of the goods have passed to the buyer, which coincides with
their delivery to the customers.
Revenue from Maintenance Contracts
Revenues from maintenance contracts are recognised pro-rata over the
period of the contract as and when services are rendered.
Interest
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the rate applicable.
j) Foregn Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
(iii) Exchange Differences
As per accounting standard -11 issued by the institute of Chartered
accountants of India Exchange differences arising on the settlement of
monetary items or on reporting Companys monetary items at rates
different from those at which they were initially recorded during the
year or reported in previous financial statements, are recognised as
income or as expenses in the year in which they arise.
(iv) Forward exchange contracts not intended for trading or speculation
purposes
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancelation or renewal of forward
exchange contract is recognised as income or as expense for the year.
k) Retirement and other employee benefits
Provident Funds and Employees State Insurance Fund (Defined
Contribution Schemes) are administered by Central Government of India
and contribution to the said funds is charges to Profit and Loss
Account or accrual basis.
l) Income Taxes
As per accounting standard-22 issued by the institute of chartered
accountants of India tax expense comprises of current and deferred tax.
Current income tax is measured at the amount expected to be paid to the
tax authorities in accordance with the Indian Income Tax Act, 1961.
Deferred income taxes reflect the impact of current years timing
differences between taxable income and accounting income for the year
and reversal of timing differences of earlier years / period. Deferred
tax is measured based on the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set off current tax assets against current tax liabilities
and the deferred tax assets and deferred tax liabilities relate to the
taxes on income levied by same governing taxation laws. Deferred tax
assets are recognised 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 of tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that such deferred tax
assets can be realised against future taxable profits. At each balance
sheet date, the Company reassesses unrecognised deferred tax assets. It
recognises unrecognised deferred tax assets to the extent that it has
become reasonably or virtualy 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 balance
sheet date. The Company writes-down the carrying amount of a deferred
tax asset to the extent that it is no longer reasonably certain or
virtualy 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 virtualy certain, as the case may be,
that sufficient future taxable income will be available.
m) Earnings Per Share
As per accounting standard -20 issued by the institute of chartered
accountants of india Basic earnings per share are calculated by
dividing the net profit or loss for the year / period attributable to
equity shareholders by the weighted average number of equity shares
outstanding during the year / period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the year / period attributable to equity
shareholders and the weighted average number of shares outstanding
during the year / period are adjusted for the effects of all dilutive
potential equity shares.
n) Provisions
A provision is recognised when an enterprise has a present obligation
as a result of past event; it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present value and are determined based on best estimate required to
settle the obligation at the balance sheet date. These are reviewed at
each balance sheet date and are adjusted to reflect the current best
estimates.
o) Warranty
Warranty costs are provided on accrual basis on the total sales under
warranty on the following basis:
Telecommunications
Warranty costs are provided on an accrual basis, taking into account
the past trend of warranty claims received by the Company, to settle
the obligation at the balance sheet date.
Information Technology
Warranty costs are provided at the specific rates agreed with the
authorised service providers.
p) Segment Reporting Policies
Identification of segments
The Companys operating businesses are organized and managed separately
according to the nature of products and services provided, with each
segment representing a strategic business unit that offers different
products and serves different markets. The analysis of geographical
segments is based on geographical location of the customers.
Intersegment Transfers
The Company generally accounts for intersegment sales and transfers as
if the sales or transfers were to third parties at current market
prices.
Allocation of common costs
Common allocable costs are allocated to each segment according to the
relative contribution of each segment to the total common costs.
Unallocated items
The unallocated items include general corporate income and expense
items which are not allocated to any business segment.
q) Cash and cash equivalents
Cash and cash equivalents in the cash flow statement comprise cash at
bank and cash in hand and short term investments with the original
maturity of three months or less.
r) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the year they occur. Borrowing costs consist of interest
and other costs that an entity incurs in connection with the borrowing
of funds.
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