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Accounting Policies of Rudrabhishek Enterprises Ltd. Company
Mar 31, 2025
1. MATERIAL ACCOUNTING POLICIES
Company has adopted Indian Accounting Standards ("Ind
AS") notified under the Companies (Indian Accounting
Standards) Rules,2015
1.1 Statement of Compliance
The Ind AS Financial Statements were authorised for issue in
accordance with a resolution of the Board of Directors of the
company passed on 30th May 2025.
1.2 Basis of Preparation
The financial statements of the company are consistently
prepared and presented under historical cost convention
on an accrual basis in accordance with Ind AS except for
certain financial assets and liabilities that are measured at
fair values.
The company''s functional currency and presentation
currency is Indian Rupees (INR). All amounts disclosed in the
financial statements and notes are in INR except otherwise
indicated.
Classification of Assets and Liabilities into current and
Non- Current
The Company presents its assets and liabilities in the Balance
Sheet based on current/ non-current classification.
As asset is treated as current when it is:
a) expected to be realised or intended to be sold or
consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the
reporting period; or
d) cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when :
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the
reporting period; or
d) there is no unconditional right to defer the settlement
of the liabilty for at least twelve months after the
reporting period
All other liabilities are classified as non-current.
Based on the nature of products and the time between the
acquisition of assets for processing and their realisation in
cash and cash equivalents, the company has ascertained its
operating cycle being a period within twelve months for the
purpose of current and non-current classification of assets
and liabilities.
1.3 Use of judgements, estimates and assumptions
The preparation of the company''s financial statements
required management to make judgements, estimates and
assumptions that affect the reported amount of revenues,
expenses, assets and liabilities, and the accompanying
disclosures, and the disclosures of contingent liabilities.
Uncertainity about these assumptions and estimates could
result in outcomes that require a material adjustment in the
future periods in the carrying amount of assets or liabilities
affected.
In the company''s accounting policies, management has
made judgements in respect of evaluation of recoverability
of deferred tax assets,which has the most significant effect
on the amounts recognised in the financial statements:
The following are the key assumptions concerning the future,
and other other key sources of estimation uncertainity at
the end of reporting period that may have significant risk
of causing material adjustments to the carrying amounts of
assets and liabilities with in :-
a) Useful life of property, plant and equipment and
intangible assets: The company has estimated useful
life of the Property, Plant and Equipment as specified
in Schedule II to Companies Act 2013. However, the
actual useful life for individual equipments could turn
out to be different, there could be technology changes,
breakdown, unexpected failure leading to impairment
or complete discard. Alternately, the equipment may
continue to provide useful service well beyond the
useful assumed.
b) Fair value measurement of financial instruments: When
the fair values of financial assets and financial liabilities
cannot be measured based on quoted process in active
market, the fair value is measured using valuation
techniques including book value and discounted cash
flow (DCF) model. The inputs to these models are taken
from observable markets where possible, but where
this is not possible, a degree of judgement is required
in establishing fair values.
c) Impairment of financial and non-financial assets:
The impairment provisions for the financial assets
are based on assumptions about risk of default and
expected loss rates. The company uses judgement in
making these assumptions and selecting the input
for the impairment calculations, based on Company''s
past history, existing market conditions, technology,
economic developments as well as forward looking
estimates at the end of each reporting period.
d) Taxes: Taxes have been paid / provided, exemptions
availed, allowances considered etc. are based on the
extent laws and the company''s interpretation of the
same based on the legal advice received wherever
required. These could differ in the view taken by the
authorities, clarifications issued subsequently by the
government and court, amendments to statues by the
government etc.
e) Defined benefit plans: The cost of defined benefit
plans and other post-employment benefits plans and
the present value of such obligations are determined
using acturial valuations. An acturial valuation involves
making various assumptions that may differ from
actual developments in the future.
f) Provisions: The Company makes provisions for leave
encashment and gratuity, based on report received
from the independent actuary. These valuation reports
use complex valuation models using not only the
inputs provided by the Company but also various
other economic variables. Considerable judgement is
involved in the process.
g) Contingencies: A provision is recognised 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
measured at the present value of management''s best
estimate of the expenditure required to settle the
present obligations at the end of the reporting period.
However, the actual liability could be considerably
different.
1.4 Property, Plant and Equipment
Freehold land is carried at historical cost. All other property,
plant and equipment are stated at cost, net of recoverable
taxes, trade discounts and rebates less accumulated
depreciation and impairment loss, if any. The cost of tangible
assets comprises its purchase price, borrowing cost, any
costs directly attributable to bringing the asset into the
location and condition necessary for it to be capable of
operating in the manner intended by management, initial
estimation of any decommissioning obligations and finance
cost.
When significant parts of the Property, Plant and Equipment
are required to be replaced at intervals, the company
derecognises the replaced part, and recognises the new
part with its own associated useful life and depreciated
accordingly. Likewise, when a major inspection is performed,
its cost is recognised in the carrying amount of the plant
and equipment as a replacement, if the recognition criteria
are satisfied. All other repair and maintenance costs are
recognised in the Statement of Profit and Loss as incurred.
Cost of Software directly identified with hardware is
recognised along with the cost of hardware.
An item of Property, Plant and Equipment and any significant
part initially recognised is derecognised upon disposal or
when no future economic benefits are expected from its
use. Any gain or loss arising on derecognition of the asset is
included in the Statement of Profit and Loss when the asset
is derecognised.
Capital Work-in- progress includes cost of Property, Plant
and Equipment which are not ready for their intended use.
The residual values and useful lives of Property, Plant and
Equipment are reviewed at each financial year end, and
changes, if any, are accounted prospectively.
Depreciation on the Property, Plant and Equipment is
provided over the useful life of assets as specified in
Schedule II to the Companies Act, 2013 using Written Down
Value method which are as under:
Property, Plant and Equipment which are added/ disposed
off during the year, depreciation is provided on pro rata
basis with reference to the month of addition / deletion.
In line with the provisions of Schedule II of the Companies
Act 2013, the Company depreciates significant components
of the main asset (which have different useful lives as
compared to the main asset) based on the individual useful
life of those components. Useful life for such components
has been assessed based on the historical experience and
internal technical inputs.
Improvements to lease hold building is amortized over the
lease period/residual life of lease period.
1.5 Investment Properties
Property that is held for long term rental yield or for capital
appreciation or for both and that is not occupied by the
company is classified as Investment property. Investment
property is measured initially at its cost including related
transaction cost and where applicable borrowing cost.
Subsequent to initial recognition, Investment properties
are stated at cost less accumulated depreciation and
accumulated impairment loss, if any. Subsequent
expenditure is capitalised to assets carrying amount
only when it is probable the future economic benefits
associated with the expenditure will flow to the company
and cost of item can be measured reliably. Though the
company measures Investment Property using cost based
measurement, the fair value of Investment Property is
disclosed by way of note. Fair values are determined based
on annual evaluation performed by external independent
valuer applying valuation report as per Ind AS 113 "Fair Value
Measurement".
Investment properties are derecognised either when they
have been disposed off or when they are permanently
withdrawn from use and no future economic benefit is
expected from the disposal. The difference between net
disposal proceeds and the carrying amount of asset is
recognised in profit or loss in period of derecognition.
Investment properties are depreciated using written down
value method over their estimated useful life. Transfer of
property from investment property to property, plant &
equipment is made when the property is no longer held for
long term rental yield or for capital appreciation or both at
carrying amount of property transferred.
1.6 Intangible Assets
Intangible Assets are recognised only if they are separately
identiiable and the Company expects to receive future
economic benefits arising out of them. Intangible Assets
are stated at cost of acquisition net of recoverable taxes less
accumulated amortisation/ depletion and impairment loss,
if any. The cost comprises purchase price, borrowing costs,
and any cost directly attributable to bringing the asset to its
working condition for the intended use.
Intangible assets with finite lives are amortised on straight
line basis over their useful economic life and assessed
for impairment whenever there is an indication that the
intangible asset may be impaired. The amortised expense
on intangible assets and impairment loss is recognised in
the Statement of Profit and Loss.
Intangible Assets are amortised over a period of 5 Years.
The useful lives of intangible assets are assessed as either
finite or indefinite.
Gains or losses arising from derecognition of an intangible
asset are recognised in the Statement of Profit and Loss
when the asset is derecognised.
Intangible assets with indefinite useful lives, are not
amortised, but are tested for impairment annually. The
assessment of indefinite life is reviewed annually to
determine whether the indefinite life continues to be
supportable. If not, the change in useful life from indefinite
to finite is made on a prospective basis. The impairment loss
on intangible assets with indefinite life is recognised in the
Statement of Profit and Loss.
1.7 Impairment of Non- Financial assets
At each Balance Sheet date, the Company assesses whether
there is an indication that an asset may be impaired and also
whether there is an indication of reversal of impairment loss
recognised in the previous periods. If any indication exists,
or when annual impairment testing for an asset is required,
the Company determines the recoverable amount and
impairment loss is recognised when the carrying amount of
an asset exceeds its recoverable amount.
An asset''s recoverable amount is the higher of an asset''s or
cash-generating unit''s (CGU) fair value less costs of disposal
and its value in use. Recoverable amount is determined for
an individual asset, unless the asset does not generate cash
inlows that are largely independent of those from other
assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its
recoverable amount, the asset is considered impaired and is
written down to its recoverable amount.
In assessing the value in use, the estimated future cash
flows are discounted to their present value using a pre-tax
discount rate that relects 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.
1.8 Non-current Assets Held for Sale
Non-current assets classified as held for sale are measured at
the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their
carrying amounts will be recovered through a sale
transaction rather than through continuing use. This
condition is regarded as met only when the sale is highly
probable and the asset is available for immediate sale in its
present condition subject only to terms that are usual and
customary for sales of such assets
Property, plant and equipment and intangible assets are not
depreciated or amortized once classified as held for sale.
1.9 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.
A. Financial Assets:
(i) Classiication:
The Company classifies financial assets as
subsequently measured at amortised cost, fair
value through other comprehensive income, or
fair value through profit and loss on the basis
of its business model for managing the financial
asset and the contractual cash low characteristics
of the financial asset.
(ii) Initial recognition and measurement
All Financial assets are recognised initially at
fair value plus, in the case of financial assets not
recognised at fair value through profit and loss,
transaction costs that are attributable to the
acquisition of the Financial asset.
(iii) Financial assets measured at amortised cost:
Financial assets are subsequently measured
at amortised cost using effective interest rate
method (EIR), if these financial assets are held
within a business whose objective is to hold these
assets in order to collect contractual cash flows
and the contractual terms of the financial asset
give rise on specified dates to cash flows that are
solely payments of principal and interest on the
principal outstanding. The losses arising from the
impairment are recognised in the Statement of
Profit and Loss.
(iv) Financial assets at fair value through other
comprehensive income
Financial assets are measured at fair value
through other comprehensive income if these
financial assets are held within a business
whose objective is achieved by both collecting
contractual cash lows and selling financial assets
and the contractual terms give rise to cash flows
that are solely payments of principal and interest
on the principal outstanding.
(v) Financial assets measured at fair value
through profit and loss
Financial assets under this category are measured
initially as well as at each reporting date at fair
value. Fair value movements are recognised in
profit and loss.
(vi) Derecognition of financial assets
A financial asset is primarily 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.
(vii) Investment in Subsidiaries
At Transition date, the company has fair valued its
investment in subsidiaries and associate and fair
value so determined is taken as deemed cost and
thereafter the company follows cost model less
impairment loss, if any.
AA. Impairment of Financial Assets
In accordance with Ind-AS 109, the Company applies
Expected Credit Loss (ECL) model for measurement and
recognition of impairment loss.
The Company follows ''simpliied approach'' for recognition
of impairment loss allowance on trade receivables. The
application of simplified approach does not require the
Company to track changes in credit risk. Rather, it recognises
impairment loss allowance based on lifetime ECLs at each
reporting date, right from its initial recognition.
AAA. Impairment of Investment in Subsidiaries and associate
The company reviews its carrying value of investment
carried at deemed cost ( net of impairment if any) annually
or more frequently when there is indication for impairment.
If the recoverable amount is less than its carrying amount,
the impairment loss is accounted in statement of profit &
loss A/c.
B. Financial Liabilities
(i) Classiication
The Company classifies all financial liabilities as
subsequently measured at amortised cost, except
for financial liabilities at fair value through profit
and loss. Such liabilities, including derivatives that
are liabilities, shall be subsequently measured at
fair value.
(ii) Initial recognition and measurement
All financial liabilities are recognised initially at
fair value, in the case of loans, borrowings and
payables, net of directly attributable transaction
costs. Financial liabilities include trade and other
payables, loans and borrowings including bank
overdrafts and derivative financial instruments.
(iii) Subsequent measurement
All financial liabilities are re-measured at fair value
through statement of profit and loss include
financial liabilities held for trading and financial
liabilities designated upon initial recognition
as at fair value through statement of profit and
loss. Financial liabilities are classified as held for
trading if they are incurred for the purpose of
repurchasing in the near term.
(iv) Loans and borrowings
Interest bearing loans and borrowings are
subsequently measured at amortised cost using
effective interest rate (EIR) method. Gains and
losses are recognised in Statement of Profit and
Loss when the liabilities are derecognised as
well as through EIR amortisation process. The EIR
amortisation is included as finance cost in the
Statement of Profit and Loss.
(v) Derecognition of financial liabilities
A financial liability is derecognised when the
obligation under the liability is discharged or
canceled or expires. When an existing financial
liability is replaced by another from the same
lender on substantially different terms, or the
terms of an existing liability are substantially
modiied, such an exchange or modification
is treated as the derecognition of the original
liability and the recognition of a new liability. The
difference in the respective carrying amounts is
recognised in the Statement of Profit and Loss.
(vi) Derivative financial instruments
The Company uses derivative financial
instruments such as forward currency contracts
and options to hedge its foreign currency risks.
Such derivative financial instruments are initially
recognized at fair value on the date on which
a derivative contract is entered into and are
subsequently re-measured at fair value. The gain
or loss in the fair values is taken to Statement of
Profit and Loss at the end of every period. Profit
or loss on cancellations / renewals of forward
contracts and options are recognised as income
or expense during the period.
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and
the net amount is reported in the Balance Sheet if
there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to
settle on a net basis to realise the assets and settle the
liabilities simultaneously.
1.10 Fair value measurement
The Company measures certain financial assets and inancial
liabilities including derivatives and deined benefit plans at
fair value.
Fair value is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The
fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes
place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most
advantageous market for the asset or liability
The fair value of an asset or a liability is measured using
the assumptions that market participants would use
when pricing the asset or liability, assuming that market
participants act in their best economic interest.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based
on the lowest level input that is signiicant to the fair value
measurement as a whole:
Level 1 â Quoted (unadjusted) market prices in active
markets for identical assets or liabilities.
Level 2 â Valuation techniques for which the lowest level
input that is significant to the fair value measurement is
directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level
input that is signiicant to the fair value measurement is
unobservable.
For assets and liabilities that are recognised in the inancial
statements on a recurring basis, the Company determines
whether transfers have occurred between levels in the
hierarchy by re-assessing categorisation (based on the lowest
level input that is significant to the fair value measurement
as a whole) at the end of each reporting period.
1.11 Borrowing cost
Borrowing costs directly attributable to the acquisition,
construction or production of an asset are capitalised as
part of the cost of the asset. All other borrowing costs are
expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds.
Borrowing cost also includes exchange differences to the
extent regarded as an adjustment to the borrowing costs.
Mar 31, 2024
Corporate Information
Rudrabhishek Enterprises Ltd.("the Company") is a company limited by shares incorporated and domiciled in India. The company is primarily engaged in the business of Integrated Real Estate & Infrastructure Consultants and also in excution of EPC contracts.
The registered office of the Company is situated at office No:820, Antriksha Bhawan K.G. Marg New Delhi -110001.
Note: 1
1. MATERIAL ACCOUNTING POLICIES
Company has adopted Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,2015
1.1 Statement of Compliance
The Ind AS Financial Statements were authorised for issue in accordance with a resolution of the Board of Directors of the company passed on 20th May 2024.
1.2 Basis of Preparation
The financial statements of the company are consistently prepared and presented under historical cost convention on an accrual basis in accordance with Ind AS except for certain financial assets and liabilities that are measured at fair values.
The company''s functional currency and presentation currency is Indian Rupees (INR). All amounts disclosed in the financial statements and notes are in INR except otherwise indicated.
Classification of Assets and Liabilities into current and Non- Current
The Company presents its assets and liabilities in the Balance Sheet based on current/ non-current classification.
As asset is treated as current when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when :
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liabilty for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle being a period within twelve months for the purpose of current and non-current classification of assets and liabilities.
1.3 Use of judgements, estimates and assumptions
The preparation of the company''s financial statements required management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosures of contingent liabilities. Uncertainity about these assumptions and estimates could result in outcomes that require a material adjustment in the future periods in the carrying amount of assets or liabilities affected.
In the company''s accounting policies, management has made judgements in respect of evaluation of recoverability of deferred tax assets,which has the most significant effect on the amounts recognised in the financial statements:
The following are the key assumptions concerning the future, and other other key sources of estimation uncertainity at the end of reporting period that may have significant risk of causing material adjustments to the carrying amounts of assets and liabilities with in :-
a) Useful life of property, plant and equipment and intangible assets: The company has estimated useful life of the Property, Plant and Equipment as specified in Schedule II to Companies Act 2013. However, the actual useful life for individual equipments could turn out to be different, there could be technology changes, breakdown, unexpected failure leading to impairment or complete discard. Alternately, the equipment may continue to provide useful service well beyond the useful assumed.
b) Fair value measurement of financial instruments: When the fair values of financial assets and financial liabilities cannot be measured based on quoted process in active market, the fair value is measured using valuation techniques including book value and discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not possible, a degree of judgement is required in establishing fair values.
c) Impairment of financial and non-financial assets: The impairment provisions for the financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the input for the impairment calculations, based on Company''s past history, existing market conditions, technology, economic developments as well as forward looking estimates at the end of each reporting period.
d) Taxes: Taxes have been paid / provided, exemptions availed, allowances considered etc. are based on the extent laws and the company''s interpretation of the same based on the legal advice received wherever required. These could differ in the view taken by the authorities, clarifications issued subsequently by the government and court, amendments to statues by the government etc.
e) Defined benefit plans: The cost of defined benefit plans and other post-employment benefits plans and the present value of such obligations are determined using acturial valuations. An acturial valuation involves making various assumptions that may differ from actual developments in the future.
f) Provisions: The Company makes provisions for leave encashment and gratuity, based on report received from the independent actuary. These valuation reports use complex valuation models using not only the inputs provided by the Company but also various other economic variables. Considerable judgement is involved in the process.
g) Contingencies: A provision is recognised 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 measured at the present value of management''s best estimate of the expenditure required to settle the present obligations at the end of the reporting period. However, the actual liability could be considerably different.
1.4 Property, Plant and Equipment
Freehold land is carried at historical cost. All other property, plant and equipment are stated at cost, net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of tangible assets comprises its purchase price, borrowing cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, initial estimation of any decommissioning obligations and finance cost.
When significant parts of the Property, Plant and Equipment are required to be replaced at intervals, the company derecognises the replaced part, and recognises the new part with its own associated useful life and depreciated accordingly. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement, if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
Cost of Software directly identified with hardware is recognised along with the cost of hardware.
An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit and Loss when the asset is derecognised.
Capital Work-in- progress includes cost of Property, Plant and Equipment which are not ready for their intended use.
The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and changes, if any, are accounted prospectively.
Depreciation on the Property, Plant and Equipment is provided over the useful life of assets as specified in Schedule II to the Companies Act, 2013 using Written Down Value method which are as under:
|
Nature of Assets |
Useful life as per Schedule II to Companies Act 2013 |
Useful life taken |
|
Furniture & Fixtures |
10 Years |
10 Years |
|
Vehicles |
8 Years |
8 Years |
|
Office Equipment |
5 Years |
5 Years |
|
Computer Hardware |
3 Years |
3 Years |
Property, Plant and Equipment which are added/ disposed off during the year, depreciation is provided on pro rata basis with reference to the month of addition / deletion.
In line with the provisions of Schedule II of the Companies Act 2013, the Company depreciates significant components of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life of those components. Useful life for such components has been assessed based on the historical experience and internal technical inputs.
Improvements to lease hold building is amortized over the lease period/residual life of lease period.
1.5 Investment Properties
Property that is held for long term rental yield or for capital appreciation or for both and that is not occupied by the company is classified as Investment property. Investment property is measured initially at its cost including related transaction cost and where applicable borrowing cost. Subsequent to initial recognition, Investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure is capitalised to assets carrying amount only when it is probable the future economic benefits associated with the expenditure will flow to the company and cost of item can be measured reliably. Though the company measures Investment Property using cost based measurement, the fair value of Investment Property is disclosed by way of note. Fair values are determined based on annual evaluation performed by external independent valuer applying valuation report as per Ind AS 113 "Fair Value Measurement".
Investment properties are derecognised either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. The difference between net disposal proceeds and the carrying amount of asset is recognised in profit or loss in period of derecognition.
Investment properties are depreciated using written down value method over their estimated useful life. Transfer of property from investment property to property, plant &
equipment is made when the property is no longer held for long term rental yield or for capital appreciation or both at carrying amount of property transferred.
1.6 Intangible Assets
Intangible Assets are recognised only if they are separately identiiable and the Company expects to receive future economic benefits arising out of them. Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Intangible assets with finite lives are amortised on straight line basis over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortised expense on intangible assets and impairment loss is recognised in the Statement of Profit and Loss.
Intangible Assets are amortised over a period of 5 Years.
The useful lives of intangible assets are assessed as either finite or indefinite.
Gains or losses arising from derecognition of an intangible asset are recognised in the Statement of Profit and Loss when the asset is derecognised.
Intangible assets with indefinite useful lives, are not amortised, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment loss on intangible assets with indefinite life is recognised in the Statement of Profit and Loss.
1.7 Impairment of Non- Financial assets
At each Balance Sheet date, the Company assesses whether there is an indication that an asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inlows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that relects 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.
1.8 Non-current Assets Held for Sale
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets
Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.
1.9 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.
A. Financial Assets:
(i) Classiication:
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit and loss on the basis of its business model for managing the financial asset and the contractual cash low characteristics of the financial asset.
(ii) Initial recognition and measurement
All Financial assets are recognised initially at fair value plus, in the case of financial assets not recognised at fair value through profit and loss, transaction costs that are attributable to the acquisition of the Financial asset.
(iii) Financial assets measured at amortised cost:
Financial assets are subsequently measured at amortised cost using effective interest rate method (EIR), if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. The losses arising from the impairment are recognised in the Statement of Profit and Loss.
(iv) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash lows and selling financial assets and the contractual terms give rise to cash flows that are solely payments of principal and interest on the principal outstanding.
(v) Financial assets measured at fair value through profit and loss
Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in profit and loss.
(vi) Derecognition of financial assets
A financial asset is primarily 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.
(vii) Investment in Subsidiaries
At Transition date, the company has fair valued its investment in subsidiaries and associate and fair value so determined is taken as deemed cost and thereafter the company follows cost model less impairment loss, if any.
AA. Impairment of Financial Assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss.
The Company follows ''simpliied approach'' for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
AAA. Impairment of Investment in Subsidiaries and associate
The company reviews its carrying value of investment carried at deemed cost ( net of impairment if any) annually or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted in statement of profit & loss A/c.
B. Financial Liabilities
(i) Classiication
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit and loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
(ii) Initial recognition and measurement
All financial liabilities are recognised initially at fair value, in the case of loans, borrowings and payables, net of directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
(iii) Subsequent measurement
All financial liabilities are re-measured at fair value through statement of profit and loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through statement of profit and
loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
(iv) Loans and borrowings
Interest bearing loans and borrowings are subsequently measured at amortised cost using effective interest rate (EIR) method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as well as through EIR amortisation process. The EIR amortisation is included as finance cost in the Statement of Profit and Loss.
(v) Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or canceled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modiied, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
(vi) Derivative financial instruments
The Company uses derivative financial instruments such as forward currency contracts and options to hedge its foreign currency risks. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. The gain or loss in the fair values is taken to Statement of Profit and Loss at the end of every period. Profit or loss on cancellations / renewals of forward contracts and options are recognised as income or expense during the period.
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously.
1.10 Fair value measurement
The Company measures certain financial assets and inancial liabilities including derivatives and deined benefit plans at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is signiicant to the fair value measurement as a whole:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is signiicant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the inancial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
1.11 Borrowing cost
Borrowing costs directly attributable to the acquisition, construction or production of an asset are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.12 Provisions, Contingent liabilities, Contingent Assets
A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outlow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligations at the end of the reporting period. 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 changes in the provision due to the passage of time are recognised as a finance cost.
Contingent liabilities are disclosed in the case of :
a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;
a present obligation arising from the past events, when no reliable estimate is possible;
a possible obligation arising from past events, unless the probability of outlow of resources is remote.
1.13 Employee Benefits
A. Short Term Benefits
Short Term Benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.
B. Post Employment benefits - Defined Benefit Plans: Gratuity ( Funded)
The Company has an obligation towards gratuity -a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of ive years of service and is payable thereafter on occurrence of any of above events.
The cost of providing beneits under the defined benefit plan is determined using the projected unit credit method with actuarial valuations being carried out at each Balance Sheet date, which is recognised in each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in the net interest on the net defined liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earning through Other Comprehensive Income in the period in which they occur. Re-measurements are not re-classified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognized in the Statement of Profit and Loss in the period of plan amendment.
Net interest is calculated by applying the discount rate to the net defined benefit plan liability or asset.
The Company recognizes the following changes in the net deined benefit obligations under employee benefit expenses in the Statement of Profit and Loss:
Service costs comprising of current service costs, past-service costs, gains and losses on curtailments and non- routine settlements
Net current expenses or income
C. Other Long-Term Employee Benefits - Compensated Absences/ Leave Encashment ( Unfunded)
The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The Company makes provisions for compensated absences based on an independent actuarial valuation carried out at each reporting date, using Projected Unit Cost Method. Actuarial gains and losses are recognized in the Statement of Profit and Loss.
1.14 Segment Information
The company operates in one operating segments namely Consulting Services and Investments.
1.15 Revenue Recognition
"The Company recognizes revenue in accordance with Ind AS 115, Revenue is to be recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those products or services. In respect of fixed price advisory and consultancy contracts, revenue is recognised using percentage of completion method (POC method) of accounting with contract cost incurred determining the degree of completion of performance obligation. Contract assets are recognised when there are excess of revenue earned over billing on contracts. Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there is unconditional right to receive cash, and scheduled date/period of billing as per contractual terms is not met."
Goods and Service Tax, wherever applicable is excluded from Revenue.
Interest
For all debt instruments measured either at amortized cost, 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 or to the amortized cost of a financial liability. When calculating the effective Interest rate, the Company estimates the expected cash flows by considering all the contractual terms of a financial instrument but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.
Dividend Income
Revenue is recognized when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Current Tax
The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to the Company.
Deferred Tax
Deferred tax is recognised using the Balance Sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that suficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the reporting 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 taxes relate to the same taxable entity and the same taxation authority.
1.16 Earnings per Share
Basic earnings per share are calculated by dividing the profit after tax or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. In case there are any dilutive securities during the period presented, the impact of the same is given to arrive at diluted earnings per share.
1.17 Leases
In accordance with IND AS 116, the Company recognizes right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of the lease liability adjusted for any lease payment made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any, and adjusted for any remeasurement of lease liability. The right of use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right of use asset. The estimated useful lives of right of use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modification or to reflect
revised- in-substance fixed lease payments, the company recognizes amount of remeasurement of lease liability due to modification as an adjustment to right of use assets and statement of profit and loss depending upon the nature of modification. Where the carrying amount of right of use assets is reduced to zero and there is further reduction in measurement of lease liability, the Company recognizes any remaining amount of the remeasurement in statement of profit and loss.
The Company has elected not to apply the requirements of IND AS 116 to short term leases of all assets that have a lease term of twelve month or less and leases for which the underlying asset is of low value and to those leasing arrangements where lease payment is not fixed and is variable. The lease payments associated with these leases are recognized as an expense over lease term.
1.18 Foreign exchange transactions
Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing at the reporting date. All exchange differences arising on translation of monetary items are dealt with in the Statement of Profit and Loss.
1.19 Skill India Project - Assets, Liability & Expenses
The company receives funds from Skill Development board for various skill development project. The untilized amount of funds received are shown as other current liabilities. The bank balances held which is earmarked for the concerned project is shown as Balance with Bank in earmarked account. The expenses incurred on the project are initially recognised as expense and then adjusted against amount received. The company do not account for any revenue on this account as no invoices are being raised.
Mar 31, 2023
Corporate Information
Rudrabhishek Enterprises Ltd.("the Company") is a company limited by shares incorporated and domiciled in India. The company is primarily engaged in the business of Integrated Real Estate & Infrastructure Consultants.
The registered office of the Company is situated at office No:820, Antriksha Bhawan K.G. Marg New Delhi New Delhi DL-110001.
Note: 11. SIGNIFICANT ACCOUNTING POLICIES
Company has adopted Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,2015
The Ind AS Financial Statements were authorised for issue in accordance with a resolution of the Board of Directors of the company passed on 24.05.2023
The financial statements of the company are consistently prepared and presented under historical cost convention on an accrual basis in accordance with Ind AS except for certain financial assets and liabilities that are measured at fair values.
The company''s functional currency and presentation currency is Indian Rupees (INR). All amounts disclosed in the financial statements and notes are in INR except otherwise indicated.
Classification of Assets and Liabilities into current and Non- Current
The Company presents its assets and liabilities in the Balance Sheet based on current/ non-current classification.
As asset is treated as current when it is:
a) expected to be realised or intended to be sold or consumed in normal operating cycle;
b) held primarily for the purpose of trading;
c) expected to be realised within twelve months after the reporting period; or
d) cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is treated as current when :
a) it is expected to be settled in normal operating cycle;
b) it is held primarily for the purpose of trading;
c) it is due to be settled within twelve months after the reporting period; or
d) there is no unconditional right to defer the settlement of the liabilty for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the company has ascertained its operating cycle being a period within twelve months for the purpose of current and non-current classification of assets and liabilities.
1.3 Use of judgements, estimates and assumptions
The preparation of the company''s financial statements required management to make judgements, estimates and assumptions that affect the reported amount of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosures of contingent liabilities. Uncertainity about these assumptions and estimates could result in outcomes that require a material adjustment in the future periods in the carrying amount of assets or liabilities affected.
In the company''s accounting policies, management has made judgements in respect of evaluation of recoverability of deferred tax assets,which has the most significant effect on the amounts recognised in the financial statements:
The following are the key assumptions concerning the future, and other other key sources of estimation uncertainity at the end of reporting period that may have significant risk of causing material adjustments to the carrying amounts of assets and liabilities with in :-
a) Useful life of property, plant and equipment and intangible assets: The company has estimated useful life of the Property, Plant and Equipment as specified in Schedule II to Companies Act 2013. However, the actual useful life for individual equipments could turn out to be different, there could be technology changes, breakdown, unexpected failure leading to impairment or complete discard. Alternately, the equipment may continue to provide useful service well beyond the useful assumed.
b) Fair value measurement of financial instruments: When the fair values of financial assets and financial liabilities cannot be measured based on quoted process in active market, the fair value is measured using valuation techniques including book value and discounted cash flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not possible, a degree of judgement is required in establishing fair values.
c) Impairment of financial and non-financial assets: The impairment provisions for the financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the input for the impairment calculations, based on Company''s past history, existing market conditions, technology, economic developments as well as forward looking estimates at the end of each reporting period.
d) Taxes: Taxes have been paid / provided, exemptions availed, allowances considered etc. are based on the extent laws and the company''s interpretation of the same based on the legal advice received wherever required. These could differ in the view taken by the authorities, clarifications issued subsequently by the government and court, amendments to statues by the government etc.
e) Defined benefit plans: The cost of defined benefit plans and other post-employment benefits plans and the present value of such obligations are determined using acturial valuations. An acturial valuation involves making various assumptions that may differ from actual developments in the future.
f) Provisions: The Company makes provisions for leave encashment and gratuity, based on report received from the independent actuary. These valuation reports use complex valuation models using not only the inputs provided by the Company but also various other economic variables. Considerable judgement is involved in the process.
g) Contingencies: A provision is recognised 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 measured at the present value of management''s best estimate of the expenditure required to settle the present obligations at the end of the reporting period. However, the actual liability could be considerably different.
1.4 Property, Plant and Equipment
Freehold land is carried at historical cost. All other property, plant and equipment are stated at cost, net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment loss, if any. The cost of tangible assets comprises its purchase price, borrowing cost, any costs directly attributable to bringing the asset into the location and condition necessary for it to be capable of operating in the manner intended by management, initial estimation of any decommissioning obligations and finance cost.
When significant parts of the Property, Plant and Equipment are required to be replaced at intervals, the company derecognises the replaced part, and recognises the new part with its own associated useful life and depreciated accordingly. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant and equipment as a replacement, if the recognition criteria are satisfied. All other repair and maintenance costs are recognised in the Statement of Profit and Loss as incurred.
Cost of Software directly identified with hardware is recognised along with the cost of hardware.
An item of Property, Plant and Equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit and Loss when the asset is derecognised.
Capital Work-in- progress includes cost of Property, Plant and Equipment which are not ready for their intended use.
The residual values and useful lives of Property, Plant and Equipment are reviewed at each financial year end, and changes, if any, are accounted prospectively.
Depreciation on the Property, Plant and Equipment is provided over the useful life of assets as specified in Schedule II to the Companies Act, 2013 using Written Down Value method which are as under:
|
Nature of Assets |
Useful life as per Schedule II to Companies Act 2013 |
Useful life taken |
|
Furniture & Fixtures |
10 Years |
10 Years |
|
Vehicles |
8 Years |
8 Years |
|
Office Equipment |
5 Years |
5 Years |
|
Computer Hardware |
3 Years |
3 Years |
Property, Plant and Equipment which are added/ disposed off during the year, depreciation is provided on pro rata basis with reference to the month of addition / deletion.
In line with the provisions of Schedule II of the Companies Act 2013, the Company depreciates significant components of the main asset (which have different useful lives as compared to the main asset) based on the individual useful life of those components. Useful life for such components has been assessed based on the historical experience and internal technical inputs.
Improvements to lease hold building is amortized over the lease period/residual life of lease period.
Property that is held for long term rental yield or for capital appreciation or for both and that is not occupied by the company is classified as Investment property. Investment property is measured initially at its cost including related transaction cost and where applicable borrowing cost. Subsequent to initial recognition, Investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. Subsequent expenditure is capitalised to assets carrying amount only when it is probable the future economic benefits associated with the expenditure will flow to the company and cost of item can be measured reliably. Though the company measures Investment Property using cost based measurement, the fair value of Investment Property is disclosed by way of note. Fair values are determined based on annual evaluation performed by external independent valuer applying valuation report as per Ind AS 113 "Fair Value Measurement".
Investment properties are derecognised either when they have been disposed off or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. The difference between net disposal proceeds and the carrying amount of asset is recognised in profit or loss in period of derecognition.
Investment properties are depreciated using written down value method over their estimated useful life. Transfer of property from investment property to property, plant & equipment is made when the property is no longer held for long term rental yield or for capital appreciation or both at carrying amount of property transferred.
Intangible Assets are recognised only if they are separately identiiable and the Company expects to receive future economic benefits arising out of them. Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortisation/ depletion and impairment loss, if any. The cost comprises purchase price, borrowing costs, and any cost directly attributable to bringing the asset to its working condition for the intended use.
Intangible assets with finite lives are amortised on straight line basis over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortised expense on intangible assets and impairment loss is recognised in the Statement of Profit and Loss.
Intangible Assets are amortised over a period of 5 Years.
The useful lives of intangible assets are assessed as either finite or indefinite.
Gains or losses arising from derecognition of an intangible asset are recognised in the Statement of Profit and Loss when the asset is derecognised.
Intangible assets with indefinite useful lives, are not amortised, but are tested for impairment annually. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. The impairment loss on intangible assets with indefinite life is recognised in the Statement of Profit and Loss.
1.7 Impairment of Non- Financial assets
At each Balance Sheet date, the Company assesses whether there is an indication that an asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
An asset''s recoverable amount is the higher of an asset''s or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inlows that are largely independent of those from other assets or groups of assets.
When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing the value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that relects 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.
Cash and cash equivalent in the Balance Sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to insigniicant risk of changes in value.
For the purpose of statement of cashflows, cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts as they are considered as an integral part of the Company''s cash management.
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows . The cash flows from operating, investing and financing activities of the Company are segregated.
Bank Balances other than above
Dividend escrow account balances, deposits with banks as margin money for guarantees issued by the banks, deposits kept as security deposits for statutory authorities are accounted as bank balances other than Cash and Cash equivalents.
1.9 Non-current Assets Held for Sale
Non-current assets classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell.
Non-current assets are classified as held for sale if their carrying amounts will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets
Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale.
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.
A. Financial Assets:
(i) Classiication:
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income, or fair value through profit and loss on the basis of its business model for managing the financial asset and the contractual cash low characteristics of the financial asset.
(ii) Initial recognition and measurement
All Financial assets are recognised initially at fair value plus, in the case of financial assets not recognised at fair value through profit and loss, transaction costs that are attributable to the acquisition of the Financial asset.
(iii) Financial assets measured at amortised cost:
Financial assets are subsequently measured at amortised cost using effective interest rate method (EIR), if these financial assets are held within a business whose objective is to hold these assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal outstanding. The losses arising from the impairment are recognised in the Statement of Profit and Loss.
(iv) Financial assets at fair value through other comprehensive income
Financial assets are measured at fair value through other comprehensive income if these financial assets are held within a business whose objective is achieved by both collecting contractual cash lows and selling financial assets and the contractual terms give rise to cash flows that are solely payments of principal and interest on the principal outstanding.
(v) Financial assets measured at fair value through profit and loss
Financial assets under this category are measured initially as well as at each reporting date at fair value. Fair value movements are recognised in profit and loss.
(vi) Derecognition of financial assets
A financial asset is primarily 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.
(vii) Investment in Subsidiaries
At Transition date, the company has fair valued its investment in subsidiaries and associate and fair value so determined is taken as deemed cost and thereafter the company follows cost model less impairment loss, if any.
AA. Impairment of Financial Assets
In accordance with Ind-AS 109, the Company applies Expected Credit Loss (ECL) model for measurement and recognition of impairment loss.
The Company follows ''simpliied approach'' for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECLs at each reporting date, right from its initial recognition.
AAA. Impairment of Investment in Subsidiaries and associate
The company reviews its carrying value of investment carried at deemed cost ( net of impairment if any) annually
or more frequently when there is indication for impairment. If the recoverable amount is less than its carrying amount, the impairment loss is accounted in statement of profit & loss A/c.
B. Financial Liabilities
(i) Classiication
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit and loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
(ii) Initial recognition and measurement
All financial liabilities are recognised initially at fair value, in the case of loans, borrowings and payables, net of directly attributable transaction costs. Financial liabilities include trade and other payables, loans and borrowings including bank overdrafts and derivative financial instruments.
(iii) Subsequent measurement
All financial liabilities are re-measured at fair value through statement of profit and loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through statement of profit and loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term.
(iv) Loans and borrowings
Interest bearing loans and borrowings are subsequently measured at amortised cost using effective interest rate (EIR) method. Gains and losses are recognised in Statement of Profit and Loss when the liabilities are derecognised as well as through EIR amortisation process. The EIR amortisation is included as finance cost in the Statement of Profit and Loss.
(v) Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged or canceled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modiied, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
(vi) Derivative financial instruments
The Company uses derivative financial instruments such as forward currency contracts and options to hedge its foreign currency risks. Such derivative financial instruments are initially recognized at fair value on the date on which a derivative contract is entered into and are
subsequently re-measured at fair value. The gain or loss in the fair values is taken to Statement of Profit and Loss at the end of every period. Profit or loss on cancellations / renewals of forward contracts and options are recognised as income or expense during the period.
C. Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously.
The Company measures certain financial assets and inancial liabilities including derivatives and deined benefit plans at fair value.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
In the principal market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.
All assets and liabilities for which fair value is measured or disclosed in the inancial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is signiicant to the fair value measurement as a whole:
Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is signiicant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the inancial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
Borrowing costs directly attributable to the acquisition, construction or production of an asset are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Borrowing costs consist of interest and other costs that an
entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
1.12 Provisions, Contingent liabilities, Contingent Assets
A provision is recognised when an enterprise has a present obligation as a result of past event and it is probable that an outlow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions are measured at the present value of management''s best estimate of the expenditure required to settle the present obligations at the end of the reporting period. 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 changes in the provision due to the passage of time are recognised as a finance cost.
Contingent liabilities are disclosed in the case of :
a present obligation arising from the past events, when it is not probable that an outflow of resources will be required to settle the obligation;
a present obligation arising from the past events, when no reliable estimate is possible;
a possible obligation arising from past events, unless the probability of outlow of resources is remote.
A. Short Term Benefits
Short Term Benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the period in which the related service is rendered.
B. Post Employment benefits - Defined Benefit Plans: Gratuity ( Funded)
The Company has an obligation towards gratuity -a defined benefit retirement plan covering eligible employees. The plan provides a lump sum payment to vested employees at retirement, death while in employment or on termination of employment of an amount equivalent to 15 days salary payable for each completed year of service or part thereof in excess of six months. Vesting occurs upon completion of ive years of service and is payable thereafter on occurrence of any of above events.
The cost of providing beneits under the defined benefit plan is determined using the projected unit credit method with actuarial valuations being carried out at each Balance Sheet date, which is recognised in each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in the net interest on the net defined liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained
earning through Other Comprehensive Income in the period in which they occur. Re-measurements are not re-classified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognized in the Statement of Profit and Loss in the period of plan amendment.
Net interest is calculated by applying the discount rate to the net defined benefit plan liability or asset.
The Company recognizes the following changes in the net deined benefit obligations under employee benefit expenses in the Statement of Profit and Loss:
Service costs comprising of current service costs, past-service costs, gains and losses on curtailments and non- routine settlements
Net current expenses or income
C. Other Long-Term Employee Benefits - Compensated Absences/ Leave Encashment ( Unfunded)
The Company provides for encashment of leave or leave with pay subject to certain rules. The employees are entitled to accumulate leave subject to certain limits for future encashment / availment. The Company makes provisions for compensated absences based on an independent actuarial valuation carried out at each reporting date, using Projected Unit Cost Method. Actuarial gains and losses are recognized in the Statement of Profit and Loss.
The company operates in one operating segments namely Consulting Services and Investments.
The Company recognizes revenue in accordance with Ind AS 115, Revenue is to be recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration which the company expects to receive in exchange for those products or services. In respect of fixed price advisory and consultancy contracts, revenue is recognised using percentage of completion method (POC method) of accounting with contract cost incurred determining the degree of completion of performance obligation. Contract assets are recognised when there are excess of revenue earned over billing on contracts. Contract assets are classified as unbilled revenue (only act of invoicing is pending) when there is unconditional right to receive cash, and scheduled date/period of billing as per contractual terms is not met.
Goods and Service Tax, wherever applicable is excluded from Revenue.
For all debt instruments measured either at amortized cost, 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 or to the amortized cost of a financial liability. When calculating the effective Interest rate, the Company estimates the expected
cash flows by considering all the contractual terms of a financial instrument but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss.
Dividend Income
Revenue is recognized when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Current Tax
The Company provides current tax based on the provisions of the Income Tax Act, 1961 applicable to the Company.
Deferred Tax
Deferred tax is recognised using the Balance Sheet approach. Deferred tax assets and liabilities are recognised for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount.
Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that suficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax assets to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the reporting 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 taxes relate to the same taxable entity and the same taxation authority.
Basic earnings per share are calculated by dividing the profit after tax or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. In case there are any dilutive securities during the period presented, the impact of the same is given to arrive at diluted earnings per share.
In accordance with IND AS 116, the Company recognizes right of use assets representing its right to use the underlying asset for the lease term at the lease commencement date. The cost of right of use asset measured at inception shall comprise of the amount of the initial measurement of
the lease liability adjusted for any lease payment made at or before commencement date less any lease incentive received plus any initial direct cost incurred and an estimate of cost to be incurred by lessee in dismantling and removing underlying asset or restoring the underlying asset or site on which it is located. The right of use asset is subsequently measured at cost less accumulated depreciation, accumulated impairment losses, if any, and adjusted for any remeasurement of lease liability. The right of use assets is depreciated using the straight-line method from the commencement date over the shorter of lease term or useful life of right of use asset. The estimated useful lives of right of use assets are determined on the same basis as those of property, plant and equipment. Right of use assets are tested for impairment whenever there is any indication that their carrying amounts may not be recoverable. Impairment loss, if any, is recognized in statement of profit and loss.
The Company measures the lease liability at the present value of the lease payments that are not paid at the commencement date of lease. The lease payments are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses incremental borrowing rate.
The lease liability is subsequently remeasured by increasing the carrying amount to reflect interest on lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modification or to reflect revised- in-substance fixed lease payments, the company recognizes amount of remeasurement of lease liability due to modification as an adjustment to right of use assets and statement of profit and loss depending upon the nature
of modification. Where the carrying amount of right of use assets is reduced to zero and there is further reduction in measurement of lease liability, the Company recognizes any remaining amount of the remeasurement in statement of profit and loss.
The Company has elected not to apply the requirements of IND AS 116 to short term leases of all assets that have a lease term of twelve month or less and leases for which the underlying asset is of low value and to those leasing arrangements where lease payment is not fixed and is variable. The lease payments associated with these leases are recognized as an expense over lease term.
1.18 Foreign exchange transactions
Foreign currency transactions are accounted for at the exchange rate prevailing on the date of the transaction. All monetary foreign currency assets and liabilities are converted at the exchange rates prevailing at the reporting date. All exchange differences arising on translation of monetary items are dealt with in the Statement of Profit and Loss.
1.19 Skill India Project - Assets, Liability & Expenses
The company receives funds from Skill Development board for various skill development project. The untilized amount of funds received are shown as other current liabilities. The bank balances held which is earmarked for the concerned project is shown as Balance with Bank in earmarked account. The expenses incurred on the project are initially recognised as expense and then adjusted against amount received. The company do not account for any revenue on this account as no invoices are being raised.
Mar 31, 2018
a) Corporate Information
Rudrabhishek Enterprises Private Limited was incorporated in the year 1992 under the provisions of Companies Act, 1956 with Registrar of Companies, Delhi having Registration No. U74899DL1992PTC050142. Thereafter it has been converted from private limited to public limited w.e.f 03rd November, 2017 u/s 18 of Company Act, 2013 having fresh Certificate of Incorporation bearing Registration No. U74899DL1992PLC050142. It is engaged in providing services in Urban Planning, Architecture and Civic Services Planning.
b) Basis of Preparation
The Financial Statements of the Company are prepared under historical cost convention in accordance with the Generally Accepted Accounting Principles (GAAP) applicable in India and the Accounting Standards and Statements issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 2013.
c) Use of estimates
The preparation of financial statements in conformity with the GAAP requires that the Management makes estimates and assumptions that affect the reported amount of assets and liabilities on the date of the Financial Statements, the reported amount of revenues & expenses during the reporting period and disclosures of Contingent Liabilities as at the date of Financial Statements. Actual results could differ from those estimates.
d) Current/ noncurrent classification
All assets and liabilities are classified into current and non-current Assets
An asset is classified as current when it satisfies any of the following criteria:
(a) It is expected to be realized in, or is intended for sale or consumption in, the Companyâs normal operating cycles;
(b) It is held primarily for the purpose of being traded;
(c) It is held expected to be realized within 12 months after the reporting date; or
(d) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least 12 months after the reporting date.
Current assets include the current portion for non-current financial assets.
All other assets are classified as non-current.
Liabilities
A Liability is classified as current when it satisfies any of the following criteria;
(a) it is expected to be settled in the Companyâs normal operating cycle;
(b) it is held primarily for the purpose of being traded;
(c) it is due to be settled within 12 months after the reporting date; or
(d) the Company does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Terms of a liability that could, at the option, of the counter party, results in its settlement by the issue of equity instruments do not affect its classification.
Current liabilities include current portion of non-current financial liabilities
All other liabilities are classified as non-current.
Operating Cycle
Operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents. The Companyâs normal operating cycle is 12 months.
e) Property, Plant and Equipment
All items of Property, Plant and Equipment are accounted as per Cost Model defined in AS 10 (Revised) Property Plant and Equipment. In this way items of property, plant and equipment are carried at its cost less any accumulated depreciation and any accumulated 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. Any trade discounts and rebates are deducted in arriving at the purchase price. Borrowing costs directly attributable to acquisition of fixed assets which take 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.
f) Depreciation/amortization Tangible Fixed Assets
Depreciation on Tangible Fixed Assets is provided at the rates and in the manner specified under Schedule II of Companies Act 2013 from Financial Year 2014-15 onwards and at the rates and in the manner specified under Schedule XIV of Companies Act 1956 upto Financial Year 2013-14 on Written Down Value Method.
Intangibles Fixed Assets
Intangible assets (Software) are being depreciated over a period of five years.
g) Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value.
An impairment loss is charged to the Profit and Loss account in the period in which an asset is identified as impaired.
The impairment loss recognized in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.
h) Borrowing Cost
Borrowing cost attributable to acquisition, construction or production of qualifying assets (assets which requires substantial period) is capitalized to the cost of respective assets up to the date of capitalization. All other borrowing costs are charged to statement of profit & loss.
i) Revenue Recognition:
(a) Architectural & Consultancy Services
Revenue has been recognized as per the terms of the agreement.
(b) Interest Income
Interest income is recognized using the time proportion method, taking in to account the amount outstanding and the rates applicable.
(c) Dividend
Dividend Income is recognized on actual receipt of dividend income.
(d) Other Revenue
Other Revenue is accounted for on accrual basis.
j) Employees Retirement/ other Benefits
Short-term employee benefits are recognized as an expense at the undiscounted amount in the Profit and Loss account of the period in which the related service is rendered.
Post employment and other long-term employee benefits are recognized as an expense in the Profit and Loss account for the period in which the employee has rendered services. The expense is recognized at the present value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long-term benefits are charged to the Profit and Loss account.
k) Inventories
Work in Process is valued at lower of cost or net realizable value in accordance with generally accepted principles and according to the guidelines of the Institute of Chartered Accountant of India
l) Provision Contingent Liabilities and Contingent Assets
A provision is recognized when the Company has a present obligation as a result of past event; it is probable that an outflow of resources 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 the 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.
Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or reliable estimate of the amount cannot be made, is also termed as contingent liability. A contingent asset is neither recognized nor disclosed in the financial statements.
m) Income Tax Expenses
i) Current Tax
The current charge for income taxes is calculated in accordance with the relevant tax regulations applicable to the Company.
ii) Deferred Tax
Deferred Tax or credit reflects the tax effects of timing differences between accounting income & taxable income for the period. The deferred tax charge or credit and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax assets are recognized only to the extent there is reasonable certainty that the assets can be realized in future. However, where there is unabsorbed Depreciation or carry forward of losses, deferred tax assets are recognized only if there is a virtual certainty of realization of such assets. Deferred tax assets are revised at each Balance Sheet date & written down or written up to reflect the amount that is reasonably /virtually certain (as case may be) to be realized.
iii) Minimum Alternate Tax
Minimum Alternate Tax (MAT) paid in a period 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 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 Alternate 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 Entitlementâ. 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 sufficient period.
n) Foreign Currency Transactions
a) Transactions denominated in the foreign currencies are recorded at the exchange rate prevailing on the date of transaction or that approximates the actual rate at the date of transaction.
b) Any income or expenses on account of exchange differences either on settlement or on translation is recognized in the Profit & Loss account except in the case of long term liabilities, where they relate to acquisition of fixed assets, in which case they are adjusted to the carrying amount of such asset.
o) Valuation of Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as long-term investments.
Current Investments are carried at the lower of cost or quoted / fair value computed scrip wise, Long Term Investments are stated at cost. Provision for diminution in the value of long term investments is made only if such decline is other than temporary.
p) 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 the weighted average number of shares outstanding during the period are adjusted for the effect of all dilutive potential equity shares.
q) Cash and Cash Equivalent
Cash and cash equivalents comprise cash at bank and in hand and short-term investments with balance maturity period of three months or less as on the Balance Sheet date.
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