(J) Provisions and Contingencies
Provisions:
Provisions are recognised when there is a present obligation (legal or constructive]
as a result of a past event, it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation and there is a reliable
estimate of the amount of the obligation. Provisions are measured at the best
estimate of the expenditure required to settle the present obligation at the Balance
sheet date and are discounted to its present value as appropriate.
Contingent Liabilities:
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 or 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 a reliable
estimate of the amount cannot be made, is termed as a contingent liability.
(K) Revenue recognition
Revenue is measured at fair value of the consideration received or receivable.
Revenue is recognized when (or as] the Company satisfies a performance obligation
by transferring a promised good or service (i.e. an asset] to a customer. An asset is
transferred when (or as] the customer obtains control of that asset.
When (or as] a performance obligation is satisfied, the Company recognizes as
revenue the amount of the transaction price (excluding estimates of variable
consideration] that is allocated to that performance obligation.
The Company applies the five-step approach for recognition of revenue:
i. Identification of contract(s) with customers;
ii. Identification of the separate performance obligations in the contract;
iii. Determination of transaction price;
iv. Allocation of transaction price to the separate performance obligations; and
v. Recognition of revenue when (or as] each performance obligation is
satisfied.
(L) Other income:
Interest: Interest income is calculated on effective interest rate, but recognised
on a time proportion basis taking into account the amount outstanding and the
rate applicable.
Dividend: Dividend income is recognised when the right to receive dividend is
established.
(M) Finance Cost:
Borrowing costs that are directly attributable to the acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets. A qualifying asset
is one that necessarily takes substantial period of time to get ready for its intended
use. Based on borrowings incurred specifically for financing the asset or the weighted
average rate of all other borrowings, if no specific borrowings have been incurred for
the asset.
Interest income earned on the temporary investment of specific borrowings pending
their expenditure on qualifying assets is deducted from the borrowing costs eligible
for capitalization.
Borrowing costs include exchange differences arising from foreign currency
borrowings to the extent they are regarded as an adjustment to the interest cost.
All other borrowing costs are charged to the Statement of Profit and Loss for the
period for which they are incurred.
(N) Earnings per share (EPS):
Basic EPS is 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 EPS, the net profit or loss for
the period attributable to equity shareholders and the weighted average number of
additional equity shares that would have been outstanding are considered assuming
the conversion of all dilutive potential equity shares. Earnings considered in
ascertaining the EPS is the net profit for the period and any attributable tax thereto
for the period.
(O) Employee benefits:i. Gratuity
The Company is not covered under the provisions of the Payment of Gratuity
Act, 1972 as the number of employees is below the prescribed threshold.
Accordingly, no liability towards gratuity benefits has been recognized in the
financial statements. The Company shall account for gratuity obligations, if
any, in accordance with applicable laws and the requirements of Ind AS 19,
Employee Benefits.
(Q) Fair Value Measurement:
The Company measures financial instruments such as investments in quoted share,
certain other investments etc. at fair value at each Balance Sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a
liability at the measurement date. All assets and liabilities for which fair value is
measured or disclosed in the financial statements are categorized within the fair
value hierarchy, described as follows, based on the lowest level input that is
significant to the fair value measurement as a whole.
Level 1 -Quoted (unadjusted] market prices in active markets for identical
assets or liabilities.
Level 2 -Valuation techniques for which the lowest level input that is
significant to the fair value measurement is directly or indirectly
observable.
Level 3 -Valuation techniques for which the lowest level input that is
significant to the fair value measurement is unobservable.
(P) 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.
Financial assets:Initial recognition
Financial assets are recognized when the Company becomes a party to the
contractual provisions of the instruments. Financial assets other than trade
receivables and other specific assets are initially recognized at fair value plus
transaction costs for all financial assets not carried at fair value through profit or
loss. Financial assets carried at fair value through profit or loss are initially
recognized at fair value, and transaction costs are expensed in the Statement of
Profit and Loss.
Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at
amortized cost, fair value through other comprehensive income or fair value
through profit or loss on the basis of both:
i. The entity’s business model for managing the financial assets and
ii. The contractual cash flow characteristics of the financial asset.
De-recognition
The Company derecognizes a financial asset when the contractual rights to the
cash flows from the financial asset expire, or it transfers rights to receive cash
flows from an asset, it evaluates if and to what extent it has retained the risks and
rewards of ownership. When it has neither transferred nor retained substantially
all of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognize the transferred asset to the extent of the
Company’s continuing involvement. In that case, the Company also recognizes an
associated liability. The transferred asset and the associated liability are measured
on a basis that reflects the rights and obligations that the Company has retained.
Financial Liabilities:Initial Recognition and Subsequent Measurement
All financial liabilities are recognized initially at fair value and in case of
borrowings and payables, net of directly attributable cost. Financial liabilities are
subsequently carried at amortized cost using the effective interest method. For
trade and other payables maturing within one year from the Balance Sheet date,
the carrying amounts approximate fair value due to the short maturity of these
instruments. Changes in the amortized value of liability are recorded as finance
cost.
De-recognition
A financial liability is de-recognized when the obligation under the liability is
discharged or cancelled 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 modified, 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 recognized in the
statement of profit or loss.
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