1. CORPORATE INFORMATION
Compuage Infocom Limited (the Company) is a Public Limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on the BSE Ltd. and National Stock Exchange of India Ltd.
The Company is engaged in trading in Computer parts and peripherals, Software and Telecom Products. The Company also provides products support services for Information Technology products.
i. Pursuant to Para D5 of Ind AS 101, the Company has exercised option to consider fair value on the date of transition as deemed cost for office premises. Rest all other assets are accounted as per Ind AS.
ii. The Company has hypothicated Office Premises to avail the loan from the Bank.
Terms / rights attached to Equity Shares
The Company has only one class of Equity Shares having a par value of Rs.2.00 per share. Each holder of Equity Shares is entitled to one vote per share.
In the event of liquidation of the Company, the holder of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts.
The distribution will be in proportion to the number of Equity Sahres held by Shareholders.
The Dividend proposed by the Board of Directors is subject to the approval of the Shareholders in the ensuing Annual General Meeting. During the year ended March 31, 2018, the amount of per share final dividend proposed as distribution to the Equity Shareholders is Rs..0.40 per share (March 31, 2017 :Rs.0.40 per share)
Nature and purpose of other reserves
a) Securities Premium Reserve
Securities Premium Reserve is used to record the premium on issue of shares. The reserve is utilised in accordance with the provisions of the Companies Act, 2013.
Term loan from Indian Bank (secured by hypothecation of office premises) carry interest of 10.50% p.a. and is repayable in 20 equal quarterly installments of Rs.125 Lakhs each along with interest.
Term loan from other refer Loan from Tata Capital Financial Services Ltd. (secured by personal guarantee of Directors) carry interest of 11.00% p.a. and is repayable in 24 equal quarterly instalment of Rs.12.5 Lakhs each along with interest.
The Company has not defaulted on repayment of loans and interest during the year.
b) The Statutory income tax rate applied for computing current tax @ 34.608 % & for Deferred Tax @ 34.944% as applicable to the Company.
c) No aggregate amounts of current and deferred tax have arisen in the reporting periods which have been recognised in Equity and not in Statement of Profit and Loss or Other Comprehensive Income.
f) Deferred Tax Liabilities (Net)
The balance comprises temporary differences attributable to the below items and corresponding movement in Deferred Tax Liabilities / (Assets):
The Company does not envisage any likely reimbursements in respect of the above.
The above matters are currently being considered by the tax authorities and the Company expects the judgment will be in its favour and has therefore, not recognised the provision in relation to these claims. Future cash outflow in respect of above will be determined only on receipt of judgement / decision pending with tax authorities. The potential undiscounted amount of total payments for taxes that the Company could be required to make if there was an adverse decision related to these disputed demands of regulators as of the date reporting period ends are as illustrated above.
NOTE 2 : EMPLOYEE BENEFIT OBLIGATIONS
Funded Scheme
a) Defined Benefit Plans:
Gratuity
The Company operates a gratuity plan through the Life Insurance Corporation of India'. Every Employee is entitled to a benefit equivalent to fifteen days salary last drawn for each completed year of service in line with the Payment of Gratuity Act, 1972 or Company scheme whichever is beneficial. The same is payable at the time of separation from the Company or retirement, whichever is earlier. The benefits vest after five years of continuous service.
NOTE 3 : TRANSITION TO IND AS
These are the First Financial Statements of the Company prepared in accordance with Ind AS.
The Accounting Policies set out in Note 1 have been applied in preparing the Financial Statements for the year ended March 31, 2018, the comparative information presented in these Financial Statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS Balance Sheet as at April 1, 2016 (the date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in Financial Statements prepared in accordance with the Accounting Standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (Previous GAAP). An explanation of how the transition from Previous GAAP to Ind AS has affected the financial position, financial performance and cash flows of the Company is set out in the following tables and notes:
NOTE 3 (A) : EXEMPTIONS AND EXCEPTIONS AVAILED
In preparing these Ind AS Financial Statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 First-time Adoption of Indian Accounting Standards (Ind AS 101), as explained below. The resulting difference between the carrying values of the assets and liabilities in the Financial Statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity). This Note explains the adjustments made by the Company in restating its Previous GAAP Financial Statements, including the Balance Sheet as at April 1, 2016 and the Financial Statements as at and for the year ended March 31, 2017.
a) Ind AS optional exemptions
Set out below are the applicable Ind AS 101 voluntary exemptions applied in the transition from Previous GAAP to Ind AS.
i) Deemed cost
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date except for certain class of assets which are measured at fair value as deemed cost.
ii) Investments in Subsidiary Companies, Associate Company and Joint Venture Company
Ind AS 101 permits a first-time adopter to measure it's investment, at the date of transition, at cost determined in accordance with Ind AS 27, or deemed cost, The deemed cost of such investment shall be it's fair value at date of transition to Ind AS of the Company, or Previous GAAP carrying amount at that date. The Company has elected to measure its investment in Subsidiary Companies, Associate Company and Joint Venture Company under Previous GAAP carrying amount as its deemed cost on the transition date.
b) Ind AS mandatory exceptions
The Company has applied the following exceptions from full retrospective application of Ind AS as mandatorily required under Ind AS 101:
i) Estimates
Estimates in accordance with Ind AS at the transition date will be consistent with estimates made for the same date in accordance with Previous GAAP (after adjustments to reflect any difference in Accounting Policies) unless there is objective evidence that those estimates were in error.
Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with Previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under Previous GAAP :
1) Investment in equity instruments carried at FVPL or FVOCI
2) Fair value of investment properties
ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets (investment in debt instruments) on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
* The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.
c) Impact of Ind AS adoption on the Standalone Statements of Cash Flows for the year ended March 31, 2017
The transition from Indian GAAP to Ind AS has not had a material impact on the Statement of Cash Flows.
NOTE 3 (C) : NOTES TO RECONCILIATION BETWEEN PREVIOUS GAAP AND IND AS
a) Property, Plant and Equipment
The Company has elected to measure items of property, plant and equipment and intangible assets at its carrying value at the transition date except for certain class of assets which are measured at fair value as deemed cost.
b) Fair Valuation of Long Term Borrowings
Under Ind AS loan processing fees / transaction costs are considered for calculating effective interest rate. The impact for the periods subsequent to the date of transition is reflected in the Statement of Profit and Loss.
c) Deferred Tax
Under Previous GAAP, deferred tax were accounted for using the income statement approach which focuses on differences between taxable profit and accounting profit for the period. Ind AS requires entities to account for deferred taxes using the Balance Sheet approach which focuses on temporary differences between the carrying amount of an asset or liability in the Balance Sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred taxes on temporary differences which were not required to be recorded under Previous GAAP.
In addition, the various transitional adjustments have led to deferred tax implications which the Company has accounted for. Deferred tax adjustments are recognised in correlation to the underlying transaction either in Retained earnings or Other Comprehensive Income on the date of transition.
d) Proposed Dividend
Under Previous GAAP, dividends proposed by the Board of Directors after the Balance Sheet date, but before the approval of the Financial Statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by the Shareholders in the General Meeting. Accordingly, the liability for proposed dividend (including dividend distribution tax) of Rs.282.79 Lakhs as at April 1, 2016 and Rs.282.79 Lakhs as at March 31, 2017 included under current provisions has been reversed with corresponding adjustment to Retained earnings. Consequently, the total equity has increased by an equivalent amount.
e) Retained Earnings
Retained earnings as at April 1, 2016 have been adjusted consequent to the above Ind AS transition adjustments.
f) Other Comprehensive Income
Under Ind AS, all items of income and expense recognised in a period are to be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss, but are shown in the Statement of Profit and Loss as Other Comprehensive Income which includes remeasurement of defined benefit plans, effective portion of gain | (loss) on cash flow hedging instruments and fair value gain | (loss) on FVOCI equity instruments. The concept of Other Comprehensive Income did not exist under Previous GAAP.
NOTE 4 : SEGMENT REPORTING
The Company operates only in one reportable segment.
NOTE 5 : LEASE ARRANGEMENTS
The Company procures office premises under operating lease agreements that are renewable on a periodic basis at the option of both lessor and lessee. The initial tenure of the lease is below 12 months. The lease rentals recognised in the Statement of Profit and Loss for the year are Rs.735.45 Lakhs (previous year Rs.683.47 Lakhs). The contingent rent recognised in the Statement of Profit and Loss for the year is Nil (previous year Nil).
NOTE 6 : CAPITAL MANAGEMENT
Risk Management
The primary objective of Capital Management of the Company is to maximise Shareholder value. The Company monitors capital using Debt-Equity Ratio which is Total Debt divided by Total Equity. For the purposes of Capital Management, the Company considers the following components of its Balance Sheet to manage capital:
Total Equity includes General Reserve, Retained Earnings, Share Capital, Security Premium. Total Debt includes Current Debt plus Non-Current Debt less Cash and Cash Equivalents & Other Bank Balances.
NOTE 7 : OUTSTANDING DUES OF MICRO ENTERPRISE AND SMALL ENTERPRISE
There are no Micro, Small and Medium Enterprises, as defined in the Micro, Small and Medium Enterprises Development Act, 2006 to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made.
The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
NOTE 8 : VALUATION OF IMPORTS
Valuation of Imports calculated on C.I.F. basis for one year period ended March 31, 2018 is Rs.66,164 Lakhs (Previous year Rs.38,332.23 Lakhs).
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