Arco Leasing Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2025

1 CORPORATE INFORMATION

Arco Leasing Limited (“the Company”) is a listed public limited company incorporated on February 1, 1984.

2 SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under section 133 of Companies Act, 2013 (the Act) [Companies (Indian Accounting Standards) Rules, 2015] and other relevant provision of the Act.

2.2 Significant accounting judgements, estimates and assumptions

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

The Company prepared its financial statements based on assumptions and estimates on parameters available at that time. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Fair value measurement of financial instruments

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share based payment transactions that are within the scope of Ind AS 102, leasing transactions that are within the scope of Ind AS 17, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2, or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 inputs are inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3 inputs are unobservable inputs for the asset or liability.

2.3 Income tax

The income tax expense or credit for the period is the tax payable on the current period''s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charges is calculated on the basis of the tax laws enacted at the end of the reporting period in India. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be 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 asset to be recovered.

2.4 Provisions, contingent liabilities and contingent assets

Provisions are recognised when the Company has a present legal or constructive obligation, as a result of past events, and it is probable that an outflow of resources, that can reliably be estimated, will be required to settle such an obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the statement of profit and loss as a finance cost. Provisions are reviewed at each balance sheet date and are adjusted to reflect the current best estimate.

Contingent liabilities are not recognised but disclosed where the existence of an obligation will only be confirmed by future events or where the amount of the obligation cannot be measured reliably. Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable.

2.5 Financial instruments

A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.

(i) Financial assets

All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit and loss.

Subsequent measurement of debt instruments depends on the Company’s business model for managing the assets and the cash flow characteristics of the assets. There are three measurement categories into which the Company classifies its debt instruments;

Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows represent solely payment of principal and interest (SPPI) are measured at amortised cost. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.

Fair value through other comprehensive income (FVOCI): Assets that are held for collection of contractual cash flows and for selling the assets, where the assets'' cash flows represent solely payment of principal and interest (SPPI), are measured at fair value through other comprehensive income. Fair value movements are recognised in the other comprehensive income, except for the recognition of impairment gains or losses, interest income and foreign exchange gain and losses which are recognised in profit and loss. When the financial assets is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified from equity to profit or loss. Interest income from these financial assets is included in other income using the effective interest rate method.

Fair value through profit and loss (FVPL): Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. Debt instruments included within the FVPL category are measured at fair value with all changes recognized in the statement in profit and loss. Interest income from these financial assets is included in other income using the effective interest rate method.

All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVPL. For all other equity instruments, the Company may classify the same either as at FVTOCI or FVPL. The Company makes such election on an instrument-by-instrument basis. The classification is made on initial recognition and is irrevocable.

Equity instruments which are classified as FVOCI, all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to profit and loss, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVPL category are measured at fair value with all changes recognised in the profit or loss.

Impairment of financial assets

The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost and FVOCI debt instruments. The impairment methodology applied depends on whether there has been a significant increase in credit risk.

The Company applies the ‘simplified approach’ for recognition of impairment loss allowance on trade receivables. The application of simplified approach does not require the Company to track changes in credit risk. Rather, it recognise impairment loss allowance based on lifetime Expected Credit Losses" (ECL) at each reporting date, right from its initial recognition.

For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.

Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events on a financial instrument that are possible within 12 months after the reporting date. ECL is the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. When estimating the cash flows, an entity is required to consider:

• All contractual terms of the financial instrument (including prepayment, extension, call and similar options) over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.

• Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms

ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit or loss. This amount is reflected in a separate line in the profit or loss as an impairment gain or loss.

(ii) Financial liabilities

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and trade and payables, net of directly attributable transaction costs. The measurement of financial liabilities depends on their classification, as described below:

Financial liabilities at fair value through profit or loss:

Financial liabilities at fair value through profit or loss include financial liabilities designated upon initial recognition as at fair value through profit or loss. For liabilities designated as FVPL, fair value gains/ losses attributable to changes in own credit risk are recognized in OCI. These gains/ loss are not subsequently transferred to profit or loss. However, the Company may transfer the cumulative gain or loss within equity. All other changes in fair value of such liability are recognised in the statement of profit or loss.

Financial liabilities at amortized cost

Financial liabilities classified and measured at amortised such as loans and borrowings, trade and other payable are initially recognized at fair value, net of transaction cost incurred. After initial recognition, financial liabilities are subsequently measured at amortised cost using the Effective interest rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.

De-recognition

A financial liability is derecognised 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 de-recognition 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 or loss.

2.6 Property, Plant and Equipment

Tangible assets are stated at cost of acquisition less accumulated depreciation and impairment loss, if any. Cost include acquisition cost which is directly attributable to bring the assets to its working condition.

The company has not charged any depreciation for the current year the balance in the fixed asset represent the scrap value of the asset at the time of sale as per the provisions contained in companies act, 2013.

2.7 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and in hand, short-term deposits with banks with original maturity of less than three months and short-term highly liquid investments, that are readily convertible into cash and which are subject to insignificant risk of changes in the principal amount. Bank overdrafts, which are repayable on demand and form an integral part of the operations are included in cash and cash equivalents.

2.8 Segment Reporting

The accounting policies adopted for segment reporting are in conformity with the accounting policies of the Company. Segment revenue, segment expenses, segment assets and segment liabilities have been identified to segments on the basis of their relationship to the operating activities of the segment.Revenue, expenses, assets and liabilities which relate to the Company as a whole and are not allocable to segments on a reasonable basis have been included under ‘unallocated revenue / expenses / assets / liabilities’.

2.9 Earnings per share

Basic earnings per share are computed by dividing the profit / (loss) by the weighted average number of equity shares outstanding during the year. Earnings considered in ascertaining the Company’s earnings per share are the profit / (loss) for the year after deducting preference dividends and attributable taxes attributable to equity shareholders. The weighted average number of equity shares outstanding during the year and for all years presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the profit / (loss) for the year are adjusted for the effects of changes in income, expenses, tax and dividends that would have occurred had the dilutive potential equity shares been converted into equity shares. Such adjustments after taking account of tax include preference dividends or other items related to convertible preference shares, interest on convertible debt and any other changes in income or expense that would result from the conversion of dilutive potential ordinary shares. The weighted average number of shares outstanding during the year is adjusted for the effects of all dilutive potential equity shares.

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Mar 31, 2024

2.1 Basis of preparalion

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ihd AS) notified under section 133
of Companies Act, 2013 (the Act) [Companies < Indian Accounting Standards) Rules, 201 S| and other relevant provision of the Act.

2.2 Significant accounting judgements, estimates and assumptions

The preparation of financial statements requires rnanagoment to make judgements, estimates and assumptions that effect the reported amounte
of revenues, expenses, assets end liabilities, and the accompanying disclosures. and the disclosure of contingent liabilities. Uncertainty about
these assumptions and estimates could result in outcomes that require a material adjustment to tire- oa trying amount of assets or liabilities affected
in Mture periods

The Company prepared its financial statements based on assumptions end estimates on parameters available at that time. Existing
circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising ih=t are
beyond the control of tin* Company Suoh changes are reflected lh tire assumptions when they ooctr.

Fair value measurement of financial instruments

Fair value is the price that would ba received to sell an asset or paid id transfer a liability in an orderly transaction between market participants sit
tiie measurement dste, regardless cf whether that price is directly observable or estimated using another valuation technique. In estimating the
fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take
those characteristics into account when pricing the- asset or liability at the measurement date. Fair value for measurement and/or cfsdosure
purposes in these financial statements is determined on such a basis, except for share based payment transactions that are wlthih the scope ''Of
Ind AS 102. leasing transactions that are within tin* scope of Ihd AS 17, and measurements that have some similarities to fair Value but are net fair
value, such as net realisable value in Ind AS 2 or value in use in Ind AS 36.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1,2, or 3 based on the degree to which the inputs
to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described
as fallows:

Level 1 inputs are quoted fences {unadjusted) m active markets tor Identical assets or liabilities that the entity can access at the measurement
date;

Level 2 inputs are inputs other than quoted prices Ihcluded wtthlh Level 1. that are observable tor tie asset of liability, elflrer directly of Indirectly;
and

Level 3 Inputs ate Uhobservable Inputs for the asset or liability.

2.3 Income tax

The income tax expense or credit fbr the period is the tax payable on the current period''s taxable income based on the applicable income tax rate
adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and tc unused tax losses.

me current Income tax charges is calculated on the bass of the tax laws enacted at the ehd of tine reporting period lh India. Management
periodically evaluates positiohs taken m the fax returns with respect to situations in which appricahe tax reflations are subject to interpretation
and establishes provisions where appropriate.

The carrying amount: of defah-ed tax assets is reviewed at each reporting date and reduced to the extent that it is ho longer probable that sufficient
taxable profit Will be available to si low all or part of tire deferred tax asset to be utilised. Unteooghised deferred tax assets are re-assessed at eaeh
reporting date and are recognised to the extent that it has become probable that Mure taxable profits Will allow the deferred tax asset to be
recovered

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Mar 31, 2015

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

The financial statements are prepared as a going concern under historical cost convention on accrual basis and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles.

b. FIXED ASSETS:-

Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation and subsequent additional cost in respect of major reconditioning expenses enhancing the standard of performance of the assets less accumulated depreciation. All costs, including financing cost till commencement of commercial production are capitalized.

c. DEPRECIATION

Depreciation has not been provided during the year in accordance with Schedule II of the Companies Act, 2013 with effect from 1st April, 2014 as the carrying amount of tangible fixed assets is either equal to or less than residual value.

d. INVESTMENTS

Investments are classified into current and long-term investments. Current and Long Term Investments are stated at the lower of cost or fair value. Provision for diminution, if any, in the value of long-term investments is made only if such decline is not temporary in nature.

e. BASIS OF ACCOUNTING:-

All income and expenditure items having a material bearing on the financial statements are recognized on mercantile basis except certain items where it is not possible to ascertain the quantum thereof with reasonable accuracy, are accounted for on cash basis.

f. INCOME TAX:-

The Company provides for Income Tax as per provisions of Income Tax Act, 1961.

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Mar 31, 2014

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

The financial statements are prepared as a going concern under historical cost convention on accrual basis and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles.

b. FIXED ASSETS:-

Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation and subsequent additional cost in respect of major reconditioning expenses enhancing the standard of performance of the assets less accumulated depreciation. All costs, including financing cost till commencement of commercial production are capitalized.

c. DEPRECIATION:-

The Company has provided depreciation on fixed assets under Written Down Value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d. INVESTMENTS:-

Investments are classified into current and long-term investments. Current Investments are stated at the lower of cost or fair value. Long-term investments are stated at cost. Provision for diminution, if any, in the value of long-term investments is made only if such decline is not temporary in nature.

e. BASIS OF ACCOUNTiNG:-

All income and expenditure items having a material bearing on the financial statements are recognized on mercantile basis except certain items where it is not possible to ascertain the quantum thereof with reasonable accuracy, are accounted for on cash basis.

f. INCOME TAX:-

The Company provides for Income Tax as per provisions of Income Tax Act, 1961.

Current & Deferred Taxation

Provision for the current Tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income Tax Act, 1961, Deferred Tax resulting from "timing differences" between book and taxable profit wherever material is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred Tax Asset, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

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Mar 31, 2013

A. BASIS OF PREPARED :

The financial statements are prepared as a going concern under historical cost convention on accrual basis and in accordance with tfc: Companies Act, I m. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles.

b. FIXED ASSFTSV

exiled Assets are staled at uteri original cost inducting incidental expenses rotate to acquisition and installation and subsequent additional cost in respect of major reconditioning expenses enhancing the standard of performance of the assets less accumulated depreciation. Ail ousts, including financing cost till commencement of commercial production are capitalized.

c. Depreciation

Tote Company has provided depreciation on fixed assets under Written Down Value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d. INVESTMENTS:-

Investments'' are current ano long-term investments.

Laurent investments are sue attune rower 01 cost or fair value, Long-term investments arc stated at cost. Provision diminution, if any, in the value of long- term investments is made only if such decline is not temporary in nature.

e. BASIS OF ACCOUNTING:

Ait income ana expcnuiturc items name a material Bearing on ten financial statements arc rccogniaeo on mercantile basis except certain items where it is not possible to ascertain the quantum thereof with reasonable accuracy, are accounted for on cash basis.

f. INCOME TAX

Tube Company provides for Income Tan as per Tax Ace, urgent & Deferred Tanation

Provision tor [he current Tax is made on the bails of the amount of [ax payable on taxable income for the year in accordance with the Income Tax Act, 1961, Deferred Tax resulting from "timing differences between bonk and taxable prolong where year material Es aero anted the tax rates and laws mat have been enacted or substantially enacted as on balance sheet date. Deferred Tax Asset, subject to consideration of prudence are recogmzed and carried forward only to the extent tilt the is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized,

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Mar 31, 2012

A. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:-

The financial statements are prepared as a going concern under historical cost convention on accrual basis and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles.

b. FIXED ASSETS:-

Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation and subsequent additional cost in respect of major reconditioning expenses enhancing the standard of performance of the assets less accumulated depreciation. All costs, including financing cost till commencement of commercial production are capitalized.

c. DEPRECIATION

The Company has provided depreciation on fixed assets under Written Down Value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d. INVESTMENTS:-

Investments classified as long term Investments are stated at cost. Provision for diminution, if any, in the value of long term investments is made to recognize a decline other than temporary in the fair value of investments.

The fair value of a long term investment is ascertained with reference to its market value, investee's assets and results and the expected cash flows from the investment as well as the strategic importance to the Company. Current Investments are stated at lower of cost and fair value.

e. BASIS OF ACCOUNTING:-

All income and expenditure items having a material bearing on the financial statements are recognized on mercantile basis except certain items where it is not possible to ascertain the quantum thereof with reasonable accuracy, are accounted for on cash basis.

f. INCOME TAX:-

The Company provides for Income Tax as per provisions of Income Tax Act, 1961.

Current & Deferred Taxation

Provision for the current Tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income Tax Act, 1961, Deferred Tax resulting from "timing differences" between book and taxable profit wherever material is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred Tax Asset, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax asset can be realized.

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Mar 31, 2010

A. BASIS OF PREPRATION OF FINANCIAL STATEMENTS:

The financial statements are prepared as a going concern under historical cost convention on accrual basis and in accordance with the Companies Act, 1956. Accounting policies not stated explicitly otherwise are consistent with generally accepted accounting principles.

b. FIXED ASSTES:

Fixed Assets are stated at their original cost including incidental expenses related to acquisition and installation and subsequent additional cost in respect of major reconditioning expenses enhancing the standard of performance of the assets less accumulated depreciation. All costs, including financial cost till commencement of commercial production are capitalized.

c. DEPRECIATION:

The Company has provided depreciation on fixed assets under Written Down Value method at the rates and in the manner prescribed in Schedule XIV of the Companies Act, 1956.

d. BASIS OF ACCOUNTING:

All income and expenditure items having a material bearing on the financial statements are recognized on mercantile basis except certain items where it is not possible to ascertain the quantum thereof with reasonable accuracy, are accounted for on cash basis.

e. INCOME TAX:

The company provides for Income tax as per provisions of Income Tax Act, 1961.

Current & Deferred Taxation

Provisions for the current Tax is made on the basis of the amount of tax payable on taxable income for the year in accordance with the Income Tax Act, 1961, Deferred Tax resulting from "Time differences" between book and taxable profit wherever material is accounted for using the tax rates and laws that have been enacted or substantially enacted as on balance sheet date. Deferred tax Asset, subject to consideration of prudence, are recognized and carried forward only to the extent that there is reasonable certainty that sufficient further taxable income will be available against which such deferred tax assets can be realized.