Santosh Industries Ltd. కంపెనీ అకౌంటింగ్ విధానాలు

Mar 31, 2018

1. Significant Accounting Policies

a. Basis of preparation of Financial Statements

The financial statements have been prepared in conformity with generally accepted accounting principles (Indian GAAP) to comply in all material respects with the Accounting Standards (''AS'') prescribed under relevant provisions of the Companies Act, 2013 (''the Act'') and the guidelines issued by the Reserve Bank of India (''RBI'') as applicable to a Non Banking Finance Company (''NBFC''). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

b. Use of estimates

The preparation of financial statements in conformity with generally accepted accounting principles (Indian GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting year end.

Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates. Any revisions to the accounting estimates are recognized prospectively in the current and future years.

c. Fixed Assets, Depreciation/Amortization and Impairment

i. Fixed Assets

Fixed assets are stated at cost less accumulated depreciation/amortization and impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

ii. Depreciation/Amortisation

Pursuant to the enactment of Companies Act, 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortized carrying value is being depreciated/amortised over the revised/remaining useful lives using WDV method.

iii. Impairment of assets

The carrying amount of assets is reviewed at each balance sheet date if there is any indication of impairment based on internal/external factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the assets, net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value at the weighted average cost of capital.

After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.

A previously recognized impairment loss is increased or reversed depending on changes in circumstances. However the carrying value after reversal is not increased beyond the carrying value that would have prevailed by charging usual depreciation if there was no impairment.

d. Investments

Investments intended to be held for not more than a year are classified as current investments. All other investments are classified as non current (long-term) investments. The investments are stated at cost.

e. Inventories

Inventories are valued at lower of cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost necessary to make sale.

f. Provisioning /Write-off of assets

i. The Company makes provision for Standard and Non-Performing Assets are as per Master Directions-Non Banking Financial Company-Non Systemically important Non-Deposit taking Company ( Reserve Bank) Directions, 2016 as amended from time to time.

ii. Loans and advances which, as per management are not likely to be recovered , are considered as bad debts and written off.

g. Revenue recognition

Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured.

i. Interest on loan is recognized on accrual basis except in case of Non Performing Assets ("NPAa") where interest is recognized upon realization, as per the Prudential Norms/ Directions of RBI, applicable to NBFCs.

ii. Interest income on fixed deposits/margin money, call money (CBLO), certificate of deposits and pass through certificates are recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.

iii. Revenue from trading in securities /intraday transactions are accounted for on trade date basis.

iv. Dividend Income: Revenue is recognized when the shareholders/units holders right to receive/payment of dividend is established.

v. All other income is accounted for on accrual basis.

h. Income tax

Tax expense comprises of current tax [(net of Minimum Alternate Tax (MAT) credit entitlement)] and deferred tax.

Current tax is the amount of tax payable on the taxable income for the year determined in accordance with the provisions of the Income Tax Act, 1961. Deferred tax reflects the impact of timing differences between taxable income and accounting income for the current reporting year and reversal of timing differences of earlier years.

Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the Balance Sheet date. Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities. The deferred tax assets and deferred tax liabilities relate to the taxes on income levied by the same governing taxation laws. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each Balance Sheet date, the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

MAT credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. In the year in which the MAT credit becomes eligible to be recognised as an asset in accordance with the recommendations contained in guidance note issued by The Institute of Chartered Accountants of India, the said asset is created by way of a credit to the Statement of Profit and Loss and shown as MAT Credit Entitlement. The Company reviews the same at each Balance Sheet date and writes down the carrying amount of MAT Credit Entitlement to the extent there is no longer convincing evidence to the effect that the Company will pay normal income tax during the specified period.

i. Segment reporting

The Company''s operating businesses are organized and managed in one segment only. The analysis of geographical segments is based on the areas in which major operation of the company exists.

j. Earnings per share

Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting attributable taxes) by the weighted average number of equity shares outstanding during the year.

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 effects of all dilutive potential equity shares.

k. Provisions

A provision is recognised when the company has a present obligation as a result of past event; it is probable that outflow of resources will be required to settle the obligation, in respect of which a reliable estimate be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.