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Moneycontrol.com India | Accounting Policy > Computers - Software - Training > Accounting Policy followed by Shanti Educational Initiatives Limited - BSE: 539921, NSE: N.A
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Shanti Educational Initiatives Limited

BSE: 539921|ISIN: INE440T01010|SECTOR: Computers - Software - Training
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Shanti Educational Initiatives Limited is not listed on NSE
Mar 16
Accounting Policy Year : Mar '18

Note:1 Significant Accounting Policies, Contingent Liabilities and Notes Forming Part of Accounts

1.1 BASIS OF ACCOUNTING

(a) Financial statements have been prepared under the historical cost convention in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) and comply with the Accounting Standards issued by the Institute of Chartered Accountants of India and referred to section 129 & 1330020of the Companies Act, 2013.

The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

(b) The Company follows the mercantile system of accounting on a going concern basis.

1.2 USE OF ESTIMATE

The presentation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosure relating to contingent assets and liabilities as at the date of financial statements are reported amounts of incomes and expenses during the period. Actual results could differ from those estimates.

1.3 FIXED ASSETS AND CAPITAL WORK IN PROGRESS

A. FIXED ASSET

Fixed Assets are recorded at cost of acquisition/construction less accumulated depreciation and impairment losses, if any. Cost comprises the purchase price and the attributable cost of bringing the asset to its working condition for its intended use. Where the construction or development of any such asset requiring a substantial period of time to set up for its intended use, is funded by borrowings if any, the corresponding borrowing cost are capitalized upto the date when the asset is ready for its intended use.

B. CAPITAL WORK IN PROGRESS

Projects under which fixed assets are not yet ready for their intended use are carried at cost, comprising direct cost, related incidental expenses and attributable interest.

1.4 DEPRECIATION / AMORTIZATION

Except for Building, depreciation is charged on written down value method (WDV) and on Building depreciation is charged on Straight Line Method (SLM) as per useful life prescribed under Schedule II of the Companies Act, 2013. Any addition to an existing asset which is of capital nature and which becomes an integral part of the existing asset is depreciated over the remaining useful life of that asset.

Patent and Trademark is amortized on its useful life of 10 years as certified by the management.

Depreciation for additions / deletion from assets is calculated pro-rata from the day of additions/deletion.

1.5 REVENUE RECOGNITION

A. Sales of Franchisee and other material Traded are recognized net of refund/returned and discounts, if any, when significant risks and rewards of ownership of products are passed on to customers but excluding Value Added Tax and Service Tax till 30.06.2017 and w.e.f 01.07.2017 excluding GST, where ever applicable.

B. Revenue from Franchisee constituting one time Franchisee fee (non - refundable) is recognized upon receipt of fee from the Franchisee. The recurring revenue from Franchisee and Royalty is recognized on accrual basis but excluding Service Tax/GST wherever applicable.

C. Revenue from Dividend income is recorded when right to receive the income arises.

D. Interest and Rent income is accounted on time proportional basis and in respect of rent excluding Service Tax/GST wherever applicable.

1.6 INVENTORIES

a) Inventories are stated at Cost or Net realizable value whichever is lower after considering credit of VAT.

b) In determining cost of franchise Materials and material/goods, weighted average method is used.

1.7 INVESTMENTS

Long Term Investments are stated at cost less provision for permanent diminution in value, if any, as at the Balance sheet date.

1.8 RETIREMENT BENEFITS

a) Short Term Benefits

Short term employees benefits are recognized as an expense at the undiscounted amount expected to be paid over the period of services rendered by the employees to the company.

b) Long Term Benefits

The company has no defined contribution however has defined benefit plans and on that basis provisions are made in the books as per actuarial valuation calculated by approved valuer for gratuity. However, there is no defined contribution and benefit plan for leave encashment.

C) Actuarial gains and losses comprise experience adjustments and the effects of changes in actuarial assumptions and are recognized in the statement of Profit & Loss in the year in which they arise.

1.9 FOREIGN CURRENCY TRANSACTION

Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount at the exchange rate between the reporting currency and foreign currency at the date of the transactions.

Foreign currency monetary items are reported using the closing rate. Non - monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.

Exchange differences arising on the settlement of monetary or on reporting a company’s monetary items at rates different from those at which they were initially recorded during the year, or reported in the previous financial statements, are recognized as income or as expenses in the year in which they arise.

Monetary assets & liabilities denominated in foreign currency remaining unsettled at the year-end are translated at the closing rates.

1.10 BORROWING COST

Borrowing costs includes interest incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs, if any, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized. All other borrowing costs are expensed are expensed in the period they occur.

1.11 PRELIMINARY EXPENDITURE

Preliminary expenditure, if any, is to be apportioning in five equal installments, commencing from the year in which the expenditure has been incurred.

1.12 TAXES ON INCOME

A) Current tax

The current charge for income taxes is calculated in accordance with the relevant income tax regulations applicable to the company.

B) Deferred Tax

Deferred tax charge or credit (reflecting the tax effects to timing differences between accounting income and taxable income of the period) and the corresponding deferred tax liabilities or assets are recognized using the tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred Tax assets are recognized only to the extend there is reasonable certainty that the assets can be realized in future; however, where there is unabsorbed depreciation or carried forward loss under taxation laws, deferred tax assets are recognized only if there is virtual certainty of realization of such assets. Deferred tax assets are reviewed at each balance sheet date and written down or written up to reflect the amount that is reasonably/virtually certain (as the case may be) to be realized.

C) Minimum alternate tax (MAT)

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit & loss as current tax. The company recognizes MAT credit available as an asset only to the extent that there is convincing evidence that the company will pay normal income tax during the 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 “MAT credit entitlement” The company reviews the “MAT credit entitlement” asset to the extent the company does not have convincing evidence that it will pay normal tax during the specified period.

1.13 PRIOR PERIOD ITEMS

Prior period incomes & expenditures are treated as current year’s income/expenditure.

1.14 PROVISION

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 embodying economic benefits will be required to settled the obligation and on a reliable estimate can be made of the amount of obligation.

1.15 EARNING PER SHARE

The earning considered in ascertaining the company’s EPS comprises the Net Profit or Loss for the period after and extraordinary items. The basic EPS is computed on the basis of weighted average number of equity shares outstanding during the year.

1.16 Corporate social responsibility expenditure

Corporate social responsibility expenditure are charged to the statement of profit and loss as an expense in the year in which they are incurred.

1.17 Lease

All leases are classified into operating and finance lease at the inception of the lease. Leases that transfer substantially all risks and rewards from lessor to lesses are classified as finance lease and others being classified as operating lease. There are no finance lease transactions entered by the company. Rent Expense represent operating leases which are recognized as an expense.

1.18 CASH AND CASH EQUIVALENT

Cash and cash equivalents comprise cash and balance with Banks.

1.19 CONTINGENT LIABILITIES

Contingent Liabilities are determined on the basis of available information and explanations given to us and are disclosed by way of note to the accounts.

Source : Dion Global Solutions Limited
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