SIGNIFICANT ACCOUNTING POLICIES AND OTHER EXPLANATORY INFORMATION FOR THE YEAR ENDED 31 MARCH 2015 Background of the Company Cineline India Limited was incorporated on 22 May 2002. The Company is into the business of renting out brmises owned by the Company and operating windmill. 1. Basis of brparation of financial statements The financial statements which have been brpared under historical cost convention on the accrual basis of accounting, are in accordance with the applicable requirements of the Companies Act, 2013 (the "Act") and comply in all material aspects with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended). 2. Use of estimates The brparation of financial statements in conformity with the generally accepted accounting principles requires management to make estimates and assumption that affect the reported amounts of assets and liabilities, revenue and expenses and disclosure of contingent liabilities. The estimates and assumptions used in accompanying financial statements are based upon management's evaluation of the relevant facts and circumstances as of the date of the financial statements. Actual results may differ from the estimates and assumptions used in brparing the accompanying financial statements. Any revision to accounting estimates is recognised prospectively in current and future periods. 3. Significant accounting policies a. Revenue recognition (i) Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured. (ii) Interest income is recognised on a time proportionate basis, taking into account the amount outstanding and the rates applicable. (iii) Revenue from rent and common area maintenance is recognised based upon the agreement, for the period the property has been let out. (iv) Revenue from sale of power is booked on monthly basis as per the power generation reports at wind farm and the same is sold to State Government. (v) Revenue from car parking is based on the actual collection depending on the vehicles parked at the respective sites or as per the agreement entered into for the property. (vi) Advertisement income is recognised as and when advertisements are displayed at the property. b. Fixed assets and debrciation / amortisation (i) Fixed assets are stated at cost less accumulated debrciation, amortisation and impairment losses. Cost includes purchase price, inward freight, taxes and expenses incidental to acquisition and installation, up to the point the asset is ready for its intended use. (ii) Debrciation is provided, pro rata for the period of use, on the straight line method (SLM) as per the useful life of the assets brscribed under Schedule II to the Companies Act, 2013. c. Impairment of assets In accordance with Accounting Standard 28 "Impairment of Assets" as specified under section 133 of the Act, read with the Rule 7 of the Companies (Accounts) Rules, 2014 as amended, the carrying amounts of the Company's assets are reviewed at each balance sheet date to determine whether there is any impairment. The recoverable amount of the assets (or where applicable, that of the cash generating unit to which the asset belongs) is estimated as the higher of its net selling price and its value in use. An impairment loss is recognised whenever the carrying amount of an asset or a cash-generating unit exceeds its recoverable amount. Impairment loss is recognised in the statement of profit and loss or against revaluation surplus where applicable. d. Investments Investments are classified into long term investments and current investments. Long term investments are carried at cost. Provision for diminution in the value of long-term investments is not provided for unless it is considered other than temporary. Current investments are valued at lower of cost and net realisable value. e. Borrowing costs Borrowing costs incurred on constructing or acquiring a qualifying asset are capitalised as cost of that asset/project until it was ready for its intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. All other borrowing costs were charged to revenue and recognised as an expense in the statement of profit and loss. f. Foreign currency transactions (i) Initial recognition - Transactions denominated in foreign currencies were recorded at the rates of exchange brvailing on the date of the transaction. (ii) Conversion - Monetary assets and liabilities denominated in foreign currencies were converted at the rate of exchange brvailing on the date of the balance sheet. (iii) Exchange differences - All exchange differences arising on settlement/conversion on foreign currency transactions were included in the statement of profit and loss in the year in which they arise. g. Employee benefits (i) All short term employee benefits are accounted on undiscounted basis during the accounting period based on services rendered by employees. (ii) The Company contributes to statutory provident fund in accordance with Employees Provident Fund and Miscellaneous Provisions Act, 1952 that is a defined contribution plan and contribution paid or payable is recognised as an expense in the period in which the employee renders services. (iii) The Company's liability towards gratuity and compensated absences being defined benefit plans is accounted for on the basis of an independent actuarial valuation done at the year end and actuarial gains/losses are charged to the statement of profit and loss. h. Operating lease Lease of assets under which all the risks and rewards of ownership are effectively retained by the lessor are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight line basis over the lease term. i. Taxes on income Current tax Current tax is computed and provided for in accordance with the applicable provisions of the Income Tax Act, 1961. Minimum alternate tax Minimum alternate tax (MAT) paid in accordance with the tax laws gives rise to future economic OTHER EXPLANATORY INFORMATION benefits in the form of adjustments of future income tax liability. The same is considered as an asset if there is convincing evidence that the Company will pay normal income tax after the tax holiday period. Accordingly, MAT credit is recognised as an asset in the balance sheet when it is probable that the future economic benefits associated with it will flow to the Company and the asset can be measured reliably. Deferred tax 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 are recognised only to the extent that there is a reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. If the Company has unabsorbed debrciation or carry forward tax losses, deferred tax assets are recognised only if there is a virtual certainty supported by convincing evidence that such deferred tax assets can be realised against future taxable profits. At each balance sheet date the Company reassesses 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. j. Provisions and contingencies The Company creates a provision when there is brsent obligation as a result of a past event that probably requires an outflow of resources embodying economic benefits and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a brsent obligation that may, but probably will not, require an outflow of resources. When there is a possible obligation or a brsent obligation in respect of which the likelihood of outflow of resources is remote, no provision or disclosure is made. 3. Based on the available information with the management, the Company does not owe any sum to a micro, small or medium enterprise as defined in Micro, Small and Medium Enterprises Development Act, 2006. 4. Balances of certain trade receivables, advances and trade payables are subject to confirmation / reconciliation and subsequent adjustment, if any. In the opinion of the management such adjustment are not likely to be material. 5. Previous year comparatives Figures for the brvious year have been regrouped wherever considered necessary to confirm with the current year's brsentation. For Walker Chandiok & Co LLP (Formerly known as Walker, Chandiok & Co) Chartered Accountants Sudhir N. Pillai Partner For and on behalf of the Board of Directors Rasesh B. Kanakia Chairman DIN no.-00015857 Jitendra Mehta Chief Financial Officer Himanshu B. Kanakia Managing Director DIN no.-00015908 Jatin Shah Company Secretary Place : Mumbai Date : 27 May, 2015 |