Home  »  Company  »  Future Retail  »  Quotes  »  Accounting Policy
Enter the first few characters of Company and click 'Go'

Accounting Policies of Future Retail Ltd. Company

Mar 31, 2015

A. Basis of Preparation

Financial statements have been prepared in accordance with Generally Accepted Accounting Principles in India (Indian GAAP) under the historical cost convention on an accrual basis in compliance with all material aspects of the Accounting standards (As) notified under section 133 of the Companies Act, 2013 read together with the paragraph 7 of the Companies (Accounts) Rules 2014. The Financial statements have been prepared under the historical cost convention on an accrual basis.

B. Use of Estimates

Preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in differences between the actual results and estimates which are recognised in future period.

C. Tangible Fixed Assets and Depreciation

Tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. Depreciation is provided pro rata for the period of use on straight line basis as per the useful life of the assets prescribed under schedule II of the Companies Act, 2013 except for leasehold improvements which are depreciated over the remaining expected lease term and employee perquisite related assets which are depreciated over three years.

D. Intangible Assets and Amortisation

Intangible Assets are stated at acquisition cost less accumulated amortisation and accumulated impairment losses, if any. Intangible assets are amortised on straight line basis over their estimated useful life of ten years.

E. Investments

Current investments are carried at lower of cost and fair value computed on individual investment basis. Long- term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in value.

F. Inventories

Inventories are valued at lower of cost and net realizable value. Finished goods and Work-in-Progress include cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories are computed on weighted average basis.

G. Foreign Currency Transaction

Transactions in foreign currencies are recorded at the prevailing rates of exchange on the date of transaction. Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the balance sheet date. All gains and losses arising out of fluctuations in exchange rates are accounted for in the statement of Profit and Loss. exchange differences on forward contracts entered into for hedging foreign exchange fluctuation risk in respect of an underlying asset/liability, are recognised in the statement of profit and loss in the reporting period in which the exchange rate changes. Premium/Discount on foreign exchange contracts are recognised as an expense/income over the life of the contract.

H. Borrowing Costs

Borrowing costs, 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, are capitalized as part of the cost of the respective asset. All other borrowing costs are charged in the period they occur in the statement of Profit and Loss.

I. Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. sales are recognised when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts VAT and sales Tax. Revenue from services are recognised as they are rendered based on agreements/arrangements with the concerned parties and recognised net of service tax (If applicable). Interest income is recognised on time proportion basis taking into account the amount outstanding and the applicable rate. Dividend income is recognised when right to receive is established.

J. Retirement and Other Employee Benefits

Short term employee benefits are recognised as an expense at the undiscounted amount in the statement of Profit and Loss for the period in which the related service is rendered.

Post employment and other long term employee benefits are recognised as an expense in the statement of Profit and Loss for the period in which the employee has rendered services. The expense is recognised at the present of the amounts payable determined using actuarial valuation techniques. Actuarial gain and loss in respect of post employment and other long term benefits are charged to statement of Profit and Loss.

K. Income Taxes

Tax expense includes provision for current tax and deferred tax. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of the Income Tax Act, 1961.Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted as at the Balance sheet date. Deferred tax asset is recognised and carried forward only to the extent that there is virtual certainty that the asset will be realised in future.

Minimum Alternative Tax (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 the guidance note issued by Institute of Chartered Accountants of India ('ICAI'), the said asset is created by way of a credit to the statement of Profit and Loss. 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 Company will pay normal income tax during the specified period.

L. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised, but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

M. Impairment

The carrying amounts of assets are reviewed at each Balance sheet date if there is any indication of impairment based on internal/external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognised in prior years is recorded when there is an indication that the impairment losses recognised for the assets no longer exist or have decreased.

N. Leases

Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as operating leases and lease rental thereof are charged to the statement of Profit and Loss as per the terms of agreement which is representative of the time pattern of the user's benefit.


Mar 31, 2014

A. Basis of Preparation

Financial statements have been prepared in accordance with generally accepted accounting Principles in india (indian gaaP) under the historical cost convention on an accrual basis in compliance with all material aspects of the accounting standards (as) notified under the companies act 1956 ("the act") read with the general circular 15/2013 dated september 13, 2013 of the Ministry of corporate affairs in respect of section 133 of the companies act, 2013 and the relevant provisions of the companies act 1956 (to the extent applicable) and companies act, 2013 (to the extent notified).

B. Use of estimates

Preparation of financial statements in conformity with indian gaaP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in differences between the actual results and estimates which are recognized in future periods.

c. Fixed assets and Depreciation

tangible fixed assets are stated at cost, less accumulated depreciation and impairment loss, if any. cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use.

Depreciation is provided on straight line basis at the rates and in the manner prescribed under schedule XiV of the companies act, 1956 except leasehold improvements which are amortized over the lease period and employee perquisite related assets which are depreciated over three years.

Computer software is amortized over six years. Fixed assets, individually costing less than Rupees Five thousands are fully depreciated in the year of purchase. Depreciation on the fixed assets added/disposed off/discarded during the period is provided on pro-rata basis with reference to the month of addition/disposal/discarding.

D. Investments

investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. all other investments are classified as long-term investments. investments are recorded at cost, which includes acquisition charges such as brokerage, stamp duty, taxes etc. current investments are stated at lower of cost and fair value computed on individual investment basis. long-term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in value.

e. Inventories

Inventories are valued at lower of cost, computed on weighted average basis, and net realizable value.

Cost of inventories comprises all costs of purchases and other costs incurred in bringing the inventories to their present condition and location.

Materials and other items held for use in the production of inventories are written down below cost only if the finished products in which they will be used are expected to be sold below cost.

F. Foreign currency transaction

Transactions in foreign currencies are recorded at the prevailing rates of exchange on the date of transaction. Monetary items denominated in foreign currencies, are restated at the prevailing rates of exchange at the balance sheet date. all gains and losses arising out of fluctuations in exchange rates are accounted for in the statement of Profit and loss. exchange differences on forward contracts entered into for hedging foreign exchange fluctuation risk in respect of an underlying asset/liability, are recognized in the statement of profit and loss in the reporting period in which the exchange rate changes. Premium/Discount on foreign exchange contracts are recognized as an expense/income over the life of the contract.

g. Borrowing costs

Borrowing costs, 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, are capitalized as part of the cost of the respective asset. all other borrowing costs are charged in the period they occur in the statement of Profit and loss.

H. 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. sales are recognized when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts and Vat. Revenue from services are recognized as they are rendered based on agreements/arrangements with the concerned parties and recognized net of service tax (if applicable). interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable rate. Dividend income is recognized when right to receive is established.

i. Retirement and other employee Benefits

Employee benefits such as salaries, allowances, non-monetary benefits and employee benefits under defined contribution plans such as provident fund and other funds, which fall due for payment within a period of twelve months after rendering service, are charged as expense to the statement of profit and loss for the period in which the service is rendered.

Employee benefits under defined benefit plans and other long term employee benefits such as gratuity and compensated absences which fall due for payment after completion/cessation of employment or after a period of twelve months from rendering service are measured by the projected unit credit method, based on actuarial valuations at each balance sheet date carried out by independent actuaries. the company''s obligations recognized in the balance sheet represent the present value of obligations as reduced by the fair value of plan assets, where applicable. actuarial gains and losses are recognized immediately in the statement of profit and loss.

J. Taxation

Tax expense includes provision for current tax and deferred tax. Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the provisions of the income tax act, 1961.Deffered tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted as at the Balance sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

K. Provisions, contingent liabilities and contingent assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. contingent liabilities are not recognized, but are disclosed in the notes. contingent assets are neither recognized nor disclosed in the financial statements.

l. Impairment of assets

The carrying amounts of assets are reviewed at each Balance sheet date if there is any indication of impairment based on internal/ external factors. an asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. an impairment loss, if any, is charged to the statement of Profit and loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

M. Leases

Leases where significant portion of risk and reward of ownership are retained by the lessor are classified as operating leases and lease rental thereof are charged to the statement of Profit and loss as per the terms of agreement which is representative of the time pattern of the user''s benefit.

(ii) Terms/Rights attached to equity shares

The company has equity shares having a par value of Rs. 2/- each at the Balance sheet Date. equity shares have been further classified in to equity shares carrying normal voting and dividend rights (ordinary shares) and equity shares carrying differential voting and dividend rights class B (series-1) shares.

Each holder of ordinary shares, is entitled to one vote per member in case of voting by show of hands and one vote per ordinary shares held in case of voting by poll/ballot. each holder of equity share is also entitled to normal dividend (including interim dividend, if any) as may declared by the company.

Each holder of class B (series -1) shares, is entitled to one vote per member in case of voting by show of hands and three vote per four class B (series-1) shares held in case of voting by poll/ballot. each holder of class B (series-1) share is also entitled to 2% additional dividend in addition to normal dividend (including interim dividend, if any) as may declared by the company. Further, the company may declare dividend only for class B (series-1) share upto 2% without declaring any dividend for equity shares.

All other rights would be same for both classes of equity shares.

The company declares and pays dividends in indian Rupees. the dividend proposed by the Board of Directors is subject to approval of the shareholders in the annual general Meeting.

In the event of liquidation of company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. the distributions will be in proportion to the number of equity shares held by shareholder.

(iii) The company does not have any holding company.

(iv) Shares in the company held by each shareholder holding more than 5 percent shares and number of shares held are as under:

(v) Pursuant to the provisions of section 206a of the companies act, 1956, the issue of 11,400 equity shares is kept in abeyance.

(vi) Shares allotted as fully paid up without payment received in cash (during 5 years preceding March 31, 2014).

Allotted 59,28,818 equity shares of Rs. 2/- each and 63,47,635, 0.01% compulsory convertible Preference shares of Rs. 100/- each as fully paid up pursuant to scheme of arrangement.

(vii) The company has reserved issuance of 25,00,000 (2012 : nil) equity shares of Rs. 2/- each for offering to eligible employees of the company under employees stock option scheme (esos). During the period, company has granted 2,76,279 (2012 : nil ) revised to 3,05,192 options, post corporate action affecting option value and transfer of certain options to Future lifestyle Fashions limited due to transfer of the employees pursuant to scheme of arrangement, to the eligible employees at exercise price of Rs. 20/- per option, again revised post corporate action to exercise price of Rs. 10/- per option plus all applicable taxes, as may be levied in this regard on the company. out of the options granted, 11,798 options were cancelled due to cessation of employment. the options would vest over a maximum period of 3 years or such other period as may be decided by the nomination and Remuneration committee from the date of grant based on specified criteria.


Dec 31, 2012

A. Basis of preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India (IGAAP) under the historical cost convention on accrual basis and comply in all material aspects with the Accounting Standards notified under Section 211(3C) and other relevant provisions of the Companies Act, 1956.

B. Use of Estimates

Preparation of financial statements in conformity with IGAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in differences between the actual results and estimates which are recognized in future periods.

C. Fixed Assets and Depreciation

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

Borrowing costs attributable to acquisition and construction of qualifying assets are capitalized as a part of the cost of such assets up to the date when such assets are ready for its intended use.

Depreciation is provided on straight line basis at the rates and in the manner prescribed under Schedule XIV of the Companies Act, 1956 except leasehold improvements which are amortized over the lease period and employee perquisite related assets which are depreciated over three years.

Computer software is amortized over six years. Fixed assets, individually costing less than Rupees Five thousands are fully depreciated in the year of purchase. Depreciation on the fixed assets added/ disposed off/ discarded during the period is provided on pro-rata basis with reference to the month of addition/ disposal/ discarding.

D. Investments

Current Investments are carried at lower of cost and fair value computed on individual investment basis. Long-term investments are stated at cost after deducting provisions made, if any, for other than temporary diminution in value.

E. Inventories

Inventories are valued at lower of cost, computed on weighted average basis, and net realizable value.

Cost of inventories comprises all costs of purchases and other costs incurred in bringing the inventories to their present condition and location.

Materials and other items held for use in the production of inventories are written down below cost only if the finished products in which they will be used are expected to be sold below cost.

F. Transactions in foreign currency

Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction.

Monetary foreign currency items at the year end are restated at year end rates. In case of items which are covered by forward exchange contracts, the difference between the year end rate and the rate on the date of the contract is recognized as exchange difference and the premium paid on forward contracts is recognized over the life of the contract. All exchange differences, either on settlement or translation, are recognized in the Statement of Profit and Loss.

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.

Sales are recognized when significant risk and rewards of ownership of the goods have passed to the buyer which coincides with delivery and are recorded net of trade discounts and VAT.

Interest income is recognized on time proportion basis taking into account the amount outstanding and the applicable rate.

Dividend income is recognized when right to receive is established.

H. Retirement and other employee benefits

Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.

Post employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the period in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post employment and other long term benefits are charged to Statement of Profit and Loss.

I. Taxation

Provision for current tax is made on the basis of estimated taxable income for the current accounting period in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from "timing difference" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as at the Balance Sheet date. Deferred tax asset is recognized and carried forward only to the extent that there is virtual certainty that the asset will be realized in future.

J. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized, but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements.

K. Impairment of assets

The carrying amounts of assets are reviewed at each Balance Sheet date if there is any indication of impairment based on internal/ external factors. An asset is treated as impaired when the carrying cost of the assets exceeds its recoverable value. An impairment loss, if any, is charged to the Statement of Profit and Loss in the year in which an asset is identified as impaired. Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the assets no longer exist or have decreased.

L. Leases

Leases where significant portion of risk and reward of ownership are retained by the Lessor are classified as operating leases and lease rental thereof are charged to the Statement of Profit and Loss as per the terms of agreement which is representative of the time pattern of the user''s benefit.


Jun 30, 2010

1. Basis of Accounting

The financial statements are prepared under historical cost convention on accrual basis and in accordance with applicable accounting standards notified by the Government of India/issued by the Institute of Chartered Accountants of India and the provisions of the Companies Act, 1956.

2. Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates. Any revision to accounting estimates is recognised prospectively in current and future periods. Difference between the actual results and estimates is recognised in the period in which the results are known/materialized.

3. Fixed Assets and Depreciation

Fixed assets are stated at cost, less accumulated depreciation. Cost comprises the purchase price and all attributable cost of bringing the asset to its working condition for its intended use. Financing and other cost relating to acquisition of fixed assets are also included to the extent they relate to the period till such time as the assets are ready for commercial operation. Depreciation is provided on Straight Line Method as per the rates and in the manner prescribed in Schedule XIV to the Companies Act, 1956 except Leasehold improvements which are amortised over the lease period and employee perquisite- related assets which are depreciated over three years. Intangible Assets are amortised over their useful life not exceeding ten years.

4. Investments

Current investments are carried at lower of cost and fair value.Long-term investments are stated at cost. Provision for diminution is being made if necessary to recognise a decline, other than temporary in the value thereof.

5. Inventories

Inventories are valued as follows :

a) Stores, Spare parts, Packing material and Branding material : At Cost

b) Raw material & Stitching material : At Cost

c) Finished goods and Work in Progress : At the lower of cost or net realisable value Cost of inventories comprises all costs of purchase and other costs incurred in bringing the inventories to their present condition and location. Cost is computed on weighted average basis.

6. Transaction in Foreign Currency

Foreign currency transactions are recorded at the exchange rates prevailing at the date of the transaction. Monetary foreign currency assets and liabilities are translated into Indian rupees at the exchange rate prevailing at the balance sheet date. All exchange differences are dealt with in profit and loss account.

7. Revenue Recognition

Revenue is recognised when it is earned and no significant uncertainty exists as to its realization or collection. Sale of Goods is accounted on delivery to customers. Sales is net of returns, discounts and Value Added Tax/ Sales Tax. Export sales is accounted as revenue on the basis of Bill of Lading. Interest income is recognized on accrual basis. Dividend income is accounted for when the right to receive is established.

8. Retirement and other employee benefits

ShortTerm Employee Benefits:

Short Term employee benefits are recognised as an expense at the undiscounted amount in the profit and loss account of the year in which the related service is rendered.

Post Employment Benefits:

Post employment and other long term employee benefits are recognised as an expense in the Profit and Loss account for the year in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determind using actuarial valuation techniques. Acturial gains and losses in respect of post employment and other long term benefits are charged to Profit and Loss account.

9. Provision for current and deferred tax

a. Provision for current tax is made on the basis of estimated taxable income for the current accounting period in accordance with the provisions of Income tax Act, 1961. Deferred tax resulting from "timing differences" between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date.

b. Tax Expenses comprise of current tax and deferred tax.The provision for current income tax is the aggregate of the balance provision for 9 months ended March 31,2010 and the estimated provision based on the taxable profit of remaining 3 months upto June 30,2010,the actual tax liability, for which, will be determined on the basis of the results for the period April 1,2010 to March 31, 2011.

10. Provisions, Contingent Liabilities and Contingent Assets

Provisions involving substantial degree of estimation in measurement are recognised when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognised but are disclosed in the notes. Contingent Assets are neither recognised nor disclosed in the financial statements.

11. Impairment of Assets

An asset is treated as impaired when the carrying cost of the asset exceeds its recoverable value. An impairment loss is charged to Profit & Loss Account in the year in which the asset is impaired and the impairment loss recognised in prior accounting periods is reversed if there has been a change in the estimate of recoverable amount. For the purpose of assessing impairment, assets are grouped at the lowest level of cash generating units.

12. Leases

Leases where significant portion of risk and reward of ownership are retained by the lessor are classified as operating leases and lease rental thereon are charged to Profit and Loss account.

 
Subscribe now to get personal finance updates in your inbox!