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Accounting Policies of Cantabil Retail India Ltd. Company

Mar 31, 2023

Significant Accounting Policies

2.01 Basis of Preparation

The financial statements have been prepared in
accordance with Indian Accounting Standards as
defined in Rule 2(1)(a) of the Companies (Indian
Accounting Standards) Rules, 2015 and relevant
amendment rules issued thereafter, prescribed under
Section 133 of the Companies Act, 2013 ("Ind AS").

2.02 Overall Consideration

These financial statements have been prepared on
going concern basis using the significant accounting
policies and measurement basis summarised below:
These accounting policies have been used throughout
all periods presented in financial statements.

2.03 Basis of Measurement

The financial statements are prepared on Historical
Cost basis except financial assets and liabilities that are
measured at fair value (Refer accounting policy
regarding Financial Instruments). The accounting
policies not specifically referred to otherwise, are
consistent and in consonance with generally
accepted accounting principles. All income and
expenditure are being accounted for on accrual basis.
Historical cost is generally based on the fair value of the
consideration given in exchange for goods and
services.

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.

2.04 Functional and Presentation Currency

These financial statements are presented in Indian
Rupees (INR), which is the Company’s functional
currency. All financial information presented in INR have
been shown in lakhs and rounded off to the nearest

thousand and have been expressed in terms of
decimals of thousands.

2.05 Use of Estimates

In preparing Company''s financial statements in
conformity with Ind AS, management is required to
make estimates and assumptions that affect the
reported amount of assets and liabilities and the
disclosure of contingent liabilities at the date of the
financial statements and reported amount of revenues
and expenses during the reporting period. Actual
results could differ from those estimates. Estimates and
underlying assumption are renewed at each balance
sheet date. Any revision to accounting estimates is
recognized in the period in which the same is
determined.

2.06 Significant Accounting Judgements, Estimates and
Assumptions.

The preparation of the Company''s financial statements
requires management to make judgments, estimates
and assumptions that affect the reported amounts of
revenues, expenses, assets and liabilities and the
related 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.

Estimates and assumptions

The key assumptions concerning the future and other
key sources of estimation uncertainty at the reporting
date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year, are described
below. The Company based its assumptions and
estimates on parameters available when these financial
statements were prepared. 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 as and when
they occur.

(i) Estimation of defined benefit obligation

The cost of the defined benefit plan and other post¬
employment benefits and the present value of
such obligation are determined using actuarial
valuations. An actuarial valuation involves making
various assumptions that may differ from actual
developments in the future. These include the
determination of the discount rate, future salary
increases, mortality rates and attrition rate. Due to
the complexities involved in the valuation and its
long-term nature, a defined benefit obligation is

highly sensitive to changes in these assumptions.
All assumptions are reviewed at each reporting
date.

(ii) Estimation of current tax and deferred tax
Management judgment is required for the
calculation of provision for income - taxes and
deferred tax assets and liabilities. The Company
reviews at each balance sheet date the carrying
amount of deferred tax assets. The factors used in
estimates may differ from actual outcome which
could lead to adjustment to the amounts reported
in these financial statements.

(iii) Useful lives of depreciable/amortizable assets
Management reviews its estimate of the useful
lives of depreciable/amortizable assets at each
reporting date, based on the expected utility of the
assets. Uncertainties in these estimates relate to
technical and economic obsolescence that may
change the utility of certain property, plant and
equipment.

(iv) Impairment of trade receivables

Trade receivables do not carry any interest and are
stated at their normal value as reduced by
appropriate allowances for estimated
irrecoverable amounts. Individual trade
receivables are written off when management
deems them not to be collectible. Impairment is
recognised based on the expected credit losses,
which are the present value of the cash shortfall
over the expected life of the financial assets.

(v) Fair value measurement

Management applies valuation techniques to
determine the fair value of financial instruments
(where active market quotes are not available) and
non-financial assets. This involves developing
estimates and assumptions consistent with how
market participants would price the instrument.
Management bases its assumptions on
observable data as far as possible but this is not
always available. In that case management uses
the best information available. Estimated fair
values may vary from the actual prices that would
be achieved in an arm’s length transaction at the
reporting date.

(vi) Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of
impairment of assets is based on assessment of
several external and internal factors which could
result in deterioration of recoverable amount of the
assets.

2.07 Current and Non-Current Classification

The Company presents assets and liabilities in the

balance sheet based on current/non-current

classification.

An asset is current when it is:

• Expected to be realized or intended to be sold or
consumed in normal operating cycle;

• Held primarily for the purpose of trading;

• Expected to be realized within twelve months after
the reporting period; or

• Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least
twelve months after the reporting period.

• Current assets include current portion of non-current
financial assets.

All other assets are classified as non-current.

A liability is current when it is:

• Expected to be settled in normal operating cycle;

• It is held primarily for the purpose of trading;

• Due to be settled within twelve months after the
reporting period; or

• There is no unconditional right to defer settlement of
the liability for at least twelve months after the
reporting period.

• Current Liabilities include current portion of non¬
current financial liabilities.

All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non¬
current assets and liabilities.

2.08 Operating Expenses

Operating expenses are recognised in statement of
profit or loss upon utilisation of the service or as
incurred.

2.09 Equity, Reserves and Dividend Payment

Equity shares are classified as equity. Incremental costs
directly attributable to the issue of new shares are
shown in equity as a deduction, net of tax, from the
proceeds. Retained earnings include current and prior
period retained profits. All transactions with owners of
the Company are recorded separately within equity.

2.10 Property Plant & Equipment

i) Initial Recognition and Measurement

An item of property, plant and equipments
recognized as an asset if and only if it is probable
that future economic benefits associated with the
item will flow to the company and the cost of the
item can be measured reliably.

Items of Property, Plant and Equipment are
measured at cost less accumulated depreciation/
amortization and accumulated impairment losses.
Cost includes expenditure that is directly
attributable to bringing the asset, inclusive of non¬
refundable taxes & duties, to the location and
condition necessary for it to be capable of
operating in the manner intended by management.
When parts of an item of property, plant and
equipment have different useful life, they are
recognized separately.

Items of spare parts, stand-by equipment and
servicing equipment which meet the definition of
Property, Plant and Equipment are capitalized.
Property, Plant and Equipments which are not
ready for intended use as on the date of Balance
Sheet are disclosed as '' Capital Work-In-Progress''.

ii) Subsequent costs

Subsequent expenditure is recognized as an
increase in the carrying amount of the asset when it
is probable that future economic benefits deriving
from the cost incurred will flow to the enterprise and
the cost of the item can be measured reliably.

The cost of replacing part of an item of property,
plant and equipment is recognized in the carrying
amount of the item if it is probable that the future
economic benefits embodied within the part will
flow to the Company and its cost can be measured
reliably. The carrying amount of the replaced part is
derecognized. The costs of the day-to-day
servicing of Property, Plant and Equipment are
recognized in profit or loss as incurred.

iii) De-recognition

Property, Plant and Equipment are derecognized
when no future economic benefits are expected
from their use or upon their disposal. Gains and
losses on disposal of an item of property, plant and
equipment are determined by comparing the
proceeds from disposal with the carrying amount of
property, plant and equipment, and are recognized
in the statement of profit and loss.

iv) Depreciation/amortization

Depreciation is recognized in profit or loss on a
written down value over the estimated useful life of
each item of Property, Plant and Equipment.
Depreciation on additions to/deductions from
property, plant and equipment during the year is
charged on pro-rata basis from/up to the date on
which the asset is available for use/disposed.
Depreciation on property, plant and equipment is
provided on their estimated useful life as
prescribed by Schedule II of The Companies Act,

2.11 Capital Work-in-Progress

These are assets which includes the cost of materials &
direct labour, borrowing costs, any other costs directly
attributable to bring the assets to the location and
condition necessary for it to be capable of operating in
the manner intended by management but not put to use
as on reporting date.

2.12 Other Intangible Assets

i) Initial Recognition and Measurement

An intangible asset is recognized if and only if it is
probable that the expected future economic benefits
that are attributable to the asset will flow to the
company and the cost of the asset can be measured
reliably.

Intangible assets that are acquired by the Company,
which have definite useful lives, are recognized at
cost less accumulated amortization and
accumulated impairment losses, if any. Cost includes
any directly attributable incidental expenses
necessary to make the assets ready for its intended
use.

ii) Subsequent Costs

Subsequent expenditure is recognized as an increase
in the carrying amount of the asset when it is probable
that future economic benefits deriving from the cost
incurred will flow to the enterprise and the cost of the
item can be measured reliably.

iii) De-Recognition

An intangible asset is derecognized when no future
economic benefits are expected from their use or
upon their disposal. Gains and losses on disposal of
an item of intangible assets are determined by
comparing the proceeds from disposal with the
carrying amount of intangible assets and are
recognized in the statement of profit and loss.

iv) Amortization

Intangible assets having definite life are amortized on
straight line method in their useful life.

2.13 Impairment of Property, Plant and Equipment, Other
Intangible Assets

Assets are tested for impairment whenever events or
changes in circumstances indicate that the carrying
amount may not be recoverable and impairment loss is
recognised for the amount by which the asset''s carrying
amount exceeds its recoverable amount. The
recoverable amount is higher of an asset''s fair value less
costs of disposal and value in use. For the purpose of
assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash
inflows which are largely independent of the cash
inflows from other assets or Company of assets (cash
generating units). If at the balance sheet date, there is an
indication that a previously assessed impairment loss

no longer exists, the recoverable amount is reassessed
and the asset is reflected at the recoverable amount
subject to a maximum of depreciated historical cost and
the same is accordingly reversed in the statement of
profit and loss.

2.14 Investment Property

Investment properties are measured at cost less
accumulated depreciation and impairment losses, if
any. Depreciation on building is provided over the
estimated useful lives as specified in Schedule II to the
Companies Act, 2013.

2.15 Inventories

Inventories of Raw material, Work-in-progress, Finished
goods and Consumable Spares are valued at the lower
of cost and net realisable value.The cost of inventories
of items that are not ordinarily interchangeable shall be
assigned by using specific identification of their
individual costs and other items shall be assigned by
using first in first out (FIFO) cost formula .

Costs incurred in bringing each product to its present
location and condition are accounted for as follows:

• Raw materials: cost includes cost of purchase and
other costs incurred in bringing the inventories to their
present location and condition.

• Work in progress: cost includes raw material costs
plus conversion costs depending upon the stage of
completion.

• Finished goods: cost includes cost of direct materials
and labour and a proportion of manufacturing
overheads based on the normal operating capacity.
All other inntories of stores, consumables, packing
material at site are valued at cost. The stock of waste
is valued at estimated net realisable value.

The Company considers the age and nature of the
product to which inventory pertains for determining the
net realisable value for slow moving and obsolete
inventories. Such inventories are thereafter marked
down to their estimated net realisable value, i.e. what
the Company expects to realise from sale of such
inventory. The Company makes provisions for slow
moving and/ or obsolete stock, based on the analysis of
inventories, past experience, current trend and future
expectations, depending upon the category of goods.

2.16 Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet
comprise cash at banks and cash in hand and short¬
term deposits with an original maturity of three months
or less, which are subject to insignificant risk of change
in value.

2.17 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: Financial assets are recognised
when the Company becomes a party to the
contractual provisions of the instrument.

a) Initial Recognition and Measurement

All financial assets are recognized initially at fair
value plus, in 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.

b) Subsequent Measurement

Financial assets are subsequently classified and
measured at:

• Financial assets at amortised cost

• Financial assets at fair value through profit and
loss (FVTPL)

• Financial assets at fair value through other
comprehensive income (FVTOCI).

c) Equity Instruments:

All investments in equity instruments in entities
other than subsidiaries and joint ventures are
measured at fair value. Equity instruments if held
for trading are classified as at FVTPL. For all other
equity instruments, the Company decides to
classify the same either at FVTOCI or FVTPL. The
Company makes such election on an instrument
by instrument basis. The classification is made
on initial recognition and is irrevocable.

If the company decides to classify an equity
instrument as at FVTOCI, then all fair value
changes on the instruments, excluding
dividends, are recognized in the OCI. There is no
recycling of the amounts from OCI to P&L, even
on sale of investment as the company transfers
cumulative gain or loss within the equity.

Equity instruments if classified as FVTPL
category are measured at fair value with all
changes recognized in the profit and loss.

d) De-Recognition

A financial asset (or, where applicable, a part of a
financial asset or part of a Company of similar
financial assets) is primarily derecognized (i.e.
removed from the Company’s balance sheet)
when:

• The contractual rights to receive cash flows
from the asset have expired, or

• The Company has transferred its
contractual rights to receive cash flows from
the asset.

e) Impairment of Financial Asset

Expected credit losses are recognized for all
financial assets subsequent to initial recognition
in Statement of Profit and loss.

For recognition of impairment loss on financial

assets other than Trade receivables, the
company determines 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
impairment loss. However, If credit risk is
increased significantly, lifetime ECL is used.

If, in a subsequent period, credit quality of the
instrument improves to such extent 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.

For trade receivables Company applies
‘simplified approach’ which requires expected
lifetime losses to be recognised from initial
recognition of the receivables. The Company
uses historical default rates to determine
impairment loss on the portfolio of trade
receivables. At every reporting date these
historical default rates are reviewed and changes
in the forward looking estimates are analysed.
ii) Financial Liabilities

a) Initial Recognition and Measurement

All financial liabilities are recognized at fair value
and in case of loans, net of directly attributable
cost. Fees of recurring nature are directly
recognised in the Statement of Profit and Loss as
finance cost.

b) Subsequent Measurement

Financial liabilities are carried at amortized cost
using the effective interest method. Amortized
cost is calculated by taking into account any
discount or premium on acquisition and any
material transaction that are any integral part of
the EIR. Trade and other payables maturing
within one year from the balance sheet date are
carried at transaction value and the carrying
amounts approximate fair value due to the short
maturity of these instruments.

Financial liabilities carried at fair value through
profit or loss are measured at fair value with all
changes in fair value recognised in the Statement
of Profit and Loss.

c) De-Recognition

A financial liability is derecognized 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
recognized in the statement of profit or loss.

2.18 Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and
the net amount is reported in the balance sheet if there is
a currently enforceable legal right to offset the
recognised amounts and there is an intention to settle
on a net basis or realise the asset and settle the liability
simultaneously. The legally enforceable right must not
be contingent on future events and must be enforceable
in the normal course of business and in the event of
default, insolvency or bankruptcy of the group or the
counterparty.

2.19 Fair Value Measurement

The Company measures financial instruments, such as,
derivatives at fair value at each balance sheet date. 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.
The fair value measurement is based on the
presumption that the transaction to sell the asset or
transfer the liability takes place either:

• In the principal market for the asset or liability, or

• In the absence of a principal market, in the most
advantageous market for the asset or liability.

The principal or the most advantageous market must be
accessible by the company. The fair value of an asset or
a liability is measured using the assumptions that
market participants would use when pricing the asset or
liability, assuming that market participants act in their
economic best interest. A fair value measurement of a
non-financial asset takes into account a market
participant’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it
to another market participant that would use the asset in
its highest and best use. The company uses valuation
techniques that are appropriate in the circumstances
and for which sufficient data are available to measure
fair value, maximizing the use of relevant observable
inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured
or disclosed in the financial statements are categorized
within the fair value hierarchy, described as follows,
based on the lowest level input that is significant to the
fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active

markets for identical assets or liabilities

Level 2 - Valuation techniques for which the lowest level

input that is significant to the fair value measurement is

directly or Indirectly observable

Level 3 - Valuation techniques for which the lowest level

input that is significant to the fair value measurement is

unobservable.

For assets and liabilities that are recognized in the
financial statements on a recurring basis, the company
determines whether transfers have occurred between
levels in the hierarchy by re-assessing categorization

(based on the lowest level input that is signify cant to the
fair value measurement as a whole) at the end of each
reporting period. The Company determines the policies
and procedures for both recurring fair value
measurement, such as derivative instruments and
unquoted financial assets measured at fair value, and
for non-recurring measurement, such as assets held for
distribution in discontinued operations.

2.20 Impairment of Financial Assets

All financial assets except for those at FVTPL are
subject to review for impairment at least at each
reporting date to identify whether there is any objective
evidence that a financial asset or a company of financial
assets is impaired. Different criteria to determine
impairment are applied for each category of financial
assets.

In accordance with Ind-AS 109, the company applies
expected credit loss (ECL) model for measurement and
recognition of impairment loss for financial assets
carried at amortised cost.

ECL is the weighted average of difference between all
contractual cash flows that are due to the company in
accordance with the contract and all the cash flows that
the company expects to receive, discounted at the
original effective interest rate, with the respective risks
of default occurring as the weights. When estimating the
cash flows, the company is required to consider -

- All contractual terms of the financial assets (including
prepayment and extension) over the expected life of
the assets.

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


Mar 31, 2018

1 Significant accounting policies

1.1 Statement of Compliance

Company has adopted Indian accounting Standard (Referred to as “Ind AS”) as notified by Companies (Indian Accounting Standards) Rules 2015 read with Section 133 of the Companies Act, 2013 with effect from 1 April 2017. Previous period has been restated as per Ind AS.

These are the company’s first financial statements for the year ended 31 March 2018 that has been prepared in accordance with Ind AS notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016, read with Ind AS based Schedule III, under the Companies Act, 2013.

For all periods up to and including for the year ended 31 March 2018, the company’s financial statements have been prepared complying in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rule, 2014.

The Company has consistently applied the accounting policies used in the preparation of its opening Ind AS Balance Sheet at April 1, 2016 throughout all periods presented in this statement, as if these policies had always been in effect and are covered by Ind AS 101 ‘’First-time adoption of Indian Accounting Standards”. The transition was carried out from accounting principles generally accepted in India (‘’Indian GAAP”) which is considered as the previous GAAP, as defined in Ind AS 101. The reconciliation of effects of the transition from Indian GAAP to Ind AS is disclosed in Note 48 to these financial statements The Company’s financial statements provide comparative information in respect to the previous year. In addition, the company presents Balance Sheet as at the beginning of the previous year, which is the transition date to Ind AS.

Exemptions and Exceptions availed

The Company has prepared the financial statements in accordance with Ind AS for the year ending March 31, 2018. In preparing such statements the opening balance sheet was prepared at April 1, 2016, the company’s date of transition to Ind AS. The note explains principal adjustments made in order to restate its Indian GAAP financial statements including the balance sheet as at April 1, 2016 and financial statements as at and for the year ended March 31, 2017.

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS :

EXEMPTIONS:

i) Property, Plant & Equipment

The Company has opted to continue with the carrying value for all of its property, plant and equipment as recognised in the previous GAAP financial statements as their deemed cost at the transition date to Ind AS (i.e. April 1, 2016)

ii) Deemed cost of Investment Properties:

The Company has elected to continue with the carrying value for all of its Investment Properties as recognised in the previous GAAP financial statements as their deemed cost at the transition date to Ind AS (i.e. April 1, 2016).

EXCEPTIONS :

i) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.

ii) Classification and Measurement of financial assets

Ind AS 101 requires an entity to assess the classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS

2.2 Basis of measurement

The financial statements are prepared on Historical Cost basis except for certain financial assets and liabilities that are measured at fair value (Refer accounting policy regarding Financial Instruments). The accounting policies not specifically referred to otherwise, are consistent and in consonance with generally accepted accounting priniples. All income and expenditure are being accounted for on accrual basis.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

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.

2.3 Functional and Presentation currency

These financial statements are presented in Indian Rupees (INR), which is the Company’s functional currency. All financial information presented in INR has been rounded to the nearest lakhs (upto two decimals), except as stated otherwise.

2.4 Use of Estimates

In preparing Company’s financial statements in conformity with accounting principles generally accepted in India, management is required to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements and reported amount of revenues and expenses during the reporting period. Actual results could differ from those estimates. Any revision to accounting estimates is recognized in the period in which the same is determined.

2.5 Current and non-current classification

The Company presents assets and liabilities in the balance sheet based on current/non-current classification.

An asset is current when it is:

- Expected to be realized or intended to sold or consumed in normal operating cycle;

- Held primarily for the purpose of trading;

- Expected to be realized within twelve months after the reporting period; or

- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when it is:

- Expected to be settled in normal operating cycle;

- Due to be settled within twelve months after the reporting period; or

- There is no unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

All other liabilities are classified as non-current.

2.6 Property Plant & Equipment

i) Initial recognition and measurement

An item of property, plant and equipments recognized as an asset if and only if it is probable that future economic benefits associated with the item will flow to the company and the cost of the item can be measured reliably.

Items of Property, Plant and Equipment are measured at cost less accumulated depreciation/ amortization and accumulated impairment losses. Cost includes expenditure that is directly attributable to bringing the asset, inclusive of non-refundable taxes & duties, to the location and condition necessary for it to be capable of operating in the manner intended by management.

When parts of an item of property, plant and equipment have different useful life, they are recognized separately.

Items of spare parts, stand-by equipment and servicing equipment which meet the definition of Property, Plant and Equipment are capitalized.

Property, Plant and Equipments which are not ready for intended use as on the date of Balance Sheet are disclosed as ‘Capital Work-In-Progress’.

ii) Subsequent costs

Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

The cost of replacing part of an item of property, plant and equipment is recognized in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Company and its cost can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of Property, Plant and Equipment are recognized in profit or loss as incurred.

iii) De-recognition

Property, Plant and Equipment are derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment, and are recognized in the statement of profit and loss.

iv) Depreciation/amortization

Depreciation is recognized in profit or loss on a written down value over the estimated useful life of each item of Property, Plant and Equipment.

Depreciation on additions to/deductions from property, plant and equipment during the year is charged on pro-rata basis from/up to the date on which the asset is available for use/disposed.

2.7 Capital work-in-progress

The cost of self-constructed assets includes the cost of materials & direct labour, borrowing costs, any other costs directly attributable to bring the assets to the location and condition necessary for it to be capable of operating in the manner intended by management.

2.8 Intangible assets

i) Initial recognition and measurement

An intangible asset is recognized if and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the company and the cost of the asset can be measured reliably.

Intangible assets that are acquired by the Company, which have finite useful lives, are recognized at cost.

Subsequent measurement is done at cost less accumulated amortization and accumulated impairment losses.

Cost includes any directly attributable incidental expenses necessary to make the assets ready for its intended use.

ii) Subsequent costs

Subsequent expenditure is recognized as an increase in the carrying amount of the asset when it is probable that future economic benefits deriving from the cost incurred will flow to the enterprise and the cost of the item can be measured reliably.

iii) De-recognition

An intangible asset is derecognized when no future economic benefits are expected from their use or upon their disposal. Gains and losses on disposal of an item of intangible assets are determined by comparing the proceeds from disposal with the carrying amount of intangible assets and are recognized in the statement of profit and loss.

iv) Amortization

Intangible assets having definite life are amortized on straight line method in their useful life of 5 years.

2.9 Investment Property

Investment properties are measured at cost less accumulated depreciation and impairment losses, if any. Depreciation on building is provided over the estimated useful lives as specified in Schedule II to the Companies Act, 2013.

2.10 Inventories

Inventories of Raw material, Work-in-progress, Finished goods and Consumable Spares are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition are accounted for as follows:

- Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on FIFO basis.

- Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity.

All other inventories of stores, consumables, project material at site are valued at cost. The stock of waste is valued at net realisable value.

2.11 Cash and Cash Equivalents

Cash and cash equivalent in the balance sheet comprise cash at banks and cash on hand and shortterm deposits with an original maturity of three months or less, which are subject to insignificant risk of change in value.

2.12 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:

Financial assets are recognised when the Company becomes a party to the contractual provisions of the instrument.

a) Initial recognition and measurement

All financial assets are recognized initially at fair value plus or minus, in the case of financial assets not recorded at fair value through profit or loss.

b) Subsequent measurement

Financial assets are subsequently classified and measured at:

- Financial assets at amortised cost

- Financial assets at fair value through profit and loss (FVTPL)

- Financial assets at fair value through other comprehensive income (FVOCI).

c) Equity Instruments:

All investments in equity instruments in entities other than subsidiaries and joint ventures are measured at fair value. Equity instruments if held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either at FVTOCI or FVTPL. The Company makes such election on an instrument by instrument basis. The classification is made on initial recognition and is irrevocable.

If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instruments, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment as the company transfers cumulative gain or loss within the equity.

Equity instruments if classified as FVTPL category are measured at fair value with all changes recognized in the profit and loss.

d) De-recognition

A financial asset (or, where applicable, a part of a financial asset or part of a Company of similar financial assets) is primarily derecognized (i.e. removed from the Company’s balance sheet) when:

- The contractual rights to receive cash flows from the asset have expired, or - The Company has transferred its contractual rights to receive cash flows from the asset.

e) Impairment of Financial Asset

Expected credit losses are recognized for all financial assets subsequent to initial recognition in Statement of Profit and loss.

For recognition of impairment loss on financial assets other than Trade receivables, the company determines 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 impairment loss. However, If credit risk is increased significantly, lifetime ECL is used.

If, in a subsequent period, credit quality of the instrument improves to such extent 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.

For trade receivables Company applies ‘simplified approach’ which requires expected lifetime losses to be recognised from initial recognition of the receivables. The Company uses historical default rates to determine impairment loss on the portfolio of trade receivables. At every reporting date these historical default rates are reviewed and changes in the forward looking estimates are analysed.

ii) Financial liabilities

a) Initial recognition and measurement

All financial liabilities are recognized at fair value and in case of loans, net of directly attributable cost. Fees of recurring nature are directly recognised in the Statement of Profit and Loss as finance cost.

b) Subsequent measurement

Financial liabilities are carried at amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on acquisition and any material transaction that are any integral part of the EIR. Trade and other payables maturing within one year from the balance sheet date are carried at transaction value and the carrying amounts approximate fair value due to the short maturity of these instruments.

Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.

c) De-recognition

A financial liability is derecognized 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 recognized in the statement of profit or loss.

2.13 Fair value measurement

The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date. 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. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

- In the principal market for the asset or liability, or

- In the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the company. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or Indirectly observable

Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

For assets and liabilities that are recognized in the financial statements on a recurring basis, the company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is signify cant to the fair value measurement as a whole) at the end of each reporting period. The Company determines the policies and procedures for both recurring fair value measurement, such as derivative instruments and unquoted financial assets measured at fair value, and for non-recurring measurement, such as assets held for distribution in discontinued operations.

2.14 Impairment of Non-Financial Assets

The Company, in accordance with the Indian Accounting Standard (Ind AS) 36 “Impairment of Assets” , has adopted the practice of assessing at each Balance Sheet date whether there is any Indication that an asset may be impaired. If any such Indication exists, then the company provides for the loss for impairment of Assets after estimating the recoverable amount of the assets.

2.15 Provisions, Contingent Liabilities and Contingent Assets

Provision are measured at the Present value of the management’s best estimate of the expenditure required to settle the present obligation at the end of reporting period. 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 disclosed only when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events which is not wholly within the control of the Company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle the obligation or estimate of the amount cannot be measured reliably.

No contingent asset is recognized but disclosed by way of notes to accounts only when its recognition is virtually certain.

2.16 Revenue Recognition

Revenue is measured at the fair value of the consideration received or receivable and it is probable that future economic benefits will flow to the entity. Amount of sales are net of goods and service tax, sale returns , trade allowances and discounts but inclusive of excise duty.

Revenue from sale of products is recognized when the significant risks and rewards of ownership of the products have been transferred to the buyer, and the amount of revenue can be measured reliably. Revenue from the provision of services is recognised as per stage of completion at the balance sheet date.

Company continues to account for export benefits on accrual basis.

Dividend income is recognized when the right to receive the income is established.

Interest income is recognised, when no significant uncertainty as to measurability or collectability exists, on a time proportion basis taking into account the amount outstanding and the applicable interest rate , using the effective interest rate method (EIR).

2.17 Foreign Currency Conversions/Transactions

Foreign Currency Transactions are recorded at the exchange rates prevailing on the date of the transactions. Gains and losses arising out of subsequent fluctuations are accounted for on actual payments or realisations as the case may be. Monetary assets and liabilities denominated in foreign currency as on Balance Sheet date are translated into functional currency at the exchange rates prevailing on that date and Exchange differences arising out of such conversion are recognised in the Statement of Profit and Loss.

2.18 Income Taxes

Income tax expense for the year comprises of current tax and deferred tax. It is recognised in the Statement of Profit and Loss except to the extent it relates to any business combination or to an item which is recognised directly in equity or in other comprehensive income.

a) Current Tax

Current Tax is the amount of tax payable on the estimated taxable income for the current year as per the provisions of Income Tax Act,1961.

b) Deferred Tax

Deferred tax is recognised for temporary differences. However, Deferred Tax Assets is recognised to the extent that, it is probable that taxable income will be available against which the same can be realised. Deferred tax assets are reviewed at each Balance Sheet date and are written-down or written-up to reflect the amount that is reasonably 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 and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the company will pay normal income tax during the specified 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, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset.

The company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.

2.19 Employee Benefits

i) Short Term Employee Benefits

Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognized for the amount expected to be paid under performance related pay if the Company has a present, legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

ii) Post-Employment benefits

Employee benefit that are payable after the completion of employment are Post-Employment Benefit (other than termination benefit). Company has identified two types of post employment benefits:

a) Defined contribution plans

Defined contribution plans are those plans in which the company pays fixed contribution into separate entities and will have no legal or constructive obligation to pay further amounts. Provident Fund and Employee State Insurance are Defined Contribution Plans in which company pays a fixed contribution and will have no further obligation beyond the monthly contributions and are recognised as an expenses in Statement of Profit & Loss.

b) Defined benefit plans

A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. Company pays Gratuity as per provisions of the Gratuity Act, 1972. The Company’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit to employees is discounted to determine its present value.

The calculation is performed annually by a qualified actuary using the projected unit credit method. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Any actuarial gains or losses pertaining to components of re-measurements of net defined benefit liability/(asset) are recognized in OCI in the period in which they arise.

2.20 Borrowing Cost

General and Specific Borrowing Cost that are directly attributable to the acquisition or construction or production of qualifying assets are capitalized as part of the cost of such assets upto the date when such assets are ready for intended use. Qualified assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.

Other borrowing costs are charged as expenses in the year in which they are incurred.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalisation.

2.21 Earning Per Share

Basic Earning Per Share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by weighted average number of equity shares outstanding during the period.

For the purpose of calculating diluted earnings per share, net profit after tax during the year and the weighted average number of shares outstanding during the year are adjusted for the effect of all dilutive potential equity shares.

2.22 Leases As Lessee

Accounting for finance leases

Leases of Property, Plant and Equipment, if any, where the Company, as lessee has substantially all risks and rewards of ownership are classified as finance lease. On initial recognition, assets held under finance leases are recorded as Property, Plant and Equipment and the related liability is recognized under borrowings. At inception of the lease, finance leases are recorded at amounts equal to the fair value of the leased asset or, if lower, the present value of the minimum lease payments. Minimum lease payments made under finance leases are apportioned between the finance expense and the reduction of the outstanding liability.

Accounting for operating leases

Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating lease. Payments made under operating leases are recognized as an expense on straight line basis over the lease term.

2.23 Statement of Cash Flows

Statement of cash flows is prepared in accordance with the Indirect method prescribed in Ind AS-7 ‘Statement of cash flows.

2.24 Government Grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in equal amounts over the expected useful life of the related asset.


Mar 31, 2016

1 Corporate information :

The Company was incorporated on 09th Feb,1989 and is mainly engaged in the business of designing, manufacturing, branding and retailing of apparel and apparel accessories through chain of retail store under the brand name “CANTABIL” & “ Bonetti “ .The Company is also into the business of real estate trade.

2 Significant accounting policies

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Accounting Principles generally accepted in India in accordance with Accounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialize.

2.3 Inventories

Raw Material & Packing Materials : At cost or net realizable value (on FIFO basis) whichever is lower.

Finished Goods : At cost or net realizable value whichever is lower.

Work in Process : At cost or net realizable value whichever is lower

Stores and Spares : At cost or net realizable value (on FIFO basis) whichever is lower.

Scrap : At estimated net realizable value.

Cost of raw material and packing material are determined using first in first out (FIFO) method. Cost of finished goods and work in process include cost of raw material and packing materials, cost of conversion and other cost incurred in bringing the inventories to the present location and condition.

2.4 Cash and cash equivalents

Cash and cash equivalent comprises cash in hand and Bank Balance.

2.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.6 Depreciation and Amortization

Depreciation has been provided on Written Down Value (WDV) Method on all assets based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 except for intangible assets which are amortized over a period of five years as prescribed in Accounting Standard 26 .

2.7 Revenue recognition

Revenue is recognized only when risk and rewards incidental to ownership are transferred to the customers. Discounts given / accrued to customers at the time of dispatch are considered as trade discounts and netted from sales. Sales is recorded net of sales tax/VAT. Interest income is recognized on an accrual basis on time proportionate basis, based on interest rates implicit in the transaction.

2.08 Fixed Assets

Tangible Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment losses, if any. The cost of tangible assets comprises its purchase price, borrowings cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent expenditure relating to Tangible Assets is capitalized only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Capital work-in-progress:

Tangible Assets acquired for the new company owned showrooms or any new project are shown as Capital Work In Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date.

Intangible Assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognized as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

2.09 Extraordinary item

Extraordinary items are income or expense that aries from transaction that are clearly distinct from ordinary activities. They are not expected to recur frequently or regularly.

2.10 Investments

Long-term investments , are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.11 Employee benefits

Employee benefits include provident fund, gratuity, compensated absences.

Defined contribution plans

The Company’s contribution to provident fund if considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognized in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognized immediately to the extent that the benefits are already vested and otherwise is amortized on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognized in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognized past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognized during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognized as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

2.12 Borrowing costs

Borrowing costs include interest, amortization of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilized for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset up to the date of capitalization of such asset is added to the cost of the assets. Capitalization of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.13 Operating Lease

Operating lease payments are recognized as an expense in the statement of Profit and Loss on a straight-line basis or other systematic bases more respresentive of the time pattern of the user’s benefit.

2.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.15 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognized as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognized on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognized for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognized only if there is virtual certainty that there will be sufficient future taxable income available to realize such assets. Deferred tax assets are recognized for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realized. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their reliability.

2.16 Impairment of assets

An assets is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairment loss is charged to the profit and loss statement in the year in which an asset is identified as impaired. The impairment loss recognized in prior accounting period is reversed if there has been a changed in the estimate of recoverable amount.

2.17 Provisions and contingencies

A provision is recognized when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the 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. Contingent assets are neither recognized nor disclosed in the financial statement. Contingent liabilities are disclosed in the Notes.


Mar 31, 2015

2.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Accounting Principles generally accepted in India in accordance with Accounting Standards sepecified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Inventories

Raw Material & Packing Materials : At cost or net realizable value (on FIFO basis) whichever is lower.

Finished Goods : At cost or net realizable value whichever is lower.

Work in Process : At cost or net realizable value whichever is lower.

Stores and Spares : At cost or net realizable value (on FIFO basis) whichever is lower.

Scrap : At estimated net realizable value.

Cost of raw material and packing material are determined using first in first out (FIFO) method.Cost of finished goods and work in process include cost of raw material and packing materials,cost of conversion and other cost incurred in bringing the inventories to the present location and condition.

2.4 Cash and cash equivalents

Cash and cash equivalant comprises cash in hand and Bank Balance.

2.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

2.6. Depreciation and Amortisation

Depreciation has been provided on Written Down Value (WDV) Method on all assets based on useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 except for intangible assets which are amortised over a period of five years as prescribed in Accounting Standard 26.

2.7 Revenue recognition

Revenue is recognised only when risk and rewards incidental to ownership are transferred to the customers. Discounts given / accrued to customers at the time of despatch are considered as trade discounts and netted from sales. Sales is recorded net of Sales Tax/VAT.

Interest income is recognized on an accrual basis on time proportionate basis, based on interest rates implicit in the transaction.

2.8 Fixed Assets

Tangible Assets

Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates less accumulated depreciation and impairment losses, if any. The cost of tangible assets comprises its purchase price, borrowings cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent expenditure relating to Tangible Assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Capital work-in-progress:

Tangible Assets acquired for the new company owned showrooms or any new project are shown as Capital Work- In-Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date.

Intangible Assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

2.9 Extraordinary item

Extraordinary items are income or expense that arises from transaction that are clearly distinct from ordinary activities. They are not expected to recur frequently or regularly.

2.10 Investments

Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.11 Employee benefits

Employee benefits include provident fund, gratuity, compensated absences.

Defined contribution plans

The Company's contribution to provident fund if considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

2.12 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.13 Operating Lease

Operating lease payments are recognised as an expense in the statement of Profit and Loss on a Straight-Line basis or other systematic bases more respresentive of the time pattern of the user's benefit.

2.14 Earnings Per Share

Basic Earnings Per Share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted Earnings Per Share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic Earnings Per Share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.15 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

2.16 Impairment of assets

An assets is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairement loss is charged to the profit and loss statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount.

2.17 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the 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.Contingent assets are neither recognised nor disclosed in the financial statement. Contingent liabilities are disclosed in the Notes.


Mar 31, 2014

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notifed under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention.The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

2.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

2.3 Inventories

Inventories

(i) Raw Material

At cost or net realizable value (on FIFO basis) whichever is lower.

ii) Finished Goods

At cost or net realizable value whichever is lower. For arriving at the cost for this purpose the cost includes material cost , manufacturing expenses and Overheads.

iii) Work in Process

At apportioned manufacturing expenses and depreciation.

iv) Stores and Spares

At cost or net realizable value (on FIFO basis) whichever is lower.

v) Scrap

At estimated realizable value.

2.4 Cash and cash equivalents (for purposes of Cash Flow Statement) Cash and cash equivalant comprises cash in hand and Bank Balance.

2.5 Cash fow statement

Cash flows are reported using the indirect method, whereby Profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and fnancing activities of the Company are segregated based on the available information.

2.6. Depreciation and Amortisation

The depreciation on all assets has been provided on ''written down method'' at the rates prescribed in Schedule XIV of the Companies Act, 1956.

2.7 Revenue recognition

Revenue in respect of sale of products is recognised on delivery, which coincides with the transfer of risk and rewards of ownership. Discounts given / accrued to customers at the time of despatch are considered as trade discounts and netted from sales.

Sales made to Nepal has been treated as domestic sale since there is no infow of Foreign Exchange on sales to Nepal.

Interest income is recognized on an accrual basis on time proportionate basis, based on interest rates implicit in the transaction.

2.8 Other income

Dividend Income on investments is recognized as and when declared by the respective Asset Management Entity. Dividend under the reinvestment scheme is accumulated in the fund value and upon maturity of the fund short term/ long term capital gain is recognized accordingly.

2.9 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Capital work-in-progress:

Fixed Assets acquired for the new company owned showrooms or any new project are shown as Capital Work In Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date.

2.10 Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

2.11 Extraordinary item

Extraordinary items are income or expense that aries from transaction that are clearly distinct from ordinary activities. They are not expected to recur frequently or regularly

2.12 Investments

Long-term investments , are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

2.13 Employee benefits

Employee benefits include provident fund, gratuity, compensated absences.

Defined contribution plans

The Company''s contribution to provident fund if considered as Defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For Defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the Defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur."

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the Defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the Defined benefit obligation as at the Balance Sheet date.

2.14 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

2.15 Operating Lease

Operating lease payments are recognised as an expense in the statement of Profit and Loss on a straight-line basis or other systematic bases more respresentive of the time pattern of the user''s benefit.

2.16 Earnings per share

Basic earnings per share is computed by dividing the Profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the Profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net Profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

2.17 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will fow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be suffcient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that suffcient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

2.18 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

2.19 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to refect the current best estimates. Contingent liabilities are disclosed in the Notes.


Mar 31, 2013

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention.The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation ofthe financial statements in conformity with Indian GAAP requiresthe Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation ofthe financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise.

1.3 Inventories

"Inventories

(i) Raw Material

At cost or net realizable value (on FIFO basis) whichever is lower.

ii) Finished Goods

At cost or net realizable value whichever is lower. For arriving at the cost for this purpose the cost includes material cost, manufacturing expenses and Overheads.

iii) Semi Finished Goods

At cost of input plus apportioned overhead expenses and depreciation.

iv) Job work in Process

At apportioned manufacturing expenses and depreciation.

v) Stores and SparesAt cost or net realizable value (on FIFO basis) whichever is lower.

vi) ScrapAt estimated realizable value.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalant comprises cash in hand and Bank Balance.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and Amortisation

The depreciation on all assets has been provided on ''written down method'' at the rates prescribed in Schedule XIV of the Companies Act, 1956.

1.7 Revenue recognition

"Revenue in respect of sale of products is recognised on delivery, which coincides with the transfer of risk and rewards of ownership. Discounts given / accrued to customers at the time of despatch are considered as trade discounts and netted from sales. Sales made to Nepal has been treated as domestic sale. Since there is no inflow of Foreign Exchange on sales to Nepal.Interest income is recognized on an accrual basis on time proportionate basis, based on interest rates implicit in the transaction.

1.8 Other income

Dividend Income on investments is recognized as & when declared by the respective Asset Management Entity. Dividend under the reinvestment scheme is accumulated in the fund value and upon maturity of the fund short term/ long term capital gain is recognized accordingly.

1.9 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

Capital work-in-progress:

Fixed Assets acquired for the new company owned showrooms or any new project are shown as Capital Work In Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date.

1.10 Intangible assets

Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and othertaxes (otherthan those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

1.11 Foreign currency transactions

Treatment of exchange differences

Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss.

1.12 Investments

Long-term investments, are carried individually at cost less provision fordiminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.13 Employee benefits

Employee benefits include provident fund, gratuity, compensated absences.

Defined contribution plans

The Company''s contribution to provident fund if considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis overthe average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months afterthe end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheetdate.

1.14 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss overthe tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction /development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.15

Operating Lease

Operating lease payments are recognised as an expense in the statement of Profit and Loss on a straight-line basis or other systematic bases more respresentive of the time pattern of the user''s benefit.

1.16 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) aftertax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.17 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961 .Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date fortheir realisability. Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.18 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.19 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the 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. Contingent liabilities are disclosed in the Notes.


Mar 31, 2012

1.1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under the Companies (Accounting Standards) Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous year.

1.2 Use of estimates

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialize.

1.3 Inventories

(i) Raw Material

At cost or net realizable value (on FIFO basis) whichever is lower.

ii) Finished Goods

At cost or net realizable value whichever is lower. For arriving at the cost for this purpose the cost includes material cost , manufacturing expenses and Overheads.

iii) Semi Finished Goods

At cost of input plus apportioned overhead expenses and depreciation.

iv) Job work in Process

At apportioned manufacturing expenses and depreciation.

v) Stores and Spares

At cost or net realizable value (on FIFO basis) whichever is lower.

vi) Scrap

At estimated realizable value.

1.4 Cash and cash equivalents (for purposes of Cash Flow Statement)

Cash and cash equivalant comprises cash in hand and staff imprest amount.

1.5 Cash flow statement

Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information.

1.6 Depreciation and Amortisation

The depreciation on all assets has been provided on 'written down method' at the rates prescribed in Schedule XIV of the Companies Act, 1956.

1.7 Revenue recognition

Revenue in respect of sale of products is recognised on delivery, which coincides with the transfer of risk and rewards of ownership. Discounts given / accrued to customers at the time of despatch are considered as trade discounts and netted from sales.

Sales made to Nepal has been treated as domestic sales since there is no inflow of Foreign Exchange on sales to Nepal.

Interest income is recognized on an accrual basis or time proportionate basis, based on interest rates implicit in the transaction.

1.8 Other income

Dividend Income on investments is recognized as & when declared by the respective Asset Management Entity. Dividend under the reinvestment scheme is accumulated in the fund value and upon maturity of the fund short term/ long term capital gain is recognized accordingly.

1.9 Tangible fixed assets

Fixed assets are carried at cost less accumulated depreciation and impairment losses, if any. The cost of fixed assets includes interest on borrowings attributable to acquisition of qualifying fixed assets up to the date the asset is ready for its intended use and other incidental expenses incurred up to that date. Exchange differences arising on restatement / settlement of long-term foreign currency borrowings relating to acquisition of depreciable fixed assets are adjusted to the cost of the respective assets and depreciated over the remaining useful life of such assets. Subsequent expenditure relating to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its previously assessed standard of performance.

CENVAT Credit availed on acquisition of fixed assets is reduced from the cost of concerned assets.

Fixed assets acquired in full or part exchange for another asset are recorded at the fair market value or the net book value of the asset given up, adjusted for any balancing cash consideration. Fair market value is determined either for the assets acquired or asset given up, whichever is more clearly evident. Fixed assets acquired in exchange for securities of the Company are recorded at the fair market value of the assets or the fair market value of the securities issued, whichever is more clearly evident.

Capital work-in-progress:

Fixed Assets acquired for the new company owned showrooms or any new project are shown as Capital Work In Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date.

1.10 Intangible assets

Intangible assets are carried at cost less accumulated amortization and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset.

1.11 Foreign currency transactions and translations

Initial recognition

Transactions in foreign currencies entered into by the Company and its integral foreign operations are accounted at the exchange rates prevailing on the date of the transaction or at rates that closely approximate the rate at the date of the transaction.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company and its net investment in non-integral foreign operations outstanding at the Balance Sheet date are restated at the year-end rates.

In the case of integral operations, assets and liabilities (other than non-monetary items), are translated at the exchange rate prevailing on the Balance Sheet date. Non-monetary items are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these translations are charged to the Statement of Profit and Loss.

Treatment of exchange differences

Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company and its integral foreign operations are recognised as income or expense in the Statement of Profit and Loss. The exchange differences on restatement / settlement of loans to non-integral foreign operations that are considered as net investment in such operations

are accumulated in a "''Foreign currency translation reserve"" until disposal / recovery of the net investment.

The exchange differences arising on restatement / settlement of long-term foreign currency monetary items are capitalised as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement / over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets. The unamortised balance is carried in the Balance Sheet as "Foreign currency monetary item translation difference account" net of the tax effect thereon.

1.12 Investments

Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties.

1.13 Employee benefits

Employee benefits include provident fund, superannuation fund, gratuity fund, compensated absences, long service awards and post-employment medical benefits.

Defined contribution plans

The Company's contribution to provident fund and superannuation fund are considered as defined contribution plans and are charged as an expense as they fall due based on the amount of contribution required to be made.

Defined benefit plans

For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight- line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet represents the present value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the present value of available refunds and reductions in future contributions to the schemes.

Short-term employee benefits

The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under :

(a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and

(b) in case of non-accumulating compensated absences, when the absences occur.

Long-term employee benefits

Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the present value of the defined benefit obligation as at the Balance Sheet date.

1.14 Borrowing costs

Borrowing costs include interest, amortisation of ancillary costs incurred and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted.

1.15 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable, had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period presented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate.

1.16 Taxes on income

Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961.

Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company.

Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed depreciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability.

Current and deferred tax relating to items directly recognised in equity are recognised in equity and not in the Statement of Profit and Loss.

1.17 Impairment of assets

The carrying values of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any indication of impairment exists, the recoverable amount of such assets is estimated and impairment is recognised, if the carrying amount of these assets exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. Value in use is arrived at by discounting the future cash flows to their present value based on an appropriate discount factor. When there is indication that an impairment loss recognised for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognised in the Statement of Profit and Loss, except in case of revalued assets.

1.18 Provisions and contingencies

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their present value and are determined based on the 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. Contingent liabilities are disclosed in the Notes.


Mar 31, 2011

A) BASIS OF ACCOUNTING

The financial statements of the company have been prepared under the historical cost convention on accrual basis of accounting in accordance with the generally accepted accounting principles, accounting standards issued by The Institute of Chartered Accountants of India (ICAI), as applicable, and the relevant disclosure requirements of Companies Act, 1956.

b) REVENUE RECOGNITION

i) The accrual basis of accounting has been followed in respect of income and expenditure.

ii) Sales figures are stated at net of sales returns and tax chargeable at the time of sale.

iii) The sale includes sale of goods made through consignment agents. No separate consignment account has been prepared to determine profit or loss on consignment. However this accounting treatment does not affect the profitability of the company and also the net worth position of the company.

c) ACCOUNTING FOR TAXES ON INCOME

i) Provision for Direct taxes has been made in accordance with provisions of Income Tax Act, 1961.

ii) The company has accounted for deferred taxation (DT) liability/ Asset in compliance of Accounting Standard AS-22 issued by ICAI.

d) RETIREMENT BENEFITS

The provision for payment of gratuity, leave encashment has been made as certified by the independent actuarial as per requirements of Accounting Standard AS-15 issued by ICAI.

e) FOREIGN CURRENCY TRANSACTIONS

I) Foreign currency transactions are initially recognized at prevailing rate at the time of transaction or nearest date thereof.

II) Monetary items denominated in foreign currencies remaining unsettled are translated at the year end rates.

III) Any Income or Expenses arising on account of exchange difference either on settlement or on translation is recognized in the profit and loss account.

f) FIXED ASSETS

Fixed Assets are stated at cost less accumulated depreciation. The company has capitalized all cost relating to acquisition of fixed assets and installation thereof.

g) DEPRECIATION

Depreciation on fixed assets is provided using written down method at the rate prescribed under Schedule XIV of the Companies Act, 1956. Proportionate depreciation is provided for additions/ deletions during the year.

h) INVENTORIES

Inventories are valued on the following basis:- 1. Finished Goods/Goods for Resale At lower of cost or net realizable value (other than rejected stock/ Scrap)

2. Raw Material At cost

3. Work in Progress At cost

4. Rejected Stock/ Scrap At net realizable value

i) IMPAIRMENT OF ASSETS AS PER AS-28

In the opinion of the management, the Net Realizable Amount (NRA) of the fixed assets of the company as on 31st March 2011 are not less than the Actual Carrying Cost shown in the balance sheet, therefore no loss on account of impairment is recognized and charged to the profit and loss account.

j) INVESTMENTS.

Company has policy to value long term investments at cost and short-term investments are valued at market price in accordance with the provisions of AS- 13 issued by ICAI.

k) PRIOR PERIOD EXPENSES AND INCOMES

Prior period expenses and incomes below Rs. 20000/- have been treated as current year''s expenses/incomes.

l) CONTINGENT LIABILITIES

i. The company has executed corporate guarantee in favour of bank for borrowing of Rs 1.70 crores by director of the company. The company has derived due benefits from such guarantee.

ii. The company is taken on rent various commercial properties and has been regularly paying rent thereof but has not paid service tax on rents chargeable under provisions of Finance Act. The payments have not been made on the basis of judgment of Delhi Court ruling against the leviability of service tax on rentals. Service Tax on such amounts of rent paid works out to Rs 79,24,991/-. The liability of said amount of Rs 79,24,991/- may arise on the company if the matter is decided in favour of revenue.

m) CLAIMS NOT ACKNOWLEDGED BY THE COMPANY

i. Demand of Rs 4.38 lacs has been raised by Employees State Insurance Corporation in respect of persons not employed by the company. No provision has been made for the liability as the company has contested the demand in the Civil Court.

ii. Company is contesting demand of Rs 56.59 lacs in labour court, against amount demanded by some employees of the company.

iii. Fine of Rs 1.00 lacs has been levied by Chief Inspector Factory for factory premises inspection irregularities. No provision has been made for the liability as the company has contested the demand in the Civil Court.

iv. Demand of Rs. 18.48 lacs has been raised by the Delhi VAT Department for the year 2005-06 that has been contested by the company in appeal with appropriate Appellate Authority.

v. Demand of Rs. 1.26 lacs has been raised by sales tax department for the year 2007-08 that has been contested by the company in appeal.

vi. Demand of Rs. 174.31 lacs has been raised by the Income Tax Department u/s 201(1) and 201(1A) of Income Tax Act for the assessment year 2009-10 out of which amount Rs 173.92 lacs has been contested by the company in appeal with appropriated Appellate Authority.

vii. Demand of Rs. 15.71 lacs has been raised by the Income Tax Department u/s 201(1) and 201(1A) of Income Tax Act for the assessment year 2008-09 out of which amount Rs 15.51 lacs has been contested by the company.

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