Accounting Policies of Trent Ltd. Company
Mar 31, 2022
Company information
Trent Limited (The Company) is a Public Limited Company domiciled in India and is incorporated under the provisions of the Indian Companies Act, 1913. Itâs shares are listed on two recognized stock exchanges in India. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai, 400001. The Company is engaged in retailing / trading of apparels, footwear, accessories, toys, games etc. It operates through âWestsideâ, âLandmarkâ, âZudioâ and "Utsaâ retail formats. Westside -Trentâs flagship format offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. Operating with a predominantly exclusive brands model, Westside continues to demonstrate the ability to compete effectively in the market place. Landmark, a family entertainment format - offers a curated range of toys, front list books and sports merchandise. Zudio is a value retail format catering to apparels and footwear for men, women and children. Utsa is a modern Indian lifestyle format which offers ethnic apparel, beauty products and accessories.
Note 22.1 Basis of preparation
These separate financial statements are prepared on the accrual basis of accounting and in accordance with the Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 and referred under Section 133 of the Companies Act,2013.
The separate financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 27th April, 2022.
These separate financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value or amortized cost (refer accounting policy regarding financial instruments). These separate financial statements are presented in Indian Rupees (?) in crores, which is also the Companyâs functional currency. All values are rounded off to the nearest (?) in crore upto two decimals, except when otherwise indicated.
2.2 Summary of Significant accounting policies
a) Foreign currencies
Foreign currency transactions are accounted at the rates prevailing on the date of transaction. Year-end monetary assets and liabilities are translated at the exchange rate ruling on reporting date. Exchange differences on settlement/conversion are adjusted to the Statement of Profit and Loss.
Non monetary items measured at historical cost/fair value, are translated using the exchange rate prevailing on the date of transaction/fair value measurement respectively.
The Company measures certain financial instrument at fair value at each reporting date. Fair value is the price that would be received on sale of 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 participantâs 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 is 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2 (If Level 1 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3 (If Level 1 and 2 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Companyâs Board / Board Committee / Director approves the policies 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 as part of discontinued operations. Where required / appropriate, external valuers are involved. The Board / Board Committee review the valuation results. This includes a discussion of the major assumptions used in the valuations.
c) Revenue recognition Operating revenues
Revenue from sale of goods is recognised when goods are delivered and control has been transferred to the buyer or buyerâs agents. Revenue from sale of goods is stated net of discounts, returns, applicable taxes and adjustment with respect to accrued loyalty points. Revenue is measured at fair value of the consideration received or receivable. Other operating revenues are recognised on accrual basis. Consideration received is allocated between goods sold and customer loyalty points issued, with the consideration allocated to the points equal to their fair value. The fair value of points issued is deferred and recognised as revenue when the points are redeemed.
Revenue from display and sponsorship services, commission on sales, fees, etc. is recognised when the service is provided to the customer.
Interest income is recognised on an accrual basis using effective interest rate (EIR) method.
Dividend income is recognised when the companyâs right to receive the payment is established.
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms, except where escalation in rent is in line with expected general inflation.
d) Taxes on Income Current Tax
Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed, it also takes into account current income tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity) in accordance with the provisions of the relevant tax laws. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate. Current tax assets and current tax liabilities are offset if a legally enforceable right exists to set off the recognised amounts.
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in Statement of Profit and Loss, Other Comprehensive Income or directly in Equity as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities.
e) Property, plant and equipment
All items of Property, Plant and Equipment, including freehold land, are initially recorded at cost. Subsequent to initial recognition, Property, Plant and Equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of Property, Plant and Equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable.
The cost of an item of Property, Plant and Equipment is 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. The cost includes the purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use, cost of replacing part of the Property, Plant and Equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying Property, Plant and Equipment. The accounting policy for borrowing costs is set out in note (h) below. All other repair and maintenance costs are recognised in the Statement of Profit or Loss as incurred.
Depreciation on tangible assets is provided in accordance with IND AS 16 âProperty, Plant and Equipmentâ with useful life as prescribed in Schedule II of the Companies Act, 2013 as below except improvements to leasehold property which are amortized over the period of lease term.
a) In respect of the assets of the retail business on "Straight Lineâ method.
b) In respect of all other assets on "Written Down Valueâ method.
|
Assets |
Useful life in years |
|
Building |
60 |
|
Plant & Equipment |
15 |
|
Furniture and Electrical Installation |
10 |
|
Office Equipment |
5 |
|
Computers/Computer server |
3/6 |
|
Vehicles |
8 |
An item of Property, Plant and Equipment is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of Profit and Loss in the year the asset is de-recognized.
The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.
Intangible assets acquired are initially recorded at cost. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. The amortization expense on intangible assets with finite lives is recognised in the Statement of Profit and Loss. In case of finite lives, following useful economic life has been considered:
|
Assets |
Useful life in years |
|
Computer software |
5 |
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognized.
Goodwill and Distribution Network are considered as intangible assets with indefinite life, hence not amortised. The carrying values of these assets are reviewed for impairment annually or changes in circumstances indicating that the carrying value may not be recoverable.
Property that is held to earn rentals or for capital appreciation or both, and that is also not occupied by the company, is classified as Investment Property. Investment Property is measured initially at cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. Depreciation is provided using the Straight Line Method in accordance with IND AS 40 âInvestment Propertyâ with useful life as prescribed in Schedule II of the Companies Act, 2013.
|
Components of Investment Property |
Useful life in years |
|
Building |
60 |
|
Furniture and Electrical Installations |
10 |
|
Office Equipment |
5 |
A part of investment property is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year it is de-recognized. All other repair and maintenance costs are expensed when incurred.
The residual values, useful lives and methods of depreciation of investment property is reviewed at the end of each reporting period and adjusted prospectively, as appropriate.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Company as lessee
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
⢠Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
⢠Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
⢠The amount expected to be payable by the lessee under residual value guarantees;
⢠The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
⢠Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease. The lease liability is presented as a separate line in the financial statement.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
⢠The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
⢠The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
⢠A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The effective date of the modification is the date when both the parties agree to the lease modification and is accounted for in that point in time.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets are presented as a separate line in the statement of financial position.
The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the âProperty, Plant and Equipmentâ policy.
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line "Other expensesâ in profit or loss.
As a practical expedient, IND AS 116 permits a lessee not to separate lease and non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient and has recognised single ROU for entire lease and non lease components.
The Company enters into lease agreements as a lessor with respect to some of its investment properties. Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term.
Amounts due from lessee under finance leases are recognised as receivables at the amount of the Companyâs net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Companyâs net investment outstanding in respect of the leases.
When a contract includes both lease and non-lease components, the Company account entire consideration as lease.
Inventories are valued at the lower of cost on the basis of moving weighted average price or net realizable value.
The cost of inventories includes all cost of purchases, cost of conversion and other related cost incurred to bring the inventories to its present location and condition. Goods and materials in transit are valued at actual cost incurred upto the date of Balance Sheet.
k) Impairment of Non-Financial Assets
The carrying value of assets/cash generating units at each Balance Sheet date are reviewed for impairment. If, any such indication exists, the Company estimates their recoverable amount and impairment is recognised if, the carrying amount of these assets/cash generating units exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. 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 & Loss.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of such obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to such provision is presented in the Statement of Profit & Loss net of such reimbursement. The reimbursement is recognised as a separate asset only when the reimbursement is virtually certain and the amount receivable can be measured reliably.
A disclosure for contingent liability is made, when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
The Company participates in various employee benefit plans. Pensions and Other Post-Employment benefits are classified as either Defined Contribution Plans or Defined Benefit Plans. Under Defined Contribution Plan, the Companyâs only obligation is to pay a fixed amount. Under a Defined Benefit Plan, it is the Companyâs obligation to provide agreed benefits to the employees. The present value of the Defined Benefit Obligations is calculated by an independent actuary using the Projected Unit Credit Method. The Company has the following employee benefit plans:
(i) Contribution to Provident Fund, Family Pension Fund, ESIC, Labour Welfare Fund and Superannuation Fund
(a) Companyâs contributions during the year towards Government administered Provident Fund, Family Pension Fund, ESIC and Labour Welfare Fund are charged to the Statement of Profit & Loss as incurred
(b) Companyâs contributions during the year towards Superannuation, to the Superannuation Trust administered by a Life Insurance Company are charged to the Statement of Profit and Loss as incurred.
In accordance with the Payment of Gratuity Act 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Life Insurance Corporation of India (LIC) and TATA AIG. The Companyâs obligation in respect of the gratuity plan, which is a Defined Benefit Plan, is provided for based on actuarial valuation using the Projected Unit Credit Method. The Company recognizes actuarial gains and losses immediately in other comprehensive income, net of taxes.
(iii) Other Retirement Benefit
Provision for Other Retirement/Post Retirement Benefits in the forms of Pensions, Medical Benefits and Long Term Compensated Absences (Leave Encashment) is made on the basis of actuarial valuation.
n) Financial Instruments i) Financial Assets
Initial Recognition and Measurement
All financial assets are recognised initially at fair value (purchase value plus transaction costs that are attributable to the acquisition of the financial asset), amortized cost or at cost. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in five categories:
⢠Debt instruments at Amortized Cost.
⢠Debt instruments at Fair Value Through Other Comprehensive Income (FVTOCI).
⢠Debt instruments, derivatives and equity instruments at Fair Value Through Profit or Loss (FVTPL).
⢠Equity instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI) or Fair Value Through Profit or Loss (FVTPL).
⢠Equity instruments measured at Cost.
Debt Instruments at Amortized Cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the outstanding principal amount.
After initial measurement, financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit or Loss. The losses arising from impairment are recognised in the Statement of Profit or Loss.
Debt Instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit & Loss.
Equity Instruments measured at FVTOCI or FVTPL
All equity investments in scope of Ind-AS 109 are measured at Fair Value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as 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 instrument, excluding dividends, are recognized in the Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit and loss statement.
Equity instruments measured at Cost
Equity instruments / Investments in subsidiaries / Joint Ventures / Associates are accounted at cost in accordance with Ind AS 27 - Separate Financial Statements.
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of Financial Assets
The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred âloss eventâ) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
ii) Non-Derivative Financial Liabilities
Financial liabilities are classified as either "Financial Liabilities at fair value through profit or lossâ or "Other Financial Liabilitiesâ
(a) Financial liabilities are classified as "Financial Liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities at fair value through profit or loss. These are measured initially at fair value with subsequent changes recognized in Profit or Loss. Fair value is determined as per IND AS 113 âFair Value Measurementâ.
(b) Other financial liabilities, including loans and borrowing, are initially measured at fair value, net of directly attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the EIR method.
Derecognition of Financial Liabilities
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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
iii) 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, to realize the assets and settle the liabilities simultaneously.
Note 33.1 Significant accounting judgments, estimates and assumptions
The preparation of the Companyâs standalone financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying 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. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognized in the year in which the estimates are revised and in any future year affected.
In the process of applying the Companyâs accounting policies, management has made the following judgements, estimates and assumptions which have significant effect on the amounts recognised in the financial statements.
Provision for doubtful advances and trade receivables: The Company is not significantly exposed to credit risk as most of the sales are in cash, credit cards or redeemable vouchers issued by others. Similarly advance to parties are made in normal course of business as per terms and conditions of the contract. Since the amount involved is not material, the Company does not calculate any credit loss for trade receivables and advances to parties as required under Ind AS 109 âFinancial Instrumentsâ. However, the company provides for doubtful advances and trade receivables based on its judgement about recoverability of amount.
Styleclub points: The company has considered nil breakage for the purpose of calculating deferred revenue related to loyalty points.
Defined benefit plans: The cost and present obligation of Defined Benefit Gratuity Plan and Compensated Absences are determined using actuarial valuation. 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 and mortality rates. Due to 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 assumed at each reporting date.
Fair Value measurement of Financial Instruments: When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.
Taxes: Deferred tax, subject to the consideration of prudence, is recognised on temporary differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised to the extent that there is reasonable certainty that sufficient future tax income will be available against which such deferred tax assets can be realized.
Impairment of financial assets: The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Discounting of lease payments and deposits: The lease payments and deposits are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses applicable incremental borrowing rate as independently sourced.
3.2 Standards issued but not yet effective
Ministry of Corporate Affairs ("MCAâ) notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1, 2022.
3.3 Standards that became effective during the year
There are no new Standards that became effective during the year. Amendments that became effective during the year did not have any material effect.
Mar 31, 2021
Note 1
Company information
Trent Limited (The Company) is a Public Limited Company domiciled in India and is incorporated under the provisions of the Indian Companies Act, 1913. It''s shares are listed on two recognized stock exchanges in India. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai, 400001. The Company is engaged in retailing / trading of apparels, footwear, accessories, toys, games etc. It operates through ''Westside, ''Landmark,''Zudio''and "Utsa" retail formats. Westside - Trent''s flagship format offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. Operating with a predominantly exclusive brands model, Westside continues to demonstrate the ability to compete effectively in the market place. Landmark, a family entertainment format - offers a curated range of toys, front list books and sports merchandise. Zudio is a value retail format catering to apparels and footwear for men, women and children. Utsa is a modern Indian lifestyle format which offers ethnic apparel, beauty products and accessories.
Note 22.1 Basis of preparation
These separate financial statements are prepared on the accrual basis of accounting and in accordance with the Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 and referred under Section 133 of the Companies Act,2013.
The separate financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 30th April, 2021.
These separate financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value or amortized cost (refer accounting policy regarding financial instruments). These separate financial statements are presented in Indian Rupees (?) in crores, which is also the Company''s functional currency. All values are rounded off to the nearest (?) in crore upto two decimals, except when otherwise indicated.
2.2 Summary of Significant accounting policies
a) Foreign currencies
Foreign currency transactions are accounted at the rates prevailing on the date of transaction. Year-end monetary assets and liabilities are translated at the exchange rate ruling on reporting date. Exchange differences on settlement/conversion are adjusted to the Statement of Profit and Loss.
Non monetary items measured at historical cost/fair value, are translated using the exchange rate prevailing on the date of transaction/fair value measurement respectively.
The Company measures certain financial instrument at fair value at each reporting date. Fair value is the price that would be received on sale of 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 is 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2 (If Level 1 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3 (If Level 1 and 2 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company''s Board / Board Committee / Director approves the policies 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 as part of discontinued operations. Where required / appropriate, external valuers are involved. The Board / Board Committee review the valuation results. This includes a discussion of the major assumptions used in the valuations.
c) Revenue recognition Operating revenues
Revenue from sale of goods is recognised when goods are delivered and control has been transferred to the buyer or buyer''s agents. Revenue from sale of goods is stated net of discounts, returns, applicable taxes and adjustment with respect to accrued loyalty points. Revenue is measured at fair value of the consideration received or receivable. Other operating revenues are recognised on accrual basis. Consideration received is allocated between goods sold and customer loyalty points issued, with the consideration allocated to the points equal to their fair value. The fair value of points issued is deferred and recognised as revenue when the points are redeemed.
Revenue from display and sponsorship services, commission on sales, fees, etc. is recognised when the service is provided to the customer.
Interest income is recognised on an accrual basis using effective interest rate (EIR) method.
Dividend income is recognised when the company''s right to receive the payment is established.
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms, except where escalation in rent is in line with expected general inflation.
d) Taxes on Income Current Tax
Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed, it also takes into account current income tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity) in accordance with the provisions of the relevant tax laws. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate. Current tax assets and current tax liabilities are offset if a legally enforceable right exists to set off the recognised amounts.
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in Statement of Profit and Loss, Other Comprehensive Income or directly in Equity as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities.
e) Property, plant and equipment
All items of Property, Plant and Equipment, including freehold land, are initially recorded at cost. Subsequent to initial recognition, Property, Plant and Equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of Property, Plant and Equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The cost of an item of Property, Plant and Equipment is 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. The cost includes the purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use, cost of replacing part of the Property, Plant and Equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying Property, Plant and Equipment. The accounting policy for borrowing costs is set out in note (h) below. All other repair and maintenance costs are recognised in the Statement of Profit or Loss as incurred. Depreciation on tangible assets is provided in accordance with IND AS 16 ''Property, Plant and Equipment'' with useful life as prescribed in Schedule II of the Companies Act, 2013 as below except improvements to leasehold property which are amortized over the period of lease term.
a) In respect of the assets of the retail business on "Straight Line" method.
b) In respect of all other assets on "Written Down Value" method.
An item of Property, Plant and Equipment is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of Profit and Loss in the year the asset is de-recognized.
|
Assets |
Useful life in years |
|
Building |
60 |
|
Plant & Equipment |
15 |
|
Furniture and Electrical Installation |
10 |
|
Office Equipment |
5 |
|
Computers/Computer server |
3/6 |
|
Vehicles |
8 |
The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.
Intangible assets acquired are initially recorded at cost. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. The amortization expense on intangible assets with finite lives is recognised in the Statement of Profit and Loss. In case of finite lives, following useful economic life has been considered:
Assets Useful life in years
Computer software 5
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognized.
Goodwill and Distribution Network are considered as intangible assets with indefinite life, hence not amortised. The carrying values of these assets are reviewed for impairment annually or changes in circumstances indicating that the carrying value may not be recoverable.
Property that is held to earn rentals or for capital appreciation or both, and that is also not occupied by the company, is classified as Investment Property. Investment Property is measured initially at cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. Depreciation is provided using the Straight Line Method in accordance with IND AS 40 ''Investment Property'' with useful life as prescribed in Schedule II of the Companies Act, 2013.
|
Components of Investment Property |
Useful life in years |
|
Building |
60 |
|
Furniture and Electrical Installations |
10 |
|
Office Equipment |
5 |
A part of investment property is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year it is de-recognized. All other repair and maintenance costs are expensed when incurred. The residual values, useful lives and methods of depreciation of investment property is reviewed at the end of each reporting period and adjusted prospectively, as appropriate.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
⢠Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;
⢠Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
⢠The amount expected to be payable by the lessee under residual value guarantees;
⢠The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
⢠Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made. The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
⢠The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
⢠The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
⢠A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. The effective date of the modification is the date when both the parties agree to the lease modification and is accounted for in that point in time.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease. The right-of-use assets are presented as a separate line in the statement of financial position. The Company applies Ind AS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the ''Property, Plant and Equipment'' policy.
Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line "Other expenses" in profit or loss. As a practical expedient, IND AS 116 permits a lessee not to separate lease and non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has used this practical expedient and has recognised single ROU for entire lease and non lease components.
The Company enters into lease agreements as a lessor with respect to some of its investment properties. Leases for which the Company is a lessor are classified as finance or operating leases. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
When the Company is an intermediate lessor, it accounts for the head lease and the sub-lease as two separate contracts. The sub-lease is classified as a finance or operating lease by reference to the right-of-use asset arising from the head lease. Rental income from operating leases is recognised on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised on a straight-line basis over the lease term. Amounts due from lessee under finance leases are recognised as receivables at the amount of the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company''s net investment outstanding in respect of the leases. When a contract includes both lease and non-lease components, the Company account entire consideration as lease.
Inventories are valued at the lower of cost on the basis of moving weighted average price or net realizable value.
The cost of inventories includes all cost of purchases, cost of conversion and other related cost incurred to bring the inventories to its present location and condition. Goods and materials in transit are valued at actual cost incurred upto the date of Balance Sheet.
k) Impairment of Non-Financial Assets
The carrying value of assets/cash generating units at each Balance Sheet date are reviewed for impairment. If, any such indication exists, the Company estimates their recoverable amount and impairment is recognised if, the carrying amount of these assets/cash generating units exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. 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 & Loss.
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of such obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to such provision is presented in the Statement of Profit & Loss net of such reimbursement. The reimbursement is recognised as a separate asset only when the reimbursement is virtually certain and the amount receivable can be measured reliably.
A disclosure for contingent liability is made, when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
The Company participates in various employee benefit plans. Pensions and Other Post-Employment benefits are classified as either Defined Contribution Plans or Defined Benefit Plans. Under Defined Contribution Plan, the Company''s only obligation is to pay a fixed amount. Under a Defined Benefit Plan, it is the Company''s obligation to provide agreed benefits to the employees. The present value of the Defined Benefit Obligations is calculated by an independent actuary using the Projected Unit Credit Method. The Company has the following employee benefit plans:
(i) Contribution to Provident Fund, Family Pension Fund, ESIC, LabourWelfare Fund and Superannuation Fund
(a) Company''s contributions during the year towards Government administered Provident Fund, Family Pension Fund, ESIC and Labour Welfare Fund are charged to the Statement of Profit & Loss as incurred.
(b) Company''s contributions during the year towards Superannuation, to the Superannuation Trust administered by a Life Insurance Company are charged to the Statement of Profit and Loss as incurred.
(ii) Gratuity
In accordance with the Payment of Gratuity Act 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Life Insurance Corporation of India (LIC) and TATA AIG. The Company''s obligation in respect of the gratuity plan, which is a Defined Benefit Plan, is provided for based on actuarial valuation using the Projected Unit Credit Method. The Company recognizes actuarial gains and losses immediately in other comprehensive income, net of taxes.
(iii) Other Retirement Benefit
Provision for Other Retirement/Post Retirement Benefits in the forms of Pensions, Medical Benefits and Long Term Compensated Absences (Leave Encashment) is made on the basis of actuarial valuation.
n) Financial Instruments i) Financial Assets
Initial Recognition and Measurement
All financial assets are recognised initially at fair value (purchase value plus transaction costs that are attributable to the acquisition of the financial asset), amortized cost or at cost. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in five categories:
⢠Debt instruments at Amortized Cost.
⢠Debt instruments at Fair Value Through Other Comprehensive Income (FVTOCI).
⢠Debt instruments, derivatives and equity instruments at Fair Value Through Profit or Loss (FVTPL).
⢠Equity instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI) or Fair Value Through Profit or Loss (FVTPL).
⢠Equity instruments measured at Cost.
Debt Instruments at Amortized Cost
A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the outstanding principal amount.
After initial measurement, financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit or Loss. The losses arising from impairment are recognised in the Statement of Profit or Loss.
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit & Loss.
Equity Instruments measured at FVTOCI or FVTPL
All equity investments in scope of Ind-AS 109 are measured at Fair Value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as 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 instrument, excluding dividends, are recognized in the Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit and loss statement.
Equity instruments measured at Cost
Equity instruments / Investments in subsidiaries / Joint Ventures / Associates are accounted at cost in accordance with Ind AS 27 - Separate Financial Statements.
Derecognition
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of Financial Assets
The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ''loss event'') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
ii) Non-Derivative Financial Liabilities
Financial liabilities are classified as either "Financial Liabilities at fair value through profit or loss" or "Other Financial Liabilities".
(a) Financial liabilities are classified as "Financial Liabilities at fair value through profit or loss" if they are held for trading or if they are designated as financial liabilities at fair value through profit or loss. These are measured initially at fair value with subsequent changes recognized in Profit or Loss. Fair value is determined as per IND AS 113 ''Fair Value Measurement.
(b) Other financial liabilities, including loans and borrowing, are initially measured at fair value, net of directly attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the EIR method.
Derecognition of Financial Liabilities
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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
iii) 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, to realize the assets and settle the liabilities simultaneously.
3.1 Significant accounting judgments, estimates and assumptions
The preparation of the Company''s standalone financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying 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. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances existing when the financial statements were prepared. The estimates and underlying assumptions are reviewed on an ongoing basis. Revision to accounting estimates is recognized in the year in which the estimates are revised and in any future year affected.
In the process of applying the Company''s accounting policies, management has made the following judgements, estimates and assumptions which have significant effect on the amounts recognised in the financial statements.
Provision for doubtful advances and trade receivables: The Company is not significantly exposed to credit risk as most of the sales are in cash, credit cards or redeemable vouchers issued by others. Similarly advance to parties are made in normal course of business as per terms and conditions of the contract. Since the amount involved is not material, the Company does not calculate any credit loss for trade receivables and advances to parties as required under Ind AS 109 ''Financial Instruments''. However, the company provides for doubtful advances and trade receivables based on its judgement about recoverability of amount.
Styleclub points: The company has considered nil breakage for the purpose of calculating deferred revenue related to loyalty points.
Defined benefit plans: The cost and present obligation of Defined Benefit Gratuity Plan and Compensated Absences are determined using actuarial valuation. 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 and mortality rates. Due to 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 assumed at each reporting date.
Fair Value measurement of Financial Instruments: When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using appropriate valuation techniques. The inputs for these valuations are taken from observable sources where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of various inputs including liquidity risk, credit risk, volatility etc. Changes in assumptions/judgements about these factors could affect the reported fair value of financial instruments.
Taxes: Deferred tax, subject to the consideration of prudence, is recognised on temporary differences between the taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax assets are recognised to the extent that there is reasonable certainty that sufficient future tax income will be available against which such deferred tax assets can be realized.
Impairment of financial assets: The impairment provision for financial assets are based on assumptions about risk of default and expected loss rates. The company uses judgement in making these assumptions and
selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Discounting of lease payments and deposits: The lease payments and deposits are discounted using the interest rate implicit in the lease, if that rate can be readily determined. If that rate cannot be readily determined, the Company uses applicable incremental borrowing rate as independently sourced.
3.2 Standards issued but not yet effective
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1, 2021.
3.3 Standards that became effective during the year
There are no new Standards that became effective during the year. Amendments that became effective during the year did not have any material effect except for amendments to Ind AS 116 para 46A for which effect has been separately disclosed below as required in para 60A of the above mentioned standard:
Amendments to Ind AS 116 - Covid-19 Related Rent Concessions:
The Company has applied practical expedient of Para 46 A of Ind AS 116 to all the eligible rent concession and consequently recognised '' 88.81 Crores as part of other income in the profit and loss statement for the year ended March''21.
Mar 31, 2019
a) Foreign currencies
Foreign currency transactions are accounted at the rates prevailing on the date of transaction. Year-end monetary assets and liabilities are translated at the exchange rate ruling on reporting date. Exchange differences on settlement/conversion are adjusted to the Statement of Profit and Loss.
Non monetary items measured at historical cost/fair value, are translated using the exchange rate prevailing on the date of transaction/fair value measurement respectively.
b) Fair value measurement
The Company measures certain financial instruments at fair value at each reporting date. Fair value is the price that would be received on sale of 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 participantâs 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 is 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
- Level 2 (If Level 1 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 (If Level 1 and 2 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Companyâs Board / Board Committee / Director approves the policies 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 as part of discontinued operations. Where seen required / appropriate external valuers are involved. The Board / Board Committee review the valuation results. This includes a discussion of the major assumptions used in the valuations.
c) Revenue recognition
Operating revenues
Revenue from sale of goods is recognised when goods are delivered and the significant risks and rewards of ownership have been transferred to the buyer or buyerâs agents. Revenue from sale of goods is stated net of discounts, returns, applicable taxes and adjustment with respect to accrued loyalty points. Revenue is measured at fair value of the consideration received or receivable. Other operating revenues are recognised on accrual basis. Consideration received is allocated between goods sold and customer loyalty points issued, with the consideration allocated to the points equal to their fair value. The fair value of points issued is deferred and recognised as revenue when the points are redeemed.
Income from services
Revenue from display and sponsorship services, commission on sales, fees, etc. is recognised when the service is provided to the customer.
Interest income
Interest income is recognised on an accrual basis using effective interest rate (EIR) method.
Dividends
Dividend income is recognised when the companyâs right to receive the payment is established.
Rental income
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms, except where escalation in rent is in line with expected general inflation.
d) Taxes on Income Current Tax
Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed, it also takes into account current income tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity) in accordance with the provisions of the relevant tax laws. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions, where appropriate. Current tax assets and current tax liabilities are offset if a legally enforceable right exists to set off the recognised amounts.
Deferred tax
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in Statement of Profit and Loss, Other Comprehensive Income or directly in Equity as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities.
e) Property, plant and equipment
All items of Property, Plant and Equipment, including freehold land, are initially recorded at cost. Subsequent to initial recognition, Property, Plant and Equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of Property, Plant and Equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The cost of an item of Property, Plant and Equipment is recognised 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. The cost includes the purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use, cost of replacing part of the Property, Plant and Equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying Property, Plant and Equipment. The accounting policy for borrowing costs is set out in note (h) below. All other repair and maintenance costs are recognised in the Statement of Profit or Loss as incurred. Depreciation on tangible assets is provided in accordance with Ind AS 16 âProperty, Plant and Equipmentâ with useful life as prescribed in Schedule II of the Companies Act, 2013 as below except improvements to leasehold property which are amortized over the period of lease term.
a) In respect of the assets of the retail business on âStraight Lineâ method.
b) In respect of all other assets on âWritten Down Valueâ method.
An item of Property, Plant and Equipment is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of Profit and Loss in the year the asset is de-recognised.
The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.
f) Intangible assets
Intangible assets acquired are initially recorded at cost. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. The amortization expense on intangible assets with finite lives is recognised in the Statement of Profit and Loss. In case of finite lives, following useful economic life has been considered:
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Statement of Profit and Loss when the asset is derecognised.
Goodwill and Distribution Network are considered as intangible assets with indefinite life hence not amortised. The carrying values of these assets are reviewed for impairment annually or when changes in circumstances indicate that the carrying value may not be recoverable.
g) Investment Property
Property that is held to earn rentals or for capital appreciation or both, and that is also not occupied by the company, is classified as Investment Property. Investment Property is measured initially at cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. Depreciation is provided using the Straight Line Method in accordance with Ind AS 40 âInvestment Propertyâ with useful life as prescribed in Schedule II of the Companies Act, 2013.
A part of investment property is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year it is de-recognised. All other repair and maintenance costs are expensed when incurred. The residual values, useful lives and methods of depreciation of investment property is reviewed at the end of each reporting period and adjusted prospectively, as appropriate.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
i) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is (or contains) a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a Finance Lease or an Operating Lease. Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor are recognised as Operating Leases. Lease rents under Operating Leases are recognised in the Statement of Profit and Loss on Straight Line basis, except where escalation in rent is in line with expected general inflation.
Lease arrangements where lessee assumes substantially all the risks and rewards of ownership are classified as Finance Leases. Finance leases are capitalized at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.
j) Inventories
Inventories are valued at the lower of Cost on the basis of Moving Weighted Average Price or Net Realizable Value.
The cost of inventories includes all cost of purchases, cost of conversion and other related cost incurred to bring the inventories to its present location and condition. Goods and materials in transit are valued at actual cost incurred upto the date of Balance Sheet.
k) Impairment of Non-Financial Assets
The carrying value of assets/cash generating units at each Balance Sheet date are reviewed for impairment. if, any such indication exists, the Company estimates their recoverable amount and impairment is recognised if, the carrying amount of these assets/cash generating units exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. 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.
l) Provisions General
Provisions are recognised when, the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of such obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to such provision is presented in the Statement of Profit & Loss net of such reimbursement. The reimbursement is recognised as a separate asset only when the reimbursement is virtually certain and the amount receivable can be measured reliably.
Contingencies
A disclosure for contingent liability is made, when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
m) Employee Benefits
The Company participates in various employee benefit plans. Pensions and Other Post-Employment benefits are classified as either Defined Contribution Plans or Defined Benefit Plans. Under Defined Contribution Plan, the Companyâs only obligation is to pay a fixed amount. Under a Defined Benefit Plan, it is the Companyâs obligation to provide agreed benefits to the employees. The present value of the Defined Benefit Obligations is calculated by an independent actuary using the Projected Unit Credit Method. The Company has the following employee benefit plans:
(i) Contribution to Provident Fund, Family Pension Fund, ESIC, Labour Welfare Fund and Superannuation Fund
(a) Companyâs contributions during the year towards Government administered Provident Fund, Family Pension Fund, ESIC and Labour Welfare Fund are charged to the Statement of Profit & Loss as incurred.
(b) Companyâs contributions during the year towards Superannuation, to the Superannuation Trust administered by a Life Insurance Company are charged to the Statement of Profit and Loss as incurred.
(ii) Gratuity
In accordance with the Payment of Gratuity Act 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Life Insurance Corporation of India (LIC) and TATA AIG. The Companyâs obligation in respect of the gratuity plan, which is a Defined Benefit Plan, is provided for based on actuarial valuation using the Projected Unit Credit Method. The Company recognizes actuarial gains and losses immediately in Other Comprehensive Income, net of taxes.
(iii) Other Retirement Benefit
Provision for Other Retirement/Post Retirement Benefits in the forms of Pensions, Medical Benefits and Long Term Compensated Absences (Leave Encashment) is made on the basis of actuarial valuation.
n) Financial Instruments
i) Financial Assets
Initial recognition and measurement
All financial assets are recognised initially at fair value (purchase value plus transaction costs that are attributable to the acquisition of the financial asset), amortized cost or at cost. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in five categories:
- Debt Instruments at Amortized Cost.
- Debt Instruments at Fair Value Through Other Comprehensive Income (FVTOCI).
- Debt Instruments, Derivatives and Equity Instruments at Fair Value Through Profit or Loss (FVTPL).
- Equity Instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI) or Fair Value Through Profit or Loss (FVTPL).
- Equity Instruments measured at Cost.
Debt Instruments at Amortized Cost : A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the outstanding principal amount.
After initial measurement, financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss.
Debt Instrument at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.
Equity Instruments measured at FVTOCI or FVTPL: All equity investments in scope of Ind AS 109 are measured at Fair Value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as 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 instrument, excluding dividends, are recognised in the Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the Statement of Profit and Loss.
Equity instruments measured at Cost: Equity instruments / Investments in subsidiaries / Joint Ventures / Associates are accounted at cost in accordance with Ind AS 27 - Separate Financial Statements.
Derecognition: The Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of Financial Assets: The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that have occurred after the initial recognition of the asset (an incurred âloss eventâ) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
ii) Non-Derivative Financial Liabilities
Financial liabilities are classified as either âFinancial Liabilities at fair value through profit or lossâ or âOther Financial Liabilitiesâ.
(a) Financial liabilities are classified as âFinancial Liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities at fair value through profit or loss. These are measured initially at fair value with subsequent changes recognised in Statement of Profit and Loss. Fair value is determined as per IND AS 113 âFair Value Measurement.
(b) Other financial liabilities, including loans and borrowing, are initially measured at fair value, net of directly attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the EIR method.
Derecognition of Financial Liabilities
A financial liability is derecognised 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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
iii) 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, to realize the assets and settle the liabilities simultaneously.
Mar 31, 2018
Note 1
Company information
Trent Limited (The Company) is a Public Limited Company domiciled in India and is incorporated under the provisions of the Indian Companies Act, 1913. Its shares are listed on two recognized stock exchanges in India. The registered office of the Company is located at Bombay House, 24, Homi Mody Street, Mumbai, 400001.The Company is engaged in retailing of apparels, footwear, accessories, toys, games etc. It operates through ''Westside, ''Landmark'' and ''Zudio'' retail formats. Westside - Trent''s flagship format offers apparel, footwear and accessories for men, women and children, along with furnishings, decor and a range of home accessories. Operating with a predominantly exclusive brands model, Westside continues to demonstrate the ability to compete effectively in the market place. Landmark a family entertainment format- offers a curated range of toys, front list books and sports merchandise. Zudio is a value retail format catering to apparels and footwear for men, women and children.
Note 2 2.1 Basis of preparation
These separate financial statements are prepared on the accrual basis of accounting and in accordance with the Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules, 2015 and referred under Section 133 of the Companies Act,2013.
The financial statements were authorized for issue in accordance with a resolution passed by the Board of Directors on 3rd May 2018.
These separate financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value or amortized cost (refer accounting policy regarding financial instruments). These separate financial statements are presented in Indian rupees (INR) in Crores, which is also the Company''s functional currency. All values are rounded off to the nearest INR crore up to two decimals, except when otherwise indicated.
2.2 Summary of Significant accounting policies
a) Foreign currencies
Foreign currency transactions are accounted at the rates prevailing on the date of transaction. Year-end monetary assets and liabilities are translated at the exchange rate ruling on reporting date. Exchange differences on settlement/conversion are adjusted to the Statement of Profit and Loss.
Non monetary items measured at historical cost/fair value are translated using the exchange rate prevailing on the date of transaction/fair value measurement respectively.
b) Fair value measurement
The Company measures certain financial instrument at fair value at each reporting date. Fair value is the price that would be received on sale of 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2 (If Level 1 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 (If Level 1 and 2 feed is not available / appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Company''s Board / Board Committee / Director approves the policies 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 as part of discontinued operations. Where seen required / appropriate external valuers are involved. The Board / Board Committee review the valuation results . This includes a discussion of the major assumptions used in the valuations.
C) Revenue recognition Operating revenues
Revenue from sale of goods is recognized when goods are delivered and the significant risks and rewards of ownership have been transferred to the buyer or buyer''s agents. Revenue from sale of goods is stated net of discounts, returns, applicable taxes and adjustment with respect to accrued loyalty points. Revenue is measured at fair value of the consideration received or receivable. Other operating revenues are recognized on accrual basis. Consideration received is allocated between goods sold and customer loyalty points issued, with the consideration allocated to the points equal to their fair value. The fair value of points issued is deferred and recognized as revenue when the points are redeemed.
Income from services
Revenue from display and sponsorship services, commission on sales, fees, etc. is recognized when the service is provided to the customer.
Interest income
Interest income is recognized on an accrual basis using effective interest rate (EIR) method.
Dividends
Dividend income is recognized when the Company''s right to receive the payment is established. Rental income
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms, except where escalation in rent is in line with expected general inflation.
d) Taxes on Income Current Tax
Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed and also takes into account current income tax relating to items recognized outside profit or loss (either in other comprehensive income or in equity) in accordance with the provisions of the relevant tax laws. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current tax assets and current tax liabilities are offset if a legally enforceable right exists to set off the recognized amounts.
Deferred tax
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. The Carrying Amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized deferred tax assets are reassessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognized in correlation to the underlying transaction either in Statement of Profit and Loss, Other Comprehensive Income or directly in equity as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities.
e) Property, plant and equipment
All items of Property, Plant and Equipment, including freehold land, are initially recorded at cost. Subsequent to initial recognition, Property, Plant and Equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of Property, Plant and Equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The cost of an item of Property, Plant and Equipment is 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. The cost includes the purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use, cost of replacing part of the Property, Plant and Equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying Property, Plant and Equipment. The accounting policy for borrowing costs is set out in note
(h) below. All other repair and maintenance costs are recognized in the Statement of Profit or Loss as incurred. Depreciation on tangible assets is provided in accordance with Ind AS 16 ''Property, Plant and Equipment'' with useful life as prescribed in Schedule II of the Companies Act, 2013 as below except improvements to leasehold property which are amortized over the period of lease term.
a) In respect of the assets of the retail business on "Straight Line" method.
b) In respect of all other assets on "Written Down Value" method.
An item of Property, Plant and Equipment is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year the asset is de-recognized. The residual values, useful lives and methods of depreciation of Property, Plant and Equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.
f) Intangible assets
Intangible assets acquired are initially recorded at cost. Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at the end of each reporting perid. The amortization expense on intangible assets with finite lives is recognized in the Staten of Profit and Loss. In case of finite lives, following useful economic life has been considered:
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Goodwill and Distribution Network are considered as intangible assets with indefinite life hence not amortized. The carrying values of these assets are reviewed for impairment annually or changes in circumstances indicating that the carrying value may not be recoverable.
g) Investment Property
Property that is held to earn rentals or for capital appreciation or both, and that is also not occupied by the company, is classified as Investment Property. Investment Property is measured initially at cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. Depreciation is provided using the Straight Line Method in accordance with Ind AS 40 investment Property'' with useful life as prescribed in Schedule II of the Companies Act, 2013.
A part of investment property is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year it is de-recognized. All other repair and maintenance costs are expensed when incurred. The residual values, useful lives and methods of depreciation of investment property is reviewed at the end of each reporting period and adjusted prospectively, as appropriate.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
i) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is (or contains) a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a Finance Lease or an Operating Lease. Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the less or are recognized as Operating Leases. Lease rents under Operating Leases are recognized in the Statement of Profit and Loss on Straight Line basis, except where escalation in rent is in line with expected general inflation.
Lease arrangements where lessee assumes substantially all the risks and rewards of ownership are classified as Finance Leases. Finance leases are capitalized at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments. Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.
j) Inventories
Inventories are valued at the lower of Cost on the basis of Moving Weighted Average Price or Net Realizable Value.
The cost of inventories includes all cost of purchases, cost of conversion and other related cost incurred to bring the inventories to its present location and condition. Goods and materials in transit are valued at actual cost incurred up to the date of Balance Sheet.
k) Impairment of Non-Financial Assets
The carrying value of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any such indication exists the Company estimates the asset''s / cash generating unit''s recoverable amount and impairment is recognized if the carrying amount of these assets / cash generating units exceeds their recoverable amount. The recoverable amount is the greater of the net selling price and their value in use. When there is indication that an impairment loss recognized for an asset in earlier accounting periods no longer exists or may have decreased, such reversal of impairment loss is recognized in the Statement of Profit & Loss.
l) Provisions General
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the Statement of Profit and Loss net of any reimbursement. The reimbursement is recognized as a separate asset, but only when the reimbursement is virtually certain the amount of the receivable can be measured reliably.
Contingencies
A disclosure for contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
m) Employee Benefits
The Company participates in various employee benefit plans. Pensions and other post-employment benefits are classified as either defined contribution plans or defined benefit plans. Under defined contribution plan, the Company''s only obligation is to pay a fixed amount. Under a defined benefit plan, it is the Company''s obligation to provide agreed benefits to the employees. The present value of the defined benefit obligations is calculated by an independent actuary using the Projected Unit Credit Method. The Company has the following employee benefit plans:
(i) Contribution to Provident Fund, Family Pension Fund, ESIC, Labour Welfare Fund and Superannuation Fund
(a) Company''s contributions during the year towards Government administered Provident Fund, Family Pension Fund, ESIC and Labour Welfare Fund are charged to the Statement of Profit and Loss as incurred.
(b) Company''s contributions during the year towards Superannuation to the Superannuation Trust administered by a Life Insurance Company are Statement of Profit and Loss as incurred.
(ii) Gratuity
I n accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Life Insurance Corporation of India (LIC) and TATA AIG . The Company''s obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the Projected Unit Credit Method. The Company recognizes actuarial gains and losses immediately in other comprehensive income, net of taxes.
(iii) Other Retirement Benefit
Provision for Other Retirement / Post Retirement Benefits in the forms of Pensions, Medical Benefits and Long Term Compensated Absences (Leave Encashment) is made on the basis of actuarial valuation.
n) Financial Instruments
i) Financial Assets
Initial recognition and measurement
All financial assets are recognized initially at fair value (purchase value plus transaction costs that are attributable to the acquisition of the financial asset), amortized cost or at cost. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognized on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in five categories:
- Debt instruments at Amortized Cost.
- Debt instruments at Fair Value Through Other Comprehensive Income (FVTOCI).
- Debt instruments, derivatives and equity instruments at Fair Value Through Profit or Loss (FVTPL).
- Equity instruments measured at Fair Value Through Other Comprehensive Income (FVTOCI) or Fair Value Through Profit or Loss (FVTPL).
- Equity instruments measured at Cost.
Debt Instruments at Amortized Cost : A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the outstanding principal amount.
After initial measurement, financial assets are subsequently measured at amortized cost using the EIR method. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit or Loss. The losses arising from impairment are recognized in the Statement of Profit or Loss.
Debt Instrument at FVTPL: FVTPL is a residual category for debt instruments. Any Debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Equity Instruments measured at FVTOCI or FVTPL: All equity investments in scope of Ind AS 109 are measured at Fair Value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as 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 instrument, excluding dividends, are recognized in the Other Comprehensive Income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit and loss statement.
Equity instruments measured at Cost: Equity instruments / Investments in subsidiaries / Joint Ventures / Associates are accounted at cost in accordance with Ind AS 27 - Separate Financial Statements.
Derecognition: The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of Financial Assets: The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ''loss event'') and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
ii) Non-Derivative Financial Liabilities
Financial liabilities are classified as either "Financial Liabilities at fair value through profit or loss" or "Other Financial Liabilities".
(a) Financial liabilities are classified as "Financial Liabilities at fair value through profit or loss" if they are held for trading or if they are designated as financial liabilities at fair value through profit or loss. These are measured initially at fair value with subsequent changes recognized in Profit or Loss. Fair value is determined as per Ind AS 113 ''Fair Value Measurement''.
(b) Other financial liabilities, including loans and borrowing, are initially measured at fair value, net of directly attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the EIR method.
Derecognition of Financial Liabilities
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 derecognition 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.
iii) 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Mar 31, 2017
a) Foreign currencies
Foreign currency transactions are accounted at the rates prevailing on the date of transaction. Year-end monetary assets and liabilities are translated at the exchange rate ruling on reporting date. Exchange differences on settlement/conversion are adjusted to the Statement of Profit and Loss. Non monetary items measured at historical cost/fair value are translated using the exchange rate prevailing on the date of transaction /fair value measurement respectively.
b) Fair value measurement
The Company measures certain financial instrument at fair value at each reporting date. Fair value is the price that would be received on sale of 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 participantâs 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, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
- Level 2(if level1 feed is not available/appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 (if level1 and 2 feed is not available/appropriate) â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
The Companyâs board/board Committee/Director approves the policies 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 as part of discontinued operations. Where seen required/appropriate external valuers are involved. The board/ board committee review the valuation results.This includes a discussion of the major assumptions used in the valuations.
c) Revenue recognition Operating revenues
Revenue from sale of goods is recognised when goods are delivered and the significant risks and rewards of ownership have been transferred to the buyer or buyerâs agents. Revenue from sale of goods is stated net of discounts, returns, applicable taxes and adjustment with respect to accrued loyalty points. Revenue is measured at fair value of the consideration received or receivable. Other operating revenues are recognised on accrual basis. Consideration received is allocated between goods sold and customer loyalty points issued, with the consideration allocated to the points equal to their fair value.The fair value of points issued is deferred and recognised as revenue when the points are redeemed.
Income from services
Revenue from display and sponsorship services, commission on sales, fees, etc. is recognised when the service is provided to the customer.
Interest income
Interest income is recognised on an accrual basis using effective interest rate (EIR) method.
Dividends
Dividend income is recognised when the Companyâs right to receive the payment is established. Rental income
Rental income arising from operating leases is accounted for on a straight-line basis over the lease terms, except where escalation in rent is in line with expected general inflation.
d) Taxes on Income Current Tax
Tax on income for the current period is determined on the basis of estimated taxable income and tax credits computed and also takes into account current income tax relating to items recognised outside profit or loss (either in other comprehensive income or in equity) in accordance with the provisions of the relevant tax laws. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate. Current tax assets and current tax liabilities are offset if a legally enforceable right exists to set off the recognised amounts.â
Deferred tax
Deferred tax is provided on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax items are recognised in correlation to the underlying transaction either in statement of profit and loss, other comprehensive income or directly in equity as applicable.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities .
e) Property, plant and equipment
All items of property, plant and equipment, including freehold land, are initially recorded at cost. Subsequent to initial recognition, property, plant and equipment other than freehold land are measured at cost less accumulated depreciation and any accumulated impairment losses. Freehold land has an unlimited useful life and therefore is not depreciated. The carrying values of property, plant and equipment are reviewed for impairment when events or changes in circumstances indicate that the carrying value may not be recoverable. The cost of an item of property, plant and equipment is 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. The cost includes the purchase price and any directly attributable costs of bringing the asset to its working condition and location for its intended use, cost of replacing part of the property, plant and equipment and borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying property, plant and equipment. The accounting policy for borrowing costs is set out in note (h) below. All other repair and maintenance costs are recognized in the statement of profit or loss as incurred. Depreciation on tangible assets is provided in accordance with Ind AS 16 âProperty, Plant and Equipmentâ with useful life as prescribed in Schedule II of the Companies Act,2013 as below except improvements to leasehold property which are amortised over the period of lease term.
a) In respect of the assets of the retail business on âStraight Lineâ method.
b) In respect of all other assets on âWritten Down Valueâ method.
An item of property, plant and equipment is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year the asset is de-recognized. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at the end of each reporting period and adjusted prospectively, if appropriate.
f) Intangible assets
Intangible assets acquired are initially recorded at cost. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at the end of each reporting period. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit and loss. In case of finite lives, following useful economic life has been considered:
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit or loss when the asset is derecognised.
g) Investment Property:
Property that is held to earn rentals or for capital appreciation or both, and that is also not occupied by the company, is classified as investment property. Investment property is measured initially at cost, including related transaction costs and where applicable borrowing costs. Subsequent expenditure is capitalized to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the company and the cost of the item can be measured reliably. Depreciation is provided using the straight line method in accordance with Ind AS 40 âInvestment propertyâ with useful life as prescribed in Schedule II of the Companies Act,2013.
A part of investment property is de-recognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Statement of profit and loss in the year it is de-recognized. All other repair and maintenance costs are expensed when incurred.
The residual values, useful lives and methods of depreciation of investment property is reviewed at the end of each reporting period and adjusted prospectively, as appropriate.
h) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
i) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is (or contains) a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease or an operating lease. Lease arrangements where the risks and rewards incident to ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rents under operating leases are recognised in the Statement of Profit and Loss on straight line basis ,except where escalation in rent is in line with expected general inflation.
Lease arrangements where lessee assumes substantially all the risks and rewards of ownership are classified as finance leases.Finance leases are capitalized at the lower of the fair value of the leased assets at inception and the present value of minimum lease payments.Lease payments are apportioned between the finance charge and the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.
j) Inventories
Inventories are valued at the lower of cost on the basis of moving weighted average price or net realisable value.
The cost of inventories includes all cost of purchases,cost of conversion and other related cost incurred to bring the inventories to its present location and condition. Goods and materials in transit are valued at actual cost incurred upto the date of balance sheet.
k) Impairment of non-financial assets
The carrying value of assets / cash generating units at each Balance Sheet date are reviewed for impairment. If any such indication exists the Company estimates the assetâs/cash generating unitâs recoverable amount and impairment is recognised if the carrying amount of these assets/cash generating units exceeds their recoverable amount.The recoverable amount is the greater of the net selling price and their value in use.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 & Loss.
l) Provisions General
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the statement of profit and loss net of any reimbursement. The reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain the amount of the receivable can be measured reliably.
Contingencies
A disclosure for contingent liability is made when there is possible obligation or a present obligation that may, but probably will not, require an outflow of resources. Where there is a possible obligation or present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made.
m) Employee benefits
The Company participates in various employee benefit plans. Pensions and other post-employment benefits are classified as either defined contribution plans or defined benefit plans. Under defined contribution plan, the Companyâs only obligation is to pay a fixed amount. Under a defined benefit plan, it is the Companyâs obligation to provide agreed benefits to the employees. The present value of the defined benefit obligations is calculated by an independent actuary using the projected unit credit method.The Company has the following employee benefit plans:
i) Contribution to Provident fund family pension fund, ESIC, labour welfare fund and superannuation fund:
(a) Companyâs contributions during the year towards Government administered Provident Fund, Family Pension Fund, ESIC and Labour Welfare Fund are charged to the Profit and Loss statement as incurred.
(b) Companyâs contributions during the year towards Superannuation to the Superannuation Trust administered by a Life Insurance Company are recognized in the Profit and Loss statement as incurred.
(ii) Gratuity
In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Life Insurance Corporation of India (LIC) and TATA AIG . The Companyâs obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the projected unit credit method. The Company recognises actuarial gains and losses immediately in other comprehensive income, net of taxes.
(iii) Other retirement benefit
Provision for other retirement / post retirement benefits in the forms of pensions, medical benefits and long term compensated absences (leave encashment) is made on the basis of actuarial valuation.
n) Financial instruments
i) Financial assets Initial recognition and measurement All financial assets are recognised initially at fair value (purchase value plus transaction costs that are attributable to the acquisition of the financial asset),amortised cost or at cost. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement
For purposes of subsequent measurement, financial assets are classified in four categories:
- Debt instruments at amortised cost
- Debt instruments at fair value through other comprehensive income (FVTOCI)
- Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL)
- Equity instruments measured at fair value through other comprehensive income (FVTOCI) or fair value through profit or loss (FVTPL).
- Equity instruments measured at cost
Debt instruments at amortised cost : âdebt instrumentâ is measured at the amortised cost if both the following conditions are met:
(a) The asset is held within a business model whose objective is to hold assets for collecting contractual cash flows, and
(b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding
After initial measurement, financial assets are subsequently measured at amortised cost using the EIR method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the Statement of Profit or Loss. The losses arising from impairment are recognised in the Statement of Profit or Loss.
Debt instrument at FVTPL: FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of Profit and Loss.
Equity instruments measured at FVTOCI or FVTPL: All equity investments in scope of Ind-AS 109 are measured at fair value. Equity instruments which are held for trading are classified as at FVTPL. For all other equity instruments, the Company decides to classify the same either as 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 instrument, excluding dividends, are recognized in the other comprehensive income (OCI). There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognized in the Profit and loss statement.
Equity instruments measured at Cost: Equity investments in subsidiaries / joint ventures / associates are accounted at cost in accordance with Ind AS 27 - Separate financial statements.
Derecognition: The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Impairment of financial assets: The Company assesses at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred âloss eventâ) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated.
ii) Non-derivative financial liabilities
Financial liabilities are classified as either âfinancial liabilities at fair value through profit or lossâ or âother financial Liabilities.
(a) Financial liabilities are classified as âfinancial liabilities at fair value through profit or lossâ if they are held for trading or if they are designated as financial liabilities at fair value through profit or loss. These are measured initially at fair value with subsequent changes recognized in profit or loss. Fair value is determined as per Ind AS 113 âfair value measurementâ.
(b) Other financial liabilities, including loans and borrowing, are initially measured at fair value, net of directly attributable transaction costs. Subsequent to initial recognition, these are measured at amortized cost using the EIR method.
Derecognition of financial liabilities:
A financial liability is derecognised 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 derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
iii) 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 as intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Mar 31, 2016
1.1 Basis of preparation of accounts
The financial statements are prepared on the accrual basis of
accounting and in accordance with the Accounting Standards notified
under Companies (Accounts) Rules,2014 and referred under Section 133 of
the Companies Act,2013.
1.2 Fixed Assets and depreciation
(a) Fixed Assets are stated at cost less depreciation/amortisation and
impairment. Costs comprise of cost of acquisition, Borrowing Cost, Cost
of Improvement and any attributable cost of bringing the asset to
condition for its intended use.
(b) Depreciation on tangible assets is provided in accordance with
useful life as prescribed in Schedule II of the Companies Act,2013.
(Refer Note 4.22, Page 127)
(a) In respect of the assets of the Retail Business on "Straight Line"
method.
(b) In respect of all other assets on "Written Down Value" method.
(c ) Leasehold land is amortised over the period of lease remaining as
at the date of their capitalisation.
(d) Improvement to leasehold premises are depreciated over the period
of lease remaining as at the date of their capitalisation.
(e) Intangible Assets are amortised over their useful life or ten years
whichever is lower.
1.3 Investments
Long Term Investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of Long
Term Investments. Current Investments are stated at lower of cost or
fair value.
1.4 Inventories
Inventories are valued at lower of cost or net realisable value.
1.5 Income
(a) Sale of goods is recognised on delivery to customers
(b) Other operating revenues are accounted on accrual basis.
(c) Interest income is accounted on accrual basis.
(d) Dividend income is accounted when right to receive payment is
establishe
1.6 Retirement benefits
1.6.1 defined Contribution plans
a) Company''s contributions during the year towards Government
administered Provident Fund, Family Pension Fund, ESIC and Labour
Welfare Fund are charged to the Profit and Loss Account as incurred.
b) Company''s contributions during the year towards Superannuation to
the Superannuation Trust administered by a Life Insurance Company are
recognized in the Profit and Loss Account as incurred.
1.6.2 Defined Benefit Plans
a) Company''s Contribution towards Gratuity made under the Group
Gratuity Schemes with Life Insurance Companies are determined based on
the amounts recommended by Life Insurance Companies as per actuarial
valuation.
b) Provision for other retirement / post retirement benefits in the
forms of pensions, medical benefits and long term compensated absences
(leave encashment) has been made on the basis of actuarial valuation.
1.7 Foreign Currency transactions
Foreign Currency transactions are accounted at the rates prevailing on
the date of transaction.
Year end monetary assets and liabilities are translated at the exchange
rate ruling on the date of the Balance Sheet.
Exchange differences on settlement/conversion are adjusted to the
Profit and Loss Account.
1.8 Provisions And Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
1.9 Taxation
(a) Current Tax comprises of Provision for Income Tax as determined in
accordance with the provisions of Income Tax Act, 1961.
(b) Deferred tax, subject to the consideration of prudence, is
recognised on timing differences between the taxable income and
accounting income that originate in one period and are capable of
reversal in one or more subsequent periods. Deferred tax assets are
recognised to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In case of unabsorbed depreciation
and carry forward tax losses, deferred tax assets are recognised to the
extent that there is virtual certainty that sufficient future taxable
income will be available against which such deferred tax assets can be
realized.
1.10 Leases
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lessor are recognised as operating
leases. Lease rents under operating leases are recognised in the Profit
and Loss Account on straight line basis.
1.11 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in
connection with the borrowing of funds and is considered as revenue
expenditure for the year in which it is incurred. Borrowing cost
attributed to the acquisition/improvement of qualifying capital assets
and incurred till the commencement of commercial use of the assets is
capitalised as cost of the assets.
1.12 Impairment of Assets
The carrying value 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.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 &
Loss, except in case of revalued assets.
Mar 31, 2013
1.1 Basis of preparation of accounts
The financial statements are prepared on the accrual basis of
accounting and in accordance with the Accounting Standards notified by
the Companies (Accounting Standards) Rules,2006 and refered to in
Section 211(3C) of the Companies Act,1956
1.2 Fixed Assets and Depreciation
(a) Fixed Assets are stated at cost less depreciation. Costs comprise
of cost of acquisition, Borrowing Cost, Cost of Improvement and any
attributable cost of bringing the asset to condition for its intended
use.
(b) Depreciation on tangible assets is provided in accordance with the
provisions of Schedule XIV to the Companies Act, 1956 as under: -
(i) In respect of the assets of the Retail Business on "Straight Line"
method.
(ii) In respect of all other assets on "Written Down Value" method.
(iii ) Leasehold land is amortised over the period of lease remaining
as at the date of their capitalisation.
(iv) Improvement to leasehold premises are depreciated over the period
of lease remaining as at the date of their capitalisation.
(v) Intangible Assets are amortised over their useful life not
exceeding ten years.
1.3 Investments
Long Term Investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of Long
Term Investments. Current Investments are stated at lower of cost or
fair value.
1.4 Inventories
Inventories are valued as under :
Raw materials, packing materials and stores & spares : at cost.
Finished Products : at lower of cost or net realisable value.
1.5 Income
(a) Sale of goods is recognised on delivery to customers
(b) Other operating revenues are accounted on accrual basis.
(c) Interest income is accounted on accrual basis.
(d) Dividend income is accounted when right to receive payment is
established.
1.6 Retirement Benefits
1.6.1 Defined Contribution Plans
a) Company''s contributions during the year towards Government
administered Provident Fund, Family Pension Fund, ESIC and Labour
Welfare Fund are charged to the Profit and Loss Account as incurred.
b) Company''s contributions during the year towards Superannuation to
the Superannuation Trust administered by a Life Insurance Company are
recognized in the Profit and Loss Account as incurred.
1.6.2 Defined Benefit Plans
a) Company''s Contribution towards Gratuity made under the Group
Gratuity Schemes with Life Insurance Companies are determined based on
the amounts recommended by Life Insurance Companies as per actuarial
valuation.
b) Provision for other retirement / post retirement benefits in the
forms of pensions, medical benefits and long term compensated absences
(leave encashment) has been made on the basis of actuarial valuation.
1.7 Foreign Currency Transactions
Foreign Currency transactions are accounted at the rates prevailing on
the date of transaction.
Year end current assets and liabilities are translated at the exchange
rate ruling on the date of the Balance Sheet.
Exchange differences on settlement/conversion are adjusted to the
Profit and Loss Account.
1.8 Employee Stock Option Scheme (ESOS)
In respect of Options granted under the Company''s Employee Stock
Options Scheme (ESOS), in accordance with guidelines issued by SEBI ,
the accounting value of options is accounted as Deferred Employee
Compensation, which is amortised on a straight line basis over the
vesting period.
1.9 Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
1.10 Taxation
(a) Current Tax comprises of Provision for Income Tax and Wealth Tax is
determined in accordance with the provisions of Income Tax Act, 1961
and the Wealth Tax Act, 1957.
(b) Deferred tax is recognised on timing difference between the taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
1.11 Leases
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lessor are recognised as operating
leases. Lease rents under operating leases are recognised in the Profit
and Loss Account on straight line basis.
1.12 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in
connection with the borrowing of funds and is considered as revenue
expenditure for the year in which it is incurred. Borrowing cost
attributed to the acquisition/improvement of qualifying capital assets
and incurred till the commencement of commercial use of the assets is
capitalised as cost of the assets.
1.13 Impairment of Assets
The carrying value 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.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 &
Loss, except in case of revalued assets.
Mar 31, 2012
1.1 Basis of preparation of accounts
The financial statements are prepared on the accrual basis of
accounting and in accordance with the Accounting Standards notified by
the Companies (Accounting Standards) Rules, 2006 and refered to in
Section 211(3C) of the Companies Act,1956.
1.2 Fixed Assets and Depreciation
(a) Fixed Assets are stated at cost less depreciation. Costs comprise
of cost of acquisition, Borrowing Cost, Cost of Improvement and any
attributable cost of bringing the asset to condition for its intended
use.
(b) Depreciation on tangible assets is provided in accordance with the
provisions of Schedule XIV to the Companies Act, 1956 as under:
(a) In respect of the assets of the Retail Business on "Straight Line"
method.
(b) In respect of all other assets on "Written Down Value" method.
(c ) Leasehold land is amortised over the period of lease remaining as
at the date of their capitalisation.
(d) Improvement to leasehold premises are depreciated over the period
of lease remaining as at the date of their capitalisation.
(e) Intangible Assets are amortised over their useful life not
exceeding ten years.
3.3 Investments
Long Term Investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of Long
Term Investments. Current Investments are stated at lower of cost or
fair value.
3.4 Inventories
Inventories are valued as under:
Raw materials, packing materials and stores and spares: at cost.
Finished Products: at lower of cost or net realisable value.
3.5 Income
(a) Sale of goods is recognised on delivery to customers.
(b) Other operating revenues are accounted on accrual basis.
(c) Interest income is accounted on accrual basis.
(d) Dividend income is accounted when right to receive payment is
established.
3.6 Retirement Benefits
3.6.1 Defined Contribution Plans
a) Company's contributions during the year towards Government
administered Provident Fund, Family Pension Fund, ESIC and Labour
Welfare Fund are charged to the Profit & Loss Account as incurred.
b) Company's contributions during the year towards Superannuation to
the Superannuation Trust administered by a Life Insurance Company are
recognized in the Profit & Loss Account as incurred.
3.6.2 Defined Benefit Plans
a) Company's Contribution towards Gratuity made under the Group
Gratuity Schemes with Life Insurance Companies are determined based on
the amounts recommended by Life Insurance Companies as per actuarial
valuation.
b) Provision for other retirement/post retirement benefits in the forms
of pensions, medical benefits and long term compensated absences (leave
encashment) has been made on the basis of actuarial valuation.
3.7 Foreign Currency Transactions
Foreign Currency transactions are accounted at the rates prevailing on
the date of transaction.
Year end current assets and liabilities are translated at the exchange
rate ruling on the date of the Balance Sheet.
Exchange differences on settlement/conversion are adjusted to the
Profit and Loss Account.
3.8 Employee Stock Option Scheme (ESOS)
In respect of Options granted under the Company's Employee Stock
Options Scheme (ESOS), in accordance with guidelines issued by SEBI,
the accounting value of options is accounted as Deferred Employee
Compensation, which is amortised on a straight line basis over the
vesting period.
3.9 Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
3.10 Taxation
(a) Current Tax comprises of Provision for Income Tax and Wealth Tax is
determined in accordance with the provisions of Income Tax Act, 1961
and the Wealth Tax Act, 1957.
(b) Deferred tax is recognised on timing difference between the taxable
income and accounting income that originate in one period and are
capable of reversal in one or more subsequent periods.
3.11 Leases
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lessor are recognised as operating
leases. Lease rents under operating leases are recognised in the Profit
& Loss Account on straight line basis.
3.12 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in
connection with the borrowing of funds and is considered as revenue
expenditure for the year in which it is incurred. Borrowing cost
attributed to the acquisition/improvement of qualifying capital assets
and incurred till the commencement of commercial use of the assets is
capitalised as cost of the assets.
Mar 31, 2011
1.0 Basis of preparation of accounts
The financial statements are prepared on the accrual basis of
accounting and in accordance with the Standard on Accordance with the
standard on Accounting notified by the Companies (Accounting Standards)
Rules,2006 and refered to in Section 211(3C) of the Companies Act,1956
2.0 Fixed Assets and Depreciation
2.1 Fixed Assets are stated at cost less depreciation. Costs comprise
of cost of acquisition, Borrowing Cost, Cost of Improvement and any
attributable cost of bringing the asset to condition for its intended
use.
2.2 Depreciation on tangible assets is provided in accordance with the
provisions of Schedule XIV to the Companies Act, 1956 as under: -
(a) In respect of the assets of the Retail Business on "Straight Line"
method.
(b) In respect of all other assets on "Written Down Value" method.
2.3 Leasehold land is amortised over the period of lease remaining as
at the date of their capitalisation.
2.4 Improvement to leasehold premises are depreciated over the period
of lease remaining as at the date of their capitalisation.
2.5 Intangible Assets are amortised over their useful life not
exceeding ten years.
3.0 Investments
Long Term Investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of Long
Term Investments. Current Investments are stated at lower of cost or
fair value.
4.0 Inventories
Inventories are valued as under :
Raw materials,packing materials and stores and spares : at cost.
Finished Products : at lower of cost or net realisable value.
5.0 Income
5.1 Sale of goods is recognised on delivery to customers and include
amounts recovered towards sales tax.
5.2 Interest income is accounted on accrual basis.
5.3 Dividend income is accounted when right to receive payment is
established.
6.0 Retirement Benefits
Defined Contribution Plans
6.1 a) Companys contributions during the year towards Government
administered Provident Fund, Family
Pension Fund, ESIC and Labour Welfare Fund are charged to the Profit
and Loss Account as incurred.
b) Companys contributions during the year towards Superannuation to
the Superannuation Trust administered by a Life Insurance Company are
recognized in the Profit and Loss Account as incurred. (Refer Note No
21 (d), Page No. 72)
6.2 Defined Benefit Plans
a) Companys Contribution towards Gratuity made under the Group
Gratuity Schemes with Life Insurance Companies are determined based on
the amounts recommended by Life Insurance Companies as per actuarial
valuation. (Refer Note 21(a), Page No. 71)
b) In the case of certain employees, contribution towards Provident
Fund is made to an approved trust administered by the Company. The
interest rate payable to the members of the trust shall not be lower
than the statutory rate of interest declared by the Central Government
under the Employees Provident Fund and Miscellaneous Provisions Act,
1952 and shortfall, if any, shall be made good by the Company.
c) Provision for other retirement / post retirement benefits in the
forms of pensions, medical benefits and long term compensated absences
(leave encashment) has been made on the basis of actuarial valuation.
Schedule Forming Part of the Balance Sheet and Profit and Loss Account
(Contd.)
7.0 Foreign Currency Transactions
Foreign Currency transactions are accounted at the rates prevailing on
the date of transaction.
Year end current assets and liabilities are translated at the exchange
rate ruling on the date of the Balance Sheet.
Exchange differences on settlement/conversion are adjusted to the
Profit and Loss Account.
8.0 Employee Stock Option Scheme (ESOS)
In respect of Options granted under the Companys Employee Stock
Options Scheme (ESOS), in accordance with guidelines issued by SEBI ,
the accounting value of options is accounted as Deferred Employee
Compensation, which is amortised on a straight line basis over the
vesting period.
9.0 Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there is
possible obligation or a present obligation that may, but probably will
not, require an outflow of resources. Where there is a possible
obligation or present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
10.0 Taxation
10.1 Current Tax comprises of Provision for Income Tax and Wealth Tax
is determined in accordance with the provisions of Income Tax Act, 1961
and the Wealth Tax Act, 1957.
10.2 Deferred tax is recognised on timing difference between the
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods.
11.0 Leases
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lessor are recognised as operating
leases. Lease rents under operating leases are recognised in the Profit
and Loss Account on straight line basis.
12.0 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in
connection with the borrowing of funds and is considered as revenue
expenditure for the year in which it is incurred. Borrowing cost
attributed to the acquisition/improvement of qualifying capital assets
and incurred till the commencement of commercial use of the assets is
capitalised as cost of the assets,
Mar 31, 2010
1.0 Basis of preparation of accounts
The accounts have been prepared to comply in all material aspects with
applicable accounting principles in India, the Accounting Standards
issued by the Institute of Chartered Accountants of India and the
relevant provisions of the Companies Act, 1956.
2.0 Fixed Assets and Depreciation
2.1 Fixed Assets are stated at cost less depreciation. Costs comprise
of cost of acquisition, Borrowing Cost, Cost of Improvement and any
attributable cost of bringing the asset to condition for its intended
use.
2.2 Depreciation on tangible assets is provided in accordance with the
provisions of Schedule XIV to the Companies Act, 1956 as under: -
(a) In respect of the assets of the Retail Business on "Straight Line"
method.
(b) In respect of all other assets on "Written Down Value" method.
2.3 Leasehold land is amortised over the period of lease remaining as
at the date of their capitalisation.
2.4 Improvement to leasehold premises are depreciated over the period
of lease remaining as at the date of their capitalisation.
2.5 Intangible Assets are amortised over their useful life not
exceeding ten years.
3.0 Investments
Long Term Investments are stated at cost. A provision for diminution is
made to recognise a decline, other than temporary, in the value of Long
Term Investments. Current Investments are stated at lower of cost or
fair value.
4.0 Inventories
Inventories are valued as under:
Raw materials,packing materials and stores and spares: at cost.
Finished Products: at lower of cost or net realisable value. 5.0
Income
5.1 Sale of goods is recognised on delivery to customers and include
amounts recovered towards sales tax.
5.2 Interest income is accounted on accrual basis.
5.3 Dividend income is accounted when right to receive payment is
established. 6.0 Retirement Benefits
Defined Contribution Plans
6.1 a) Companys contributions during the year towards Government
administered Provident Fund, Family
Pension Fund, ESIC and Labour Welfare Fund are charged to the Profit
and Loss Account as incurred.
b) Companys contributions during the year towards Superannuation to
the Superannuation Trust administered by the Life Insurance Comapny are
recognized in the Profit and Loss Account as incurred. (Refer Note No
21 (d), Page No. 67)
6.2 Defined Benefit Plans
a) Companys Contribution towards Gratuity made under the Group
Gratuity Schemes with Life Insurance Companies are determined based on
the amounts recommended by Life Insurance Companies as per actuarial
valuation. (Refer Note 21(a), Page No. 66)
b) In the case of certain employees, contribution towards Provident
Fund is made to an approved trust administered by the Company. The
interest rate payable to the members of the trust shall not be lower
than the statutory rate of interest declared by the Central Government
under the Employees Provident Fund and Miscellaneous Provisions Act,
1952 and shortfall, if any, shall be made good by the Company.
c) Provision for other retirement / post retirement benefits in the
forms of pensions, medical benefits and long term compensated absences
(leave encashment) has been made on the basis of actuarial valuation.
7.0 Foreign Currency Transactions
Foreign Currency transactions are accounted at the rates prevailing on
the date of transaction.
Year end current assets and liabilities are translated at the exchange
rate ruling on the date of the Balance Sheet.
Exchange differences on settlement/conversion are adjusted to the
Profit and Loss Account.
8.0 Employee Stock Option Scheme (ESOS)
In respect of Options granted under the Companys Employee Stock
Options Scheme (ESOS), in accordance with guidelines issued by SEBI ,
the accounting value of options is accounted as Deferred Employee
Compensation, which is amortised on a straight line basis over the
vesting period.
9.0 Provisions and Contingent Liabilities
The Company recognises a provision when there is a present obligation
as a result of past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for contingent liability is made when there
is possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or present obligation that the likelihood of outflow of
resources is remote, no provision or disclosure is made.
10. Taxation
10.1 Current Tax comprises of Provision for Income Tax, Fringe Benefits
Tax and Wealth Tax is determined in accordance with the provisions of
Income Tax Act, 1961 and the Wealth Tax Act, 1957.
10.2 Deferred tax is recognised on timing difference between the
taxable income and accounting income that originate in one period and
are capable of reversal in one or more subsequent periods.
11.0 Leases
Lease arrangements where the risks and rewards incident to ownership of
an asset substantially vest with the lessor are recognised as operating
leases. Lease rents under operating leases are recognised in the Profit
and Loss Account on straight line basis.
12.0 Borrowing Cost
Borrowing cost include interest, fees and other charges incurred in
connection with the borrowing of funds and is considered as revenue
expenditure for the year in which it is incurred. Borrowing cost
attributed to the acquisition/improvement of qualifying capital assets
and incurred till the commencement of commercial use of the assets is
capitalised as cost of the assets,
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