NOTES FORMING PART OF STANDALONE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2016 Note No. 1 Significant accounting policies: i) Basis of Preparation : The financial statements are brpared on the basis of going concern, under historical cost convention and on accrual basis of accounting and in compliance with the Accounting Standards referred to in section 133 of the Companies Act, 2013 ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Act. Claims against the company are recognized when finally accepted by the company. ii) Use of Estimates: Preparation of the financial statements, in conformity with generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. Management believes that the estimates used in the brparation of the financial statements are prudent and reasonable. Any revision to the accounting estimates is recognized prospectively. iii) Classification of Assets and Liabilities : Assets and Liabilities are classified as current/non-current, considering inter-alia, expected realization/settlement in the Company's normal operating cycle of six/seven months or a period of twelve months from the Balance sheet date. iv) Fixed Assets : Fixed Assets (Tangible & Intangible) are carried at the cost of acquisition or at appropriate cost of fabrication (including excise duty where applicable) in case of in-house fabricated tangible assets, after reducing CENVAT credit thereon, where applicable, less accumulated debrciation and amortization. Costs directly attributable to bringing the assets to their working condition for intended use, are capitalized. Such costs include appropriate cost of borrowing in respect of assets other than those which are ready for their intended use upon acquisition. v) Debrciation and Amortisation : (a) Leasehold Land Premium on leasehold land is amortised over the period of lease. (b) Other Assets Debrciation has been provided, considering the lives as brscribed by Schedule II of the Act, on Straight Line Method in respect of Tangible Assets, except on items of Furniture & Fixtures capitalized at the retail stores which are debrciated over their useful life of 2 years on pro-rata basis, considering nature of assets at the said stores and the period for which such stores may remain in operation. Cost of Trademarks is amortized over a period of 5 years and cost of brand is amortized over a period of 6 years. Assets costing less than Rs. 5000/- each, acquired during the financial year, are being fully debrciated. vi) Investments : a) Non-Current Investment are stated at cost. Provision is made in respect of diminution in the value of investment, only if such decline is other than temporary. b) Current Investment is stated at the lower of cost and market value. vii) Inventories : a) Raw materials, Stores and Spares and Packing materials are valued at the lower of cost and net realizable value on First In First Out basis. b) Finished goods (manufactured) and Work-in-progress are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes direct materials, direct labour, freight, other relevant overheads, including applicable duties and levies, incurred to bring such goods in their brsent location and condition. c) Finished goods (traded) are valued at the lower of cost and net realizable value on First In First Out basis. Cost includes landed cost of Goods, freight, octroi, and other costs incurred to bring such goods in their brsent location and condition. viii) Revenue Recognition : Sales are recognized on dispatch of goods to the customers and are reflected in accounts at the gross realizable value, inclusive of excise duty, and excluding VAT, wherever applicable, less returns. ix) Import Duty Benefits : Goods imported for trading and eligible for refund of Special Additional Duty of Customs are accounted net of such benefit. x) Foreign Currency Transactions : a) Foreign currency transactions during the year are accounted at the spot rate brvailing on the date of respective transaction. b) Difference between the spot rate brvailing on the date of transaction and the exchange rate at which the liability is settled is recognized in the Statement of Profit & Loss. Foreign currency monetary transactions outstanding at the close of the financial year are restated at the spot rate brvailing at the close of the financial year. Loss or gain due to such restatement is recognized in the Statement of Profit & Loss. c) In case of forward exchange contracts, the difference i.e. brmium or discount, between the forward rate and exchange rate on the date of the transaction is recognized as expense or income over the life of the contract. xi) Taxation : Current Tax : Provision for Current Tax is made on the basis of taxable income for the current year in accordance with the provisions of the Income Tax Act, 1961. Deferred Tax : Income tax expense is accrued in accordance with Accounting Standard 22 - Accounting for Taxes on Income, which includes current and deferred taxes. Deferred Income Taxes reflect the impact of timing differences between taxable income & accounting income for the year and reversal/restatement of timing differences of earlier years. Deferred tax assets and liabilities are measured using the tax rate and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax assets are recognized for all reversible timing differences, carry forward of unused tax assets and unused tax losses subject to consideration of prudence. Carrying amount of deferred tax assets is reviewed at each balance sheet date on the same consideration. xii) Employee Benefits : a. Defined Contribution Plan Provident Fund, Family Pension Fund - Contribution as per the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 towards Provident Fund and Family Pension Fund are provided for and payments in respect thereof are made to the relevant authorities on actual basis. b. Defined Benefit Plan Gratuity - In accordance with applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("Gratuity Plan") covering all employees. The company has an employees' gratuity fund managed by Life Insurance Corporation of India ("LIC").The Gratuity Plan provides a lump sum payment to vested employees, at retirement or termination of employment, an amount based on the respective employee's last drawn basic salary and the years of employment with the Company. Liability with regard to Gratuity Plan is accrued based on actuarial valuation at the Balance Sheet date, carried out by an independent actuary. Actuarial gain or loss is recognized immediately in the Statement of Profit and loss as income or expense. c. Compensated Absences The employees are entitled to accumulate leave subject to certain limits, for the future availment. Encashment of leave is given as per the leave policy of the company. xiii) Product Warranties : Product Warranty costs are provided in the year of sale based on past experience. xiv) Voluntary Employees' Separation Scheme : Ex-gratia to employees is paid based on the effective acceptance of the application under "Voluntary Employees Separation Scheme" (VESS), payment of ex-gratia under VESS is charged to Statement of Profit & Loss. xv) Leases Payments under operating leases are recognized in the Statement of Profit and Loss as Rent. xvi) Impairment of Assets : If internal/external indications suggest that an asset of the company may be impaired, the recoverable amount of asset/ cash generating unit is determined on the Balance Sheet date and if it is less than its carrying amount, the carrying amount of the asset/cash generating unit is reduced to the said recoverable amount. The recoverable amount is measured as the higher of net selling price and value in use of such assets/cash generating unit, which is determined by the brsent value of the estimated future Cash Flows. xvii)Provisions, Contingent Liabilities and Contingent Assets : a) The Company recognizes as Provisions, the liabilities being brsent obligations arising out of past events, the settlement of which is expected to result in an outflow of resources and which can be measured only by using a substantial degree of estimation. b) Contingent Liability is disclosed, unless the possibility of an outflow of resources is remote. c) Contingent Assets are not recognized nor disclosed. 2. Segment Reporting : The Company's activities pertain to a single reportable segment of travel goods as per Accounting Standard - 17 3. Micro, Small and Medium Enterprises Based on the information in possession with the Company no supplier has been identified as being covered under the Micro, Small and Medium Enterprises Development Act, 2006 ("the Act"). Accordingly no amount of dues outstanding as at 31st March, 2016 have been identified as relating to the Micro, Small and Medium Enterprise referred to in the said Act. 4. Corporate Social Responsibility Gross Amount required to be spent by the Company during the year Rs. 3.50 Lacs (Rs. Nil). Donations made for objects/ purposes as per Schedule VII of the Act - Rs. 3.50 Lacs (Rs. Nil) 5. Trade receivables, Trade Payables and Advances/Deposits balances are subject to confirmation and subsequent reconciliation. 6. Previous year figures have been regrouped or reclassified wherever necessary. Figures in bracket relates to brvious year. As per our Report of even date For BANSI S. MEHTA & CO. Chartered Accountants (Firm Regn. No. 100991W) H. G. BUCH Partner (M. No. 33114) FOR AND ON BEHALF OF THE BOARD OF DIRECTORS SUDHIR JATIA (Chairman & Managing Director) (DIN : 00031969) VIRENDRA GANDHI (Chief Financial Officer) PUNKAJJ LATH (Director) (DIN : 00172371) JIGNA PARIKH (Company Secretary) Mumbai, Date: 16th May, 2016 |