Note 1: Significant accounting policies Note Particulars 1. Corporate information : CIN :- L74899DL1989PLC034995 The Company was incorporated on 9th Feb,1989 and is mainly engaged in the business of designing, manufacturing, branding and retailing of apparel and apparel accessories through chain of retail store under the brand name "CANTABIL" & "Bonetti".The Company is also into the business of real estate trade. 2. Significant accounting policies 2.1 Basis of accounting and brparation of financial statements The financial statements of the Company have been brpared in accordance with the Accounting Principles generally accepted in India in accordance with Accounting Standards sepecified under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been brpared on accrual basis under the historical cost convention.The accounting policies adopted in the brparation of the financial statements are consistent with those followed in the brvious year. 2.2 Use of estimates The brparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions considered in the reported amounts of assets and liabilities (including contingent liabilities) and the reported income and expenses during the year. The Management believes that the estimates used in brparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognised in the periods in which the results are known / materialise. 2.3 Inventories Raw Material & Packing Materials : At cost or net realizable value (on FIFO basis) whichever is lower. Finished Goods : At cost or net realizable value whichever is lower. Work in Process : At cost or net realizable value whichever is lower. Stores and Spares : At cost or net realizable value (on FIFO basis) whichever is lower. Scrap : At estimated net realizable value. Cost of raw material and packing material are determined using first in first out (FIFO) method.Cost of finished goods and work in process include cost of raw material and packing materials,cost of conversion and other cost incurred in bringing the inventories to the brsent location and condition. 2.4 Cash and cash equivalents Cash and cash equivalant comprises cash in hand and Bank Balance. 2.5 Cash flow statement Cash flows are reported using the indirect method, whereby profit / (loss) before extraordinary items and tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from operating, investing and financing activities of the Company are segregated based on the available information. 2.6. Debrciation and Amortisation Debrciation has been provided on Written Down Value (WDV) Method on all assets based on useful life of the assets as brscribed in Schedule II of the Companies Act, 2013 except for intangible assets which are amortised over a period of five years as brscribed in Accounting Standard 26. 2.7 Revenue recognition Revenue is recognised only when risk and rewards incidental to ownership are transferred to the customers. Discounts given / accrued to customers at the time of despatch are considered as trade discounts and netted from sales. Sales is recorded net of Sales Tax/VAT. Interest income is recognized on an accrual basis on time proportionate basis, based on interest rates implicit in the transaction. 2.8 Fixed Assets Tangible Assets Tangible Assets are stated at cost net of recoverable taxes, trade discounts and rebates less accumulated debrciation and impairment losses, if any. The cost of tangible assets comprises its purchase price, borrowings cost and any cost directly attributable to bringing the assets to its working condition for its intended use. Subsequent expenditure relating to Tangible Assets is capitalised only if such expenditure results in an increase in the future benefits from such asset beyond its brviously assessed standard of performance. Capital work-in-progress: Tangible Assets acquired for the new company owned showrooms or any new project are shown as Capital Work-In-Progress till the commencement of the commercial operation of the showroom/ project as on the reporting date. Intangible Assets Intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any import duties and other taxes (other than those subsequently recoverable from the taxing authorities), and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Subsequent expenditure on an intangible asset after its purchase / completion is recognised as an expense when incurred unless it is probable that such expenditure will enable the asset to generate future economic benefits in excess of its originally assessed standards of performance and such expenditure can be measured and attributed to the asset reliably, in which case such expenditure is added to the cost of the asset. 2.9 Extraordinary item Extraordinary items are income or expense that arises from transaction that are clearly distinct from ordinary activities. They are not expected to recur frequently or regularly. 2.10 Investments Long-term investments, are carried individually at cost less provision for diminution, other than temporary, in the value of such investments. Current investments are carried individually, at the lower of cost and fair value. Cost of investments include acquisition charges such as brokerage, fees and duties. 2.11 Employee benefits Employee benefits include provident fund, gratuity, compensated absences. Defined contribution plans The Company's contribution to provident fund if considered as defined contribution plans and is charged as an expense as they fall due based on the amount of contribution required to be made. Defined benefit plans For defined benefit plans in the form of gratuity fund and post-employment medical benefits, the cost of providing benefits is determined using the Projected Unit Credit method, with actuarial valuations being carried out at each Balance Sheet date. Actuarial gains and losses are recognised in the Statement of Profit and Loss in the period in which they occur. Past service cost is recognised immediately to the extent that the benefits are already vested and otherwise is amortised on a straight-line basis over the average period until the benefits become vested. The retirement benefit obligation recognised in the Balance Sheet rebrsents the brsent value of the defined benefit obligation as adjusted for unrecognised past service cost, as reduced by the fair value of scheme assets. Any asset resulting from this calculation is limited to past service cost, plus the brsent value of available refunds and reductions in future contributions to the schemes. Short-term employee benefits The undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the year when the employees render the service. These benefits include performance incentive and compensated absences which are expected to occur within twelve months after the end of the period in which the employee renders the related service. The cost of such compensated absences is accounted as under : (a) in case of accumulated compensated absences, when employees render the services that increase their entitlement of future compensated absences; and (b) in case of non-accumulating compensated absences, when the absences occur. Long-term employee benefits Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are recognised as a liability at the brsent value of the defined benefit obligation as at the Balance Sheet date less the fair value of the plan assets out of which the obligations are expected to be settled. Long Service Awards are recognised as a liability at the brsent value of the defined benefit obligation as at the Balance Sheet date. 2.12 Borrowing costs Borrowing costs include interest, amortisation of ancillary costs incurred. Costs in connection with the borrowing of funds to the extent not directly related to the acquisition of qualifying assets are charged to the Statement of Profit and Loss over the tenure of the loan. Borrowing costs, allocated to and utilised for qualifying assets, pertaining to the period from commencement of activities relating to construction / development of the qualifying asset upto the date of capitalisation of such asset is added to the cost of the assets. Capitalisation of borrowing costs is suspended and charged to the Statement of Profit and Loss during extended periods when active development activity on the qualifying assets is interrupted. 2.13 Operating Lease Operating lease payments are recognised as an expense in the statement of Profit and Loss on a Straight-Line basis or other systematic bases more resbrsentive of the time pattern of the user's benefit. 2.14 Earnings Per Share Basic Earnings Per Share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) by the weighted average number of equity shares outstanding during the year. Diluted Earnings Per Share is computed by dividing the profit / (loss) after tax (including the post tax effect of extraordinary items, if any) as adjusted for dividend, interest and other charges to expense or income relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic Earnings Per Share and the weighted average number of equity shares which could have been issued on the conversion of all dilutive potential equity shares. Potential equity shares are deemed to be dilutive only if their conversion to equity shares would decrease the net profit per share from continuing ordinary operations. Potential dilutive equity shares are deemed to be converted as at the beginning of the period, unless they have been issued at a later date. The dilutive potential equity shares are adjusted for the proceeds receivable had the shares been actually issued at fair value (i.e. average market value of the outstanding shares). Dilutive potential equity shares are determined independently for each period brsented. The number of equity shares and potentially dilutive equity shares are adjusted for share splits / reverse share splits and bonus shares, as appropriate. 2.15 Taxes on income Current tax is the amount of tax payable on the taxable income for the year as determined in accordance with the provisions of the Income Tax Act, 1961. Minimum Alternate Tax (MAT) paid in accordance with the tax laws, which gives future economic benefits in the form of adjustment to future income tax liability, is considered as an asset if there is convincing evidence that the Company will pay normal income tax. Accordingly, MAT is recognised as an asset in the Balance Sheet when it is probable that future economic benefit associated with it will flow to the Company. Deferred tax is recognised on timing differences, being the differences between the taxable income and the accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Deferred tax is measured using the tax rates and the tax laws enacted or substantially enacted as at the reporting date. Deferred tax liabilities are recognised for all timing differences. Deferred tax assets in respect of unabsorbed debrciation and carry forward of losses are recognised only if there is virtual certainty that there will be sufficient future taxable income available to realise such assets. Deferred tax assets are recognised for timing differences of other items only to the extent that reasonable certainty exists that sufficient future taxable income will be available against which these can be realised. Deferred tax assets and liabilities are offset if such items relate to taxes on income levied by the same governing tax laws and the Company has a legally enforceable right for such set off. Deferred tax assets are reviewed at each Balance Sheet date for their realisability. 2.16 Impairment of assets An assets is treated as impaired when the carrying cost of asset exceeds its recoverable value. An impairement loss is charged to the profit and loss statement in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed if there has been a change in the estimate of recoverable amount. 2.17 Provisions and contingencies A provision is recognised when the Company has a brsent obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. Provisions (excluding retirement benefits) are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the Balance Sheet date. These are reviewed at each Balance Sheet date and adjusted to reflect the current best estimates.Contingent assets are neither recognised nor disclosed in the financial statement. Contingent liabilities are disclosed in the Notes. Note : Figures in bracket relate to the brvious year As per our attached report of even date For SURESH & ASSOCIATES For and on behalf of the Board of Directors FRN: 003316N CHARTERED ACCOUNTANTS (CA SURESH K. Gupta) PARTNER M.NO. 080050 (Vijay Bansal) Managing Director DIN: 01110877 (Deepak Bansal) Director DIN:01111104 (CA Rajesh Rohilla) Chief Financial Officer (CS Poonam Chahal) Company Secretary PLACE : DELHI DATE : 25th May, 2015 |