A Oneindia Venture
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Future Enterprises Ltd. कंपली की लेखा नीति
Mar 31, 2018
1. Company Overview And Significant Accounting Policies
1.1 Company Overview
Future Enterprises Limited (formerly known as Future Retail Limited) (âthe Companyâ) is a public Company domiciled in India and incorporated under the provisions of Companies Act, 1956 on October 12, 1987. The Company engaged in the business of manufacturing, trading and leasing of assets.
The Company has its registered office at Mumbai, Maharashtra, India. The Company has its primary listings on the National Stock Exchange of India Limited and BSE Limited.
The financial statements were authorised for issue in accordance with a resolution of the Board of Directors on May 25, 2018.
1.2 Basis of Preparation and Presentation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values. The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
1.3 Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
1.4 Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit or Loss when the asset is derecognised.
The company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:
Plant and Equipment : 15 years
Office Equipment* : 3 to 6 years
Furniture and Fixture : 10 years
Electrical Installation and Equipment : 10 years
Vehicles : 10 years
Leasehold Improvement* : Lease term or 15 years, whichever is lower
*Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
1.5 Intangible Assets
Intangible assets are stated at acquisition cost and other cost incurred, which is attributable to preparing the asset for its intended use, less accumulated amortization and accumulated impairment losses, if any. The cost of intangible assets acquired in a business combination is recorded at fair value on the date of acquisition. Intangible assets are amortised on straight line basis over their estimated useful economic life not exceeding ten years. An item of Intangible Asset is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit or Loss when the asset is derecognised. The residual values, useful lives and methods of amortisation of Intangible Assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
1.6 Business Combinations
Business combinations have been accounted for using the acquisition method under the provisions of Ind AS 103, Business Combinations. The cost of an acquisition is measured at the fair value of the assets transferred, equity instruments issued and liabilities incurred or assumed at the date of acquisition, which is the date on which control is transferred to the Company. The cost of acquisition also includes the fair value of any contingent consideration. Identifiable assets acquired, liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value on the date of acquisition. Business combinations between entities under common control is accounted for at carrying value. Transaction costs that the Company incurs in connection with a business combination such as finderâs fees, legal fees, due diligence fees, and other professional and consulting fees are expensed as incurred.
1.7 Impairment of Assets
(i) Financial Assets
The Company recognizes loss allowances using the expected credit losses (ECL) model for the financial assets which are not fair valued through statement of profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in such case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in statement of profit and loss.
(ii) Non-Financial Assets
Intangible Assets and Property, Plant and Equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognised for the asset in prior years.
(iii) Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
1.8 Financial instruments
(i) Initial Recognition and Measurement
The Company recognizes financial assets and liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are recognised on the trade date.
(ii) Subsequent Measurement
a) Non-Derivative Financial Instruments
(i) Financial Assets Carried At Amortised Cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
(ii) Financial Assets At Fair Value Through Other Comprehensive Income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) Investments in Associates, Joint Venture and Subsidiaries
Investments in Associates, Joint Venture and Subsidiaries are carried at cost.
(iv) Financial Assets at Fair Value Through Profit or Loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
(v) Financial Liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Derivative Financial Instruments
The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counterparty for these contracts is generally a bank.
(i) Financial Assets or Liabilities, at Fair Value Through Profit or Loss.
This category has derivative financial assets or liabilities which are not designated as hedges.
Although the company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.
Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/ liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.
(ii) Derecognition of Financial Instruments
The company derecognises a financial asset when the contractual right to receive the cash flows from the financial asset expire or it transfers the financial asset.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expires.
1.9 Current Versus Non-Current Classification
An asset is considered as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is considered as current when it is:
- Expected to be settled in normal operating cycle
- Held primarily for the purpose of trading
- Due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1.10 Measurement of Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market 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, 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
1.11 Inventories
Inventories are valued at lower of cost or net realizable value. Inventories of traded goods are valued at lower of cost or net realizable value. Finished Goods and Work-in-Progress include cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of inventories are computed on weighted average basis.
1.12 Employee Benefits
Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.
Post-employment and other long term employee benefits are recognised as an expense in the Statement of Profit and Loss for the period in which the employee has rendered services. The expense is recognised at the present value of the amounts payable determined using actuarial valuation techniques. Gains and losses through remeasurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in net profit in the statement of profit and loss.
1.13 Share-Based Payment
The Company recognizes compensation expense relating to share-based payments in statement of profit and loss, using fair-value. The estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.
1.14 Provisions
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Provisions for warranty-related costs are recognised when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
1.15 Revenue recognition
Revenue is recognised on a fair value basis to the extent it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(i) Sale of goods
Revenue from sale of goods is recognised, when significant risks and rewards of ownership have been transferred to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. It also includes excise duty and excludes value added tax and Goods and service tax (GST). It is measured at fair value of consideration received or receivable, net of returns and allowances.
(ii) Revenue from Sale of Services
Revenue from Sale of services are recognised as they are rendered based on arrangements with the customers.
(iii) Lease Income
Lease agreements where the risks and rewards incidental to the ownership of an asset substantially vest with the lessor are recognised as operating leases. Lease rentals are recognised on straight - line basis as per the terms of the agreements in the statement of profit or loss.
(iv) Interest Income
For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset.
(v) Dividend Income
Dividend income is recognised when the Companyâs right to receive the payment is established.
1.16 Foreign Currency Transactions
(i) Functional Currency
Financial statements of the Companyâs are presented in Indian Rupees (â), which is also the functional currency.
(ii) Transactions and Translations
Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in net profit in the Statement of Profit and Loss. Non-monetary assets and nonmonetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and nonmonetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gain and losses are presented in the statement of profit and loss on net basis within other gains/ (losses).
1.17 Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as Operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
1.18 Taxes on Income
Income tax comprises current and deferred income tax. It is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent there is reasonable certainty that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
1.19 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the Company and the weighted average number of shares outstanding during the period, are adjusted for the effects of all dilutive potential equity shares.
1.20 Borrowing Costs
Borrowing costs, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use, are capitalized as part of the cost of the respective asset. All other borrowing costs are charged in the period they occur in the statement of profit and loss.
Mar 31, 2017
1. Company Overview And Significant Accounting Policies
1.1 Company Overview
Future Enterprises Limited (Formerly Known as Future Retail Limited) (''the Company'') is a public Company domiciled in India and incorporated under the provisions of Companies Act, 1956 on 12 October, 1987. The Company engaged in the business of manufacturing, trading and leasing of assets.
The Company has its registered office at Mumbai, Maharashtra, India. The Company has its primary listings on the National Stock Exchange of India Limited and BSE Limited.
The financial statements were authorized for issue in accordance with a resolution of the Board of Directors on May 19, 2017.
1.2 Basis of Preparation and Presentation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convention method on accrual basis except for certain financial instruments which are measured at fair values. The Ind AS are prescribed under Section 133 of the Companies Act, 2013 (Act) read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The Company has adopted all the Ind AS standards and the adoption was carried out in accordance with Ind AS 101 First-Time Adoption of Indian Accounting Standards. The transition was carried out from Indian Accounting Principles generally accepted in India as prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (IGAAP), which was the previous GAAP. Reconciliations and descriptions of the effect of the transition has been summarized in note 2.
1.3 Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
1.4 Property, Plant and Equipment
Property, plant and equipment are stated at cost, less accumulated depreciation and impairment, if any. Costs directly attributable to acquisition are capitalized until the property, plant and equipment are ready for use, as intended by management.
An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit or Loss when the asset is derecognized.
For transition to Ind AS, the Company has elected to continue with the carrying value of all its property, plant and equipment recognized as on April 1, 2015 measured as per previous GAAP as it deemed cost on the date of transition.
The company depreciates property, plant and equipment over their estimated useful lives using the straight-line method. The estimated useful lives of assets are as follows:
Plant and Equipment : 15 years
Office Equipment* : 3 to 6 years
Furniture And Fixture : 10 years
Electrical Installation and Equipment : 10 years Vehicles : 10 years
Leasehold Improvement* : Lease term or 15 Years, whichever is lower
*Based on technical evaluation, the management believes that the useful lives as given above best represent the period over which management expects to use these assets. Hence, the useful lives for these assets is different from the useful lives as prescribed under Part C of Schedule II of the Companies Act 2013.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets and the cost of assets not put to use before such date are disclosed under ''Capital work-in-progress''.
1.5 intangible Assets
Intangible assets are stated at acquisition cost and other cost incurred, which is attributable to preparing the asset for its intended use, less accumulated amortization and accumulated impairment losses, if any. Intangible assets are amortized on straight line basis over their estimated useful economic life not exceeding ten years.
An item of intangible assets is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset is included in the Statement of Profit or Loss when the asset is derecognized.
The residual values, useful lives and methods of amortization of intangible assets are reviewed at each financial year end and adjusted prospectively, if appropriate.
For transition to Ind AS, the Company has elected to continue with the carrying value of all its intangible assets recognized as on April 1, 2015 measured as per previous GAAP as it deemed cost on the date of transition.
1.6 impairment of Assets
i Financial Assets
The Company recognizes loss allowances using the expected credit losses (ECL) model for the financial assets which are not fair valued through statement of profit and loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in statement of profit and loss.
ii Non-Financial Assets
Intangible Assets and Property, Plant and Equipment
Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit to which the asset belongs.
If such assets are considered to be impaired, the impairment to be recognized in the Statement of Profit and Loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
iii Share Capital Ordinary Shares
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary shares and share options are recognized as a deduction from equity, net of any tax effects.
1.7 Financial instruments
i Initial Recognition and Measurement
The Company recognizes financial assets and liabilities when it becomes a party to the contractual provisions of the instrument. All financial assets and liabilities are recognized at fair value on initial recognition, except for trade receivables which are initially measured at transaction price. Transaction costs that are directly attributable to the acquisition or issue of financial assets and liabilities that are not at fair value through profit or loss are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are recognized on the trade date.
ii Subsequent Measurement
a) Non-Derivative Financial Instruments
i Financial Assets Carried At Amortized Cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold the asset in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
ii Financial Assets At Fair Value Through Other Comprehensive Income
A financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
The Company has made an irrevocable election for its investments which are classified as equity instruments to present the subsequent changes in fair value in other comprehensive income based on its business model. Further, in cases where the Company has made an irrevocable election based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
iii Investments in Associates, Joint Venture and Subsidiaries
Investments in Associates, Joint Venture and Subsidiaries are carried at cost.
iv Financial Assets at Fair Value Through Profit or Loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
v Financial Liabilities
Financial liabilities are subsequently carried at amortized cost using the effective interest method, except for contingent consideration recognized in a business combination which is subsequently measured at fair value through profit and loss. For trade and other payables maturing within one year from the Balance Sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
b) Derivative Financial Instruments
The Company holds derivative financial instruments such as foreign exchange forward and option contracts to mitigate the risk of changes in exchange rates on foreign currency exposures. The counter party for these contracts is generally a bank.
i Financial Assets or Liabilities, at Fair Value Through Profit or Loss.
This category has derivative financial assets or liabilities which are not designated as hedges.
Although the company believes that these derivatives constitute hedges from an economic perspective, they may not qualify for hedge accounting under Ind AS 109, Financial Instruments. Any derivative that is either not designated a hedge, or is so designated but is ineffective as per Ind AS 109, is categorized as a financial asset or financial liability, at fair value through profit or loss.
Derivatives not designated as hedges are recognized initially at fair value and attributable transaction costs are recognized in net profit in the Statement of Profit and Loss when incurred. Subsequent to initial recognition, these derivatives are measured at fair value through profit or loss and the resulting exchange gains or losses are included in other income. Assets/ liabilities in this category are presented as current assets/ liabilities if they are either held for trading or are expected to be realized within 12 months after the balance sheet date.
ii Derecognition of Financial Instruments
The company derecognizes a financial asset when the contractual right to receive the cash flows from the financial asset expire or it transfers the financial asset.
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or expires.
1.8 Current Versus Non-Current Classification
An asset is considered as current when it is:
- Expected to be realized or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realized within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is considered as current when it is:
- Expected to be settled in normal operating cycle
- Held primarily for the purpose of trading
- Due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
1.9 Measurement of Fair Value
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic 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 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3 â Input for the asset or liability that are not based on observable market data (unobservable inputs).
1.10 inventories
Inventories are valued at lower of cost or net realizable value. Inventories of traded goods are valued at lower of cost or net realizable value. Finished Goods and Work-in-Progress include cost of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Costs of inventories are computed on weighted average basis.
1.11 Employee Benefits
Short term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss for the period in which the related service is rendered.
Post-employment and other long term employee benefits are recognized as an expense in the Statement of Profit and Loss for the period in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined using actuarial valuation techniques. Gains and losses through remeasurements of the net defined benefit liability/ (asset) are recognized in other comprehensive income. The actual return of the portfolio of plan assets, in excess of the yields computed by applying the discount rate used to measure the defined benefit obligation is recognized in other comprehensive income. The effect of any plan amendments are recognized in the statement of profit and loss.
1.12 Share-Based Payment
The Company recognizes compensation expense relating to share-based payments in statement of profit and loss, using fair-value. The estimated fair value of awards is charged to income on a straight-line basis over the requisite service period for each separately vesting portion of the award as if the award was in-substance, multiple awards with a corresponding increase to share options outstanding account.
1.13 Provisions
A provision is recognized if, as a result of a past event, the company has a present legal or constructive obligation that is reasonably estimable, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.
Provisions for warranty-related costs are recognized when the product is sold or service provided to the customer. Initial recognition is based on historical experience. The initial estimate of warranty-related costs is revised annually.
1.14 Revenue Recognition
Revenue is recognized on a fair value basis to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured.
(i) Sale of goods
Revenue from sale of goods is recognized, when significant risks and rewards of ownership have been transferred to the buyer and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. It also includes excise duty and excludes value added tax / sales tax. It is measured at fair value of consideration received or receivable, net of returns and allowances.
(ii) Revenue from Sale of Services
Revenue from Sale of services are recognized as they are rendered based on arrangements with the customers.
(iii) Lease Income
Lease agreements where the risks and rewards incidental to the ownership of an asset substantially vest with the less or are recognized as operating leases. Lease rentals are recognized on straight - line basis as per the terms of the agreements in the statement of profit or loss.
(iv) Interest Income
For all financial instruments measured at amortized cost, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset.
(v) Dividend Income
Dividend income is recognized when the Company''s right to receive the payment is established.
1.15 Foreign Currency Transactions
(i) Functional Currency
Financial statements of the Company''s are presented in Indian Rupees (''), which is also the functional currency.
(ii) Transactions and Translations
Foreign-currency denominated monetary assets and liabilities are translated into the relevant functional currency at exchange rates in effect at the balance sheet date. The gains or losses resulting from such translations are included in the Statement of Profit and Loss. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at fair value are translated at the exchange rate prevalent at the date when the fair value was determined. Non-monetary assets and non-monetary liabilities denominated in a foreign currency and measured at historical cost are translated at the exchange rate prevalent at the date of the transaction. Transaction gains or losses realized upon settlement of foreign currency transactions are included in determining net profit for the period in which the transaction is settled.
Foreign exchange differences regarded as an adjustment to borrowing costs are presented in the statement of profit and loss, within finance costs. All other foreign exchange gain and losses are presented in the statement of profit and loss on net basis within other gains/ (losses).
1.16 Leases
Finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalized at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized as finance costs in the statement of profit and loss. Lease management fees, legal charges and other initial direct costs of lease are capitalized.
A leased asset is depreciated on a straight-line basis over the useful life of the asset. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
Leases, where the less or effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognized as an expense in the statement of profit and loss on a straight-line basis over the lease term unless the payments are structured to increase in line with expected general inflation to compensate for the less orâs expected inflationary cost increases.
1.17 Taxes on income
Income tax comprises current and deferred income tax. It is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in other comprehensive income.
Provision for current tax is made after taking into consideration benefits admissible under the provisions of the Income-tax Act, 1961.
Deferred income tax assets and liabilities are recognized for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent there is reasonable certainty that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
1.18 Earnings Per Share
Basic earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders of the Company and the weighted average number of shares outstanding during the period, are adjusted for the effects of all dilutive potential equity shares.
1.19 Borrowing Costs
Borrowing costs, directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use, are capitalized as part of the cost of the respective asset. All other borrowing costs are charged in the period, in which they occur in the statement of profit and loss.
1.20 First-Time Adoption of ind AS
These financial statements for the year ended March 31, 2017 have been prepared in accordance with Ind AS. For the year ended up to March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
For the purposes of transition to Ind AS, the Company has followed the guidance prescribed in Ind AS 101 - First Time adoption of Indian Accounting Standard, with April 1, 2015 as the transition date and IGAAP as the previous GAAP.
The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles. The accounting policies set out in above note have been applied in preparing the financial statements for the year ended March 31, 2017 and the comparative information. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s Balance Sheet, Statement of Profit and Loss, is set out in below note. Exemptions on first time adoption of Ind AS availed in accordance with Ind AS 101 have been set out in note 1.21.
1.21 Exemptions availed on First-Time Adoption of ind AS 101
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has accordingly applied the following exemptions.
(i) Business Combination
The Company has elected not to apply Ind AS 103 Business Combinations retrospectively to past business combinations that occurred before the transition date. The Company elected to apply Ind AS 103 prospectively.
(ii) Deemed Cost
The Company has elected to continue with the carrying value of all of its property, plant and equipment and intangible assets recognized as of transition date measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
(iii) Share - Based Payment
The excess of stock compensation expense measured using fair value over the cost recognized under IGAAP using intrinsic value has been adjusted in ''Share Option Outstanding Account'', with the corresponding impact taken to the retained earnings as on the transition date.
(ii) Terms/Rights Attached to Equity Shares
The Company has Equity Shares having a par value of '' 2/- each at the Balance Sheet Date. Equity Shares have been further classified in to Equity Shares carrying normal voting and dividend rights (Ordinary Shares) and Equity Shares carrying differential voting and dividend rights Class B (Series-1) Shares.
Each holder of Ordinary Shares, is entitled to one vote per member in case of voting by show of hands and one vote per Ordinary Shares held in case of voting by poll/ballot. Each holder of Equity Share is also entitled to normal dividend (including interim dividend, if any) as may declared by the company.
Each holder of Class B (Series -1) Shares, is entitled to one vote per member in case of voting by show of hands and three vote per four Class B (Series-1) shares held in case of voting by poll/ballot. Each holder of Class B (Series-1) Share is also entitled to 2% additional dividend in addition to normal dividend (including interim dividend, if any) as may declared by the company. Further, the Company may declare dividend only for Class B (Series-1) Share up to 2% without declaring any dividend for Equity Shares.
All other rights would be same for both classes of Equity Shares.
The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the Annual General Meeting.
In the event of liquidation of company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distributions will be in proportion to the number of equity shares held by shareholder.
(v) Pursuant to the provisions of the Companies Act, 1956 and Companies Act 2013, the issue of equity shares are kept in abeyance.
a) 11,400 Equity Shares of Rights Issue of 2006.
b) 84,478 Equity Shares of Rights Issue of 2015.
c) 8,493 Equity Shares of Class B (Series-1) of Rights Issue of 2015.
31. Financial Risk Management
The Company''s financial risk management is an integral part of how to plan and execute its business strategies. The Company''s financial risk management policy is set by the managing board.
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the interest rates, foreign currency exchange rates and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial instruments including loans and borrowings, foreign currency receivables and payables.
The Company manages market risk through treasury department, which evaluates and exercises independent control over the entire process of market risk management. The treasury department recommends risk management objectives and policies, which are approved by Senior Management and the Audit Committee. The activities of this department include management of cash resources, implementing hedging strategies for foreign currency exposures and borrowing strategies.
i Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company is not exposed to significant interest rate risk as at the respective reporting dates.
ii Foreign Currency Risk
The Company is exposed to exchange fluctuation risk for its purchase from overseas suppliers in various foreign currencies.
The Company follows established risk management policies including the use of derivatives like foreign exchange forward contracts to hedge exposures to foreign currency risk.
iii Credit Risk
Credit risk refers to the risk of default on its obligation by the counter party resulting in a financial loss. The maximum exposure to the credit risk at the reporting date is primarily from trade receivables amounting to '' 366.71 Crore and '' 256.00 Crore as of March 31, 2017 and March 31, 2016 respectively. Trade receivables are typically unsecured and are derived from revenue earned from customers. Credit risk has always been managed by the company through credit approvals, establishing credit limits and continuously monitoring the credit worthiness of customers to which the company grants credit terms in the normal course of business. On account of adoption of Ind AS 109, the company uses expected credit loss model to assess the impairment loss or gain. The company uses a provision matrix to compute the expected credit loss allowance for trade receivables. The provision matrix takes into account available external and internal credit risk factors and the company''s historical experience for customers.
iv Liquidity Risk
The company''s principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations. Liquidity risk is defined as the risk that the company will not be able to settle or meet its obligations on time or at a reasonable price. Typically the company ensures that it has sufficient cash on demand to meet expected operational expenses and servicing of financial obligations.
v. Financial Instruments Valuation
a) All financial instruments are initially recognized and subsequently re-measured at fair value as described below:
b) The fair value of quoted investment is measured at quoted price or NAV.
c) The fair value of the remaining financial instruments is determined using discounted cash flow analysis.
d) All foreign currency denominated assets and liabilities are translated using exchange rate at reporting date.
The financial instruments are categorized into two levels based on the inputs used to arrive at fair value measurements as described below:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities; and
Level 2: Inputs other than the quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.
vi Capital Management
For the purpose of the Company''s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company''s capital management is to maximize the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, interest bearing loans and borrowings, trade and other payables, less cash and cash equivalents.
In order to achieve this overall objective, the Company''s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the year ended March 31, 2017 and March 31, 2016.
Mar 31, 2015
A. Basis of Preparation
Financial statements have been prepared in accordance with Generally
Accepted Accounting Principles in India (Indian GAAP) under the
historical cost convention on an accrual basis in compliance with all
material aspects of the Accounting standards (As) notified under
section 133 of the Companies Act, 2013 read together with the paragraph
7 of the Companies (Accounts) Rules 2014. The Financial statements have
been prepared under the historical cost convention on an accrual basis.
B. Use of Estimates
Preparation of financial statements in conformity with Indian GAAP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management's best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in differences
between the actual results and estimates which are recognised in future
period.
C. Tangible Fixed Assets and Depreciation
Tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use. Depreciation is provided pro rata for the period of
use on straight line basis as per the useful life of the assets
prescribed under schedule II of the Companies Act, 2013 except for
leasehold improvements which are depreciated over the remaining
expected lease term and employee perquisite related assets which are
depreciated over three years.
D. Intangible Assets and Amortisation
Intangible Assets are stated at acquisition cost less accumulated
amortisation and accumulated impairment losses, if any. Intangible
assets are amortised on straight line basis over their estimated useful
life of ten years.
E. Investments
Current investments are carried at lower of cost and fair value
computed on individual investment basis. Long- term investments are
stated at cost after deducting provisions made, if any, for other than
temporary diminution in value.
F. Inventories
Inventories are valued at lower of cost and net realizable value.
Finished goods and Work-in-Progress include cost of purchase, cost of
conversion and other costs incurred in bringing the inventories to
their present location and condition. Cost of inventories are computed
on weighted average basis.
G. Foreign Currency Transaction
Transactions in foreign currencies are recorded at the prevailing rates
of exchange on the date of transaction. Monetary items denominated in
foreign currencies, are restated at the prevailing rates of exchange at
the balance sheet date. All gains and losses arising out of
fluctuations in exchange rates are accounted for in the statement of
Profit and Loss. exchange differences on forward contracts entered into
for hedging foreign exchange fluctuation risk in respect of an
underlying asset/liability, are recognised in the statement of profit
and loss in the reporting period in which the exchange rate changes.
Premium/Discount on foreign exchange contracts are recognised as an
expense/income over the life of the contract.
H. Borrowing Costs
Borrowing costs, directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use, are capitalized as part of
the cost of the respective asset. All other borrowing costs are charged
in the period they occur in the statement of Profit and Loss.
I. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. sales are recognised when significant risk and
rewards of ownership of the goods have passed to the buyer which
coincides with delivery and are recorded net of trade discounts VAT and
sales Tax. Revenue from services are recognised as they are rendered
based on agreements/arrangements with the concerned parties and
recognised net of service tax (If applicable). Interest income is
recognised on time proportion basis taking into account the amount
outstanding and the applicable rate. Dividend income is recognised when
right to receive is established.
J. Retirement and Other Employee Benefits
Short term employee benefits are recognised as an expense at the
undiscounted amount in the statement of Profit and Loss for the period
in which the related service is rendered.
Post employment and other long term employee benefits are recognised as
an expense in the statement of Profit and Loss for the period in which
the employee has rendered services. The expense is recognised at the
present of the amounts payable determined using actuarial valuation
techniques. Actuarial gain and loss in respect of post employment and
other long term benefits are charged to statement of Profit and Loss.
K. Income Taxes
Tax expense includes provision for current tax and deferred tax.
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the
provisions of the Income Tax Act, 1961.Deferred tax resulting from
"timing difference" between taxable and accounting income is
accounted for using the tax rates and laws that are enacted as at the
Balance sheet date. Deferred tax asset is recognised and carried
forward only to the extent that there is virtual certainty that the
asset will be realised in future.
Minimum Alternative Tax (MAT) credit is recognised as an asset only
when and to the extent there is convincing evidence that the Company
will pay normal income-tax during the specified period. In the year in
which the MAT credit becomes eligible to be recognised as an asset in
accordance with the recommendations contained in the guidance note
issued by Institute of Chartered Accountants of India ('ICAI'), the
said asset is created by way of a credit to the statement of Profit and
Loss. The Company reviews the same at each balance sheet date and
writes down the carrying amount of MAT credit entitlement to the extent
there is no longer convincing evidence to the effect that Company will
pay normal income tax during the specified period.
L. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised, but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
M. Impairment
The carrying amounts of assets are reviewed at each Balance sheet date
if there is any indication of impairment based on internal/external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss, if any, is
charged to the statement of Profit and Loss in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognised in prior years is recorded when there is an indication that
the impairment losses recognised for the assets no longer exist or have
decreased.
N. Leases
Leases where significant portion of risk and reward of ownership are
retained by the Lessor are classified as operating leases and lease
rental thereof are charged to the statement of Profit and Loss as per
the terms of agreement which is representative of the time pattern of
the user's benefit.
Mar 31, 2014
A. Basis of Preparation
Financial statements have been prepared in accordance with generally
accepted accounting Principles in india (indian gaaP) under the
historical cost convention on an accrual basis in compliance with all
material aspects of the accounting standards (as) notified under the
companies act 1956 ("the act") read with the general circular 15/2013
dated september 13, 2013 of the Ministry of corporate affairs in
respect of section 133 of the companies act, 2013 and the relevant
provisions of the companies act 1956 (to the extent applicable) and
companies act, 2013 (to the extent notified).
B. Use of estimates
Preparation of financial statements in conformity with indian gaaP
requires the management to make judgments, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in differences
between the actual results and estimates which are recognized in future
periods.
c. Fixed assets and Depreciation
tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss, if any. cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
Depreciation is provided on straight line basis at the rates and in the
manner prescribed under schedule XiV of the companies act, 1956 except
leasehold improvements which are amortized over the lease period and
employee perquisite related assets which are depreciated over three
years.
Computer software is amortized over six years. Fixed assets,
individually costing less than Rupees Five thousands are fully
depreciated in the year of purchase. Depreciation on the fixed assets
added/disposed off/discarded during the period is provided on pro-rata
basis with reference to the month of addition/disposal/discarding.
D. Investments
investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. all other investments are
classified as long-term investments. investments are recorded at cost,
which includes acquisition charges such as brokerage, stamp duty, taxes
etc. current investments are stated at lower of cost and fair value
computed on individual investment basis. long-term investments are
stated at cost after deducting provisions made, if any, for other than
temporary diminution in value.
e. Inventories
Inventories are valued at lower of cost, computed on weighted average
basis, and net realizable value.
Cost of inventories comprises all costs of purchases and other costs
incurred in bringing the inventories to their present condition and
location.
Materials and other items held for use in the production of inventories
are written down below cost only if the finished products in which they
will be used are expected to be sold below cost.
F. Foreign currency transaction
Transactions in foreign currencies are recorded at the prevailing rates
of exchange on the date of transaction. Monetary items denominated in
foreign currencies, are restated at the prevailing rates of exchange at
the balance sheet date. all gains and losses arising out of
fluctuations in exchange rates are accounted for in the statement of
Profit and loss. exchange differences on forward contracts entered into
for hedging foreign exchange fluctuation risk in respect of an
underlying asset/liability, are recognized in the statement of profit
and loss in the reporting period in which the exchange rate changes.
Premium/Discount on foreign exchange contracts are recognized as an
expense/income over the life of the contract.
g. Borrowing costs
Borrowing costs, directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use, are capitalized as part of
the cost of the respective asset. all other borrowing costs are charged
in the period they occur in the statement of Profit and loss.
H. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured. sales are recognized when significant risk and
rewards of ownership of the goods have passed to the buyer which
coincides with delivery and are recorded net of trade discounts and
Vat. Revenue from services are recognized as they are rendered based on
agreements/arrangements with the concerned parties and recognized net
of service tax (if applicable). interest income is recognized on time
proportion basis taking into account the amount outstanding and the
applicable rate. Dividend income is recognized when right to receive is
established.
i. Retirement and other employee Benefits
Employee benefits such as salaries, allowances, non-monetary benefits
and employee benefits under defined contribution plans such as
provident fund and other funds, which fall due for payment within a
period of twelve months after rendering service, are charged as expense
to the statement of profit and loss for the period in which the service
is rendered.
Employee benefits under defined benefit plans and other long term
employee benefits such as gratuity and compensated absences which fall
due for payment after completion/cessation of employment or after a
period of twelve months from rendering service are measured by the
projected unit credit method, based on actuarial valuations at each
balance sheet date carried out by independent actuaries. the company''s
obligations recognized in the balance sheet represent the present value
of obligations as reduced by the fair value of plan assets, where
applicable. actuarial gains and losses are recognized immediately in
the statement of profit and loss.
J. Taxation
Tax expense includes provision for current tax and deferred tax.
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the
provisions of the income tax act, 1961.Deffered tax resulting from
"timing difference" between taxable and accounting income is accounted
for using the tax rates and laws that are enacted as at the Balance
sheet date. Deferred tax asset is recognized and carried forward only
to the extent that there is virtual certainty that the asset will be
realized in future.
K. Provisions, contingent liabilities and contingent assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
contingent liabilities are not recognized, but are disclosed in the
notes. contingent assets are neither recognized nor disclosed in the
financial statements.
l. Impairment of assets
The carrying amounts of assets are reviewed at each Balance sheet date
if there is any indication of impairment based on internal/ external
factors. an asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. an impairment loss, if any, is
charged to the statement of Profit and loss in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognized in prior years is recorded when there is an indication that
the impairment losses recognized for the assets no longer exist or have
decreased.
M. Leases
Leases where significant portion of risk and reward of ownership are
retained by the lessor are classified as operating leases and lease
rental thereof are charged to the statement of Profit and loss as per
the terms of agreement which is representative of the time pattern of
the user''s benefit.
(ii) Terms/Rights attached to equity shares
The company has equity shares having a par value of Rs. 2/- each at the
Balance sheet Date. equity shares have been further classified in to
equity shares carrying normal voting and dividend rights (ordinary
shares) and equity shares carrying differential voting and dividend
rights class B (series-1) shares.
Each holder of ordinary shares, is entitled to one vote per member in
case of voting by show of hands and one vote per ordinary shares held
in case of voting by poll/ballot. each holder of equity share is also
entitled to normal dividend (including interim dividend, if any) as may
declared by the company.
Each holder of class B (series -1) shares, is entitled to one vote per
member in case of voting by show of hands and three vote per four class
B (series-1) shares held in case of voting by poll/ballot. each holder
of class B (series-1) share is also entitled to 2% additional dividend
in addition to normal dividend (including interim dividend, if any) as
may declared by the company. Further, the company may declare dividend
only for class B (series-1) share upto 2% without declaring any
dividend for equity shares.
All other rights would be same for both classes of equity shares.
The company declares and pays dividends in indian Rupees. the dividend
proposed by the Board of Directors is subject to approval of the
shareholders in the annual general Meeting.
In the event of liquidation of company, the holders of equity shares
will be entitled to receive remaining assets of the company, after
distribution of all preferential amounts. the distributions will be in
proportion to the number of equity shares held by shareholder.
(iii) The company does not have any holding company.
(iv) Shares in the company held by each shareholder holding more than 5
percent shares and number of shares held are as under:
(v) Pursuant to the provisions of section 206a of the companies act,
1956, the issue of 11,400 equity shares is kept in abeyance.
(vi) Shares allotted as fully paid up without payment received in cash
(during 5 years preceding March 31, 2014).
Allotted 59,28,818 equity shares of Rs. 2/- each and 63,47,635, 0.01%
compulsory convertible Preference shares of Rs. 100/- each as fully paid
up pursuant to scheme of arrangement.
(vii) The company has reserved issuance of 25,00,000 (2012 : nil)
equity shares of Rs. 2/- each for offering to eligible employees of the
company under employees stock option scheme (esos). During the period,
company has granted 2,76,279 (2012 : nil ) revised to 3,05,192 options,
post corporate action affecting option value and transfer of certain
options to Future lifestyle Fashions limited due to transfer of the
employees pursuant to scheme of arrangement, to the eligible employees
at exercise price of Rs. 20/- per option, again revised post corporate
action to exercise price of Rs. 10/- per option plus all applicable
taxes, as may be levied in this regard on the company. out of the
options granted, 11,798 options were cancelled due to cessation of
employment. the options would vest over a maximum period of 3 years or
such other period as may be decided by the nomination and Remuneration
committee from the date of grant based on specified criteria.
Dec 31, 2012
A. Basis of preparation
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India (IGAAP) under the
historical cost convention on accrual basis and comply in all material
aspects with the Accounting Standards notified under Section 211(3C)
and other relevant provisions of the Companies Act, 1956.
B. Use of Estimates
Preparation of financial statements in conformity with IGAAP requires
the management to make judgments, estimates and assumptions that affect
the reported amounts of revenues, expenses, assets and liabilities and
the disclosure of contingent liabilities, at the end of the reporting
period. Although these estimates are based on the management''s best
knowledge of current events and actions, uncertainty about these
assumptions and estimates could result in differences between the
actual results and estimates which are recognized in future periods.
C. Fixed Assets and Depreciation
Tangible fixed assets are stated at cost, less accumulated depreciation
and impairment loss, if any. Cost comprises the purchase price and any
attributable cost of bringing the asset to its working condition for
its intended use.
Borrowing costs attributable to acquisition and construction of
qualifying assets are capitalized as a part of the cost of such assets
up to the date when such assets are ready for its intended use.
Depreciation is provided on straight line basis at the rates and in the
manner prescribed under Schedule XIV of the Companies Act, 1956 except
leasehold improvements which are amortized over the lease period and
employee perquisite related assets which are depreciated over three
years.
Computer software is amortized over six years. Fixed assets,
individually costing less than Rupees Five thousands are fully
depreciated in the year of purchase. Depreciation on the fixed assets
added/ disposed off/ discarded during the period is provided on
pro-rata basis with reference to the month of addition/ disposal/
discarding.
D. Investments
Current Investments are carried at lower of cost and fair value
computed on individual investment basis. Long-term investments are
stated at cost after deducting provisions made, if any, for other than
temporary diminution in value.
E. Inventories
Inventories are valued at lower of cost, computed on weighted average
basis, and net realizable value.
Cost of inventories comprises all costs of purchases and other costs
incurred in bringing the inventories to their present condition and
location.
Materials and other items held for use in the production of inventories
are written down below cost only if the finished products in which they
will be used are expected to be sold below cost.
F. Transactions in foreign currency
Foreign currency transactions are recorded at the exchange rates
prevailing at the date of the transaction.
Monetary foreign currency items at the year end are restated at year
end rates. In case of items which are covered by forward exchange
contracts, the difference between the year end rate and the rate on the
date of the contract is recognized as exchange difference and the
premium paid on forward contracts is recognized over the life of the
contract. All exchange differences, either on settlement or
translation, are recognized in the Statement of Profit and Loss.
G. Revenue Recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured.
Sales are recognized when significant risk and rewards of ownership of
the goods have passed to the buyer which coincides with delivery and
are recorded net of trade discounts and VAT.
Interest income is recognized on time proportion basis taking into
account the amount outstanding and the applicable rate.
Dividend income is recognized when right to receive is established.
H. Retirement and other employee benefits
Short term employee benefits are recognized as an expense at the
undiscounted amount in the Statement of Profit and Loss for the period
in which the related service is rendered.
Post employment and other long term employee benefits are recognized as
an expense in the Statement of Profit and Loss for the period in which
the employee has rendered services. The expense is recognized at the
present value of the amounts payable determined using actuarial
valuation techniques. Actuarial gains and losses in respect of post
employment and other long term benefits are charged to Statement of
Profit and Loss.
I. Taxation
Provision for current tax is made on the basis of estimated taxable
income for the current accounting period in accordance with the
provisions of the Income Tax Act, 1961. Deferred tax resulting from
"timing difference" between taxable and accounting income is
accounted for using the tax rates and laws that are enacted or
substantively enacted as at the Balance Sheet date. Deferred tax asset
is recognized and carried forward only to the extent that there is
virtual certainty that the asset will be realized in future.
J. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognized, but are disclosed in the
notes. Contingent Assets are neither recognized nor disclosed in the
financial statements.
K. Impairment of assets
The carrying amounts of assets are reviewed at each Balance Sheet date
if there is any indication of impairment based on internal/ external
factors. An asset is treated as impaired when the carrying cost of the
assets exceeds its recoverable value. An impairment loss, if any, is
charged to the Statement of Profit and Loss in the year in which an
asset is identified as impaired. Reversal of impairment losses
recognized in prior years is recorded when there is an indication that
the impairment losses recognized for the assets no longer exist or have
decreased.
L. Leases
Leases where significant portion of risk and reward of ownership are
retained by the Lessor are classified as operating leases and lease
rental thereof are charged to the Statement of Profit and Loss as per
the terms of agreement which is representative of the time pattern of
the user''s benefit.
Jun 30, 2010
1. Basis of Accounting
The financial statements are prepared under historical cost convention
on accrual basis and in accordance with applicable accounting standards
notified by the Government of India/issued by the Institute of
Chartered Accountants of India and the provisions of the Companies Act,
1956.
2. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon managements best
knowledge of current events and actions, actual results could differ
from these estimates. Any revision to accounting estimates is
recognised prospectively in current and future periods. Difference
between the actual results and estimates is recognised in the period in
which the results are known/materialized.
3. Fixed Assets and Depreciation
Fixed assets are stated at cost, less accumulated depreciation. Cost
comprises the purchase price and all attributable cost of bringing the
asset to its working condition for its intended use. Financing and
other cost relating to acquisition of fixed assets are also included to
the extent they relate to the period till such time as the assets are
ready for commercial operation. Depreciation is provided on Straight
Line Method as per the rates and in the manner prescribed in Schedule
XIV to the Companies Act, 1956 except Leasehold improvements which are
amortised over the lease period and employee perquisite- related assets
which are depreciated over three years. Intangible Assets are amortised
over their useful life not exceeding ten years.
4. Investments
Current investments are carried at lower of cost and fair
value.Long-term investments are stated at cost. Provision for
diminution is being made if necessary to recognise a decline, other
than temporary in the value thereof.
5. Inventories
Inventories are valued as follows :
a) Stores, Spare parts, Packing material and Branding material : At
Cost
b) Raw material & Stitching material : At Cost
c) Finished goods and Work in Progress : At the lower of cost or net
realisable value Cost of inventories comprises all costs of purchase
and other costs incurred in bringing the inventories to their present
condition and location. Cost is computed on weighted average basis.
6. Transaction in Foreign Currency
Foreign currency transactions are recorded at the exchange rates
prevailing at the date of the transaction. Monetary foreign currency
assets and liabilities are translated into Indian rupees at the
exchange rate prevailing at the balance sheet date. All exchange
differences are dealt with in profit and loss account.
7. Revenue Recognition
Revenue is recognised when it is earned and no significant uncertainty
exists as to its realization or collection. Sale of Goods is accounted
on delivery to customers. Sales is net of returns, discounts and Value
Added Tax/ Sales Tax. Export sales is accounted as revenue on the basis
of Bill of Lading. Interest income is recognized on accrual basis.
Dividend income is accounted for when the right to receive is
established.
8. Retirement and other employee benefits
ShortTerm Employee Benefits:
Short Term employee benefits are recognised as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
Post Employment Benefits:
Post employment and other long term employee benefits are recognised as
an expense in the Profit and Loss account for the year in which the
employee has rendered services. The expense is recognised at the
present value of the amounts payable determind using actuarial
valuation techniques. Acturial gains and losses in respect of post
employment and other long term benefits are charged to Profit and Loss
account.
9. Provision for current and deferred tax
a. Provision for current tax is made on the basis of estimated taxable
income for the current accounting period in accordance with the
provisions of Income tax Act, 1961. Deferred tax resulting from "timing
differences" between taxable and accounting income is accounted for
using the tax rates and laws that are enacted or substantively enacted
as on the balance sheet date.
b. Tax Expenses comprise of current tax and deferred tax.The provision
for current income tax is the aggregate of the balance provision for 9
months ended March 31,2010 and the estimated provision based on the
taxable profit of remaining 3 months upto June 30,2010,the actual tax
liability, for which, will be determined on the basis of the results
for the period April 1,2010 to March 31, 2011.
10. Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
11. Impairment of Assets
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to Profit
& Loss Account in the year in which the asset is impaired and the
impairment loss recognised in prior accounting periods is reversed if
there has been a change in the estimate of recoverable amount. For the
purpose of assessing impairment, assets are grouped at the lowest level
of cash generating units.
12. Leases
Leases where significant portion of risk and reward of ownership are
retained by the lessor are classified as operating leases and lease
rental thereon are charged to Profit and Loss account.
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Future Enterprises Ltd. पर और जानकारी
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Future Enterprises Ltd. टूल
- बल्क डील
- ब्लॉक डील
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Future Enterprises Ltd. कंपनी का विवरण
- कंपनी का प्रोफाइल
- कंपनी का इतिहास
- मैनेजमेंट टीम
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- बैंकर/ऑडीटर/रजिस्ट्रार
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कंपनी का इतिहास
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Future Enterprises Ltd. मुख्य वित्तीय अनुपात
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Future Enterprises Ltd. परिणाम
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- छहमाही परिणाम
- नौ महीने के परिणम
- वार्षिक परिणाम
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Future Enterprises Ltd. Financial Data
- ऑडिट के परिणाम
- नकदी प्रवाह
- बैलेंस शीट
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Future Enterprises Ltd. की रिपोर्ट
- लेखा नीति
- ऑडीटर की रिपोर्ट
- निदेशक की रिपोर्ट
- खाते के लिये नोट
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Future Enterprises Ltd. कॉर्पोरेट घोषणाएं
- बुक क्लोज़र
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- बोर्ड की मीटिंग
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Stock Market Crash: जंग का असर बाजार में हाहाकार, सेंसेक्स 2500 अंक से ज्यादा लुढ़का, निफ्टी 700 अंक क्रैश -
Stock Market Outlook: होर्मुज स्ट्रेट में संकट! क्या आने वाला है भारतीय शेयर बाजार में बड़ा गिरावट का दौर? -
मिडिल ईस्ट के बढ़ते तनाव ने बिगाड़ा बाजार का मूड, सेंसेक्स 1500 अंक लुढ़का, निफ्टी भी बुरी तरह फिसला -
Stock Market Today: मिडिल ईस्ट तनाव! शेयर बाजार में कोहराम, सेंसेक्स 900+ अंक टूटा, निफ्टी 24,900 के नीचे -
Stock Market: Anthropic के दावे से बढ़ी टेंशन! Nifty-Sensex में बड़ी गिरावट, शेयर बाजार किन 5 कारणों से धड़ाम? -
Stock Markets Today: कारोबारी हफ्ते की शानदार शुरुआत, Sensex और Nifty 50 जबरदस्त बढ़त के साथ बंद -
Stock Alert: सस्ते में मिल रहे Nifty 50 के कई शेयर, यहां से होगी पैसों की बारिश? -
Stock Market Crash: बाजार में हाहाकार, सेंसेक्स 1,200 प्वाइंट से ज्यादा गिरा, निफ्टी भी 400 अंक क्रैश -
Stock Markets Today: बढ़त के साथ बंद हुआ बाजार, Sensex और Nifty की शानदार क्लोजिंग -
Stock Markets Today: Nifty वीकली एक्सपायरी के दिन बाजार में तेजी, IT और PSU इंडेक्स बढ़त के साथ बंद -
Defence Stock: Cochin Shipyard के शेयर में जबरदस्त उछाल, रक्षा मंत्रालय से बड़ा ऑर्डर -
Stock Markets Today: कारोबारी हफ्ते के पहले दिन बाजार की शानदार क्लोजिंग, Sensex और Nifty बढ़त के साथ बंद -
अमेरिका संग ट्रेड डील से SENSEX-NIFTY में दिखा जोश, इन 9 स्टॉक्स में लगा 20% का अपर सर्किट, आपके पास है कोई? -
Stock Market News: India-US ट्रेड डील का असर...शेयर बाजार में जबरदस्त रैली, निवेशकों को 20 लाख करोड़ का फायदा! -
Stock Market News: भारी गिरावट के बाद वापसी, सेंसेक्स-निफ्टी दिन के निचले स्तर से रिकवर, तेजी के पीछे का कारण? -
Stock Market: मोदी सरकार के 15 बजट में कब शेयर बाजार का प्रदर्शन रहा सबसे बेहतर; कब रहा सबसे खराब? फुल रिपोर्ट
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