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Accounting Policies of Ceenik Exports (India) Ltd. Company
Mar 31, 2025
B SIGNIFICANT ACCOUNTING POLICIES
1 Basis of preparation and presentation
The financial statements of the Company have been prepared to comply in all material respects with the
Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules,
2015.
The financial statements for all periods upto and including year ended 31 March 2017 were prepared in
accordance with the Companies (Accounting Standards) Rules, 2006 notified under Section 133 of the
Companies Act ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended)
("previous GAAP").
The financial statements for the year ended 31 March 2018 are the first financial statements prepared by
the Company in accordance with Ind AS.
The financial statements have been prepared under the historical cost convention with the exception of
certain financial assets and liabilities which have been measured at fair value, on an accrual basis of
accounting.
All the assets and liabilities have been classified as current and non-current as per normal operating cycle
of the Company and other criteira set out in as per the guidance set out in Schedule III to the Act. Based on
nature of services, the Company ascertained its operating cycle as 12 months for the purpose of current
and non-current classification of asset and liabilities.
The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional
currency.
C Use of Estimates:
The preparation of the financial statements, in conformity with the Ind AS, requires the management to
make estimates and assumptions that affect the application of accounting policies and the reported
amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements
and the results of operation during the reported period. Although these estimates are based upon
management''s best knowledge of current events and actions, actual results could differ from these
estimates which are recognised in the period in which they are determined.
i) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the
reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of
assets and liabilities within the next financial year. The Company based its assumptions and estimates on
parameters available when the financial statements were prepared. Existing circumstances and
assumptions about future developments, however, may change due to market changes or circumstances
arising that are beyond the control of the Company. Such changes are reflected in the financial statements
in the period in which changes are made and, if material, their effects are disclosed in the notes to the
financial statements.
ii) Deferred tax assets
In assessing the realisability of deferred income tax assets, management considers whether some portion
or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax
assets is dependent upon the generation of future taxable income during the periods in which the
temporary differences become deductible. Management considers the scheduled reversals of deferred
income tax liabilities, projected future taxable income, and tax planning strategies in making this
assessment. Based on the level of historical taxable income and projections for future taxable income over
the periods in which the deferred income tax assets are deductible, management believes that the
Company will realize the benefits of those deductible differences. The amount of the deferred income tax
assets considered realizable, however, could be reduced in the near term if estimates of future taxable
income during the carry forward period are reduced.
iii) Provisions
Provisions and liabilities are recongnised in the period when it becomes probable that there will be a future
outflow of funds resulting from past operations or events and the amount of cash flow can be realiably
estimated .The timing of recognition and quantification of the liability require application of judgement to
the existing facts and circumstances which can be subject to change. The carrying amounts of provisions
and liabilities are reviewed regualarly and revised to take account of changing the facts and circumstances
D Property, Plant and Equipment
i) Tangible Assets
Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance
costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and
accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment
is capitalised only when it is probable that future economic benefits associated with the item will flow to
the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs
are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation
are eliminated from the financial statements, either on disposal or when retired from active use and the
resultant gain or loss are recognised in the Statement of Profit and Loss.
Capital work-in-progress, representing expenditure incurred in respect of assets under development and
not ready for their intended use, are carried at cost. Cost includes related acquisition expenses,
construction cost, related borrowing cost and other direct expenditure.
ii) Intangible Assets
Intangible assets includes software which are not integral part of the hardware are stated at cost less
accumulated amortisation. Intangible assets under development represents expenditure incurred in
respect of softwares under devlopment and are carried at cost.
Assets acquired but not ready for use are classified under Capital work-in-progress or intangible assets
under development, as the case may be.
On transition to Ind AS, the Company has opted to continue with the carrying values measured under the
previous GAAP as at 1 April 2016 of its Intangible Assets and used that carrying value as the deemed cost of
the Intangible Assets on the date of transition i.e. 1 April 2016.
E Depreciation and Amortisation:
Depreciation on all fixed assets, except intangible assets, is provided on Written Down value method over
the useful life of Asset and in the manner as prescribed by Schedule II of the Act.
F Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability
or equity instrument of another entity.
i) Financial Assets
Initial Recognition
In the case of financial assets not recorded at fair value through profit or loss (FVPL), financial assets are
recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the
financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame
established by regulation or convention in the market place (regular way trades) are recognised on the
trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial Assets at Amortised Cost ( AC)
Financial assets are subsequently measured at amortised cost if these financial assets are held within a
business model with an objective to hold these assets 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. Interest income from these financial assets is
included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses
arising on these assets are recognised in the Statement of Profit and Loss.
Financial Assets Measured at Fair Value
Financial assets are measured at fair value through OCI if these financial assets are held within a business
model with an objective to hold these assets in order to collect contractual cash flows or to sell these
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. Movements in the
carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest
revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
Financial asset not measured at amortised cost or at fair value through OCI is carried at FVTPL.
On transition to Ind AS, the Company has opted to continue with the carrying values measured under the
previous GAAP as at 1 April 2016 of its equity investments in subsidiaries, Joint Ventures associates and
investment in partnership firm, if any, and used that carrying value as the deemed cost of these
investments on the date of transition i.e. 1 April 2016.
G Impairment of Financial Assets:
In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for
measurement and recognition of impairment loss on financial assets and credit risk exposures.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade
receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it
recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial
recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines
that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has
not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has
increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument
improves such that there is no longer a significant increase in credit risk since initial recognition, then the
entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the group in accordance with the
contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the
original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the
expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from
default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense
H De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the
asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the
asset to another entity.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and
continues to control the transferred asset, the Company recognizes its retained interest in the assets and
an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset,
the Company continues to recognise the financial asset and also recognises a collateralised borrowing for
the proceeds received.
b) Equity Instruments and Financial Liabilities
Financial liabilities and equity instruments issued by the Company are classified according to the substance
of the contractual arrangements entered into and the definitions of a financial liability and an equity
instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after
deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds
received, net of direct issue costs. Equity instruments which are issued for consideration other than cash
are recorded at fair value of the equity instrument.
I Financial Liabilities
i) Initial Recognition
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings
and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of
loans and borrowings and payables, net of directly attributable transaction costs.
ii) Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below
Financial liabilities at FVPL
Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated
upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred
for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are
recognised in the Statement of Profit and Loss.
Financial guarantee contracts issued by the Company are those contracts that require a payment to be
made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment
when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised
initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance
of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance
determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative
amortisation. Amortisation is recognised as finance income in the Statement of Profit and Loss.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised
cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the
settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of
Profit and Loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or
costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement
of Profit and Loss.
iii) De-recognition of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled
or expired. When an existing financial liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially modified, such an exchange or
modification is treated as de-recognition of the original liability and recognition of a new liability. The
difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
iv) Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if
there is a currently enforceable legal right to offset the recognised amounts and there is an intention to
settle on a net basis to realise the assets and settle the liabilities simultaneously.
J Impairment of Non-Financial Assets
As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial
asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in
the previous periods. If any indication exists, or when annual impairment testing for an asset is required,
the Company determines the recoverable amount and impairment loss is recognised when the carrying
amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and
- In case of cash generating unit (a group of assets that generates identified, independent cash flows), at
the higher of cash generating unit''s fair value less cost to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre¬
tax discount rate that reflects current market assessments of the time value of money and risk specified to
the asset. In determining fair value less cost to sell, recent market transaction are taken into account. If no
such transaction can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the
Statement of Profit and Loss, except for properties previously revalued with the revaluation taken to OCI.
For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation.
When the Company considers that there are no realistic prospects of recovery of the asset, the relevant
amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be
related objectively to an event occurring after the impairment was recognised, then the previously
recognised impairment loss is reversed through the Statement of Profit and Loss.
K Trade receivables
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold
or services rendered in the normal course of business. Trade receivables are recognised initially at fair
value and subsequently measured at amortised cost using the EIR method, less provision for impairment.
L Trade payables
A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods
purchased or services received in the normal course of business. These amounts represent liabilities for
goods and services provided to the Company prior to the end of the financial year which are unpaid. These
amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months after the
reporting period. They are recognised initially at their fair value and subsequently measured at amortised
cost using the EIR method.
M Earnings Per Share
Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the
equity shareholders of the Company by the weighted average number of equity shares outstanding during
the period. The weighted average number of equity shares outstanding during the period and for all
periods presented is adjusted for events, such as bonus shares, other than the conversion of potential
equity shares, that have changed the number of equity shares outstanding, without a corresponding
change in resources.
Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the
equity shareholders of the Company and weighted average number of equity shares considered for
deriving basic earnings per equity share and also the weighted average number of equity shares that could
have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity
shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e.
the average market value of the outstanding equity shares).
N Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand and short-term
deposits with an original maturity of three month or less, which are subject to an insignificant risk of
changes in value.
O Borrowing Costs
Borrowing costs consist of interest and other costs that the Company incurs in connection with the
borrowing of funds. Also, the EIR amortisation is included in finance costs.
Borrowing costs relating to acquisition, construction or production of a qualifying asset which takes
substantial period of time to get ready for its intended use are added to the cost of such asset to the extent
they relate to the period till such assets are ready to be put to use. All other borrowing costs are expensed
in the Statement of Profit and Loss in the period in which they occur.
P Revenue Recognition:
i) Revenue on sale of goods is recognized when all significant risks and rewards of ownership of the goods are
passed on to the buyer and no significant uncertainty exists as to its realization or collection.
ii) Rent Income is recognized on the basis of term with lessee.
iii) Interest Income is recognized on a time proportion basis by reference to the principal outstanding and at
the interest rate applicable.
iv) Dividend is accounted on receipt basis.
Q Foreign Currency Transactions:
a Initial Recognition
Foreign currency transactions are initially recorded in the reporting currency, by applying to the foreign
currency amount the exchange rate between the reporting currency and the foreign currency at the date of
the transaction. However, for practical reasons, the Company uses a monthly average rate if the average
rate approximate the actual rate at the date of the transactions.
b Conversion
Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate at the
reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign
currency are reported using the exchange rate at the date of the transaction.
c Treatment of Exchange Difference
Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets
and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss
except those arising from investment in Non Integral operations.
R Inventories
Inventories are valued at cost or net realizable value whichever is lower. Cost of property under
construction held as inventory includes cost of purchases, construction cost, and other cost incurred in
bringing the properties to their present location and condition
Mar 31, 2024
B SIGNIFICANT ACCOUNTING POLICIES 1 Basis of preparation and presentation
The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards ("Ind AS'') notified under the Companies (Indian Accounting Standards) Rules, 2015.
The financial statements for all periods upto and including year ended 31 March 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) ("previous GAAP'').
The financial statements for the year ended 31 March 2018 are the first financial statements prepared by the Company in accordance with Ind AS.
The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities which have been measured at fair value, on an accrual basis of accounting.
All the assets and liabilities have been classified as current and non-current as per normal operating cycle of the Company and other criteira set out in as per the guidance set out in Schedule III to the Act. Based on nature of services, the Company ascertained its operating cycle as 12 months for the purpose of current and non-current classification of asset and liabilities.
The Company''s financial statements are reported in Indian Rupees, which is also the Companyâs functional currency.
C Use of Estimates:
The preparation of the financial statements, in conformity with the Ind AS, requires the management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon managementâs best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.
i) Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
In assessing the realisability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believesthat the Company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
iii) Provisions
Provisions and liabilities are recongnised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash flow can be realiably estimated .The timing of recognition and quantification of the liability require application of judgement to the existing facts and circumstances which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regualarly and revised to take account of changing the facts and circumstances
D Property, Plant and Equipment i) Tangible Assets
Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognised in the Statement of Profit and Loss.
Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.
i) Intangible Assets
Intangible assets includes software which are not integral part of the hardware are stated at cost less accumulated amortisation. Intangible assets under development represents expenditure incurred in respect of softwares under devlopment and are carried at cost.
Assets acquired but not ready for use are classified under Capital work-in-progress or intangible assets under development, as the case may be.
On transition to Ind AS the Company has opted to continue with the carrying values measured under the previous GAAP as at 1 April 2016 of its Intangible Assets and used that carrying value as the deemed cost of the Intangible Assets on the date of transition i.e. 1 April 2016.
E Depreciation and Amortisation:
Depreciation on all fixed assets, except intangible assets, is provided on Written Down value method over the useful life of Asset and in the manner as prescribed by Schedule II of the Act.
F Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i) Financial Assets Initial Recognition
In the case of financial assets not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent Measurement
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial Assets at Amortised Cost ( AC)
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets 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. Interest income from these financial assets is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.
Financial Assets M easured at Fair Value
Financial assets are measured at fair value through OCI if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these 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. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
Financial asset not measured at amortised cost or at fair value through OCI is carried at FVTPL.
On transition to Ind AS the Company has opted to continue with the carrying values measured under the previous GAAP as at 1 April 2016 of its equity investments in subsidiaries, Joint Ventures associates and investment in partnership firm, if any, and used that carrying value asthe deemed cost of these investments on the date of transition i.e. 1 April 2016.
5 Impairment of Financial Assets:
In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on financial assets and credit risk exposures.
The Company follows âsimplified approachâ for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determinesthat whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense
in In zn Of a inn ant n f Drnf if onrl I ne«f*
H De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
b) Equity Instruments and Financial Liabilities
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.
I Financial Liabilities
i) Initial Recognition
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
ii) Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below Financial liabilities at FVPL
Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation. Amortisation is recognised as finance income in the Statement of Profit and Loss.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of Profit and Loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
iii) De-recognition of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
iv) Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously.
J Impairment of Non-Financial Assets
As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and
- In case of cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of cash generating unit''s fair value less cost to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation.
When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.
K Trade receivables
A receivable is classified as a âtrade receivableâ if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment.
L Trade payables
A payable is classified as a âtrade payableâ if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method.
M Earnings Per Share
Basic earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period and for all periods presented is adjusted for events, such as bonus shares, other than the conversion of potential equity shares, that have changed the number of equity shares outstanding, without a corresponding change in resources.
Diluted earnings per share is computed by dividing the net profit or loss for the period attributable to the equity shareholders of the Company and weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares).
N Cash and Cash Equivalents
Cash and cash equivalents in the Balance Sheet comprises of cash at banks and on hand and short-term deposits with an original maturity of three month or less, which are subject to an insignificant risk of changes in value.
Borrowing costs consist of interest and other costs that the Company incurs in connection with the borrowing of funds. Also, the EIR amortisation is included in finance costs.
Borrowing costs relating to acquisition, construction or production of a qualifying asset which takes substantial period of time to get ready for its intended use are added to the cost of such asset to the extent they relate to the period till such assets are ready to be put to use. All other borrowing costs are expensed in the Statement of Profit and Loss in the period in which they occur.
* Revenue Recognition:
) Revenue on sale of goods is recognized when all significant risks and rewards of ownership of the goods are passed on to the buyer and no significant uncertainty exists as to its realization or collection.
i) Rent Income is recognized on the basis of term with lessee.
ii) Interest Income is recognized on a time proportion basis by reference to the principal outstanding and at the interest rate applicable.
v) Dividend is accounted on receipt basis.
3 Foreign Currency Transactions:
a Initial Recognition
Foreign currency transactions are initially recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction. However, for practical reasons, the Company uses a monthly average rate if the average rate approximate the actual rate at the date of the transactions.
b Conversion
Monetary assets and liabilities denominated in foreign currencies are reported using the closing rate at the reporting date. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction.
c Treatment of Exchange Difference
Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss except those arising from investment in Non Integral operations.
Inventories
Inventories are valued at cost or net realizable value whichever is lower. Cost of property under construction held as inventory includes cost of purchases, construction cost, and other cost incurred in bringing the properties to their present location and condition
Mar 31, 2023
A Corporate information
Ceenik Exports (India) Ltd. (''the Company'') is in business of Garment Manufacturer and Renting of Immovable property. The Company is a public limited company incorparated in India and has its registered office at Mumbai, Maharashtra, India. The Company has its primary listing in BSE Ltd.
B SIGNIFICANT ACCOUNTING POLICIES 1 Basis of preparation and presentation
The financial statements of the Company have been prepared to comply in all material respects with the Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules, 2015.
The financial statements for all periods upto and including year ended 31 March 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006 notified under Section 133 of the Companies Act ("the Act"), read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) ("previous GAAP").
The financial statements for the year ended 31 March 2018 are the first financial statements prepared by the Company in accordance with Ind AS.
The financial statements have been prepared under the historical cost convention with the exception of certain financial assets and liabilities which have been measured at fair value, on an accrual basis of accounting.
All the assets and liabilities have been classified as current and non-current as per normal operating cycle of the Company and other criteira set out in as per the guidance set out in Schedule III to the Act. Based on nature of services, the Company ascertained its operating cycle as 12 months for the purpose of current and non-current classification of asset and liabilities.
The Company''s financial statements are reported in Indian Rupees, which is also the Company''s functional currency.
The preparation of the financial statements, in conformity with the Ind AS, requires the management to make estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities and disclosure of contingent liabilities as at the date of financial statements and the results of operation during the reported period. Although these estimates are based upon management''s best knowledge of current events and actions, actual results could differ from these estimates which are recognised in the period in which they are determined.
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year. The Company based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
In assessing the realisability of deferred income tax assets, management considers whether some portion or all of the deferred income tax assets will not be realized. The ultimate realization of deferred income tax assets is dependent upon the generation of future taxable income during the periods in which the temporary differences become deductible. Management considers the scheduled reversals of deferred income tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based on the level of historical taxable income and projections for future taxable income over the periods in which the deferred income tax assets are deductible, management believes that the Company will realize the benefits of those deductible differences. The amount of the deferred income tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carry forward period are reduced.
Provisions and liabilities are recongnised in the period when it becomes probable that there will be a future outflow of funds resulting from past operations or events and the amount of cash flow can be realiably estimated .The timing of recognition and quantification of the liability require application of judgement to the existing facts and circumstances which can be subject to change. The carrying amounts of provisions and liabilities are reviewed regualarly and revised to take account of changing the facts and circumstances
D Property, Plant and Equipment
i) Tangible Assets
Property, Plant and Equipment are stated at cost of acquisition including attributable interest and finance costs, if any, till the date of acquisition/ installation of the assets less accumulated depreciation and accumulated impairment losses, if any. Subsequent expenditure relating to Property, Plant and Equipment is capitalised only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are charged to the Statement of Profit and Loss as incurred. The cost and related accumulated depreciation are eliminated from the financial statements, either on disposal or when retired from active use and the resultant gain or loss are recognised in the Statement of Profit and Loss.
Capital work-in-progress, representing expenditure incurred in respect of assets under development and not ready for their intended use, are carried at cost. Cost includes related acquisition expenses, construction cost, related borrowing cost and other direct expenditure.
Intangible assets includes software which are not integral part of the hardware are stated at cost less accumulated amortisation. Intangible assets underdevelopment represents expenditure incurred in respect of softwares under devlopment and are carried at cost.
Assets acquired but not ready for use are classified under Capital work-in-progress or intangible assets under development, as the case may be.
On transition to Ind AS, the Company has opted to continue with the carrying values measured under the previous GAAP as at 1 April 2016 of its Intangible Assets and used that carrying value as the deemed cost of the Intangible Assets on the date of transition i.e. 1 April 2016.
E Depreciation and Amortisation:
Depreciation on all fixed assets, except intangible assets, is provided on Written Down value method over the useful life of Asset and in the manner as prescribed by Schedule II of the Act.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. 65
In the case of financial assets not recorded at fair value through profit or loss (FVPL), financial assets are recognised initially at fair value plus transaction costs that are directly attributable to the acquisition of the financial asset. Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Company commits to purchase or sell the asset.
For purposes of subsequent measurement, financial assets are classified in following categories:
Financial Assets at Amortised Cost ( AC)
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model with an objective to hold these assets 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. Interest income from these financial assets is included in finance income using the effective interest rate ("EIR") method. Impairment gains or losses arising on these assets are recognised in the Statement of Profit and Loss.
Financial Assets Measured at Fair Value
Financial assets are measured at fair value through OCI if these financial assets are held within a business model with an objective to hold these assets in order to collect contractual cash flows or to sell these 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. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains and losses which are recognised in the Statement of Profit and Loss.
Financial asset not measured at amortised cost or at fair value through OCI is carried at FVTPL.
On transition to Ind AS, the Company has opted to continue with the carrying values measured under the previous GAAP as at 1 April 2016 of its equity investments in subsidiaries, Joint Ventures associates and investment in partnership firm, if any, and used that carrying value as the deemed cost of these investments on the date of transition i.e. 1 April 2016.
G Impairment of Financial Assets:
In accordance with Ind AS 109, the Company applies the expected credit loss ("ECL") model for measurement and recognition of impairment loss on financial assets and credit risk exposures.
The Company follows ''simplified approach'' for recognition of impairment loss allowance on trade receivables. Simplified approach does not require the Company to track changes in credit risk. Rather, it recognises impairment loss allowance based on lifetime ECL at each reporting date, right from its initial recognition.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines that whether there has been a significant increase in the credit risk since initial recognition. If credit risk has not increased significantly, 12-month ECL is used to provide for impairment loss. However, if credit risk has increased significantly, lifetime ECL is used. If, in a subsequent period, credit quality of the instrument improves such that there is no longer a significant increase in credit risk since initial recognition, then the entity reverts to recognising impairment loss allowance based on 12-month ECL.
ECL is the difference between all contractual cash flows that are due to the group in accordance with the contract and all the cash flows that the entity expects to receive (i.e., all cash shortfalls), discounted at the original EIR. Lifetime ECL are the expected credit losses resulting from all possible default events over the expected life of a financial instrument. The 12-month ECL is a portion of the lifetime ECL which results from default events that are possible within 12 months after the reporting date.
ECL impairment loss allowance (or reversal) recognised during the period is recognised as income/ expense
in the Ctatement of D rofit and |oss
H De-recognition of Financial Assets
The Company de-recognises a financial asset only when the contractual rights to the cash flows from the asset expire, or it transfers the financial asset and substantially all risks and rewards of ownership of the asset to another entity.
If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the assets and an associated liability for amounts it may have to pay.
If the Company retains substantially all the risks and rewards of ownership of a transferred financial asset, the Company continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received.
b) Equity Instruments and Financial Liabilities
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments which are issued for cash are recorded at the proceeds received, net of direct issue costs. Equity instruments which are issued for consideration other than cash are recorded at fair value of the equity instrument.
Financial liabilities are classified, at initial recognition, as financial liabilities at FVPL, loans and borrowings and payables as appropriate. All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The measurement of financial liabilities depends on their classification, as described below Financial liabilities at FVPL
Financial liabilities at FVPL include financial liabilities held for trading and financial liabilities designated upon initial recognition as at FVPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Gains or losses on liabilities held for trading are recognised in the Statement of Profit and Loss.
Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specified debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognised less cumulative amortisation. Amortisation is recognised as finance income in the Statement of Profit and Loss.
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the EIR method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of Profit and Loss.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the Statement of Profit and Loss.
iii) De-recognition of Financial Liabilities
Financial liabilities are de-recognised when the obligation specified in the contract is discharged, cancelled or expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as de-recognition of the original liability and recognition of a new liability. The difference in the respective carrying amounts is recognised in the Statement of Profit and Loss.
iv) Offsetting Financial Instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis to realise the assets and settle the liabilities simultaneously.
J Impairment of Non-Financial Assets
As at each Balance Sheet date, the Company assesses whether there is an indication that a non-financial asset may be impaired and also whether there is an indication of reversal of impairment loss recognised in the previous periods. If any indication exists, or when annual impairment testing for an asset is required, the Company determines the recoverable amount and impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount.
Recoverable amount is determined:
- In case of an individual asset, at the higher of the assets'' fair value less cost to sell and value in use; and
- In case of cash generating unit (a group of assets that generates identified, independent cash flows), at the higher of cash generating unit''s fair value less cost to sell and value in use.
In assessing value in use, the estimated future cash flows are discounted to their present value using pre-tax discount rate that reflects current market assessments of the time value of money and risk specified to the asset. In determining fair value less cost to sell, recent market transaction are taken into account. If no such transaction can be identified, an appropriate valuation model is used.
Impairment losses of continuing operations, including impairment on inventories, are recognised in the Statement of Profit and Loss, except for properties previously revalued with the revaluation taken to OCI. For such properties, the impairment is recognised in OCI up to the amount of any previous revaluation.
When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through the Statement of Profit and Loss.
A receivable is classified as a ''trade receivable'' if it is in respect of the amount due on account of goods sold or services rendered in the normal course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the EIR method, less provision for impairment.
A payable is classified as a ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of the financial year which are unpaid. These amounts are unsecured and are usually settled as per the payment terms stated in the contract. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the EIR method.
c Treatment of Exchange Difference
Exchange differences arising on settlement/ restatement of short-term foreign currency monetary assets and liabilities of the Company are recognised as income or expense in the Statement of Profit and Loss except those arising from investment in Non Integral operations.
Inventories are valued at cost or net realizable value whichever is lower. Cost of property under construction held as inventory includes cost of purchases, construction cost, and other cost incurred in bringing the properties to their present location and condition
S Provisions and Contingent Liabilities and Assets:
A provision is recognised when the Company has a present obligation (legal or constructive) as a result of past events and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, in respect of which a reliable estimate can be made of the amount of obligation. Provisions (excluding gratuity and compensated absences) are determined based on management''s estimate required to settle the obligation at the Balance Sheet date. In case the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. These are reviewed at each Balance Sheet date and adjusted to reflect the current management estimates.
Contingent liabilities are disclosed in respect of possible obligations that arise from past events, whose existence would be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Company. A contingent liability also arises, in rare cases, where a liability cannot be recognised because it cannot be measured reliably.
Contingent asset is not recognised unless it becomes virtually certain that an flow of econimic benefits will arise.
i) Defined Contribution Plan
Contributions to defined contribution schemes such as provident fund, employees'' state insurance, labour welfare are charged as an expense based on the amount of contribution required to be made as and when services are rendered by the employees. The above benefits are classified as Defined Contribution Schemes as the Company has no further obligations beyond the monthly contributions.
The Company also provides for gratuity which is a defined benefit plan, the liabilities of which is determined based on valuations, as at the balance sheet date, made by an independent actuary using the projected unit credit method. Re-measurement, comprising of actuarial gains and losses, in respect of gratuity are recognised in the OCI, in the period in which they occur. Re-measurement recognised in OCI are not reclassified to the Statement of Profit and Loss in subsequent periods. Past service cost is recognised in the Statement of Profit and Loss in the year of plan amendment or curtailment. The classification of the Company''s obligation into current and non-current is as per the actuarial valuation report.
iii) Leave entitlement and compensated absences
Accumulated leave which is expected to be utilised within next twelve months, is treated as short-term employee benefit. Leave entitlement, other than short term compensated absences, are provided based on a actuarial valuation, similar to that of gratuity benefit. Re-measurement, comprising of actuarial gains and losses, in respect of leave entitlement are recognised in the Statement of Profit and Loss in the period in which they occur.
Short-term employee benefits such as salaries, wages, performance incentives etc. are recognised as expenses at the undiscounted amounts in the Statement of Profit and Loss of the period in which the related service is rendered. Expenses on non-accumulating compensated absences is recognised in the period in which the absences occur.
v) Termination benefits
Termination benefits are recognised as an expense as and when incurred.
U Accounting for Taxes of Income:-
i) Current Taxes
Current income tax is recognised based on the estimated tax liability computed after taking credit for allowances and exemptions in accordance with the Income Tax Act, 1961. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
ii) Deferred Taxes
Deferred tax is determined by applying the Balance Sheet approach. Deferred tax assets and liabilities are recognised for all deductible temporary differences between the financial statements'' carrying amount of existing assets and liabilities and their respective tax base. Deferred tax assets and liabilities are measured using the enacted tax rates or tax rates that are substantively enacted at the Balance Sheet date. The effect on deferred tax assets and liabilities of a change in tax rates is recognised in the period that includes the enactment date. Deferred tax assets are only recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. Such assets are reviewed at each Balance Sheet date to reassess realisation.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
MAT is recongnised as deferred Tax Assets in the Balance Sheet when the asset can be measured reliably and it is probable that the furure econimic benefit associated with asset will be realised
Mar 31, 2015
(a) Basis of accounting and preparation of financial statements
The financial statements are prepared under the historical cost
convention on an accural basis of accounting in accordance with the
genrally accounting principles. Accounting Standards notified under
section 211 (3C) of the Companies Act, 1956 and the relevant provisions
thereof.
(b) Use of estimates
The preparation of the financial statements requires management to make
judgements, estimates anassumptions, that affect the application of
accounting policies and the reported amounts of assets and liabilities
and disclosures of contingent liabilities at the date of these
financial liabilities and the reported amounts of revenues and expenses
for the year under review. The Management believes that the estimates
used in preparation of the financial statements are prudent and
reasonable and in conformity with Indian GAAP. Actual results may
differ from these estimates and the differences between the actual
results and the estimates are recognised in the periods inwhich the
results are known or materialised. Estimates and underlying assumptions
are reviewed on an ongoing basis.
(c) Inventories
Inventories of raw material are valued at the lower of cost and the net
realisable value on on FIFO basis after providing for obsolescence and
other losses, where considered necessary. Cost includes all charges in
bringing the goods to the point of manufacturing facility, including
octroi and other levies. Inventories of finished goods are valued at
the lower of cost and net realisable value after proiding for
obsolesence. Cost includes all charges in bringing the goods to the
point of sale, including octroi and other levies. Net realisable value
is estimated selling price in the ordinary course of business less
estimated cost of completion and selling expenses.
(d) Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value
(e) Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
(f) Depreciation and amortization
Depreciation has been provided on written down method as per the rates
prescribed in Schedule XIV to the Companies Act, 1956. '
(g) Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Sales
exclude sales tax and value added tax.
Income from Rented Properties
Income from Commercial properties rented are recognised on accural
basis and for invoices raised. Rental income is inclusive of related
deducted at source but exluding service tax.
(h) Other income
Interest income from Bank Fixed Deposit and other interest is accounted
on accmal basis, inclusive of related tax deducted at source.Dividend
income is accounted on receipt basis.
(i) Fixed assets
Fixed Assets are stated at cost of acquisition less accumlated
depreciation / amortisation. Cost includes purchase price, taxes and
duties and other direct costs incurred upto the date the asset is ready
for its intended use.
(j) Foreign currency transactions and translations
initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates. Exchange differences arising out of these translations are
recognised in the Statement of Profit and Loss.
(k) lnvestments
Long-term investments (including investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties.
(l) lmpairment
At each Balance Sheet date, the Company assesses whether there is any
indication that the fixed assets have suffered an impairment loss. If
any such indication exits, the receoverable amount of the asset is
estimated in order to determine the extent of the impairment, if any.
Where it is nor possible to estimate the recoverable amount of the
individual asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
As per the assessment conducted by the company at March 31st., 2014,
there were no indication that the fixed assets have suffered an
impairment loss.
(m) Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
and leave enchasement.
Defined contribution plans
The Company's contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made.
Defined benefit plans
For defined benefit plans in the form of gratuity fund are accounted on
cash basis.
(n) Business Segments
The Company is engaged mainly in the business of manufacturing of
garments and renting of properties. These, in context of Accounting
Standard 17 on Segment Reporting, as specified in the Companies
(Accounting Standard) Rules, 2006, are considered to two primary
segments. Further, there is no reportable secondary segment i.e.
Geographical Segment.
(o) Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if any)
bythe weighted average number of equity shares outstanding during the
year. Diluted earnings per share is computed by dividing the profit /
(loss) after tax (including the post tax effect of extraordinary items,
if any) as adjusted for dividend, interest and other charges to expense
or income relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic
earnings per share and the weighted average number of equity shares
which could have been issued on the conversion of all dilutive potential
equity shares.
(p) Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961. Current tax is net of credit for entitlement for Minimum
Alternate Tax (MAT). Deferred tax is recognised on timing differences,
being the differences between the taxable income and the accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax is measured using the tax
rates and the tax laws enacted or substantially enacted as at the
reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets in respect of unabsorbed depreciation
and carry ' forward of losses are recognised only if there is virtual
certainty that there will be sufficient future taxable income available
to realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability.
(q) Provisions and contingencies
The Company records a liability for any claims where a potential loss
is probable and capable of being estimated and discloses such matters
in its financial statements, if material. For losses that are possible
(but not probable), the Company provides disclosure in the financial
statements dut does not record a liability in its accounts unless the
loss becomes probable.
Mar 31, 2014
(a) Basis of accounting and preparation of financial statements
The financial statements are prepared under the historical cost
convention on an accural basis of accounting in accordance with the
generally accounting principles. Accounting Standards notified under
section 211 (3C) of the Companies Act, 1956 and the relevant provisions
thereof.
(b) Use of estimates
The preparation of the financial statements requires management to make
judgements, estimates an assumptions, that affect the application of
accounting policies and the reported amounts of assets and liabilities
and disclosures of contingent liabilities at the date of these
financial liabilities and the reported amounts of revenues and expenses
for the year under review. The Management believes that the estimates
used in preparation of the financial statements are prudent and
reasonable and in conformity with Indian GAAP. Actual results may
differ from these estimates and the differences between the actual
results and the estimates are recognised in the periods in which the
results are known or materialised. Estimates and underlying assumptions
are reviewed on an ongoing basis.
(c) Inventories
Inventories of raw material are valued at the lower of cost and the net
realisable value on on FIFO basis after providing for obsolescence and
other losses, where considered necessary. Cost includes all charges in
bringing the goods to the point of manufacturing facility, including
octroi and other levies. Inventories of finished goods are valued at
the lower of cost and net realisable value after providing for
obsolescence. Cost includes all charges in bringing the goods to the
point of sale, including octroi and other levies. Net realisable value
is estimated selling price in the ordinary course of business less
estimated cost of completion and selling expenses.
(d) Cash and cash equivalents (for purposes of Cash Flow Statement)
Cash comprises cash on hand and demand deposits with banks. Cash
equivalents are short-term balances (with an original maturity of three
months or less from the date of acquisition), highly liquid investments
that are readily convertible into known amounts of cash and which are
subject to insignificant risk of changes in value
(e) Cash flow statement
Cash flows are reported using the indirect method, whereby profit /
(loss) before extraordinary items and tax is adjusted for the effects
of transactions of non-cash nature and any deferrals or accruals of
past or future cash receipts or payments. The cash flows from
operating, investing and financing activities of the Company are
segregated based on the available information.
(f) Depreciation and amortization
Depreciation has been provided on written down method as per the rates
prescribed in Schedule XIV to the Companies Act, 1956.
(g) Revenue recognition
Sale of goods
Sales are recognised, net of returns and trade discounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Sales
exclude sales tax and value added tax. Income from Rented Properties
Income from Commercial properties rented are recognised on accural
basis and for invoices raised. Rental income is inclusive of related
deducted at source but excluding service tax.
(h) Other income
Interest income from Bank Fixed Deposit and other interest is accounted
on accrual basis, inclusive of related tax deducted at source. Dividend
income is accounted on receipt basis.
(i) Fixed assets
Fixed Assets are stated at cost of acquisition less accumulated
depreciation / amortisation. Cost includes purchase price, taxes and
duties and other direct costs incurred upto the date the asset is ready
for its intended use.
(j) Foreign currency transactions and translations
Initial recognition
Transactions in foreign currencies entered into by the Company and its
integral foreign operations are accounted at the exchange rates
prevailing on the date of the transaction or at rates that closely
approximate the rate at the date of the transaction.
Measurement of foreign currency monetary items at the Balance Sheet
date
Foreign currency monetary items (other than derivative contracts) of
the Company and its net investment in non-integral foreign operations
outstanding at the Balance Sheet date are restated at the year-end
rates. Exchange differences arising out of these translations are
recognised in the Statement of Profit and Loss.
(k) lnvestments
Long-term investments (including investment properties), are carried
individually at cost less provision for diminution, other than
temporary, in the value of such investments. Current investments are
carried individually, at the lower of cost and fair value. Cost of
investments include acquisition charges such as brokerage, fees and
duties.
(l) Impairment
At each Balance Sheet date, the Company assesses whether there is any
indication that the fixed assets have suffered an impairment loss. If
any such indication exits, the recoverable amount of the asset is
estimated in order to determine the extent of the impairment, if any.
Where it is nor possible to estimate the recoverable amount of the
individual asset, the Company estimates the recoverable amount of the
cash-generating unit to which the asset belongs.
As per the assessment conducted by the company at March 31st., 2014,
there were no indication that the fixed assets have suffered an
impairment loss.
(m) Employee benefits
Employee benefits include provident fund, superannuation fund, gratuity
and leave enchasement. Defined contribution plans
The Company''s contribution to provident fund and superannuation fund
are considered as defined contribution plans and are charged as an
expense as they fall due based on the amount of contribution required
to be made. Defined benefit plans
For defined benefit plans in the form of gratuity fund are accounted on
cash basis.
(n) Business Segments
The Company is engaged mainly in the business of manufacturing of
garments and renting of properties. These, in context of Accounting
Standard 17 on Segment Reporting, as specified in the Companies
(Accounting Standard) Rules, 2006, are considered to two primary
segments. Further, there is no reportable secondary segment i.e.
Geographical Segment.
(o) Earnings per share
Basic earnings per share is computed by dividing the profit / (loss)
after tax (including the post tax effect of extraordinary items, if
any) by the weighted average number of equity shares outstanding during
the year. Diluted earnings per share is computed by dividing the profit
/ (loss) after tax (including the post tax effect of extraordinary
items, if any) as adjusted for dividend, interest and other charges to
expense or income relating to the dilutive potential equity shares, by
the weighted average number of equity shares considered for deriving
basic earnings per share and the weighted average number of equity
shares which could have been issued on the conversion of all dilutive
potential equity shares.
(p) Taxes on income
Current tax is the amount of tax payable on the taxable income for the
year as determined in accordance with the provisions of the Income Tax
Act, 1961. Current tax is net of credit for entitlement for Minimum
Alternate Tax (MAT). Deferred tax is recognised on timing differences,
being the differences between the taxable income and the accounting
income that originate in one period and are capable of reversal in one
or more subsequent periods. Deferred tax is measured using the tax
rates and the tax laws enacted or substantially enacted as at the
reporting date. Deferred tax liabilities are recognised for all timing
differences. Deferred tax assets in respect of unabsorbed depreciation
and carry forward of losses are recognised only if there is virtual
certainty that there will be sufficient future taxable income available
to realise such assets. Deferred tax assets are recognised for timing
differences of other items only to the extent that reasonable certainty
exists that sufficient future taxable income will be available against
which these can be realised. Deferred tax assets and liabilities are
offset if such items relate to taxes on income levied by the same
governing tax laws and the Company has a legally enforceable right for
such set off. Deferred tax assets are reviewed at each Balance Sheet
date for their realisability.
(q) Provisions and contingencies
The Company records a liability for any claims where a potential loss
is probable and capable of being estimated and discloses such matters
in its financial statements, if material. For losses that are possible
(but not probable), the Company provides disclosure in the financial
statements but does not record a liability in its accounts unless the
loss becomes probable.
Mar 31, 2010
A) Accounting Concepts:
The financial statements are prepared under the historical cost
convention on an accrual basis and in accordance with the mandatory
Accounting Standards prescribed by the Institute of Chartered
Accountants of India and in accordance with relevant presentational
requirements of the Companies Act, 1956
b) Fixed Assets:
Fixed Assets are stated at historical cost. Cost is inclusive of
freight, installation, duties and other incidental expenses.
c) Investments:
Investments are classified as long term. They are valued at cost.
Diminution in market value is not considered as permanent.
d) Inventories:
Raw Materials are valued at the lower of cost and net realisable value
except waste/scrap which is valued at net realisable value.
Finished goods include cost of conversion and other manufacturing
costs.
e) Revenue:
i) Export Sales represent invoiced value of goods sold.
ii) Incomes from shares and Mutual funds are recognised on receipt
basis.
iii) Income from Bank FDRs is accounted on accrual basis, inclusive of
related tax deducted at source.
iv) Profit on sale of Properties & Investments is net of Profit / Loss
on sale of individual shares and fixed assets and mutual funds and also
includes gains / (loss) on shares.
v) Incomes from Commercial Premises and flats rented are recognised on
accrual basis, except on one commercial property where the matter is
sub-judice. vi) Other Interest Incomes are accounted on accrual basis,
inclusive of related tax deducted at Source.
vii) Refund/ Dues from Government Authorities are accounted on
receipt of order.
f) Depreciation:
Depreciation is charged on assets on written down value method applying
the rates of Schedule XIV of the Companies Act, 1956.
g) Retirement Benefits:
The Company makes regular contribution of provident fund and these
contributions are charged to Profit and Loss Account.
Gratuity is recognised on cash basis and charged to Profit & Loss
Account.
h) Foreign Currency Translations:
Transactions in foreign currencies are recorded at exchange rates
existing at the time of transactions and exchange differences arising
from the foreign currency transaction are dealt with in Profit and Loss
Account separately.
Current Assets at the year-end are being converted at closing rates and
exchange differences are dealt with in the Profit and Loss Account.
i) Taxes on Income:
Provisions for Current Tax are made on the basis of estimated taxable
income for the current accounting period and in accordance with the
provisions as per the Income Tax Act, 1961.
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