2) (i) Material accounting policies
I) Statement of compliance
These standalone financial statements have
been prepared & comply in all material aspects
with Indian Accounting Standards (“Ind AS”)
notified under section 133 of the Companies
Act, 2013 read with the Companies (Indian
Accounting Standards) Rules, 2015, as
amended & other relevant provisions of the Act.
II) Basis of preparation of standalone financial
statements
These standalone financial statements are
prepared under the historical cost convention
on the accrual basis except for certain financial
instruments which are measured at fair
values at the end of each reporting period, as
explained in the accounting policies below. The
Ind AS are prescribed under Section 133 of the
Act read with Rule 3 of the Companies (Indian
Accounting Standards) Rule 2015 and relevant
amendments rules issued thereafter.
Historical cost is generally based on the fair
value of the consideration given in exchange
for goods and services.
Fair value is the price that would be received
to sell an asset or paid to transfer a liability
in an ordinarily transactions between market
participants at the measurement date.
III) Functional and presentation currency
Items included in the standalone financial
statements of the Company are measured
using the currency of the primary economic
environment in which the Company operates
(“functional currency”). The standalone
financial statements are presented in Indian
Rupees O, which is the functional currency of
the Company.
IV) Use of estimates and judgements
The preparation of the standalone financial
statements requires the Management to make
certain 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 standalone financial
statements and reported amounts of revenues
and expenses during the period. The estimates
and associated assumptions are based on
historical experience and other factors that
are considered to be relevant. Accounting
estimates could change from period to period.
Actual results may differ from these estimates.
This note provides an overview of the areas
that involved a higher degree of judgment or
complexity and of items which are more likely
to be materially adjusted due to estimates and
assumptions turning out to be different than
those originally assessed. Detailed information
about each of these estimates and judgments
is included in the relevant notes together with
information about the basis of calculation
for each affected line item in the standalone
financial statements.
V) Property, plant & equipment
(i) Freehold Land is carried at historical cost.
All other items of Property, Plant and
Equipment of the Company are valued at
cost of acquisition or construction net of
recoverable taxes, trade discounts and
rebates less accumulated depreciation
and impairment loss, if any. The cost of
fixed assets includes purchase price,
borrowing cost of Capitalization allocated
/ apportioned direct and indirect expenses
incurred in relation to bringing the fixed
assets to its working condition for its
intended life.
Subsequent costs are included in the
asset's carrying amount or recognized
as a separate asset, as appropriate, 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. The carrying
amount of any component accounted
for as separate asset is derecognized
when replaced. All other repairs and
maintenance are charged to Profit or Loss
during the reporting period in which they
are incurred.
The Company identifies and determines
cost of each component/ part of the
asset separately, if the component/ part
has a cost which is significant to the total
cost of the asset and has useful life that
is materially different from that of the
remaining asset.
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
(calculated as the difference between the
net disposal proceeds and the carrying
amount of the asset) is included in the
standalone statement of profit and loss
when the asset is derecognized.
The useful lives, residual values and method
of depreciation of property, plant and
equipment are reviewed at each financial
year end and adjusted prospectively.
(ii) Capital Work in Progress - All costs
attributable to the assets or incurred in
relation to the assets under completion
are aggregated under Capital work in
progress to be allocated to individual
assets on completion.
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
VI) Depreciation on Property, plant & equipment
Leasehold improvements at stores are
depreciated on straight line basis over the
period of lease or useful life (not exceeding 9
years), whichever is lower.
Depreciation on property, plant and equipment
has been provided on the straight-line method
as per the useful life prescribed in Schedule II
to the Companies Act, 2013, except intangible
assets & assets held under lease and in respect
of the following categories of asset, in whose
case the life of the assets has been assessed
as under based on technical advice, taking into
account the nature of the asset, the estimated
usage of the asset, the operating conditions
of the asset, past history of replacement and
maintenance support, etc.:
Depreciation is calculated on pro-rata basis
from the date of installation till the date the
asset sold or discarded.
The residual values are not more than 5%
of the original cost of the asset. The assets
residual values and useful lives are reviewed,
and adjusted if appropriate, at the end of each
reporting period.
VII) Intangible assets
Intangible assets acquired separately are
measured in initial recognition at cost. Following
initial recognition, intangibles, intangible assets
are carried at cost less any accumulated
amortization and accumulated impairment
losses.
The useful lives of intangible assets are
assessed as either finite or indefinite.
Intangible assets with finite lives are amortized
over the useful life and assessed for impairment
whenever there is an indication that the intangible
asset may be impaired. The amortization period
and the amortization method for an intangible
asset with finite life are reviewed at least at the
end of each reporting period.
Expenditure incurred which are eligible for
capitalizations under intangible assets are
carried as intangible assets under development
till they are ready for their intended use.
Amortization
Intangible assets are amortized over their
respective individual estimated useful lives on
a straight-line basis, from the date that they
are available for use. Useful life of Computer
Software is estimated at six years.
VIII) Impairment of Non-financial assets
The company assess at each reporting date,
whether there is an indication that an asset
may be impaired. If any indication exists, or
when annual impairment testing for an asset
is required, the company estimate the asset’s
recoverable amount. An asset’s recoverable
amount is the higher of an assets or cash¬
generating units (CGU) fair value less costs
of disposal and its value in use. Recoverable
amount is determined for an individual asset,
unless the asset does not generate cash
inflows that are largely independent of those
from other assets or group of assets. When the
carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered
impaired and is written down to its recoverable
amount.
In assessing value in use, the estimated future
cash flows are discounted to their present
value using a pre -tax discount rate that
refects current market assessments of the
time value of money and the risks specific to
the asset. In determining fair value less costs
of disposal, recent market transactions are
taken into account. If no such transactions can
be identified, an appropriate valuation model
is used. These calculations are corroborated
by valuation multiples, quoted share prices for
publicly traded companies or other available
fair value indicators.
For assets excluding goodwill, an assessment
is made at each reporting date to determine
whether there is an indication that previously
recognized impairment losses no longer exist
or have decreased. If such indication exists,
the company estimates the asset's or CGU's
recoverable amount. A previously recognized
impairment loss is reversed only if there has
been a change in the assumptions used to
determine the asset's recoverable amount
since the last impairment loss was recognized.
The reversal is limited so that the carrying of the
asset does not exceed its recoverable amount,
nor exceed the carrying amount that would
have been determined, net of depreciation, had
no impairment loss been recognized for the
asset in prior years. Such reversal is recognized
in the Statement of Profit or Loss unless the
asset is carried at a revalued amount, in which
case, the reversal is treated as an increase in
revaluation.
IX) Dividend to equity holders of the Company
The Company recognizes a liability to make
dividend distributions to equity holders of the
Company when the distribution is authorized
and the distribution is no longer at the discretion
of the Company. As per the corporate laws
in India a distribution is authorized when it is
approved by the shareholders, However, Board
of Directors of a Company may declare interim
dividend during any financial year out of the
surplus in statement of profit and loss and out
of the profits of the financial year in which such
interim dividend is sought to be declared. A
corresponding amount is recognized directly in
equity.
X) Leases
The Company’s lease assets largely contain
leases for buildings/showrooms taken for
warehouses and retail stores company also
has taken Land as lease from Development
Authorities. At inception of a contract, the
Company assesses whether a contract
contains a lease. If the contract conveys the
right to control the use of an identified asset for
a period of time in exchange for consideration,
then the contract is considered as lease.
Following factors are considered to determine
whether a contract conveys the right to control
the use of an identified asset:
(i) The contract encompasses the use of an
identified asset;
(ii) The Company has extensively all of the
economic benefits from use of the asset
during the period of the lease; and
(iii) The Company is in position to direct the
use of the asset.
On the beginning of the lease, except for leases
with a term of twelve months or less and low value
leases, the Company recognizes a right-of-use
asset (“ROU”) and a corresponding lease liability
for all lease provisions in which it is a lessee.
For leases with a term of twelve months or less
and low value leases, the Company recognizes
the lease payments as an operating expense on
a straight-line basis over the term of the lease.
Where the lease provisions include the options
to extend or terminate the lease before the
end of the lease term. ROU assets and lease
liabilities adjusted only when it is reasonably
certain that they will be exercised.
The ROU assets are initially accounted for at
cost, which comprises the initial amount of the
lease liability adjusted for any lease payments
made at or prior to the commencement date
of the lease plus any initial direct costs less
any lease incentives. Subsequently they
are measured at cost less accumulated
depreciation and impairment losses, if any.
ROU assets are depreciated from the
commencement date on a straight-line basis
over the shorter of the lease term and useful life
of the underlying ROU asset. Whenever events
or changes in circumstances designate that
their carrying amounts may not be recoverable
ROU assets are evaluated for recoverability.
Variable lease payments that depend on sales
are recognized in profit or loss in the period
which the condition that triggers those payment
occurs.
The lease liabilities at the commencement are
measured at amortized cost at the present
value of the future lease payments. The lease
payments are discounted using the interest
rate implicit in the lease or, if not readily
determinable, using the incremental borrowing
rates or risk-free rate as the case may be. Lease
liabilities are re-measured with a consistent
change to the related ROU asset if the Company
changes its appraisal about exercise of option
for extension or termination.
Lease liabilities and ROU assets have been
presented separately in the Balance Sheet
and lease payments have been classified as
financing cash flows.
XI) 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.
a. Initial recognition and measurement
All financial assets and liabilities are
recognized at fair value on initial
recognition.
Transaction cost in relation to financial
assets and financial liabilities other than
those carried at fair value through profit
or loss (FVTPL) are added to the fair
value on initial recognition. However, the
trade receivables that doesn’t contain
a significant financing component are
measured at transaction price.
Transaction cost that are directly
attributable to the acquisition or issue
of financial assets and financial liabilities
that are carried at fair value through profit
or loss are immediately recognized in the
statement of profit or loss.
b. Subsequent measurement
- Non-derivative financial instruments
(i) Financial assets carried at
amortized cost
A f nancial 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 f ows 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 f nancial 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 f ows 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.
(iii) Financial assets at fair value
through profit or loss
A financial asset which is not
classified in any of the above
categories is subsequently
measured at fair value through
profit or loss.
(iv) Financial liabilities
The financial liabilities are
subsequently carried at
amortized cost using the
effective interest method.
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.
- Equity investments
All equity investments in scope of
Ind AS 109 are measured at fair
value. Equity instruments which
are held for trading and contingent
consideration recognized by an
acquirer in a business combination
to which Ind AS103 (Business
Combinations) applies are classified
as at FVTPL. The classification is
made on initial recognition and is
irrevocable.
If the company decides to classify
an equity instrument as at FVTOCI,
then all fair value changes on the
instrument, excluding dividends, are
recognized in the OCI. There is no
recycling of the amounts from OCI
to P&L, even on sale of investment.
However, the company may transfer
the cumulative gain or loss within
equity.
Equity instruments included within
the FVTPL category are measured
at fair value with all changes
recognized in the P&L.
- Financial assets or financial liability at
fair value through profit or loss
This category has 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/current
liabilities if they are either held for trading
or are expected to be realized within 12
months after the balance sheet date.
- Derivative financial instruments and
hedge accounting
In the ordinary course of business, the
Company uses certain derivative financial
instruments to reduce business risks
which arise from its exposure to foreign.
The instruments are confined principally
to forward foreign exchange contracts.
The instruments are employed as hedges
of transactions included in the standalone
financial statements or for highly probable
forecast transactions/firm contractual
commitments. These derivatives
contracts do not generally extend beyond
twelve months.
Derivatives are initially accounted for and
measured at fair value on the date the
derivative contract is entered into and
are subsequently remeasured to their fair
value at the end of each reporting period.
The Company adopts hedge accounting
for forward foreign exchange contracts
wherever possible. At inception of each
hedge, there is a formal, documented
designation of the hedging relationship.
This documentation includes, inter alia,
items such as identification of the hedged
item and transaction and nature of the
risk being hedged. At inception, each
hedge is expected to be highly effective
in achieving an offset of changes in fair
value or cash flows attributable to the
hedged risk. The effectiveness of hedge
instruments to reduce the risk associated
with the exposure being hedged is
assessed and measured at the inception
and on an ongoing basis. The ineffective
portion of designated hedges is
recognized immediately in the statement
of profit and loss.
When hedge accounting is applied:
- For fair value hedges of recognized
assets and liabilities, changes in
fair value of the hedged assets
and liabilities attributable to the
risk being hedged, are recognized
in the statement of profit and loss
and compensate for the effective
portion of symmetrical changes in
the fair value of the derivatives.
- For cash flow hedges, the effective
portion of changes in fair value
of derivatives that are designated
and qualify as cash flow hedges is
recognized in other comprehensive
income and accumulated under
the heading of cash f ow hedging
reserve. The gain or loss relating to
the ineffective portion is recognized
immediately in profit or loss.
Amounts previously recognized
in other comprehensive income
and accumulated in equity relating
to effective portion as described
above are reclassified to profit or
loss in the periods when the hedged
item affects profit or loss, in the
same line as the recognized hedged
item. However, when the hedged
forecast transaction results in the
recognition of a non- financial asset
or a non-financial liability, such
gains or losses are transferred from
equity (but not as a reclassification
adjustment) and included in the
initial measurement of the cost
of the non-f nancial asset or non¬
financial liability.
Hedge accounting is discontinued
when the hedging instrument expires
or is sold, terminated, or exercised,
or when it no longer qualifies for
hedge accounting. Any gain or loss
recognized in other comprehensive
income and accumulated in equity
at that time remains in equity and
is recognized when the forecast
transaction is ultimately recognized
in profit or loss. When a forecast
transaction is no longer expected to
occur, the gain or loss accumulated
in equity is recognized immediately
in profit or loss.
- Equity share capital
Equity shares
Equity shares issued by the
Company 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.
De-recognition of financial
instruments
A financial asset is derecognized
when the contractual rights to the
cash f ows from the f nancial asset
expire or it transfers the financial
asset and the transfer qualifies for
De-recognition under Ind AS 109.
A financial liability is derecognized
when the obligation specified in the
contract is discharged or cancelled
or expires.
Fair Value of Measurement
Fair value is the price that would
be received to sell an asset or paid
to transfer a liability in an ordinarily
transactions between market
participants at the measurement
date.
Fair value measurement under Ind
AS are categorized as below based
on the degree to which the inputs
to the fair value measurements are
observable and the significance
of the inputs to the fair value
measurement in its entirety:
Level 1 inputs are quoted prices
(unadjusted) in active markets
for identical assets or liabilities
that the Company can access at
measurement date.
Level 2 inputs are inputs, other than
quoted prices included in level 1,
that are observable for the assets or
liability, either directly or indirectly and
Level 3 inputs are unobservable
inputs for the valuation of assets/
liabilities.
In case of financial instruments where
the carrying amount approximates
fair value due to the short maturity of
those instruments, carrying amount is
considered as fair value.
Offsetting financial instruments
Financial assets and financial
liabilities are offset and the net
amount is reported in the standalone
financial statement if there is a
currently enforceable legal right to
offset the recognized amounts and
there is an intention to settle on a
net basis, to realize the assets and
settle the liabilities simultaneously.
Dividend Income
Dividends are recognized in the
Statement of Profit and Loss only
when the right to receive payment
is established. Incomes from
investments are accounted on an
accrual basis.
Interest Income
Interest income is recognized on
time proportion basis taking in to
account the amount outstanding
and rate applicable.
XII) Impairment of financial assets
The Company measures the expected credit
loss associated with its assets based on
historical trend, industry practices and the
business environment in which the entity
operates or any other appropriate basis. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk.
The Company assesses at each date of balance
sheet whether a financial asset or a Company
of financial assets is impaired. Ind AS 109
requires expected credit losses to be measured
through a loss allowance. In determining the
allowances for doubtful trade receivables, the
Company has used a practical expedient by
computing the expected credit loss allowance
for trade receivables based on a provision
matrix. The provision matrix takes into account
historical credit loss experience and is adjusted
for forward looking information. The expected
credit loss allowance is based on the ageing
of the receivables that are due and allowance
rates used in the provision matrix. For all other
financial assets, expected credit losses are
measured at an amount equal to the 12-month
expected credit losses or at an amount equal
to the lifetime expected credit losses if the
credit risk on the financial asset has increased
significantly since initial recognition.
XIII) Borrowing and borrowing cost
Borrowings are initially recognized at fair value,
net of transaction cost incurred. Borrowings
are subsequently measured at amortized cost.
Any difference between the proceeds (net of
transaction cost) and the redemption amount
is recognized in profit or loss over the period
of the borrowings, using the effective interest
method. Fees paid on the established loan
facilities are recognized as transaction cost of
the loan, to the extent that it is probable that
some or all the facility will be drawn down.
Borrowings are classified as current liabilities
unless the Company has an unconditional
right to defer settlement of the liability for at
least 12 months after the reporting period.
Costs that are attributable to the acquisition,
construction or production of qualifying assets
are capitalized as part of cost of such assets,
all other Borrowing cost are charged to the
Statement of Profit & Loss. Borrowing costs
comprise of interest and other costs incurred in
connection with borrowing of funds.
XIV) Investments in subsidiaries, joint ventures
and associates
Investments in subsidiaries, joint ventures and
associates are recognized at cost as per Ind AS
27. Except where investments accounted for at
cost shall be accounted for in accordance with
Ind AS 105, Non-current Assets Held for Sale
and Discontinued Operations, when they are
classified as held for sale.
XV) Inventories
Manufactured Goods: Raw materials,
components, stores and spares, and packing
materials are valued at lower of cost or net
realizable value. However, these items are
considered to be realizable at cost if the
finished products, in which they will be used,
are expected to be sold at or above cost. Cost
includes cost of purchase and other costs
in bringing the inventories to their present
location and condition. Cost is determined on
a weighted average cost basis.
Traded Goods: Traded goods, work-in-progress
and finished goods are valued at cost or net
realizable value, whichever is lower. Work-in¬
progress and finished goods include costs of
direct materials, labour and a proportion of
manufacturing overheads based on the normal
operating capacity but excluding borrowing
cost. Traded goods cost includes cost of
purchase and other costs incurred in bringing
the inventories to their present location and
condition. Cost of work-in-progress and
finished goods is determined on weighted
average cost basis and cost of traded goods is
determined on moving weighted average cost
basis.
Net realizable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and the
estimated costs necessary to make the sale.
Proceeds in respect of sale of raw materials/
stores are credited to the respective heads.
Obsolete and defective inventory are duly
provided for, basis the management estimates.
Goods in Process: At cost plus estimated value
addition/cost of conversion at each major stage
of production.
Net Realizable Value of inventory
The Company has defined policy for
provision on inventory based on obsolete,
damaged and slow-moving inventories. The
Company provides provision based on policy,
past experience, current trend and future
expectations of these materials depending on
the category of goods.
Provision on Inventory -
The company has defined policy for provision
on inventory for each of its business by
differentiating the inventory into core and non -
core (fashion) and sub categorized into finished
goods and raw materials. The company provides
provision based on policy, past experience,
current trend and future expectations of these
materials depending on the category of goods.
XVI) Foreign currency transactions
(i) Financial Instruments
Derivative financial instruments such as
forward contracts, option contracts and
cross currency swaps, to hedge its foreign
currency risks are initially recognized at
fair value on the date a derivative contract
is entered into and are subsequently re¬
measured at their fair value with changes
in fair value recognized in the Statement
of Profit and Loss in the period when they
arise.
(ii) Transactions and balances
Transactions in foreign currencies are
recognized at the prevailing exchange
rates on the transaction dates. Realized
gains and losses on settlement of foreign
currency transactions are recognized in
the Statement of Profit and Loss.
Monetary foreign currency assets and
liabilities at the year-end are translated at the
year-end exchange rates and the resultant
exchange differences are recognized in the
Statement of Profit and Loss.
XVII) Cash flow statement
The cash flow statement is prepared in
accordance with the Indian Accounting
Standard (Ind AS) - 7 “Statement of Cash
flows” using the indirect method for operating
activities.
XVIII)Revenue Recognition
(i) Revenue from sale of goods and
services
Revenue from contracts with customer
is recognized when control of goods are
transferred to the customer at an amount
that reflects the consideration entitled in
exchange for those goods or services, and
excludes taxes and levies collected on
behalf of the Government. In accordance
with Ind AS 115 on revenue and schedule
III of Companies Act, 2013, duties levy
like GST are not part of revenue.
Generally, control is transfer upon
shipment of goods to the customer or
when the goods are made available to
the customer, provided the transfer of
the title to the customer occurs and the
Company has not retained any significant
title of ownership or future obligations
with respect to the goods shipped.
Revenue is measured based on
the transaction price, which is the
consideration, adjusted for discounts,
price Concessions and incentives, if
any, as specified in the contract with the
customer. Revenue also excludes taxes
collected from customers.
The Company provides for discount and
sales return based on season wise, brand
wise and channel wise trend of previous
years. The Company reviews the trend at
regular intervals to ensure the applicability
of the same in the changing scenario, and
based on the management’s assessment
of market conditions.
For e-commerce sales, it is the Company’s
policy to sell its products to the end
customer with a right of return within 10
to 20 days. Therefore, a refund liability in
relation to expected returns (included in
other current liabilities- refund liabilities)
and a right to recover the returned goods
(included in other current assets) are
recognized for the products expected to
be returned. Past experience is used to
estimate such returns at the time of sale at
a portfolio level (expected value method).
Because the number of products returned
has been steady for years, it is highly
probable that a significant reversal in the
cumulative revenue recognized will not
occur. The validity of this assumption
and the estimated amount of returns are
reassessed at each reporting date.
Revenue from related party is recognized
based on transaction price which is at
arm’s length.
The Company does not expect to have
any contracts where the period between
the transfer of the promised goods or
services to the customer and payment
by the customer exceeds one year. As a
consequence, it does not adjust any of
the transaction prices for the time value
of money.
(ii) Export incentives
The revenue in respect of export benefits
is recognized on post export basis at the
rate at which the entitlements accrue.
(iii) Insurance and other claims
Insurance and other claims are recognized
when there exists no significant
uncertainty with regard to the amount to
be realized and the ultimate collection
thereof.
XIX) Employee benefits
a. Short-term obligations
Liabilities for wages and salaries, including
non- monetary benefits that are expected
to be settled wholly within 12 months
after the end of the period in which the
employees render the related service
are recognized in respect of employees’
services up to the end of the reporting
period and are measured at the amounts
expected to be paid when the liabilities
are settled.
b. Compensated absences
Compensated absences which are not
expected to occur within twelve months
after the end of the period in which the
employee renders the related services are
recognized as a liability at the Balance
Sheet date, the cost of providing benefit is
determined based on actuarial valuation
using projected unit credit method.
Actuarial gain /loss are recognized in the
statement of profit or loss in the period
in which they occur. Non accumulating
compensated absences are recognized in
the period, in which the absences occur.
c. Post-employment obligations
The Company operates the following
post- employment schemes:
(1) Defined benefit plans such as
gratuity; and
(2) Defined contribution plans such as
provident fund etc.
Gratuity
The liability recognized in the balance
sheet in respect of defined benefit gratuity
is the present value of the defined benefit
obligation at the end of the reporting
period. The defined benefit obligation is
calculated annually by actuaries using the
projected unit credit method.
The present value of the defined benefit
obligation is determined by discounting
the estimated future cash outflows by
reference to market yields at the end
of the reporting period on government
bonds that have terms approximating to
the terms of the related obligation.
The interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation. This cost is
included in employee benefit expense in
the Statement of Profit and Loss.
Re measurement gains and losses
arising from experience adjustments and
changes in actuarial assumptions are
recognized in the period in which they
occur, directly in other comprehensive
income. They are included in retained
earnings in the statement of changes in
equity and in the balance sheet.
Defined Contribution Plans
Defined Contribution Plans such as
Provident Fund etc., are charged to the
Statement of Profit and Loss as incurred
and deposited with the Government
Provident Fund Scheme.
Termination benefits
Termination benef ts are payable when
employment is terminated by the
Company before the normal retirement
date, or when an employee accepts
voluntary redundancy in exchange for
these benefits. The Company recognizes
termination benefits at the earlier of the
following dates: (a) when the Company
can no longer withdraw the offer of those
benefits; and (b) when the Company
recognizes costs for a restructuring that is
within the scope of Ind AS 37 and involves
the payment of terminations benefits. In
the case of an offer made to encourage
voluntary redundancy, the termination
benef ts are measured based on the
number of employees expected to accept
the offer. Benefits falling due more than
12 months after the end of the reporting
period are discounted to present value.
XX) Accounting for taxes on income
Income tax expense is recognized in net profit
in the Statement of Profit and Loss except to
the extent that it relates to items recognized
directly in equity, in which case it is recognized
in other comprehensive income
The income tax expense or credit for the period
is the tax payable on the current period's
taxable income based on the applicable income
tax rate adjusted by changes in deferred tax
assets and liabilities attributable to temporary
differences and to unused tax losses.
Deferred income tax is provided in full, using the
liability method on temporary differences arising
between the tax bases of assets and liabilities
and their carrying amount in the standalone
financial statements. Deferred income tax is
determined using tax rates (and laws) that have
been enacted or substantially enacted by the
end of the reporting period and are expected
to apply when the related deferred income tax
asset is realized, or the deferred income tax
liability is settled.
Deferred tax assets are recognized for all
deductible temporary differences and unused
tax losses, only if, it is probable that future
taxable amounts will be available to utilize
those temporary differences and losses.
Deferred tax assets and liabilities are offset
when there is a legally enforceable right to
offset current tax assets and liabilities and
when the deferred tax balances relate to the
same taxation authority. Current tax assets and
tax liabilities are off set where the Company has
a legally enforceable right to offset and intends
either to settle on a net basis, or to realize the
asset and settle the liability simultaneously.
Current and deferred tax is recognized in the
Statement of Profit and Loss, except to the
extent that it relates to items recognized in
other comprehensive income or directly in
equity. In this case, the tax is also recognized
in other comprehensive income or directly in
equity, respectively
XXI) Earnings per share
Basic earnings per equity share are computed
by dividing the net profit attributable after tax
to the equity holders of the Company by the
weighted average number of equity shares
outstanding during the period. Diluted earnings
per equity share are computed by dividing the
net prof t after tax attributable to the equity
holders of the Company by the 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 deemed
converted as of the beginning of the period,
unless issued at a later date. Dilutive potential
equity shares are determined independently for
each period presented.
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