1 Corporate Information
RLF Limited (‘RLF’ or ‘the Company’) is a public limited Company incorporated under the provisions of the Companies Act, 2013 on April 04, 1979.
The Company is domiciled in India and has its registered office located at 14 Kms Gurgaon Pataudi Road, village Jhund Sarai Veeran Distt Gurgaon,
Haryana, Haryana, India. Its equity shares are listed on Bombay Stock Exchange in India. The Company carries the business of Textile Embroidery and its
new venture of Sports Academy.
2 Material accounting policies
The material accounting policies applied by the Company in the preparation of its financial statements are listed below. Such accounting policies have
been applied consistently to all the periods presented in these financial statements, unless otherwise indicated below:
Recent accounting pronouncement :
MCA has notified amendment to Ind AS 21, The Effects of Changes in Foreign Exchange Rates, vide the Companies (Indian Accounting Standards)
Amendment Rules, 2025 through Notification No. G.S.R. 291(E) dated May 7, 2025. The amendment provide comprehensive guidance on assessing the
exchangeability of currencies, determining spot exchange rates when currencies are not exchangeable and enhancing related disclosures. The amendment
is effective for annual reporting periods beginning on or after April 1, 2025. The Company will evaluate the impact of this amendment and implement the
necessary changes in its financial reporting for periods commencing on or after the effective date.
2.1 Basis of Preparation
The financial statements ofthe Company have been prepared in accordance with Indian Accounting Standards (Ind AS), including the rules notified under
the Companies (Indian Accounting Standards) Rules, 2015 (as amended from time to time) and Presentation and disclosure requirements of Division II of
Schedule III to the Companies Act, 2013 as amended from time to time.
The financial statements have been prepared on a historical cost basis except for certain financial assets and liabilities (refer accounting policy regarding
financial instruments) which have been measured at fair value. The functional and presentation currency of the Company is Indian Rupee which is the
currency of the primary economic environment in which the Company operates, and all values are rounded to nearest crore except when otherwise
indicated.
2.2 Summary of significant accounting policies
a. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/ non-current classification. An asset is treated as current when it is:
i. Expected to be realised or intended to be sold or consumed in normal operating cycle,
ii. Held primarily for the purpose of trading,
iii. Expected to be realised within twelve months after the reporting period, or
iv. Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
All other assets are classified as non-current.
A liability is current when:
i. It is expected to be settled in normal operating cycle,
ii. It is held primarily for the purpose of trading,
iii. It is due to be settled within twelve months after the reporting period, or
iv. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Advance tax paid is classified as non-current assets.
Operating cycle for the business activities of the Company extends up to the realisation of receivables (including retention monies) within the agreed credit
period normally applicable to the respective line of business.
b. Fair value measurement of financial instruments
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date using valuation techniques.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
a) In the principal market for the asset or liability, or
b) In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its
highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described
as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred
between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole)
at the end of each reporting period.
c. Revenue Recognition
The Company recognises revenue from contracts with customers when it satisfies a performance obligation by transferring promised good or service to a
customer. The revenue is recognised to the extent of transaction price allocated to the performance obligation satisfied. Performance obligation is satisfied
over time when the transfer of control of asset (good or service) to a customer is done over time and in other cases, performance obligation is satisfied at a
point in time. For performance obligation satisfied over time, the revenue recognition is done by measuring the progress towards complete satisfaction of
performance obligation. The progress is measured in terms of a proportion of actual cost incurred to date, to the total estimated cost attributable to the
performance obligation.
Transaction price is the amount of consideration to which the Company expects to be entitled in exchange for transferring good or service to a customer
excluding amounts collected on behalf of a third party. Variable consideration is estimated using the expected value method or most likely amount as
appropriate in a given circumstance. Payment terms agreed with a customer are as per business practice and there is no financing component involved in
the transaction price.
Costs to obtain a contract which are incurred regardless of whether the contract was obtained are charged-off in the statement of profit and loss
immediately in the period in which such costs are incurred. Incremental costs of obtaining a contract, if any, and costs incurred to fulfil a contract are
amortised over the period of execution of the contract in proportion to the progress measured in terms of a proportion of actual cost incurred to-date, to the
total estimated cost attributable to the performance obligation.
Significant judgments are used in:
1. Determining the revenue to be recognised in case of performance obligation satisfied over a period of time; revenue recognition is done by measuring
the progress towards complete satisfaction of performance obligation. The progress is measured in terms of a proportion of actual cost incurred to-date, to
the total estimated cost attributable to the performance obligation.
2. Determining the expected losses, which are recognised in the period in which such losses become probable based on the expected total contract cost as
at the reporting date.
Revenue from Operations
Revenue from operation is exclusive of goods and service tax (GST). Revenue includes adjustments made towards liquidated damages and variation
wherever applicable. Escalation and other claims, which are not ascertainable/acknowledged by customers are not taken into account.
Revenue from sale of goods
Revenue from sale of goods is recognised after the transfer of goods along with the risk and rewards.
Revenue from Embroidery services
Revenue from Embroidery services are recognised on completion of performance obligation in accordance with IND AS 115.
Contract Balances
Trade Receivables
A receivable represents the Company’s right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment
of the consideration is due).
Contract Liabilities
A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Company transfers the
related goods or services. Contract liabilities are recognised as revenue when the Company performs under the contract (i.e., transfers control of the related
goods or services to the customer).
Other Income
Interest income is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable except the interest income
received from customers for delayed payments which are accounted on the basis of reasonable certainty / realisation.
For all debt instruments measured either at amortised cost or at fair value through other comprehensive income, interest income is recorded using the
effective interest rate (EIR). EIR is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial
instrument or a shorter period, where appropriate, to the gross carrying amount of the financial asset or to the amortised cost of a financial liability. When
calculating the effective interest rate, the Company estimates the expected cash flows by considering all the contractual terms of the financial instrument
but does not consider the expected credit losses. Interest income is included in finance income in the statement of profit and loss. Interest income is
included in other operating income in the statement of profit and loss.
d. Taxes on income
Current income tax
Tax expense for the year comprises current and deferred tax. The tax currently payable is based on taxable profit for the year. Taxable profit differs from
net profit as reported in the statement of profit and loss because it excludes items of income or expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using the tax rates and tax laws that have
been enacted or substantively enacted by the end of the reporting period.
Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in
equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity. Management periodically evaluates
positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.
Deferred income tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying values of assets and liabilities in the financial statements
and the corresponding tax bases used in the computation of the taxable profit and is accounted for using the balance sheet liability model. Deferred tax
liabilities are generally recognised for all the taxable temporary differences. In contrast, deferred assets are only recognised to the extent that is probable
that future taxable profits will be available against which the temporary differences can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity).
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and
the deferred taxes relate to the same taxable entity and the same taxation authority.
e. Property, plant and equipment
Freehold land is carried at historical cost and is revaluated periodically. All other items of property, plant and equipment are stated at historical cost less
accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly attributable to the acquisition of
the items.
Capital work in progress includes cost of property, plant and equipment under installation/under development as at the balance sheet date.
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 having useful life that is materially different from that of the remaining asset. These components are depreciated over their useful
lives; the remaining asset is depreciated over the life of the principal asset. When significant parts of plant and equipment are required to be replaced at
intervals, the Company depreciates them separately based on their specific useful lives. Likewise, when a major inspection is performed, its cost is
recognized in the carrying amount of the plant and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance
costs are recognized in the statement of profit or loss as and when incurred.
Subsequent costs are included in the asset’s carrying amount or recognised 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 a separate assets are derecognised when replaced. All other repairs and maintenance are charged to profit and loss during the
reporting period in which they are incurred.
f. Borrowing Cost
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds including interest expense calculated
using the effective interest method. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get
ready for its intended use or sale are capitalised as part of the cost of the asset until such time as the assets are substantially ready for the intended use or
sale. All other borrowing costs are expensed in the period in which they occur.
g. Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
? Raw materials: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition..
? Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the
normal operating capacity, but excluding borrowing costs.
? Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition.
Cost of inventories is determined on a weighted average basis. Net realisable 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.
Assessment of net realisable value is made in each subsequent period and when the circumstances that previously caused inventories to be written-down
below cost no longer exist or when there is clear evidence of an increase in net realisable value because of changed economic circumstances, the write¬
down, if any, in the past period is reversed to that extent of the original amount written-down so that the resultant carrying amount is the lower of the cost
and the revised net realisable value.
h. Impairment of non-financial assets
As at the end of each accounting year, the Company reviews the carrying amounts of its PPE determine whether there is any indication that those assets
have suffered an impairment loss. If such indication exists, the said assets are tested for impairment so as to determine the impairment loss, if any.
Impairment loss is recognised when the carrying amount of an asset exceeds its recoverable amount. Recoverable amount is determined:
(i) in case of an individual asset, at the higher of the net selling price and the value in use; and
(ii) in case of a cash generating unit (a Company of assets that generates identified, independent cash flows), at the higher of the cash generating unit’s net
selling price and the value in use.
(The amount of value in use is determined as the present value of estimated future cash flows from the continuing use of an asset and from its disposal at
the end of its useful life. For this purpose, the discount rate (pre-tax) is determined based on the weighted average cost of capital of the company suitably
adjusted for risks specified to the estimated cash flows of the asset).
For this purpose, a cash generating unit is ascertained as the smallest identifiable Company of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or Companys of assets.
If recoverable amount of an asset (or cash generating unit) is estimated to be less than its carrying amount, such deficit is recognised immediately in the
statement of Profit and Loss as impairment loss and the carrying amount of the asset (or cash generating unit) is reduced to its recoverable amount. For this
purpose, the impairment loss recognised in respect of a cash generating unit is allocated first to reduce the carrying amount of any goodwill allocated to
such cash generating unit and then to reduce the carrying amount of the other assets of the cash generating unit on a pro-rata basis.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment
loss is recognised for the asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of
profit and loss
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