COFFEE DAY Accounting Policy

1.1 Basis of preparation of financial statements

The financial statements have been prepared and presented under the
historical cost convention on the accrual basis of accounting and
comply with the Generally Accepted Accounting Principles (GAAP) in
India. GAAP comprises mandatory accounting standards prescribed under
Section 133 of the Companies Act, 2013 ("Act") read with Rule 7 of the
Companies (Accounts) Rules, 2014, the provision of the Act (to the
extent notified and applicable), other pronouncements of the Institute
of Chartered Accountants of India (''''ICAI''''). The financial statements
are prepared in Rupees unless otherwise stated.

1.2 Use of Estimates

The preparation of the financial statements in conformity with
generally accepted accounting principles in India (''''Indian GAAP'''')
requires the Management to make estimates and assumptions that effect
the reported amounts of assets and liabilities and the disclosure of
contingent liabilities on the date of the financial statements. Actual
results could differ from those estimates. Any revision to accounting
estimates is recognised prospectively in the current and future years.

1.3 Fixed Assets and Depreciation

Fixed assets are stated at the cost of acquisition or construction less
accumulated depreciation. The cost of fixed assets includes freight,
duties, taxes and other incidental expenses relating to the acquisition
and installation of the respective assets. Borrowing costs directly
attributable to acquisition or construction of those fixed assets which
necessarily take a substantial period of time to get ready for their
intended use are capitalized. Advance paid towards the acquisition of
fixed assets outstanding at each balance sheet are shown under long
term advances as capital advances.

Depreciation on tangible assets is provided on the straight-line method
over the useful lives of assets estimated by the Company. Depreciation
for assets purchased/ sold during a period is proportionately charged.
Intangible assets are amortised over their respective individual useful
lives on a straight-line basis, commencing from the date is available
to the Company for its use. The Company estimates the useful lives for
fixed assets as follows:

The building built on leasehold land is classified as a building and is
amortised over the lease term (i.e. 22 years) or the useful life of
the building (i.e. 20 years), whichever is lower.

(1) For these classes of assets, based on internal assessment, the
Management believes that the useful lives as given above best represent
the period over which the Management expects to use these assets. Hence
the useful lives for these assets is different from the useful lives as
prescribed under Part C of Schedule II of the Companies Act 2013.

Depreciation and amortization methods, useful lives and residual values
are reviewed periodically, including at each financial year end.

1.4 Revenue Recognition

The Company derives its revenue primarily from running and/or managing
hotels and resorts and providing consultancy services. Service income
is recognized when the related services are rendered unless significant
future contingencies exist.

Revenue from sale of coffee beans is recognise on transfer of all
significant risk and rewards of ownership to the buyer.

Sales are disclosed both gross and net of sales tax, services tax,
trade discount and quality claims.

Interest on the deployment of funds is recognised using the
time-proportion method, based on underlying interest rates.

Advances received from the customers are reported as liabilities until
all conditions for revenue recognition are met and is recognized as
revenue once the related services are rendered.

Dividend income is recognised when the Company''''s right to receive
dividend is established.

1.5 Investments

Long-term investments are valued at cost less provision for diminution,
other than temporary, to recognise any decline in the value of such
investments. Such an assessment is carried out individually for each
investment.

Profit or loss on sale of investments is determined as the difference
between the sale price and carrying value of investment, determined
individually for each investment.

1.6 Employee Benefits

Gratuity, which is a defined benefit, is accrued based on an actuarial
valuation, carried out by an independent actuary. Actuarial gains and
losses are recognized in the statement of profit and loss.

Contributions payable to the recognized provident fund, which is a
defined contribution, is charged to the statement of profit and loss on
an accrual basis

1.7 Foreign currency transactions

Foreign currency transactions are recorded at the rates of exchange
prevailing on the dates of the respective transactions. Exchange
differences arising on foreign exchange transactions settled during the
year are recognised in the statement of profit and loss of the year.

Monetary assets and liabilities denominated in foreign currencies as at
the balance sheet date are translated at the exchange rates on that
date. The resultant exchange differences are recognised in the
statement of profit and loss.

1.8 Taxation

Income-tax expense comprises current tax (i.e. amount of tax for the
year determined in accordance with the income tax law) and deferred tax
charge or credit (reflecting the tax effect of timing differences
between accounting income and taxable income for the year). The
deferred tax charge or credit and the corresponding deferred tax
liabilities or assets are recognised using the tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred
tax assets are recognised only to the extent there is reasonable
certainty that the assets can be realised in future, however, where
there is an unabsorbed depreciation or carry-forward losses under
taxation laws, deferred tax assets are recognised only if there is a
virtual certainty of realisation of such assets. Deferred tax assets
are reviewed as at the balance sheet date and written down or
written-up to reflect the amount that is reasonably/virtually certain
as the case may be to be realised.

The Company offsets on a year on year basis, current tax assets and
liabilities where it has a legally enforceable rights to set off and
where the Management intends to settle such assets and liabilities on a
net basis.

1.9 Provisions and Contingent Liabilities

Provision is recognised when, as a result of an obligating event, there
is a present obligation that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation.

The disclosure of contingent liability is made when, as a result of an
obligating event, there is a possible obligation or a present
obligation that may, but probably will not, require an outflow of
resources.

No provision or disclosure is made when, as a result of an obligating
event, there is a possible obligation or a present obligation where the
likelihood of an outflow of resources is remote.

Provisions for onerous contracts, i.e. contracts where the expected
unavoidable costs of meeting the obligations under the contract exceed
the economic benefits expected to be received under it, are recognised
when it is probable that an outflow of resources embodying economic
benefits will be required to settle a present obligation as a result of
an obligating event based on a reliable estimate of such obligation.

1.10 Impairment of Assets

The Company at each balance sheet date assesses whether there is any
indication that an asset or a group of assets comprising a
cash-generating unit may be impaired. If any such indication exists,
the Company estimates the recoverable amount of the asset. For an asset
or group of assets that does not generate largely independent cash
inflows, the recoverable amount is determined for the cash-generating
unit to which the asset belongs. If such recoverable amount of the
asset or the recoverable amount of the cash-generating unit to which
the asset belongs is less than its carrying amount, the carrying amount
is reduced to its recoverable amount. The reduction is treated as an
impairment loss and is recognised in the statement of profit and loss.
If at the balance sheet date there is an indication that if a
previously assessed impairment loss no longer exists, the recoverable
amount is reassessed and the asset is reflected at the recoverable
amount subject to a maximum of depreciable historical cost. An
impairment loss is reversed only to the extent that the carrying amount
of asset does not exceed the net book value that would have been
determined; if no impairment loss had been recognised.

1.11 Earnings/(loss) per share

The basic earnings/(loss) per share is computed by dividing the net
profit/(loss) attributable to equity shareholders for the year by the
weighted average number of equity shares outstanding during the year.

The number of shares used in computing diluted earnings/ (loss) per
share comprises the weighted average shares considered for deriving
basic earnings/ (loss) per share and also the weighted average number
of equity shares which could have been issued on the conversion of all
dilutive potential equity shares.

Dilutive potential equity shares are deemed converted as of the
beginning of the year, unless they have been issued at a later date. In
computing diluted earnings per share, only potential equity shares that
are dilutive and which either reduces earnings per share or increase
loss per share are included.

1.12 Cash and Cash Equivalents

Cash and cash equivalents comprise cash and balances with banks. The
Company considers all highly liquid investments with a remaining
maturity at the date of purchase of three months or less and that are
readily convertible to known amounts of cash to be cash equivalents.

1.13 Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit/
(loss) before tax is adjusted for the effects of transactions of a
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.

1.14 Borrowing Cost

Borrowing cost includes interest and ancillary costs incurred in
connection with the arrangement of borrowings. Borrowing costs directly
attributable to acquisition or construction of those fixed assets which
necessarily take a substantial period of time to get ready for their
intended use are capitalized. Other borrowing costs are accounted as
an expense in the period in which they are incurred. Ancillary costs
incurred in connection with the arrangement of borrowings are amortised
over the tenure of borrowing.

1.15 Leases

Leases under which the Company assumes substantially all the risks and
rewards of ownership are classified as finance leases. Such assets
acquired are capitalised at the fair value of the asset or the present
value of the minimum lease payments at the inception of the lease,
whichever is lower.

Lease payments under operating lease are recognised as an expense in
the statement of profit and loss on a straight line basis over the
lease term. Lease term is the non-cancellable period for which the
Company has agreed to lease the asset together with any further periods
for which the Company has the option to continue the lease and at the
inception of the lease it is reasonably certain that the Company will
exercise such an option.

CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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