Accounting Policies of BPL Ltd. Company
Mar 31, 2023
Notes attached to and forming part of the Standalone Accounts for the period ended 31" March, 2023 CORPORATE INFORMATION
BPL Limited (''the Company'') is a public limited Company domiciled in India and incorporated on 16th of April 1963 under the provisions of the Companies Act 1956 having its registered office at BPL Works, Palakkad - 678 007, Kerala. The Company is listed on BSE and NSE. The Company is in the business of manufacturing Printed Circuit Boards (PCBs).
The Standalone financials statements were approved in the meeting of the Board of Directors held on 29th May 2023.
34. SIGNIFICANT ACCOUNTING POLICIES34.1 Basis for preparation of Financial Statements
The financial statements have been prepared in accordance with Indian Accounting Standards (IND AS) notified under Companies (Indian Accounting Standards) Rules, 2015. For all periods including year ended 31st March 2023, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014(lndianGAAP).
The Ind AS Financial Statements have been prepared using the significant accounting policies and measurement bases summarized below. These accounting policies have been used throughout all periods presented in these financial statements, except where the Company has applied certain accounting policies and exemptions upon transition to Ind AS.
The Ind AS Financial Statements have been prepared on a historical cost 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 financial statements are presented in INR and all values are rounded to the nearest lakhs (INR 00,000), except when otherwise indicated.
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these
assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The Company bases its estimates and assumptions 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 assumptions when they occur.
Significant management judgments
The following are significant management judgments in applying the accounting policies of the Company that have the most significant effect on the financial statements.
Recognition of deferred tax assets
The extent to which deferred tax assets can be recognised is based on an assessment ofthe probability that future taxable income will be available against which the deductible temporary differences and tax loss carry forward can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various tax jurisdictions.
Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. In assessing impairment, management estimates the recoverable amount of each asset or cash generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
Recoverability of advances/receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
Fair value measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and
assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible, but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an arm''s length transaction at the reporting date.
Current/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:
⢠Expected to be realized or intended to be sold or consumed in normal operatingcycle.
⢠Held primarily forthe purpose oftrading.
⢠Expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.
All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in a normal operatingcycle.
⢠It is held primarily for purpose oftrading.
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months afterthe reporting period.
All other liabilities are classified as non-current.
Deferred tax assets and deferred tax liabilities are classified as non-currentassetsand liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operatingcycle.
a. Sales have been recognized with the transfer of significant risk and rewards of ownership of the goods and costs incurred or to be incurred in respect of the transaction are measurable reliably and the recovery of the consideration is probable.
b. Sales are measured at the fair value of consideration received or receivable. Sales are recognized net of GST, intermediary sales rebates, and discount.
c. Dividend income from investments is accounted for when the right to receive the payment is established.
d. Interest Income is recognized on a time proportion basis, considering the amount outstanding and the rate applicable.
e. Other incomes have been recognized on an accrual basis.
f. During sales of fixed assets any profit earned / loss sustained towards excess / shortfall of sale value visa-vis carrying cost of assets is accounted for in the statement of profit & loss.
34.4 Property, Plant and Equipment (PPEs)
These tangible assets are held for use in production, supply of goods or services or for administrative purposes. These are recognized and carried under cost model i.e. cost less accumulated depreciation and impairment loss, if any which is akin to recognition criteria undererstwhile Indian GAAP.
Cost includes freight, duties, taxes and other expenses directly incidental to acquisition, bringing the asset to the location and installation including site restoration up to the time when the asset is ready for intended use. Such Costs also include Borrowing Cost if the recognition criteria are met.
Depreciation has been provided on straight line method over the expected life span of assets as referred to in Schedule II of the Companies Act, 2013, on the cost of the asset after reducing estimated scrap values thereof as below:
|
Category |
Expected life span (years) |
|
Buildings |
30 |
|
Plant & Machinery |
15 |
|
Computer, Equipment and Networking |
3 |
|
Furniture & Fixtures |
10 |
|
Vehicles |
8 |
The residual value and useful life are reviewed annually, and any deviation is accounted for as a change in estimate.
Properties (Land and Buildings) held to earn rentals or / and for capital appreciation but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes
are categorized as investment properties. These are measured initially at cost, including transaction costs. After initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost shall also include borrowing cost if the recognition criteria are met. Said assets are depreciated on straight line basis based on expected life span of assets which is in accordance with Schedule II of Companies Act, 2013. Any gain or loss on disposal of investment properties is recognized in the profit or loss account.
The fair value of investments properties under each category are disclosed in the notes. Fair values are determined based on the evaluation performed by an accredited external independent valuer applying a recognized and accepted valuation model or estimation based on available sources of information from market.
Transfers to or from the investment property are made only when there is a change in use and the same is made at the carrying amount of Investment Property.
a) Intangible Assets are initially recognized at cost.
Following initial recognition, intangible assets are carried at cost less than any accumulated amortization and accumulated impairment loss. Research costs are recognized as an expense in the period in which it is incurred.
b) Intangible assets with finite useful life are assessed for impairment whenever there is an indication that the intangible assets may be impaired. Intangible assets with infinite useful life are tested for impairment annually. Intangible assets with finite useful life are amortized over the useful economic life on a straightline basis. Intangible assets with infinite useful life shall not beamortized.
34.7 Impairment of Non-Financial Assets
The Company assesses 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 estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset or cash-generating unit''s (CGU) fair value less costs of disposal and its value in use. A 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 groups 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 reflects 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 considered. If no such transactions can be identified, an appropriate valuation model isused.
Impairment losses including impairment on inventories are recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life.
i. Financial Assets
The Company classifies its financial assets in the following measurement categories:
a. Those to be measured at fair value (either through other comprehensive income, or through profit or loss)
b. Those measured at amortized cost.
Initial Recognition and Measurement
All financial assets are recognized initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset. Financial assets are classified, at initial recognition, as financial assets measured at fair value or as financial assets measured at amortized cost.
Trade Receivables that do not contain a significant financing component (determined in accordance with Ind AS 115, Revenue from contracts with customers) are initially measured at their transaction price and not at fair values.
For purposes of subsequent measurement, financial assets are classified in four categories:
i. Debt instruments at amortized cost.
ii. Debt instruments at fair value through other comprehensive income (FVTOCI);
iii. Debt instruments, derivatives, and equity instruments at fair value through profit or loss (FVTPL); and
iv. Equity investments.
i. Debt instruments at amortized cost
A ''debt instrument'' is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective is to hold assets for collecting contractual cashflows; and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by considering any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
ii. Debt instrument at FVTOCI
''A ''debt instrument'' is classified as at the FVTOCI if both of thefollowingcriteria are met:
a) The objective of the business model is achieved both by collecting contractual cash flows and selling the financial assets; and
b) The asset''s contractual cash flows represent SPPI.
''Debt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of profit & loss. On derecognition of the asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Statement of profit & loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
iii. Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
''In addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such an election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as ''accounting mismatch''). The Company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of profit & loss.
iv. Equity investments
All equity investments in the scope of Ind AS 109 Financial Instruments, 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 AS 103 Business Combinations applies are classified as FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such an election on an instrument-by- instrument basis. 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 Statement of profit & loss.
De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset) is primarily derecognized (i.e. removed from the Company''s balance sheet) when:
a. The rights to receive cash flows from the asset have expired, or
b. The Company has transferred its rights to receive cash
flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement; and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognizes an associated liability. The transferred assets and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
nvestments in subsidiaries are carried at cost less accumulated impairment losses. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. The recoverable amount is the higher of an asset''s fair value less costs of disposal and value in use. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts is recognized in the statement of profit and loss.
(ii) Financial liabilitiesInitial Recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit orloss, loans and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109 Financial Instruments.
Financial liabilities - Derecognition
Financial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. 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 the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Impairment of financial assets
In accordance with Ind AS 109 Financial Instruments, the Company applies the expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
The Company tracks credit risk and changes thereon for each customer. For recognition of impairment loss on other financial assets and risk exposure, the Company determines 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.
ECL is the difference between all contractual cash flows that are due to the Company 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. When estimating the cash flows, an entity is required to consider:
-All contractual terms of the financial instrument over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term of the financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
The Company uses default rate for credit risk to determine impairment loss allowance on portfolio of its trade receivables.
ECL impairment loss allowance (or reversal) recognized duringthe period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head ''other expenses'' in the P&L. The balance sheet presentation for various financial instruments is described below:
a. Financial assets measured as at amortised cost, contractual revenue receivable and lease receivables:
ECL is presented as an allowance, i.e., as an integral part of the measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
b. Loan commitments and financial guarantee contracts:
ECL is presented as a provision in the balance sheet, i.e. as a liability.
c. Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as ''accumulated impairment amount''intheOCI.
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, impairment loss is provided.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
-In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset considers a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 - 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.
Inventories are valued at the lower cost or net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Cost includes purchase price, duties, transport & handing costs and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition.
Inventories are valued asunder:
Finished Goods : At lower of cost or net realizable value
Work in Progress : At cost inclusive of appropriate overheads
Materials, Components & Spares: At weighted average cost
Goods in transit: At cost
Liabilities in respect of employee benefits to employees are provided for as follows:
a) Short-term employee benefits
i) Liabilities for wages and salaries, including nonmonetary benefits that are expected to be settled wholly within 12 months afterthe 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 andare measured at the amounts expected to be incurred when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
ii) ESI is provided on the basis of actual liability accrued and paid to the authorities.
b) Other Long-Term Employee Benefits Obligations I Provident Fund: Contribution to recognized Provident Fund is made at predetermined rates. The Employee''s Gratuity Fund Scheme, which is defined plan, is administered by Life Insurance Corporation of India. The liabilities with respect to Gratuity plan are determined by actuarial valuation on the projected unit credit method on the balance sheet date, based upon which the Company contributes to the Group Gratuity Scheme. The difference, if any, between the actuarial valuation of the gratuity of employees at the year end and the balance of funds with Life Insurance Corporation of India is provided for as assets/ (liability) in the books. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The company recognizes the following changes in the net defined benefit obligation under Employee benefit expense / finance costs in statement of profit or loss:
a) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements
b) Net interest expense or income under finance Costs. Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re- measurements are not reclassified to profit or loss in subsequent periods.
The Company has an arrangement with Life Insurance Corporation of India to administer its Gratuity scheme.
When the Company is the lessee, all leases with a term of more than 12 months are recognized as Right-of-Use ("ROU") assets and associated lease liabilities in the balance sheet, if any. The lease liabilities are measured at the lease inception date at the present value of the lease payments not yet paid determined using the Company''s
incremental borrowing rate, being the rate that the Company would have to pay to borrow the funds necessary to obtain an asset of similar value to the ROU asset in a similar economic environment with similar terms, security and conditions. ROU assets represent the Company''s right to control the underlying assets under lease, and the lease liability is the obligation to make the lease payments related to the underlying assets under lease. The interest rate implicit in the lease is generally not determinable in transactions where the Company is the lessee. The ROU asset equals the lease liability adjusted for any initial direct costs ("IDCs"), prepaid and accrued rent and lease incentives. Fixed and in-substance fixed payments are included in the recognition of ROU assets and lease liabilities, however, variable lease payments, other than those based on a rate or index, are recognized in the statement of profit and loss in the period in which the obligation for those payments is incurred.
ROU assets are generally amortized on a straight-line basis over the lease term with the interest expense on the lease liability recorded using the effective interest rate method. The amortization and interest expense are recorded separately in the statement of profit and loss. The Company has elected not to recognize leases with a lease term of less than 12 months in the balance sheet, including those acquired in a business combination, and lease costs for those short-term leases are recognized in thestatementofprofitand loss.
The liability of the company on account of Income Tax is computed considering the provisions of the Income Tax Act, 1961.
Deferred tax is provided on temporary differences at the reporting date as difference between the tax base and the carrying amount of assets and liabilities and unused tax losses. Deferred tax is recognized subject to the probability that taxable profit will be available against which the temporary differences can be reversed. Deferred 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 atthe reporting date.
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.
34.13 Current Tax Assets (Net)
Advance payment of taxes including TDS, current year provision of taxes includingTDS liabilities and input credit available under GST are designated as current tax assets.
34.14 Provisions,ContingentLiabilityandContingentAssets Provisions:
A provision is recognized when the Company has a present obligation (legal or constructive) because of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted using a current pretax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Warranty Provisions: Provisions for warranty-related costs are recognized when the product is sold or service is provided to the customer. Initial recognition is based on historical experience. The Company periodically reviews the adequacy of product warranties and adjusts warranty percentage and warranty provisions for actual experience, if necessary. The timing of outflow is expected to be within one to two years.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. Contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize contingent liability but discloses its existence in the
financial statements unless the probability of outflow of resources is remote.
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Company), whose operating results are regularly reviewed by the Company''s chief operating decision maker to make decisions about resources to be allocated to the segment and its performance and for which discrete financial information is available. Operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company is engaged in the manufacture of unpopulated Printed Circuit Boards (PCBs), which constitutes its single reportable segment.
34.16 Foreign CurrencyTranslation
Items included in the financial statements are measured usingthe currency of the primary economic environment in which the entity operates (''the functional currency''). The Company''s financial statements are presented in Indian rupee (Rs) which is also the Company''s functional and presentation currency.
Foreign currency transactions are recorded on initial recognition in the functional currency, usingthe exchange rate prevailing at the date of transaction.
Measurement of foreign currency items at the balance sheet date
Foreign currency monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates atthe dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
Exchange differences arising on settlement or translation of monetary items are recognized as income or expense in
the period in which they arise with the exception of exchange differences on gain or loss arising on translation of non-monetary items measured at fair value which is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).
Basic EPS are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equities shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equities shares outstanding during the period is adjusted for events such as bonus issues that have changed the number of equities shares outstanding, without a corresponding change in resources.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares, if any) by the weighted average number of equities shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. Dilutive potential equity shares are deemed converted as ofthe beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Other bank balances include deposits held with financial institutions with original maturities of more than 12 months.
Mar 31, 2018
1 SIGNIFICANT ACCOUNTING POLICIES
1.1 Basis for preparation of Financial Statements
The financial statements have been prepared in accordance with Indian Accounting Standards (IND AS)) notified under Companies (Indian Accounting Standards) Rules, 2015. For all periods including year ended 31st March, 2017 the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
1.2 Basis of preparation
a) The first Indian Accounting Standards (Ind AS) financial statements to be reported by the Company is for the year ending 31st March, 2018 and the transition date to Ind AS is 1st April, 2016. Ind AS 101, First-time Adoption of Indian Accounting Standards, requires first-time adopters to prepare an opening Ind AS balance sheet at the date of transition to Ind AS. As part of conversion to Ind AS, the Company has prepared these special purpose financial statements to establish the financial position (Balance Sheet as at 31st March, 2017 and the Opening Balance Sheet as at 1st April, 2016), income (the Statement of Profit and Loss, including results of operations and Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity of the Company for the year ended 31st March, 2017 (collectively referred to as the âComparative Ind AS Financial Statementsâ) necessary to provide the comparative financial information expected to be included in the Companyâs first complete set of Ind AS financial statements as at the Companyâs Ind AS reporting date of 31st March, 2018.
Comparative Ind AS Financial Statements of the Company have been prepared in accordance with Ind ASs notified by the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
The financial information for the year ended 31st March, 2017 and the transition date Opening Balance Sheet as at 1st April, 2016 included in these Comparative Ind AS Financial Statements, are based on the previously issued statutory financial statements for the year ended
31st March, 2017 and 31st March, 2016 respectively, prepared in accordance with the accounting standards notified under Section 133 ofthe Companies Act, 2013 (âthe Actâ), read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (as amended) (âPrevious GAAPâ), approved and adopted by the Companyâs Board of Directors on 13th May, 2017 and 26th May, 2016 respectively, as adjusted for the differences in the accounting principles adopted by the Company on transition to the Ind AS.
The Ind AS Financial Statements have been prepared using the significant accounting policies and measurement bases summarized below. These accounting policies have been used throughout all periods presented in these financial statements, except where the Company has applied certain accounting policies and exemptions upon transition to Ind AS.
The Ind AS Financial Statements have been prepared on the historical cost 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 financial statements are presented in INR and all values are rounded to the nearest lakhs (INR 00,000), except when otherwise indicated.
b) Use of Estimates
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
The Company bases its estimates and assumptions 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 assumptions when they occur.
Significant management judgments
The following are significant management judgments in applying the accounting policies ofthe Company that have the most significant effect on the financial statements
Recognition of deferred taxassets
The extent to which deferred taxassets can be recognised is based on an assessment of the probability that future taxable income will be available against which the deductible temporary differences and tax loss carryforward can be utilised. In addition, significant judgement is required in assessing the impact of any legal or economic limits or uncertainties in various taxjurisdictions
Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets. In assessing impairment, management estimates the recoverable amount of each asset or cash generating units based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate.
Recoverability of advances / receivables
At each balance sheet date, based on historical default rates observed over expected life, the management assesses the expected credit loss on outstanding receivables and advances.
Fairvalue measurements
Management applies valuation techniques to determine the fair value of financial instruments (where active market quotes are not available) and non-financial assets. This involves developing estimates and assumptions consistent with how market participants would price the instrument. Management bases its assumptions on observable data as far as possible but this is not always available. In that case management uses the best information available. Estimated fair values may vary from the actual prices that would be achieved in an armâs length transaction at the reporting date.
Current / 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:
. Expected to be realized or intended to be sold or consumed in normal operating cycle
. Held primarily for purpose of trading
. Expected to be realized within twelve months after the reporting period, or
. cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve monthsafterthe reporting period
All other assets are classified as non-current.
A liability is current when:
. It is expected to be settled in normal operating cycle.
. It is held primarily for purpose of trading
. It is due to be settled within twelve months after the reporting period, or
. There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other liabilities are classified as non-current.
Deferred tax assets and deferred tax liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realization in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
1.3 Revenue Recognition
a. Sales have been recognized with the transfer of significant risk and rewards ofownership ofthe goods and costs incurred or to be incurred in respect of the transaction are measurable reliably and the recovery of the consideration is probable.
b. Sales are measured at the fair value of consideration received or receivable. Sales are recognized net of sales tax, VAT, GSTJntermediary sales rebatesand discount.
c. Dividend income on investments is accounted when the right to receive the payment is established.
d. Interest Income is recognized on time proportion basis, considering the amount outstanding and the rate applicable.
e. Other incomes have been recognized on accrual basis.
f. During sales of fixed assets any profit earned / loss sustained towards excess / shortfall of sale value vis-a-vis carrying cost of assets is accounted for in statement of profit & loss.
1.4 Property, Plants and Equipments (PPEs)
These tangible assets are held for use in production, supply of goods or services or for administrative purposes. These are recognized and carried under cost model i.e. cost less accumulated depreciation and impairment loss, if any which is akin to recognition criteria under erstwhile Indian GAAP.
Cost includes freight, duties, taxes and other expenses directly incidental to acquisition, bringing the asset to the location and installation including site restoration up to the time when the asset is ready for intended use. Such Costs also include Borrowing Cost if the recognition criteria are met.
Depreciation has been provided on straight line method over the expected life span of assets as referred to in Schedule II of the Companies Act, 2013, on the cost of the asset after reducing estimated scrap values thereof.
The residual value and useful life is reviewed annually and any deviation is accounted for as a change in estimate.
1.5 Investments Properties
Properties (Land and Buildings) held to earn rentals or/and for capital appreciation but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes are categorized as investment properties. These are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation and accumulated impairment loss, if any. The cost shall also include borrowing cost if the recognition criteria are met. Said assets are depreciated on straight line basis based on expected life span of assets which is in accordance with Schedule II of Companies Act, 2013. Any gain or loss on disposal of investment properties is recognized in profit or loss account.
Fair value of investments properties under each category are disclosed in the notes. Fair values are determined based on the evaluation performed by an accredited external independent valuer applying a recognized and accepted valuation model or estimation based on available sources of information from market.
Transfers to or from the investment property is made only when there is a change in use and the same is made at the carrying amount of Investment Property.
1.6 Intangible Assets
a) Intangible Assets are initially recognized at cost.
Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment loss. Research costs are recognized as expense in the period in which it is incurred.
b) Intangible assets with finite useful life are assessed for impairment whenever there is an indication that the intangible assets may be impaired. Intangible assets with infinite useful life are tested for impairment annually. Intangible assets with finite useful life are amortized over the useful economic life on a straight line basis. Intangible assets with infinite useful life shall not be amortized.
1.7 Impairment of Non-Financial Assets
The Company assesses, 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 estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or cash-generating unitâs (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 groups 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 reflects 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.
Impairment losses including impairment on inventories are recognized in the statement of profit and loss. After impairment, depreciation is provided on the revised carrying amount of the asset over its remaining useful life
1.8 Financial Instruments
(i) Financial Assets
The Company classifies its financial assets in the following measurement categories:
a. Those to be measured at fair value (either through other comprehensive income, or through profit or loss.)
b. Those measured at amortized cost
Initial Recognition and Measurement
All financial assets are recognized intially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial assets. Financial assets are classified, at intial recognization as financial assets measured at fair value or as measured at amortized cost. Trade Receivables that do not contain a significant financing component (determined in accordance with Ind AS 115, Revenue from contracts with customers) are initially measured at their transaction price and not at fairvalues.
Subsequent Measurement
For the purpose of subsequent measurement, financial assets are classified in four categories:
i. Debtinstrumentsatamortized cost;
ii. Debt instruments at fair value through other comprehensive income (FVTOCI);
iii. Debt instruments, derivatives and equity instruments at fair value through profit or loss (FVTPL);and
iv. Equity investments.
i. Debtinstrumentsatamortized cost
A âdebt instrumentâ is measured at the amortized cost if both the following conditions are met:
a) The asset is held within a business model whose objective isto hold assetsfor collecting contractual cash flows; and
b) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments of principal and interest (SPPI) on the principal amount outstanding.
âThis category is the most relevant to the Company. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part ofthe EIR. The EIR amortization is included in finance income in the profit or loss. The losses arising from impairment are recognized in the profit or loss. This category generally applies to trade and other receivables.
ii. Debt instrument at FVTOCI
âA âdebt instrumentâ is classified as at the FVTOCI if both ofthe following criteria are met:
a) The objective ofthe business model is achieved both by collecting contractual cash flows and selling the financial assets;and
b) The assetâs contractual cashflows represent SPPI.
âDebt instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses & reversals and foreign exchange gain or loss in the Statement of profit & loss. On derecognition ofthe asset, cumulative gain or loss previously recognized in OCI is reclassified from the equity to Statement of profit & loss. Interest earned whilst holding FVTOCI debt instrument is reported as interest income using the EIR method.
iii. Debt instrument at FVTPL
FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
âIn addition, the Company may elect to designate a debt instrument, which otherwise meets amortized cost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces or eliminates a measurement or recognition inconsistency (referred to as âaccounting mismatchâ). The Company has not designated any debt instrument as at FVTPL.
Debt instruments included within the FVTPL category are measured at fair value with all changes recognized in the Statement of profit & loss.
iv. Equity investments
All equity investments in scope oflnd AS 109 Financial Instruments, 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 AS 103 Business Combinations, applies are classified as at FVTPL. For all other equity instruments, the Company may make an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Company makes such election on an instrument-by-instrument basis. 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 Statement of profit & loss.
De-recognition of financial assets
A financial asset (or, where applicable, a part of a financial asset) is primarily derecognized (i.e. removed from the Companyâs balance sheet) when:
a. The rights to receive cash flows from the asset have expired, or
b. The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cashflows in full without material delay to a third party under a âpass-throughâarrangement and either (i) the Company has transferred substantially all the risks and rewards of the asset, or (ii) the Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its rights to receive cash flows from an asset or has entered into a passthrough arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognize the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
(ii) Financial liabilities
Initial Recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, financial guarantee contracts and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109 Financial Instruments.
Financial liabilities - Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. 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 the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
Offsetting of 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 recognized amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
Impairment of financial assets
In accordance withlnd AS 109 Financial Instruments, the Company applies expected credit loss (ECL) model for measurement and recognition of impairment loss for financial assets.
The Company tracks credit riskand changes thereon for each customer. 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.
ECL is the difference between all contractual cash flows that are due to the Company 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. When estimating the cash flows, an entity is required to consider:
- All contractual terms of the financial instrument over the expected life of the financial instrument. However, in rare cases when the expected life of the financial instrument cannot be estimated reliably, then the entity is required to use the remaining contractual term ofthe financial instrument.
- Cash flows from the sale of collateral held or other credit enhancements that are integral to the contractual terms.
The Company uses default rate for credit risk to determine impairment loss allowance on portfolio of its trade receivables
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/ expense in the statement of profit and loss. This amount is reflected under the head âother expensesâ in the P&L. The balance sheet presentation for various financial instruments is described below.
a. Financial assets measured as at amortised cost-contractual revenue receivables and lease receivables: ECL is presented as an allowance, i.e., as an integral part ofthe measurement of those assets in the balance sheet. The allowance reduces the net carrying amount. Until the asset meets write-off criteria, the Company does not reduce impairment allowance from the gross carrying amount.
b. Loan commitments and financial guarantee contracts: ECL is presented as a provision in the balance sheet, i.e. as a liability.
c. Debt instruments measured at FVTOCI: Since financial assets are already reflected at fair value, impairment allowance is not further reduced from its value. Rather, ECL amount is presented as âaccumulated impairment amountâ in the OCI.
Otherfinancial assets
For recognition of impairment loss on other financial assets and risk exposure, the Company determines whether there has been a significant increase in the credit risk since initial recognition and if credit risk has increased significantly, impairment loss is provided.
Fair value measurement
Fairvalue is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability, or
- In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participantâs ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All assets and liabilities for which fairvalue 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 fairvalue measurement asa 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.
1.9 Inventories
Inventories are valued at the lower of cost or Net Realizable Value. Net Realizable Value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. Cost includes purchase price, duties, transport & handling costs and other costs directly attributable to the acquisition and bringing the inventories to their present location and condition.
Inventories are valued asunder:
Finished Goods: At lower of cost or Net Realizable Value
Work in Progress : At cost - inclusive of appropriate overheads
Materials, Components & Spares : At weighted average cost
Goods in transit: At cost
1.10 Employee Benefits
Liabilities in respect of employee benefits to employees are provided for as follows:
a) Short-term employee benefits
i) 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 employeesâ services up to the end of the reporting period and are measured at the amounts expected to be incurred when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
ii) ESI is provided on the basis of actual liability accrued and paid to authorities.
b) Other Long-Term Employee Benefits Obligations
. Provident Fund: Contribution to recognized Provident Fund is made at predetermined rates. The Employeeâs Gratuity Fund Scheme, which is defined plan, is administered by Life Insurance Corporation of India. The liabilities with respect to Gratuity plan are determined by actuarial valuation on the projected unit credit method on the balance sheet date, based upon which the Company contributes to the Group Gratuity Scheme. The difference, if any, between the actuarial valuation of the gratuity of employees at the year end and the balance of funds with Life Insurance Corporation of India is provided for as assets/ (liability) in the books. Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The company recognizes the following changes in the net defined benefit obligation under Employee benefit expense /finance costs in statement of profit or loss:
a) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and nonroutine settlements
b) Net interest expense or income under finance Costs.
Re-measurements, comprising of actuarial gains and losses, the effect ofthe asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re- measurements are not reclassified to profit or loss in subsequent periods.
The Company has an arrangement with Life Insurance Corporation of India to administer its Gratuity scheme.
1.11 Income Taxand Deferred Tax
The liability of company on account of Income Tax is computed considering the provisions ofthe Income Tax Act, 1961.
Deferred tax is provided on temporary differences at the reporting date as difference between the tax base and the carrying amount of assets and liabilities. Deferred tax is recognized subject to the probability that taxable profit will be available against which the temporary differences can be reversed. Deferred 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 reporting date.
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.
1.12 Current Tax Assets (Net)
Advance payment of taxes including TDS, current year provision of taxes including TDS liabilities and input credit available under GST are designated as current taxassets
1.13 Provisions, Contingent Liability and Contingent Assets Provisions:
A provision is recognized when the Company has a present obligation (legal or constructive) as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Warranty Provisions:
Provisions for warranty-related costs are recognized when the product is sold or service is provided to customer. Initial recognition is based on historical experience. The Company periodically reviews the adequacy of product warranties and adjusts warranty percentage and warranty provisions for actual experience, if necessary. The timing of outflow is expected to be within one to two years.
Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases, where there is a liability that cannot be recognized because it cannot be measured reliably. The Company does not recognize a contingent liability but discloses its existence in the financial statements unless the probability of outflow of resources is remote.
1.14 Segment Reporting
Operating segment is reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The Company is engaged in the business of Consumer Electronic durable products which constitutes its single reportable segment.
1.15 Foreign Currency Translation
Items included in the financial statements are measured using the currency of the primary economic environment in which the entity operates (âthe functional currencyâ). The Companyâs financial statements are presented in Indian rupee (Rs) which is also the Companyâs functional and presentation currency.
Foreign currency transactions are recorded on initial recognition in the functional currency, using the exchange rate prevailing at the date of transaction.
Measurement of foreign currency items at the balance sheet date
Foreign currency monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Nonmonetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
Exchange differences
Exchange differences arising on settlement or translation of monetary items are recognized as income or expense in the period in which they arise with the exception of exchange differences on gain or loss arising on translation of nonmonetary items measured at fair value which is treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e., translation differences on items whose fair value gain or loss is recognized in OCI or profit or loss are also recognized in OCI or profit or loss, respectively).
1.16 Earnings Per Share
Basic EPS are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue that have changed the number of equity shares outstanding, without a corresponding change in resources.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company (after adjusting for interest on the convertible preference shares, if any) by the weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares. 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 foreach period presented.
1.17 Cash and Cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
1.18 Other Bank Balances
For the purpose of presentation in the statement of cash flows, other bank balances includes deposits held with financial institutions with original maturities of more than 12 months.
Mar 31, 2016
21. Significant Accounting Policies
21.1 General
The financial statements have been prepared under historical cost convention in accordance with Generally Accepted Accounting Principles in India and the provisions of the Companies Act, 2013 as adopted consistently by the company.
21.2 Fixed Assets
Fixed Assets, except Land and Building which were revalued as on 30.04.85, are stated at their original cost of acquisition including incidental expenditure related thereto, taxes, duties other than motivate credit availed and installation expenses. Net surplus or deficiency that arise when an asset is disposed/discarded/demolished/destroyed, are duly accounted.
21.3 Depreciation
Depreciation on Fixed Assets are provided on Straight Line Method at the rates and manner prescribed under Schedule II of the Companies Act, 2013.
21.4 Investments
Investments are stated at cost. Provisions are made to recognize permanent diminution in the value of Investments.
21.5 Inventories
Inventories are valued as under:
Finished Goods: At lower of cost or realizable value
Work in Progress: At cost inclusive of appropriate overheads
Materials, Components & Spares: At weighted average cost including taxes & duties Goods in transit : At cost
21.6 Foreign Currency Transaction
Transactions in Foreign Currency, other than those covered by forward contracts are accounted at exchange rates prevailing on the date of the transaction. Assets and liabilities in foreign currency not covered by forward contracts are translated at exchange rate prevailing on the date of the Balance Sheet. The Net loss, if any, on conversion is charged to revenue / asset account but gains if insignificant, is not accounted for.
21.7 Research and Development
Fixed Assets purchased for Research & Development are capitalized and depreciated as per the Company''s policy.
21.8 Retirement Benefit
Contribution to recognized Provident Fund is made at predetermined rates. The Company has an arrangement with Life Insurance Corporation of India to administer its Gratuity and Superannuation Schemes. The Gratuity liability calculated as per Actuarial Valuation is Rs. 91.83 Lakhs for existing employees. The liability for the exit employees is Rs. 26.59 Lakhs. The following table sets out the status of the plan as required under AS 15:
21.9 Borrowing Cost
The Company has discontinued the Superannuation Scheme effective November 2011. The crystallized liability under Superannuation Scheme as on 31st March, 2016 was Rs. 12.56 lakhs. Borrowing Cost that is directly attributable to the acquisition, Construction or production of a qualifying asset are capitalized as part of the asset. Other borrowing costs are recognized as expense in the period in which they are incurred.
21.10 Revenue Recognition
Revenue in respect of Sale of Products is recognized when goods are supplied to customers.
Service Income is accounted as and when services are rendered. Dividend income on Investments is accounted when the right to receive the payment is established. Interest income is recognized on a time proportionate basis considering the amount outstanding and rate applicable. Expenses are accounted for on accrual basis and provision is made for all known losses and liabilities.
21.11 Contingent Liability
All known liabilities are provided for in the accounts except liabilities of a contingent nature, which are adequately disclosed in accounts.
22.2 Share Capital
2.1 Share Capital includes 21,930 Equity Shares of Rs 10/- each allotted as Fully Paid Up for consideration other than cash and 96, 50,000 Equity Shares of Rs 10/- each allotted as Bonus Shares by Capitalization of General Reserve during an earlier period.
2.2 1,69,58,682 Non- Convertible, Non-Cumulative 0.001% Preference Shares of Rs. 100/- each, were allotted on 23rd September, 2005, pursuant to the Scheme of Arrangement approved by the Hon. High Court of Kerala, Ernakulam. Out of which, 1,41,24,682 shares are redeemable in four equal installments at the end of the 11th,12th,13th and 14th year and the balance of 28,34,000 shares are redeemable in ten equal installments commencing from 31st March, 2008. The Company is yet to redeem these preference shares and the amount outstanding as on 31st March 2016, was Rs.25.51crores. Company is making arrangements for the redemption of the above and the same will be redeemed in due course.
2.3 There are no Micro and Small Enterprises to whom the company owes dues, which are outstanding for more than 45 days as at 31st March 2016. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006, has been determined to the extent such parties have been identified on the basis of information available with the company.
2.4 As the company has no qualifying assets as defined in Accounting Standard 16, amount of borrowing cost that are directly attributable to the acquisition, construction or production of a qualifying asset have not been capitalized.
2.5 In accordance with the provisions of Accounting Standard 17, the Company has only one reporting segment viz, Electronic Industry. Segmental reporting as defined is therefore not applicable. The operating lease arrangements are renewable on a periodic basis. Some of these lease agreements have price escalation clauses.
. The amount provided by the company in the books of account towards gratuity is sufficient to cover the actuarial value of liability as certified by an external value. However, due to shortage of funds, the company is yet to fund the full actuarial liability under the scheme administered by LIC of India. As per the agreement with employees, the company has no liability for payment of leave encashment to its employees.
. The company has obtained confirmation of balances from its debtors. The balances due to creditors including Group Companies are subject to confirmation/ reconciliation.
- Previous year''s figures have been regrouped/ reclassified, wherever necessary, to correspond with the current yearâs classification/ disclosure.
Mar 31, 2015
1.1 General
The financial statements have been prepared under historical cost
convention in accordance with Generally Accepted Accounting Principles
in India and the provisions of the Companies Act, 2013as adopted
consistently by the company.
1.2 Fixed Assets
Fixed Assets, except Land and Building which were revalued as on
30.04.85, are stated at their original cost of acquisition including
incidental expenditure related thereto, taxes, duties other than modvat
credit availed and installation expenses. Net surplus or deficiency
that arise when an asset is disposed/discarded/demolished/ destroyed,
are duly accounted.
1.3 Depreciation
Depreciation on Fixed Assets are provided on Straight Line Method at
the rates and manner prescribed under Schedule II of the Companies Act,
2013.
1.4 Investments
Investments are stated at cost. Provisions are made to recognize
permanent diminution in the value of Investments.
1.5 Inventories
Inventories are valued as under:
Finished Goods : At lower of cost or realisable value
Work in Progress : At cost inclusive of appropriate overheads
Materials, Components & Spares : At weighted average cost including
taxes & duties Goods in transit : At cost
1.6 Foreign Currency Transaction
Transactions in Foreign Currency, other than those covered by forward
contracts are accounted at exchange rates prevailing on the date of the
transaction. Assets and liabilities in foreign currency not covered by
forward contracts are translated at exchange rate prevailing on the
date of the Balance Sheet. The Net loss, if any, on conversion is
charged to revenue / asset account but gains if in significant, is not
accounted for
1.7 Research and Development
Fixed Assets purchased for Research & Development are capitalised and
depreciated as per the Company's policy.
1.8 Retirement Benefit
Contribution to recognised Provident Fund is made at predetermined
rates. The Company has an arrangement with Life Insurance Corporation
of India to administer its Gratuity and Superannuation Schemes. The
Gratuity liability calculated as per Actuarial Valuation is Rs. 83.22
Lakhs for existing employees. The liability for the exit employees is
Rs. 26.94 Lakhs. The following table sets out the status of the plan as
required under AS 15:
1.9 Borrowing Cost
Borrowing Cost that are directly attributable to the acquisition,
Construction or production of a qualifying asset are capitalised as
part of the asset. Other borrowing costs are recognized as expense in
the period in which they are incurred.
1.10 Revenue Recognition
Revenue in respect of Sale of Products is recognised when goods are
supplied to customers.
Revenue from Annual Maintenance Contract (AMC) is recognized on time
proportion basis. Service Income is accounted as and when services are
rendered. Dividend income on Investments is accounted when the right to
receive the payment is established. Interest income is recognised on a
time proportionate basis considering the amount outstanding and rate
applicable. Expenses are accounted for on accrual basis and provision
is made for all known losses and liabilities.
1.11 Contingent Liability
All known liabilities are provided for in the accounts except
liabilities of a contingent nature, which are adequately disclosed in
accounts.
Mar 31, 2014
1.1 General
The financial statements have been prepared under historical cost
convention in accordance with Generally Accepted Accounting Principles
in India and the provisions of the Companies Act, 1956 / 2013 as
adopted consistentlybythecompany.
1.2 Fixed Assets
Fixed Assets, except Land and Building which were revalued as on
30.04.85, are stated at their original cost of acquisition including
incidental expenditure related thereto, taxes, duties other than modvat
credit availed and installation expenses. Net surplus or deficiency
that arise when an asset is disposed/ discarded/ demolished/ destroyed,
are duly accounted.
1.3 Depreciation
Depreciation on Fixed Assets are provided on Straight Line Method at
the rates and manner prescribed under Schedule XIVofthe Companies Act,
1956.
1.4 Investments
Investments are stated at cost. Provisions are made to recognize
permanent diminution in the value of Investments.
1.5 Inventories
Inventories are valued as under:
Finished Goods : At lower of cost or realisable value
Work in Progress : At cost inclusive of appropriate overheads
Materials, Components & Spares : At weighted average cost including
taxes & duties Goods in transit : At cost
1.6 Foreign Currency Transaction
Transactions in Foreign Currency, other than those coveredbyforward
contracts are accounted at exchange rates prevailing on the date of the
transaction. Assets and liabilities in foreign currency not covered by
forward contracts are translated at exchange rate prevailing on the
date of the Balance Sheet. The Net loss, if any, on conversion is
charged to revenue /asset account but gains if insignificant, is not
accounted for.
1.7 ResearchandDevelopment
Fixed Assets purchased for Research & Development are capitalised and
depreciated as per the Company''s policy.
1.8 Retirement Benefit
Contribution to recognised Provident Fund is made at predetermined
rates. The Company has an arrangement with Life Insurance Corporation
of India to administer its Gratuityand Superannuation Schemes. The
Gratuity liability calculated as per Actuarial Valuation is Rs. 68.88
Lakhs for existing employees and for exit employees, it is Rs. 79.90
Lakhs. The following table sets out the status of the planasrequired
underAS15:
1.9 Borrowing Cost
Borrowing Cost that are directly attributable to the acquisition,
Construction or production of a qualifying asset are capitalised as
part of the asset. Other borrowing costs are recognized as expense in
the period in which they are incurred.
1.10 Revenue Recognition
Revenue in respect of Sale of Products is recognised when goods are
supplied to customers.
Revenue from AMC Income is recognized on time proportion basis. Service
Income is accounted as and when services are rendered. Dividend income
on Investments is accounted when the right to receive the
payment is established. Interest income is recognised on a time
proportionate basis considering the amount outstanding and rate
applicable. Expenses are accounted for on accrual basis and provision
is made for all known losses and liabilities.
1.11 Contingent Liability
All known liabilities are provided for in the accounts except
liabilities of a contingent nature, which are adequately disclosed in
accounts.
Mar 31, 2013
1.1 General
The financial statements have been prepared under historical cost
convention in accordance with Generally Accepted Accounting Principles
in India and the provisions of the Companies Act, 1956 as adopted
consistently by the company.
1.2 FixedAssets
Fixed Assets, except Land and Building which were revalued as on
30.04.85, are stated at their original cost of acquisition including
incidental expenditure related thereto, taxes, duties other than modvat
credit availed and installation expenses. Net surplus or deficiency
that arise when an asset is disposed/ discarded/ demolished/ destroyed,
are duly accounted.
1.3 Depreciation
Depreciation on FixedAssets are provided on Straight Line Method at the
rates and manner prescribed under Schedule XIV of the Companies Act,
1956.
1.4 Investments
Investments are stated at cost. Provisions are made to recognize
permanent diminution in the value of Investments.
1.5 Inventories
Inventories are valued as under:
Finished Goods : At lower of cost or realisable value
Work in Progress : At cost inclusive of appropriate overheads
Materials, Components & Spares : At weighted average cost including
taxes & duties Goods in transit : At cost
1.6 Foreign Currency Transaction
Transactions in Foreign Currency, other than those covered by forward
contracts are accounted at exchange rates prevailing on the date of the
transaction. Assets and liabilities in foreign currency not covered by
forward contracts are translated at exchange rate prevailing on the
date of the Balance Sheet. The Net loss, if any, on conversion is
charged to revenue / asset account but gains if insignificant, isnot
accounted for.
1.7 Research and Development
FixedAssets purchased for Research & Development are capitalised and
depreciated as per the Company''s policy.
1.8 Retirement Benefit
Contribution to recognised Provident Fund is made at predetermined
rates. The Company has an arrangement with Life Insurance Corporation
of India to administer its Gratuity and Superannuation Schemes. The
Gratuity liability calculated as per Actuarial Valuation is Rs. 201.57
Lakhs for existing employees and for exit employees it is Rs. 268.16
Lakhs. The following table sets out the status of the planas required
underAS15:
The Company had discontinued the Superannuation Scheme effective
November 2011. The crystallized liability under Superannuation Scheme
as on 31stMarch 2013 was X 26.39 lakhs.
1.9 Borrowing Cost
Borrowing Cost that are directly attributable to the acquisition,
Construction or production of a qualifying asset are capitalised as
part of the asset. Other borrowing costs are recognized as expense in
the period in which they are incurred.
1.10 Revenue Recognition
Revenue in respect of Sale of Products is recognised when goods are
supplied to customers.
Revenue from AMC Income is recognized on time proportion basis. Service
Income is accounted as and when services are rendered. Dividend income
on Investments is accounted when the right to receive the payment is
established. Interest income is recognised on a time proportionate
basis considering the amount outstanding and rate applicable. Expenses
are accounted for on accrual basis and provision is made for all known
losses and liabilities.
1.11 Contingent Liability
All known liabilities are provided for in the accounts except
liabilities of a contingent nature, which are adequately disclosed in
accounts.
Mar 31, 2012
1.1 General
The financial statements have been prepared under historical cost
convention in accordance with generally accepted accounting principle
in India and the provisions of the Companies Act, 1956 as adopted
consistently by the company.
1.2 Fixed Assets
Fixed Assets, except land and building which were revalued as on
30.04.85, are stated at their original cost of acquisition including
incidental expenditure related thereto, taxes, duties other than modvat
credit availed and installation expenses. Net surplus or deficiency
that arise when an asset is disposed/ discarded/ demolished/destroyed,
are duly accounted.
1.3 Depreciation
Depreciation on Fixed Assets are provided on Straight Line Method at
the rates and manner prescribed under Schedule XIV of the Companies Act,
1956.
1.4 Investments
Investments are stated at cost. Provisions are made to recognize
permanent diminution in the value of investments.
1.5 Inventories
Inventories are valued as under:
Finished Goods : At lower of cost or realizable value
Work in Progress : At cost inclusive of appropriate overheads
Materials, Components & Spares : At weighted average cost including
taxes & duties Goods in transit : At cost
1.6 Foreign Currency Transaction
Transactions in Foreign Currency, other than those covered by forward
contracts are accounted at exchange rates prevailing on the date of the
transaction. Assets and liabilities in foreign currency not covered by
forward contracts, are translated at exchange rate prevailing on the
date of the Balance Sheet. The net loss, if any, on conversion is
charged to revenue / asset account but gains if insignificant is not
accounted for.
1.7 Research and Development
Fixed Assets purchased for Research and Development are capitalized and
depreciated as per the Company's policy.
1.8 Retirement Benefit
Contribution to recognized Provident Fund is made at predetermined
rates. The company has an arrangement with Life Insurance Corporation
of India to administer its Gratuity and Superannuation Schemes. The
gratuity liability calculated as per Actuarial Valuation is Rs. 252.26
lakhs for existing employees and for exit employees it is Rs. 195.38
lakhs. The following table sets out the status of the plan as required
under AS 15:
1.9 Borrowing Cost
Borrowing Cost that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized as
part of the asset. Other borrowing costs are recognized as expense in
the period in which they are incurred.
1.10 Revenue Recognition
Revenue in respect of sale of products is recognized when goods are
supplied to customers.
Revenue from AMC income is recognized on time proportion basis. Service
income is accounted as and when services are rendered. Dividend income
on investments is accounted when the right to receive the payment is
established. Interest income is recognized on a time proportionate
basis considering the amount outstanding and rate applicable. Expenses
are accounted for on accrual basis and provision is made for all known
losses and liabilities.
1.11 Contingent Liability
All known liabilities are provided for in the accounts except
liabilities of a contingent nature, which are adequately disclosed in
accounts.
Mar 31, 2010
General : The financial statements have been prepared under historical
cost convention in accordance with generally accepted accounting
principle in India and the provisions of the Companies Act, 1956, as
adopted consistently by the company.
Fixed Assets : Fixed Assets, except Land and Building which were
revalued as on 30.4.85, are stated at their original cost of
acquisition including incidental expenditure related thereto, taxes,
duties other than modvat credit availed and installation expenses. Net
surplus or deficiency arising when an asset is disposed, discarded,
demolished or destroyed are duly accounted.
Depreciation : Depreciation on Fixed Assets are provided on Straight
Line Method at the rates and manner prescribed under Schedule XIV of
the Companies Act, 1956.
Investments : Investments are stated at cost. Provisions are
made to recognize permanent diminution in the value of Investments.
Inventories : Inventories are valued as under :
Finished Goods : At lower of cost or realisable value
Work in Progress : At cost, inclusive of appropriate
overheads Materials,
Components : At weighted average cost & Spares
including taxes & duties
Goods-in-transit : At cost
Foreign Currency Transaction : Transactions in foreign currency, other
than those covered by forward contracts are accounted at exchange rates
prevailing on the date of the
transaction. Assets and Liabilites in foreign currency not covered by
forward contracts, are translated at exchange rate prevailing on the
date of the Balance Sheet. The net loss, if any, on conversion is
charged to revenue / asset account but gains, if insignificant, is not
accounted for.
Research and Development : Fixed Assets purchased for Research and
Development are capitalised and depreciated as per the Companys
policy.
Retirement Benefit : Contribution to recognised Provident Fund is made
at predetermined rates. There is no defined benefit scheme for Leave
Encashment. The Company has an arrangment with Life Insurance
Corporation of India to administer its Gratuity and Superannuation
Schemes.
Borrowing Cost : Borrowing Cost that are directly attributable to the
acquisition, construction or production of a qualifying asset are
capitalised as part of the asset. Other borrowing costs are recognized
as an expense in the period in which they are incurred.
Revenue Recognition : Revenue in respect of sale of products are
recognised when goods are supplied to customers. Dividend income on
Investments are accounted for when the right to receive the payment is
established. Interest income is recognised on a time proportionate
basis considering the amount outstanding and rate applicable. Expenses
are accounted for on accrual basis and provision is made for all known
losses and liabilities.
Contingent Liability : All known liabilites are provided for in the
accounts except liabilites of a contingent nature, which are adequately
disclosed in accounts.
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