Accounting Policies of Grauer & Weil (India) Ltd. Company
Mar 31, 2018
A) General Information:
Grauer & Weil (India) Limited (the Companyâ) is primarily engaged in the business of manufacturing and selling of Basic, Electroplating and Intermediary Chemicals, Oils and Lubricants, Paints, Enamels, Varnishes and Oil bound Distempers. The Company presently has its manufacturing facilities in Dadra, Vapi (Gujarat), Barotiwala (H.P) and Samba (J.K.) and Engineering division at Khed, Pune District and a Mall at Kandivli (Mumbai).
The Registered office of the Company is located at Growel Corporate, Akurli Road, Kandivli (East), Mumbai 400 101.
B) Basis of preparation of financial statements:
The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented.
The Company has adopted the Indian Accounting Standards (Ind AS) in accordance with Ind AS 101 - First time adoption of Indian Accounting Standards. The Company has transited from its previous GAAP as defined in Ind AS 101 with the necessary disclosures relating to reconciliation of shareholders equity under previous GAAP and Ind AS and of the net profit as per previous GAAP and total comprehensive income under Ind AS. (Refer note 29)
i. Statement of compliance:
In accordance with the notification issued by the Ministry of Corporate Affairs, the Company has adopted Indian Accounting Standards (referred to as âInd ASâ) notified under the Companies (Indian Accounting Standards) Rules, 2015 with effect from April 1, 2017. These financial statements have been prepared in accordance with Ind AS as prescribed under Section 133 of the Companies Act, 2013 read together with the Companies (Indian Accounting Standards) Rules, 2015 and subsequent amendments thereto.
The financial statements for the year ended 31st March, 2018 are the first financial statements, the Company has prepared in accordance with Ind AS. (Refer Para âCâ below for the details of first-time adoption exemptions availed by the Company.)
ii. Basis of preparation and presentation:
The financial statements have been prepared on historical cost basis considering the applicable provisions of Companies Act 2013, except for the following items that have been measured at fair value as required by the relevant Ind AS. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services at the time of initial recognition.
a) Certain financial assets/liabilities measured at fair value (Refer Note 32) and
b) Any other item as specifically stated in the accounting policy.
The financial statements are presented in INR and all values are rounded off to Rupees Lacs unless otherwise stated.
The financial statements of the Company for the year ended 31st March, 2018 were authorized for issue in accordance with a resolution of the Board of Directors dated 30th May, 2018.
iii. Use of estimate and judgment:
In the application of accounting policies which are described in Para C below, the management is required to make judgments, estimates and assumptions about the carrying amount of assets and liabilities, income and expenses, contingent liabilities and the accompanying disclosures that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant and are prudent and reasonable. Actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised, if the revision affects only that period, or in the period of revision and future periods if the revision affects both current and future period.
The few critical estimations and judgments made in applying accounting policies are:
- Inventories:
Inventory obsolescence is based on assessment of the future uses. In all cases, inventory is carried at the lower of historical cost and net realizable value.
- Lease:
Lease accounting after evaluating the right to use the underlying assets, substance of the transactions including legally enforceable arrangements and other significant terms and conditions of the arrangement to conclude whether the arrangements meet the criteria under Ind AS 17.
- 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''s or CGU''s fair value less costs of disposal and its value in use. It 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. Where 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. These calculations are corroborated by valuation multiples or other available fair value indicators.
- Impairment of Financial Assets:
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Company''s past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
- Defined Benefit Plans:
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligations are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
- Fair Value Measurement of Financial Instruments:
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
C) Summary of Significant Accounting Policies:
1) Property, Plant and Equipment (PPE):
For transition to Ind AS, the Company has elected to continue with the carrying value of Property, Plant and Equipment (âPPE'') recognized as of 1st April, 2016 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost of the PPE as on the transition date.
Property, Plant and Equipment are stated at cost less accumulated depreciation and accumulated impairment losses except for freehold land which is not depreciated. Cost includes purchase price after deducting trade discount / rebate, import duties, non-refundable taxes, cost of replacing the component parts, borrowing costs and other directly attributable cost of bringing the asset to its working condition in the manner intended by the management.
Spares parts procured along with the Plant and Equipment or subsequently which meets the definition and recognition criteria of PPE considering the concept of materiality are capitalized and added to the carrying amount of such items. The carrying amount of those spare parts that are replaced is derecognized when no future economic benefits are expected from their use or upon disposal. Other machinery spares are treated as âstores and spares'' forming part of the inventory. If the cost of the replaced part is not available, the estimated cost of similar new parts is used as an indication of what the cost of the existing part was when the item was acquired.
An item of PPE is derecognized on disposal or when no future economic benefits are expected from use or disposal. Any gain or loss arising on derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds and the carrying amount of the asset and is recognized in Statement of Profit and Loss when the asset is derecognized.
Expenditure on acquisition of PPE for Research and Development (R&D) is included in PPE and depreciation thereon is provided as applicable.
The depreciable amount of an asset is determined after deducting its residual value. Where the residual value of an asset increases to an amount equal to or greater than the asset''s carrying amount, no depreciation charge is recognized till the asset''s residual value decreases below the asset''s carrying amount. Depreciation of an asset begins when it is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the intended manner. Depreciation of an asset ceases at the earlier of the date that the asset is classified as held for sale in accordance with Ind AS 105 and the date that the asset is derecognized. Depreciation on all assets is provided on straight line basis.
Further, the Company has identified and determined separate useful life for each major component of fixed assets, if they are materially different from that of the remaining assets, for providing depreciation in compliance with Schedule II of the Companies Act, 2013.
Depreciation on fixed assets added/disposed off during the period is provided on pro-rata basis with reference to the date of addition/ disposal.
The assets residual values, useful lives and methods of depreciation are reviewed at each financial year end and adjusted prospectively, if appropriate.
2) Intangible assets:
Intangible assets acquired separately are measured on initial recognition at cost. After initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses.
Software (not being an integral part of the related hardware) acquired for internal use are treated as intangible assets.
An item of intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. Any profit or loss arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the Statement of Profit and Loss when the asset is derecognized.
Intangible assets are amortized on straight line basis over a period of five years.
3) Impairment of tangible (PPE) and intangible assets:
At the end of each reporting period, the Company reviews the carrying amounts of its PPE and other intangible assets to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (CGU) to which the asset belongs. 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. The resulting impairment loss is recognized in the Statement of Profit and Loss.
The recoverable amount is the higher of fair value less costs to sell and value in use. 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.
Where an impairment loss subsequently reverses, the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset or CGU in prior years. A reversal of an impairment loss is recognized in the Statement of Profit and Loss.
4) Investment properties:
Management has assessed applicability of Ind AS 40 - Investment Property to the Mall property. In assessing such applicability, management has considered the ownership of assets, terms of license agreements, various services provided to the licensees, etc. Based on such assessment, the management has considered the Mall property as owner occupied property and hence classified as Property, Plant and Equipment.
5) Inventories:
Raw materials, packing materials and stores and spares are valued at lower of cost and net realizable value. However, materials held for use in production of inventories are not written down below cost, if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, packing materials and stores and spares is determined on daily moving weighted average cost basis.
Work in progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated cost of completion and estimated cost necessary to make the sale.
6) Leases:
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is (or contains) a lease, if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease or an operating lease.
Where the Company is a lessee-
Finance leases that transfer substantially all the risks and benefits incidental to ownership of the leased item (i.e. PPE), are generally capitalized at the inception of the lease at the fair value of the leased assets or, if lower, at the present value of minimum lease payments. Lease payments are apportioned between finance charges and a reduction in lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the Statement of Profit and Loss.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases are charged to Statement of Profit and Loss over the period of lease on straight line basis other than those cases where the escalations are linked to expected general inflation in which case they are charged on contractual terms.
Where the Company is a lessor-
Leases in which a significant portion of the risks and rewards of ownership are not transferred by the Company are classified as operating leases. Assets subject to operating leases are included as fixed assets. Lease income on an operating lease is recognized in the Statement of Profit and Loss on a straight line basis other than those cases where escalations are linked to expected general inflation in which case they are recognized on contractual terms.
Leases are classified as finance leases when substantially all the risks and rewards of ownership transfer from the Company to the lessee. Amounts due from the lessees under finance leases are recorded as receivables at the Company''s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the net investment outstanding in respect of the lease.
7) Government grants:
Government grants/subsidy are recognized when there is reasonable assurance that the Company will comply with the conditions attached to them and that the grants/subsidy will be received.
Grants/subsidy related to income are recognized as income over the periods necessary to match them with the costs for which they are intended to compensate on a systematic basis. Government grants/subsidy that are receivable as compensation for expenses or losses already incurred or for the purpose of providing immediate financial support with no future related costs are recognized in the Statement of Profit and Loss in the period in which they become receivable. Grants/subsidy related to income are presented under other income in the Statement of Profit and Loss except for grants/subsidy received in the form of rebate or exemption which are deducted in reporting the related expense. Grant/subsidy receivable against a specific fixed asset is deducted from the cost of the relevant fixed asset.
8) Provisions, contingent liabilities and contingent assets:
Provisions are recognised when there is a present legal or constructive obligation as a result of a past event and it is probable (i.e. more likely than not) 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. Such provisions are determined based on management estimate of the amount required to settle the obligation at the balance sheet date. When the Company expects some or all of a provision to be reimbursed, the reimbursement is recognised as a standalone asset only when the reimbursement is virtually certain.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous contract is considered to exist when a contract under which the unavoidable costs of meeting the obligations exceed the economic benefits expected to be received from it.
Contingent liabilities are disclosed on the basis of judgment of management / independent experts. These are reviewed at each balance sheet date and are adjusted to reflect the current management estimate.
Contingent assets are not recognized, however, disclosed in financial statement when inflow of economic benefits is probable.
9) Foreign currency transactions:
The financial statements of Company are presented in INR, which is also the functional currency. In preparing the financial statements, transactions in currencies other than the entity''s functional currency are recognized at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary items denominated in foreign currency are reported at the exchange rate ruling on the date of transaction. Exchange difference on monetary items are recognized in the statement of profit and loss in the period in which they arise.
10) Share capital and securities premium:
Ordinary shares are classified as equity, incremental costs directly attributable to the issue of new shares are shown in equity as a deduction net of tax from the proceeds. Par value of the equity share is recorded as share capital and the amount received in excess of the par value is classified as securities premium.
11) Dividend distribution to equity shareholders:
The Company recognizes a liability to make cash distributions to equity holders when the distribution is authorized and the distribution is no longer at the discretion of the Company. A distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in other equity along with any tax thereon.
12) Cash flows and cash and cash equivalents:
Statement of cash flows is prepared in accordance with the indirect method prescribed in the relevant Ind AS. For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, cheques and drafts on hand, deposits held with banks, 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.
13) Revenue recognition:
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government.
i. Sale of goods:
Revenue from sale of goods is recognized, when all significant risks and rewards are transferred to the buyer, as per the terms of the contracts and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. It includes excise duty and excludes value added tax/sales tax. goods and services tax. It is measured at fair value of consideration received or receivable, net of returns and allowances, trade discounts and volume rebates.
ii. Engineering division:
Equipment manufactured by the Engineering division for use by other divisions is included in the sales at transfer price and are capitalized by other division.
iii. Import entitlement:
Benefit on account of entitlement to import duty free materials under the âDuty Entitlement Exemption Certificateâ (DEEC) is accounted in the year of import.
iv. Income from business conducting/license fees:
Income arising out of business conducting/license fees is accounted at contracted rates, keeping in view, the collectability of the resulting receivables is reasonably assured and is disclosed net of indirect taxes, if any.
v. Revenue from amenities provided:
Revenue from amenities provided is recognized at value of service and is disclosed net of indirect taxes, if any. Recoveries made against common area maintenance expenses are netted of against relevant expenses.
vi. Job contract receipts:
Income from operations in Paints division includes Job Contract receipts, net of payments made to sub contractors. The Company follows the âPercentage of Completion Methodâ of accounting for all contracts. The revenue from the execution of contracts is recognized proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred.
vii. Rendering of services:
Revenue from rendering of services is recognized as per the terms of the contract with customers when related services are performed and when the outcome of the transactions involving rendering of services can be estimated reliably.
viii. Dividend income:
Dividend income is accounted for when the right to receive the same is established, which is generally when shareholders approve the dividend.
ix. Interest income:
Interest income on financial assets measured at amortized cost is recognized on a time-proportion basis using the effective interest method.
x. Insurance and other claims:
Insurance and other claims/refunds, due to uncertainty in realization are accounted for on acceptance/actual receipt basis.
14) Borrowing costs:
Borrowing cost includes interest, commitment charges, brokerage, underwriting costs, discounts / premiums, financing charges, exchange difference to the extent they are regarded as interest costs and all ancillary / incidental costs incurred in connection with the arrangement of borrowing.
Borrowing costs which are directly attributable to acquisition / construction of qualifying assets that necessarily takes a substantial period of time to get ready for its intended use are capitalized as a part of cost pertaining to those assets. All other borrowing costs are recognized as expense in the period in which they are incurred.
15) Employee benefits:
i. Short term employee benefits:
All employee benefits payable wholly within twelve months of rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., are recognized during the period in which the employee renders related services and are measured at undiscounted amount expected to be paid when the liabilities are settled.
ii. Long term employee benefits:
The cost of providing long term employee benefit such as earned leave is measured as the present value of expected future payments to be made in respect of services provided by employees upto the end of the reporting period. The expected costs of the benefit is accrued over the period of employment using the same methodology as used for defined benefits post employment plans. Actuarial gains and losses arising from the experience adjustments and changes in actuarial assumptions are charged or credited to the Statement of Other Comprehensive Income in which they arise except those included in cost of assets as permitted. The benefit is valued annually by independent actuary.
iii. Post employment benefits:
The Company provides the following post employment benefits:
i) Defined benefit plans such as gratuity; and
ii) Defined contributions plans such as provident fund.
iv. Defined benefits plans:
The cost of providing benefits on account of gratuity are determined using the projected unit credit method on the basis of actuarial valuation made at the end of each balance sheet date, which recognizes each period of service as given rise to additional unit of employees benefit entitlement and measuring each unit separately to build up the final obligation. The yearly expenses on account of these benefits are provided in the books of accounts.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of Profit and Loss except those included in cost of assets as permitted.
Re-measurements comprising of actuarial gains and losses arising from experience adjustments and change in actuarial assumptions, the effect of change in assets ceiling (if applicable) and the return on plan asset (excluding net interest as defined above) are recognized in other comprehensive income (OCI) except those included in cost of assets as permitted in the period in which they occur. Re-measurements are not reclassified to the Statement of Profit and Loss in subsequent periods.
Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements) is recognized in the Statement of Profit and Loss except those included in cost of assets as permitted in the period in which they occur.
v. Defined contribution plans:
Payments to defined contribution retirement benefit plans, viz., provident fund for eligible employees, and superannuation benefits are recognized as an expense when employees have rendered the service entitling them to the contribution.
16) Taxes on income:
Income tax expense represents the sum of tax currently payable and deferred tax. Tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized directly in equity or in other comprehensive income.
a) Current tax:
Current tax includes provision for income Tax computed under special provision (i.e., minimum alternate tax) or normal provision of Income Tax Act. Tax on income for the current period is determined on the basis on estimated taxable income and tax credits computed in accordance with the provisions of the relevant tax laws and based on the expected outcome of assessments/appeals.
b) Deferred tax:
Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the balance sheet and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets are generally recognized for all deductible temporary differences, unabsorbed losses and unabsorbed depreciation to the extent that it is probable that future taxable profits will be available against which those deductible temporary differences, unabsorbed losses and unabsorbed depreciation can be utilized.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the balance sheet date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The company recognizes MAT credit available as deferred tax asset only to the extent it is possible that sufficient taxable profit will be available to allow all or part of MAT credit to be utilized during the specified period, i.e. the period for which such credit is allowed to be utilized.
17) Earnings per share:
Basic earnings per share is calculated by dividing the profit from continuing operations and total profit, both attributable to equity shareholders of the Company by the weighted average number of equity shares outstanding during the period.
For calculating diluted earnings per share the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
18) Current versus non-current classification:
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
a) An asset is current when it is:
- Expected to be realized or intended to be sold or consumed in the normal operating cycle,
- Held primarily for the 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 months after the reporting period.
All other assets are classified as non-current.
b) A liability is current when:
- It is expected to be settled in the normal operating cycle,
- It is held primarily for the 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.
c) Deferred tax assets and 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.
19) Fair value measurement:
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, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of asset and liability if market participants would take those into consideration. Fair value for measurement and / or disclosure purposes in these financial statements is determined in such basis except for transactions in the scope of Ind AS 2, 17 and 36. Normally at initial recognition, the transaction price is the best evidence of fair value.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
All financial assets and financial 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 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
Financial assets and Financial liabilities that are recognized at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization at the end of each reporting period.
20) Financial instruments:
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. The Company recognizes a financial asset or financial liability in its balance sheet only when the entity becomes party to the contractual provisions of the instrument.
a) Financial assets:
A financial asset inter-alia includes any asset that is cash, equity instrument of another entity or contractual obligation to receive cash or another financial asset or to exchange financial asset or financial liability under condition that are potentially favourable to the Company.
Investments in subsidiaries:
Investments in equity shares of subsidiaries are carried at cost less impairment. Impairment is provided for on the basis explained in Para C (3) above.
Financial assets other than investment in subsidiaries:
Financial assets of the Company comprise trade receivable, cash and cash equivalents, bank balances, investments in equity shares of companies other than in subsidiaries, investment other than equity shares, loans/advances to employee/related parties/others, security deposit, claims recoverable etc.
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. Transaction costs of financial assets carried at fair value through profit or loss are expensed in Statement of Profit and Loss. Where transaction price is not the measure of fair value and fair value is determined using a valuation method that uses data from observable market, the difference between transaction price and fair value is recognized in Statement of Profit and Loss and in other cases spread over life of the financial instrument using effective interest method.
Subsequent measurement:
For purposes of subsequent measurement financial assets are classified in three categories:
- Financial assets measured at amortized cost
- Financial assets at fair value through OCI
- Financial assets at fair value through profit or loss Financial assets measured at amortized cost:-
Financial assets are measured at amortized cost if the financials asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. These financials assets are amortized using the effective interest rate (EIR) method, less impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortization is included in finance income in the Statement of Profit and Loss. The losses arising from impairment are recognized in the Statement of Profit and Loss in finance costs.
Financial assets at fair value through OCI (FVTOCI):-
Financial assets are measured at fair value through other comprehensive income if the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. At initial recognition, an irrevocable election is made (on an instrument-by-instrument basis) to designate investments in equity instruments other than held for trading purpose at FVTOCI. Fair value changes are recognized in the other comprehensive income (OCI). However, the Company recognizes interest income, impairment losses and reversals and foreign exchange gain or loss in the income statement. On de-recognition of the financial asset other than equity instruments, cumulative gain or loss previously recognized in OCI is reclassified to income statements.
Financial assets at fair value through profit or loss (FVTPL):-
Any financial asset that does not meet the criteria for classification as at amortized cost or as financial assets at fair value through other comprehensive income, is classified as financial assets at fair value through profit or loss. Further, financial assets at fair value through profit or loss also include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held for trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit or loss are fair valued at each reporting date with all the changes recognized in the Statement of Profit and Loss.
De-recognition:
The Company de-recognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Company neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Company recognizes its retained interest in the asset and an associated liability for amounts it may have to pay.
Impairment of financial assets:
The Company assesses impairment based on expected credit loss (ECL) model on the following:
- Financial assets that are measured at amortized cost.
- Financial assets measured at fair value through other comprehensive income (FVTOCI).
ECL is measured through a loss allowance on a following basis:
- The 12 month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within 12 months after the reporting date)
- Full life time expected credit losses (expected credit losses that result from all possible default events over the life of financial instruments)
The Company follows âsimplified approach'' for recognition of impairment on trade receivables or contract assets resulting from normal business transactions. The application of simplified approach does not require the Company to track changes in credit risk. However, it recognizes impairment loss allowance based on lifetime ECLs at each reporting date, from the date of initial recognition.
For recognition of impairment loss on other financial assets, the Company determines whether there has been a significant increase in the credit risk since initial recognition. If credit risk has increased significantly, lifetime ECL is provided. For assessing increase in credit risk and impairment loss, the Company assesses the credit risk characteristics on instrument-by-instrument basis.
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.
Impairment loss allowance (or reversal) recognized during the period is recognized as expense/income in the Statement of Profit and Loss.
b) Financial liabilities:
The Company''s financial liabilities include loans and borrowings including book overdraft, trade payable, accrued expenses and other payables.
Initial recognition and measurement:
All financial liabilities at initial recognition are classified as financial liabilities at amortized cost or financial liabilities at fair value through profit or loss, 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. Any difference between the proceeds (net of transaction costs) and the fair value at initial recognition is recognized in the Statement of Profit and Loss or in the âExpenditure Attributable to Constructionâ if another standard permits inclusion of such cost in the carrying amount of an asset over the period of the borrowings using the effective rate of interest.
Subsequent measurement:
The subsequent measurement of financial liabilities depends upon the classification as described below:
- Financial liabilities classified as amortized cost
- Financial liabilities that are not held for trading and are not designated as at FVTPL are measured at amortized cost at the end of subsequent accounting periods. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the effective interest rate. Interest expense that is not capitalized as part of costs of assets is included as finance costs in the Statement of Profit and Loss.
Financial liabilities at fair value through profit and loss (FVTPL):-
- FVTPL includes financial liabilities held for trading and financial liabilities designated upon initial recognition as FVTPL. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. Financial liabilities have not been designated upon initial recognition at FVTPL.
Derecognition:
A financial liability is derecognized when the obligation under the liability is discharged / cancelled / expired. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized 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.
c) First time adoption of Ind AS - mandatory exceptions / optional exemptions:
Overall principle:
The Company has prepared the opening balance sheet as per Ind AS as of 1st April, 2016 (the transition date) by recognizing all assets and liabilities whose recognition is required by Ind AS, not recognizing items of assets or liabilities which are not permitted by Ind AS, by reclassifying certain items from previous GAAP to Ind AS as required under the Ind AS, and applying Ind AS in the measurement of recognized assets and liabilities. However, this principle is subject to certain mandatory exceptions and certain optional exemptions availed by the Company as detailed below:
Derecognition of financial assets and financial liabilities:
The Company has applied the de-recognition requirements of financial assets and financial liabilities prospectively for transactions occurring on or after 1st April, 2016 (the transition date).
Impairment of financial assets:
The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date. Further, the Company has not undertaken an exhaustive search for information when determining, at the date of transition to Ind AS whether there have been significant increases in credit risk since initial recognition, as permitted by Ind AS 101.
Deemed cost for PPE, CWIP and Intangible assets:
The Company has opted for historical cost of Property, Plant and Equipment / intangible assets as per Indian GAAP as the deemed cost on the opening balance sheet date.
Determining whether an arrangement contains a lease:
The Company has applied Appendix C of Ind AS 17 for determining whether an arrangement contains a Lease at the transition date on the basis of facts and circumstances existing at that date.
Investment in subsidiaries:
The Company has elected to continue with the carrying value of all its investments in subsidiaries recognized as of 1st April, 2016 (transition date) measured as per previous GAAP and use that carrying value as its deemed cost as of the transition date.
d) Recent accounting pronouncements:
The Ministry of Corporate Affairs (MCA), on 28 March 2018, notified Ind AS 115, Revenue from Contracts with Customers and Appendix B to Ind AS 21, The effects of changes in foreign exchange rates as part of the Companies (Indian Accounting Standards) Amendment Rules, 2018. These amendments will come into force from 1st April, 2018.
Ind AS 115 - Revenue from contract with customers:
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18, Revenue, Ind AS 11, Construction contracts and the related interpretations when it becomes effective.
The core principle of Ind AS 115 is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:
Identify the contract(s) with a customer, Identify the performance obligations in the contract, Determine the transaction price, Allocate the transaction price to the performance obligations in the contract and recognize revenue when (or as) the entity satisfies a performance obligation.
Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e., when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer. Far more prescriptive guidance has been added in Ind AS 115 to deal with specific scenarios. Furthermore, extensive disclosures are required by Ind AS 115.
The Company has evaluated the effect of these amendments on the financial statement and the impact is not expected to be material.
Nature of security and terms of repayment for hire purchase credits:
Hire purchase credits are for purchase of cars. These facilities are secured by first charge on respective car against which the specific facility has been taken from the Bank. The loan amount is repayable in equitable monthly installments with interest rates ranging from 7.76% to 10.90% as applicable and are expected to be fully repaid as per the respective repayment schedules and shall get fully repaid between April 2018 to January 2021.
Nature of security for working capital facilities :
The working capital facilities are secured by hypothecation of all stocks, moveable assets and book debts by way of first charge on pari-passu basis and are further collaterally secured by second pari-passu charge on the block assets of shopping mall at Kandivali, Mumbai. The working capital facility is repayable on demand and carries interest rate ranging from 8.45% to 10%.
Mar 31, 2017
a. Basis of Accounting:
The Financial Statements are prepared in accordance with the generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material aspects with the accounting standards notified under section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules 2014. The Financial statements have been prepared on an accrual basis and under the historical cost convention (except for revaluation of certain assets on merger).
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents the company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
b. Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
c. Revenue Recognition:
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Revenue from the sale of products is recognized upon passage of title to the customer, which generally coincides with their delivery. Claims, if any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other divisions is included in the Sales at transfer price and are capitalized by other division.
Benefit on account of entitlement to import duty free materials under the âDuty Entitlement Exemption Certificateâ (DEEC) is accounted in the year of import.
Income arising out of Business Conducting/License Fees is accounted at contracted rates, keeping in view, the collectability of the resulting receivables is reasonably assured and is disclosed net of indirect taxes, if any.
Revenue from amenities provided is recognized at value of service and is disclosed net of indirect taxes, if any. Recoveries made against common area maintenance expenses are netted of against relevant expenses.
Income from operations in Paints division includes Job Contract receipts, net of payments made to sub contractors. The Company follows the "Percentage of Completion Method" of accounting for all contracts. The revenue from the execution of contracts is recognized proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividend Income is recognized when the right to receive is established.
Insurance and other claims/refunds, due to uncertainty in realization are accounted for on acceptance/actual receipt basis.
d. Government Grants:
Government grants and subsidies and interest thereon are recognized when there is reasonable certainty that the grant/subsidy will be received and all conditions attached thereto will be complied with.
Government grants and subsidies receivable against an expense are deducted from such expense. If the grant/subsidy is not related to a specific expenditure, it is taken as income. Grant/subsidy receivable against a specific fixed asset is deducted from cost of the relevant fixed asset.
e. Fixed Assets and Depreciation:
Tangible fixed assets are stated at cost of acquisition/fair value including expenditure incurred during construction/erection less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributed cost of bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre-operational expenses, including borrowing cost are also capitalized. Machinery spares which can be used only in connection with an item of fixed asset and whose use as per technical assessment is expected to be irregular are capitalized and depreciated over the residual life of the respective assets.
Intangible assets are stated at acquisition cost, net of accumulated amortization and provision for impairment, if any.
Expenditure incurred during the developmental and preliminary stages of Company''s new projects are carried forward under the head Capital Work-in-Progress.
Depreciation is provided on the revised useful life of assets and in the manner specified in Schedule II of the Companies Act, 2013
- On straight-line basis in respect of all assets.
- Assets individually costing Rs. 5000 or less are depreciated fully in the year of purchase.
Premium on leasehold land is amortized over its lease period.
Intangible assets are being amortized on straight-line method over a period of five years.
Company has elected to continue with carrying value of all its property, plant and equipment recognized as per the previous GAAP in line with Revised AS-10.
Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
f. Impairment:
The carrying amount of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount, which represents the greater of the net selling price and "Value in use" of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.
g. Investments:
Investments that are readily realizable, and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
h. Inventory:
Raw materials, Packing materials and Stores and Spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, packing materials and stores and spares is determined on daily moving weighted average cost basis.
Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity.
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.
i. Research and Development:
Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of capital nature is included in fixed assets and depreciation is provided on such assets as applicable.
j. Retirement and other Employee Benefits:
Short-term employee benefit is accounted in the period during which the services have been rendered.
The Company''s contribution to the Provident Fund is remitted to âEmployees Provident Fund Organizationâ based on fixed percentage of the eligible employee''s salary and charged to the Statement of Profit & Loss.
Superannuation benefits to certain employees, a defined contribution plan, as per Company''s scheme, have been funded with Life Insurance Corporation of India and contribution is charged to statement of Profit & Loss, when the contribution to the fund is due.
The Company''s Liability towards Gratuity being defined benefit plan is accounted for based on Actuarial valuation done at the year-end using the Projected Unit Credit Method. Actuarial gains & losses are charged to the Statement of Profit & Loss. The Gratuity liability is partly funded through a trust with the Life Insurance Corporation of India for employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is accounted for based on Actuarial valuation done at the year-end using Projected Unit Credit Method. Actuarial gains & losses are charged to the Statement of Profit & Loss.
k. Foreign Currency Transactions:
Initial Recognition:
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions.
Subsequent Recognition:
As at the reporting date, non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
All monetary assets and liabilities in foreign currency are restated at the end of accounting period.
Exchange differences on restatement of all other monetary items are recognized in the Statement of Profit and Loss.
Forward Exchange Contracts:
The premium or discount arising at the inception of forward exchange contract entered into to hedge an existing asset / liability is amortized as expense or income over the life of the contract. Exchange difference on such a contract is recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for the period.
Forward exchange contracts outstanding as at the year end on account of firm commitment / highly probable forecast transactions are mark-to-market and the losses, if any, are recognized in the Statement of Profit and Loss and gains are ignored in accordance with the announcement of The Institute of Chartered Accountants of India on ''Accounting for Derivatives'' issued in March 2008.
l. Customs Duty and Excise Duty:
Excise Duty on finished goods stock lying at the factory is accounted for at the point of manufacture of goods and accordingly is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date. Similarly, custom duty on imported materials in transit/lying in bonded warehouse is accounted for at the time of import/bonding of materials.
m. Borrowing Costs:
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings directly attributable to the acquisition of or construction of qualifying assets till such time the assets are substantially ready for their intended use, are capitalized. All other borrowing costs are charged to revenue.
n. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets pertaining to unabsorbed business loss & depreciation is recognized only to the extent of virtual certainty of it realization.
Minimum Alternative Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
o. Segment Reporting:
Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The Company''s operating business are organized and managed separately according to the nature of the products and services provided, with each segment representing strategic business unit that offers different products and serves different markets.
Segment Revenue & Results:
The Income and Expenses, which are not directly attributable to business segment, are shown as unallocated income and expenses. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business segment and consist principally all Fixed Assets, Trade Receivables, Inventories and Advances. Segment Liabilities primarily include Creditors, Other Liabilities / Provisions. Common assets and liabilities that cannot be allocated to any segment are shown as a part of unallocated corporate assets and liabilities.
p. Leases:
Operating Lease payments are recognized on a straight-line basis over the lease term. q. Cash and Cash Equivalents:
Cash and Cash equivalents for the purpose of cash flow statement comprise cash at Bank and in hand. r. Earnings per share:
Basic earnings per share 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.
For calculating diluted earnings per share the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
s. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.
(a) Rights, preferences and restrictions attached to shares
The Company has one class of equity shares having a par value of Re. 1 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
M. (i) The Company has investment in Grauer & Weil (Thailand) Limited of - Rs. 83.83 Lacs (PY Rs. 83.83 Lacs). The net worth of the company has fully eroded. The management has taken several steps to revive the performance of this company viz. change in the local management, more proactive monitoring of performance, linkage of remuneration packages to performance and aggressive sales plans. The management considers this as strategic investment. Based on the projected future earnings, the management is of the opinion that the diminution in value of investment is temporary and that no provision is required, upon which, the auditors being unable to make an informed judgment, have placed their reliance.
(ii) During the year, Company has subscribed and made part payment for 50,000 Equity shares @ 50 TBH each and 49,000 Equity shares @ 75 TBH each (PY 50,000 Equity shares @ 50 TBH each) in Growel Chemicals Company Limited, a wholly owned subsidiary company, amounting to Rs. 116.70 Lacs (PY Rs. 46.14 Lacs).
Previous year''s figures are in brackets.
Q. Disclosure pursuant to Accounting Standard (AS - 18) - Related Party Transactions (i) List of Related Parties Subsidiaries
Grauer & Weil (Shanghai) Limited Grauer & Weil (UK) Limited Growel Chemicals Company Limited Associates
Growel Goema (I) Private Limited Growel Sidasa Industries Private Limited Grauer & Weil (Thailand) Limited
Mar 31, 2016
a. Basis of Accounting:
The Financial Statements are prepared in accordance with the generally accepted accounting principles in India. The Company has prepared these financial statements to comply in all material aspects with the Accounting Standards notified under section 133 of the Companies Act 2013, read together with Rule 7 of the Companies (Accounts) Rules 2014. The Financial statements have been prepared on an accrual basis and under the historical cost convention (except for revaluation of certain assets on merger).
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year. All assets and liabilities have been classified as current or non-current as per criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization in cash and cash equivalents the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
b. Use of Estimates:
The preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
c. Revenue Recognition:
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognized:
Revenue from the sale of products is recognized upon passage of title to the customer, which generally coincides with their delivery. Claims, if any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other divisions is included in the Sales at transfer price and are capitalized by other division.
Benefit on account of entitlement to import duty free materials under the âDuty Entitlement Exemption Certificateâ (DEEC) is accounted in the year of import.
Income arising out of Business Conducting/License Fees is accounted at contracted rates, keeping in view, the collectability of the resulting receivables is reasonably assured and is disclosed net of indirect taxes, if any.
Revenue from amenities provided is recognized at value of service and is disclosed net of indirect taxes, if any. Recoveries made against common area maintenance expenses are netted of against relevant expenses.
Income from operations in Paints division includes Job Contract receipts, net of payments made to sub contractors. The Company follows the âPercentage of Completion Methodâ of accounting for all contracts. The revenue from the execution of contracts is recognized proportionately with the degree of completion achieved under each contract, matching revenue with expenses incurred.
Interest income is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividend Income is recognized when the right to receive is established.
Insurance and other claims/refunds, due to uncertainty in realization are accounted for on acceptance/actual receipt basis.
d. Government Grants:
Government grants and subsidies and interest thereon are recognized when there is reasonable certainty that the grant/subsidy will be received and all conditions attached thereto will be complied with.
Government grants and subsidies receivable against an expense are deducted from such expense. If the grant/subsidy is not related to a specific expenditure, it is taken as income. Grant/subsidy receivable against a specific fixed asset is deducted from cost of the relevant fixed asset.
e. Fixed Assets and Depreciation:
Tangible fixed assets are stated at cost of acquisition/fair value including expenditure incurred during construction/erection less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributed cost of bringing the asset to working condition for its intended use. In respect of qualifying assets, related pre-operational expenses, including borrowing cost are also capitalized. Machinery spares which can be used only in connection with an item of fixed asset and whose use as per technical assessment is expected to be irregular are capitalized and depreciated over the residual life of the respective assets.
Intangible assets are stated at acquisition cost, net of accumulated amortization and provision for impairment, if any.
Expenditure incurred during the developmental and preliminary stages of Company''s new projects are carried forward under the head Capital Work-in-Progress.
Depreciation is provided on the revised useful life of assets and in the manner specified in Schedule II of the Companies Act, 2013
- On straight-line basis in respect of all assets.
- Assets individually costing Rs. 5000 or less are depreciated fully in the year of purchase.
Premium on leasehold land is amortized over its lease period.
Intangible assets are being amortized on straight-line method over a period of five years.
Additional depreciation arising on revaluation of the assets at its Paints division is adjusted against General Reserve.
Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized.
f. Impairment:
The carrying amount of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognized wherever the carrying amount of an asset exceeds its recoverable amount, which represents the greater of the net selling price and âValue in useâ of the assets. The estimated future cash flows considered for determining the value in use, are discounted to their present value at the weighted average cost of capital.
g. Investments:
Investments that are readily realizable, and are intended to be held for not more than one year from the date, on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. Current investments are carried at lower of cost or fair value. Long-term investments are carried at cost. However, provision for diminution is made to recognize a decline, other than temporary, in the value of the investments, such reduction being determined and made for each investment individually.
On disposal of investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the Statement of Profit and Loss.
h. Inventory:
Raw materials, Packing materials and Stores and Spares are valued at lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials, packing materials and stores and spares is determined on daily moving weighted average cost basis.
Work-in-progress and finished goods are valued at lower of cost and net realizable value. Cost includes direct materials and labor and a proportion of manufacturing overheads based on normal operating capacity.
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.
i. Research and Development:
Research and Development expenditure of revenue nature is written off in the year in which it is incurred and expenditure of capital nature is included in fixed assets and depreciation is provided on such assets as applicable.
j. Retirement and other Employee Benefits:
Short-term employee benefit is accounted in the period during which the services have been rendered.
The Company''s contribution to the Provident Fund is remitted to âEmployees Provident Fund Organisationâ based on fixed percentage of the eligible employee''s salary and charged to the Statement of Profit & Loss.
Superannuation benefits to certain employees, a defined contribution plan, as per Company''s scheme, have been funded with Life Insurance Corporation of India and contribution is charged to the Statement of Profit & Loss, when the contribution to the fund is due.
The Company''s Liability towards Gratuity being defined benefit plan is accounted for based on Actuarial valuation done at the year-end using the Projected Unit Credit Method. Actuarial gains & losses are charged to statement of Profit & Loss. The Gratuity liability is partly funded through a trust with the Life Insurance Corporation of India for employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is accounted for based on Actuarial valuation done at the year-end using Projected Unit Credit Method. Actuarial gains & losses are charged to the Statement of Profit & Loss. k. Foreign Currency Transactions:
Initial Recognition:
Transactions denominated in foreign currency are recorded at the exchange rate prevailing on the date of transactions.
Subsequent Recognition:
As at the reporting date, non-monetary items, which are carried in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction.
All monetary assets and liabilities in foreign currency are restated at the end of accounting period.
Exchange differences on restatement of all other monetary items are recognized in the Statement of Profit and Loss.
Forward Exchange Contracts:
The premium or discount arising at the inception of forward exchange contract entered into to hedge an existing asset / liability is amortized as expense or income over the life of the contract. Exchange difference on such a contract is recognized in the Statement of Profit and Loss in the reporting period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such a forward exchange contract is recognized as income or as expense for the period.
Forward exchange contracts outstanding as at the year end on account of firm commitment / highly probable forecast transactions are mark-to-market and the losses, if any, are recognized in the Statement of Profit and Loss and gains are ignored in accordance with the announcement of The Institute of Chartered Accountants of India on âAccounting for Derivatives'' issued in March 2008. l. Customs Duty and Excise Duty:
Excise Duty on finished goods stock lying at the factory is accounted for at the point of manufacture of goods and accordingly is considered for valuation of finished goods stock lying in the factories as on the Balance Sheet date. Similarly, custom duty on imported materials in transit/ lying in bonded warehouse is accounted for at the time of import/bonding of materials.
m. Borrowing Costs:
Borrowing cost includes interest, amortization of ancillary costs incurred in connection with the arrangement of borrowings directly attributable to the acquisition of or construction of qualifying assets till such time the assets are substantially ready for their intended use, are capitalized. All other borrowing costs are charged to revenue.
n. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is provided on the taxable income using the applicable tax rates and tax laws. Deferred tax assets and liabilities arising on account of timing difference and which are capable of reversal in subsequent periods are recognized using the tax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets pertaining to unabsorbed business loss & depreciation is recognized only to the extent of virtual certainty of it realization.
Minimum Alternative Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period. Such asset is reviewed at each Balance Sheet date and the carrying amount of the MAT credit asset is written down to the extent there is no longer a convincing evidence to the effect that the Company will pay normal income tax during the specified period.
o. Segment Reporting:
Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The Company''s operating business are organized and managed separately according to the nature of the products and services provided, with each segment representing strategic business unit that offers different products and serves different markets.
Segment Revenue & Results:
The Income and Expenses, which are not directly attributable to business segment, are shown as unallocated income and expenses. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business segment and consist principally all Fixed Assets, Trade Receivables, Inventories and Advances. Segment Liabilities primarily include Creditors, Other Liabilities / Provisions. Common assets and liabilities that cannot be allocated to any segment are shown as a part of unallocated corporate assets and liabilities.
p. Leases:
Operating Lease payments are recognized on a straight-line basis over the lease term. q. Cash and Cash Equivalents:
Cash and Cash equivalents for the purpose of cash flow statement comprise cash at Bank and in hand. r. Earnings per share:
Basic earnings per share 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.
For calculating diluted earnings per share the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
s. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation as a result of a past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of the obligation. A disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may but probably will not require an outflow of resources. Where there is a possible obligation or a present obligation that the likelihood of outflow of resources is remote, no provision or disclosure is made. Contingent Assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2015
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger, in accordance with the Companies Act, 2013 and the
applicable accounting standards.
All assets and liabilities have been classified as Current or Non
Current as per criteria set out in the Schedule III to the Companies
Act, 2013. Based on the nature of products and the time between the
acquisition of assets for processing and their realization in cash and
cash equivalents the Company has determined its operating cycle as
twelve months for the purpose of current and non-current classification
of assets and liabilities.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognized in the period in which the
results are known / materialised.
c. Revenue Recognition:
Revenue from the sale of goods is recognized upon passage of title to
the customer, which generally coincides with their delivery. Claims, if
any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other
divisions are included in the Sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty Entitlement Exemption Certificate" (DEEC) is accounted in
the year of import.
Income arising out of Business Conducting/License Fees are accounted at
contracted rates, keeping in view the collectability of the resulting
receivables is reasonably assured and is disclosed net of indirect
taxes, if any.
Revenue from amenities provided is recognized at value of service and
is disclosed net of indirect taxes, if any. Recoveries made against
common area maintenance expenses are netted of against relevant
expenses.
Income from operations in Paints division includes Job Contract
receipts, net of payments made to sub contractors. The Company follows
the "Percentage of Completion Method" of accounting for all
contracts. The revenue from the execution of contracts is recognized
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Government Grants:
Government grants and subsidies and interest thereon are recognized
when there is reasonable certainty that the grant/subsidy will be
received and all conditions attached thereto will be complied with.
Government grants and subsidies receivable against an expense are
deducted from such expense. If the subsidy/ grant is not related to a
specific expenditure, it is taken as income. Grant/subsidy receivable
against a specific fixed asset is deducted from cost of the relevant
fixed asset.
e. Fixed Assets and Depreciation:
i. Tangible fixed assets are stated at cost of acquisition/fair value
including expenditure incurred during construction/erection less
accumulated depreciation. The cost of an asset comprises its purchase
price and any directly attributed cost of bringing the asset to working
condition for its intended use. In respect of qualifying assets,
related pre-operational expenses, including borrowing cost are also
capitalised.
ii. Intangible assets are stated at acquisition cost, net of
accumulated amortisation and provision for impairment, if any.
iii. Expenditure incurred during the developmental and preliminary
stages of Company''s new projects are carried forward under the head
Capital Work-in-Progress.
iv. Depreciation is provided on the revised useful life of assets and
in the manner specified in Schedule II of the Companies Act, 2013:
- On straight-line basis in respect of all assets.
- Assets individually costing Rs. 5000 or less are depreciated fully in
the year of purchase.
v. Premium on leasehold land is amortised over its lease period.
vi. Intangible assets are being amortised on straight line method over
a period of five years.
vii. Additional depreciation arising on fair value of the assets at its
Paints division is adjusted against General Reserve.
f. Impairment:
The carrying amount of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on
external/internal factors. An impairment loss is recognized wherever
the carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price and "Value in use"
of the assets. The estimated future cash flows considered for
determining the value in use, are discounted to their present value at
the weighted average cost of capital.
g. Investments:
Investments that are readily realisable, and are intended to be held
for not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments. Current investments are carried at
lower of cost or fair value. Long-term investments are carried at cost.
However, provision for diminution is made to recognize a decline, other
than temporary, in the value of the investments, such reduction being
determined and made for each investment individually.
h. Inventory:
i. Inventory is valued as follows:
Stores, Spares, Raw Materials, Packing Materials, Finished Goods and
Work-In-Progress: At lower of cost and Net Realisable Value.
ii. Cost of Raw Materials, Stores, Spares and Packing Materials is
determined on Weighted Average Basis. Cost of Finished Goods and
Work-In-Progress is determined by considering materials, labour and
other related direct expenses.
i. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
j. Retirement and other Employee Benefits:
Short-term employee benefit is accounted in the period during which the
services have been rendered.
The Company''s contribution to the Provident Fund is remitted to
"Employees Provident Fund Organisation" based on fixed percentage
of the eligible employee''s salary and charged to statement of Profit &
Loss.
Superannuation benefits to certain employees, a defined contribution
plan, as per Company''s scheme, have been funded with Life Insurance
Corporation of India and contribution is charged to statement of Profit
& Loss, when the contribution to the fund is due.
The Company''s Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year-end using
the Projected Unit Credit Method. Actuarial gains & losses are charged
to statement of Profit & Loss. The Gratuity liability is partly funded
through a trust with the Life Insurance Corporation of India for
employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is
accounted for based on Actuarial valuation done at the year-end using
Projected Unit Credit Method. Actuarial gains & losses are charged to
statement of Profit & Loss.
k. Foreign Currency Transactions:
Initial Recognition:
Transactions denominated in foreign currency are recorded at the
exchange rate prevailing on the date of transactions.
Subsequent Recognition:
As at the reporting date, non-monetary items which are carried in terms
of historical cost denominated in a foreign currency are reported using
the exchange rate at the date of the transaction.
All monetary assets and liabilities in foreign currency are restated at
the end of accounting period.
Exchange differences on restatement of all other monetary items are
recognized in the Statement of Profit and Loss.
Forward Exchange Contracts:
The premium or discount arising at the inception of forward exchange
contract entered into to hedge an existing asset / liability is
amortized as expense or income over the life of the contract. Exchange
difference on such a contract is recognized in the Statement of Profit
and Loss in the reporting period in which the exchange rates change.
Any profit or loss arising on cancellation or renewal of such a forward
exchange contract is recognized as income or as expense for the period.
Forward exchange contracts outstanding as at the year end on account of
firm commitment / highly probable forecast transactions are
mark-to-market and the losses, if any, are recognized in the Statement
of Profit and Loss and gains are ignored in accordance with the
announcement of Institute of Chartered Accountants of India on
''Accounting for Derivatives'' issued in March 2008.
l. Customs Duty and Excise Duty:
Customs Duty and Excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse.
m. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue.
n. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognized using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deferred tax assets pertaining to unabsorbed business
loss & depreciation is recognized only to the extent of virtual
certainty of it realisation.
Minimum Alternative Tax credit is recognized, as an asset only when and
to the extent there is convincing evidence that the Company will pay
normal income tax during the specified period. Such asset is reviewed
at each Balance Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax
during the specified period.
o. Segment Reporting:
i. Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The
Company''s operating business are organised and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
ii. Segment Revenue & Results:
The Income and Expenses, which are not directly attributable to
business segment, are shown as unallocated income and expenses.
iii. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business
segment and consists principally all Fixed Assets, Debtors, Inventories
and Advances. Segment Liabilities primarily include Creditors, Other
Liabilities/ Provisions. Common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
p. Leases:
Operating Lease payments are recognized on a straight-line basis over
the lease term.
q. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made. Contingent
Assets are neither recognized nor disclosed in the financial
statements.
r. Change in Accounting Policy:
i) Effective 1st April, 2014, the Company has charged depreciation
based on the revised remaining useful life of assets as per the
requirements of Schedule II of the Companies Act, 2013. Due to above,
depreciation charge for the year ended 31st March, 2015 is higher by
Rs. 461.56 Lacs and the profit for the year is lower by the said
amount.
Further as per Para 7(b) of Schedule II, the Company has recognized the
charge on account of transitional depreciation amounting to Rs. 219.60
Lacs (Net of Deferred Tax Rs. 113.08 Lacs) to the opening balance of
Reserves and Surplus.
ii) During the year, the Company has changed the method of depreciation
from Written down Value Method to Straight Line Method on certain
assets procured before 1st April, 1991 at Kandivli and 31st December,
1986 at its Paints Division. The impact on Profits on account of the
said change is not material.
Mar 31, 2014
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger, in accordance with the Companies Act, 1956 and the
applicable Accounting Standards notified by the Companies (Accounting
Standard) Rules, 2006.
All assets and liabilities have been classified as Current or Non
Current as per criteria set out in the schedule in to the Companies
Act, 1956.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognised in the period in which the
results are known / materialised.
c. Revenue Recognition:
Revenue from the sale of goods are recognised upon passage of title to
the customer which generally coincides with their delivery. Claims, if
any, in respect of sales are accounted for as and when settled.
Equipments manufactured by the Engineering Division for use by other
divisions are included in the Sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty Entitlement Exemption Certificate" (DEEC) is accounted in the
year of import.
Income arising out of Business Conducting/License Fees are accounted at
contracted rates, keeping in view the collectability of the resulting
receivables is reasonably assured and is disclosed net of indirect
taxes, if any.
Revenue from amenities provided is recognised at value of service and
is disclosed net of indirect taxes, if any. Recoveries made against
common area maintenance expenses are netted of against relevant
expenses.
Income from operations in Paints division includes Job Contract
receipts, net of payments made to sub contractors. The Company follows
the "Percentage of Completion Method" of accounting for all contracts.
The revenue from the execution of contracts is recognised
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Government Grants:
Government grants and subsidies are recognised when there is reasonable
certainty that the grant/subsidy will be received and all conditions
attached thereto will be complied with.
Government grants and subsidies receivable against an expense are
deducted from such expense. If it is not related to a specific
expenditure, it is taken as income. Grant/subsidy receivable against a
specific fixed asset is deducted from cost of the relevant fixed asset.
e. Fixed Assets and Depreciation:
I. Tangible fixed assets are stated at cost of acquisition/fair value
including expenditure incurred during construction/erection less
accumulated depreciation. The cost of an asset comprises its purchase
price and any directly attributed cost of bringing the asset to working
condition for its intended use. In respect of qualifying assets,
related pre-operational expenses, including borrowing cost are also
captalised.
Intangible assets are stated at acquisition cost, net of accumulated
amortisation and provision for impairment, if any.
II. Expenditure incurred during the developmental and preliminary
stages of Company''s new projects are carried forward under the head
Capital Work-in-Progress.
III. Depreciation is provided in the manner and at the rates specified
in Schedule XIV of the Companies Act, 1956:
- On Written Down Value basis in respect of all assets acquired before
01/04/91 at Kandivli and assets acquired up to 31/12/1986 at its Paints
Division.
- On straight-line basis in respect of all other assets.
- Assets individually costing Rs. 5000 or less are depreciated fully in
the year of purchase.
IV. Premium on leasehold land is amortised over its lease period
unless it is a perpetual lease.
V. Intangible assets are being amortised on straight line method over
a period of five years.
VI. Additional depreciation arising on fair value of the assets at its
Paints division is adjusted against General Reserve.
f. Impairment:
Impairment loss is recognised wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognised as an
expense in the statement of profit and loss and the carrying amount of
the asset is reduced to its recoverable amount. Previously recognised
impairment loss is further provided or revised depending on changes in
circumstances.
g. Investments:
Investments that are readily realisable, and are intended to be held
for not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments. Current investments are carried at
lower of cost or fair value. Long-term investments are carried at cost.
However, provision for diminution is made to recognise a decline, other
than temporary, in the value of the investments, such reduction being
determined and made for each investment individually.
h. Inventory:
i. Inventory is valued as follows:
Stores, Spares, Raw Materials, Packing Materials, Finished Goods and
Work-in-Progress: At lower of cost and Net Realisable Value.
ii. Cost of Raw Materials, Stores, Spares and Packing Materials is
determined on Weighted Average Basis. Cost of Finished Goods and
Work-in-Progress is determined by considering materials, labour and
other related direct expenses.
i. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
j. Employee Benefits:
Short-term employee benefit is accounted in the period during which the
services have been rendered.
The Company''s contribution to the Provident Fund is remitted to
"Employees Provident Fund Organisation" based on fixed percentage of
the eligible employee''s salary and charged to statement of Profit &
Loss.
Superannuation benefits to certain employees, a defined contribution
plan, as per Company''s scheme, have been funded with Life Insurance
Corporation of India and contribution is charged to statement of Profit
& Loss, when the contribution to the fund is due.
The Company''s Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year-end using
the Projected Unit Credit Method. Actuarial gains & losses are charged
to statement of Profit & Loss. The Gratuity liability is partly funded
through a trust with the Life Insurance Corporation of India for
employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is
accounted for based on Actuarial valuation done at the year-end using
Projected Unit Credit Method. Actuarial gains & losses are charged to
statement of Profit & Loss.
k. Foreign Currency Transactions:
Transactions arising in foreign currencies during the year are recorded
at the exchange rates prevailing on the date of the transactions.
Foreign currency monetary items are converted into Rupee equivalent at
the exchange rates prevailing as on Balance Sheet date. Non- monetary
items are carried at historical cost denominated in a foreign currency
and are reported using the exchange rate at the date of transaction.
Exchange Difference arising on settlement / restatement of monetary
items are recognised as income or as expenses in the year in which they
arise. Premium or discount on Forward Contracts is amortised over the
life of such contracts and is recognised as income or expenses. Any
Profit or Loss arising in cancellation or renewal of Forward Contract
is recognised as income or as expense for the year.
l. Customs Duty and Excise Duty:
Customs Duty and Excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse.
m. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue.
n. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deferred tax assets pertaining to unabsorbed business
loss & depreciation is recognised only to the extent of virtual
certainty of it realisation.
Minimum Alternative Tax credit is recognised, as an asset only when and
to the extent there is convincing evidence that the Company will pay
normal income tax during the specified period. Such asset is reviewed
at each Balance Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax
during the specified period.
o. Segment Reporting:
i. Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The
Company''s operating business are organised and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
ii. Segment Revenue & Results:
The Income and Expenses, which are not directly attributable to
business segment, are shown as unallocated income and expenses.
iii. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business
segment and consists principally all Fixed Assets, Debtors, Inventories
and Advances. Segment Liabilities primarily include Creditors, Other
Liabilities / Provisions. Common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
p. Leases:
Operating Lease payments are recognised on a straight-line basis over
the lease term.
q. Provision & Contingent Liabilities:
The Company recognises a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made.
(a) Rights, preferences and restrictions attached to shares
The Company has one class of equity shares having a par value of Re.1
per share. Each shareholder is eligible for one vote per share held.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation, the
equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amounts, in proportion
to their shareholding.
Nature of Security
(a) Term loan from The Saraswat Co-op Bank secured by pari-passu first
charge by way of joint mortgage of deposit of title deeds of immovable
properties of the Company at Kandivli.
Terms of repayment
i The Term loan outstanding as on 31st March, 2014 amounting Rs. 217.48
Lacs is to be repaid in 14 monthly installments of Rs. 15.00 Lacs each
and last 15th installment of Rs. 7.48 Lacs.
ii The Term loan outstanding as on 31st March, 2014 amounting Rs.
2765.76 Lacs is to be repaid in 31 monthly installments of Rs. 75.00
Lacs each and last 32nd installment of Rs. 440.76 Lacs.
iii The Term loan outstanding as on 31st March, 2014 amounting Rs.
687.55 Lacs is to be repaid in 32 monthly installments of Rs. 20.83
Lacs each and last 33rd installment of Rs. 20.99 Lacs.
(b) Term loan from Woori Bank is secured by pari-passu first charge
along with The Saraswat Co-op Bank by way of joint mortgage of deposit
of title deeds of immovable properties of the Company at Kandivli.
Terms of repayment
i The Term loan outstanding as on 31st March, 2014 amounting Rs.
1600.00 Lacs is to be repaid in 41 monthly installments of Rs. 38.10
Lacs each and last 42nd installment of Rs. 37.90 Lacs.
Nature of Security
(a) Working capital facilities are secured by hypothecation of all
stocks, moveable assets and book debts by way of first charge on
pari-passu basis and are further collaterally secured by second
pari-passu charge on the block assets of Shopping Mall at Kandivli,
Mumbai. Working Capital facilities from Punjab National Bank are
further collaterally secured by first charge on the block of assets of
Samba unit.
Mar 31, 2013
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger, in accordance with the Companies Act, 1956 and the
applicable Accounting Standards notified by the Companies (Accounting
Standard) Rules, 2006.
All assets and liabilities have been classified as Current or Non-
Current as per criteria set out in the schedule in to the Companies
Act, 1956.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognised in the period in which the
results are known / materialized.
c. Revenue Recognition:
Revenue from the sale of goods are recognised upon passage of title to
the customer which generally coincides with their delivery. Claims, if
any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other
divisions are included in the Sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty Entitlement Exemption Certificate" (DEEC) is accounted in the
year of import.
Income arising out of Business Conducting/License Fees are accounted at
contracted rates, keeping in view the collectability of the resulting
receivables is reasonably assured and is disclosed net of indirect
taxes, if any.
Revenue from amenities provided is recognized at value of service and
is disclosed net of indirect taxes, if any. Recoveries made against
common area maintenance expenses are netted of against relevant
expenses.
Income from operations in Paints division includes Job Contract
receipts, net of payments made to Sub Contractors. The Company follows
the "Percentage of Completion Method" of accounting for all contracts.
The revenue from the execution of contracts is recognised
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Fixed Assets and Depreciation:
I. Tangible Fixed assets are stated at cost of acquisition/fair value
including expenditure incurred during construction / erection less
accumulated depreciation. The cost of an asset comprises its purchase
price and any directly attributed cost of bringing the asset to working
condition for its intended use. In respect of qualifying assets,
related pre-operational expenses, including borrowing cost are also
capitalised.
Intangible assets are stated at acquisition cost, net of accumulated
amortisation and provision for impairment, if any.
II. Expenditure incurred during the developmental and preliminary
stages of Company''s new projects are carried forward under the head
capital work in Progress.
III. Depreciation is provided in the manner and at the rates specified
in Schedule XIV of the Companies Act, 1956:
- On Written Down Value basis in respect of all assets acquired before
01/04/91 at Kandivli and assets acquired upto 31/12/1986 at its Paints
Division.
- On straight line basis in respect of all other assets.
IV. Premium on leasehold land is amortised over its lease period;
unless it is a perpetual lease.
V. Intangible assets are being amortised on straight line method over
a period of five years.
VI. Additional depreciation arising on fair value of the assets at its
Paints division is adjusted against General Reserve.
e. Impairment:
Impairment loss is recognised wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognised as an
expense in the statement of profit and loss and the carrying amount of
the asset is reduced to its recoverable amount. Previously recognised
impairment loss is further provided or revised depending on changes in
circumstances.
f. Investments:
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as long term investments. Current investments are carried at
lower of cost or fair value. Long-term investments are carried at cost.
However, provision for diminution is made to recognise a decline, other
than temporary, in the value of the investments, such reduction being
determined and made for each investment individually.
g. Inventory:
i. Inventory is valued as follows:
Stores, Spares, Raw Materials, Packing Materials, Finished Goods and
Work  In  Progress : At lower of cost and Net Realisable Value. ii.
Cost of Raw Materials, Stores, Spares and Packing Materials is
determined on Weighted Average Basis. Cost of Finished Goods and
Work  In  Progress is determined by considering materials, labour and
other related direct expenses.
h. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
i. Employee Benefits:
Short-term employee benefit is accounted in the period during which the
services have been rendered.
The Company''s contribution to the Provident Fund is remitted to
"Employees Provident Fund Organisation" based on fixed percentage of
the eligible employee''s salary and charged to statement of Profit &
Loss.
Superannuation benefits to certain employees, a defined contribution
plan, as per Company''s scheme, have been funded with Life Insurance
Corporation of India and contribution is charged to statement of Profit
& Loss , when the contribution to the fund is due.
The Company''s Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year end using
the Projected Unit Credit Method. Actuarial gains & losses are charged
to statement of Profit & Loss. The Gratuity liability is partly funded
through a trust with the Life Insurance Corporation of India for
employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is
accounted for based on Actuarial valuation done at the year-end using
projected unit credit method. Actuarial gains & losses are charged to
statement of Profit & loss.
j. Foreign Currency Transactions:
Transactions arising in foreign currencies during the year are recorded
at the exchange rates prevailing on the date of the transactions.
Foreign currency monetary items are converted into Rupee equivalent at
the exchange rates prevailing as on Balance Sheet date. Non- monetary
items are carried at historical cost denominated in a foreign currency
and are reported using the exchange rate at the date of transaction.
Exchange Difference arising on settlement / restatement of monetary
items are recognised as income or as expenses in the year in which they
arise. Premium or discount on Forward Contracts is amortised over the
life of such contracts and is recognised as income or expenses. Any
Profit or Loss arising in cancellation or renewal of Forward Contract
is recognised as income or as expense for the year.
k. Customs Duty and Excise Duty:
Customs Duty and Excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse.
l. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue.
m. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deferred tax assets pertaining to unabsorbed business
loss & depreciation is recognized only to the extent of virtual
certainty of it realization.
Minimum Alternative Tax credit is recognised as an asset only when and
to the extent there is convincing evidence that the company will pay
normal income tax during the specified period. Such asset is reviewed
at each Balance Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax
during the specified period.
n. Segment Reporting:
i. Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The
Company''s operating business are organized and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
i. Segment Revenue & Results:
The Income and Expenses which are not directly attributable to business
segment are shown as unallocated income and expenses.
ii. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business
segment and consists principally all Fixed Assets, Debtors, Inventories
and Advances. Segment Liabilities primarily include Creditors, Other
Liabilities / Provisions. Common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
o. Leases:
Operating Lease payments are recognised on a straight line basis over
the lease term.
p. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made.
Mar 31, 2012
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger, in accordance with the Companies Act, 1956 and the
applicable Accounting Standards notified by the Companies (Accounting
Standard) Rules, 2006.
All assets and liabilities have been classified as Current or Non-
Current as per criteria set out in the schedule in to the Companies
Act, 1956.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognised in the period in which the
results are known / materialized.
c. Revenue Recognition:
Revenue from the sale of goods are recognised upon passage of title to
the customer which generally coincides with their delivery. Claims, if
any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other
divisions are included in the Sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty Entitlement Exemption Certificate" (DEEC) is accounted in
the year of import.
Income arising out of Business Conducting/License Fees are accounted at
contracted rates, keeping in view the collectability of the resulting
receivables is reasonably assured and is disclosed net of indirect
taxes, if any.
Revenue from amenities provided is recognized at value of service and
is disclosed net of indirect taxes, if any. Recoveries made against
common area maintenance expenses are netted of against relevant
expenses.
Income from operations in Paints division includes Job Contract
receipts, net of payments made to Sub Contractors. The Company follows
the "Percentage of Completion Method" of accounting for all
contracts. The revenue from the execution of contracts is recognised
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Fixed Assets and Depreciation:
I. Tangible Fixed assets are stated at cost of acquisition/fair value
including expenditure incurred during construction / erection less
accumulated depreciation. The cost of an asset comprises its purchase
price and any directly attributed cost of bringing the asset to working
condition for its intended use. In respect of qualifying assets,
related pre-operational expenses, including borrowing cost are also
captalised.
Intangible assets are stated at acquisition cost, net of accumulated
amortisation and provision for impairment, if any.
II. Expenditure incurred during the developmental and preliminary
stages of Company's new projects are carried forward under the head
capital work in Progress.
III. Depreciation is provided in the manner and at the rates specified
in Schedule XIV of the Companies Act, 1956:
- On Written Down Value basis in respect of all assets acquired before
01/04/91 at Kandivli and assets acquired upto 31/12/1986 at its Paints
Division.
- On straight line basis in respect of all other assets.
IV! Premium on leasehold land is amortised over its lease period;
unless it is a perpetual lease.
V Intangible assets are being amortised on straight line method over a
period of five years.
VI. Additional depreciation arising on fair value of the assets at its
Paints division is adjusted against General Reserve II
e. Impairment:
Impairment loss is recognised wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognised as an
expense in the statement of profit and loss and the carrying amount of
the asset is reduced to its recoverable amount. Previously recognised
impairment loss is further provided or revised depending on changes in
circumstances.
f. Investments:
Investments that are readily realisable and are intended to be held for
not more than one year from the date, on which such investments are
made, are classified as current investments. All other investments are
classified as long term investments. Current investments are carried at
lower of cost or fair value. Long-term investments are carried at cost.
However, provision for diminution is made to recognise a decline, other
than temporary, in the value of the investments, such reduction being
determined and made for each investment individually.
g. Inventory:
i. Inventory is valued as follows:
Stores, Spares, Raw Materials, Packing Materials, Finished Goods and
Work - In - Progress: At lower of cost and Net Realisable Value.
ii. Cost of Raw Materials, Stores, Spares and Packing Materials is
determined on Weighted Average Basis. Cost of Finished Goods and Work -
In - Progress is determined by considering materials, labour and other
related direct expenses.
h. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
i. Employee Benefits:
Short-term employee benefit is accounted in the period during which the
services have been rendered.
The Company's contribution to the Provident Fund is remitted to
"Employees Provident Fund Organisation" based on fixed percentage
of the eligible employee's salary and charged to Profit & Loss Account.
Superannuation benefits to certain employees, a defined contribution
plan, as per Company's scheme, have been funded with Life Insurance
Corporation of India and contribution is charged to statement of Profit
& Loss , when the contribution to the fund is due.
The Company's Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year end using
the Projected Unit Credit Method. Actuarial gains & losses are charged
to statement of Profit & Loss. The Gratuity liability is partly funded
through a trust with the Life Insurance Corporation of India for
employees of Paints Division.
Compensated leave encashment being other long-term employee benefit is
accounted for based on Actuarial valuation done at the year-end using
projected unit credit method. Actuarial gains & losses are charged to
statement of Profit & loss. j. Foreign Currency Transactions:
Transactions arising in foreign currencies during the year are recorded
at the exchange rates prevailing on the date of the transactions.
Foreign currency monetary items are converted into Rupee equivalent at
the exchange rates prevailing as on Balance Sheet date. Non- monetary
items are carried at historical cost denominated in a foreign currency
and are reported using the exchange rate at the date of transaction.
Exchange Difference arising on settlement / restatement of monetary
items are recognised as income or as expenses in the year in which they
arise. Premium or discount on Forward Contracts is amortised over the
life of such contracts and is recognised as income or expenses. Any
Profit or Loss arising in cancellation or renewal of Forward Contract
is recognised as income or as expense for the year. k. Customs Duty
and Excise Duty:
Customs Duty and Excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse. l. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue. m. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deferred tax assets pertaining to unabsorbed business
loss & depreciation is recognized only to the extent of virtual
certainty of it realization.
Minimum Alternative Tax credit is recognised as an asset only when and
to the extent there is convincing evidence that the company will pay
normal income tax during the specified period. Such asset is reviewed
at each Balance Sheet date and the carrying amount of the MAT credit
asset is written down to the extent there is no longer a convincing
evidence to the effect that the Company will pay normal income tax
during the specified period.
n. Segment Reporting:
i. Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The
Company's operating business are organized and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
ii. Segment Revenue & Results:
The Income and Expenses which are not directly attributable to business
segment are shown as unallocated income and expenses.
iii. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business
segment and consists principally all Fixed Assets, Debtors, Inventories
and Advances. Segment Liabilities primarily include Creditors, Other
Liabilities / Provisions. Common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
o. Leases:
Operating Lease payments are recognised on a straight line basis over
the lease term.
p. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made.
Mar 31, 2011
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger under a scheme approved by The hon'ble Board for
Industrial & financial Reconstruction (BIfR), in accordance with the
companies Act, 1956 and the applicable Accounting standards notified by
the companies (Accounting standard) Rules, 2006.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognised in the period in which the
results are known / materialized.
c. Revenue Recognition:
Revenue from the sale of goods are recognised upon passage of title to
the customer which generally coincides with their delivery. claims, if
any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the engineering Division for use by other
divisions are included in the sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty entitlement exemption certificate" (Deec) is accounted in the
year of import.
Income arising out of Business conducting/License fees are accounted at
contracted rates, keeping in view the collectability of the resulting
receivables is reasonably assured and is disclosed net of indirect
taxes, if any.
Revenue from amenities provided is recognized at value of service and
is disclosed net of indirect taxes, if any. Recoveries made against
common area maintenance expenses are netted of against relevant
expenses.
Income from operations in Paints division includes Job contract
receipts, net of payments made to sub contractors. The company follows
the "Percentage of completion Method" of accounting for all contracts.
The revenue from the execution of contracts is recognised
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Fixed Assets and Depreciation:
I. fixed assets are stated at cost of acquisition/fair value including
expenditure incurred during construction / erection less accumulated
depreciation. The cost of an asset comprises its purchase price and any
directly attributed cost of bringing the asset to working condition for
its intended use.
II. expenditure incurred during the developmental and preliminary
stages of company's new projects are carried forward under the head
capital work in Progress.
III. Depreciation is provided in the manner and at the rates specified
in schedule XIV of the companies Act, 1956:
- On Written Down Value basis in respect of all assets acquired before
01/04/91 at Kandivli and assets acquired upto 31/12/1986 at its Paints
Division.
- On straight line basis in respect of all other assets. I V. Premium
on leasehold land is amortised over its lease period; unless it is a
perpetual lease.
V. computer software is being amortised on straight line method over a
period of five years.
VI. Additional depreciation arising on fair value of the assets at its
Paints division is adjusted against General Reserve II
e. Impairment:
Impairment loss is recognised wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognised as an
expense in the statement of profit and loss and the carrying amount of
the asset is reduced to its recoverable amount. Previously recognised
impairment loss is further provided or revised depending on changes in
circumstances.
f. Investments:
Long Term Investments are stated at cost of acquisition or book value.
Book value being arrived at after adjusting provision for diminution in
value, provided such diminution is other than temporary. current
investments are stated at lower of cost and fair value.
g. Inventories:
i. Inventories are valued as follows:
Stores, spares, Raw Materials, Packing Materials, finished Goods and
Work à In à Progress : At lower of cost and Net Realisable Value.
ii. cost of Raw Materials, stores, spares and Packing Materials is
determined on Weighted Average Basis. cost of finished Goods and Work Ã
In à Progress is determined by considering materials, labour and other
related direct expenses.
h. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
i. Employee Benefits:
short term employee benefit is accounted in the period during which the
services have been rendered.
The company's contribution to the Provident fund is remitted to
"employees Provident fund Organisation" based on fixed percentage of
the eligible employee's salary and charged to Profit & Loss Account.
superannuation benefits to certain employees, a defined contribution
plan, as per company's scheme, have been funded with Life Insurance
corporation of India and contribution is charged to Profit & Loss
Account, when the contribution to the fund is due.
The company's Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year end using
the Projected Unit credit Method. Actuarial gains & losses are charged
to Profit & Loss Account. The Gratuity liability is partly funded
through a trust with the Life Insurance corporation of India for
employees of Paints Division.
Compensated leave encashment being other long term employee benefit is
accounted for based on Actuarial valuation done at the year end using
projected unit credit method. Actuarial gains & losses are charged to
Profit & loss Account.
j. Foreign Currency Transactions:
Transactions arising in foreign currencies during the year are recorded
at the exchange rates prevailing on the date of the transactions.
foreign currency monetary items are converted into Rupee equivalent at
the exchange rates prevailing as on Balance sheet date. Non- monetary
items are carried at historical cost denominated in a foreign currency
and are reported using the exchange rate at the date of transaction.
exchange Difference arising on settlement / restatement of monetary
items are recognised as income or as expenses in the year in which they
arise. Premium or discount on forward contracts is amortised over the
life of such contracts and is recognised as income or expenses. Any
Profit or Loss arising in cancellation or renewal of forward contract
is recognised as income or as expense for the year.
k. Customs Duty and Excise Duty:
customs Duty and excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse.
l. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue.
m. Income Taxes:
Tax expense comprises both current and deferred taxes. current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deffered tax assets pertaining to unabsorbed business
loss & depreciation is recognized only to the extent of virtual
certainty of it realization.
n. Segment Reporting:
i. Identification of segments:
The company has disclosed Business segment as the Primary segment. The
company's operating business are organized and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
ii. segment Revenue & Results:
The Income and expenses which are not directly attributable to business
segment are shown as unallocated income and expenses.
iii. segment Assets & Liabilities:
segment Assets include all operating assets used by the business
segment and consists principally all fixed Assets, Debtors, Inventories
and Advances. segment Liabilities primarily include creditors, Other
Liabilities / Provisions. common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
o. Leases:
Operating Lease payments are recognised on a straight line basis over
the lease term.
p. Provision & Contingent Liabilities:
The company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made.
Mar 31, 2010
A. Basis of Accounting:
The accounts have been prepared on the accrual basis of accounting,
under the historical cost convention and fair valuation of certain
assets on merger under a Scheme approved by The Honble Board for
Industrial & Financial Reconstruction (BIFR), in accordance with the
Companies Act, 1956 and the applicable Accounting Standards notified by
die Companies (Accounting Standard) Rules, 2006.
b. Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect, the reported amount of assets and liabilities on the
date of the financial statement and a reported amount of revenues and
expenses during the reporting period. Difference between the actual
expenses and estimates are recognised in the period in which the
results are known / materialized.
c. Revenue Recognition:
Revenue from the sale of goods are recognised upon passage of tide to
the customer which generally coincides with their delivery. Claims, if
any, in respect of sales are accounted for as and when settled.
Equipment manufactured by the Engineering Division for use by other
divisions are included in the Sales at transfer price and are
capitalised by other division.
Benefit on account of entitlement to import duty free materials under
the "Duty Entitlement Exemption Certificate" (DEEC) is accounted in the
year of import.
Income arising out of Business Conducting Fees are accounted at
contracted rates.
Income from operations in Paints division includes Job Contract
receipts, net of payments made to Sub Contractors. The Company follows
the "Percentage of Completion Method" of accounting for all contracts.
The revenue from the execution of contracts is recognised
proportionately with the degree of completion achieved under each
contract, matching revenue with expenses incurred.
d. Fixed Assets and Depreciation:
I. Fixed assets are stated at cost of acquisition/fair value including
expenditure incurred during construction / erection less accumulated
depreciation. The cost of an asset comprises its purchase price and any
directly attributed cost of bringing the asset to working condition for
its intended use.
II. Expenditure incurred during the developmental and preliminary
stages of Companys new projects are carried forward under the head
capital work in Progress.
III. Depreciation is provided in the manner and at the rates specified
in Schedule XIV of die Companies Act, 1956:
- On Written Down Value basis in respect of all assets acquired before
01 /04/91 at Kandivti and assets acquired upto 31 /12/1986 at its
Paints Division.
- On straight line basis in respect of all other assets.
IV Premium on leasehold land is amortised over its lease period; unless
it is a perpetual lease.
V Computer software is being amortised on straight line method over a
period of five years.
VI. Additional depreciation arising on fair value of die assets at its
Paints division is adjusted against General Reserve II
e. impairment:
Impairment loss is recognised wherever the carrying amount of an asset
is in excess of its recoverable amount and the same is recognised as an
expense in the statement of profit and loss and the carrying amount of
the asset is reduced to its recoverable amount. Previously recognised
impairment loss is further provided or revised depending on changes in
circumstances.
f. Investments:
Long Term Investments are stated at cost of acquisition or book value.
Book value being arrived at after adjusting provision for diminution in
value, provided such diminution is otfier than temporary. Current
investments are stated at lower of cost and fair value.
g. Inventories:
i. inventories are valued as follows:
Stores, Spares, Raw Materials, Packing Materials, Finished Goods and
Work - In - Progress : At lower of cost and Net Realisable Value.
ii. Cost of Raw Materials, Stores, Spares and Packing Materials is
determined on Weighted Average Basis. Cost of Finished Goods and Work -
In - Progress is determined by considering materials, labour and other
related direct expenses.
h. Research and Development:
Research and Development expenditure of revenue nature is written off
in the year in which it is incurred and expenditure of capital nature
is included in fixed assets and depreciation is provided on such assets
as applicable.
i. Employee Benefits:
Short term employee benefit is accounted in the period during which the
services have been rendered.
The Companys contribution to the Provident Fund is remitted to
"Employees Provident Fund Organisation" based on fixed percentage of
the eligible employees salary and charged to Profit & Loss Account.
Superannuation benefits to certain employees, a defined contribution
plan, as per Companys scheme, have been funded with Life Insurance
Corporation of India and contribution is charged to Profit & Loss
Account, when the contribution to the fund is due.
The Companys Liability towards Gratuity being defined benefit plan is
accounted for based on Actuarial valuation done at the year end using
the Projected Unit Credit Method. Actuarial gains & losses are charged
to Profit & Loss Account. The Gratuity liability is partly funded
through a trust with the Life Insurance Corporation of India for
employees of Paints Division.
Compensated leave encashment being other long term employee benefit is
accounted for based on Actuarial valuation done at the year end using
projected unit credit method .Actuarial gains & losses are charged to
Profit & loss Account.
j. Foreign Currency Transactions:
Transactions arising in foreign currencies during the year are recorded
at the exchange rates prevailing on the date of the transactions.
Foreign currency monetary items are converted into Rupee equivalent at
the exchange rates prevailing as on Balance Sheet date. Non- monetary
items are carried at historical cost denominated in a foreign currency
and are reported using the exchange rate at the date of transaction.
Exchange Difference arising on settlement / restatement of monetary
items are recognised as income or as expenses in the year in which they
arise. Premium or discount on Forward Contracts is amortised over the
life of such contracts and is recognised as income or expenses. Any
Profit or Loss arising in cancellation or renewal of Forward Contract
is recognised as income or as expense for the year.
k. Customs Duty and Excise Duty:
Customs Duty and Excise Duty have been accounted on the basis of both
payments made in respect of goods cleared as well as on provision made
for goods lying in bonded warehouse.
l. Borrowing Costs:
Interest and other borrowing costs attributable to the acquisition of
or construction of qualifying assets till the date of commercial use of
the assets are capitalised. All other borrowing costs are charged to
revenue.
m. Income Taxes:
Tax expense comprises both current and deferred taxes. Current Tax is
provided on the taxable income using the applicable tax rates and tax
laws. Deferred tax assets and liabilities arising on account of timing
difference and which are capable of reversal in subsequent periods are
recognised using the tax rates and tax laws that have been enacted or
substantively enacted. Provision for Wealth Tax liability is estimated
and provided for. Deffered tax assets pertaining to unabosorbed
business loss & depreciation is recognized only to the extent of
virutual certainty of it realization.
n. Segment Reporting:
i. Identification of Segments:
The Company has disclosed Business Segment as the Primary Segment. The
Companys operating business are organized and managed separately
according to the nature of the products and services provided, with
each segment representing strategic business unit that offers different
products and serves different markets.
ii. Segment Revenue & Results:
The Income and Expenses which are not directly attributable to business
segment are shown as unallocated income and expenses.
iii. Segment Assets & Liabilities:
Segment Assets include all operating assets used by the business
segment and consists principally all Fixed Assets, Debtors, Inventories
and Advances. Segment Liabilities primarily include Creditors, Other
Liabilities / Provisions. Common assets and liabilities that cannot be
allocated to any segment are shown as a part of unallocated corporate
assets and liabilities.
o. Leases:
Operating Lease payments are recognised on a straight line basis over
the lease term.
p. Provision & Contingent Liabilities:
The Company recognizes a provision when there is a present obligation
as a result of a past event that probably requires an outflow of
resources and a reliable estimate can be made of the amount of the
obligation. A disclosure for a contingent liability is made when there
is a possible obligation or a present obligation that may, but probably
will not, require an outflow of resources. Where there is a possible
obligation or a present obligation that the likelihood of outflow of
resources is remote, no provision or disclosures is made.
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