Mar 31, 2018
1 Significant Accounting Policies:
(i) Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 ("the Act"), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act as applicable.
The Company''s financial statements up to and for the year ended March 31, 2017 were prepared in accordance with the Companies (Accounting Standards) Rules, 2006, notified under Section 133 of the Act, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ).
As these financial statements are Company''s first financial statements prepared in accordance with Indian Accounting standards (Ind AS), Ind AS 101 First time Adoption of India Accounting Standard has been applied. An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows of the company is provided in Note 44.
These financial statements have been prepared for the Company as a going concern on the basis of relevant Ind AS that are effective at the Company''s annual reporting date, March 31, 2018. These financial statements were authorised for issuance by the Company''s Board of Directors on May 28, 2018.
(ii) Functional and presentation currency
The financial statements are presented in Indian Rupee (INR), which is also the functional currency of the Company. All amounts have been rounded-off to two decimal places to the nearest lakhs, unless otherwise indicated.
(iii) Historical Cost Convention
The financial statements have been prepared on a historical cost convention and on an accrual basis, except for the following material items that have been measured at fair value as required by relevant Ind AS:
(iv) Use of estimates and judgments
While in preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Assumptions, judgements and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending March 31, 2018 are made in the following:
- Recognition of deferred tax assets: availability of future taxable profit against which tax losses carried forward can be used
- Measurement of defined benefit obligations: key actuarial assumptions;
- Recognition and measurement of provisions and contingencies: key assumptions about the likelihood and magnitude of an outflow of resources;
- Estimation of useful life of property, plant and equipment and intangible assets;
- Estimation of current tax expense and payable;
- Impairment of Financial Assets;
- Lease classification; and
- Lease: whether an arrangement contains a lease
(v) Measurement of fair values
The Company''s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. The Company regularly reviews significant unobservable inputs and valuation adjustments.
Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or liability, the Company uses observable market date as far as possible. If the inputs used to measure the fair value of and asset or liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in - Fair Value Measurements.
2 Significant Accounting Policies followed by the Company:
(i) Property, plant and equipment
a) Recognition and measurement
Items of property, plant and equipment are capitalised at cost (which includes capitalised borrowing costs, if any) less accumulated depreciation and accumulated impairment losses, if any. Cost of an item of property, plant and equipment includes its purchase price, non-recoverable duties taxes, freight, installation charges and any directly attributable cost of bringing the items to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located. The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for its intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit and loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company. Property, plant and equipment under construction are disclosed as Capital work-in-progress.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property, plant and equipment recognized as at April 1, 2016 measured as per the Previous GAAP and use that carrying value as the deemed cost (except to the extent of any adjustment permissible under other accounting standard) of the property, plant and equipment.
b) Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives as specified in Schedule II of the Companies Act, 2013 using the straight-line method based on useful lives. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Company will obtain ownership by the end of the lease term. Depreciation for assets purchased / sold during the period is proportionately charged. All assets costing Rs. 5,000 or less are fully depreciated in the year of acquisition.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.
(ii) Other intangible assets
a) Recognition and measurement
Other intangible assets are carried at cost less accumulated amortisation and impairment losses, if any. The cost of an intangible asset comprises its purchase price, including any non-recoverable duties and taxes and any directly attributable expenditure on making the asset ready for its intended use and net of any trade discounts and rebates. Cost of application software which have a useful life estimated by the management more than a year is capitalised.
b) Amortisation
The cost of the computer software capitalized as intangible asset is amortized over the estimated useful life. The estimated useful lives are as follows:
Amortisation method, useful lives and residual values are reviewed at the end of each financial year and adjusted if appropriate.
(iii) Impairment
a) Financial assets
The Company recognises loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through the statement of profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognised as an impairment gain or loss in the statement of profit or loss.
b) Non- financial assets
The Company assess at each reporting date whether there is any indication that the carrying amount may not be recoverable. If any such indication exists, then the asset''s recoverable amount is estimated and an impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount in the statement of profit and loss. The Company''s non-financial assets, inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated. For impairment testing, assets that do not generate independent cash inflows are grouped together into cash-generating units (CGUs). Each CGU represents the smallest group of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or groups of CGUs) on a pro rata basis. An impairment loss in respect of goodwill is not subsequently reversed. In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
iv) Leases
a) Determining whether an arrangement contains a lease
At inception of an arrangement, it is determined whether the arrangement is or contains a lease. At inception or on reassessment of the arrangement that contains a lease, the payments and other consideration required by such an arrangement are separated into those for the lease and those for other elements on the basis of their relative fair values. If it is concluded for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. The liability is reduced as payments are made and an imputed finance cost on the liability is recognised using the incremental borrowing rate.
b) Assets held under lease
Leases of Property, plant and equipment that transfer to the Company substantially all the risks and rewards of ownership are classified as finance leases. The leased assets are measured initially at an amount equal to the lower of their fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the assets are accounted for in accordance with the accounting policy applicable to similar owned assets. Assets held under leases that do not transfer to the Company substantially all the risks and rewards of ownership (i.e. operating leases) are not recognised in the Company''s Balance Sheet.
c) Lease payments
Payments made under operating leases are generally recognised in the statement of profit and loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessor''s expected inflationary cost increases. Lease incentives received are recognised as an integral part of the total lease expense over the term of the lease. Minimum lease payments made under finance leases are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to each period during the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability. The company is generally required to pay refundable security deposits for entering into various lease agreements with lessors. Such security deposits are financial assets and are recorded at fair value on initial recognition. The difference between the initial fair value and the refundable amount of the deposit is recognized as a lease prepayment. The initial fair value is estimated as the present value of the refundable amount of security deposit, discounted using the market interest rates for similar instruments. Subsequent to initial recognition, the security deposit is measured at amortized cost using the effective interest method with the carrying amount increased over the lease period up to the refundable amount. The amount of increase in the carrying amount of deposit is recognized as interest income. The lease prepayment is amortized on a straight line basis over the lease term as lease rental expense.
v) Inventories
Inventories are valued at the lower of cost (including landed cost, any non-recoverable taxes and other overheads incurred in bringing the inventories to their present location and condition) and estimated net realisable value, after providing for obsolescence, where appropriate. The comparison of cost and net realisable value is made on an item-by-item basis. The net realisable value of materials in process is determined with reference to the selling prices of related finished goods. Raw materials, packing materials and other supplies held for use in production of inventories are not written down below cost except in cases where material prices have declined, and it is estimated that the cost of the finished products will exceed their net realisable value. The provision for inventory obsolescence is assessed regularly based on estimated usage and shelf life of products.
Raw materials, packing materials and stores and spares are valued at cost computed on moving weighted average basis. The cost includes purchase price, inward freight and other incidental expenses net of refundable duties, levies and taxes, where applicable.
Work-in-progress is valued at input material cost plus conversion cost as applicable.
Stock-in-trade is valued at the lower of net realisable value or cost (including landed cost, any non-recoverable taxes and other overheads incurred in bringing the inventories to their present location and condition), computed on a moving weighted average basis.
Finished goods are valued at lower of net realisable value or cost (including Landed cost, any non-recoverable taxes and other overheads incurred in bringing the inventories to their present location and condition).
vi) Financial instruments
a) Recognition and initial measurement
Trade receivables issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument. A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
b) Classification and subsequent measurement Financial assets
Subsequently, a financial asset is classified as measured at
- Amortised cost;
- Fair value through other comprehensive income (FVOCI) - debt investment;
- Fair value through other comprehensive income (FVOCI) - equity investment; or
- Fair value through profit and loss (FVTPL)
Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the Company changes its business model for managing financial assets.
Financial assets carried at amortised cost
A financial asset is subsequently measured at amortised cost if it is held within a business model whose objective is to hold the asset 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.
Financial assets at fair value through other comprehensive income
A debt financial asset is subsequently measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash 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.
Financial assets at fair value through the Company''s statement of profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
Financial liabilities
Financial liabilities are subsequently carried at amortised cost using the effective interest method. For trade and other payables maturing within one year from the balance sheet date, the carrying amounts approximate fair value due to the short maturity of these instruments.
c) Derecognition Financial assets
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities
The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in the statement of profit or loss.
d) Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
e) Reclassification
The Company determines the classification of financial assets and liabilities on initial recognition. After initial recognition no reclassification is made for financial assets which are categorized as equity instruments at FVTOCI and financial assets or liabilities that are specifically designated as FVTPL.
vii) Revenue
a) Sale of Goods
Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of Goods and Service Tax (GST) collected on behalf of government.
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the company and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration received or receivable, exclusive of sales tax and net of sales return, trade discounts and volume rebates. Sales are presented gross of excise duties. Revenue in respect of certain rewards and incentives receivable by the exporters under various Export Incentive Schemes is recognised on completion of Export Sales.
b) Other Income
Dividend income is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
For all financial instruments measured at amortised cost, interest income is recorded using the effective interest rate (EIR), which is the rate that exactly discounts the estimated future cash payments or receipts over the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount of the financial asset. Interest income is included in other income in the statement of profit and loss.
viii) Foreign currencies
Transactions in foreign currencies are initially recorded by the Company at their functional currency spot rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currency are translated at the functional currency spot rates of exchange at the reporting date. Exchange differences that arise on settlement of monetary items or on reporting at each balance sheet date of the Company''s monetary items at the closing rates are recognised as income or expenses in the period in which they arise. Non-monetary items which are carried at historical cost denominated in a foreign currency are reported using the exchange rates at the date of transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined.
ix) Forward contracts
Forward Contracts are initially recognized at fair value on the date a derivative contract is entered into and are subsequently re-measured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value is routed through statement of Profit and loss.
x) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.
xi) Income tax
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or other comprehensive income.
a) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
b) Deferred tax
1 Recognition and initial measurement
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the corresponding amounts used for taxation purposes. Deferred tax is also recognised in respect of carried forward tax losses and tax credits. Temporary differences arising on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss at the time of the transaction.
2 Classification and subsequent measurement
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which they can be used. Deferred tax assets unrecognised or recognised are reviewed at each reporting date and are recognised/ reduced to the extent that it is probable/ no longer probable respectively that the related tax benefit will be realised. Deferred tax is measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on the laws that have been enacted or substantively enacted by the reporting date. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. The Company offsets, the current tax assets and liabilities (on a year on year basis) and deferred tax assets and liabilities, where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis.
xii) Borrowing costs
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to acquisition or construction of an asset which necessarily take a substantial period of time to get ready for their intended use are capitalised as part of the cost of that asset. Other borrowing costs are recognised as an expense in the statement of profit and loss in the period in which they are incurred.
xiii) Provision, contingent liabilities and contingent assets
a) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Company expects some or all of a provision to be reimbursed, the expense relating to a provision is presented in the statement of profit and loss net of any reimbursement.
b) Onerous Contracts
Provision for onerous contracts. i.e. contracts where the expected unavoidable cost of meeting the obligations under the contract exceed the economic benefits expected to be received under it, are recognised when it is probable that an outflow of resources embodying economic benefits will be required to settle a present obligation as a result of an obligating event based on a reliable estimate of such obligation.
c) Contingencies
Provision in respect of loss contingencies relating to claims, litigation, assessment, fines, penalties, etc. are recognised when it is probable that a liability has been incurred, and the amount can be estimated reliably.
xiv) Employee benefits
a) Short-term employee benefits
All employee benefits payable wholly within twelve months of rendering the service are classified as Short Term Employee benefits. Benefits such as salaries are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the employee renders the related service.
b) Post- employee benefits Defined Contribution Plans:
A defined contribution plan is post-employee benefit plan under which an entity pays a fixed contribution to a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards provident fund scheme and superannuation fund. Obligations for contributions to defined contribution plans are recognised as an employee benefit expenses in the statement of profit and loss in the periods during which the related services are rendered by employees.
Defined Benefit Plans:
Gratuity
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan. The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognised asset is limited to the present value of economic benefits available in the form of any future refunds from the plan or reductions in future contributions to the plan (''the asset ceiling''). In order to calculate the present value of economic benefits, consideration is given to any minimum funding requirements. Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs. Company''s liability towards Gratuity to past employees is determined using the Projected Unit Credit actuarial cost method which considers each period of service as giving rise to an additional unit of benefit entitlement and measure each unit separately to build up the final obligation past services are recognized on a straight line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognized immediately in the Statement of Profit and Loss as income or expense obligation is measured at the present value of estimated future cash flows using a discounted rate that is determined by reference to market yields at the Balance Sheet date on Government Securities where the currency and estimate terms of the defined benefit obligations.
c) Other long-term employee benefits
All employee benefits (other than post-employment benefits and termination benefits) which do not fall due wholly within twelve months after the end of the period in which the employees render the related services are determined based on actuarial valuation or discounted present value method carried out at each balance sheet date. The expected cost of accumulating compensated absences is determined by actuarial valuation performed by an independent actuary as at April 1, every year using projected unit credit method on the additional amount expected to be paid / availed as a result of the unused entitlement that has accumulated at the balance sheet date. Expense on non-accumulating compensated absences is recognised in the period in which the absences occur. Long service awards are recognised as a liability at the undiscounted value of the defined benefit obligation as at the balance sheet date.
xv) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, demand deposits held with financial institution, other shortterm, highly liquid investments with original maturities of three months or less that are readily convertible to know cash and which are subject to an insignificant risk of changes in value.
xvi) Earnings per share
Basic earnings per share (''BEPS'') is computed by dividing net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding for the period.
Diluted earnings per share (''DEPS'') is computed by dividing the net profit or loss for the period attributable to equity shareholders and the weighted average number of equity shares considered for deriving basic earnings per share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares.
Dilutive potential equity shares are deemed converted as of the beginning of the year, unless issued at a later date. In computing diluted earnings per share, only potential equity shares that are dilutive and that either reduces earnings per share or increases loss per share are included. The number of shares and potentially dilutive equity shares are adjusted retrospectively for all periods.
xvii) Cash flow statements
Cash flows are reported using indirect method, whereby net profits before tax is adjusted for the effects of transactions of a non-cash nature and any deferrals or accruals of past or future cash receipts or payments. The cash flows from regular operating, investing and financing activities of the Company are segregated.
xviii) First time adoption of Ind AS
The financial statements for the year ended March 31, 2018 are the first annual financial statements prepared in accordance with Ind AS''s notified under the Companies (Indian Accounting Standards) Rules, 2015. For the periods up to and inclusive of year ended March 31, 2017, the Company prepared its financial statements in accordance with accounting standards specified in Section 133 of the Companies Act, 2013 read together with Rule 7 of Companies (Accounting Standards) Rules 2014 (Indian GAAP or Previous GAAP). The adoption of Ind AS was carried out in accordance with Ind AS 101, using April 1, 2016 as the transition date. Ind AS 101 requires that all Ind AS standards that are effective for the first Ind AS financial statements to be applied consistently and retrospectively for all fiscal years presented. All applicable Ind AS have been applied consistently and retrospectively wherever required. The resulting difference between the carrying amounts of the assets and liabilities in the financial statements under both Ind AS and Previous GAAP as on the transition date have been recognized directly in equity. In preparing these financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101 as explained below.
Exceptions to and Exemptions from retrospective application
a) Estimates: An entity''s estimates in accordance with Ind AS on the date of transition shall be consistent with estimates made for the same date in accordance with Previous GAAP, unless there is an objective evidence that those estimates were in error. The Company has not made any changes to estimates made in accordance with Previous GAAP
b) Property, plant and equipment: The Company has elected to apply the exemption available under Ind AS 101 to continue with the carrying amount for all of its property, plant and equipment as per Previous GAAP and used it as deemed cost as at the date of transition.
c) Derecognition of financial assets and financial liabilities: The Company has applied derecognition criteria as per Ind AS 109 prospectively and has not recognised any previously derecognised non-derivative financial assets and financial liabilities prior to April 1, 2016 that may qualify for recognition as per Ind AS.
d) Leases: An entity shall determine whether an arrangement existing at the date of transition to Ind AS contains a lease on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has used this exemption and assessed all arrangements based on conditions existing as at the date of transition.
e) Classification and measurement of financial assets: Financial assets that qualify to be measured at amortised cost are measured accordingly prospectively. Where it is impracticable to apply the effective interest method retrospectively, the fair value of the financial asset or financial liability at the date of transition to Ind AS is considered the deemed carrying amount.
xix) New standards and interpretations not yet adopted
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, ''Statement of cash flows'' and Ind AS 102, ''Share-based payment.'' These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ''Statement of cash flows'' and IFRS 2, ''Share-based payment,â respectively. Ind AS 7 amendment is applicable to the company from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the balance sheet for liabilities arising from financing activities, to meet the disclosure requirement.
There is no material impact on account of the amendment on the financial statements of the company.
xx) Ind AS 115 Revenue from Contracts with Customers:
Ind AS 115, Revenue from Contracts with Customers was initially notified under the Companies (Indian Accounting Standards) Rules, 2015. The standard applies to contracts with customers. The core principle of the new standard is that an entity should recognize revenue to depict 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. Further, the new standard requires enhanced disclosures about the nature, timing and uncertainty of revenues and cash flows arising from the entity''s contracts with customers. The new standard offers a range of transition options. An entity can choose to apply the new standard to its historical transactions - and retrospectively adjust each comparative period. Alternatively, an entity can recognize the cumulative effect of applying the new standard at the date of initial application - and make no adjustments to its comparative information. The chosen transition option can have a significant effect on revenue trends in the financial statements. A change in the timing of revenue recognition may require a corresponding change in the timing of recognition of related costs. The standard has been currently deferred. The Company is currently evaluating the requirements of Ind AS 115, and has not yet determined the impact on the financial statements.
Mar 31, 2017
1 Background:
Kaira Can Company Limited is a company incorporated in India under Companies Act, 1956 on March 1, 1962. The company started its manufacturing activity as a Private Limited Company at Anand in the state of Gujarat, which later became a public limited company on August 24th, 1964 and is listed on Bombay Stock Exchange (BSE). The Company is engaged in the manufacture of Open Top Sanitary Cans, Lithographed and Plain Metal Containers and Special Containers. The company is also in the business of manufacturing of Ice Cream Cones since financial year 2000-2001 and processing and packing of Amul milk at Vashi (Discontinued w.e.f. July 1,2013) . The head office of the Company is situated at Mahalaxmi, Mumbai in the state of Maharashtra. The factories are located at Kanjari and Vithal Udyog Nagar in the State of Gujarat.
2 Significant Accounting Policies:
A Basis of Accounting:
The financial statements of the Company have been prepared on accrual basis under the historical cost convention and on going concern basis in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (''the Act'') / the Companies Act, 1956 as applicable.
B Use of Estimates: The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
C Fixed Assets:
(i) Property, Plant and Equipments:
Property, Plant and Equipments are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes financing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any.
(ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.
D Depreciation and Amortization:
Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful lives of the assets as per the rates prescribed under Schedule II to the Companies Act, 2013.
Cost of Leasehold Land is amortized over the lease period.
Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition, as their useful life is expected to be less than one year.
Intangible Assets (Computer Software) is being amortized over a period of five years on straight-line method.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realizable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset''s net realizable value or present value as determined.
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and 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.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
G Inventories:
Stores and Spare Parts are valued at first-in first-out cost or Net Realizable Value whichever is lower. Raw materials are valued at first-in first-out cost or Net Realizable Value whichever is lower. The cost includes purchase price as well as incidental expenses.
Process Stock is valued at cost or Net realizable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.
The finished goods inventory (Containers, Can making machinery, Ice cream cones) is valued at cost or net realizable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.
H Foreign Currency Transactions:
Initial recognition:
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate. 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 transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary items are recognized as income or expense in the year in which it arises.
The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.
I Leases:
Lease transactions entered into prior to April 1, 2001:
Lease rentals in respect of assets acquired under lease are charged to Statement of Profit & Loss.
Lease transactions entered into on or after April 1, 2001:
Assets acquired under lease where the Company has substantially all the risks and rewards incidental to ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the lessor are classified as operating lease. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis.
J 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.
Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of âRevenue from Operations (Gross)â, is excluded to arrive at âRevenue from Operations (Net)â.
Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
Revenue in respect of insurance / other claims, dividend etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
K Employee Benefits:
Short-term employees benefits are recognized as an expense at the undiscounted amount in statement of profit and loss of the year in which the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to statement of profit and loss.
Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Statement of Profit and Loss of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss. Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.
L Export Benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
N Segment Accounting Policies:
Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, trade receivables, loans and advances and operating cash & cash equivalents. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.
Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.
O Grants and Subsidy:
"Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific Tangible/Intangible Assets are reduced from the gross value of the respective Tangible/Intangible Assets. Grant for non specific capital assets are treated as capital reserve. Other capital grants in the nature of promoter''s contribution are credited to capital reserve.
P Taxation:
Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961. Deferred tax resulting from âtiming differencesâ between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realized in future.
Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.
Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognized as current tax. The credit available under the said act in respect of MAT is recognized as an asset only when there is certainty that the company will pay income tax in future periods and MAT credit can be carried forward to set-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance sheet date and written down to the extent the aforesaid certainty no longer exists.
Q Derivative financial instruments (Currency Future Contracts):
Currency futures contract are entered into to hedge the foreign currency risk of firm commitments or highly probable forecast transactions. The mark to market gains / (losses) in respect of all outstanding currency future contracts as at the Balance Sheet date are recognized in the statement of Profit and Loss in pursuance of the announcements of the ICAI dated March 29, 2008.
R Earning Per Share (EPS):
The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.
S Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.
Mar 31, 2016
1 Background:
Kaira Can Company Limited is a company incorporated in India under Companies Act, 1956 on March 1, 1962. The company started its manufacturing activity as a Private Limited Company at Anand in the state of Gujarat, which later became a public limited company on August 24th, 1964 and is listed on Bombay Stock Exchange (BSE). The Company is engaged in the manufacture of Open Top Sanitary Cans, Lithographed and Plain Metal Containers and Special Containers. The company is also in the business of manufacturing of Ice Cream Cones since financial year 2000-2001 and processing and packing of Amul milk at Vashi (Discontinued w.e.f. July 1,2013) . The head office of the Company is situated at Mahalaxmi, Mumbai in the state of Maharashtra. The factories are located at Kanjari and Vithal Udyog Nagar in the State of Gujarat.
2 Significant Accounting Policies:
A Basis of Accounting:
The financial statements of the Company have been prepared on accrual basis under the historical cost convention and ongoing concern basis in accordance with the Generally Accepted Accounting Principles in India (''Indian GAAP'') to comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013 (''the Act'') / the Companies Act, 1956 as applicable.
B Use of Estimates:
The preparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized.
C Fixed Assets:
(i) Tangible Fixed Asset:
Fixed Assets are recorded at cost of acquisition or construction net of recoverable taxes. The cost includes financing cost up to the date when such assets are ready for their intended use. They are stated at cost less accumulated depreciation and impairment loss, if any.
(ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable taxes less accumulated amortization / depletion.
D Depreciation and Amortization:
Depreciation is provided on a pro-rata basis on the straight-line method over the estimated useful lives of the assets as per the rates prescribed under Schedule II to the Companies Act, 2013.
Cost of Leasehold Land is amortized over the lease period.
Assets costing less than Rs. 5,000/- are fully depreciated in the year of acquisition, as their useful life is expected to be less than one year.
Intangible Assets (Computer Software) is being amortized over a period of five years on straight-line method.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal sources whether there is any impairment of any asset. Impairment occurs where the carrying value exceeds the present value of future cash flows expected to arise from the continuing use of the asset and its net realizable value on eventual disposal. Any loss on account of impairment is expensed as the excess of the carrying amount over the higher of the asset''s net realizable value or present value as determined.
Reversal of impairment losses recognized in prior years is recorded when there is an indication that the impairment losses recognized for the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and 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.
On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost. However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments.
On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.
G Inventories:
Stores and Spare Parts are valued at first-in first-out cost or Net Realizable Value whichever is lower.
Raw materials are valued at first-in first-out cost or Net Realizable Value whichever is lower. The cost includes purchase price as well as incidental expenses.
Process Stock is valued at cost or Net realizable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.
The finished goods inventory (Containers, Can making machinery, Ice cream cones) is valued at cost or net realizable value whichever is lower. Cost comprises all costs of purchase, cost of conversion and other costs incurred in bringing the inventory to the present location and condition.
H Foreign Currency Transactions:
Initial recognition:
Foreign currency transactions are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate. 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 transaction and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary items are recognized as income or expense in the year in which it arises.
The premium or discount arising at the inception of forward exchange contracts is amortized as expenses or income over the life of the respective contracts. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or expense for the year.
I Leases:
Lease transactions entered into prior to April 1, 2001 :
Lease rentals in respect of assets acquired under lease are charged to Statement of Profit & Loss.
Lease transactions entered into on or after April 1, 2001 :
Assets acquired under lease where the Company has substantially all the risks and rewards incidental to ownership are classified as finance leases. Such assets are capitalized at the inception of the lease at the lower of the fair value or the present value of minimum lease payments and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and rewards incidental to ownership is retained by the less or are classified as operating lease. Lease rentals under operating leases are recognized in the Statement of Profit and Loss on a straight line basis.
J 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.
Domestic sales of goods are recognized on dispatch of products. Export sales are accounted on the basis of date of bill of lading. Sales are recognized net of value added tax (VAT) collected on behalf of government. Excise duty recovered, which is part of âRevenue from Operations (Gross)â, is excluded to arrive at âRevenue from Operations (Net)â.
Interest income is recognized on time proportion basis taking into account the amount outstanding and rate applicable.
Revenue in respect of insurance / other claims, dividend etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
K Employee Benefits:
Short-term employees benefits are recognized as an expense at the undiscounted amount in statement of profit and loss of the year in which the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by statute, which is a defined contribution plan. There are no other obligations other than the contribution payable. The same is charged to statement of profit and loss.
Superannuation Scheme is a defined contribution scheme and the contribution is charged to the Statement of Profit and Loss of the year when the contribution to the fund is due. There are no other obligations other than the contribution payable.
Gratuity liability is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.
Long term compensated absences are provided for based on actuarial valuation on projected unit credit method. Actuarial gains/losses are immediately taken to statement of profit and loss.
L Export Benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under DEEC scheme are accounted on accrual basis on the basis of exports made under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.
N Segment Accounting Policies:
Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the segment. Segment assets include all operating assets used by the segment and mainly consist of fixed assets, inventories, trade receivables, loans and advances and operating cash & cash equivalents. Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves and surplus, borrowings and taxes.
Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective segment. It does not include interest income / expenses on inter-corporate deposits and borrowings, general administrative expenses, other expenses that arise at the enterprise level and relate to the enterprise as a whole and Income tax.
O Grants and Subsidy
"Government Grants are recognized when there is a reasonable assurance that the same will be received and all attaching conditions will be complied with. Revenue grants are recognized in the Statement of Profit and Loss. Capital grants relating to specific Tangible/Intangible Assets are reduced from the gross value of the respective Tangible/Intangible Assets. Grant for non specific capital assets are treated as capital reserve. Other capital grants in the nature of promoter''s contribution are credited to capital reserve."
P Taxation:
Income Tax comprises both current and deferred tax. Provision for current tax is made on the basis of estimated taxable income and tax credits computed in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax resulting from âtiming differencesâ between taxable and accounting income is accounted for using the tax rates and laws that are enacted or substantively enacted as on the balance sheet date. The deferred tax asset is recognized and carried forward only to the extent that there is a reasonable/ virtual certainty that the asset will be realized in future.
Tax on distributed profits is provided in accordance with the provisions of section 115-O of the Income Tax Act, 1961 is not considered in determination of the profits for the year.
Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act, 1961 is recognized as current tax. The credit available under the said act in respect of MAT is recognized as an asset only when there is certainty that the company will pay income tax in future periods and MAT credit can be carried forward to self-off against the normal tax liability. MAT credit recognized as an asset is reviewed at each Balance sheet date and written down to the extent the aforesaid certainty no longer exists.
Q Derivative financial instruments (Currency Future Contracts)
Currency futures contract are entered into to hedge the foreign currency risk of firm commitments or highly probable forecast transactions. The mark to market gains / (losses) in respect of all outstanding currency future contracts as at the Balance Sheet are recognised in the statement of Profit and Loss in pursuance of the announcements of the ICAI dated March 29, 2008.
R Earning Per Share (EPS)
The basic EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit attributable to the equity shareholders for the year by the weighted average number of equity and dilutive equity equivalent shares outstanding during the year.
S Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to their present values and are determined based on management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence is confirmed by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the Company.
Mar 31, 2015
A Basis of Accounting:
The financial statements of the Company have been prepared on accrual
basis under the historical cost convention and on going concern basis
in accordance with the Generally Accepted Accounting Principles in
India ('Indian GAAP') to comply with the Accounting Standards
specified under section 133 of the Companies Act, 2013, read with Rule
7 of the Companies (Accounts) Rules, 2014 and the relevant provisions
of the Companies Act, 2013 ('the Act') / the Companies Act, 1956 as
applicable.
B Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C Fixed Assets:
(i) Tangible Fixed Asset:
Fixed Assets are recorded at cost of acquisition or construction net of
recoverable taxes. The cost includes financing cost up to the date when
such assets are ready for their intended use. They are stated at cost
less accumulated depreciation and impairment loss, if any.
(ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization / depletion.
D Depreciation and Amortisation:
Depreciation is provided on a pro-rata basis on the straight-line
method over the esitmated useful lives of the assets as per the rates
prescribed under Schedule II to the Companies Act, 2013.
Cost of Leasehold Land is amortised over the lease period.
Assets costing less than Rs. 5,000/- are fully depreciated in the year
of acquisition.
Intangible Assets (Computer Software) is being amortised over a period
of five years on straight-line method.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal
sources whether there is any impairment of any asset. Impairment occurs
where the carrying value exceeds the present value of future cash flows
expected to arise from the continuing use of the asset and its net
realisable value on eventual disposal. Any loss on account of
impairment is expensed as the excess of the carrying amount over the
higher of the asset's net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
G Inventories:
Stores and Spare Parts are valued at first-in first-out cost or Net
Realisable Value whichever is lower.
Raw materials are valued at first-in first-out cost or Net Realisable
Value whichever is lower. The cost includes purchase price as well as
incidental expenses.
Process Stock is valued at cost or Net realisable value whichever is
lower. Cost comprises all costs of purchase, cost of conversion and
other costs incurred in bringing the inventory to the present location
and condition.
The finished goods inventory (Containers, Can making machinery, Ice
cream cones) is valued at cost or net realisable value whichever is
lower. Cost comprises all costs of purchase, cost of conversion and
other costs incurred in bringing the inventory to the present location
and condition.
H Foreign Currency Transactions:
Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
I Leases:
Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Statement of Profit & Loss.
Lease transactions entered into on or after 1st April, 2001 :
Assets acquired under lease where the Company has substantially all the
risks and rewards incidental to ownership are classified as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and
rewards incidental to ownership is retained by the lessor are
classified as operating lease. Lease rentals under operating leases are
recognized in the Statement of Profit and Loss on a straight line
basis.
J Revenue Recognition:
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
Domestic sales of goods are recognized on dispatch of products. Export
sales are accounted on the basis of date of bill of lading. Sales are
recognized net of value added tax (VAT) collected on behalf of
government. Excise duty recovered, which is part of "Revenue from
Operations (Gross)", is excluded to arrive at "Revenue from
Operations (Net)".
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
Revenue in respect of insurance / other claims, dividend etc. is
recognised only when it is reasonably certain that the ultimate
collection will be made.
K Employee Benefits:
Short-term employees benefits are recognized as an expense at the
undiscounted amount in statement of profit and loss of the year in
which the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by
statute, which is a defined contribution plan. There are no other
obligations other than the contribution payable. The same is charged to
statement of profit and loss.
Superannuation Scheme is a defined contribution scheme and the
contribution is charged to the Statement of Profit and Loss of the year
when the contribution to the fund is due. There are no other
obligations other than the contribution payable.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method.
Actuarial gains/losses are immediately taken to statement of profit and
loss.
Long term compensated absences are provided for based on actuarial
valuation on projected unit credit method. Actuarial gains/losses are
immediately taken to statement of profit and loss.
L Export Benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
N Segment Accounting Policies:
Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and mainly consist of fixed assets, inventories, trade
receivables, loans and advances and operating cash & cash equivalents.
Segment assets and liabilities do not include inter-corporate deposits,
share capital, reserves and surplus, borrowings and taxes.
Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
O Grants and Subsidy
Grants/Subsidies, if received for non specific capital assets are
treated as Capital Reserve.
P Taxation:
Income Tax comprises both current and deferred tax. Provision for
current tax is made on the basis of estimated taxable income and tax
credits computed in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax resulting from "timing differences" between taxable
and accounting income is accounted for using the tax rates and laws
that are enacted or substantively enacted as on the balance sheet date.
The deferred tax asset is recognized and carried forward only to the
extent that there is a reasonable/ virtual certainty that the asset
will be realised in future.
Tax on distributed profits is provided in accordance with the
provisions of section 115-O of the Income Tax Act, 1961 is not
considered in determination of the profits for the year.
Minimum Alternate Tax (MAT) under the provisions of the Income Tax Act,
1961 is recognized as current tax. The credit available under the said
act in respect of MAT is recognized as an asset only when there is
certainty that the company will pay income tax in future periods and
MAT credit can be carried forward to sef-off against the normal tax
liability. MAT credit recognized as an asset is reviewed at each
Balance sheet date and written down to the extent the aforesaid
certainty no longer exists.
Q Derivative financial instruments (Currency Future Contracts)
Currency futures contract are entered into to hedge the foreign
currency risk of firm commitments or highly probable forecast
transactions. The mark to market gains / (losses) in respect of all
outstanding currency future contracts as at the Balance Sheet are
recognised in the statement of Profit and Loss in pursuance of the
announcements of the ICAI dated March 29, 2008.
R Earning Per Share (EPS)
The basic EPS is computed by dividing the net profit attributable to
the equity shareholders for the year by the weighted average number of
equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit attributable to the
equity shareholders for the year by the weighted average number of
equity and dilutive equity equivalent shares outstanding during the
year.
S Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted
to their present values and are determined based on management estimate
required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to reflect the current
management estimates.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events but their existence is confirmed by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company.
3 (i) Nil Of the above Nil (Previous Year Nil ) shares have been issued
for consideration other than cash in five years immediately preceeding
the current financial year.
Nil
3 (ii) Equity Shares: The Company has issued only one class of equity
shares having a par value of Rs.10 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,
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.
# During the year Term Loan from Canara Bank amounting to
Rs.2,25,00,000/- , (Previous year Rs. Nil ) was taken. The same was
Repayable in 30 monthly instalments of Rs. 7.50 lacs each starting from
Oct. 2014 and ending on March 2017. Rate of interest - Base rate plus
3.50% i.e. 13.70% p.a. (Previous year Nil ). After repayment of 4
installments i.e. from Oct- 14 to Jan-15 i.e. Rs. 30,00,000/- , the
balance loan of Rs. 195.00 lacs was taken over by Kotak Mahindra Bank
Ltd. and Year end balance of such loan is Rs. Nil.
* Deposit includes deposit received from Directors amounting to Rs. Nil
/-, ( Previous Year Rs.18,35,000/) and from Shareholders Rs.
61,60,000/-, (Previous Year Rs. 31,25,000/-). Fixed Deposits having
maturity of two years amounting to Rs. 83,55,000/-, (Previous year Rs.
27,50,000/-) and three years amounting to Rs. 61,35,000/- (Previous
year Rs. 5,32,40,000/-). The new deposits were accepted only from
Shareholders amounting to Rs. 61,35,000/- , (Previous year from Public
/ Shareholders Rs. 2,46,85,000/-).
8 (i) Cash Credit from Bank of Baroda Rs. 10,04,91,914/-, (Previous
year Rs 10,93,27,191/-) are Secured by Hypothecation of Stocks of raw
material, Work-in-Progress, Finished Goods, Book Debts, Stores & Spares
and Movable Machinery at Kanjari and Anand. The cash credit accounts
are further secured by the first charge by way of equitable mortgage on
the Company's factory land and building of Metal Can Division situated
at village Kanjari & Office premises situated at Anand, in the state of
Gujarat.
Applicable Rate of Interest is 13.00% p.a., (Previous Year 15.25%
p.a.).
(ii) Overdraft facility from Kotak Mahindra Bank Rs. 2,28,53,091/-,
(Previous year Rs. Nil ) are Secured by Hypothecation of existing and
future tangible and current assets & movable fixed assets of Ice Cream
Cone Division. The Overdraft facility is further secured by the
equitable mortgage over factory / land and building situated at GIDC,
Vitthal Udhyog nagar, Karamsad, Anand, in the state of Gujarat.
# There are no amounts due for payment to the Investor Education and
Protection Fund under Section 125 of the Companies Act, 2013 as at the
year end.
* Other payables include Statutory dues, Employees contribution,
Outstanding liabilities for expenses, Bonus payable, Salaries payable,
Employee welfare expenses payable etc.
NOTES:
(i) Buildings include Rs. 42,02,801/- (as at 31-03-2011 Rs.
44,42,894/-) being the cost of ownership flats in a Co-operative
Society.
(ii) Impairment provision included in accumulated depreciation Rs. Nil
/- (As at 31-03-2014 Rs. 8,00,000/-).
(iii) Deductions include Reversal of impairment provision for Previous
year Rs. 32,13,735/- which was done as the company has sold off the
Plant & Machineries and other assets of MMPD division for which the
impairment provision was created. For current year Rs. 8,00,000/- has
been reversed as the same is no longer required. (Refer Note 20 and
33).
(iv) Consequent to Schedule II to the Companies Act, 2013 becoming
applicable w.e.f. April 01, 2014, Depreciation of Rs. 8,39,579/- (net
of deferred tax of Rs. 4,03,229/- ) on account of assets whose useful
life is already exhausted as on 1st April, 2014 have been adjusted to
General Reserve. (Refer Note 4.1 and 6.1).
(v) The Company revised the depreciation rate on certain fixed assets
as per usefull life specified in Schedule II of Companies Act, 2013 on
account of which depreciation for the year is higher by Rs.
82,46,498/-.
23 (i) As per Accounting Standard 15 "Employee Benefits", the
disclosures as defined in the Accounting Standard are given below:
Gratuity :
The employees' gratuity fund scheme managed by Trust is a defined
benefit plan. The present value of obligation is determined based on
actuarial valuation using the Projected Unit Credit Method, which
recognises each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit seprately to build
up the final obligation.
The Expected rate of return on plan assets is determined considering
several applicable factors, mainly the composition of plan assets held,
assessed risks, historical results of return on plan assets and the
Company's policy for plan assets management.
The estimates of rate of escalation in salary considered in acturial
valuation, take in account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary and relied upon by
the auditors.
Provident Fund:
In addition to the above, in accordance with indian regulations,
employees of the Company are entitled to receive benefits under the
provident fund, a defined contribution plan, in which, both the
employee and the company contribute monthly at a determined rate.
These contributions are made to the Government Provident Fund.
Mar 31, 2014
A Basis of Accounting:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial standards have been
prepared to comply in all material aspects with the accounting
standards notifed under section 211 (3C) and the other relevant
provisions of the Companies Act, 1956 read with the general circular
15/2013 dated 13th September, 2013 of the MInistry of the Corporate
Affairs in respect of section 133 of the Companies Act, 2013 and other
relevant provisions of the Companies Act, 1956.
B Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C Fixed Assets:
(i) Tangible Fixed Asset:
Fixed Assets are recorded at cost of acquisition or construction net of
recoverable taxes. The cost includes fnancing cost up to the date when
such assets are ready for their intended use. They are stated at cost
less accumulated depreciation and impairment loss, if any.
(ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization / depletion.
D Depreciation and Amortisation:
Depreciation has been calculated on straight line basis in accordance
with the provisions of Section 205(2) (b) of the Companies Act, 1956 at
the rates and in the manner specified in Schedule XIV to the said Act.
Cost of Leasehold Land is amortised over the lease period. Intangible
Assets (Computer Software) is being amortised over a period of five
years on Straight Line Method.
Assets costing less than Rs. 5,000/- are fully depreciated in the year
of acquisition.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal
sources whether there is any impairment of any asset. Impairment occurs
where the carrying value exceeds the present value of future cash flows
expected to arise from the continuing use of the asset and its net
realisable value on eventual disposal. Any loss on account of
impairment is expensed as the excess of the carrying amount over the
higher of the asset''s net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classifed as current investments. All other investments are
classifed as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of cost
and fair value determined on an individual investment basis. Long-term
investments are carried at cost. However, provision for diminution in
value is made to recognize a decline other than temporary in the value
of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
G Inventories:
Stores and Spare Parts are valued at frst-in frst-out cost or Net
Realisable Value whichever is lower.
Raw materials are valued at frst-in frst-out cost or Net Realisable
Value whichever is lower. The cost includes purchase price as well as
incidental expenses.
Process Stock is valued at cost or Net realisable value whichever is
lower. Cost comprises all costs of purchase, cost of conversion and
other costs incurred in bringing the inventory to the present location
and condition.
The fnished goods inventory (Containers, Can making machinery, Ice
cream cones) is valued at cost or net realisable value whichever is
lower. Cost comprises all costs of purchase, cost of conversion and
other costs incurred in bringing the inventory to the present location
and condition.
H Foreign Currency Transactions:
Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
I Leases:
Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Statement of profit & Loss.
Lease transactions entered into on or after 1st April, 2001 :
Assets acquired under lease where the Company has substantially all the
risks and rewards incidental to ownership are classifed as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and
rewards incidental to ownership is retained by the lessor are
classified as operating lease. Lease rentals under operating leases are
recognized in the Statement of profit and Loss on a straight line basis.
J Revenue Recognition:
Revenue is recognised to the extent that it is probable that the
economic benefits will fow to the company and the revenue can be
reliably measured.
Domestic sales of goods are recognized on dispatch of products. Export
sales are accounted on the basis of date of bill of lading. Sales are
recognized net of value added tax (VAT) collected on behalf of
government. Excise duty recovered, which is part of "Revenue from
Operations (Gross)", is excluded to arrive at "Revenue from Operations
(Net)".
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
Revenue in respect of insurance / other claims, dividend etc. is
recognised only when it is reasonably certain that the ultimate
collection will be made.
K Employee benefits:
Short-term employees benefits are recognized as an expense at the
undiscounted amount in statement of profit and loss of the year in which
the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by
statute, which is a defined contribution plan. There are no other
obligations other than the contribution payable. The same is charged to
statement of profit and loss.
Superannuation Scheme is a Defined contribution scheme and the
contribution is charged to the Statement of profit and Loss of the year
when the contribution to the fund is due. There are no other
obligations other than the contribution payable.
Gratuity liability is a Defined benefit obligation and is provided for on
the basis of an actuarial valuation on projected unit credit method.
Actuarial gains/losses are immediately taken to statement of profit and
loss.
Long term compensated absences are provided for based on actuarial
valuation on projected unit credit method. Actuarial gains/losses are
immediately taken to statement of profit and loss.
L Export benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
N Segment Accounting Policies:
Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and mainly consist of fixed assets, inventories, trade
receivables, loans and advances and operating cash & cash equivalents.
Segment assets and liabilities do not include inter-corporate deposits,
share capital, reserves and surplus, borrowings and taxes.
Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
O Grants and Subsidy:
Grants/Subsidies, if received for non Specific capital assets are
treated as Capital Reserve.
P Taxation:
Income Tax comprises both current and deferred tax. Provision for
current tax is made on the basis of estimated taxable income and tax
credits computed in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax resulting from "timing differences" between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable/ virtual certainty that the asset will be
realised in future.
Tax on distributed profits is provided in accordance with the provisions
of section 115-O of the Income Tax Act, 1961 is not considered in
determination of the profits for the year.
Q Derivative financial instruments (Currency Future Contracts):
Currency futures contract are entered into to hedge the foreign
currency risk of firm commitments or highly probable forecast
transactions. The mark to market gains / (losses) in respect of all
outstanding currency future contracts as at the Balance Sheet are
recognised in the statement of profit and Loss in pursuance of the
announcements of the ICAI dated March 29, 2008.
R Earning Per Share (EPS):
The basic EPS is computed by dividing the net profit attributable to the
equity shareholders for the year by the weighted average number of
equity shares outstanding during the year.
Diluted EPS is computed by dividing the net profit attributable to the
equity shareholders for the year by the weighted average number of
equity and dilutive equity equivalent shares outstanding during the
year.
S Provisions, Contingent Liabilities and Contingent Assets:
A provision is recognized when the enterprise has a present obligation
as a result of past event and it is probable that an outflow of
resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
their present values and are determined based on management estimate
required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to refect the current
management estimates.
Contingent Liabilities are disclosed in respect of possible obligations
that arise from past events but their existence is confirmed by the
occurrence or non occurrence of one or more uncertain future events not
wholly within the control of the Company.
Mar 31, 2013
A Basis of Accounting:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial standards have been
prepared to comply in all material aspects with the accounting
standards notified under section 211 (3C) and the other relevant
provisions of the Companies Act, 1956.
B Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C Fixed Assets:
(i) Tangible Fixed Asset:
Fixed Assets are recorded at cost of acquisition or construction net of
recoverable taxes. The cost includes financing cost up to the date when
such assets are ready for their intended use. They are stated at cost
less accumulated depreciation and impairment loss, if any. Fixed Assets
acquired on lease basis from Leasing Companies prior to 1st April, 2001
are not included in the Schedule of Fixed Assets. Lease Rentals paid in
respect thereof are charged to Profit and Loss Account.
(ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization / depletion.
D Depreciation and Amortisation:
Depreciation has been calculated on straight line basis in accordance
with the provisions of Section 205(2)
(b) of the Companies Act, 1956 at the rates and in the manner specified
in Schedule XIV to the said Act. Cost of Leasehold Land is amortised
over the lease period. Intangible Assets (Computer Software) is being
amortised over a period of five years on Straight Line Method.
Assets costing less than Rs. 5,000/- are fully depreciated in the year
of acquisition.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal
sources whether there is any impairment of any asset. Impairment occurs
where the carrying value exceeds the present value of future cash flows
expected to arise from the continuing use of the asset and its net
realisable value on eventual disposal. Any loss on account of
impairment is expensed as the excess of the carrying amount over the
higher of the asset''s net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
G Inventories:
Stores and Spare Parts are valued at first-in first-out cost or Net
Realisable Value whichever is lower.
Raw materials are valued at first-in first-out cost or Net Realisable
Value whichever is lower. The cost includes purchase price as well as
incidental expenses.
Process Stock is valued at cost or Net realisable value whichever is
lower. Cost is arrived at on the basis of absorption costing.
Finished Goods manufactured (Containers, Can making machinery, Ice
cream cones) are valued at absorption cost or net realisable value
whichever is lower.
H Foreign Currency Transactions:
Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
I Leases:
Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Profit & Loss Account.
Lease transactions entered into on or after 1st April, 2001 :
Assets acquired under lease where the Company has substantially all the
risks and rewards incidental to ownership are classified as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and
rewards incidental to ownership is retained by the lessor are
classified as operating lease. Lease rentals under operating leases are
recognized in the Profit and Loss account on a straight line basis.
J Revenue Recognition:
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
Domestic sales of goods are recognized on dispatch of products. Export
sales are accounted on the basis of date of bill of lading. Sales are
recognized net of value added tax (VAT) collected on behalf of
government. Excise duty recovered, which is part of "Revenue from
Operations (Gross)", is excluded to arrive at "Revenue from
Operations (Net)".
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable.
Revenue in respect of insurance / other claims, dividend etc. is
recognised only when it is reasonably certain that the ultimate
collection will be made.
K Employee Benefits:
Short-term employees benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by
statute, which is a defined contribution plan. There are no other
obligations other than the contribution payable. The same is charged to
Profit and Loss account.
Superannuation Scheme is a defined contribution scheme and the
contribution is charged to the Profit and Loss Account of the year when
the contribution to the fund is due. There are no other obligations
other than the contribution payable.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss
account.
Long term compensated absences are provided for based on actuarial
valuation on projected unit credit method. Actuarial gains/losses are
immediately taken to profit and loss account.
L Export Benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
N Segment Accounting Policies:
Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and mainly consist of fixed assets, inventories, trade
receivables, loans and advances and operating cash & cash equivalents.
Segment assets and liabilities do not include inter-corporate deposits,
share capital, reserves and surplus, borrowings and taxes.
Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
O Taxation:
Income Tax comprises both current and deferred tax. Provision for
current tax is made on the basis of estimated taxable income and tax
credits computed in accordance with the provisions of the Income Tax
Act, 1961.
Deferred tax resulting from "timing differences" between taxable
and accounting income is accounted for using the tax rates and laws
that are enacted or substantively enacted as on the balance sheet date.
The deferred tax asset is recognized and carried forward only to the
extent that there is a reasonable/ virtual certainty that the asset
will be realised in future.
Tax on distributed profits is provided in accordance with the
provisions of section 115-O of the Income Tax Act, 1961 is not
considered in determination of the profits for the year.
P Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2012
A Basis of Accounting:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial standards have been
prepared to comply in all material aspects with the accounting
standards notifies under section 211 (3C) and the other relevant
provisions of the Companies Act, 1956.
B Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
C Fixed Assets:
C (i) Tangible Fixed Asset:
Fixed Assets are recorded at cost of acquisition or construction net of
recoverable taxes. The cost includes financing cost up to the date when
such assets are ready for their intended use. They are stated at cost
less accumulated depreciation and impairment loss, if any. Fixed Assets
acquired on lease basis from Leasing Companies prior to 1st April, 2001
are not included in the Schedule of Fixed Assets. Lease Rentals paid in
respect thereof are charged to Profit and Loss Account.
C (ii) Intangible Assets:
Intangible Assets are stated at cost of acquisition net of recoverable
taxes less accumulated amortization / depletion.
D Depreciation and Amortisation:
Depreciation has been calculated on straight line basis in accordance
with the provisions of Section 205(2)
(b) of the Companies Act, 1956 at the rates and in the manner specified
in Schedule XIV to the said Act. Cost of Leasehold Land is amortised
over the lease period. Intangible Assets (Computer Software) is being
amortised over a period of five years on Straight Line Method.
Assets costing less than Rs. 5,000/- are fully depreciated in the year
of acquisition.
E Impairment of Assets:
Management evaluates at regular intervals, using external and internal
sources whether there is any impairment of any asset. Impairment occurs
where the carrying value exceeds the present value of future cash flows
expected to arise from the continuing use of the asset and its net
realisable value on eventual disposal. Any loss on account of
impairment is expensed as the excess of the carrying amount over the
higher of the asset's net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
F Investments:
Investments, which are readily realizable and 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.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
G Inventories:
G (i) Stores and Spare Parts are valued at first-in first-out cost or
Net Realisable Value whichever is lower.
G (ii) Raw materials are valued at first-in first-out cost or Net
Realisable Value whichever is lower. The cost includes purchase price
as well as incidental expenses.
G (iii) Process Stock is valued at cost or Net realisable value
whichever is lower. Cost is arrived at on the basis of absorption
costing.
G (iv) Finished Goods manufactured (Containers, Can making machinery,
Ice cream cones) are valued at absorption cost or net realisable value
whichever is lower.
H Foreign Currency Transactions:
H (i) Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
H (ii) Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
H (iii) Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
I Leases:
I (i) Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Profit & Loss Account.
I (ii) Lease transactions entered into on or after 1st April, 2001 :
Assets acquired under lease where the Company has substantially all the
risks and rewards incidental to ownership are classified as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
Assets acquired on leases where a significant portion of the risks and
rewards incidental to ownership is retained by the lessor are
classified as operating lease. Lease rentals under operating leases are
recognized in the Profit and Loss account on a straight line basis.
J Revenue Recognition:
J (i) Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the company and the revenue can be
reliably measured.
J (ii)Domestic sales of goods are recognized on dispatch of products.
Export sales are accounted on the basis of date of bill of lading.
Sales are recognized net of value added tax (VAT) collected on behalf
of government. Excise duty recovered, which is part of "Revenue from
Operations (Gross)", is excluded to arrive at "Revenue from
Operations (Net)".
Interest income is recognized on time proportion basis taking into
account the amount outstanding and rate applicable. Revenue in respect
of insurance / other claims, dividend etc. is recognised only when it
is reasonably certain that the ultimate collection will be made.
K Employee Benefits:
Short-term employees benefits are recognized as an expense at the
undiscounted amount in the profit and loss account of the year in which
the related service is rendered.
Post employment and other long term benefits
The Company contributes to Government provident fund as required by
statute, which is a defined contribution plan. There are no other
obligations other than the contribution payable. The same is charged to
Profit and Loss account. Superannuation Scheme is a defined
contribution scheme and the contribution is charged to the Profit and
Loss Account of the year when the contribution to the fund is due.
There are no other obligations other than the contribution payable.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss
account.
Long term compensated absences are provided for based on actuarial
valuation on projected unit credit method. Actuarial gains/losses are
immediately taken to profit and loss account.
L Export Benefits / Incentives:
Export Benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
M Borrowing Cost:
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs are
expensed in the period they occur.
N Segment Accounting Policies:
N (i) Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and mainly consist of fixed assets, inventories, sundry
debtors, loans and advances and operating cash & bank balances. Segment
assets and liabilities do not include inter-corporate deposits, share
capital, reserves and surplus, borrowings and taxes.
N (ii) Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
O Taxation:
Income Tax comprises both current and deferred tax. Provision for
current tax is made on the basis of estimated taxable income and tax
credits computed in accordance with the provisions of the Income Tax
Act, 1961. Deferred tax resulting from "timing differences"
between taxable and accounting income is accounted for using the tax
rates and laws that are enacted or substantively enacted as on the
balance sheet date. The deferred tax asset is recognized and carried
forward only to the extent that there is a reasonable/ virtual
certainty that the asset will be realised in future.
Tax on distributed profits is provided in accordance with the
provisions of section 115-O of the Income Tax Act, 1961 is not
considered in determination of the profits for the year.
P Provisions, Contingent Liabilities and Contingent Assets:
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2011
(A) Basis of Accounting:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with generally accepted accounting principles
[ÃGAAP] and in compliance with the accounting standards referred to in
Section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
(B) Use of estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
(C) Fixed Assets:
(i) Fixed Assets are recorded at cost of acquisition or construction.
They are stated at historical cost. Fixed Assets acquired on lease
basis from Leasing Companies prior to 1st April, 2001 are not included
in the Schedule of Fixed Assets. Lease Rentals paid in respect thereof
are charged to Profit and Loss Account.
(ii) Management evaluates at regular intervals, using external and
internal sources whether there is any impairment of any asset.
Impairment occurs where the carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the asset
and its net realisable value on eventual disposal. Any loss on account
of impairment is expensed as the excess of the carrying amount over the
higher of the assets net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
(iii) Depreciation:
Depreciation has been calculated on straight line basis in accordance
with the provisions of Section 205(2) (b) of the Companies Act, 1956 at
the rates and in the manner specifed in Schedule XIV to the said Act.
Cost of Leasehold Land is amortised over the lease period. Intangible
Assets (Computer Software) is being amortised over a period of Five
years on Straight Line Method.
Assets costing less than Rs. 5,000/- are fully depreciated in the year
of acquisition.
(iv) Intangible Assets:
Intangible Assets are stated at cost of acquisition.
(D) Investments:
Long Term Investments are shown at cost. Provision is made for any
diminution, other than temporary, in the value of investments.
(E) Employee benefits :
Retirement and Gratuity benefits
The Company contributes to Government provident fund as required by
statute, which is a defned contribution plan. The same is charged to
Profit and Loss account.
Superannuation Scheme is a defned contribution scheme and the
contribution is charged to the Profit and Loss Account of the year when
the contribution to the fund is due.
There are no other obligations other than the contribution payable to
the respective authorities.
Gratuity liability is a defned benefit obligation and is provided for on
the basis of an actuarial valuation on projected unit credit method.
Long term compensated absences are provided for based on actuarial
valuation made at the end of each financial year. The actuarial
valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to Profit and loss account
and are not deferred.
(F) Valuation of Inventories :
(i) Stores and Spare Parts are valued at frst-in frst-out cost or Net
Realisable Value whichever is lower.
(ii) Raw materials are valued at first-in first-out cost or Net
Realisable Value whichever is lower. The cost includes purchase price
as well as incidental expenses.
(iii) Process Stock is valued at cost or Net realisable value whichever
is lower. Cost is arrived at on the basis of absorption costing.
Finished Goods manufactured (Containers, Can making machinery, Ice
cream cones) are valued at absorption cost or net realisable value
whichever is lower.
(G) Foreign currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction; and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
(c) Exchange Differences:
Exchange differences arising on the settlement / conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of Profit and loss in the year in which the
exchange rates change. Any Profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year.
(H) Export benefits / Incentives:
Export benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
(I) Revenue Recognition:
(i) Sales are accounted on despatch of products. Export sales are
accounted on the basis of date of bill of lading.
(ii) Revenue in respect of Insurance / other claims, interest etc. is
recognised only when it is reasonably certain that the ultimate
collection will be made.
(J) Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised up to the date when such assets
are ready for their intended use and other borrowing costs are charged
to Profit & Loss Account. A qualifying asset is one that necessarily
takes substantial period of time i.e. more than 12 months to get ready
for intended use.
(K) Segment Accounting Policies:
(a) Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and consist principally of fixed Assets, inventories, sundry
debtors, loans and advances and operating cash & bank balances. Segment
assets and liabilities do not include inter-corporate deposits, share
capital, reserves and surplus, borrowings and taxes.
(b) Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
(L) Taxation:
Income Taxes are accounted for in accordance with Accounting Standard
(AS 22)- ÃAccounting for Taxes on Income, notifed in the Companies
(Accounting Standard ) Rules, 2006.
Income Tax comprises both current and deferred tax. Current tax is
measured on the basis of estimated taxable income and tax credits
computed in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax resulting from Ãtiming differencesà between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable/ virtual certainty that the asset will be
realised in future.
Tax on distributed profits payable in accordance with the provisions of
section 115-O of the Income Tax Act, 1961 is in accordance with the
Guidance Note on Accounting for Corporate Dividend Tax regarded as a
tax on distribution of Profits and is not considered in determination of
the Profits for the year.
(M) Leases
(a) Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Profit & Loss Account.
(b) Lease transactions entered into on or after 1st April, 2001 :
i. Assets acquired under lease where the Company has substantially all
the risks and rewards incidental to ownership are classifed as fnance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period.
ii. Assets acquired on leases where a Significant portion of the risks
and rewards incidental to ownership is retained by the lessor are
classifed as operating lease. Lease rentals under operating leases are
recognized in the Profit and Loss account on a straight line basis.
(N) Provisions, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.
Mar 31, 2010
(A) Basis of Accounting:
The accounts are prepared on accrual basis under the historical cost
convention in accordance with generally accepted accounting principles
[GAAP] and in compliance with the accounting standards referred to in
Section 211 (3C) of the Companies Act, 1956 and other relevant
provisions of the said Act.
(B) Use of Estimates:
The preparation of financial statements requires estimates and
assumptions to be made that affect the reported amount of assets and
liabilities on the date of the financial statements and the reported
amount of revenues and expenses during the reporting period. Difference
between the actual results and estimates are recognised in the period
in which the results are known / materialised.
(C) Fixed Assets:
(i) Fixed Assets are recorded at cost of acquisition or construction.
They are stated at historical cost. Fixed Assets acquired on lease
basis from Leasing Companies prior to 1st April, 2001 are not included
in the Schedule of Fixed Assets. Lease Rentals paid in respect thereof
are charged to Profit and Loss Account.
(ii) Management evaluates at regular intervals, using external and
internal sources whether there is any impairment of any asset.
Impairment occurs where the carrying value exceeds the present value of
future cash flows expected to arise from the continuing use of the
asset and its net realisable value on eventual disposal. Any loss on
account of impairment is expensed as the excess of the carrying amount
over the higher of the assets net realisable value or present value as
determined.
Reversal of impairment losses recognized in prior years is recorded
when there is an indication that the impairment losses recognized for
the asset no longer exist or have decreased.
(iii) Depreciation:
Depreciation has been calculated on straight line basis in accordance
with the provisions of Section 205(2)(b) of the Companies Act, 1956 at
the rates and in the manner specified in Schedule XIV to the said Act.
Cost of Leasehold Land is amortised over the lease period. Intangible
Assets (Computer Software) is being amortised over a period of Five
years on Straight Line Method. Assets costing less than Rs. 5,000/-
are fully depreciated in the year of acquisition.
(iv) Intangible Assets:
Intangible Assets are stated at cost of acquisition.
(D) Investments:
Long Term Investments are shown at cost. Provision is made for any
diminution, other than temporary, in the value of investments.
(E) Employee Benefits : Retirement and Gratuity benefits
The Company contributes to Government provident fund as required by
statute, which is a defined contribution plan. The same is charged to
Profit and Loss account.
Superannuation Scheme is a defined contribution scheme and the
contribution is charged to the Profit and Loss Account of the year when
the contribution to the fund is due.
There are no other obligations other than the contribution payable to
the respective authorities.
Gratuity liability is a defined benefit obligation and is provided for
on the basis of an actuarial valuation on projected unit credit method.
Long term compensated absences are provided for based on actuarial
valuation made at the end of each financial year.
The actuarial valuation is done as per projected unit credit method.
Actuarial gains/losses are immediately taken to profit and loss account
and are not deferred.
(F) Valuation of Inventories :
(i) Stores and Spare Parts are valued at first-in first-out cost or Net
Realisable Value whichever is lower.
(ii) Raw materials are valued at first-in first-out cost or Net
Realisable Value whichever is lower. The cost includes purchase price
as well as incidental expenses.
(iii) Process Stock is valued at cost or Net realisable value whichever
is lower. Cost is arrived at on the basis of absorption costing.
Finished Goods manufactured (Containers, Can making machinery, Ice
cream cones) are valued at absorption cost or net realisable value
whichever is lower.
(G) Foreign currency Transactions:
(a) Initial recognition:
Foreign currency transactions are recorded in the reporting currency by
applying to the foreign currency amount the exchange rate between the
reporting currency and the foreign currency at the date of transaction.
(b) Conversion:
Foreign currency monetary items are reported using the closing rate.
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 transaction; and non-monetary items which are carried at
fair value or other similar valuation denominated in a foreign currency
are reported using the exchange rates that existed when the values were
determined.
(c) Exchange Differences:
Exchange differences arising on the settlement/conversion of monetary
items are recognised as income or expense in the year in which it
arises.
The premium or discount arising at the inception of forward exchange
contracts is amortised as expenses or income over the life of the
respective contracts. Exchange differences on such contracts are
recognised in the statement of profit and loss in the year in which the
exchange rates change. Any profit or loss arising on cancellation or
renewal of forward exchange contract is recognised as income or expense
for the year. (H) Export Benefits/ Incentives:
Export Benefits / Incentives in respect of import duty benefits under
DEEC scheme are accounted on accrual basis on the basis of exports made
under DEEC scheme.
(I) Revenue Recognition:
(i) Sales are accounted on despatch of products. Export sales are
accounted on the basis of date of bill of lading.
(ii) Revenue in respect of Insurance/other claims, interest etc. is
recognised only when it is reasonably certain that the ultimate
collection will be made.
(J) Borrowing Cost:
Interest and other costs in connection with the borrowing of the funds
to the extent related / attributed to the acquisition / construction of
qualifying fixed assets are capitalised upto the date when such assets
are ready for their intended use and other borrowing costs are charged
to Profit & Loss Account. A qualifying asset is one that necessarily
takes substantial period of time i.e. more than 12 months to get ready
for intended use.
(K) Segment Accounting Policies:
(a) Segment assets and liabilities:
All Segment assets and liabilities are directly attributable to the
segment. Segment assets include all operating assets used by the
segment and consist principally of fixed Assets, inventories, sundry
debtors, loans and advances and operating cash & bank balances. Segment
assets and liabilities do not include inter-corporate deposits, share
capital, reserves and surplus, borrowings and taxes.
(b) Segment revenue and expenses:
Segment revenue and expenses are directly attributable to respective
segment. It does not include interest income / expenses on
inter-corporate deposits and borrowings, general administrative
expenses, other expenses that arise at the enterprise level and relate
to the enterprise as a whole and Income tax.
(L) Taxation:
Income Taxes are accounted for in accordance with Accounting Standard
(AS 22)- Accounting for Taxes on Income, notified in the Companies
(Accounting Standard) Rules, 2006.
Income Tax comprises both current and deferred tax. Current tax is
measured on the basis of estimated taxable income and tax credits
computed in accordance with the provisions of the Income Tax Act, 1961.
Deferred tax resulting from "timing differences" between taxable and
accounting income is accounted for using the tax rates and laws that
are enacted or substantively enacted as on the balance sheet date. The
deferred tax asset is recognized and carried forward only to the extent
that there is a reasonable/ virtual certainty that the asset will be
realised in future.
Tax on distributed profits payable in accordance with the provisions of
section 115-0 of the Income Tax Act, 1961 is in accordance with the
Guidance Note on Accounting for Corporate Dividend Tax regarded as a
tax on distribution of profits and is not considered in determination
of the profits for the year.
(M) Leases
(a) Lease transactions entered into prior to 1st April, 2001 :
Lease rentals in respect of assets acquired under lease are charged to
Profit & Loss Account.
(b) Lease transactions entered into on or after 1st April, 2001 :
i. Assets acquired under lease where the Company has substantially all
the risks and rewards incidental to ownership are classified as finance
leases. Such assets are capitalised at the inception of the lease at
the lower of the fair value or the present value of minimum lease
payments and a liability is created for an equivalent amount. Each
lease rental paid is allocated between the liability and the interest
cost, so as to obtain a constant periodic rate of interest on the
outstanding liability for each period. ii. Assets acquired on leases
where a significant portion of the risks and rewards incidental to
ownership is retained by the lessor are classified as operating lease.
Lease rentals under operating leases are recognized in the Profit and
Loss account on a straight line basis.
(N) Provisions, Contingent Liabilities and Contingent Assets :
Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent Liabilities are not recognised but are disclosed in the
notes. Contingent Assets are neither recognised nor disclosed in the
financial statements.