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Notes to Accounts of Kingfa Science & Technology (India) Ltd.

Mar 31, 2023

Provisions and Contingencies

Necessary provisions are made for the present obligations that arise out of past events entailing future outflow of economic
resources. Such provisions reflect best estimates based on available information.

However a disclosure for a contingent liability is made when there is a possible obligation or a present obligation that may, but
probably will not, require an outflow of resources. When there is a possible obligation or a present obligation in respect of
which the likelihood of outflow of resources is remote, no provision or disclosure is made.

4.20. Revenue Recognition

a. Revenue towards satisfaction of performance obligations is measured at the amount of transaction price (net of
variable consideration) allocated to that performance obligation. The transaction price of goods sold and services
rendered is net of variable consideration on account of various discounts and schemes offered by the Company as
part of the contract. Consideration is generally due upon satisfaction of performance obligations and a receivable is
recognised when it becomes unconditional.

The Company manufactures and sells thermoplastic compounds. Sales are recognized when control of the products
has been transferred, when the products are delivered to the customer and there is no unfulfilled obligation that could
affect the customer’s acceptance of the products. Delivery occurs when the products have been shipped, the risks of
obsolescence and loss have been transferred to the customer, and either the customer has accepted the products in
accordance with the sales contract, the acceptance provisions have lapsed, or the company has objective evidence
that all criteria for acceptance have been satisfied.

A receivable is recognized when the goods are delivered as this is the point in time that the consideration is
unconditional because only the passage of time is required before the payment is due. Sales are stated net of
discounts, rebates and returns. It also excludes Goods and Service Tax.

b. Revenue from export incentives are accounted for on export of goods if the entitlements can be estimated with
reasonable assurance and conditions precedent to claim are fulfilled.

c. Interest income from - debt instruments is recognized when it is probable that the economic benefits will flow to the
Company and the amount of income can be measured reliably. Interest income is accrued on a timely basis, by
reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly
discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying
amount on initial recognition.

4.21. Government Grant

Grants and subsidies from the government are recognized if the following conditions are satisfied,

- There is reasonable assurance that the Company will comply with the conditions attached to it.

- Such benefits are earned and reasonable certainty exists of the collection.

However, company has opted for recording non monitory government grants at nominal value as per the Companies
(India Accounting Standards) second amendment rule 2018 notified as on 20th September 2018

4.22. Cash dividend

The Company recognizes a liability to make cash distributions to the equity holders of the Company when the distribution is
authorized and the distribution is no longer at the discretion of the Company. As per the provisions of Companies Act, 2013, a
distribution is authorized when it is approved by the shareholders. A corresponding amount is recognized directly in equity.
Non-cash distributions, if any, are measured at the fair value of the assets to be distributed with fair value re-measurement
recognized directly in equity.

Upon distribution of non-cash assets, any difference between the carrying amount of the liability and the carrying amount of
the assets distributed is recognized in the statement of profit and loss.

4.23. Earnings Per Share

Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the
weighted average number of equity shares outstanding during the year.

4.24. Cash Flow Statement

Cash flows are reported using the indirect method, whereby net profit before tax is adjusted for the effects of transactions of a
non cash nature and any deferral 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.

4.25. Segment Reporting

The business of the Company falls under a single primary segment i.e. "Reinforced Polypropylene" for the purpose of Ind AS
108.

4.26. Rounding of amounts

All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the
requirement of Schedule III, unless otherwise stated.


Mar 31, 2018

1. Corporate Information

The Company is a Public Limited Company domiciled in India and is incorporated under the provisions of the Companies Act 1956. The registered office of the Company is located at Dhun Building, III Floor, 827, Anna Salai, Chennai - 600002.

The equity shares of the Company are listed on two recognised stock exchanges in India i.e. BSE Limited and National Stock Exchange of India Limited.

The Company is a subsidiary company of M/s Kingfa Science & Technology Co. Ltd China.

The Company is engaged in the business of manufacturing and supplier of high quality reinforced polypropylene compounds, thermoplastics elastomers and fibre re-inforced composites.

The standalone financial statements were approved by the Board of Directors and authorized for issue on 28th May 2018.

2. Basis of preparation of Financial Statements

The standalone financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as issued under the Companies (Indian Accounting Standards) Rules, 2015.

The standalone financial statements have been prepared to comply in all material respects with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the said Act. These standalone financial statements for the year ended 31 March 2018 are the first standalone financial statements that the Company has prepared in accordance with Ind AS. Refer to Note 4 for information on how the Company adopted Ind AS.

The standalone financial statements have been prepared on a historical cost basis, except defined benefit plan, wherein plan assets are measured at Fair value.

3. Significant accounting judgments, estimates and assumptions

The preparation of the Company’s financial statements requires management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.

3.1. Judgments

In the process of applying the Company’s accounting policies, the management has made the following judgments, which have the most significant effect on the amounts recognised in the standalone financial statements:

Operating Lease

Lease arrangements under which all risks and rewards of ownership are effectively retained by the lessor are classified as operating lease. Lease rental under operating lease are recognised in the Statement of Profit and Loss on a straight-line basis over the lease term.

3.2. Estimates and assumptions

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the standalone financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.

Defined benefit plans

The cost of the defined benefit plans and other post-employment benefits and the present value of the obligation are determined using actuarial valuation. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future post-retirement medical benefit increase.Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.

The parameter most subject to change is the discount rate. In determining the appropriate discount rate, management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation and extrapolated as needed along the yield curve to correspond with the expected term of the defined benefit obligation.

The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at intervals in response to demographic changes. Future salary increases are based on expected future inflation rates for the country.

Further details about defined benefit obligations are provided in Note 35.6.6.

Deferred Tax

Deferred tax assets are recognised for all deductible temporary differences including the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized.

4. First-time adoption of Indian Accounting Standards (“Ind AS”)

The standalone financial statements have been prepared in accordance with Indian Accounting Standards (“Ind AS”) as issued under the Companies (Indian Accounting Standards) Rules, 2015. The Company has adopted Ind AS for the first time. Note 33 spells out details of various provisions for First time adoption.

The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligations as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

The followings are the expected future benefit payments for the defined benefit plan

5.1. In the absence of information from suppliers with regard to their registration with the specified authority, despite the company calling for such information through a circular letter, the additional disclosure as required under the Micro, Small and Medium Enterprises Development Act, 2006 is not furnished.

5.2. Related parties have been identified as defined under Clause 9 of Accounting Standard (Ind AS 24) “Related Party Disclosures”

The above figures do not include provision for leave encashment and gratuity, as actuarial valuation of such provision for the

Key Management Personnel is included in the total provision for Leave encashment & gratuity.

Terms and conditions of transactions with related parties

Transactions entered into with related party are made on terms equivalent to those that prevail in arm’s length transactions. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables. For the year ended 31 March 2018, the Company has not recorded any impairment of receivables relating to amounts owed by related parties (31 March 2017: ''Nil and 1 April 2016: ''Nil). This assessment is undertaken each financial year through examining the financial position of the related party and the market in which the related party operates.

The above figures do not include provision for leave encashment and gratuity, as actuarial valuation of such provision for the Key Management Personnel is included in the total provision for Leave encashment & gratuity.

Earnings per share are calculated in accordance with Accounting Standard (Ind AS 33) “Earnings Per Share”.

5.3. Fair value disclosures for financial assets and financial liabilities

The management believes that the fair values of non-current financial assets (e.g. loans and others),current financial assets (e.g., cash and cash equivalents, trade and other receivables, loans), non-current financial liabilities and current financial liabilities(e.g. Trade payables and other payables and others) approximate their carrying amounts.

5.4. Financial instruments risk management objectives and policies

The Company’s principal financial liabilities, other than derivatives, comprise borrowings, trade and other payables and other financial liabilities. The main purpose of these financial liabilities is to finance the Company’s operations to support its operations. The Company’s principal financial assets include trade and other receivables, cash and short-term deposits and other financial assets that derive directly from its operations.

The company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Audit Committee and Board review financial risks and the appropriate risk governance framework for the company’s financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.

a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include borrowings, deposits, trade and other receivables, trade and other payables and derivative financial instruments.

The sensitivity analyses in the following sections relate to the position as at 31 March 2018, 31 March 2017 and 1 April 2016.

The analyses exclude the impact of movements in market variables on: the carrying values of gratuity provisions.

The following assumption has been made in calculating the sensitivity analyses:

- The sensitivity of the relevant statement of profit and loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31 March 2018, 31 March 2017 and 1 April 2016.

i ) Interest rate risk

a. Exposure

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.

ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).

The Company is in the process of managing its foreign currency risk by hedging transactions related to sales & purchases. Foreign currency sensitivity

The following tables demonstrate the sensitivity to a reasonably possible change in USD, CNY & JPY exchange rates, with all other variables held constant. The impact on the Company’s profit before tax is due to changes in the fair value of monetary assets and liabilities. The impact on the Company’s pre-tax equity is due to changes in the fair value of forward exchange contracts designated as cash flow hedges and net investment hedges. The Company’s exposure to foreign currency changes for all other currencies is not material.

iii) Commodity price risk

The Company is affected by the price volatility of certain commodities. Its operating activities require the on-going manufacture of and therefore require a continuous supply of polypropylene. However the company being indirect user of these commodities and based on past trend to pass on these volatility to customers, does not have direct impact on profitability over a period of time.

iv) Other Price Risk

The company does not hold investments in equity or mutual fund as on the date of Balance Sheet and hence it is not exposed to any such risks.

v) Equity price risk

The Company has not made any investment in equity instruments and hence, the Company do not foresee any risk from this unlisted equity shares.

b) Credit risk

Credit risk is the risk that counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks, foreign exchange transactions and other financial instruments.

Trade receivables

Receivables are reviewed, managed and controlled for each class of customers separately. Credit exposure risk is mainly influenced by class /type of customers, depending upon their characteristics. Credit risk is managed through credit approval process by establishing credit limits along with continuous monitoring of credit worthiness of customers to whom credit terms are granted. Wherever required, credit risk of receivables is further covered through letter of credit, bank guarantee, business deposits and such other forms of credit assurance schemes.

An impairment analysis is performed at each reporting date on an individual basis for major clients. In addition, a large number of minor receivables are combined into homogenous category and assessed for impairment collectively. The calculation is based on actual incurred historical data. The Company does not hold collateral as security. The Company evaluates the concentration of risk with respect to trade receivables as low, as its customers are spread over vast spectrum.

Financial instruments and cash deposits

Credit risk from balances with banks and financial institutions is managed by the Company in accordance with the Company’s policy. Investments of surplus funds are made as per the approved investment policy. Investment limits are set to minimise the concentration of risks and therefore mitigate financial loss if any.

c) Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of underlying businesses, company’s treasury maintains flexibility in funding by maintaining availability under committed credit lines.

Management monitors rolling forecast of the company’s liquidity position and cash and cash equivalents on the basis of expected cash flows. This is generally carried out at the local level in the operating companies in accordance with the practice and limits set by the company. These limits vary by location to take into account the liquidity of the market in which the entity operates. In addition, the company’s liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.

(i) The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments:

5.5. Capital management

For the purpose of the Company’s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the Company. The primary objective of the Company’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Company manages its capital structure and makes adjustments to it in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018, 31 March 2017 and 1 April 2016.

NOTE 6 : First-time adoption of Indian Accounting Standards (“Ind AS”)

These financial statements, for the year ended 31 March 2018, are the first financial statements, the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2017, the Company prepared its financial statements in accordance with Indian GAAP.

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening Balance Sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the Balance Sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.

Exemptions applied

Ind AS 101 “First-time Adoption of Indian Accounting Standards” allows a first-time adopter certain exemption from the retrospective application of certain requirements under Ind AS.

The Company has applied the following exemptions:

1. The Company has elected to continue with the carrying value for all of its Property, plant and equipment as recognised in its Indian GAAP financial statements as at April 01, 2016 as deemed cost at the date of transition.

2. The Company has elected to disclose the following amounts prospectively from the date of transition (Ind AS ordinarily requires the amounts for the current and previous four annual periods to be disclosed):

(i) the present value of the defined benefit obligation, the fair value of the plan assets and the surplus or deficit in the plan; and

(ii) the experience adjustments arising on the plan liabilities and the plan assets.

3. Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. However, the Company has used the exemption in Ind AS 101 and assessed all such arrangements for embedded leases based on conditions existing as at the date of transition to Ind-AS.

Exceptions

The Company has elected to apply the derecognition requirement for financial assets under Ind AS 109 “Financial Instruments”, prospectively for transactions occurring on or after 1 April 2016.

Estimates

The estimates made under Ind AS as at 1 April 2016 and at 31 March 2017 are consistent with the estimates made for the same dates in accordance with Indian GAAP except the following item where application of Indian GAAP did not require estimation:

4. Notes to the reconciliation of the equity as at 1 April 2016 and 31 March 2017 and total comprehensive income for the year ended 31 March 2017.

a. Defined benefit obligation

Both under Indian GAAP and Ind AS, the Company recognises costs related to its post-employment defined benefit plan on an actuarial basis. However, under Indian GAAP, the entire cost, including actuarial gains and losses, are recognised in the statement of profit and loss. Under Ind AS, re-measurements [comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through Other Comprehensive Income net of taxes.

b. Deferred taxes

Indian GAAP requires deferred taxes to be accounted using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12-Income Taxes requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP.

In addition, certain transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments have been recognised in correlation to the underlying transaction either in retained earnings or as a separate component of equity.

c. Sale of goods

Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses.

d. Other comprehensive income

Under Indian GAAP, there were no requirements to separately disclose Other Comprehensive Income (‘OCI’) and hence, the Company had not presented other comprehensive income (OCI) separately. As such, items falling under OCI and effect of Income tax thereon are disclosed. Hence, the Company has reconciled the profit under Indian GAAP to the profit as per Ind AS. Further, the profit under Ind AS is reconciled to total comprehensive income as per Ind-AS.

e. Government grant

The company had taken a leasehold land during FY 2016-17 for which the government has provided an exemption from payment of stamp duty as per the relevant pronouncements. The amount of exemption has been added as a cost of the land and is treated as deferred income in the financial statements. This deferred amount is charged to income as and when the obligations prescribed for availing the exemption gets fulfilled.

f. Rights issue expenses

The company had incurred expenses for the purpose of right issue. These expenses were charged to Profit & Loss Account under I-GAAP. However as per the extant guidelines of IND AS, the same have been charged off to equity.

g. Standalone Statement of cash flow

The transition from Indian GAAP to Ind AS has no material impact on the standalone statement of cash flows.

NOTE 7 : Standards issued but not yet effective

The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 on March 28, 2018. The Rules shall be effective from reporting period beginning on or after April 1, 2018 and cannot be early adopted.

a. Ind AS 115 - Revenue from contracts with customers

Ind AS 115, Revenue from contracts with customers deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control of a promised good or service and thus has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. The standard replaces Ind AS 18 Revenue and Ind AS 11 Construction contracts and related appendices.

A new five-step process must be applied before revenue can be recognised:

(i) identify contracts with customers

(ii) identify the separate performance obligation

(iii) determine the transaction price of the contract

(iv) allocate the transaction price to each of the separate performance obligations, and

(v) recognise the revenue as each performance obligation is satisfied.

The new standard is mandatory for financial years commencing on or after April 1, 2018 and early application is not permitted. The standard permits either a full retrospective or a modified retrospective approach for the adoption.

There are consequential amendments to other Ind AS due to notification of Ind AS 115. The Company is in the process of evaluating the impact on the financial statements in terms of the amount and timing of revenue recognition under the new standard.

b. Ind AS 21 - The Effects of changes in foreign exchange rates

The MCA has notified Appendix B to Ind AS 21, Foreign currency transactions and advance consideration. The appendix clarifies how to determine the date of transaction for the exchange rate to be used on initial recognition of a related asset, expense or income where an entity pays or receives consideration in advance for foreign currency-denominated contracts.

For a single payment or receipt, the date of the transaction should be the date on which the entity initially recognises the non-monetary asset or liability arising from the advance consideration (the prepayment or deferred income/contract liability). If there are multiple payments or receipts for one item, date of transaction should be determined as above for each payment or receipt.

The appendix can be applied :

(i) retrospectively for each period presented applying Ind AS 8;

(ii) prospectively to items in scope of the appendix that are initially recognized

- on or after the beginning of the reporting period in which the appendix is first applied (i.e. 1 April 2018); or

- from the beginning of a prior reporting period presented as comparative information (i.e. 1 April 2017 ).

The Company is in the process of evaluating the impact on the financial statements in terms of the amount and timing of revenue recognition under the new standard.

c. Ind AS 40 - Investment property

The amendments clarify that transfers to, or from, investment property can only be made if there has been a change in use that is supported by evidence. A change in use occurs when the property meets, or ceases to meet, the definition of investment property. A change in intention alone is not sufficient to support a transfer. The list of evidence for a change of use in the standard was re-characterized as a non-exhaustive list of examples and scope of these examples have been expanded to include assets under construction / development and not only transfer of completed properties.

The amendment provides two transition options. Entities can choose to apply the amendment:

(i) Retrospectively without the use of hindsight; or

(ii) Prospectively to changes in use that occur on or after the date of initial application (i.e. April 1, 2018). At that date, an entity shall reassess the classification of properties held at that date and, if applicable, reclassify properties to reflect the conditions that exist as at that date.

There is no impact of this amendment to the Company.

d. Ind AS 12 - Income taxes

The amendments clarify the accounting for deferred taxes where an asset is measured at fair value and that fair value is below the asset’s tax base. They also clarify certain other aspects of accounting for deferred tax assets set out below:

A temporary difference exists whenever the carrying amount of an asset is less than its tax base at the end of the reporting period.

The estimate of future taxable profit may include the recovery of some of an entity’s assets for more than its carrying amount if it is probable that the entity will achieve this. For example, when a fixed-rate debt instrument is measured at fair value, however, the entity expects to hold and collect the contractual cash flows and it is probable that the asset will be recovered for more than its carrying amount.

Where the tax law restricts the source of taxable profits against which particular types of deferred tax assets can be recovered, the recoverability of the deferred tax assets can only be assessed in combination with other deferred tax assets of the same type.

Tax deductions resulting from the reversal of deferred tax assets are excluded from the estimated future taxable profit that is used to evaluate the recoverability of those assets. This is to avoid double counting the deductible temporary differences in such assessment.

An entity shall apply the amendments to Ind AS 12 retrospectively in accordance with Ind AS 8. However, on initial application of the amendment, the change in the opening equity of the earliest comparative period may be recognised in opening retained earnings (or in another component of equity, as appropriate), without allocating the change between opening retained earnings and other components of equity.

There is no impact of this amendment to the Company.

NOTE 8 : Previous year’s figures have been re-grouped wherever considered necessary to make them comparable with those of the current year.

Signatures to Note 1 to 35, forming part of the Financial Statements.


Mar 31, 2017

i) The company is authorised to issue Equity and 16% Cumulative Redeemable Preference shares. However the company has One class of equity shares having a par value of Rs.10 each . Each share holder is eligible for one vote per share. The dividend proposed by the Board of directors is subject to approval of share holders, except in case of interim dividend. In the event of liquidation, the equity share holders are eligible to receive remaining assets of the company after distribution of all preferential amounts, in proportion of their share holding.

ii) 7,582,340 equity shares are held by the holding company, M/s. Kingfa Sci. & Tech. Co. Ltd., China in the paid up share capital of the company.

iii) Details of shares held by shareholders holding more than 5% of the shares in the company :

iv) The company had issued 3,703,364 Equity Shares of Rs.10 each at a Premium of Rs.260 each through Right Issue during the financial year 2015-16.

Note : 1. Trade payables

In the absence of information from the suppliers with regard to their registration with the specified authority, despite the company calling for such information through a circular letter, the additional disclosure as required under the Micro, Small and Medium Enterprises Development Act, 2006 is not furnished.

a) General description of Employee Benefits :

(i) Short term Employee Benefits

The employee benefits payable wholly within 12 months of rendering the service are classified as short term benefits. Benefits such as salaries, wages, short term compensated absences and the expected cost of bonus and ex-gratia are recognised at the undiscounted amount in the year in which the employee renders the related service.

(ii) Post Employment Benefits

(a) Provident fund is a defined contribution plan and contributions made to the fund in accordance with the applicable rules/statutes are expensed.

(b) The Employees Group Gratuity Scheme is a defined benefit plan which is funded with the Life Insurance Corporation of India and the annual contribution to the fund actuarially assessed by them is expensed.

(c) Superannuation is a defined contribution plan. The contributions in accordance with the company’s scheme made to the fund administered by the Life Insurance Corporation of India are expensed.

(d) The Employee Group Gratuity Fund and the Employee Superannuation Fund respectively have been constituted through Kingfa Science and Technology (India) Limited Employees Group Gratuity Trust and Kingfa Science and Technology (India) Limited Employee Superannuation Trust in which one of the Company’s director is a Trustee.

(e) Leave encashment is provided as per the Company’s policies and is expensed as under :

1. The leave accumulation upto 60 days is funded through a policy with LIC of India.

2. The encashment of leave accumulated beyond 60 days is borne by the company.

3. Any difference arising out of actuarial valuation is expensed.

Note: 2. Share application money represents the application money received in advance from promoter M/s. Kingfa Science and Technology Limited, China towards its rights entitlement.

Note: 3. Miscellaneous expenses includes Rs.38,590/- spent towards Corporate Social Resposibility (CSR) for the year.

Note: 4. Disclosure in respect of specified bank notes held and transacted

Specified Bank Notes is defined as Bank Notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees. The disclosures with respects to ‘Permitted Receipts’, ‘Permitted Payments’, ‘Amount Deposited in Banks’ and ‘Closing Cash in Hand as on 30.12.2016’ is understood to be applicable in case of SBNs only.

Note: 5. There being no indication of impairment of fixed assets determined by the Company, no loss has been recognized on impairment of assets.

Note:6. Previous year’s figures (including those given within brackets) have been regrouped/ reclassified wherever necessary to correspond to the current year’s classification/ disclosure:

Figures in the financial statements have been shown as Rs. in lacs except per share data.


Mar 31, 2016

(ii) Post Employment Benefits .

(a) Provident fund is a defined contribution plan and contributions made to the fund in accordance with the applicable rules/statutes are expensed.

(b) The Employees Group Gratuity Scheme is a defined benefit plan which is funded with the Life Insurance Corporation of India and the annual contribution to the fund actuarially assessed by them is expensed.

(c) Superannuation is a defined contribution plan. The contributions in accordance with the company''s scheme made to the fund administered by the Life insurance Corporation of India are expensed.

(d) The Employee Group Gratuity Fund and the Employee Superannuation Fund respectively have been constituted through Hydro S & S Employees Group Gratuity Trust and Hydro S & S Employee Superannuation Trust in which one of the Company''s directors is a T trustee.


Mar 31, 2015

Note: 1.Effective from 01.04.2014, depreciation on tangible assets has been provided as per "useful life" specified in part C in Schedule II of the Companies Act, 2013. The carrying amount as on 01.04.2014 is accordingly depreciated over "useful life". Due to these changes, the impact on depreciation for the year ended 31.03.2015 is higher by Rs. 6.48 lakhs. The Carrying value of Rs. 18.57 lakhs relating to assets whose "useful life" is Nil as on 01.04.2014 has been adjusted in the opening balance of retained earnings in terms of Schedule II of the Act.

Note: 2.There being no indication of impairment of fixed assets determined by the Company, no loss has been recognized on impairment of assets.

Note: 3.Previous year's figures (including those given within bracket) have been regrouped/ reclassified wherever necessary to correspond to the current period's classification/ disclosure. Figures in the financial statements have been shown Rs.in lacs except per share data.


Mar 31, 2013

Note: 1. Contingent Liabilities not provided for

a) Letters of credit 457.07 452.19

b) Letters of guarantee 6.62 6.62

c) Commitment on capital accounts 1.54 4.61

d) Customs duty on materials-in-bond 15.72 2.11

e) Custom duty disputed in appeals 26.78 26.78

f) Income Tax disputed in appeals 61.54 16.94

g) Sales Tax disputed in appeals 12.75

h) Excise duty & Service Tax disputed in appeals 14.96 12.58

Note: 2. Previous year''s figures (including those given within brackets) have been regrouped / reclassified wherever necessary to correspond to the current year''s classification / disclosure. Figures in the financial statements have been shown Rs. in lacs except per share data.


Mar 31, 2012

Details of Security

The above Rupee Term loans from Banks are secured by a mortgage of the Company's immovable properties and hypothecation of applicable movable assets, present and future, at Pudukkottai, Puducherry, Jejuri and Tirunelveli on a pari passu basis and collaterally secured by way of second charge on the current assets of the company.

A. Hire purchase finance is used to fund vehicles purchased for the company. The vehicles are secured by hypothecation to the financiers

Note: 1. Contingent liabilities not provided for

a) Letters of credit 452.19 533.87

b) Letters of guarantee 6.62 2.00

c) Commitment on capital accounts 4.61 18.40

d) Customs duty on materials-in-bond 2.11 3.38

e) Custom duty disputed in appeals 26.78 26.78

f) Income tax disputed in appeals 16.94 16.94

g) Excise duty & Service tax disputed in appeals 12.58 5.56

f) General description of Employee Benefits :

(i) Short term Employee Benefits

The employee benefits payable wholly within 12 months of rendering the service are classified as short term benefits. Benefits such as salaries, wages, short term compensated absences and the expected cost of bonus and ex-gratia are recognized at the undiscounted amount in the year in which the employee renders the related service.

(ii) Post Employment Benefits

(a) Provident fund is a defined contribution plan and contributions made to the fund in accordance with the applicable rules/statutes are expensed.

(b) The employees group Gratuity scheme is a defined benefit plan which is funded with the Life Insurance Corporation of India and the annual contribution to the fund actuarially assessed by them is expensed.

(c) Superannuation is a defined contribution plan. The contributions in accordance with the company's scheme made to the fund administered by the Life Insurance Corporation of India are expensed.

(d) Leave encashment is provided as per the Company's policies and is expensed as under :

1. The leave accumulation up to 60 days is funded through a policy with LIC of India.

2. The encashment of leave accumulated beyond 60 days is borne by the company.

3. Any difference arising out of actuarial valuation is expensed.

Note: 2. The Revised Schedule VI has become effective from 1 April, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous year's figures (including those given within brackets) have been regrouped / reclassified wherever necessary to correspond to the current year's classification / disclosure. Figures in the financial statements have been shown Rs. in lacs except per share data.


Mar 31, 2010

1. Secured Loans

a) Cash credit and other working capital facilities from banks are secured against hypothecation of stock-in-trade, book debts, documentary bills and supply bills and collaterally secured by way of second charge on the present and future fixed assets of the company at Pudukkottai, Puducherry, Jejuri & Tirunelveli.

b) Term loans from Banks are secured by a mortgage of the Companys immovable property and hypothecation of applicable movable assets, present and future, at Pudukkottai, Puducherry, Jejuri and Tirunelveli on a pari passu basis and collaterally secured by way of second charge on the current assets of the Company.

2. Letters seeking confirmation of balances in respect of debtors and creditors have been sent during the year. Confirmation remains to be received in some cases.

3. Unclaimed dividends are transferred to the Investor Education and Protection Fund at the appropriate time.

(Rs. in 000s)

As at 31-03-2010 As at 31-03-2009

4. Contingent Liabilities not provided for :

a) Letters of credit 35,957 74,140

b) Letters of guarantee 10 10

c) Commitment on capital accounts 1,918 3,944

d) Customs duty on materials-in-bond 1,052 1,986

e) Custom duty disputed 2,678 2,678

f) Income Tax disputed in appeal 605 1,334

g) Excise duty & Service Tax disputed in appeal 633 679



5. Pursuant to the decision of the Board on 16.09.2008 to Buy back Equity Shares of Rs.10/- each of the company upto a limit of 10% of the Equity Capital and Free Reserves, the Company as on 15.09.2009 has bought back 118425 of the Equity Shares of Rs.10/- each. Consequently, the sum of Rs.1,184 (000’s) being the nominal value of the Equity Shares bought back and extinguished, has been transferred to Capital Redemption Reserve Account.

6. Fringe Benefit Tax included under Current Tax

7. Power, Fuel & Water charges under other costs is net of 4,412 (8,145) being income generated by our Wind Energy Generators located at Tirunelveli.

8. Disclosure relating to Micro, Small and Medium Enterprises

In the absence of information from the suppliers with regard to their registration with the specified authority, despite the company calling for such information through a circular letter, the additional disclosure as required under the Micro, Small and Medium Enterprises Development Act, 2006 is not furnished.

f) General description of Employee Benefits :

(i) Short term Employee Benefits

The employee benefits payable wholly within 12 months of rendering the service are classified as short term benefits. Benefits such as salaries, wages, short term compensated absences and the expected cost of bonus and ex-gratia are recognised at the undiscounted amount in the year in which the employee renders the related service.

(ii) Post Employment Benefits

(a) Provident fund is a defined contribution plan and contributions made to the fund in accordance with the applicable rules/statutes are expensed.

(b) The employees group Gratuity scheme is a defined benefit plan which is funded with the Life Insurance Corporation of India and the annual contribution to the fund actuarially assessed by them is expensed.

(c) Superannuation is a defined contribution plan. The contributions in accordance with the companys scheme made to the fund administered by the Life Insurance Corporation of India are expensed.

(d) Leave encashment is provided as per the Company’s policies and is expensed as under :

1. The leave accumulation upto 60 days is funded through a policy with LIC of India.

2. The encashment of leave accumulated beyond 60 days is borne by the company.

3. Any difference arising out of actuarial valuation is expensed.

9. The Related Party Disclosures:

(i) Related parties - Names & Descriptions

Key Management Personnel

Mr. Narayan Sethuramon (upto 29-07-2009)

Mr. S.K. Subramanyan

Relative of Key Management Personnel

Mr. V. Srinivasan

Mr. Murali Venkatraman

Mrs. Suchitra Murali Balakrishnan

Associates

W.S. Industries (India) Ltd.

W.S. Industries (India) Ltd. Unit II

Other related parties

W S International Pvt Ltd.

Vensunar Holdings Pvt Ltd.

10. Previous years figures (shown separately and within brackets wherever given) have been regrouped wherever necessary to conform to this years classification.

11. Schedules "1" to "15" form an integral part of the Balance Sheet and the Profit and Loss Account and have been duly authenticated.

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