Mar 31, 2023
1. Company information
KRBL Limited (âCompanyâ) is a Limited Company domiciled in India and was incorporated on 30 March 1993. The registered office of the Company is located at 5190, Lahori Gate, Delhi 110006. The shares of the Company are listed in India on National Stock Exchange of India Limited (âNSEâ) and BSE Limited (âBSEâ).
The Company is worldâs leading basmati rice producer and has fully integrated operations in every aspect of basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands owned by the Company âIndia Gateâ is the flagship brand both in domestic and international markets.
2. Basis of preparation, measurement and significant accounting policies(i) General information
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, as amended from time to time and other relevant provisions of the Act. The Company has uniformly applied the accounting policies during the periods presented.
These standalone financial statements for the year ended 31 March 2023 were authorized and approved for issue by the Board of Directors on 30 May 2023.
The standalone financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorized into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.
(iii) Functional and presentation currency
These standalone financial statements are presented in Indian rupees (T) which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest lacs as per the requirements of Ind AS Schedule III of the Act, unless otherwise indicated.
(iv) Summary of significant accounting policies
The standalone financial statements have been prepared using the significant accounting policies and measurement basis summarized below. These were used throughout all periods presented in the standalone financial statements.
The Company presents assets and liabilities in the standalone balance sheet based on current / noncurrent classification.
An asset/liability is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed or settled in normal operating cycle;
⢠Expected to be realised/settled within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as noncurrent. Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
Property, plant and equipment are measured at cost, less accumulated depreciation and impairment losses, if any. Freehold land is stated at original cost of acquisition.
Cost of an item of property, plant and equipment includes acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses. Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced. All other repairs and maintenance are generally charged to the statement of profit and loss during the reporting period in which they are incurred.
In respect of major projects involving construction, related preoperational expenses form part of the
value of assets capitalized. Expenses capitalized also include applicable borrowing costs.
Property, plant and equipment which are not ready for intended use as on the date of balance sheet are disclosed as âCapital work-in-progressâ.
Depreciation on property, plant and equipment has been provided on straight line method, in terms of useful life of the assets as prescribed in Para C of Schedule II to the Companies Act, 2013. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which the asset is capitalized/disposed-off.
Depreciation method and useful lives are reviewed annually. If the useful life of an asset is estimated to be significantly different from previous estimates, the depreciation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the depreciation method is changed to reflect the changed pattern.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the statement of profit and loss when the item is derecognized.
Property held to earn rentals or / and for capital appreciation or both but not for sale in the ordinary course of business, or for use in the production or supply of goods or services or for administrative purposes, are categorized as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment, if any. Subsequent expenditure is capitalized to the assetâs carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment properties are depreciated using the straight-line method over the useful lives as mentioned in Schedule II of the Act.
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying cost (including accumulated depreciation) on the date of reclassification and vice-a-versa.
d. Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Intangible assets which are not ready for intended use as on the date of balance sheet are disclosed as âIntangible assets under developmentâ.
Computer software, patent, trademark and design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which was depreciated in 6 years on straight line method based upon life of servers where it is installed.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the statement of profit and loss when the asset is derecognized.
e. Investment in subsidiaries
Investment in equity instruments of subsidiaries are measured at cost as per Ind AS 27 âSeparate Financial Statements.
Raw materials, stores and spares and packing materials are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be
used, are expected to be sold at or above cost. The cost is calculated on weighted average cost method and it comprises all costs incurred in bringing the inventories to their present location and condition and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving and defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
Finished goods are valued at lower of cost and net realisable value. Cost of inventories of finished goods includes cost of raw materials, direct and indirect overheads which are incurred to bring the inventories to their present location and condition.
By-products are valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties, if any. The Company recognizes revenue when it transfers control over a product or service to a customer.
To determine whether to recognize revenue, the Company follows a 5-step process:
⢠Identifying the contract with a customer
⢠Identifying the performance obligations
⢠Determining the transaction price
⢠Allocating the transaction price to the performance obligations
⢠Recognising revenue when/as performance obligation(s) are satisfied.
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, regardless of when the payment is being made.
The Company derives revenue primarily from two segments - Agri and Energy. Agri segment of the Company principally generate revenue from sale of goods (rice and by products) and Energy segment generates revenue by generating power units and selling it to state government owned power distribution companies (âDISCOMâ) under the power purchase agreements. (for more detailed information about reportable segments, refer note 45)
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customers and when there are no longer any unfulfilled obligations.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.
Sale of energy is accounted for on basis of energy supplied.
Dividend is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest income is recognized using the time proportion method based on the rates implicit in the transaction.
All employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus, allowances and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees. Further, the liabilities are presented as provisions for employee benefits under other current liabilities in the standalone balance sheet.
The Company makes payments made to defined contribution plans such as provident fund and employeesâ state insurance. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
The liability recognised in the standalone balance sheet in respect of gratuity is the present value of the defined benefit obligation as at the standalone balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated at the standalone balance sheet date on the basis of actuarial valuation by an independent actuary using projected unit credit method. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in the Other Comprehensive Income in the year in which such gains or losses arise.
Other long-term employee benefits are recognised as an expense in the standalone statement of profit and loss as and when they accrue. The Company determines the liability using the Projected Unit Credit Method, with actuarial valuations carried out as at the standalone balance sheet date. Actuarial gains and losses in respect of such benefits are charged to the statement of profit and loss.
Revenue expenditure on research and development is charged to the statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included under property, plant and equipment and/or intangible assets, as the case may be.
j. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
For purposes of subsequent measurement financial assets are classified in below categories:
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.
A 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.
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
A financial asset is primarily de recognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
The Company assesses impairment based on expected credit losses (ECL) model for measurement and recognition of impairment loss, the calculation of which is based on historical data, on the financial assets that are trade receivables or contract revenue receivables.
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
The measurement of financial liabilities depends on their classification, as described below:
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are de recognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the standalone statement of profit and loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the standalone statement of profit and loss.
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the standalone statement of profit and loss.
Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and full currency swaps, to hedge its foreign currency risks and interest rate risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to standalone statement of profit and loss.
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2: Valuation techniques for which the lowest level input that is significant to the
fair value measurement is directly or indirectly observable.
⢠Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the standalone balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by reassessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
The Company uses derivative financial instruments, such as forward contracts to hedge its foreign currency risks and interest rate risks and non-derivative financial liabilities to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Foreign currency risk of non-derivative financial liabilities used for hedging is measured using spot rates.
Any gains or losses arising from changes in the fair value of derivatives and change in foreign currency risk component of non-derivative financial liabilities are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedged item affects profit or loss. For the purpose of hedge accounting, hedges are classified as cash flow hedges where Company hedges its exposure to variability in cash flows that is attributable to foreign currency risk and interest rate risk associated with recognised liabilities in the standalone financial statements.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the groupâs risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the hedging instrumentâs fair value in offsetting the exposure to changes in the hedged itemâs cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine that they continue to be highly effective throughout the financial reporting periods for which they are designated.
When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss within other gains/(losses).
The Companyâs lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset;
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and;
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use assets and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Right-of-use assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right of use assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.
Lease liability and Right-of-use assets have been separately presented in the standalone balance sheet and lease payments have been classified as financing cash flows.
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.
On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the standalone statement of profit and loss.
Foreign currency monetary items of the Company are translated at the closing exchange rates. Nonmonetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured. Exchange differences arising out of these translations are recognised in the standalone statement of profit and loss.
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax is measured at the amount expected to be paid/ recovered to/from the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity/other comprehensive income is recognised under the respective head and not in the standalone statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities if, and only if, a legally enforceable right exists to set off the recognised amounts and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, 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 utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Tax relating to items recognized directly in equity/other comprehensive income is recognised in respective head and not in the statement of profit and loss.
The carrying amount of deferred tax assets is reviewed at each standalone balance sheet date and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed.
o. Subsidy income
Subsidy income from the government is recognised when there is reasonable assurance that the subsidy income will be received and the Company will comply with all attached conditions.
Subsidy income is recognized on a systematic basis over the periods in which the related costs that are intended to be compensated by such subsidies are recognized.
Subsidy income received from government towards property, plant and equipment acquired/ constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
Cash comprises cash in hand and at bank. Cash and cash equivalents are short-term (highly liquid), that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
q. Segment reporting
According to Ind AS 108 âOperating Segmentâ, identification of operating segments is based on Chief Operating Decision Maker (âCODMâ) approach for making decisions about allocating resources to the segment and assessing its performance.
An operating segment is a component of the Company that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relate to transactions with any of the Companyâs other components.
Results of the operating segments are reviewed regularly by the management team (Chairman, Joint Managing Directors and Chief Financial Officer) which has been identified as the CODM, to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Revenues and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under âUnallocated corporate expensesâ. Assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis, are shown as unallocated corporate assets and liabilities respectively.
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the standalone financial statements of the Company as a whole.
r. Borrowing cost
General and specific borrowing costs directly attributed to the acquisition, construction or production of a qualifying asset are capitalised upto the period of time that is required to complete and prepare the asset for its intended use. Qualifying major assets are assets that necessarily take a substantial period of time to get ready for their intended use.
All other borrowing costs are expensed in the period in which they occur or accrue. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
s. Earnings per share
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted
earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year end, except where the results would be anti-dilutive.
Dividend to equity shareholders is recognised as a liability and deducted from shareholdersâ equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
(v) Significant management judgements in applying accounting policies and estimation uncertainty
The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities including contingent liability and the related disclosures.
Significant judgements
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Companyâs future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets
At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
Significant estimates
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.
The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. 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.
When the fair values of financial assets and financial liabilities recorded in the standalone balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Inventories
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by future market-driven changes that may reduce future selling prices.
Leases
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.
(vi) Recent accounting pronouncements
MCA has vide notification dated 31 March 2023 notified Companies (Indian Accounting Standards) Amendment Rules, 2023 (the âRulesâ) which amends certain accounting standards, and are effective 1 April 2023.
The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information is material if, together with other information can reasonably be expected to influence decisions of primary users of general- purpose financial statements. The Company does not expect this amendment to have any significant impact in its financial statements.
The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the recognition exemption in paragraphs 15 and 24 of Ind AS 12 (recognition exemption) so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences.
Amendment to Ind AS 8 âAccounting Policies, Changes in Accounting Estimates and Errorsâ
The amendments will help entities to distinguish between accounting policies and accounting estimates. The definition of a change in accounting estimates has been replaced with a definition of accounting estimates. Under the new definition, accounting estimates are âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities use measurement techniques and inputs to develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty. The Company does not expect this amendment to have any significant impact in its financial statements.
Mar 31, 2022
1. Company information
KRBL Limited (''Company'') is a Limited Company domiciled in India and was incorporated on 30 March 1993. The registered office of the Company is located at 5190, Lahori Gate, Delhi 110006. The shares of the Company are listed in India on National Stock Exchange of India Limited (''NSE'') and BSE Limited (''BSE'').
The Company is world''s leading basmati rice producer and has fully integrated operations in every aspect of basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands owned by the Company "India Gate" is the flagship brand both in domestic and international markets.
2. Basis of preparation, measurement and significant accounting policies
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended) The Company has uniformly applied the accounting policies during the periods presented.
These standalone financial statements for the year ended 31 March 2022 were authorized and approved for issue by the Board of Directors on 27 May 2022.
The standalone financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the standalone financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorized into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.
These standalone financial statements are presented in Indian rupees (?) which is also the Company''s functional currency. All amounts have been rounded-off
to the nearest lacs as per the requirements of Part II of Schedule III of the Act, unless otherwise indicated.
The standalone financial statements have been prepared using the significant accounting policies and measurement basis summarized below. These were used throughout all periods presented in the standalone financial statements.
The Company presents assets and liabilities in the standalone balance sheet based on current / noncurrent classification.
An asset/liability is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed or settled in normal operating cycle;
⢠Expected to be realised/settled within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
Recognition, measurement and subsequent expenditure
Property, plant and equipment are measured at cost, less accumulated depreciation and impairment losses, if any. Freehold land is stated at original cost of acquisition.
Cost of an item of property, plant and equipment includes acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a
separate asset is derecognized when replaced. All other repairs and maintenance are generally charged to the statement of profit and loss during the reporting period in which they are incurred.
In respect of major projects involving construction, related preoperational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs.
Property, plant and equipment which are not ready for intended use as on the date of balance sheet are disclosed as ''Capital work-in-progress''.
Depreciation on property, plant and equipment has been provided on straight line method, in terms of useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which the asset is capitalized/disposed-off.
Depreciation method and useful lives are reviewed annually. If the useful life of an asset is estimated to be significantly different from previous estimates, the depreciation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the depreciation method is changed to reflect the changed pattern.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the statement of profit and loss when the item is derecognized.
Recognition and measurement
Property held to earn rentals or / and for capital appreciation or both but not for sale in the ordinary course of business, or for use in the production or supply of goods or services or for administrative purposes, are categorized as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and
impairment, if any. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment properties are depreciated using the straight-line method over the useful lives as mentioned in Part C of Schedule II of the Act.
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying cost (including accumulated depreciation) on the date of reclassification and vice-a-versa.
Recognition and measurement
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Intangible assets which are not ready for intended use as on the date of balance sheet are disclosed as "Intangible assets under development".
Computer software, patent, trademark and design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the statement of profit and loss when the asset is derecognized.
I nvestment in equity instruments of subsidiaries are measured at cost as per Ind AS 27 ''Separate Financial Statements.
f. Inventory
Raw materials, stores and spares and packing materials
Raw materials, stores and spares and packing materials are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost. The cost is calculated on weighted average cost method and it comprises all costs incurred in bringing the inventories to their present location and condition and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving and defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
Finished goods and by products
Finished goods are valued at lower of cost and net realisable value. Cost of inventories of finished goods includes cost of raw materials, direct and indirect overheads which are incurred to bring the inventories to their present location and condition.
By-products are valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
g. Revenue
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties, if any. The Company recognizes revenue when it transfers control over a product or service to a customer.
To determine whether to recognize revenue, the Company follows a 5-step process:
⢠Identifying the contract with a customer
⢠Identifying the performance obligations
⢠Determining the transaction price
⢠Allocating the transaction price to the performance obligations
⢠Recognising revenue when/as performance obligation(s) are satisfied.
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, regardless of when the payment is being made.
The Company derives revenue primarily from two segments - Agri and Energy. Agri segment of the Company principally generate revenue from sale of goods (rice and by products) and Energy segment generates revenue by generating power units and selling it to state government owned power distribution companies (''DISCOM'') under the power purchase agreements (for more detailed information about reportable segments, refer note 46).
Sale of goods (rice and by-products)
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customers and when there are no longer any unfulfilled obligations.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.
Revenue from electricity generation
Sale of energy is accounted for on basis of energy supplied.
Dividend is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest income is recognized using the time proportion method based on the rates implicit in the transaction.
h. Employee Benefit
Short term employee benefits
All employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus, allowances and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees. Further, the liabilities are presented as provisions for employee benefits under other current liabilities in the standalone balance sheet.
The Company makes payments made to defined contribution plans such as provident fund and employees'' state insurance. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit plan
The liability recognised in the standalone balance sheet in respect of gratuity is the present value of the defined benefit obligation as at the standalone balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated at the standalone balance sheet date on the basis of actuarial valuation by an independent actuary using projected unit credit method. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in the Other Comprehensive Income in the year in which such gains or losses arise.
Other long-term employee benefits
Other long-term employee benefits are recognised as an expense in the standalone statement of profit and loss as and when they accrue. The Company determines the liability using the Projected Unit Credit Method, with actuarial valuations carried out as at the standalone balance sheet date. Actuarial gains and losses in respect of such benefits are charged to the statement of profit and loss.
i. Research and development
Revenue expenditure on research and development is charged to the statement of profit and loss in the year in which it is incurred. Capital expenditure on research and development is included under property, plant and equipment and/or intangible assets, as the case may be.
j. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive
income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in below categories:
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 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.
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
De-recognition
A financial asset is primarily de recognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model for measurement and recognition of impairment loss, the calculation of which is based on historical data, on the financial assets that are trade receivables or contract revenue receivables.
b) Financial liabilities Classification
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are de recognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the standalone statement of profit and loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes
derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the standalone statement of profit and loss.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the standalone statement of profit and loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the standalone balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Derivative financial instruments
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and full currency swaps, to hedge its foreign currency risks and interest rate risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to standalone statement of profit and loss.
e) Fair value measurement
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
All assets and liabilities for which fair value is measured or disclosed in the standalone financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the standalone balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
f) Hedge accounting
Initial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward contracts to hedge its foreign currency risks and interest rate risks and non-derivative financial liabilities to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Foreign currency risk of nonderivative financial liabilities used for hedging is measured using spot rates.
Any gains or losses arising from changes in the fair value of derivatives and change in foreign currency risk component of non-derivative financial liabilities are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedged item affects profit or loss. For the purpose of hedge accounting, hedges are classified as cash flow hedges where Company hedges its exposure to variability in cash flows that is attributable to foreign currency risk and interest rate risk associated with recognised liabilities in the standalone financial statements.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the group''s risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the hedging instrument''s fair value in offsetting the exposure to changes in the hedged item''s cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine that they continue to be highly effective throughout the financial reporting periods for which they are designated.
When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss within other gains/(losses).
Company as a lessee
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) The contract involves the use of an identified asset.
(ii) The Company has substantially all of the economic benefits from use of the asset through the period of the lease and;
(iii) The Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (''ROU'') assets and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
ROU assets are initially recognized at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.
Lease liability and ROU assets have been separately presented in the standalone balance sheet and lease payments have been classified as financing cash flows.
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight-line basis over the term of the relevant lease.
On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the standalone statement of profit and loss.
Foreign currency monetary items of the Company are translated at the closing exchange rates. Non-monetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured. Exchange differences arising out of these translations are recognised in the standalone statement of profit and loss.
m. Income tax
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax is measured at the amount
expected to be paid/ recovered to/from the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity/other comprehensive income is recognised under the respective head and not in the standalone statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities if, and only if, a legally enforceable right exists to set off the recognised amounts and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, 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 utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Tax relating to items recognized directly in equity/ other comprehensive income is recognised in respective head and not in the statement of profit & loss.
The carrying amount of deferred tax assets is reviewed at each standalone balance sheet date
and is adjusted to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent assets are neither recognized nor disclosed.
Subsidy income from the government is recognised when there is reasonable assurance that the subsidy income will be received and the Company will comply with all attached conditions.
Subsidy income is recognized on a systematic basis over the periods in which the related costs that are intended to be compensated by such subsidies are recognized.
Subsidy income received from government towards property, plant and equipment acquired/ constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
Cash comprises cash in hand and at bank. Cash and cash equivalents are short-term (highly liquid), that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
According to Ind AS 108 ''Operating Segment'', identification of operating segments is based on Chief Operating Decision Maker (''CODM'') approach for making decisions about allocating resources to the segment and assessing its performance.
An operating segment is a component of the Company that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relate to transactions with any of the Company''s other components.
Results of the operating segments are reviewed regularly by the management team (Chairman, Joint Managing Directors and Chief Financial Officer) which has been identified as the CODM, to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Revenues and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated corporate expenses". Assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis, are shown as unallocated corporate assets and liabilities respectively.
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the standalone financial statements of the Company as a whole.
r. Borrowing cost
General and specific borrowing costs directly attributed to the acquisition, construction or production of a qualifying asset are capitalised upto the period of time that is required to
complete and prepare the asset for its intended use or sale. Qualifying major assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
All other borrowing costs are expensed in the period in which they occur or accrue. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year end, except where the results would be antidilutive.
t. Dividend to shareholders
Dividend to equity shareholders is recognised as a liability and deducted from shareholders'' equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
The preparation of the standalone financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities including contingent liability and the related disclosures.
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized.
The evaluation of applicability of indicators of impairment of assets requires assessment of several external and internal factors which could result in deterioration of recoverable amount of the assets
At each balance sheet date basis the management judgment, changes in facts and legal aspects, the
Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
Useful lives of depreciable/amortisable assets
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.
The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. 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.
When the fair values of financial assets and financial liabilities recorded in the standalone balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by future market-driven changes that may reduce future selling prices.
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On 23 March 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules 2022 as below.
amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant, and equipment. The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2022. The Company has evaluated the amendment and there is no impact on its standalone financial statements.
Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets - The amendment specifies that the ''cost of fulfilling'' a contract comprises the ''costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after 1 April 2022, although early adoption is permitted. The Company has evaluated the amendment and the impact is not expected to be material.
Mar 31, 2021
1. Company information
KRBL Limited (âCompany'') is a Limited Company domiciled in India and was incorporated on 30 March 1993. The registered office of the Company is located at 5190, Lahori Gate, Delhi 110006. The shares of the Company are listed in India on National Stock Exchange of India Ltd. and BSE Limited.
The Company is world''s leading basmati rice producer and has fully integrated operations in every aspect of basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands owned by the Company "India Gate" is the flagship brand both in domestic and international markets.
2. Basis of preparation, measurement and significant accounting policies
These standalone financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd AS'') as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 (as amended). The Company has uniformly applied the accounting policies during the periods presented, however during the previous year, the Company has adopted hedge accounting, as mentioned in para j below.
The financial statements for the year ended 31 March 2021 were authorized and approved for issue by the Board of Directors on 29 June 2021.
The financial statements have been prepared on going concern basis in accordance with accounting principles generally accepted in India. Further, the financial statements have been prepared on historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Fair valuations related to financial assets and financial liabilities are categorized into level 1, level 2 and level 3 based on the degree to which the inputs to the fair value measurements are observable.
(iii) Functional and presentation currency
These financial statements are presented in Indian rupees (?) which is also the Company''s functional currency. All amounts have been rounded-off to
the nearest lac as per the requirements of Part II of Schedule III of the Act, unless otherwise indicated.
(iv) Summary of significant accounting policies
The financial statements have been prepared using the significant accounting policies and measurement basis summarized below. These were used throughout all periods presented in the financial statements.
a. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current / non-current classification.
An asset/liability is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed or settled in normal operating cycle;
⢠Expected to be realised/settled within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.
b. Property, plant and equipment
Recognition, measurement and subsequent expenditure
Property, plant and equipment are measured at cost, less accumulated depreciation and impairment losses, if any. Freehold land is stated at original cost of acquisition.
Cost of an item of property, plant and equipment includes acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses. Subsequent costs are included in the asset''s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognized when replaced.
All other repairs and maintenance are generally charged to the statement of profit and loss during the reporting period in which they are incurred.
In respect of major projects involving construction, related preoperational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs.
Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as "Capital work-in-progress".
Depreciation on property, plant and equipment has been provided on straight line method, in terms of useful life of the assets as prescribed in Schedule II to the Companies Act, 2013. Depreciation on additions (disposals) is provided on a pro-rata basis i.e. from (up to) the date on which the asset is capitalised/disposed off.
Depreciation method and useful lives are reviewed annually. If the useful life of an asset is estimated to be significantly different from previous estimates, the depreciation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the depreciation method is changed to reflect the changed pattern.
The carrying amount of an item of property, plant and equipment is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an item of property, plant and equipment is measured as the difference between the net disposal proceeds and the carrying amount of the item and is recognized in the statement of profit and loss when the item is derecognized.
Recognition and measurement
Property held to earn rentals or / and for capital appreciation or both but not for sale in the ordinary course of business, or for use in the production or supply of goods or services or for administrative purposes, are categorized as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and
impairment, if any. Subsequent expenditure is capitalized to the asset''s carrying amount only when it is probable that future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognized.
Investment properties are depreciated using the straight-line method over the useful lives as mentioned in Part C of Schedule II of the Act.
Reclassification to/from investment property
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying cost (including accumulated depreciation) on the date of reclassification and vice-a-versa.
Recognition and measurement
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment loss, if any.
Intangible assets which are not ready for intended use as on the date of Balance Sheet are disclosed as "Intangible assets under development".
Computer software, patent, trademark and design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
The carrying amount of an intangible asset is derecognized on disposal or when no future economic benefits are expected from its use or disposal. The gain or loss arising from the de recognition of an intangible asset is measured as the difference between the net disposal proceeds and the carrying amount of the intangible asset and is recognized in the statement of profit and loss when the asset is derecognized.
I nvestment in equity instruments of subsidiaries are measured at cost as per Ind AS 27 âSeparate Financial Statements.
Raw materials, stores and spares and packing materials
Raw materials, stores and spares and packing materials are valued at lower of cost and net realizable value. However, these items are considered to be realizable at cost if the finished products, in which they will be used, are expected to be sold at or above cost. The cost is calculated on weighted average cost method and it comprises all costs incurred in bringing the inventories to their present location and condition and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving and defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
Finished goods and by products
Finished goods are valued at lower of cost and net realisable value. Cost of inventories of finished goods includes cost of raw materials, direct and indirect overheads which are incurred to bring the inventories to their present location and condition.
By-products are valued at net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties, if any. The Company recognizes revenue when it transfers control over a product or service to a customer.
To determine whether to recognize revenue, the Company follows a 5-step process:
⢠Identifying the contract with a customer
⢠Identifying the performance obligations
⢠Determining the transaction price
⢠Allocating the transaction price to the performance obligations
⢠Recognising revenue when/as performance obligation(s) are satisfied.
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, regardless of when the payment is being made.
The Company derives revenue primarily from two segments - Agri and Energy. Agri segment of the Company principally generate revenue from sale of goods (rice and by products) and Energy segment generates revenue by generating power units and selling it to governments under the agreements (for more detailed information about reportable segments, refer note 45).
Sale of goods (rice and by products)
Revenue from sale of goods is recognised when control of the products being sold is transferred to the customers and when there are no longer any unfulfilled obligations.
Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as goods and services tax, etc. Accumulated experience is used to estimate the provision for such discounts and rebates. Revenue is only recognised to the extent that it is highly probable a significant reversal will not occur.
Revenue from electricity generation
Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL.
Dividend income
Dividend is recognised when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Interest income is recognized using the time proportion method based on the rates implicit in the transaction.
h. Employee Benefit
Short term employee benefits
All employee benefits payable wholly within twelve months of receiving employee services are classified as short-term employee benefits. These benefits include salaries and wages, bonus, allowances and ex-gratia. The undiscounted amount of short-term employee benefits to be paid in exchange for employee services is recognised as an expense as the related service is rendered by employees. Further, the liabilities are presented as provisions for employee benefits under other current liabilities in the balance sheet.
Defined contribution plan
The Company makes payments made to defined contribution plans such as provident fund and employees'' state insurance. The Company has no further payment obligations once the contributions have been paid. The contributions are accounted for as defined contribution plans and the contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is available.
Defined benefit plan
The liability recognised in the balance sheet in respect of gratuity is the present value of the defined benefit obligation as at the balance sheet date less the fair value of plan assets. The defined benefit obligation is calculated at the balance sheet date on the basis of actuarial valuation by an independent actuary using projected unit credit method. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are recorded in the Statement of Other Comprehensive Income in the year in which such gains or losses arise.
Other long-term employee benefits
Other long-term employee benefits are recognised as an expense in the statement of profit and loss as and when they accrue. The Company determines the liability using the Projected Unit Credit Method, with actuarial valuations carried out as at the balance sheet date. Actuarial gains and losses in respect of such benefits are charged to the statement of profit and loss.
i. Research and development
Revenue expenditure on research and development is charged to the statement of profit and loss in
the year in which it is incurred. Capital expenditure on research and development is included under property, plant and equipment and/or intangible assets, as the case may be.
j. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
a) Financial assets Classification
The Company classifies financial assets as subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of its business model for managing the financial assets and the contractual cash flows characteristics of the financial asset.
Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
Subsequent measurement
For purposes of subsequent measurement financial assets are classified in below categories:
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 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 profit or loss
A financial asset which is not classified in any of the above categories are subsequently fair valued through profit or loss.
De-recognition
A financial asset is primarily de recognised when the rights to receive cash flows from the asset have expired or the Company has transferred its rights to receive cash flows from the asset.
Impairment of financial assets
The Company assesses impairment based on Expected Credit Losses (ECL) model for measurement and recognition of impairment loss, the calculation of which is based on historical data, on the financial assets that are trade receivables or contract revenue receivables.
b) Financial liabilities Classification
The Company classifies all financial liabilities as subsequently measured at amortised cost, except for financial liabilities at fair value through profit or loss. Such liabilities, including derivatives that are liabilities, shall be subsequently measured at fair value.
Initial recognition and measurement
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as described below:
Financial liabilities at amortised cost
After initial recognition, interest-bearing loans and borrowings are subsequently
measured at amortised cost using the Effective Interest Rate (EIR) method. Gains and losses are recognised in profit or loss when the liabilities are de recognised as well as through the EIR amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit and loss.
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Company that are not designated as hedging instruments in hedge relationships as defined by Ind AS 109. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit and loss.
De-recognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit and loss.
c) Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention
to settle on a net basis, to realize the assets and settle the liabilities simultaneously.
d) Derivative financial instruments
The Company uses derivative financial instruments, such as forward currency contracts, interest rate swaps and full currency swaps, to hedge its foreign currency risks and interest rate risks, respectively. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives are taken directly to statement of profit and loss.
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
⢠Level 1: Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the balance sheet on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets
and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
f) Hedge accountingInitial recognition and subsequent measurement
The Company uses derivative financial instruments, such as forward contracts to hedge its foreign currency risks and interest rate risks and non-derivative financial liabilities to hedge its foreign currency risks. Such derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Foreign currency risk of nonderivative financial liabilities used for hedging is measured using spot rates.
Any gains or losses arising from changes in the fair value of derivatives and change in foreign currency risk component of nonderivative financial liabilities are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedged item affects profit or loss. For the purpose of hedge accounting, hedges are classified as cash flow hedges where Company hedges its exposure to variability in cash flows that is attributable to foreign currency risk and interest rate risk associated with recognised liabilities in the financial statements.
At the inception of a hedge relationship, the Company formally designates and documents the hedge relationship to which the Company wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes the group''s risk management objective and strategy for undertaking hedge, the hedging/ economic relationship, the hedged item or transaction, the nature of the risk being hedged, hedge ratio and how the entity will assess the effectiveness of changes in the hedging instrument''s fair
value in offsetting the exposure to changes in the hedged item''s cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in achieving offsetting changes in cash flows and are assessed on an ongoing basis to determine that they continue to be highly effective throughout the financial reporting periods for which they are designated.
When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs. When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss within other gains/(losses).
Company as a lessee
The Company''s lease asset classes primarily consist of leases for land and buildings. The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether:
(i) the contract involves the use of an identified asset.
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and;
(iii) the Company has the right to direct the use of the asset.
At the date of commencement of the lease, the Company recognizes a right-of-use (ROU) asset and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of 12 months or less (short-term leases) and low value leases. For these short-term and low-value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
The ROU assets are initially recognized at cost, which comprises the initial amount of the lease
liability adjusted for any lease payments made at or prior to the commencement date of the lease plus any initial direct costs less any lease incentives. They are subsequently measured at cost less accumulated depreciation and impairment losses. ROU assets are depreciated from the commencement date on a straight-line basis over the shorter of the lease term and useful life of the underlying asset.
The lease liability is initially measured at amortized cost at the present value of the future lease payments. The lease payments are discounted using the interest rate implicit in the lease or, if not readily determinable, using the incremental borrowing rates in the country of domicile of these leases.
Lease liability and ROU assets have been separately presented in the Balance Sheet and lease payments have been classified as financing cash flows.
l. Foreign currency transactions Initial recognition
On initial recognition, transactions in foreign currencies entered into by the Company are recorded in the functional currency (i.e. Indian Rupees), by applying to the foreign currency amount, the spot exchange rate between the functional currency and the foreign currency at the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognised in the statement of profit and loss.
Measurement of foreign currency items at reporting date
Foreign currency monetary items of the Company are translated at the closing exchange rates. Nonmonetary items that are measured at historical cost in a foreign currency, are translated using the exchange rate at the date of the transaction. Non-monetary items that are measured at fair value in a foreign currency, are translated using the exchange rates at the date when the fair value is measured. Exchange differences arising out of these translations are recognised in the statement of profit and loss.
m. Income tax
Tax expense is the aggregate amount included in the determination of profit or loss for the period in respect of current tax and deferred tax.
Current tax is measured at the amount expected to be paid/ recovered to/from the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity/other comprehensive income is recognised under the respective head and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Current tax assets are offset against current tax liabilities if, and only if, a legally enforceable right exists to set off the recognised amounts and there is an intention either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.
Deferred tax assets are recognised for all deductible temporary differences, 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 utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Tax relating to items recognized directly in equity/other comprehensive income is recognised in respective head and not in the statement of profit & loss.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and is adjusted to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.
Minimum alternate tax (âMAT'') credit entitlement is recognised as an asset only when and to the extent there is convincing evidence that normal income tax will be paid during the specified period. In the year in which MAT credit becomes eligible to be recognised as an asset, the said asset is created by way of a credit to the statement of profit and loss and shown as MAT credit entitlement. This is reviewed at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent it is not reasonably certain that normal income tax will be paid during the specified period.
n. Provision, contingent assets and contingent liability
The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation can be made at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.
A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made.
Contingent assets are neither recognized nor disclosed.
Grants from the government are recognised when there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Grant received from government towards fixed assets acquired/ constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
Cash comprises cash in hand and at bank. Cash and cash equivalents are short-term (highly liquid), that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
According to Ind AS 108 âOperating Segment'', identification of operating segments is based on Chief Operating Decision Maker (âCODM'') approach for making decisions about allocating resources to the segment and assessing its performance.
An operating segment is a component of the Company that engages in business activities from which it earns revenues and incurs expenses, including revenues and expenses that relate to transactions with any of the Company''s other components.
Results of the operating segments are reviewed regularly by the management team (Chairman, Joint Managing Directors and Chief Financial Officer) which has been identified as the CODM, to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Revenues and expenses, which relate to the Company as a whole and are not allocable to segments on a reasonable basis, have been included under "Unallocated corporate expenses". Assets and liabilities, which relate to the Company as a whole and are not allocable to segments on reasonable basis, are shown as unallocated corporate assets and liabilities respectively.
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
General and specific borrowing costs directly attributed to the acquisition, construction or production of a qualifying asset are capitalised upto the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying major assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
All other borrowing costs are expensed in the period in which they occur or accrue. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.
Basic earnings per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. Diluted earnings per share is computed using the weighted average number of equity and dilutive equity equivalent shares outstanding during the year end, except where the results would be anti-dilutive.
Dividend to equity shareholders is recognised as a liability and deducted from shareholders'' equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
(v) Significant management judgements in applying accounting policies and estimation uncertainty
The preparation of the Company''s financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities including contingent liability and the related disclosures.
Significant judgementsRecognition of deferred tax assets
The extent to which deferred tax assets can be recognized is based on an assessment of the probability of the Company''s future taxable income against which the deferred tax assets can be utilized.
Evaluation of indicators for impairment of assets
The evaluation of applicability of indicators of impairment of assets requires assessment of several
external and internal factors which could result in deterioration of recoverable amount of the assets.
At each balance sheet date basis the management judgment, changes in facts and legal aspects, the Company assesses the requirement of provisions against the outstanding contingent liabilities. However, the actual future outcome may be different from this judgement.
Significant estimatesUseful lives of depreciable/amortisable assets
Management reviews its estimate of the useful lives of depreciable/amortisable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical and economic obsolescence that may change the utilisation of assets.
Defined benefit obligation (DBO)
The cost of the defined benefit plan and other postemployment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. 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.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets,
their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Management estimates the net realisable values of inventories, taking into account the most reliable evidence available at each reporting date. The future realisation of these inventories may be affected by future market-driven changes that may reduce future selling prices.
The Company evaluates if an arrangement qualifies to be a lease as per the requirements of Ind AS 116. Identification of a lease requires significant judgment. The Company uses significant judgement in assessing the lease term (including anticipated renewals) and the applicable discount rate. The discount rate is generally based on the incremental borrowing rate specific to the lease being evaluated or for a portfolio of leases with similar characteristics.
(vi) Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from 1st April, 2021. MCA issued notifications dated 24th March, 2021 to amend Schedule III to the Companies Act, 2013 to enhance the disclosures required to be made by the Company in its financial statements. These amendments are applicable to the Company for the financial year starting 1st April, 2021.
Mar 31, 2018
1.1 Basis of Preparation
- These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.
1.2 Use of Estimates and Judgements
- The preparation of Financial Statements requires management to make certain assumptions and estimates that affect the reported amount, the Financial Statements and Notes thereto. Difference between actual results and estimates are recognized in the period in which they materialize.
1.3 Property, Plant & Equipment including Intangible Assets
- Property, Plant & Equipment are stated at cost of acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses and net of accumulated depreciation. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. All upgradation / enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
- Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital work-in-progressâ and stated at the amount spent upto the date of Balance Sheet.
- Freehold Land is stated at original cost of acquisition.
- Intangible assets are stated at their cost of acquisition.
1.4 Depreciation
- Depreciation on Property, Plant & Equipment has been provided on straight line method, in terms of useful life of the Assets as prescribed in Schedule II to the Companies Act 2013.
- Computer software charges, patent, trademark & design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
1.5 Investment Properties
- Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.
1.6 Investments and Other Financial Assets
- Classification: The Company classifies its financial assets in the following measurement categories:
(i) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
(ii) those measured at amortised cost.
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
- Measurement: At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
12.6.1 Investments
- Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as âCurrent Investmentsâ. All other Investments are classified as âNon-Current Investmentsâ. The Company measures its Current investments at fair value through profit and loss. Non-current investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of non-current investments.
1.7 Dividend to equity shareholders
- Dividend to equity shareholders is recognised as a liability and deducted from shareholdersâ equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
1.8 Inventories
- Items of inventories are measured at lower of cost or net realizable value. Raw material on shop floor and work-in process is taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it comprises expenditure incurred in normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving & defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of Excise Duty.
1.9 Cash and Cash Equivalent
- Cash and cash equivalents are short-term, highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
1.10 Revenue Recognition and Accounting for Sales & Services
- Revenue from sale of goods is recognised when all the significant risk and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. On recognition of revenue the Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable, export sales are adjusted for exchange fluctuations on exports realized during the year and the trade receivable in foreign exchange which are restated at the year end. Domestic sales are recognized net of Sales Return, Discounts, Scheme on Sales, Sales Tax and GST.
- Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL.
- Dividend income is recognised when the right to receive Dividend is established. Revenue and Expenditure are accounted for on going concern basis. Interest Income / Expenditure is recognized using the time proportion method based on the rates implicit in the transaction.
- Revenue in respect of Insurance / others claims, Interest, Commission, etc. is recognised only when it is reasonably certain that the ultimate collection will be made.
1.11 Research and Development
- Revenue expenditure on Research & Development is written off in the year in which it is incurred. Capital Expenditure on Research & Development is included under Property, Plant & Equipment.
1.12 Employee Benefits
- Contributions to defined provident fund are charged to the statement of profit and loss on accrual basis. Present liability for future payment of gratuity and unavailed leave benefits are determined on the basis of actuarial valuation at the balance sheet date and charged to the statement of profit and loss. Gratuity fund is managed by the Kotak Life Insurance.
1.13 Derivative financial instruments
- Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured at their fair value with changes in fair value recognised in the Statement of Profit and Loss in the period when they arise.
1.14 Foreign Currency Transactions
- Transactions in foreign currencies are recognised at the prevailing exchange rates on the transaction dates. Realised gains and losses on settlement of foreign currency transactions are recognised in the Statement of Profit and Loss.
- Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognised in the Statement of Profit and Loss.
- In respect of Non integral foreign operation - both monetary and non-monetary items are translated at the closing rate and resultant difference is accumulated in foreign currency translation reserve, until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
1.15 Government Grant
- Grants from the government are recognised when there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Grant received from government towards Property, Plant & Equipment acquired/constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
1.16 Borrowing
- Borrowings are initially recognised at net of transaction costs incurred and measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
1.17 Borrowing Costs
- Interest and other borrowing costs attributable to qualifying assets are capitalised as a part of such assets till such time the assets are ready for use. Other interest and borrowing costs are charged to Statement of Profit and Loss.
1.18 Income taxes
- The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences. Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax assets is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilise those temporary differences.
- Current and deferred tax is recognised in the Statement of Profit and Loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively the liability of Company on Account of Income Tax is estimated considering the provisions of Income-Tax Act, 1961.
- Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between book and tax profits that originate in one year and capable of reversal in one or more subsequent years.
1.19 Leases
i) As a lessee:
- Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.
ii) As a lessor:
- Lease income from operating leases where the Company is a lessor is recognised in income on a straight-line basis over the lease term.
1.20 Provisions, Contingent Liability and Contingent
Assets
- The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets neither recognised nor disclosed in the Financial Statement.
1.21 Segment Reporting
- Segments are identified based on dominant source and nature of risks and returns and internal financial reporting system to the management. Inter segment revenue are accounted for on the basis of transactions which are primarily market led. Revenue and expenses which relate to enterprises as a whole and are not attributable to segments are included under âOther Unallocable Expenditure Net of Unallocable Incomeâ
1.22 Financial and Management Information System
- An Integrated Accounting System has been put to practice which unifies both Financial Books and Costing Records. The books of account and other records have been designated to facilitate compliance with the relevant provisions of the Companies Act on one hand and provide Internal Financial Reporting System for Planning, Review and Internal Control on the other. The Cost Accounts are designed to adopt Costing Systems appropriate to the business carried out by the Division, with each Division incorporating into its costing system, the basic tenets and principles of Standard Costing, Budgetary Control and Marginal Costing as appropriate.
1.23 Impairment of Financial Asset
- Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
1.24 Impairment of Non-Financial Asset
- The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such Indication exists; the Company estimates the recoverable amount of assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognised in the statement of Profit & Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets is reflected at recoverable amount.
1.25 Mergers/Amalgamation
- Mergers / Amalgamations (in the nature of Merger) of other company / body Corporate with the company are accounted for on the basis of purchase method, the Asset / Liabilities being incorporated in terms of values of assets and Liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of Goodwill or Capital Reserve.
1.26 Standards Issued but not Effective
On March 28, 2018, the Ministry of Corporate Affairs (MCA) has notified Ind AS 115 - Revenue from Contract with Customers and certain amendment to existing Ind AS. These amendments shall be applicable to the Company from April 01, 2018.
(a) Issue of Ind AS 115 - Revenue from Contracts with Customers
Ind AS 115 will supersede the current revenue recognition guidance including Ind AS 18 Revenue, Ind AS 11 Construction Contracts and the related interpretations. Ind AS 115 provides a single model of accounting for revenue arising from contracts with customers based on the identification and satisfaction of performance obligations.
(b) Amendment to Existing issued Ind AS
The MCA has also carried out amendments of the following accounting standards:
i. Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
ii. Ind AS 40 - Investment Property
iii. Ind AS 12 - Income Taxes
iv. I nd AS 28 - Investments in Associates and Joint Ventures and
v. Ind AS 112 - Disclosure of Interests in Other Entities
Application of above standards are not expected to have any significant impact on the Companyâs Financial Statements.
Premises given on operating lease:
The Company had given a warehouse in Kandla, Gujarat on cancellable operating lease. During the year a major portion of warehouse is taken under repairs and maintenance since January 2018 and lease rentals stands proportionately reduced.
Estimation of fair value
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex,age of building and trend of fair market rent in Gandhi Dham, Gujarat area.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorised in level 2 fair value hierarchy.
Mar 31, 2017
1. COMPANY INFORMATION
- KRBL Limited (the Company) is a Domestic Public Limited company and listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The Company is Worldâs leading Basmati Rice player with milling capacity of 195 MT per hour. The company has fully integrated operations with involvement in every aspect of Basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands launched by the company âIndia Gateâ is the flagship brand both in Domestic and International Markets.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation
- These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the âInd ASâ) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. These financial statements for the year ended March 31, 2017 are prepared by the company under Ind AS for the first time. For all periods upto and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as âPrevious GAAPâ) used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended March 31, 2016 and the opening Balance Sheet as at April 01, 2015 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Companyâs Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in Other Notes Forming part of the financial statements.
- The Financial Statements have been prepared on the historical cost convention on going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at April 01, 2015 being the âdate of transition to Ind ASâ.
2.2 Use of Estimates and Judgments
- The preparation of Financial Statements requires management to make certain assumptions and estimates that affect the reported amount, the Financial Statements and Notes thereto. Difference between actual results and estimates are recognized in the period in which they materialize.
2.3 Property, Plant & Equipment including Intangible Assets
- Property, Plant & Equipment are stated at cost of acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses and net of accumulated depreciation. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. All up gradation / enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
- Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as âCapital work-in-progressâ and stated at the amount spent upto the date of Balance Sheet.
- Freehold Land is stated at original cost of acquisition.
- Intangible assets are stated at their cost of acquisition.
2.4 Depreciation
- Depreciation on fixed assets has been provided on straight line method, in terms of useful life of the Assets as prescribed in Schedule II to the Companies Act 2013.
- Computer software charges, patent, trademark & design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
2.5 Investment Properties
- Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.
2.6 Investments and Other Financial Assets
- Classification: The Company classifies its financial assets in the following measurement categories:
(i) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
(ii) those measured at amortized cost.
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
- Measurement: At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
2.6.1 Investments
- Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as âCurrent Investmentsâ. All other Investments are classified as âNon-Current Investmentsâ. The Company measures its Current investments at fair value through profit and loss. Non-current investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of noncurrent investments. Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., April 01,2015.
2.7 Dividend to equity shareholders
- Dividend to equity shareholders is recognized as a liability and deducted from shareholdersâ equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
2.8 Inventories
- Items of inventories are measured at lower of cost or net realizable value. Raw material on shop floor and work-in process is taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it comprises expenditure incurred in normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving & defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of Excise Duty.
2.9 Cash and Cash Equivalent
- Cash and cash equivalents are short-term, highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
2.10 Revenue Recognition and Accounting for Sales &
Services
- Revenue from sale of goods is recognized when all the significant risk and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. On recognition of revenue the Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable. Export sales are adjusted for exchange fluctuations on exports realized during the year and the trade receivable in foreign exchange which are restated at the year end. Domestic sales are recognized net of discounts, Scheme on Sales, Sales Tax, Sale Returns and Excise Duty.
- Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL.
- Dividend income is recognized when the right to receive Dividend is established. Revenue and Expenditure are accounted for on going concern basis. Interest Income / Expenditure is recognized using the time proportion method based on the rates implicit in the transaction.
- Revenue in respect of Insurance / others claims, Interest, Commission, etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
2.11 Research and Development
- Revenue expenditure on Research & Development is written off in the year in which it is incurred. Capital Expenditure on Research & Development is included under Fixed Assets.
2.12 Employee Benefits
- Contributions to defined provident fund are charged to the statement of profit and loss on accrual basis. Present liability for future payment of gratuity and unveiled leave benefits are determined on the basis of actuarial valuation at the balance sheet date and charged to the statement of profit and loss. Gratuity fund is managed by the Kotak Life Insurance.
2.13 Derivative financial instruments
- Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognized at fair value on the date a derivative contract is entered into and are subsequently premeasured at their fair value with changes in fair value recognized in the Statement of Profit and Loss in the period when they arise.
2.14 Foreign Currency Transactions
- Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.
- Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.
- In respect of Non integral foreign operation - both monetary and non-monetary items are translated at the closing rate and resultant difference is accumulated in foreign currency translation reserve, until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.15 Government Grant
- Grants from the government are recognized when there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Grant received from government towards fixed assets acquired/constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
2.16 Borrowing
- Borrowings are initially recognized at net of transaction costs incurred and measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
2.17 Borrowing Costs
- Interest and other borrowing costs attributable to qualifying assets are capitalized as a part of such assets till such time the assets are ready for use. Other interest and borrowing costs are charged to Statement of Profit and Loss.
2.18 Income taxes
- The income tax expense or credit for the period is the tax payable on the current periodâs taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences. Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilize those temporary differences.
- Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively the liability of Company on Account of Income Tax is estimated considering the provisions of Income tax Act, 1961.
- Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between book and tax profits that originate in one year and capable of reversal in one or more subsequent years.
2.19 Leases
i) As a lessee:
- Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.
ii) As a less or:
- Lease income from operating leases where the Company is a less or is recognized in income on a straight-line basis over the lease term.
2.20 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets neither recognized nor disclosed in the Financial Statement.
2.21 Segment Reporting
- Segments are identified based on dominant source and nature of risks and returns and internal financial reporting system to the management Inter segment revenue are accounted for on the basis of transactions which are primarily market led. Revenue and expenses which relate to enterprises as a whole and are not attributable to segments are included under âOther Unallowable Expenditure Net of Unallowable Incomeâ.
2.22 Financial and Management Information System
- An Integrated Accounting System has been put to practice which unifies both Financial Books and Costing Records. The books of account and other records have been designated to facilitate compliance with the relevant provisions of the Companies Act on one hand and provide Internal Financial Reporting System for Planning, Review and Internal Control on the other. The Cost Accounts are designed to adopt Costing Systems appropriate to the business carried out by the Division, with each Division incorporating into its costing system, the basic tenets and principles of Standard Costing, Budgetary Control and Marginal Costing as appropriate.
2.23 Impairment of Financial Asset
- Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
2.24 Impairment of Non-Financial Asset
- The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such Indication exists; the Company estimates the recoverable amount of assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of Profit & Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets is reflected at recoverable amount.
2.25 Mergers/Amalgamation
- Mergers / Amalgamations (in the nature of Merger) of other company / body Corporate with the company are accounted for on the basis of purchase method, the Asset / Liabilities being incorporated in terms of values of assets and Liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of Goodwill or capital reserve.
3. FIRST TIME ADOPTION OF IND AS
- The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01, 2016, with a transition date of April 01, 2015. These financial statements for the year ended March 31, 2017 are the first financial statements the Company has prepared under Ind AS. For all periods upto and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âPrevious GAAPâ).
- The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended March 31, 2017, together with the comparative information as at and for the year ended March 31, 2016 and the opening Ind AS Balance Sheet as at April 01, 2015, the date of transition to Ind AS.
- In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognized directly in retained earnings.
(a) Optional exemptions from retrospective application
Ind AS 101 permits first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. The Company has elected to apply the following optional exemptions from retrospective application:
(i) Deemed cost for property, plant and equipment and intangible assets
The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.
(ii) Investment in subsidiaries
The Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.
(b) Mandatory Exceptions to retrospective application
The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101:
(i) Estimates
On assessment of the estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence that those estimates were in error. However, estimates that were required under Ind AS but not required under Previous GAAP are made by the Company for the relevant reporting dates reflecting conditions existing as at that date.
(ii) Classification and measurement of financial assets
The classification of financial assets to be measured at amortized cost or fair value through profit/loss is made on the basis of the facts and circumstances that existed on the date of transition to Ind AS.
(For more details kindly refer Note No. 31.10 transition to Ind AS Reconciliations)
Premises given on operating lease:
The Company has given a warehouse in Kandla, Gujarat on cancellable operating lease. The lease is renewable for further period on mutually agreeable terms.
Estimation of fair value:
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex, age of building and trend of fair market rent in Gandhi Dham, Gujarat area.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorized in level 2 fair value hierarchy.
Mar 31, 2016
1. COMPANY INFORMATION
- KRBL Limited (the Company) is a Domestic Public Limited company and listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The Company is Worldâs leading Basmati Rice player with milling capacity of 195 MT per hour. The company has fully integrated operations with involvement in every aspect of Basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands launched by the company âIndia Gateâ is the flagship brand both in Domestic and International Markets.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
- The Financial Statements are prepared on the historical cost convention on going concern basis and in accordance with the applicable accounting standards notified under relevant provisions of the Companies Act, 2013 and other Accounting principles generally accepted in India, to the extent applicable.
2.2 Use of Estimates
- The preparation of Financial Statements requires management to make certain assumptions and estimates that affect the reported amount the Financial Statements and Notes thereto. Difference between actual results and estimates are recognized in the period in which they materialize.
2.3 Fixed Assets including intangible Assets
- Fixed Assets are stated at cost of acquisition / installation inclusive of freight, duties, taxes and all incidental expenses and net of accumulated depreciation. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. All up gradation / enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
- Intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work- in- progress is stated at amount spent up to the date of Balance Sheet.
2.4 Depreciation and Amortization
- Depreciation on fixed assets has been provided on straight line method, in terms of useful life of the
Assets as prescribed in Schedule II to the Companies Act 2013.
- Computer software charges, patent, trademark & design and Goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
- Leasehold land is amortized on straight line method over the lease period.
2.5 Investments
- Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as âCurrent Investmentsâ. All other Investments are classified as âNon-Current Investmentsâ. Current investments are stated at lower of cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of noncurrent investments.
2.6 Inventories
- Items of inventories are measured at lower of cost or net realizable value. Raw material on shop floor and work-in process is taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it comprises expenditure incurred in normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving & defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of Excise Duty.
2.7 Revenue Recognition and Accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading and adjusted for exchange fluctuations on exports realized during the year and the trade receivable in foreign exchange which are restated at the year end. Domestic sales are recognized on the dispatch of goods to the customers and are net of discounts, Sales Tax,
Excise Duty, Returns. Gross sales includes Excise Duty and then reduced thereafter to compute net sales in conformity with AS-14 on disclosure of the revenue from sale transaction. Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL. Dividend income is recognized when the right to receive Dividend is established. Revenue and Expenditure are accounted for on going concern basis. Interest Income / Expenditure is recognized using the time proportion method based on the rates implicit in the transaction.
- Revenue in respect of Insurance / others claims, Interest, Commission, etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
2.8 Proposed Dividend
- Dividend (including Dividend Tax thereon, if any) are provided for in the books of account as proposed by the Directors pending for approval at the ensuing Annual General Meeting.
2.9 Research and Development
- Revenue expenditure on Research & Development is written off in the year in which it is incurred. Capital Expenditure on Research & Development is included under Fixed Assets.
2.10 Treatment of Employee Benefits
- Contributions to defined provident fund are charged to the profit and loss account on accrual basis. Present liability for future payment of gratuity and unveiled leave benefits are determined on the basis of actuarial valuation at the balance sheet date and charged to the profit and loss account. Gratuity fund is managed by the Kotak Life Insurance.
2.11 Foreign Currency Transactions
- The transactions in foreign currencies are recognized at rate of overseas currencies ruling on the date of transaction. Gain / ( loss) arising on account of rise or fall in overseas currencies vis a vis reporting currencies between the date of transaction and that of payment is charged to statement of Profit& loss account.
- Year-end balance of foreign currency monetary items is translated at the year-end rates and the corresponding effect is given in the respective accounts. Transactions completed during the year are adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit & Loss Account on change of Exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled on future dates are recognized at the year-end rates of the underlying foreign currency. Effects arising from swap contracts are adjusted on the date of settlement.
- In respect of Non integral foreign operation - both monetary and non-monetary items are translated at the closing rate and resultant difference is accumulated in foreign currency translation reserve, until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.12 Government Grant
- Government grant is considered for inclusion in accounts only when conditions attached to them are complied with and it is reasonably certain that ultimate collection will be made. Grant received from government towards fixed assets acquired/constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
2.13 Borrowing Costs
- Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use or sale. All other borrowing costs are recognized as expense in the period in which they are incurred.
2.14 Taxes on Income
- The liability of Company on Account of Income Tax is estimated considering the provisions of Income tax Act 1961.
- Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between book and tax profits that originate in one year and capable of reversal in one or more subsequent years.
2.15 Leases
- In respect of Operating leases, rentals are expensed with reference to lease terms and other considerations.
2.16 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets neither recognized nor disclosed in the Financial Statement.
2.17 Segment Reporting
- Segments are identified based on dominant source and nature of risks and returns and internal financial reporting system to the management Inter segment revenue are accounted for on the basis of transactions which are primarily market led. Revenue and expenses which relate to enterprises as a whole and are not attributable to segments are included under âOther Unallocable Expenditure Net of Unallocable Incomeâ.
2.18 Financial and Management Information System
- An Integrated Accounting System has been put to practice which unifies both Financial Books and Costing Records. The books of account and other records have been designated to facilitate compliance with the relevant provisions of the Companies Act on one hand and provides Internal Financial Reporting System for Planning, Review and Internal Control on the other. The
Cost Accounts are designed to adopt Costing Systems appropriate to the business carried out by the Division, with each Division incorporating into its costing system, the basic tenets and principles of Standard Costing, Budgetary Control and Marginal Costing as appropriate.
2.19 Impairment of Assets
- The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such Indication exists; the Company estimates the recoverable amount of assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets is reflected at recoverable amount.
2.20 Mergers/Amalgamation
- Mergers / Amalgamations (of the nature of Merger) of other company / body Corporate with the company are accounted for on the basis of purchase method, the Asset / Liabilities being incorporated in terms of values of assets and Liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of Goodwill or capital reserve.
Mar 31, 2015
1. Company information
- KRBL Limited (the Company) is a Domestic Public Limited company and
listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock
Exchange of India Ltd. (NSE). Te Company is World''s leading Basmati
Rice player with milling capacity of 195 MT per hour. Te company has
fully integrated operations with involvement in every aspect of Basmati
value chain, right from seed development, contact farming, procurement
of paddy, storage, processing, packaging, branding and marketing. Among
the many brands launched by the company "India Gate" is the flagship
brand both in Domestic and International Markets.
2.1 accounting Convention
- Te Financial Statements are prepared on the historical cost
convention on going concern basis and in accordance with the applicable
accounting standards notified under relevant provisions of the Companies
Act, 2013 and other Accounting principles generally accepted in India,
to the extent applicable.
2.2 use of estimates
- Te preparation of Financial Statements requires management to make
certain assumptions and estimates that affect the reported amount the
Financial Statements and Notes thereto. Difference between actual
results and estimates are recognized in the period in which they
materialize.
2.3 Fixed assets including intangible assets
- Fixed Assets are stated at cost of acquisition / installation
inclusive of freight, duties, taxes and all incidental expenses and net
of accumulated depreciation. In respect of major projects involving
construction, related pre-operational expenses form part of the value
of assets capitalized. Expenses capitalized also include applicable
borrowing costs. All up gradation / enhancements are generally charged
of as revenue expenditure unless they bring similar signifcant
additional benefts.
- Intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work-in-progress is stated at amount spent up to the date of
Balance Sheet.
2.4 depreciation and amortization
- Depreciation on fixed assets has been provided on straight line
method, in terms of useful life of the Assets as prescribed in Schedule
II of Companies Act, 2013.
- Computer software charges, patent, trademark & design and Goodwill
are recognized as intangible assets and amortized on straight line
method over a period of 10 years except one software which is
depreciated in 6 years on straight line method based upon life of
servers where it is installed.
- Leasehold land is amortized on straight line method over the lease
period.
2.5 investments
- Investments that are readily realizable and are intended to be held
for not more than one year at the point of acquisition are classified as
"Current Investments". All other Investments are classified as
"Non-Current Investments". Current investments are stated at lower of
cost and fair value. Non-current investments are stated at cost. A
provision for diminution is made to recognize a decline, other than
temporary, in the value of non-current investments.
2.6 inventories
- Items of inventories are measured at lower of cost or net realizable
value. Raw material on shop for and work- in process is taken as part
of raw material and valued accordingly.
- Te cost is calculated on weighted average cost method and it
comprises expenditure incurred in normal course of business in bringing
such inventories to its location and includes, where applicable,
appropriate overheads based on normal level of activity. Obsolete, slow
moving & defective inventories are identifed at the time of physical
verifcation and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from
the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of
Excise Duty.
2.7 Revenue Recognition and accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading
and adjusted for exchange fluctuations on exports realized during the
year and the trade receivable in foreign exchange which are restated at
the year end. Domestic sales are recognized on the dispatch of goods to
the customers and are net of discounts, Sales Tax, Excise Duty,
Returns. Gross sales includes Excise Duty and then reduced thereafter
to compute net sales in conformity with AS-14 on disclosure of the
revenue from sale transaction. Sale of energy is accounted for on basis
of energy supplied. Sale of Certified Emission Reduction (CER) is
recognized as income on delivery of CERs to the customer. Sale of
Renewable Energy Certificate (REC) is recognized as income on sale of
REC on the IEX / PXIL. Dividend income is recognized when the right to
receive Dividend is established. Revenue and Expenditure are accounted
for ongoing concern basis. Interest Income / Expenditure is
recognized using the time proportion method based on the rates implicit
in the transaction.
- Revenue in respect of Insurance / others claims, Interest,
Commission, etc. is recognized only when it is reasonably certain that
the ultimate collection will be made.
2.8 proposed dividend
- Dividend (including Dividend Tax thereon, if any) are provided for in
the books of account as proposed by the Directors pending for approval
at the ensuing Annual General Meeting.
2.9 Research and development
- Revenue expenditure on Research & Development is written of in the
year in which it is incurred. Capital Expenditure on Research &
Development is included under Fixed Assets.
2.10 treatment of employee benefits
- Contributions to defend provident fund are charged to the profit and
loss account on accrual basis. Present liability for future payment of
gratuity and unavailed leave benefts are determined on the basis of
actuarial valuation at the balance sheet date and charged to the proft
and loss account. Gratuity fund is managed by the Kotak Life
Insurance.
2.11 Foreign Currency transactions
- Te transactions in foreign currencies are recognized at rate of
overseas currencies ruling on the date of transaction. Gain / ( loss)
arising on account of rise or fall in overseas currencies vis a vis
reporting currencies between the date of transaction and that of
payment is charged to statement of Profit& loss account.
- Year-end balance of foreign currency monetary items is translated at
the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit &
Loss Account on change of Exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled
on future dates are recognized at the year-end rates of
the underlying foreign currency. Effects arising from swap contracts are
adjusted on the date of settlement.
- In respect of Non integral foreign operation-both monetary and
non-monetary items are translated at the closing rate and resultant
diference is accumulated in foreign currency translation reserve, until
the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.12 government grant
- Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be made. Grant received from
government towards fixed assets acquired / constructed by the Company is
deducted out of gross value of the asset acquired / constructed and
depreciation is charged accordingly.
2.13 borrowing Costs
- Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalized as a
part of such assets till such time as the assets are ready for their
intended use or sale. All other borrowing costs are recognized as
expense in the period in which they are incurred.
2.14 taxes on income
- Te liability of Company on Account of Income Tax is estimated
considering the provisions of Income tax Act 1961.
- Deferred tax is recognized subject to the consideration of prudence
on timing differences being the difference between book and tax profits
that originate in one year and capable of reversal in one or more
subsequent years.
2.15 leases
- In respect of Operating leases, rentals are expensed with reference
to lease terms and other considerations.
2.16 provisions, Contingent liability and Contingent assets
- Te Company creates a provision when there is a present obligation as
a result of past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure of contingent liability is made when there is a possible
obligation or a present obligation that will probably not require
outflow of resources or where a reliable estimate of the obligation
cannot be made. Contingent Assets neither recognized nor disclosed in
the Financial Statement.
2.17 Segment Reporting
- Segments are identifed based on dominant source and nature of risks
and returns and internal fnancial reporting system to the management
Inter segment revenue are accounted for on the basis of transactions
which are primarily market led. Revenue and expenses which relate to
enterprises as a whole and are not attributable to segments are
included under "Other Unallocable Expenditure Net of Unallocable
Income".
2.18 Financial and management information System
- An Integrated Accounting System has been put to practice which unifies
both Financial Books and Costing Records. Te books of account and other
records have been designated to facilitate compliance with the relevant
provisions of the Companies Act on one hand and provides Internal
Financial Reporting System for Planning, Review and Internal Control on
the other. Te Cost Accounts are designed to adopt Costing Systems
appropriate to the business carried out by the Division, with each
Division incorporating into its costing system, the basic tenets and
principles of Standard Costing, Budgetary Control and Marginal Costing
as appropriate.
2.19 impairment of assets
- Te Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such Indication
exists; the Company estimates the recoverable amount of assets. If such
recoverable amount of the assets or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. Te
reduction is treated as an impairment loss and is recognised in the
Proft & Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the assets is refected
at recoverable amount.
2.20 mergers / amalgamation
- Mergers / Amalgamations (of the nature of Merger) of other company /
body Corporate with the company are accounted for on the basis of
purchase method, the Assets / Liabilities being incorporated in terms
of values of assets and Liabilities appearing in the books of
transferor entity on the date of such merger / amalgamation for the
purpose of arriving at the figure of Good will or amalgamation reserve.
Mar 31, 2013
1.1 Accounting Convention
- The Financial Statements are prepared on the historical cost
convention on going concern basis and in accordance with the applicable
accounting standards referred to in section 211 (3C) of the Companies
Act, 1956.
- The Company follows mercantile system of accounting and recognizes
income and expenditure on accrual basis
1.2 Use Of Estimates
- The preparation of Financial Statements requires management to make
certain assumptions and estimates that affect the reported amount the
Financial Statements and notes thereto. Difference between actual
results and estimates are recognised in the period in which the results
are known/ materialise.
1.3 Fixed Assets including intangible Assets
- Fixed Assets are stated at cost of acquisition / installation
inclusive of freight, duties, taxes and all incidental expenses and net
of accumulated depreciation. In respect of major projects involving
construction, related pre-operational expenses form part of the value
of assets capitalised. Expenses capitalised also include applicable
borrowing costs. The original cost of imported Fixed Assets acquired
through foreign currency loans has been adjusted at the end of each
Financial Year by any change in liability arising out of expressing the
outstanding foreign loan at the rate of exchange prevailing at the date
of Balance Sheet. All up gradation / enhancements are generally charged
off as revenue expenditure unless they bring similar significant
additional benefits.
- Intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work- in- progress is stated at amount spent up to the date
of Balance Sheet.
1.4 Depreciation and Amortisation
- Depreciation on fixed assets is provided on straight line method at
the rates specified in Schedule XIV of the Companies Act, 1 956 for the
period of usage.
- Computer software charges, patent, trademark & design and Goodwill
are recognised as intangible assets and amortized on straight line
method over a period of 1 0 years.
- Leasehold land is amortized on straight line method over the lease
period.
1.5 Investments
- Investments are classified into current and non-current investments.
Current investments are stated at lower of cost and fair value.
Non-current investments are stated at cost. A provision for diminution
is made to recognize a decline, other than temporary, in the value of
non-current investments
1.6 Inventories
- Items of inventories are measured at lower of cost or net realizable
value. Raw material on shop floor and work-in- process is taken as part
of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it
comprises expenditure incurred in normal course of business in bringing
such inventories to its location and includes, where applicable,
appropriate overheads based on normal level of activity. Obsolete, slow
moving & defective inventories are identified at the time of physical
verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from
the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of
Excise Duty
1.7 Revenue Recognition and Accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading
and adjusted for exchange fluctuations on exports realized during the
year and the trade receivable in foreign exchange which are restated at
the year end. Domestic sales are recognized on the dispatch of goods to
the customers and are net of discounts, Sales Tax, Excise Duty,
Returns. Gross sales includes Excise Duty and then reduced thereafter
to compute net sales in conformity with AS-14 on disclosure of the
revenue from sale transaction. Dividend income is recognised when the
right to receive Dividend is established. Revenue and Expenditure are
accounted for on going concern basis. Interest Income/Expenditure is
recognized using the time proportion method based on the rates implicit
in the transaction.
- Revenue in respect of Insurance/others claims, Interest, Commission,
etc. is recognised only when it is reasonably certain that the ultimate
collection will be made.
1.8 Proposed Dividend
- Dividends (including Dividend Tax thereon, if any) are provided for
in the books of account as proposed by the Directors pending for
approval at the ensuing Annual General Meeting.
1.9 Research and Development
- Revenue expenditure on Research & Development is written-off in the
year in which it is incurred. Capital Expenditure on Research &
Development is included under Fixed Assets.
1.10 Treatment of Employee Benefits
- Contributions to defined provident fund are charged to the profit and
loss account on accrual basis. Present liability for future payment of
gratuity and unavailed leave benefits are determined on the basis of
actuarial valuation at the balance sheet date and charged to the profit
and loss account. Gratuity fund is managed by the Kotak Life Insurance.
1.11 Foreign Currency Transactions
- Year-end balance of foreign currency monetary items is translated at
the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit
& Loss Account on change of exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled
on future dates are recognised at the year-end rates of the underlying
foreign currency. Effects arising from swap contracts are adjusted on
the date of settlement.
- In respect of Non integral foreign operation - both monetary and
non-monetary items are translated at the closing rate and resultant
difference is accumulated in foreign currency translation reserve,
until the disposal of net investment.
- Non monetary foreign currency item are carried at cost
1.12 Government Grant
- Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be made. Grant received from
government towards fixed assets acquired by the Company is deducted out
of gross value of the asset acquired and depreciation is charged
accordingly.
1.13 Borrowing Costs
- Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalised as a
part of such assets till such time as the assets are ready for their
intended use or sale. All other borrowing costs are recognised as
expense in the period in which they are incurred.
1.14 Taxes on Income
- Current tax is determined on taxable income for the period at the
applicable rates. Deferred tax is recognised subject to the
consideration of prudence in respect of deferred tax assets, resulting
from timing differences between book and tax profits, at the tax rates
that have been enacted or substantially enacted by the balance sheet
date, to the extent these are capable of reversal in one or more
subsequent periods.
1.15 Leases
- In respect of Operating leases, rentals are expensed with reference
to lease terms and other considerations.
1.16 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as
a result of past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure of contingent liability is made when there is a possible
obligation or a present obligation that will probably not require
outflow of resources or where a reliable estimate of the obligation can
not be made. Contingent Assets neither recognised nor disclosed in the
Financial statement.
1.17 Segment Reporting
- Segments are identified based on dominant source and nature of risks
and returns and the internal organization and management structure.
Inter segment revenue are accounted for on the basis of transactions
which are primarily market led. Revenue and expenses which relate to
enterprises as a whole and are not attributable to segments are
included under "Other Unallocable Expenditure Net of Unallocable
Income.
1.18 Financial and Management Information System
- An Integrated Accounting System has been put to practice which
unifies both Financial Books and Costing Records. The books of account
and other records have been designated to facilitate compliance with
the relevant provisions of the Companies Act on o ne hand and meet the
internal requirements of information and systems for Planning, Review
and Internal Control on the other. The Cost Accounts are designed to
adopt Costing Systems appropriate to the business carried out by the
Division, with each Division incorporating into its costing system, the
basic tenets and principles of Standard Costing, Budgetary Control and
Marginal Costing as appropriate
1.19 Impairment of Assets
- The Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such Indication
exists; the Company estimates the recoverable amount of assets. If such
recoverable amount of the assets or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit & Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the assets is
reflected at recoverable amount.
Mar 31, 2012
1.1 Accounting Convention
- The Financial Statements are prepared on the historical cost
convention on going concern basis and in accordance with the applicable
accounting standards referred to in section 211(3C) of the Companies
Act, 1956.
- The company follows mercantile system of accounting and recognizes
income and expenditure on accrual basis.
1.2 Use of Estimates
- The preparation of Financial Statements requires management to make
certain assumptions and estimates that affect the reported amount in
the financial statements and notes thereto. Difference between actual
results and estimates are recognised in the period in which the results
are known/ materialise.
1.3 Fixed Assets including intangible Assets
- Fixed Assets are stated at cost of acquisition / installation
inclusive of freight, duties, taxes and all incidental expenses and net
of accumulated depreciation. in respect of major projects involving
construction, related pre-operational expenses form part of the value
of assets capitalised. Expenses capitalised also include applicable
borrowing costs. The original cost of imported Fixed Assets acquired
through foreign currency loans has been adjusted at the end of each
financial year by any change in liability arising out of expressing the
outstanding foreign loan at the rate of exchange prevailing at the date
of Balance Sheet. All up gradation / enhancements are generally charged
off as revenue expenditure unless they bring similar significant
additional benefits.
- intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work- in- progress is stated at amount spent up to the date
of Balance Sheet.
1.4 Depreciation and Amortisation
- Depreciation on fixed assets is provided on straight line method at
the rates specified in Schedule XIV of the Companies Act, 1956 for the
period of usage.
- Computer software charges, patent, trademark & design and Goodwill
are recognised as intangible assets and amortized on straight line
method over a period of 10 years.
- Leasehold land is amortized on straight line method over the lease
period.
1.5 Investments
- Investments are classified into current and non-current investments.
Current investments are stated at lower of cost and fair value.
Non-current investments are stated at cost. A provision for diminution
is made to recognize a decline, other than temporary, in the value of
non-current investments.
1.6 Inventories
- Item of finish goods inventories are measured at lower of cost or net
reliasable value. item of raw materials, stores, spares and consumable
are valued at cost. Raw material on shop floor and work-in- process are
taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it
comprises expenditure incurred in normal course of business in bringing
such inventories to its location and includes, where applicable,
appropriate overheads based on normal level of activity. Obsolete, slow
moving & defective inventories are identified at the time of physical
verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from
the cost of main product.
- inventory of Finished Excisable Products are valued inclusive of
Excise Duty.
1.7 Revenue Recognition and Accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading
and adjusted for exchange fluctuations on exports realized during the
year and the trade receivable in foreign exchange which are restated at
the year end. Domestic sales are recognized on the dispatch of goods to
the customers and are net of discounts, Sales Tax, Excise Duty, Returns
etc. Gross sales includes Excise Duty and then reduced thereafter to
compute net sales in conformity with ASI-14 on disclosure of the
revenue from sale transaction. Dividend income is recognised when the
right to receive dividend is established. Revenue and Expenditure are
accounted for on going concern basis. interest income / Expenditure is
recognized using the time proportion method based on the rates implicit
in the transaction.
- Revenue in respect of insurance / others claims, interest,
Commission, etc. is recognised only when it is reasonably certain that
the ultimate collection will be made.
1.8 Proposed Dividend
- Dividends (including Dividend Tax thereon) are provided for in the
books of account as proposed by the Directors pending approval at the
Annual General Meeting.
1.9 Research and Development
- Revenue expenditure on Research & Development is written- off in the
year in which it is incurred. Capital Expenditure on Research &
Development is included under Fixed Assets.
1.10 Treatment of Employee Benefits
- Contributions to defined provident fund are charged to the Statement
of Profit & Loss on accrual basis. Present liability for future payment
of gratuity and unavailed leave benefits are determined on the basis of
actuarial valuation at the balance sheet date and charged to the profit
and loss account. Gratuity fund is managed by the Kotak Life Insurance.
1.11 Foreign Currency Transactions
- Year-end balance of foreign currency monetary items is translated at
the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit
& Loss Account on change of exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled
on future dates are recognised at the year-end rates of the underlying
foreign currency. Effects arising from swap contracts are adjusted on
the date of settlement.
- in respect of Non integral foreign operation - both monetary and
non-monetary items are translated at the closing rate and resultant
difference is accumulated in foreign currency translation reserve,
until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
1.12 Government Grant
- Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be made. Grant received from
government towards fixed assets acquired by the Company is deducted out
of gross value of the asset acquired and depreciation is charged
accordingly
1.13 Borrowing Costs
- Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalised as a
part of such assets till such time as the assets are ready for their
intended use or sale. All other borrowing costs are recognised as
expense in the period in which they are incurred.
1.14 Taxes on Income
- Current tax is determined on taxable income for the period at the
applicable rates. Deferred tax is recognised subject to the
consideration of prudence in respect of deferred tax assets, resulting
from timing differences between book and tax profits, at the tax rates
that have been enacted or substantially enacted by the balance sheet
date, to the extent these are capable of reversal in one or more
subsequent periods.
1.15 Leases
- in respect of operating leases, rentals are expensed with reference
to lease terms and other considerations.
1.16 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as
a result of past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure of contingent liability is made when there is a possible
obligation or a present obligation that will probably not require
outflow of resources or where a reliable estimate of the obligation can
not be made. Contingent Assets neither recognised nor disclosed in the
financial statement.
1.17 Segment Reporting
- Segments are identified based on dominant source and nature of risks
and returns and the internal organisation and management structure.
inter segment revenue are accounted for on the basis of transactions
which are primarily market led. Revenue and expenses which relate to
enterprises as a whole and are not attributable to segments are
included under "other unallocable expenditure net of unallocable
income.
1.18 Financial and Management Information System
- An integrated Accounting System has been put to practice which
unifies both Financial Books and Costing Records. The books of account
and other records have been designated to facilitate compliance with
the relevant provisions of the Companies Act on one hand and meet the
internal requirements of information and systems for Planning, Review
and internal
Control on the other. The Cost Accounts are designed to adopt Costing
Systems appropriate to the business carried out by the division, with
each division incorporating into its costing system, the basic tenets
and principles of Standard Costing, Budgetary Control and Marginal
Costing as appropriate.
1.19 Impairment of Assets
- The Company assess at each Balance Sheet date whether there is any
indication that an asset may be impaired. if any such indication
exists, the Company estimates the recoverable amount of asset. if such
recoverable amount of the asset or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Statement of Profit & Loss. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the asset is reflected
at recoverable amount.
Mar 31, 2011
A. Accounting Convention
(a) The accounts are prepared on the historical cost convention on
going concern basis and in accordance with the accounting standards
referred to in section 211(3C) of the Companies Act, 1956.
(b) The company follows mercantile system of accounting and recognizes
income and expenditure on accrual basis.
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 Financial Statements and reported amount of
revenue and expenditure during the reporting period. Difference between
actual results and estimates are recognised in the period in which the
results are known/ materialise.
C. Fixed Assets
(a) Valuation of Fixed Assets
(i) Fixed Assets are stated at cost of acquisition/installation
inclusive of freight, duties, taxes and all incidental expenses are
stated net of accumulated depreciation. In respect of major projects
involving construction, related pre-operational expenses form part of
the value of assets capitalised. Expenses capitalised also include
applicable borrowing costs. The original cost of imported Fixed Assets
acquired through foreign currency loans has been adjusted at the end of
each financial year by any change in liability arising out of
expressing the outstanding foreign loan at the rate of exchange
prevailing at the date of Balance Sheet. All up gradation/enhancements
are generally charged off as revenue expenditure unless they bring
similar significant additional benefits.
(ii) Intangible assets are stated at their cost of acquisition,
(iii) Land is stated at original cost of acquisition.
(iv) Capital work-in-progress is stated at amount spent up to the date
of Balance Sheet.
(b) Methods of Depreciation And Amortisation
i) Depreciation on fixed assets is provided for on straight line method
at the rates specified in Schedule XIV of the Companies Act, 1956 for
the period of usage.
ii) Computer software Development charges and patent, trademark &
design are recognised as intangible assets and amortized on straight
line method over a period of 10 years.
iii) Leasehold land is amortized on straight line method over lease
period.
D. Investments
Investments are classified into current and long term investments.
Current investments are stated at lower of cost and fair value. Long
term investments are stated at cost. A provision for diminution is made
to recognize a decline, other than temporary, in the value of long term
investments.
E. Inventories
(a) Items of inventories are measured at lower of cost or net
realizable value. Raw material on floor shop and work-in- process is
taken as part of raw material and valued accordingly.
(b) The cost is calculated on weighted average cost method. Cost
comprises of expenditure incurred in normal course of business in
bringing such inventories to its location and includes, where
applicable, appropriate overhead based on normal level of activity .
Obsolete, slow moving & defective inventories are identified at the
time of physical verification of inventories and, where necessary,
provision is made for such inventories.
(c) By-products are valued at net realizable value and are deducted
from the cost of main product.
(d) Inventory of Finished Excisable product is valued inclusive of
Excise Duty.
F. Revenue Recognition
(a) Export sales are accounted for on the basis of date of bill of
lading. Domestic sales of goods are recognised on the dispatch of goods
to the customers. Sales are net of discounts, Sales Tax, Excise Duty
and Returns but include exchange fluctuations on exports realised
during the year and also the effect of trade receivable in foreign
exchange as at the year end and restated at exchange rate existing as
on that date excise duty is first included in gross sales and reduce
there after to compute net sales in confirmity with ASI-14 on
disclosure of the revenue from sale transation. Dividend income is
recognised when the right to receive dividend is established. Revenue
and Expenditure are accounted for on a going concern basis. Interest
Income/ Expenditure is recognised using the time proportion method
based on the rates implicit in the transaction.
(b) Revenue in respect of Insurance / others claims, Interest,
Commission, etc. is recognised only when it is reasonably certain that
the ultimate collection will be made.
(c) Turnover includes gain / loss on corresponding forward contracts.
G. Proposed Dividend
Dividends (including Income Tax thereon) are provided for in the books
of account as proposed by the Directors, pending approval at the Annual
General Meeting.
H. Research & Development
All expenditure other than Capital Expenditure on Research &
Development is written-off in the year it is incurred. Capital
Expenditure on Research & Development is included under Fixed Assets.
I. Employee Benefits
Contributions to the provident fund, which is a defined contribution
retirement plan, are charged to the profit and loss account in the
period in which the contributions are incurred. Present liability for
future payment of gratuity and unavailed leave benefits are determined
on the basis of actuarial valuation carried out by M/s. K.A. Pandit
Consultant & Actuarial at the balance sheet date and is charged to the
profit and loss account and Gratuity fund is managed by the Kotak Life
Insurance.
J. Foreign Exchange Transactions
(a) Year-end balance of foreign currency monetary items is translated
at the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
(b) Exchange difference on forward contract is also recognized in
profit & loss Account on change of Exchange rate at the reporting date.
(c) Transactions covered by cross currency swap contracts to be settled
on future dates are recognised at the year-end rates of the underlying
foreign currency. Effects arising from swap contracts are adjusted on
the date of settlement. Non monetary foreign currency items are carried
at cost.
(d) In respect of Non integral foreign operation - both monetary and
non-monetary items are translated at the closing rate and resultant
difference is accumulated in foreign currency translation reserve,
until the disposal of net investment.
(e) Non monetary foreign currency item are carried at cost.
K. Government Grant
Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be made. Grant received from
government towards fixed assets acquired by the Company is deducted out
of gross value of the asset acquired and depreciation is charged
accordingly.
L. Borrowing Costs
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as a part of such
assets till such time as the assets are ready for their intended use or
sale. All other borrowing costs are recognised as expense in the period
in which they are incurred.
M. Taxes On Income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognised subject to
the consideration of prudence in respect of deferred tax assets,
resulting from timing differences between book and tax profits, at the
tax rates that have been enacted or substantively enacted by the
balance sheet date, to the extent these are capable of reversal in one
or more subsequent periods.
N. Leases
In respect of Operating leases, rentals are expensed with reference to
lease terms and other considerations.
O. Contingent Liabilities
Contingent liabilities are disclosed by way of note to the Balance
Sheet. Provision is made in accounts for those liabilities which are
likely to materialise after the year end and having effect on the
position stated in the Balance Sheet as at the year end.
P. Segment Reporting
Segments are identified based on dominant source and nature of risks
and returns and the internal organization and management structure.
Inter segment revenue accounted for on the basis of transactions which
are primary market led. Revenue and expenses which relate to
enterprises as a whole and are not attributable to segments are
included under "other unallocable expenditure net of unallocable
incomeÃ.
Q. Financial And Management Information System
An Integrated Accounting System has been put to practice which unifies
both Financial Books and Costing Records. The books of account and
other records have been designated to facilitate compliance with the
relevant provisions of the Companies Act on one hand, and meet the
internal requirements of information and systems for Planning, Review
and Internal Control on the other. The Cost Accounts are designed to
adopt Costing Systems appropriate to the business carried out by the
Division, with each Division incorporating into its costing system, the
basic tenets and principles of Standard Costing, Budgetary Control and
Marginal Costing as appropriate.
R. Impairment Of Assets
The Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such indication
exists; the Company estimates the recoverable amount of assets. If such
recoverable amount of the assets or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit & Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the assets is
reflected at recoverable amount.
Mar 31, 2010
A. ACCOUNTING CONVENTION
(a) The accounts are prepared on the historical cost convention on
going concern basis and in accordance with the accounting standards
referred to in section 211(3C) of the Companies Act, 1956.
(b) The company follows mercantile system of accounting and recognizes
income and expenditure on accrual basis.
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 Financial Statements and reported amount of
revenue and expenditure during the reporting period. Difference between
actual results and estimates are recognised in the period in which the
results are known/ materialise.
C. FIXED ASSETS
(a) VALUATION OF FIXED ASSETS
(i) Fixed Assets are stated at cost of acquisition / installation
inclusive of freight, duties, taxes and all incidental expenses are
stated net of accumulated depreciation. In respect of major projects
involving construction, related pre-operational expenses form part of
the value of assets capitalised. Expenses capitalised also include
applicable borrowing costs. The original cost of imported Fixed Assets
acquired through foreign currency loans is adjusted at the end of each
financial year by any change in liability arising out of expressing the
outstanding foreign loan at the rate of exchange prevailing at the date
of Balance Sheet. All up gradation / enhancements are generally charged
off as revenue expenditure unless they bring significant additional
benefits.
(ii) Intangible assets are stated at their cost of acquisition,
(iii) Land is stated at original cost of acquisition.
(iv) Capital work in progress is stated at amount spent up to the date
of Balance Sheet.
(b) METHODS OF DEPRECIATION AND AMORTISATION
(i) Depreciation on fixed assets is provided for on straight line
method at the rates specified in Schedule XIV of the Companies Act,
1956 for the period of usage.
(ii) Computer software Development charges and Patent, Trademark &
Design are recognised as intangible assets and amortized on straight
line method over a period of 10 years.
(iii) Leasehold land is amortized on straight line method over lease
period.
D. INVESTMENTS
Investments are classified into current and long term investments.
Current investments are stated at lower of cost and fair value. Long
term investments are stated at cost. A provision for diminution is made
to recognize a decline, other than temporary, in the value of long term
investments.
E. INVENTORIES
(a) Items of inventories are measured at lower of cost or net
realizable value. Raw material on floor shop and work-in- process is
taken as part of raw material and valued accordingly.
(b) The cost is calculated on weighted average cost method. Cost
comprises of expenditure incurred in normal course of business in
bringing such inventories to its location and includes, where
applicable, appropriate overhead based on normal level of activity.
Obsolete, slow moving & defective inventories are identified at the
time of physical verification of inventories and, where necessary,
provision is made for such inventories.
(c) By-products are valued at net realizable value and are deducted
from the cost of main product.
(d) Inventory of Finished Excisable product is valued inclusive of
Excise Duty.
F. REVENUE RECOGNITION
(a) Export sales are accounted for on the basis of date of bill of
lading. Domestic sales of goods are recognised on the dispatch of goods
to the customers. Sales are net of discounts, Sales Tax, Excise Duty
and Returns but include exchange fluctuations on exports realised
during the year and also the effect of trade receivable in foreign
exchange as at the year end and restated at exchange rate existing as
on that date. Dividend income is recognised when the right to receive
dividend is established. Revenue and Expenditure are accounted for on a
going concern basis. Interest Income / Expenditure is recognised using
the time proportion method based on the rates implicit in the
transaction.
(b) Revenue in respect of Insurance / others claims, Interest,
Commission, etc. is recognised only when it is reasonably certain that
the ultimate collection will be realised.
(c) Turnover includes gain / loss on corresponding forward contracts.
G. PROPOSED DIVIDEND
Dividends (including dividend Tax thereon) are provided for in the
books of account as proposed by the Boards, pending approval at the
Annual General Meeting.
H. RESEARCH & DEVELOPMENT
All expenditure other than Capital Expenditure is written- off in the
year it is incurred. Capital Expenditure on Research & Development is
included under Fixed Assets.
I. EMPLOYEE BENEFITS
Contributions to the provident fund, which is a defined contribution
retirement plan, are charged to the profit and loss account in the
period in which the contributions are incurred. Present liability for
future payment of gratuity and unavailed leave benefits are determined
on the basis of actuarial valuation carried out by M/s. K.A. Pandit,
Consultant & Actuarial at the balance sheet date and is charged to the
profit and loss account. Gratuity fund is managed by the Kotak Life
Insurance.
J. FOREIGN EXCHANGE TRANSACTIONS AND FORWARD CONTRACTS
(a) Year-end balance of foreign currency monetary items is translated
at the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
(b) Exchange difference on forward contract is also recognized in
profit & loss Account on change of Exchange rate at the reporting date.
(c) Transactions covered by cross currency swap contracts to be settled
on future dates are recognised at the year-end rates of the underlying
foreign currency. Effects arising from swap contracts are adjusted on
the date of settlement. Non monetary foreign currency items are
carried at cost.
(d) To recornise the net mark to market loss in the profit and loss
accounts on the outstanding portfolio of options as at the balance
sheet date, and to ignore the net gain, if any, in respect of Non
integral foreign operation - both monetary and non-monetary items are
translated at the closing rate and resultant difference is accumulated
in foreign currency translation reserve, until the disposal of net
investment.
K. GOVERNMENT GRANT
Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be realised. Grant received from
government towards fixed assets acquired by the Company is deducted
from gross value of the asset acquired and depreciation is charged
accordingly.
L. BORROWING COSTS
Borrowing costs that are attributable to the acquisition, construction
or production of qualifying assets are capitalised as a part of such
assets till such time as the assets are ready for their intended use or
sale. All other borrowing costs are recognised as expense in the period
in which they are incurred.
M. TAXES ON INCOME
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax is recognised subject to
the consideration of prudence in respect of deferred tax assets,
resulting from timing differences between book and tax profits, at the
tax rates that have been enacted or substantively enacted by the
balance sheet date, to the extent these are capable of reversal in one
or more subsequent periods.
N. LEASES
In respect of Operating leases, rentals are expensed with reference to
lease terms and other considerations.
O. CONTINGENT LIABILITIES
Contingent liabilities are disclosed by way of notes to the accounts of
financial statements. Provision is made in accounts for those
liabilities which are likely to materialise after the year end and
having effect on the position stated in the Balance Sheet as at the
year end.
P. SEGMENT REPORTING
Segments are identified based on dominant source and nature of risks
and returns and the internal organization and management structure.
Inter segment revenue accounted for on the basis of transactions which
are primary market led. Revenue and expenses which relate to
enterprises as a whole and not attributable to segments are included
under "other unallocable expenditure net of unallocable income".
Q. FINANCIAL AND MANAGEMENT INFORMATION SYSTEM
An Integrated Accounting System has been put to practice which unifies
both Financial Books and Costing Records. The books of account and
other records have been designated to facilitate compliance with the
relevant provisions of the Companies Ac t on one hand, and to meet the
internal requirements of information and systems for Planning, Review
and Internal Control on the other. The Cost Accounts are designed to
adopt Costing Systems appropriate to the business carried out by the
Divisions, with each Divisions incorporating into its costing system,
the basic tenets and principles of Standard Costing, Budgetary Control
and Marginal Costing as appropriate.
R. IMPAIRMENT OF ASSETS
The Company assesses at each Balance sheet date whether there is any
indication that an assets may be impaired. If any such Indication
exists; the Company estimates the recoverable amount of assets. If such
recoverable amount of the assets or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. The
reduction is treated as an impairment loss and is recognised in the
Profit & Loss Account. If at the balance sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the assets is
reflected at recoverable amount.