Mar 31, 2023
This note provides a list of the significant accounting
policies adopted in the preparation of the financial
statements. These policies have been consistently
applied to all the years presented, unless otherwise
stated.
a) Statement of compliance:
The financial statements are prepared in accordance
with Indian Accounting Standards (Ind AS)
notified under Section 133 of the Companies Act,
2013 (âthe Actâ) read along with the Companies
(Indian Accounting Standards) Rules as amended
and guidelines issued by the Securities and
Exchange Board of India (SEBI), as applicable.
The presentation of financial statements is based
on Ind AS Schedule III of the Companies Act,
2013.
b) Basis of preparation:
The financial statements have been prepared under
the historical cost convention with the exception
of certain assets and liabilities that are required to
be carried at fair values as per Ind AS. Fair value is
the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction
between market participants at the measurement
date.
c) Revenue recognition:
i) Revenue from contract with customers
Revenue is recognised when the performance
obligations have been satisfied, which is
once control of the goods is transferred
from the Company to the customer.
Revenue related to the sale of goods is
recognised when the product is delivered to
the destination specified by the customer,
and the customer has gained control through
their ability to direct the use of and obtain
substantially all the benefits from the asset.
Revenue is measured based on consideration
specified in the contract with a customer
which is measured at the fair value of the
consideration received or receivable, net
of returns and allowances, trade discounts
& volume rebates and excludes amounts
collected on behalf of third parties.
ii) Other income
Dividend income is recognised when the
right to receive the income is established.
Interest income is recognized on time
proportion basis taking into account the
amount outstanding and the rate applicable.
Rental income from investment properties is
recognised on a straight line basis over the
term of the relevant leases.
Export benefit under the duty free credit
entitlements is recognized in the statement
of profit and loss, when right to receive such
entitlement is established as per terms of the
relevant scheme in respect of exports made
and where there is no significant uncertainty
regarding compliance with the terms and
conditions of such scheme.
Goods & Services Tax (GST) incentives are
recognized in the statement of profit and
loss, when right to receive such entitlement
is established as per terms of the relevant
scheme and where there is no significant
uncertainty regarding compliance with the
terms and conditions of such scheme.
d) Borrowing costs:
Borrowing costs directly attributable to the
acquisition, construction or production of
qualifying assets, which are assets that necessarily
take a substantial period of time to get ready for
their intended use or sale, are added to the cost
of those assets, until such time as the assets are
substantially ready for the intended use or sale.
Investment income earned on the temporary
investment of specific borrowings pending their
expenditure on qualifying assets is deducted from
the borrowing cost eligible for capitalization.
Other borrowings costs are expensed in the period
in which they are incurred.
e) Employee benefits:
(i) Short-term obligations
Liabilities for wages and salaries, including
non-monetary benefits that are expected to
be settled wholly within 12 months after the
end of the period in which the employees
render the related service are recognized in
respect of employeesâ services up to the end
of the reporting period and are measured
at the amounts expected to be paid when
the liabilities are settled. The liabilities
are presented as current employee benefit
obligations in the balance sheet.
(ii) Other long-term employee benefit
obligations
The liabilities for earned leave is not expected
to be settled wholly within 12 months after
the end of the period in which the employees
render the related service. They are therefore
measured at the present value of expected
future payments to be made in respect
of services provided by employees up to
the end of the reporting period using the
projected unit credit method. The benefits
are discounted using the market yields at the
end of the reporting period that have terms
approximating to the terms of the related
obligations. Remeasurements as a result of
the experience adjustments and changes in
actuarial assumptions are recognized in profit
or loss.
The obligations are presented as current
liabilities in the balance sheet if the entity
does not have an unconditional right to defer
settlement for at least twelve months after
the reporting period, regardless of when the
actual settlement is expected to occur.
(iii) Gratuity obligations
The liability or assets recognized in the
balance sheet in respect of gratuity plans is the
present value of the defined benefit obligation
at the end of the reporting period less the
fair value of plan assets. The defined benefit
obligation is calculated annually by actuaries
using the projected unit credit method.
The present value of the defined benefit
obligation is determined by discounting the
estimated future cash outflows by reference
to market yields at the end of the reporting
period on government bonds that have terms
approximating to the terms of the related
obligation.
The net interest cost is calculated by applying
the discount rate to the net balance of the
defined benefit obligation and the fair value of
plan assets. This cost is included in employee
benefit expense in the statement of profit and
loss.
Remeasurement gains and losses arising
from experience adjustments and changes in
actuarial assumptions are recognized in the
period in which they occur, directly in other
comprehensive income. They are included in
retained earnings in the statement of changes
in equity and in the balance sheet.
Changes in the present value of the defined
benefit obligation resulting from plan
amendments or curtailments are recognized
immediately in profit or loss. The gratuity
liability is covered through a recognized
Gratuity Fund managed by Life Insurance
Corporation of India and the contributions
made under the scheme are charged to
statement of profit and loss.
(iv) Defined contribution plans
The Company pays provident fund
contributions to publicly administered funds
as per local regulations. 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
recognized as employee benefit expense
when they are due.
(v) Bonus plans
The Company recognizes a liability and
an expense for bonuses. The Company
recognizes a provision where contractually
obliged or where there is a past practice that
has created a constructive obligation.
f) Income taxes:
Tax expense for the year comprises current and
deferred tax.
Current Tax is the amount of tax payable on the
taxable income for the year as determined in
accordance with the applicable tax rates and the
provisions of the Income-tax Act, 1961 and other
applicable tax laws that have been enacted or
substantively enacted by the end of the reporting
period.
Deferred tax is recognised on temporary
differences between the carrying amounts of assets
and liabilities in the financial statements and the
corresponding tax bases used in the computation of
taxable profit. Deferred tax liabilities are generally
recognised for all taxable temporary differences.
Deferred tax assets are generally recognised for all
deductible temporary differences to the extent that
it is probable that taxable profits will be available
against which those deductible temporary
differences can be utilised. Such deferred tax assets
and liabilities are not recognised if the temporary
differences arise from the initial recognition
(other than in a business combination) of assets
and liabilities in a transaction that affects neither
the taxable profit nor the accounting profit. In
addition, deferred tax liabilities are not recognised
if the temporary difference arises from the initial
recognition of goodwill.
The carrying amount of deferred tax assets is
reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable
that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax assets and liabilities are measured
at the tax rates that are expected to apply in the
period in which the liability is settled or the asset
realised, based on tax rates (and tax laws) that have
been enacted or substantively enacted by the end
of the reporting period.
Tax relating to items recognized directly in equity
or other comprehensive income is recognised in
equity or other comprehensive income and not in
the statement of profit and loss.
Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax
liabilities and assets, and they are related to income
taxes levied by the same tax authority, but they
intend to settle current tax liabilities and assets on
a net basis or their tax assets and liabilities will be
realized simultaneously.
g) Property, Plant and Equipment (PPE):
PPE is carried at cost less accumulated depreciation
and impairment losses, if any. The cost of PPE
comprises of purchase price, applicable duties
and taxes net of input tax credit, any directly
attributable expenditure on making the asset ready
for its intended use, other incidental expenses and
interest on borrowings attributable to acquisition
of qualifying fixed assets, upto the date the asset is
ready for its intended use.
All other repair and maintenance costs, including
regular servicing, are recognised in the statement
of profit and loss as incurred. When a replacement
occurs, the carrying value of the replaced part is
de-recognised. Where an item of PPE comprises
major components having different useful lives,
these components are accounted for as separate
items.
Leasehold improvements are stated at cost
including taxes, freight and other incidental
expenses incurred, net of input tax credits availed.
The depreciation is provided over the life estimated
by the management.
Self constructed assets (Moulds): The Company
transfers all the directly attributable expenditure
incurred towards construction of moulds including
depreciation on actual cost basis.
PPE retired from active use and held for sale are
stated at the lower of their net book value and net
realizable value and are disclosed separately.
An item of PPE is derecognised upon disposal or
when no future economic benefits are expected to
arise from the continued use of the asset. Any gain
or loss arising on the disposal or retirement of an
item of PPE is determined as the difference between
the sales proceeds and the carrying amount of the
asset and is recognised in the statement of profit
and loss.
h) Expenditure during construction period and
intangible assets under development:
Expenditure during construction period (including
finance cost related to borrowed funds for
construction or acquisition of qualifying PPE)
is included under Capital Work-in-Progress
and the same is allocated to the respective
PPE on the completion of their construction.
Intangible Assets under development includes the
expenditure incurred for acquisition of intangible
assets.
i) Depreciation:
Depreciation is the systematic allocation of the
depreciable amount of PPE over its useful life and
is provided on the straight line method over the
useful lives as prescribed in Schedule II to the Act.
Intangible assets acquired separately are measured
on initial recognition cost and are amortized on
straight line method based on the estimated useful
lives.
The period of amortization and amortization
method are reviewed at each financial year end.
Computer software is amortized over a period of
five years.
k) Investment property:
Investment property are the properties held to earn
rentals and/or for capital appreciation (including
property under construction for such purposes).
Investment properties are measured initially at
cost, including transaction costs. Subsequent
to initial recognition, investment properties are
measured at cost model which is in accordance
with Ind AS 40.
An investment property is derecognised upon
disposal or when the investment property is
permanently withdrawn from use and no further
economic benefits expected from disposal.
Any gain or loss arising on derecognition of
the property is included in profit or loss in the
period in which the property is derecognised.
Depreciation on building is provided over itâs
useful life of 30 years using the Straight Line
Method.
l) Impairment of assets:
Intangible assets and Property, Plant and Equipment
(PPE): Intangible assets and PPE are evaluated
for recoverability whenever events or changes
in circumstances indicate that their carrying
amounts may not be recoverable. For the purpose
of impairment testing, the recoverable amount (i.e.
the higher of the fair value less cost to sell and the
value-in-use) is determined on an individual asset
basis unless the asset does not generate cash flows
that are largely independent of those from other
assets. In such cases, the recoverable amount is
determined for the Cash Generating Unit (CGU)
to which the asset belongs.
If such assets are considered to be impaired, the
impairment to be recognized in the statement
of profit and loss is measured by the amount by
which the carrying value of the assets exceeds
the estimated recoverable amount of the asset. An
impairment loss is reversed in the statement of profit
and loss if there has been a change in the estimates
used to determine the recoverable amount. The
carrying amount of the asset is increased to its
revised recoverable amount, provided that this
amount does not exceed the carrying amount
that would have been determined (net of any
accumulated amortization or depreciation) had no
impairment loss been recognized for the asset in
prior years.
m) Inventories:
Inventories includes Raw materials, Work-in¬
progress, Finished goods, Stores & Spares,
Packing materials and Other consumables. These
are valued at lower of cost and net realizable value
(NRV). However, raw materials 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. Further, cost is determined on
weighted average basis.
Valuation of Inventories of Materials in Transit is
done at Cost.
Work-in-Progress (WIP) and Finished goods
Cost of Finished Goods and WIP includes cost
of raw materials, cost of conversion and other
costs incurred in bringing the inventories to their
present location and condition. Cost of inventories
is computed on weighted average basis. Finished
goods includes sales in transit which is valued at
lower of cost and NRV.
Mar 31, 2022
1 Company information:
Mold-Tek Packaging Limited (âthe Companyâ) is a public limited company incorporated in India having its registered office at Hyderabad, Telangana, India. The Company is engaged in the manufacturing of injection-molded containers for lubes, paints, food and other products. The Company has its listings on BSE Limited and National Stock Exchange of India Limited (NSE).
2 Significant accounting policies:
This note provides a list of the significant accounting policies adopted in the preparation of the financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
a) Statement of compliance:
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (âthe Actâ) read along with the Companies (Indian Accounting Standards) Rules as amended and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable. The presentation of financial statements is based on Ind AS Schedule III of the Companies Act, 2013.
b) Basis of preparation:
The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair values as per Ind AS. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
c) Revenue recognition:
i) Revenue from contract with customers
Revenue is recognised when the performance obligations have been satisfied, which is once control of the goods is transferred from the Company to the customer. Revenue related to the sale of goods is recognised when the product is delivered to the destination specified by the customer, and the customer has gained control through their ability to direct the use of and obtain substantially all the benefits from the asset.
Revenue is measured based on consideration specified in the contract with a customer which is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts & volume rebates and excludes amounts collected on behalf of third parties.
ii) Other income
Dividend income is recognised when the right to receive the income is established.
Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
Rental income from investment properties is recognised on a straight line basis over the term of the relevant leases.
Export benefit under the duty free credit entitlements is recognized in the Statement of profit and loss, when right to receive such entitlement is established as per terms of the relevant scheme in respect of exports made and where there is no significant uncertainty regarding compliance with the terms and conditions of such scheme.
Sales tax incentives are recognized in the Statement of profit and loss, when right to receive such entitlement is established as per terms of the relevant scheme and where there is no significant uncertainty regarding compliance with the terms and conditions of such scheme.
d) Borrowing costs:
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for the intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization. Other borrowings costs are expensed in the period in which they are incurred.
e) Employee benefits:
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligations. Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least 12 months after the reporting period, regardless of when the actual settlement is expected to occur.
(iii) Gratuity obligations
The liability or assets recognized in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting
period on government bonds that have terms approximating to the terms of the related obligation.
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the Statement of profit and loss.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss. The gratuity liability is covered through a recognized Gratuity Fund managed by Life Insurance Corporation of India and the contributions made under the scheme are charged to Statement of profit and loss.
(iv) Defined contribution plans
The Company pays provident fund contributions to publicly administered funds as per local regulations. 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 recognized as employee benefit expense when they are due.
(v) Bonus plans
The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
f) Income taxes:
Tax expense for the year comprises current and deferred tax.
Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other
applicable tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Tax relating to items recognized directly in equity or other comprehensive income is recognised in equity or other comprehensive income and not in the Statement of profit and loss.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they are related to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
g) Property, Plant and Equipment (PPE):
PPE is carried at cost less accumulated depreciation and impairment losses, if any. The cost of PPE comprises of purchase price, applicable duties and taxes net of input tax credit, any directly attributable expenditure on making the asset ready
for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets, upto the date the asset is ready for its intended use.
All other repair and maintenance costs, including regular servicing, are recognised in the Statement of profit and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of PPE comprises major components having different useful lives, these components are accounted for as separate items.
Leasehold improvements are stated at cost including taxes, freight and other incidental expenses incurred, net of input tax credits availed. The depreciation is provided over the life estimated by the management.
Self constructed assets (Moulds): The Company transfers all the directly attributable expenditure incurred towards construction of moulds including depreciation on actual cost basis.
PPE retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.
An item of PPE is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of PPE is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in the Statement of profit and loss.
h) Expenditure during construction period and intangible assets under development:
Expenditure during construction period (including finance cost related to borrowed funds for construction or acquisition of qualifying PPE) is included under Capital Work-in-Progress and the same is allocated to the respective PPE on the completion of their construction. Intangible Assets under development includes the expenditure incurred for acquisition of intangible assets.
i) Depreciation:
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on the straight line method over the useful lives as prescribed in Schedule II to the Act.
j) Intangible assets and amortization:
Intangible assets acquired separately are measured on initial recognition cost and are amortized on straight line method based on the estimated useful lives.
The period of amortization and amortization method are reviewed at each financial year end.
Computer software is amortized over a period of five years.
k) Investment property:
Investment property are the properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost model which is in accordance with Ind AS 40. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no further economic benefits expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognised. Depreciation on building is provided over itâs useful life of 30 years using the Straight Line Method.
l) Impairment of assets:
Intangible assets and Property, Plant and Equipment (PPE): Intangible assets and PPE are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the Statement of profit and loss is measured by the amount by which the carryingvalue of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the Statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying
amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
m) Inventories:
Inventories includes Raw materials, Work-inprogress, Finished goods, Stores & Spares, Packing materials and other consumables. These are valued at lower of cost and net realizable value (NRV). However, raw materials 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. Further, cost is determined on weighted average basis.
Material in transit
Valuation of Inventories of Materials in Transit is done at Cost.
Work-in-Progress (WIP) and Finished goods
Cost of Finished Goods and WIP includes cost of raw materials, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis. Finished goods includes sales in transit which is valued at lower of cost and NRV.
n) Provisions, Contingent liabilities and Contingent assets :
The Company recognises provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to the reflect the current best estimate.
A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable
estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent assets are not recognized in financial statements since this may result in the recognition of income that may never be realised.
o) Financial instruments:
Financial assets and financial liabilities are
recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are
initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
(i) 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.
(ii) 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. Further, in case where
the company has made an irrevocable selection based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) 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.
(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in Statement of profit and loss.
Financial liabilities and equity instruments
1. Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Trade and other payables are initially measured at fair value, net of transaction
costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the Statement of profit and loss.
4. Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
5. Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date. The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may or may not be realized.
6. Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
q) Cash and cash equivalents:
Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
r) Transactions in foreign currencies:
The financial statements of the Company are presented in Indian rupees, which is the functional currency of the Company and the presentation currency for the financial statements.
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.
Foreign currency monetary assets and liabilities such as cash, receivables, payables, etc., are translated at year end exchange rates.
Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise.
s) Segment reporting:
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Companyâs chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
t) Government grants:
Grants from the government are recognised at fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs they are intended to compensate and presented within other income. Government grants relating to the purchase of Property, Plant and Equipment are included in non-current liabilities as deferred income and are credited to profit and loss on a straight line basis over the expected lives of the related assets and presented within other income. The benefit of a government loan at below current market rate of interest is treated as a government grant.
u) Leases:
As a lessee:
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:
(1) The Contract involves the use of an identified asset;
(2) The Company has substantially all the economic benefits from use of the asset through the period of the lease and
(3) The Company has the right to direct the use of the asset.
The Company recognizes a Right-Of-Use asset (âROUâ) and a corresponding lease liability for all lease arrangements in which it is a lessee, except for leases with a term of twelve 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. Certain lease arrangements includes the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it
is reasonably certain that they will be exercised.
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 balance lease term of the underlying asset. Right of use assets are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable.
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 the leases. Lease liabilities are re-measured with a corresponding adjustment to the related ROU asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
Lease liability and ROU asset shall be separately presented in the Balance sheet and lease payments shall be classified as financing cash flows.
As Lessor:
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.
When the Company is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The sublease is classified as a finance or operating lease by reference to the ROU asset arising from the head lease.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Operating lease - Rentals payable under operating leases are charged to the Statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is
more representative of the time pattern in which economic benefits from the leased assets are utilised.
v) Investments in subsidiaries:
Investments in subsidiary companies are measured at cost less impairment, if any.
w) Employee share based payments:
Equity- settled share-based payments to employees are measured at the fair value of the employee stock options at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is amortised over the vesting period, based on the Companyâs estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the Statement of profit and loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
x) Dividend distribution:
Dividends paid is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.
y) Rounding off amounts:
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
z) Standards issued but not yet effective:
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022 , MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022 applicable from 1st April, 2022. Amendments applicable to the Company are given below:
Ind AS 16 - Proceeds before intended use - The amendments mainly prohibit an entity from
deducting from the cost of property, plant and equipment, amounts received from selling items produced while the Company is preparing the asset for its intended use. Instead, an entity will recognise such sales proceeds and related cost in the Statement of profit and loss. The Company does not expect the amendments to have any impact in its recognition of its property, plant and equipment in its financial statements.
Ind AS 37 - Onerous Contracts - Costs of Fulfilling a Contract - The amendments specify that that the âcost of fulfillingâ a contract comprises the âcosts that relate directly to the contractâ. 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. The amendment is essentially a clarification and the Company does not expect the amendment to have any significant impact in its financial statements.
Ind AS 109 - Annual Improvements to Ind AS (2021) - The amendment clarifies which fees an entity includes when it applies the â10 percentâ test of Ind AS 109 in assessing whether to derecognise a financial liability. The Company does not expect the amendment to have any significant impact in its financial statements.
3 Use of estimates and critical accounting judgements:
In preparation of the financial statements, the Company makes judgements, estimates and assumptions about the carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and the associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and future periods affected. Significant judgements and estimates relating to the carrying values of assets and liabilities include useful lives of property, plant and equipment and intangible assets, impairment of property, plant and equipment, intangible assets and investments, provision for employee benefits and other provisions, recoverability of deferred tax assets, commitments and contingencies.
Mar 31, 2018
1 SIGNIFICANT ACCOUNTING POLICIES:
This note provides a list of the significant accounting policies adopted in the preparation of the financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated.
a) Statement of Compliance:
The financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 as amended by the Companies (Indian Accounting Standards) Amendment Rules, 2016 and Companies (Indian Accounting Standards) Amendment Rules, 2017, the relevant provisions of the Companies Act, 2013 (âthe Actâ) and guidelines issued by the Securities and Exchange Board of India (SEBI), as applicable.
The financial statements for the year ended March 31, 2018 are the Companyâs first Ind AS financial statements. The date of transition to Ind AS is April 1, 2016. Accordingly, the Company has prepared an Opening Ind AS Balance Sheet as on April 1, 2016 and comparative figures for the year ended March 31, 2017 also in compliance with Ind AS. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows of the Company is provided in Note 40.
The transition to Ind AS has resulted in changes in the presentation of the financial statements, disclosures in the notes thereto and accounting policies and principles, which are duly approved and authorised for issue by the Board of Directors of the Company.
b) Basis of preparation:
The financial statements have been prepared under the historical cost convention with the exception of certain assets and liabilities that are required to be carried at fair values as per Ind AS. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
c) Revenue Recognition:
i) Sale of Products
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the significant risks and rewards of ownership of the goods have been transferred to the buyer, usually on delivery/ dispatch of the goods. Revenue from the sale of goods is measured at the value of the consideration received or receivable, net of returns, discounts and volume rebates etc. Till 30th June, 2017, Revenue is inclusive of excise duty and excluding taxes collected from parties such as outgoing sales taxes or value added taxes. With effect from 1st July, 2017 revenue is excluding goods and service tax.
ii) Other income
Dividend income is recognised when the shareholderâs right to receive the income is established.
Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
Rental income from investment properties is recognised on a straight line basis over the term of the relevant leases.
Export benefit under the duty free credit entitlements is recognized in the statement of profit and loss, when right to receive such entitlement is established as per terms of the relevant scheme in respect of exports made and where there is no significant uncertainty regarding compliance with the terms and conditions of such scheme.
Sales tax incentives are recognized in the statement of profit and loss, when right to receive such entitlement is established as per terms of the relevant scheme and where there is no significant uncertainty regarding compliance with the terms and conditions of such scheme.
d) Borrowing Costs:
Borrowings costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for the intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing cost eligible for capitalization.
Other borrowings costs are expensed in the period in which they are incurred.
e) Employee Benefits:
(i) Short-term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
(ii) Other long-term employee benefit obligations
The liabilities for earned leave is not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured at the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligations. Remeasurements as a result of the experience adjustments and changes in actuarial assumptions are recognized in profit or loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
(iii) Gratuity obligations
The liability or assets recognized in the balance sheet in respect of gratuity plans is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets. The defined benefit obligation is calculated annually by actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows by reference to market yields at the end of the reporting period on government bonds that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in employee benefit expense in the statement of profit and loss. Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in profit or loss. The gratuity liability is covered through a recognized Gratuity Fund managed by Life Insurance Corporation of India and the contributions made under the scheme are charged to Statement of Profit and Loss.
(iv) Defined contribution plans
The Company pays provident fund contributions to publicly administered funds as per local regulations. 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 recognized as employee benefit expense when they are due.
(v) Bonus plans
The Company recognizes a liability and an expense for bonuses. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation.
f) Income Taxes
Tax expense for the year comprises current and deferred tax.
Current Tax is the amount of tax payable on the taxable income for the year as determined in accordance with the applicable tax rates and the provisions of the Income-tax Act, 1961 and other applicable tax laws that have been enacted or substantively enacted by the end of the reporting period.
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary differences arise from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
Tax relating to items recognized directly in equity or other comprehensive income is recognised in equity or other comprehensive income and not in the Statement of Profit and Loss.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they are related to income taxes levied by the same tax authority, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
g) Property, plant and equipment (PPE):
Property, plant and equipment are carried at cost less accumulated depreciation and impairment losses, if any. The cost of property, plant and equipment comprises of purchase price, applicable duties and taxes net of input tax credit, any directly attributable expenditure on making the asset ready for its intended use, other incidental expenses and interest on borrowings attributable to acquisition of qualifying fixed assets, upto the date the asset is ready for its intended use. All other repair and maintenance costs, including regular servicing, are recognised in the statement of profit and loss as incurred. When a replacement occurs, the carrying value of the replaced part is de-recognised. Where an item of property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items.
Leasehold improvements are stated at cost including taxes, freight and other incidental expenses incurred, net of input tax credits availed. The depreciation is provided over the life estimated by the management.
Self constructed assets (Moulds): The Company transfers all the directly attributable expenditure incurred towards construction of moulds including depreciation on actual cost basis.
Property, Plant and equipment retired from active use and held for sale are stated at the lower of their net book value and net realizable value and are disclosed separately.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit or loss.
h) Expenditure during construction period and Intangible assets under development:
Expenditure during construction period (including finance cost related to borrowed funds for construction or acquisition of qualifying PPE) is included under Capital Work-in-Progress and the same is allocated to the respective PPE on the completion of their construction. Intangible Assets under developement includes the expenditure incurred for acquistion of intangible assets.
i) Depreciation:
Depreciation is the systematic allocation of the depreciable amount of PPE over its useful life and is provided on the straight line method over the useful lives as prescribed in Schedule II to the Act.
j) Intangible Assets and Amortization:
Intangible assets acquired separately are measured on initial recognition cost and are amortized on straight line method based on the estimated useful lives.
The amortized period and amortization method are reviewed at each financial year end.
Computer Software is amortized over a period of five years.
k) Investment Property:
Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are measured at cost model which is in accordance with Ind AS 40. An investment property is derecognised upon disposal or when the investment property is permanently withdrawn from use and no further economic benefits expected from disposal. Any gain or loss arising on derecognition of the property is included in profit or loss in the period in which the property is derecognised. Depreciation on building is provided over itâs useful life of 30 years using the Straight Line Method.
l) Impairment of Assets:
Intangible assets and property, plant and equipment: Intangible assets and property, plant and equipment are evaluated for recoverability whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. For the purpose of impairment testing, the recoverable amount (i.e. the higher of the fair value less cost to sell and the value-in-use) is determined on an individual asset basis unless the asset does not generate cash flows that are largely independent of those from other assets. In such cases, the recoverable amount is determined for the Cash Generating Unit (CGU) to which the asset belongs. If such assets are considered to be impaired, the impairment to be recognized in the statement of profit and loss is measured by the amount by which the carrying value of the assets exceeds the estimated recoverable amount of the asset. An impairment loss is reversed in the statement of profit and loss if there has been a change in the estimates used to determine the recoverable amount. The carrying amount of the asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortization or depreciation) had no impairment loss been recognized for the asset in prior years.
m) Inventories:
Raw Materials, Fuel, Stores & Spares and Packing Materials Valued at lower of cost and net realizable value (NRV). 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, Cost is determined on weighted Average basis.
Materials in Transit:
Valuation of Inventories of Materials in Transit is done at Cost
Work-in-Progress (WIP) and Finished Goods
Valued at lower of cost and NRV. Cost of Finished Goods and WIP includes cost of raw materials, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Cost of inventories is computed on weighted average basis.
n) Provisions, Contingent Liabilities and Contingent Assets :
The Company recognises provisions when there is present obligation as a result of past event and it is probable that there will be an outflow of resources and reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows to net present value using an appropriate pre-tax discount rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each reporting date and are adjusted to the reflect the current best estimate.
A present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability. Contingent Liabilities are also disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the Company.
Contingent assets are not recognized in financial statements since this may result in the recognition of income that may never be realised.
o) Financial instruments:
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.
Financial assets
(i) 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.
(ii) 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. Further, in case where the company has made an irrevocable selection based on its business model, for its investments which are classified as equity instruments, the subsequent changes in fair value are recognized in other comprehensive income.
(iii) 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.
(iv) The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in statement of profit or loss.
Financial liabilities and equity instruments
Classification as debt or equity
Financial liabilities and equity instruments issued by the Company are classified according to the substance of the contractual arrangements entered into and the definitions of a financial liability and an equity instrument.
Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Financial Liabilities
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, using the effective interest rate method where the time value of money is significant.
Interest bearing bank loans, overdrafts and unsecured loans are initially measured at fair value and are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the settlement or redemption of borrowings is recognised over the term of the borrowings in the statement of profit and loss.
Derecognition of financial instruments
The Company derecognizes a financial asset when the contractual rights to the cash flows from the financial asset expire or it transfers the financial asset and the transfer qualifies for derecognition under Ind AS 109. A financial liability (or a part of a financial liability) is derecognized from the Companyâs balance sheet when the obligation specified in the contract is discharged or cancelled or expires.
Fair value of financial instruments
In determining the fair value of its financial instruments, the Company uses a variety of methods and assumptions that are based on market conditions and risks existing at each reporting date.
The methods used to determine fair value include discounted cash flow analysis, available quoted market prices and dealer quotes. All methods of assessing fair value result in general approximation of value, and such value may or may not be realized.
Offsetting financial instruments
Financial assets and liabilities are offset and the net amount is reported in the balance sheet where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Company or the counterparty.
p) Earnings Per Share :
The basic earnings per share is computed by dividing the profit/(loss) for the year attributable to the equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, profit/(loss) for the year attributable to the equity shareholders and the weighted average number of the equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares.
q) Cash and cash equivalents
Cash and cash equivalents include cash on hand and demand deposits with banks. Cash equivalents are short-term balances (with an original maturity of three months or less), highly liquid investments that are readily convertible into known amounts of cash and which are subject to insignificant risk of changes in value.
r) Transactions in Foreign Currencies
The financial statements of the Company are presented in Indian rupees, which is the functional currency of the Company and the presentation currency for the financial statements.
Transactions in foreign currencies are recorded at the exchange rates prevailing on the date of transaction.
Foreign currency monetary assets and liabilities such as cash, receivables, payables, etc., are translated at year end exchange rates.
Exchange differences arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise.
s) Segment Reporting - Identification of Segments:
An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the companyâs chief operating decision maker to make decisions for which discrete financial information is available. Based on the management approach as defined in Ind AS 108, the chief operating decision maker evaluates the Companyâs performance and allocates resources based on an analysis of various performance indicators by business segments and geographic segments.
t) Government Grants
Grants from the government are recognised at fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit and loss on a straight line basis over the expected lives of the related assets and presented within other income. The benefit of a government loan at below current market rate of interest is treated as a government grant.
u) Leases
The Company determines whether an arrangement contains a lease by assessing whether the fulfillment of a transaction is dependent on the use of a specific asset and whether the transaction conveys the right to use that asset to the Company in return for payment. Where this occurs, the arrangement is deemed to include a lease and is accounted for either as finance or operating lease.
The Company as lessee
Operating lease - Rentals payable under operating leases are charged to the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are utilised.
The Company as lessor
Operating lease - Rental income from operating leases is recognised in the statement of profit and loss on a straight line basis over the term of the relevant lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset is diminished. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying value of the leased asset and recognised on a straight line basis over the lease term.
v) Investments in Subsidiaries
Investments in subsidiary companies are measured at cost less impairment, if any.
w) Employee share based payments:
Equity- settled share-based payments to employees are measured at the fair value of the employee stock options at the grant date. The fair value determined at the grant date of the equity-settled share-based payments is amortised over the vesting period, based on the Companys estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Company revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in the Statement of Profit and Loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
x) Dividend Distribution
Dividends paid (including income tax thereon) is recognised in the period in which the interim dividends are approved by the Board of Directors, or in respect of the final dividend when approved by shareholders.
y) Rounding off amounts
All amounts disclosed in the financial statements and notes have been rounded off to the nearest lakhs as per the requirement of Schedule III, unless otherwise stated.
z) Standards issued but not yet effective
The standards issued, but not yet effective up to the date of issuance of the Companyâs financial statements are disclosed below.
Ind AS 115, Revenue from Contract with Customers:
On March 28,2018, Ministry of Corporate Affairs has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that revenue should be recognised when a customer obtains control of a promised good or service and thus has the ability to direct the use and obtain the benefits from the good or service in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers. The Company will adopt the standard on April1, 2018 and the effect on adoption of Ind AS 115 is expected to be insignificant.
Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, MCA has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency. This amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
Mar 31, 2016
1. SIGNIFICANT ACCOUNTING POLICIES
A. Method of accounting
a. These financial statements have been prepared in accordance with the Generally Accepted Accounting Principles in India to comply with the Accounting Standards specified under Section 133 of the Companies Act, 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 2013. The financial statements have been prepared under the historical cost convention on accrual basis.
b. The Company generally recognizes income and expenditure on an accrual basis except those with significant uncertainties.
c. The preparation of financial statements requires the management of the Company to make estimates and assumptions that affect the reported balances of assets and liabilities and disclosures relating to the contingent liabilities as at the date of the financial statements and reported amounts of income and expense during the year. Management believes that the estimates used in the preparation of the financial statements are prudent and reasonable. Examples of such estimates include provisions for doubtful receivables, employee benefits, provision for income taxes, the useful lives of depreciable fixed assets and provisions for impairment. Future results could differ due to changes in these estimates and the difference between the actual result and the estimates are recognized in the period in which the results are known/ materialize.
B. Fixed assets
a. Fixed assets are stated at original cost including taxes, freight and other incidental expenses related to acquisition/installation and after adjustment of CENVAT benefits in accordance with Accounting Standards 10 and 26 issued by the Institute of Chartered Accountants of India (ICAI). Interest/financing costs on borrowed funds attributable to assets are treated in accordance with Accounting Standard 16 issued by ICAI.
b. Expenditure not specifically identified to any asset and incurred in respect of fixed assets not commissioned is carried forward as expenditure pending allocation and forms part of capital work-in-progress.
C. Depreciation
Straight-line method of depreciation is adopted on the basis of and at rates prescribed by Schedule II to the Companies Act, 2013 except for leasehold buildings, wherein depreciation is provided on the basis of estimated useful life.
D. Impairment of assets
The Company periodically tests its assets for impairment and if the carrying values are found in excess of value in use, the same is charged to the statement of profit and loss as per AS 28. The impaired loss charged to the statement of profit and loss will be reversed in the year on the event and to that extent of enhancement in estimate of value in use.
E. Investments
Investments are either classified as current or long-term based on the management''s intention at the time of purchase. Long-term investments are carried in the books of accounts at cost of acquisition. Current investments are carried in the books of accounts at the lower of cost or fair value. Decline in market value of long-term and current investments, if any are considered in accordance with Accounting Standard 13.
Notes forming part of the Financial Statements
Cost includes material cost, labour, factory overheads and depreciation and excludes interest on borrowings.
G. Interest and financial charges
a. Documentation, commitment and service charges other than for term loans are spread over the tenure of the finance facility.
b. Interest on hire purchase finance is charged to the statement of profit and loss as per Accounting Standard ''Accounting for Leases'' issued by ICAI.
H. Loans under deferred credit/hire purchase
The hypothecation rights of assets financed by hire purchase vest with the financing companies and on expiry of agreements will be cancelled in favor of the Company. The cash price of assets thus financed is capitalized and the principal amount along with future interest is reflected in secured loans. The corresponding amount of future interest is reflected as deferred interest under loans & advances.
I. Revenue recognition
Turnover includes excise duties, and sales tax/VAT collections reduced by sale returns and quantity discounts. Excise duty is excluded as a separate line item. Dividend income is recognized when right to receive is established. Interest income is recognized on time proportion basis taking into account the amount outstanding and the rate applicable.
J. Employee benefits
a. Gratuity
1. Post-employment and other long-term benefits are recognized as an expense in the statement of profit and loss for the year in which the employee has rendered services. The expense is recognized at the present value of the amounts payable determined based on actuarial valuation.
2. In accordance with the Payment of Gratuity Act, 1972, Mold-Tek provides for gratuity, a defined benefit retirement plan (''the Gratuity plan'') covering eligible employees of the Company. The gratuity plan provides a lump-sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment with the group.
3. Liabilities with regard to the gratuity plan are determined by actuarial valuation at each balance sheet date using the projected unit credit method as per the Accounting Standard 15. The Company contributes the ascertained liabilities to the ''Mold-Tek Packaging Limited Employees Gratuity Trust'' (The Trust). Trustees administer contributions made to the Trust and contributions are deposited in a scheme with Life Insurance Corporation as permitted by the law.
b. Provident fund
Eligible employees of the Company receive provident fund benefits, a defined contribution plan. Contributions of the Company as employer are expensed as incurred/accrued.
c. Liability for leave encashment
Leave encashment in accordance with the policy of the Company and are provided based on the actuarial valuation as pronounced in Accounting Standard 15 of ICAI.
d. Employee share based payments
Measurement and disclosure of the employee share-based payment plans is done in accordance with Securities Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 and the guidance note on ''Accounting for Employee Share Based Payments'', issued by ICAI. The excess of market value of the stock on the date of grant over the exercise price of the option is recognized as deferred employee stock compensation and is charged to the statement of profit and loss on straight-line method over the vesting period of the options or on exercising of the options. The unamortized portion of cost is shown under stock options outstanding. In case of lapsed options, during the year of such lapsing, the compensation expenses charged earlier are reversed along with balance of deferred employee compensation pertaining to such lapsed options.
K. Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the exchange rate prevailing on the date of the transaction. Exchange gains or losses on recognition of transaction within the accounting year relating to fixed assets till the date of its put to use are capitalized while in respect of others the impact is recognized in the statement of profit and loss. Outstanding monetary transactions denominated in foreign currencies at the yearend are restated at year end rates.
L. Taxes on income
Provision for current tax is made in accordance with the provisions of the Income Tax Act, 1961. Deferred tax provisioning on account of timing difference between taxable & accounting income, is made in accordance with Accounting Standard 22 issued by ICAI. Deferred tax asset over and above the liability accounted in earlier period is neither disclosed nor recognized in the books.
M. Miscellaneous expenditure
Preliminary expenses are amortized over a period of 5 years.
N. Leases
Assets taken on lease where the Company acquires substantially the entire risks and rewards incidental to ownership are classified as finance leases. The rental obligations, net of interest charges, are reflected in loans and advances. Leases that do not transfer substantially all of the risks and rewards of ownership are classified as operating leases and recorded as expenses as and when payments are made over the lease term.
O. Earnings per share
The basic earnings per share (''BEPS'') is calculated by dividing the net profit or loss after taxes for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. The diluted earnings per share (''DEPS'') is calculated after adjusting the weighted average number of equity shares to give extent of the potential equity shares on the fully convertible warrants outstanding.
P. Contingent liabilities & assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent liabilities are not recognized but are disclosed in the notes. Contingent assets are neither recognized nor disclosed in the financial statements.
Mar 31, 2014
A. Method of accounting
a. The financial statements are prepared on a going concern basis with
historical costs, in accordance with the Accounting Standards specified
in sub-section (3C) of Section 211 of the Companies Act, 1956, to the
extent applicable to the Company.
b. The Company generally recognizes income and expenditure on an
accrual basis except those with significant uncertainties.
c. The preparation of financial statements requires the management of
the Company to make estimates and assumptions considered in the
reported amount of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management
believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Future results could differ from
these estimates.
B. Fixed assets
a. Fixed assets are stated at original cost including taxes, freight
and other incidental expenses related to acquisition/installation and
after adjustment of CENVAT benefits in accordance with Accounting
Standards 10 and 26 issued by ICAI. Interest/financing costs on
borrowed funds attributable to assets are treated in accordance with
Accounting Standard 16 issued by the Institute of Chartered Accountants
of India (ICAI).
b. Expenditure not specifically identified to any asset and incurred
in respect of fixed assets not commissioned is carried forward as
expenditure pending allocation and forms part of capital
work-in-progress.
C. Depreciation
Straight-line method of depreciation is adopted on the basis of and at
rates prescribed by Schedule XIV to the Companies Act, 1956 except for
leasehold buildings, wherein depreciation is provided on the basis of
estimated useful life.
Residual values of assets depreciated on straight line basis to the
extent of assets not in use, and/ or discarded having outlived their
utility are charged off during the year.
D. Impairment of assets
The Company periodically tests its assets for impairment and if the
carrying values are found in excess of value in use the same is charged
to the Statement of Profit and Loss as per AS 28. The impaired loss
charged to Statement of Profit and Loss will be reversed to that extent
in the year in of change in estimate of value in use.
E. Investments
Investments are either classified as current or long-term based on the
management''s intention at the time of purchase. Long-term investments
are carried in the books of accounts at cost of acquisition. Current
investments are carried in the books of accounts at the lower of cost
and fair value. Decline in market value of long-term and current
investments, if any are considered in accordance with Accounting
Standard 13.
F. Inventories
Inventories are valued as follows:
Raw material
At lower of applicable weighted average of landed cost net of CENVAT
benefits or market value.
Finished goods
At lower of applicable weighted average cost (including conversion
costs) or market value.
Work-in-process
At applicable weighted average cost including conversion costs to the
stage of manufacture.
Returned goods
At applicable raw material cost net of estimated reprocessing cost.
Moulds
At cost including conversion costs after providing for appropriate wear
& tear.
Consumables, packing & bought outs At cost.
Cost includes material cost, labour, factory overheads and depreciation
and excludes interest on borrowings.
G. Interest and financial charges
a. Documentation, commitment and service charges other than for term
loans are spread over the tenure of the finance facility.
b. Interest on hire purchase finance is charged to the Statement of
Profit and Loss as per Accounting Standard Accounting for leases issued
by ICAI.
H. Loans under deferred credit/hire purchase
The hypothecation rights of assets financed by hire purchase vest with
the financing companies and on expiry of agreements will be cancelled
in favor of the Company. The cash price of assets thus financed is
capitalized and the principal amount along with future interest is
reflected in unsecured loans. The corresponding amount of future
interest is reflected as deferred interest under loans & advances.
I. Revenue recognition
Turnover includes excise duties, sales tax/VAT collections, and freight
recoveries; reduced by sale returns and quantity discounts. Excise duty
is excluded as a separate line item. Dividend income is recognised when
right to receive is established. Interest income is recognized on time
proportion basis taking into account the amount outstanding and the
rate applicable.
J. Employee benefits
a. Gratuity
Post-employment and other long term benefits are recognized as an
expense in the Statement of Profit and Loss for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined based on actuarial
valuation.
In accordance with the Payment of Gratuity Act, 1972, Mold-Tek provides
for gratuity, a defined benefit retirement plan (''the gratuity plan'')
covering eligible employees of the Company. The gratuity plan provides
a lump- sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee''s salary and the tenure of employment with the
group.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation at each balance sheet date using the projected unit
credit method as per the Accounting Standard 15. The Company
contributes the ascertained liabilities to the ''Mold-Tek Packaging
Limited Employees Gratuity Trust'' (The Trust). Trustees administer
contributions made to the Trust and contributions are deposited in a
scheme with Life Insurance Corporation as permitted by the law.
b. Provident fund
Eligible employees of the company receive provident fund benefits, a
defined contribution plan. Contributions of the Company as employer are
expensed as incurred/accrued.
c. Liability for leave encashment
Leave encashment in accordance with the policy of the Company and are
provided based on the actuarial valuation as pronounced in Accounting
Standard 15 of ICAI.
d. Employee share based payments
Measurement and disclosure of the employee share-based payment plans is
done in accordance with Securities Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 and the guidance note on Accounting for Employee Share Based
Payments'', issued by the Institute of Chartered Accountants of India
(ICAI). The excess of market value of the stock on the date of grant
over the exercise price of the option is recognized as deferred
employee stock compensation and is charged to the Statement of Profit
and Loss on straight-line method over the vesting period of the options
or on exercising of the options. The unamortised portion of cost is
shown under stock options outstanding. In case of lapsed options, the
compensation expenses charged earlier are reversed along with balance
of deferred employee compensation pertaining to such lapsed options.
K. Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction. Exchange gains
or losses on recognition of transaction within the accounting year
relating to fixed assets are capitalized while in respect of others the
impact is recognized in the Statement of Profit and Loss. Outstanding
monetary transactions denominated in foreign currencies at the year end
are restated at year end rates.
L. Taxes on income
Provision for current tax is made in accordance with the provisions of
the Income Tax Act, 1961. Deferred tax provisioning on account of
timing difference between taxable & accounting income, is made in
accordance with Accounting Standard 22 issued by the Institute of
Chartered Accountants of India.
M. Miscellaneous expenditure
Preliminary expenses are amortized over a period of 5 years.
N. Leases
Assets taken on lease where the Company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The rental obligations, net of interest charges, are
reflected in loans and advances. Leases that do not transfer
substantially all of the risks and rewards of ownership are classified
as operating leases and recorded as expenses as and when payments are
made over the lease term.
O. Earnings per share
The basic earnings per share (''BEPS'') is calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the year. The diluted earnings per share
(''DEPS'') is calculated after adjusting the weighted average number of
equity shares to give effect to the potential equity shares on the
fully convertible warrants outstanding.
P. Contingent liabilities & assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2013
A. Method of accounting
a. The financial statements are prepared on a going concern basis with
historical costs, in accordance with the Accounting Standards specified
in sub-section (3C) of Section 211 of the Companies Act 1956, to the
extent applicable to the Company.
b. The Company generally recognizes income and expenditure on an
accrual basis except those with significant uncertainties.
c. The preparation of financial statements requires the management of
the Company to make estimates and assumptions considered in the
reported amount of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management
believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Future results could differ from
these estimates.
B. Fixed assets
a. Fixed assets are stated at original cost including taxes, freight
and other incidental expenses related to acquisition/installation and
after adjustment of CENVAT benefits. Interest/financing costs on
borrowed funds attributable to assets are treated in accordance with
Accounting Standard 16 issued by the Institute of Chartered Accountants
of India (ICAI).
b. Expenditure not specifically identified to any asset and incurred
in respect of fixed assets not commissioned is carried forward as
expenditure pending allocation and forms part of capital
work-in-progress.
C. Depreciation
Straight-line method of depreciation is adopted on the basis of and at
rates prescribed by Schedule XIV to the Companies Act, 1956 except for
leasehold buildings, wherein depreciation is provided on the basis of
estimated useful life.
Residual values of assets depreciated on straight line basis to the
extent of assets not in use, and/ or discarded having outlived their
utility are charged off during the year.
D. Impairment of assets
In the opinion of the management, there are no assets of the Company
carried in the financial statements whose value in use stands
diminished vis-Ã -vis their carrying cost, and hence no provision is
considered necessary.
E. Investments
Investments are either classified as current or long-term based on the
management''s intention at the time of purchase. Long-term investments
are carried in the books of accounts at cost of acquisition. Current
investments are carried in the books of accounts at the lower of cost
and fair value. Decline in market value of long-term and current
investments, if any, are considered in accordance with Accounting
Standard 13.
F. Inventories
Inventories are valued as follows:
Raw material At lower of applicable weighted average of landed cost net
of CENVAT benefits or market value.
Finished goods At lower of applicable weighted average cost (including
conversion costs) or market value.
Work-in-process At applicable weighted average cost including
conversion costs to the stage of manufacture.
Returned goods At applicable raw material cost net of estimated
reprocessing cost.
Moulds At cost including conversion costs after providing for
appropriate wear & tear.
Consumables, packing & bought outs At cost.
Cost includes material cost, labour, factory overheads and depreciation
and excludes interest on borrowings.
G. Interest and financial charges
a. Documentation, commitment and service charges other than for term
loans are spread over the tenure of the finance facility.
b. Interest on hire purchase finance is charged to the Statement of
Profit and Loss as per Accounting Standard Accounting for leases issued
by ICAI.
H. Loans under deferred credit/hire purchase
The hypothecation rights of assets financed by hire purchase vest with
the financing companies and on expiry of agreements will be cancelled
in favour of the Company. The cash price of assets thus financed is
capitalized and the principal amount along with future interest is
reflected in unsecured loans. The corresponding amount of future
interest is reflected as deferred interest under loans & advances.
I. Revenue recognition
Turnover includes excise duties, sales tax/vat collections, and freight
recoveries; reduced by sales returns and quantity discounts. Excise
duty is excluded as a separate line item. Dividend income is recognized
when right to receive is established. Interest income is recognized on
time proportion basis taking into account the amount outstanding and
the rate applicable.
J. Employee benefits
a. Gratuity
Post-employment and other long term benefits are recognized as an
expense in the statement of profit and loss for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined based on actuarial
valuation
In accordance with the Payment of Gratuity Act, 1972, Mold-Tek provides
for gratuity, a defined benefit retirement plan (Mold-Tek Packaging Ltd
Employees Gratuity Scheme) covering eligible employees of the Company.
The gratuity plan provides a lump-sum payment to vested employees at
retirement, death, incapacitation or termination of employment, of an
amount based on the respective employee''s salary and the tenure of
employment with the group.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation at each Balance Sheet date using the projected unit
credit method as per the Accounting Standard 15. The Company
contributes the ascertained liabilities to the ''Mold-Tek Packaging
Limited Employees Gratuity Trust'' (''The Trust''). The Trustees
administer contributions made to the Trust and contributions are
deposited in a scheme with Life Insurance Corporation of India as
permitted by the law.
b. Provident fund
Eligible employees of the Company receive provident fund benefits, a
defined contribution plan. Contributions of the Company as employer are
expensed as incurred/accrued.
c. Liability for leave encashment
Leave encashment is also considered as a long term liability and
provided for on the basis of actuarial valuation, estimated during the
year as per Accounting Standard 15.
d. Employee share based payments
Measurement and disclosure of the employee share-based payment plans is
done in accordance with Securities Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 and the guidance note on ''Accounting for Employee Share Based
Payments'', issued by ICAI. The excess of market value of the stock on
the date of grant over the exercise price of the option is recognized
as deferred employee stock compensation and is charged to the Statement
of Profit and Loss on straight- line method over the vesting period of
the options. The unamortized portion of cost is shown under stock
options outstanding.
K. Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction. Exchange gains
or losses on recognition of transaction within the accounting year
relating to fixed assets are capitalized while in respect of others the
impact is recognized in the Statement of Profit and Loss. Outstanding
monetary transactions denominated in foreign currencies at the year end
are restated at year end rates.
L. Taxes on income
Provision for current tax is made in accordance with the provisions of
the Income Tax Act, 1961. Deferred tax provisioning on account of
timing difference between taxable & accounting income, is made in
accordance with Accounting Standard 22 issued by ICAI.
M. Miscellaneous expenditure
Preliminary expenses are amortized over a period of 5 years.
N. Leases
Assets taken on lease where the Company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The rental obligations, net of interest charges, are
reflected in loans and advances. Leases that do not transfer
substantially all of the risks and rewards of ownership are classified
as operating leases and recorded as expenses as and when payments are
made over the lease term.
O. Earnings per share
The basic earnings per share (''BEPS'') is calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the year. The diluted earnings per share
(''DEPS'') is calculated after adjusting the weighted average number of
equity shares to give effect to the potential equity shares on the
fully convertible warrants outstanding.
Mar 31, 2012
A. Method of accounting
i. The financial statements are prepared on a going concern basis with
historical costs, in accordance with the Accounting Standards specified
in sub-section (3C) of Section 211 of the Companies Act 1956, to the
extent applicable to the Company.
ii. The Company generally recognizes income and expenditure on an
accrual basis except those with significant uncertainties.
iii. The preparation of financial statements requires the management of
the company to make estimates and assumptions considered in the
reported amount of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management
believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Future results could differ from
these estimates.
iv. For the year ended 31st March, 2012, the revised Schedule VI
notified under the Companies Act, 1956 is applicable to the Company for
presentation and disclosures in financial statements. The Company has
reclassified the previous year's figures in accordance with the revised
Schedule VI as applicable in the current year.
b. Fixed assets
i. Fixed assets are stated at original cost including taxes, freight
and other incidental expenses related to acquisition/installation and
after adjustment of CENVAT benefits. Interest/financing costs on
borrowed funds attributable to assets are treated in accordance with
Accounting Standard 16 issued by the Institute of Chartered Accountants
of India (ICAI).
ii. Expenditure not specifically identified to any asset and incurred
in respect of fixed assets not commissioned is carried forward as
expenditure pending allocation and forms part of capital work in
progress.
c. Depreciation
Straight-line method of depreciation is adopted on the basis of and at
rates prescribed by Schedule XIV to the Companies Act, 1956 except for
leasehold buildings, wherein depreciation is provided on the basis of
estimated useful life.
Residual values of assets depreciated on straight line basis to the
extent of assets not in use, and/ or discarded having outlived their
utility are charged off during the year.
d. Impairment of assets
An asset is treated as impaired when the carrying cost of the asset
exceeds its recoverable value. An impairment loss is charged to profit
and loss account in the year in which an asset is identified as
impaired. An impairment loss recognized in prior accounting period is
reversed if there has been a change in the estimate of the recoverable
amount.
e. Investments
Investments are either classified as current or long-term, based on the
management's intention at the time of purchase. Long-term investments
are carried in the books of accounts at cost of acquisition. Current
investments are carried in the books of accounts at the lower of cost
and fair value. Decline in market value of long-term and current
investments, if any, are considered in accordance with Accounting
Standard 13.
Cost includes material cost, labour, factory overheads and depreciation
and excludes interest on borrowings.
g. Interest and financial charges
i. Documentation, commitment and service charges are spread over the
tenure of the finance facility.
ii. Interest on hire purchase finance is charged to Statement of
Profit and Loss on diminishing balance method as per the guidance note
of the Institute of Chartered Accountants of India (ICAI).
h. Loans under deferred credit/hire purchase
The hypothecation rights of assets financed by hire purchase vest with
the financing companies and on expiry of agreements will be cancelled
in favor of the Company. The cash price of assets thus financed is
capitalized and the principal amount along with future interest is
reflected in unsecured loans. The corresponding amount of future
interest is reflected as deferred interest under loans & advances.
i. Revenue recognition
Revenue is recognized only when it can be reliably measured and is
reasonable to expect ultimate collection. Revenue from operations
includes sale of goods, sales tax, VAT, excise duty, adjusted for
discounts and sale returns. Dividend income is recognized when right to
receive is established. Interest income is recognized on time
proportion basis taking into account the amount outstanding and rate
applicable.
j. Employee benefits
i. Gratuity & provident fund
Post employment and other long term benefits are recognized as an
expense in the statement of profit and loss for the year in which the
employee has rendered services. The expense is recognized at the
present value of the amounts payable determined based on actuarial
valuation.
In accordance with the Payment of Gratuity Act, 1972, Mold-Tek provides
for gratuity, a defined benefit retirement plan ('the Gratuity plan')
covering eligible employees of the Company. The gratuity plan provides
a lump- sum payment to vested employees at retirement, death,
incapacitation or termination of employment, of an amount based on the
respective employee's salary and the tenure of employment with the
group.
Liabilities with regard to the gratuity plan are determined by
actuarial valuation at each balance sheet date using the projected unit
credit method as per the Accounting Standard
15. The Company contributes the ascertained liabilities to a scheme
with Life Insurance Corporation as permitted by the law.
Eligible employees of the company receive provident fund benefits, a
defined contribution plan. Contributions of the Company as employer are
expensed as incurred/accrued.
ii. Liability for leave encashment
Leave encashment also considered as long term liability and provided
for on the basis of actuarial valuation, estimated during the year.
iii. Employee share based payments
Measurement and disclosure of the employee share-based payment plans is
done in accordance with Securities Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines,
1999 and the guidance note on 'Accounting for Employee Share Based
Payments', issued by the Institute of Chartered Accountants of India
(ICAI). The excess of market value of the stock on the date of grant
over the exercise price of the option is recognized as deferred
employee stock compensation and is charged to profit and loss account
on straight-line method over the vesting period or on exercise of the
options. The unamortized portion of cost is shown under stock options
outstanding.
k. Foreign currency transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction. Exchange gains
or losses on conclusion of transaction within the accounting year
relating to fixed assets are capitalized while in respect of others the
impact is recognized in the Statement of Profit and Loss. Outstanding
monetary transactions denominated in foreign currencies at the year end
are restated at year end rates.
l. Taxes on income
Provision for current tax is made in accordance with the provisions of
the Income Tax Act, 1961. Deferred tax provisioning on account of
timing difference between taxable & accounting income, is made in
accordance with Accounting Standard 22 issued by the Institute of
Chartered Accountants of India. Deferred tax asset is not recognized in
the books.
m. Miscellaneous expenditure
Preliminary expenses are amortized over a period of 5 years.
n. Leases
Assets taken on lease where the Company acquires substantially the
entire risks and rewards incidental to ownership are classified as
finance leases. The amount recorded is the lesser of the present value
of the cumulative minimum lease rentals along with other incidental
expenses during the lease term or the asset's fair value.
The rental obligations, net of interest charges, are reflected in loans
and advances. Leases that do not transfer substantially all of the
risks and rewards of ownership are classified as operating leases and
recorded as expenses as and when payments are made over the lease term.
o. Earnings per share
The basic earnings per share ('BEPS') is calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the year. The diluted earnings per share
('DEPS') is calculated after adjusting the weighted average number of
equity shares to give effect to the potential equity shares on the
fully convertible warrants outstanding.
p. Contingent liabilities and assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes. Contingent assets are neither recognized nor disclosed in the
financial statements.
Mar 31, 2010
Method of Accounting
a. The financial statements are prepared on a going concern basis with
historical costs, in accordance with the Accounting Standards specified
in sub section (3C) of Section 211 of the Companies Act 1956, to the
extent applicable to the Company.
b. The Company generally recognizes income and expenditure on an
accrual basis except those with significant uncertainties.
c. The preparation of financial statements requires the management of
the Company to make estimates and assumptions considered in the
reported amount of assets and liabilities (including contingent
liabilities) as of the date of the financial statements and the
reported income and expenses during the reporting period. Management
believes that the estimates used in the preparation of the financial
statements are prudent and reasonable. Future results could differ from
these estimates.
Fixed Assets
a. Fixed assets are stated at original cost including taxes, freight
and other incidental expenses related to acquisition/installation and
after adjustment of CENVAT benefits. Interest/financing costs on
borrowed funds attributable to assets are treated in accordance with
Accounting Standard 16 issued by the Institute of Chartered Accountants
of India (ICAI).
b. Expenditure not specifically identified to any asset and incurred
in respect of fixed assets not commissioned is carried forward as
expenditure pending allocation and forms part of Capital
work-in-progress.
Depredation
Straight-line method of depreciation is adopted on all fixed assets on
the basis of and at rates prescribed by Schedule XIV to the Companies
Act, 1956 as amended from time to time.
Residual values of assets depreciated on straight line basis to the
extent of assets not in use, and/or discarded having outlived their
utility are charged off during the year.
Impairment of Assets
In the opinion of the management there are no assets of the Company
carried in the financial statements whose realizable value stands
diminished vis-a-vis their carrying cost, and hence no provision is
considered necessary. Assets considered as having outlived their
utility and not in use are charged off by way of reduction of the gross
block and corresponding depreciation reserve.
Investments
Long term investments are carried in the books of accounts at cost of
acquisition.
Current investments are carried in the books of accounts at the lower
of cost and fair value.
Decline in market value of long term and current investments, if any
are considered in accordance with Accounting Standard 13.
Inventories
The inventories are valued as follows: (Refer Note 8(b))
Raw Material
At lower of applicable weighted average of landed cost net of CENVAT
benefits, or market value.
Finished Goods
At lower of applicable weighted average cost
(including conversion and packing costs) or market value.
Work-in-Process
At applicable weighted average cost including conversion costs to the
stage of manufacture.
Returned Goods
At applicable raw material cost net of estimated reprocessing cost.
Moulds
At cost including conversion costs after providing for appropriate wear
& tear.
Consumables, Packing & Bought outs
At cost.
Cost includes material cost, labour, factory overheads and depreciation
but excludes interest on borrowings.
Interest and Financial Charges
a. Documentation, commitment and service charges are spread over the
tenure of the finance facility.
b. Interest on hire purchase finance is charged to Profit and Loss
Account on diminishing balance method as per the Guidance Note of the
Institute of Chartered Accountants of India (ICAI).
Loans under Deferred Credit/Hire Purchase
The hypothecation rights of assets financed by hire purchase vest with
the financing companies and on expiry of agreements will be cancelled
in favour of the Company. The cash price of assets thus financed is
capitalized and the principal amount along with future interest is
reflected in unsecured loans. The corresponding amount of future
interest is reflected as deferred interest under Loans & Advances.
Revenue Recognition
Turnover includes excise duties, sales tax/VAT collections, and freight
recoveries; and is net of sales returns. Excise duties are separately
reflected in the Profit and Loss Account.
Employee Benefits
a. Gratuity
Gratuity provided in respect of employees on the basis of actuarial
valuation as per Accounting Standard 15, is estimated during the year
in accordance with the provisions of the Payment of Gratuity Act, 1972.
b. Provident Fund
Eligible employees of the Company receive provident fund benefits, a
defined contribution plan. Contributions of the Company as employer
are expensed as incurred/accrued.
c. Liability for Leave Encashment
Liability for leave is treated as a short term liability and is
accounted as and when earned by the employee.
Foreign Currency Transactions
Transactions denominated in foreign currencies are recorded at the
exchange rate prevailing on the date of the transaction. Exchange gains
or losses on conclusion of transaction within the accounting year
relating to fixed assets are capitalized while in respect of others the
impact is recognized in the Profit and Loss Account. Out standing
monetary transactions denominated in foreign currencies at the year end
are restated at year end rates.
Taxes on Income
Provision for current tax is made in accordance with the provisions of
the Income Tax Act, 1961. Deferred tax provisioning on account of
timing difference between taxable & accounting income, is made in
accordance with Accounting Standard 22 issued by the Institute of
Chartered Accountants of India.
Deferred tax asset is not recognized in the books.
Miscellaneous Expenditure
Preliminary expenses are amortized over a period of 5 years.
Earnings per Share
The basic earning per share (EPS) is calculated by dividing the net
profit or loss for the year attributable to equity shareholders (after
deducting attributable taxes) by the weighted average number of equity
shares outstanding during the year. The diluted earning per share
(EPS) is calculated after adjusting the weighted average number of
Equity shares to give effect to the potential equity shares on the
fully convertible warrants outstanding.
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