Notes to Accounts of Shreyans Industries Ltd.
Mar 31, 2021
Trade receivables includes FNil, (previous year Nil) due from Related Party. There is no amount due from directors, other officers of the company or firm in which any director is a partner or private company in which any director is a director or member at any time during the year. There are no major customers representing more than 10% of total balance of Trade Receivables. The Company has used a practical expedient by computing the expected loss allowances for trade receivables based on historical credit loss experience
b) Rights, preferences and restrictions attached to equity shares
The company presently has one class of equity shares having a par value of F10/- each. Each holder of equity shares is entitled to one vote per equity share. The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Board has recommended a Dividend of F3/- per equity share of F10/- for the financial year ended March 31,2021 (Previous year F3/-per equity share )
d) Detail of Shares held by holding company/ ultimate holding company their subsidiaries and associates
There is no holding /ultimate holding company of the company and therefore no subsidiary/associate of holding / ultimate holding company.
I Nature and purpose of reserve
a) Capital reserve: The amount of capital profit on re-issue of forfeited shares is recognised as Capital Reserve.
b) Securities premium account: The amount received in excess of face value of the equity shares is recognised in Securities Premium. It can be utilized in accordance with the provisions of the Companies Act 2013, for issuance of bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs etc
c) General Reserve: General Reserves are the free reserves of the Company which are kept aside out of Companyâs profit to meet future requirement as and when they arise. The Company had transferred a portion of the profit after tax to General reserves pursuant to the earlier provisions of the Companies Act â1956. Mandatory transfer to General Reserve is not required under the Companies Actâ 2013.
d) Retained earnings: Retained earnings are the accumulated profit earned by the Company till date less transfer to General Reserve and payment of Dividend (including dividend distribution tax where applicable).
e) Other Comprehensive Income: The reserve represents cumulative gain and loss on remeasurement of defined benefit plan and return on plan assets (excluding amount included in net interest). The balance in the reserve can be transferred to retained earnings as and when the company decides to do so.
i Term loans from banks (other than vehicles) are secured by a joint equitable mortgage created or to be created on immovable properties both present and future, situated at Ahmedgarh and Banah in the state of Punjab and hypothecation of whole of movable plant and machinery, machinery spares, tools and accessories and other movable, both present and future (save and except book debts) subject to the charge created or to be created by the company in favour of its bankers for its working capital loans. Term loans from banks are also personally guaranteed by promoter directors of the company (refer note 38).
ii Term loans from banks and others for vehicles are secured by way of hypothecation of vehicles purchased out of such loans.
* Note: Figures of term loan stated above in para (a) includes current maturities of long term debt shown separately in Note No 26 ** Repaid during the year
c Terms of repayment of term loans from others
Repayment schedule of unsecured loans/deposits from related parties is within period of 3 years from the date of acceptance and carry interest upto 11 % p.a (Previous year upto 11% p.a)
Repayment schedule of unsecured loans/deposits from public is within period of 3 years from the date of acceptance and carry interest upto 11 % p.a (Previous year upto 11% p.a)
i) Working capital borrowings from banks F398.17 lakhs (previous year F1120.77 lakhs) are secured by hypothecation of stocks of raw materials, finished goods, bills receivables, book debts and all other movable assets of the company and further secured by way of second charge on the immovable assets situated at village Banah and at Ahmedgarh and also personally guaranteed by two promoter directors of the company (refer note 38).
ii) The Company has obtained overdraft facility from Bank against pledge of current investment as stated in Note No 9. The outstanding balance against this facility is FNil lakhs (Previous year F596.75) (refer note 38)
iii) The Company has obtained borrowings F1200 Lakhs (Previous year FNil) from Deustche India Investments Pvt Limited against pledge of current investment as stated in Note No 9. (Refer Note No 38)
37 Contingent liabilities and commitments (to the extent not provided for)
(No cash outflow is expected)
a) Claims against the company not acknowledged as debt in respect of demands for various years relating to Central excise, Customs duty, Service tax and VAT contested in appeal amounted to F110.20 lakhs (previous year F310.91 lakhs). According to the management and tax advisors that the demand raised is not in accordance with the provisions of respective laws and its ultimate resolution will not have a material adverse effect on the company financial position and result of operations. As against this, a sum of F21.83 lakhs (Previous year F21.63 lakhs) is deposited under protest and has been included under Note 7 âOther non current assetsâ.
b) Liability on account of outstanding bank guarantees and letter of credit of F2764.28 lakhs (previous year F2087.28 lakhs).
c) The Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period when the Code becomes effective.
d) The Honâble Supreme Court in a recent ruling during the year 2019 had passed a judgement on the definition and scope of âBasic Wagesâ under the Employeesâ Provident Funds and Miscellaneous Provision Act, 1952. Pending issuance of guidelines by the regulatory authorities on the application of this ruling, the impact on the Company, if any, cannot be ascertained. The Company will
The above investments (Sl. No. 1 to 9) are lien marked against Overdraft facility from Deutsche Bank AG. The outstanding balance against this facilty is FNil Lakhs (previous year F596.75 Lakhs), the investments Sl. No. 10 to 16 are lien marked against inter corporate borrowings F1200 Lakhs (previous year FNil) from Deutsche India Investments Pvt Limited
viii) The estimates of future salary increases, considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
ix) The plan typically exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. Investment Risk
The Probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Interest risk
If the Discount Rate i.e the yield on the Government Bonds decrease in future, the Actuarial Liability will increase and vice versa. The quantum of increase in valuation liability corresponding to specific decrease in the Discount Rate and vice versa, has been shown in the annexure containing the sensitivity Analysis of Key Actuarial Assumption.
Longevity risk
If the Mortality rate experienced by the staff of a particular company is higher than what is assumed in mortality Table used in the valuation, the valuation liability will increase.
However, it will be very cumbersome to measure the quantum of increase for assumed reduction of Mortality rates as can be done in case of changes in salary Growth Rate and Interest Rate.
40 Disclosures as required by Indian Accounting Standard (Ind AS) 116 Lease
The Company has lease contracts for Land and Buildings. Leases of land have lease terms of 1 to 10 years. The Company''s obligations under its leases are secured by the lessor''s title to the leased assets. Generally, the Company is restricted from assigning and subleasing the leased assets.
(a) The depreciation expense on ROU assets of F79.23 lakhs (previous year F87.40 lakhs) is included under depreciation and amortization expense in the statement of Profit and Loss.
(b) Interest Expense on the lease liability amounting to F24.69 lakhs (previous year F28.78 lakhs) has been included as a component of finance costs in the statement of Profit and Loss.
Effective April 1, 2019, the Company adopted Ind AS 116 âLeasesâ applied to all lease contracts existing on April 1, 2019 using the modified retrospective method. On transition , applying Ind AS 17, an amount of F85.41 lakhs has been recognised as Right of Use assets in respect of leases that were classified as finance lease, and a lease liability of F85.41 lakhs wes recognised on that date towards such leases. Further, in respect of leases which were classified as operating leases , applying Ind AS 17, F0.48 lakhs has been reclassified from other Assets" to "Right of Use Asset". The lease term in respect of all Operating leases ending within 12 months from the date of initial application and accordingly the company has elected to account for such leases as short term lease and has recognized the lease payments as rental expense. The cumulative effect of applying the standard was nil and there has been no adjustment to retained earnings. The aggregate depreciation expense on ROU asset is included under depreciation and amortization expense in the Statement of Profit or Loss.
The Company does not face a significant liquidity risk with regard to its lease liabilities as the current assets are sufficient to meet the obligations related to lease liabilities as and when they fall due. The discounted rate applied to lease liabilities is 8.60% p.a (g) The Company incurred Rs Nil (previous year F24.89 lakhs) for the year ended March 31,2021 towards expense relating to short term leases having tenure less than 12 months.
41 Amortisation of intangible assets
The intangible assets (Software expenditure) is amortised on estimated useful life of six years commencing from the year in which the expenditure is incurred.
45 The Company has made assessment of impact of COVID-19 on the carrying amount of property, plant and equipment, Investments, Inventories, receivables and other current assets.Based on current indicators of future economic conditions, the Company expects to recover the carrying amount of the assets. However in view of highly uncertain and continously evolving business environment, the eventual impact of COVID-19 may be different from the estimated as at the date of approval of these financial results.
Trade receivables are non-interest bearing and are generally on terms of 7 days to 30 days F2.76 lakhs (Previous year F5.10 lakhs) was recognised as provision for expected credit losses on trade receivables.
Trade receivables are presented net of impairment in the Balance sheet.
The Company classifies the right to consideration in exchange for deliverables as a receivable. Receivable is right to consideration that is unconditional upon passage of time.
C Contract Liabilities
Contract liability relate to payment received in advance for performance under contract. Contract liabilities are recognised as revenue at the time of sale of goods. Contract Liabilities includes Non current or current advances received from customers to deliver goods. Revenue recognised in the current reporting period to carried forward Contract liabilities:
The amount of revenue recognised during the year for the amount included in contract liability at the beginning of the year is F43.02 lakhs (previous year F392.60 lakhs)
E Performance obligation and remaining performance obligation
The performance obligation is satisfied upon the delivery of Writing and Printing Paper and payment is generally due within 7 days to 30 days after the delivery.
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. As on 31st March, 2021, there were no remaining performance obligation as the same is satisfied upon delivery of goods/services.
Segment Reporting based on the guiding principles given in Ind AS 108 on âOperating Segmentsâ, the Companyâs business activity falls within a single operating segment, namely manufacturing of âWriting and Printing Paperâ. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
The Board of Directors had recommended dividend of F3/- per equity share amounting to F414.74 lakhs for the year 2020-2021 during their meeting held on 11th May 2021. The dividend, as recommended by the Board of Directors, if approved at the Annual General Meeting, would be paid subject to deduction of tax (TDS) at the prescribed rates as per Income Tax Act,1961 as amended by Finance Act 2020.
49 Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act, 2013, a company meeting the applicable threshold, need to spend atleast 2% of the average net profit for the immediate preceeding three financial years on CSR activities as defined in schedule-VII of the Companies Act 2013.
(a) Gross amount required to be spent by the company during the year F155.80 lakhs (previous year F118.26 lakhs).
(b) Amount spent during the year F112.61 lakhs (previous year F52.72 lakhs)
(c) Amount remaining unspent as at the end of the year F43.19 lakhs (previous year F65.54 lakhs)
55 Financial instruments and Risk management i Capital management
The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure.
The Companyâs management reviews its capital structure considering the cost of capital, the risks associated with each class of capital and the need to maintain adequate liquidity to meet its financial obligations when they become due. The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Accordingly the management and the Board of Directors periodically review and set prudent limit on overall borrowing limits of the Company.
Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing during the year ended 31st March 2021 and 31st March 2020.
There were no changes in the objectives, policies or processes for managing capital during the year ended 31st March 2021 and 31st March 2020.
iii. Financial risk management
The principal financial assets of the Company include investments, loans, trade and other receivables, and cash and bank balances that derive directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.
This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:-
(A) Market risk management
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of Currency risk, Interest rate risk and other price risk. a.1 Foreign currency risk management
The Company is exposed to foreign currency risk arising mainly on import (of raw materials and capital items) and export (of finished goods). The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognised assets and liabilities denominated in a currency other than companyâs functional currency.
The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.
b) Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates.
As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
i) Equity investments
The company is exposed to price risk arising from equity investments. The company does not actively trade equity investments. Equity investments are mainly held for strategic rather than trading purposes. Protection principle is given high priority by limiting companyâs investments top rated money market instruments only.
Equity price risk is related to change in market reference price of investments in equity shares held by the Company. The fair value of quoted investments held by the Company exposes it to equity price risks.
ii) Mutual fund investments
The Company manages the surplus funds majorly through investments in debt based and equity mutual fund schemes. The price of investment in these mutual fund Net Asset Value (NAV) declared by the Asset Management Company on daily basis is reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investment schemes.
Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to the very short tenor of the underlying portfolio in the liquid schemes, these do not hold any significant price risks. c.1 Equity price sensitivity analysis
The Companyâs exposure in Equity Investments is not material. c.2 Mutual fund price sensitivity analysis
The sensitivity analysis below has been determined based on Mutual Fund Investment at the end of the reporting period. If NAV had been 1% higher/lower, the profit for year ended 31st March, 2021 would have increased/decreased by F /- 83.99 Lakhs (previous year: increase/decrease by F78.16 lakhs) as a result of the changes in fair value of mutual funds.
(B) Credit risk management
Credit risk arises from the possibility that a counter partyâs inability to settle its obligations as agreed in full and in time. The maximum exposure to credit risk in respect of Trade receivables and other financial assets is as under:-a. Trade Receivables
The Companyâs trade receivables consists of a large and diverse base customers including State owned Enterprises. Hence the Company is not exposed to concentration and credit risk. The company also assesses the credit worthiness of the customers internally
to whom goods are sold on credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to overseas customers are generally covered by letters of credit.
In determining the allowances for expected credit losses of trade receivables, the company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. In addition to this, Company provides for credit loss based on increase in credit risk on case to case basis.
The Company maintains exposure in cash and cash equivalents, time deposits with banks, investments in debt mutual funds. Investment of surplus funds are made only with approved counter parties. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Write off policy
The financial assets are written off in case there is no reasonable expectation of recovering from the financial asset.
(C) Liquidity risk management
The objective of liquidity risk management is to maintain sufficient liquidity to meet financial obligations of the Company as they become due. The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Company has access to various fund / non-fund based bank financing facilities. The amount of unused borrowing facilities (fund and non-fund based) available for future operating activities and to settle commitments as at 31st March, 2021 F3092.76 lakhs (as at 31st March, 2020 F2996.96 lakhs).
Liquidity risk table
The below is the detail of contractual maturities of the financial liabilities of the company at the end of each reporting period along with contractual maturity of Financial assets:
There were no transfers between Level 1 and 2 in the period. Sensitivity of Level 3 financial instruments are insignificant.
The fair value of the financial instruments are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:
Investments in mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house. NAV represents the price at which the issuer will issue further units of mutual fund and the price at which issuer will redeem such units for the investor.
Derivative contracts: The Company has entered into foreign currency contract(s) to manage its exposure to fluctuations in foreign exchange rates. These financial exposures are managed in accordance with the Companyâs risk management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data, i.e., mark to market values determined by the Authorized Dealers Banks.
Quoted equity investments: Fair value is derived from quoted market prices in active markets.
56 Figures in bracket indicate deductions.
57 Previous year figures have been regrouped/recasted/rearranged wherever necessary to confirm to its classification of the current year.
Mar 31, 2019
1 Corporate and General Information
Shreyans Industries Limited (âthe Companyâ) is a public company domiciled in India and incorporated on 11th June, 1979 under the provisions of the Companies Act, 1956. The name of the company at its incorporation was Shreyans Paper Mills Ltd. and subsequently changed to Shreyans Industries Limited on 20th October 1992. The company is engaged in the manufacturing of Writing and Printing Paper. The Company caters to both domestic and international market. The equity shares of the Company are listed on National Stock Exchange of India Ltd (NSE) and Bombay Stock Exchange Limited (BSE).
The registered office of the company is situated at Village Bholapur, P.O. Sahabana, Chandigarh Road, Ludhiana-141123, Punjab. The financial statements are approved for issue by the Companyâs Board of Directors on May 13, 2019.
2 (i) Critical accounting estimates
- Useful lives of property, plant and equipment
The estimated useful lives of property, plant and equipment are based on a number of factors including the effects of obsolescence, internal assessment of user experience and other economic factors (such as the stability of the industry, and known technological advances) and the level of maintenance expenditure required to obtain the expected future cash flows from the asset.
The Company reviews the useful life of property, plant and equipment at the end of each reporting date.
- Recoverable amount of property, plant and equipment
The recoverable amount of property plant and equipment is based on estimates and assumptions regarding the expected market outlook and expected future cash flows. Any changes in these assumptions may have a material impact on the measurement of the recoverable amount and could result in impairment.
- Post-retirement benefit plans
Employee benefit obligations are measured on the basis of actuarial assumptions including any changes in these assumptions that may have a material impact on the resulting calculations.
- Recognition of deferred tax assets
Recognition of deferred tax assets depends upon the availability of future profits against which tax losses carried forward can be used.
2 (i) Recent Accounting pronouncements:
a) Ind AS 116- Leases
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 116, Leases. Ind AS 116 will replace the existing leases Standard, Ind AS 17 Leases, and related Interpretations. The Standard sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract i.e., the lessee and the lessor. Ind AS 116 introduces a single lessee accounting model and requires a lessee to recognize assets and liabilities for all leases with a term of more than twelve months, unless the underlying asset is of low value. Currently, operating lease expenses are charged to the statement of Profit and Loss. The Standard also contains enhanced disclosure requirements for lessees. Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17.
The effective date for adoption of Ind AS 116 is annual periods beginning on or after April 1, 2019. The standard permits two possible methods of transition:
Full retrospective- Retrospectively to each prior period presented applying Ind AS 8 Accounting Policies, Changes in Accounting Estimates and Errors
Modified retrospective- Retrospectively, with the cumulative effect of initially applying the Standard recognized at the date of initial application.
Under modified retrospective approach, the lessee records the lease liability as the present value of the remaining lease payments, discounted at the incremental borrowing rate and the right of use asset either as:
Its carrying amount as if the standard had been applied since the commencement date, but discounted at lesseeâs incremental borrowing rate at the date of initial application or an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments related to that lease recognized under Ind AS 17 immediately before the date of initial application.
Certain practical expedients are available under both the methods
On completion of evaluation of the effect of adoption of Ind AS 116, the Company is proposing to use the âModified Retrospective Approachâ for transitioning to Ind AS 116, and take the cumulative adjustment to retained earnings, on the date of initial application (April 1, 2019). Accordingly, comparatives for the year ended March 31, 2019 will not be retrospectively adjusted. The Company has elected certain available practical expedients on transition.
b) Ind AS 12- Appendix C- Uncertainty over Income Tax Treatments
On March 30, 2019, Ministry of Corporate Affairs has notified Ind AS 12 Appendix C, Uncertainty over Income Tax Treatments which is to be applied while performing the determination of taxable profit (or loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. According to the appendix, companies need to determine the probability of the relevant tax authority accepting each tax treatment, or group of tax treatments, that the companies have used or plan to use in their income tax filing which has to be considered to compute the most likely amount or the expected value of the tax treatment when determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The standard permits two possible methods of transition-
i) Full retrospective approach- Under this approach, Appendix C will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors, without using hindsight.
ii) Retrospectively with cumulative effect of initially applying Appendix C recognized by adjusting equity on initial application, without adjusting comparatives.
The effective date for adoption of Ind AS 12 Appendix C is annual periods beginning on or after April 1, 2019. The Company will adopt the standard on April 1, 2019 and has decided to adjust the cumulative effect in equity on the date of initial application i.e. April 1, 2019 without adjusting comparatives.
The effect on adoption of Ind AS 12 Appendix C would be insignificant in the standalone financial statements.
Amendment to Ind AS 12 - Income taxes
On March 30, 2019, Ministry of Corporate Affairs issued amendments to the guidance in Ind AS 12, âIncome Taxesâ, in connection with accounting for dividend distribution taxes.
The amendment clarifies that an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.
Effective date for application of this amendment is annual period beginning on or after April 1, 2019. The Company does not have any impact on account of this amendment.
c) Amendment to Ind AS 19 - plan amendment, curtailment or settlement.
On March 30, 2019, Ministry of Corporate Affairs issued amendments to Ind AS 19, âEmployee Benefitsâ, in connection with accounting for plan amendments, curtailments and settlements.
The amendments require an entity:
- to use updated assumptions to determine current service cost and net interest for the remainder of the period after a plan amendment, curtailment or settlement; and
- to recognise in profit or loss as part of past service cost, or a gain or loss on settlement, any reduction in a surplus, even if that surplus was not previously recognised because of the impact of the asset ceiling.
Effective date of application of this amendment is annual period beginning on or April 1,2019.
Notes:
1. The cost of inventories recognised as an expense during the year was RS.27312.18 lakhs (previous year : RS.24644.64 lakhs).
2. The mode of valuation of inventories has been stated in Note 2 (j) on Accounting policy for inventories i.e. at cost or net realisable value which ever is lower
3. Inventories are hypothecated against loans repayable on demand from banks. (Refer Note 24 on Borrowings)
Trade receivables includes RS.1.08 lakhs, (Previous year RS.2.16 lakhs) due from Related Party
The Company has used a practical expedient by computing the expected loss allowances for trade receivables based on historical credit loss experience
b) Rights, preferences and restrictions attached to equity shares
The company presently has one class of equity shares having a par value of RS.10/- each. Each holder of equity shares is entitled to one vote per equity share. The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Board has recommended a Dividend of RS.5/- per equity share of RS.10/-, i.e 50% including one time special dividend of RS.3/- per equity share for the financial year ended March 31, 2019 (Previous year 18%) subject to the approval of the Shareholders in the ensuing Annual General Meeting.
d) Detail of Shares held by holding company/ ultimate holding company their subsidiaries and associates
There is no holding /ultimate holding company of the company and therefore no subsidiary/associate of holding / ultimate holding company.
e) Aggregate number and class of share alloted as fully paid-up pursuant to contract(s) without payment being received in cash, bonus shares and shares bought back for the period of five year immediately preceding the balance sheet date:
Note
I Nature and purpose of reserve
a) Capital reserve: The amount of capital profit on reissue of forfeited shares is recognised as Capital Reserve.
b) Securities premium account: The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. It can be utilized in accordance with the provisions of the Companies Act 2013, for issuance of bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs etc
c) General Reserve: General Reserves are the free reserves of the Company which are kept aside out of Companyâs profit to meet future requirement as and when they arise. The Company had transferred a portion of the profit after tax to General reserves pursuant to the earlier provisions of the Companies Act â1956. Mandatory transfer to General Reserve is not required under the Companies Actâ 2013.
d) Retained earnings: Retained earnings are the accumulated profit earned by the Company till date less transfer to General Reserve and payment of Dividend (including dividend distribution tax).
e) Other comprehensive income: Remeasurements of defined benefit liability/(asset) comprises actuarial gains and losses and return on plan assets (excluding interest income).
Rights attached to preference shares
The company has not issued preference shares during the current and previous year.
a) Details of security for term loans
i Term loans from banks (other than vehicles) are secured by a joint equitable mortgage created or to be created on immovable properties both present and future, situated at Ahmedgarh and Banah in the state of Punjab and hypothecation of whole of movable plant and machinery, machinery spares, tools and accessories and other movable, both present and future (save and except book debts ) subject to the charge created or to be created by the company in favour of its bankers for its working capital loans. Term loans from banks are also personally guaranteed by promoter directors of the company.
ii Term loans from banks and others for vehicles are secured by way of hypothecation of vehicles purchased out of such loans.
* Note: Figures of term loan stated above in para (a) includes current maturities of long term debt shown separately in Note No 26 ** Repaid during the year
c Terms of repayment of term loans from others
Repayment schedule of unsecured loans/deposits from related parties is within period of 3 years from the date of acceptance and carry interest upto 11 % p.a (Previous year upto 11% p.a)
Repayment schedule of unsecured loans/deposits from shareholders/public is within period of 3 years from the date of acceptance and carry interest upto 11 % p.a (Previous year upto 11% p.a)
Details of security of loans repayable on demand (secured)
i) Secured loans repayable on demand from banks for working capital RS.641.08 lakhs (previous year RS.847.88 lakhs) are secured by hypothecation of stocks of raw materials, finished goods, bills receivables, book debts and all other movable assets of the company and further secured by way of second charge on the immovable assets situated at village Banah and at Ahmedgarh and also personally guaranteed by two promotor directors of the company.
ii) The Company has obtained overdraft facility from Bank against pledge of current investment as stated in Note No 9. However outstanding balance against this facility is FNil ( previous year FNil)
*Current maturities of Long term debt includes RS.55.87 lakhs (previous year RS.128.58 lakhs) as deposits from shareholders and public, and RS.10.08 lakhs (previous year RS.15.72 lakhs) as deposits from related parties.
# As at the year end there is no amount due for payment to the Investor Education and Protection Fund under Section 125 of Companies Act, 2013.
3 Contingent liabilities and commitments (to the extent not provided for)
(No cash outflow is expected)
A Contingent Liabilities
a) Claims against the company not acknowledged as debt in respect of direct and ind irect taxes amoun ted to RS.220.19 lakhs (previous year RS.224.90 lakhs). These matters are pending before various Appellate authorities. According to the management and tax advisors that the demand raised is not in accordance with the provisions of respective laws and its ultimate resolution will not have a material adverse effect on the company financial position and result of operations.
Amount paid to statutory authorities against above tax claims amounted to RS.101.20 lakhs (previous year RS.101.20 lakhs) is included under Note 7 âOther non current assetsâ.
Liability on account of outstanding bank guarantees and letter of credit is RS.2675.64 lakhs (previous year RS.2162.52 lakhs).
The assumptions and methodology used in actuarial valuation are consistent with the requirements of Ind AS 19
viii) The estimates of future salary increases considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
ix) The plan typically exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk. Investment Risk
The Probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Interest risk
If the Discount Rate i.e the yield on the Government Bonds decrease in future, the Actuarial Liability will increase and vice versa. The quantum of increase in valuation liability corresponding to specific decrease in the Discount Rate and vice versa, has been shown at point no. (x) below containing the sensitivity Analysis of Key Actuarial Assumption.
Longevity risk
If the Mortality rate experienced by the staff of a particular company is higher than what is assumed in mortality Table used in the valuation, the valuation liability will increase.
However, it will be very cumbersome to measure the quantum of increase for assumed reduction of Mortality rates as can be done in case of changes in salary Growth Rate and Interest Rate.
Salary risk
If the salary Growth Rate over the future years of services is increased, the Actuarial Liability will increase and vice versa. The quantum of increase in the valuation liability corresponding to specific increase in the salary growth rate and vice versa has been shown at point no. (x) below containing Sensitivity Analysis of Key Actuarial Assumption.
xii) The company expects to contribute RS.130 lakhs to the gratuity trust during the fiscal 2020
xiii) The average duration of the defined benefit plan obligation at the end of the reporting period is 13.03 years (previous year 13.18 years)
4 Disclosures as required by Indian Accounting Standard (Ind AS) 17 Lease
Operating lease commitments:
(i) Company as a Lessee
The aggregate lease rentals payable are charged as Rent under âOther Expensesâ.The Companyâs significant leasing arrangements are primarily in respect of operating leases for premises. These lease arrangements range for a period between 11 months and 5 years. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.The aggregate lease rentals payable are charged as Rent under âOther Expensesâ.
5 Amortisation of intangible assets
Softwares have been amortised on estimated useful life of six years.
6 In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment loss has been provided in the books of account.
7 Sales includes excise duty collected from customers of FNil (Previous year RS.614.41 lakhs). Revenue from operations for previous period upto 30 June,2017 includes excise duty. From 1st July 2017 onwards, the excise duty and most indirect taxes in india have been replaced with Goods and services tax(GST). The company collects GST on behalf of Government. Hence GST is not included in Revenue from operations. In view of aforesaid change in indirect taxes, the Revenue from operation for year ended 31 March,2019 is not comparable with 31 March,2018 to this extent.
Trade receivables are non-interest bearing and are generally on terms of 7 days to 30 days. In 2019 RS.5.32 lakhs (Previous year RS.6.34 lakhs) was recognised as provision for expected credit losses on trade receivables.
Trade receivables are presented net of impairment in the Balance sheet. The Company classifies the right to consideration in exchange for deliverables as a receivable. Receivable is right to consideration that is unconditional upon passage of time.
C Contract Liabilities
Contract liability relate to payment received in advance for performance under contract. Contract liabilities are recognised as revenue at the time of sale of goods. Contract Liabilities includes Non current or current advances received from customers to deliver goods. Revenue recognised in the current reporting period to carried forward Contract liabilities:
Revenue recognised that was included in the contract liability balance at the beginning of the period
E Performance obligation and remaining performance obligation
The performance obligation is satisfied upon the delivery of Writing and Printing Paper and payment is generally due within 7 days to 30 days after the delivery.
The remaining performance obligation disclosure provides the aggregate amount of the transaction price yet to be recognized as at the end of the reporting period and an explanation as to when the Company expects to recognize these amounts in revenue. As on 31st March, 2019, there were no remaining performance obligation as the same is satisfied upon delivery of goods/services.
8 Segment Reporting
Segment Reporting based on the guiding principles given in Ind AS 108 on âOperating Segmentsâ, the Companyâs business activity falls within a single operating segment, namely manufacturing of âWriting and Printing Paperâ. Accordingly, the disclosure requirements of Ind AS 108 are not applicable.
9 Proposed Final Dividend
The Board of Directors have recommended a final dividend of RS.5 per equity share amounting to RS.833.31 lakhs (including dividend distribution tax) for the year 2018-2019 which includes a one-time special dividend of RS.3 per equity share (previous year final dividend RS.1.80/- per equity share amounting to RS.299.99 lakhs) after the Balance Sheet date. The same is subject to approval by the shareholders at the ensuing Annual General Meeting of the Company and therefore proposed final dividend (including dividend distribution tax) has not been recognised as a liability as at the Balance sheet date in line with Ind AS 10 "Events after the reporting period".
10 Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act, 2013, a company meeting the applicable threshold, need to spend at least 2% of the average net profit for the immediate preceding three financial years on CSR activities as defined in schedule-VII of the Companies Act 2013.
(a) Gross amount required to be spent by the company during the year RS.77.11 lakhs ( previous year RS.38.53 lakhs).
(b) Amount spent during the year RS.43.59 lakhs (previous year RS.22.75 lakhs)
(c) Amount remaining unspent as at the end of the year RS.33.52 lakhs (previous year RS.15.78 lakhs)
(d) CSR activities undertaken
11 Earning per share
The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Ind AS- 33 on "Earnings Per Share". The following is a reconciliation of the equity shares used in the computation of basic and diluted earnings per equity share:
*** As the liabilities for gratuity, compensated absences are provided on an actuarial basis for the Company as a whole, the amount pertaining to key managerial personnel has not been included.
Mr. Rajneesh Oswal, Mr Vishal Oswal and Mr Kunal Oswal are related to each other.
The related party relationship is as identified by the Company and relied upon by the auditors.
12 Financial instruments and Risk management i Capital management
The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure.
The Companyâs management reviews its capital structure considering the cost of capital, the risks associated with each class of capital and the need to maintain adequate liquidity to meet its financial obligations when they become due. The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Accordingly the management and the Board of Directors periodically review and set prudent limit on overall borrowing limits of the Company.
Further, there have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current year ended 31st March 2019. There were no changes in the objectives, policies or processes for managing capital during the year ended 31st March, 2019 and 31st March, 2018.
iii. Financial risk management
The principal financial assets of the Company include loans, trade and other receivables and cash and bank balances that derive directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.
This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:-
(A) Market risk management
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of Currency risk, Interest rate risk and other price risk.
a.1 Foreign currency risk management
The Company is exposed to foreign currency risk arising mainly on import (of raw materials and capital items) and export (of finished goods). The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent years and may fluctuate substantially in the future. Consequently the company is exposed to foreign currency risk and the results of the company may be affected as the rupee appreciates/ depreciates against foreign currencies. Foreign exchange risk arises from the future probable transactions and recognised assets and liabilities denominated in a currency other than companyâs functional currency.
The company measures the risk through a forecast of highly probable foreign currency cash flows and manages its foreign currency risk by hedging appropriately. The Company uses foreign exchange forward contracts to mitigate the risk of changes in exchange rates on foreign currency exposures.
a.2 Foreign currency sensitivity analysis
Any changes in the exchange rate of EURO and USD against INR is not expected to have significant impact on the Companyâs profit due to the less exposure of these currencies. Accordingly, a 5% appreciation/depreciation of the INR as indicated below, against the EURO and USD would have increased/reduced profit by the amounts shown below. This analysis is based on the foreign currency exchange rate variances that the Company considered to be reasonably possible at the end of the reporting period.The impact on the Companyâs profit before tax due to change in the fair value of monetary assets and liabilities including foreign currency derivatives on account of reasonably possible change in USD/EURO exchange rates (with all other variables held constant).
b) Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates.
As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The companyâs fixed rate borrowings are carried at amortised cost. They are therefore not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
At the reporting date the interest rate profile of the Companyâs interest bearing financial instrument is at its fair value:
Cash flow sensitivity analysis for variable rate instruments
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. A change of 100 basis points in interest rates for variable rate instruments at the reporting date would have increased/(decreased) profit or loss for the below years by the amounts shown below. With all other variables held constant, the Companyâs profit before tax is affected through the impact on floating rate borrowings, as follows:
c) Other Price Risk
The company is exposed to price risk arising from equity investments. The company manages equity price risk by investing in fixed deposits/Fixed Maturity Plan, debt instruments and Liquid funds. The company does not actively trade equity investments. Equity investments are mainly held for strategic rather than trading purposes. Protection principle is given high priority by limiting companyâs investments top rated money market instruments only.
Equity price risk is related to change in market reference price of investments in equity shares held by the Company. The fair value of quoted investments held by the Company exposes it to equity price risks.
The Company manages the surplus funds majorly through investments in debt based and equity mutual fund schemes. The price of investment in these mutual fund Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investment schemes.
Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to the very short tenor of the underlying portfolio in the liquid schemes, these do not hold any significant price risks.
c.1 Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period.
The Companyâs exposure in Equity Investments is not material.
c.2 Mutual fund price sensitivity analysis
The sensitivity analysis below has been determined based on Mutual Fund Investment at the end of the reporting period. If NAV had been 1% higher/lower, the profit for year ended 31st March, 2019 would have increased/decreased by F /- 61.18 Lakhs (Previous year : increase/decrease by RS.40.37 lakhs) as a result of the changes in fair value of mutual funds.
(B) Credit risk management
Credit risk arises from the possibility that a counter partyâs inability to settle its obligations as agreed in full and in time. The maximum exposure to credit risk in respect of Trade receivables and other financial assets is as under:-
a. Trade Receivables
The Companyâs trade receivables consists of a large and diverse base customers including State owned Enterprises. Hence the Company is not exposed to concentration and credit risk. The company also assesses the credit worthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to overseas customers are generally covered by letters of credit.
In determining the allowances for expected credit losses of trade receivables, the company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. In addition to this Company provides for credit loss based on increase in credit risk on case to case basis.
Trade Receivables
Out of the Trade receivables, RS.2210.80 lakhs as at 31st March 2019 (RS.2263.64 lakhs as at 31st March 2018) is due from the Companyâs major customers i.e. having more than 5% of total outstanding trade receivables. There are no other customers who represent more than 5% of the total balance of trade receivables.
The maximum exposure to credit risk at the reporting date is the carrying value of trade receivables as disclosed at Note 10.
b. Other Financial Assets
The Company maintains exposure in cash and cash equivalents, time deposits with banks, investments in debt mutual funds. Investment of surplus funds are made only with approved counter parties. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Write off policy
The financials assets are written off in case there is no reasonable expectation of recovering from the financial asset.
(C) Liquidity risk management
The objective of liquidity risk management is to maintain sufficient liquidity to meet financial obligations of the Company as they become due. The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Company has access to various fund / non-fund based bank financing facilities. The amount of unused borrowing facilities (fund and non-fund based) available for future operating activities and to settle commitments as at 31st March, 2019 RS.2238.92 lakhs (as at 31st March, 2018 RS.2827.80 lakhs).
Liquidity risk table
The below is the detail of contractual maturities of the financial liabilities of the company at the end of each reporting period
iv Fair Value Measurement
(i) Fair Value hierarchy
Level 1- Quoted prices (unadjusted) in active markets for identical assets or liabilities
Level 2- Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices)
Level 3- Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs).
There were no transfers between Level 1 and 2 in the period. Sensitivity of Level 3 financial instruments are insignificant.
The fair value of the financial instruments are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:
Investments in mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.
Derivative contracts: The Company has entered into foreign currency contract(s) to manage its exposure to fluctuations in foreign exchange rates. These financial exposures are managed in accordance with the Companyâs risk management policies and procedures. Fair value of derivative financial instruments are determined using valuation techniques based on information derived from observable market data, i.e., mark to market values determined by the Authorized Dealers Banks.
Quoted equity investments: Fair value is derived from quoted market prices in active markets.
Unquoted equity investments: Fair value is derived on the basis of net asset value approach, in this approach the net asset value is used to capture the fair value of these investments.
13 Figures in bracket indicate deductions.
14 Previous year figures have been regrouped/recasted/rearranged wherever necessary to confirm to its classification of the current year.
Mar 31, 2018
1 Corporate Information
Shreyans Industries Limited (âthe Companyâ) is a public company domiciled in India and incorporated on 11th June, 1979 under the provisions of the Companies Act, 1956.The name of the company at its incorporation was Shreyans Paper Mills Ltd. and subsequently changed to Shreyans Industries Limited on 20th October 1992. The company is engaged in the manufacturing of Writing and Printing Paper. The Company caters to both domestic and international market. The equity shares of the Company are listed on National Stock Exchange of India Limited (NSE) and Bombay Stock Exchange Limited (BSE).
The registered office of the company is situated at Village Bholapur, P.O. Sahabana, Chandigarh Road, Ludhiana-141123, Punjab. The financial statements are approved for issue by the Company''s Board of Directors on 25th May, 2018.
Notes :
1. The tangible assets are hypothecated /mortgaged to secure borrowings of the company (refer note 18)
2. The Company has elected to measure all its Property, Plant and Equipment at Previous GAAP carrying amount as at 31st March, 2016 as its deemed cost for Gross Block on the date of transition to Ind AS i.e. 1st April, 2016
The company has availed the exemption available under Ind AS 101, whereas the carrying value of Property, plant and equipment has been carried forwarded at the amount as determined under the previous GAAP netting of Ind AS adjustment such as government grants and processing fee etc.. Considering the FAQ issued by the ICAI, regarding application of deemed cost, the company has disclosed the cost as at 1st April 2016 net of accumulated depreciation. However, information regarding gross block of assets, accumulated depreciation has been disclosed by the company separately as follows:
Notes:
1. The cost of inventories recognised as an expense during the year was Rs.24644.64 lakhs (for the year ended 31st March, 2017: Rs.22799.12 lakhs).
2. The mode of valuation of inventories has been stated in Note 2 (i) on Accounting policy for inventories i.e. at cost or net realisable value which ever is lower
3. Inventories are hypothecated against loans repayable on demand from banks. (refer Note 23 on Borrowings)
(Trade receivables includes Rs.2.16 lakhs , (31st March 2017 Rs. Nil, 01st April 2016 Rs. Nil) due from Firms/Pvt Companies in which any director is a partner/director/member)
The Company has used a practical expedient by computing the expected loss allowances for the trade receivable based on historical credit loss experience
b) Rights, preferences and restrictions attached to equity shares
The company presently has one class of equity shares having a par value of F10 each. Each holder of equity shares is entitled to one vote per equity share. The dividend if proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
The Board has recommended a Dividend of 18% (Previous year 15%) (Rs.1.80 per equity share of Rs.10) for the financial year ended March 31, 2018 subject to the approval of the Shareholders in the ensuing Annual General Meeting.
d) Detail of Shares held by holding company/ ultimate holding company their subsidiaries and associates
There is no holding /ultimate holding company of the company and therefore no subsidiary/associate of holding / ultimate holding company.
Note
I Nature and purpose of reserve
a) Capital reserve: The amount of capital profit on reissue of forfeited shares is recognised as Capital reserve.
b) Securities premium account: The amount received in excess of face value of the equity shares is recognised in Securities Premium Reserve. It can be utilized in accordance with the provisions of the Companies Act 2013, for issuance of bonus shares, to provide for premium on redemption of shares or debentures, write-off equity related expenses like underwriting costs etc
c) General Reserve: General Reserves are the free reserves of the Company which are kept aside out of Company''s profit to meet future requirement as and when they arise. The Company had transferred a portion of the profit after tax to General reserves pursuant to the earlier provisions of the Companies Act ''1956. Mandatory transfer to General Reserve is not required under the Companies Act'' 2013.
d) Retained earnings: Retained earnings are the accumulated profit earned by the Company till date less transfer to General Reserve, payment of Dividend (including dividend distribution tax).
e) Other comprehensive income: Remeasurements of defined benefit liability/(asset) comprises actuarial gains and losses and return on plan assets (excluding interest income).
a) Details of security for term loans
i Term loans from banks (other than vehicles) are secured by a joint equitable mortgage created or to be created on immovable properties both present and future, situated at Ahmedgarh and Banah in the state of Punjab and hypothecation of whole of movable plant and machinery, machinery spares, tools and accessories and other movable, both present and future (save and except book debts ) subject to the charge created or to be created by the company in favour of its bankers for its working capital loans. Term loans from banks are also personally guaranteed by promoter directors of the company.
c Terms of repayment of term loans from others
Repayment schedule of unsecured loans/deposits from related parties is within period of 3 years from the date of acceptance and carry interest upto 11% p.a (Previous year upto 11% p.a)
Repayment schedule of unsecured loans/deposits from shareholders/public is within period of 3 years from the date of acceptance and carry interest upto 11% p.a (Previous year upto 11% p.a)
Details of security of loans repayable on demand (secured)
i) Secured loans repayable on demand from banks for working capital Rs.847.88 lakhs ,(31st March 2017 Rs.962.70 lakhs,1st April 2016 Rs.1645.09 Lakhs) are secured by hypothecation of stocks of raw materials, finished goods, bills receivables, book debts and all other movable assets of the company and further secured by way of second charge on the immovable assets situated at village Banah and at Ahmedgarh and also personally guaranteed by the two promoter directors of the company.
ii) Secured loans repayable on demand from banks against overdraft limit Rs.Nil, ( 31st March, 2017 Rs.42.05 lakhs,1st April, 2016 Rs.273.29 lakhs) are secured by lien on current investments.
"Current maturities of Long term debt includes Rs.128.58 lakhs (31st March 2017, Rs.57.05 lakhs, 01st April 2016, Rs.Nil) as deposits from shareholders, and Rs.15.72 lakhs (31st March 2017, Rs.50.26 lakhs, 01st April 2016, Rs.8.27 lakhs) ) as deposits from related parties.
# As at the year end there is no amount due for payment to the Investor Education and Protection Fund under Section 125 of Companies Act, 2013.
"These matters are subject to legal proceedings in the ordinary course of business. In the opinion of the management, legal proceedings when ultimately concluded will not have a material effect on the results of operations or financial position of the company. As against this, a sum of Rs.101.20 lakhs (previous year Rs.80.50 lakhs) has been deposited under protest and included under Note 7 âOther non current assets''.
#Bonds executed in favour of The President of India under sub section (I) of the section 142 of the Custom Act 1962 for fulfillment of the obligation under the said Act.
vi) The major categories of plan assets as a percentage of the fair value of total plan assets investment with the insurer
The plan assets Rs.1528.81 lakhs as on 31st March, 2018 (Rs.1200.97 lakhs as on 31st March, 2017) are maintained with the Life Insurance Corporation of India (LIC). The detail of investments maintained by LIC have not been furnished to the Company. The same have, therefore, not been disclosed.
The assumptions and methodology used in actuarial valuation are consistent with the requirements of Ind AS 19
viii) The estimates of future salary increases, considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.
ix) The plan typically exposes the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
Investment Risk
The Probability or likelihood of occurrence of losses relative to the expected return on any particular investment.
Interest risk
If the Discount Rate i.e the yield on the Government Bonds decrease in future, the Actuarial Liability will increase and vice versa. The quantum of increase in valuation liability corresponding to specific decrease in the Discount Rate and vice versa, has been shown in the annexure containing the sensitivity Analysis of Key Actuarial Assumption.
Longevity risk
If the Mortality rate experienced by the staff of a particular company is higher than what is assumed in mortality Table used in the valuation, the valuation liability will increase.
However, it will be very cumbersome to measure the quantum of increase for assumed reduction of Mortality rates as can be done in case of changes in salary Growth Rate and Interest Rate.
Salary risk
If the salary Growth Rate over the future years of services is increased, the Actuarial Liability will increase and vice versa. The quantum of increase in the valuation liability corresponding to specific increase in the salary growth rate and vice versa has been shown in the annexure containing Sensitivity Analysis of Key Actuarial Assumption.
2 The Company''s significant leasing arrangements are primarily in respect of operating leases for premises. These lease arrangements range for a period between 11 months and 5 years. Most of the leases are renewable for further period on mutually agreeable terms and also include escalation clauses.
3 Amortisation of intangible assets
Software has been amortised on estimated useful life of six years.
4 In accordance with the Ind AS-36 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.
5 Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006
(a) There are no Micro and Small Enterprises to whom the Company owes dues which are outstanding for more than 45 days as at 31st March, 2018.This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.
(b) Disclosure in accordance with Section 22 of the MSMED Act read with Notification No. GSR 679(E) dated 4th September 2015 issued by the Ministry of Corporate Affairs :
6 In accordance with Ind AS 18 on âRevenueâ and Schedule III to the Companies Act, 2013, Revenue from Operations for the previous year ended 31 March 2017 and for the period 1 April 2017 to 30 June 2017 were reported gross of Excise Duty and net of VAT/ CST. Excise Duty was reported as a separate expense line item. Consequent to the introduction of Goods and Services Tax (GST) with effect from 1 July 2017, VAT/CST, Excise Duty etc. have been subsumed into GST and accordingly the same is not recognised as part of sales as per the requirements of Ind AS 18. This has resulted in lower reported sales in the current year in comparison to the sales reported under the pre-GST structure of indirect taxes. With the change in structure of indirect taxes, certain expenses where credit of GST is available are also being reported net of taxes.
7 Exceptional Item
Punjab State Power Corporation Ltd (earlier known as Punjab State Electricity Board) levied the Voltage Surcharge for not converting from 11KV to 66 KV transmission for period October 2004 to June 2009. The Hon''ble Supreme Court of India vide order dated 01st March 2017 has partially allowed the appeal of the Company, but upheld the demand for Rs.911.83 lakhs. In view of this the following has been shown under the Exceptional items:-
8 The company is a single segment company engaged in manufacture of Writing and Printing Paper. Accordingly the disclosure requirement as contained in the Ind AS- (108) on â Operating Segmentsâ are not applicable.
Information about Major Customer: Included in revenues arising from direct sales of ''Paper'' of Rs.42681.14 lakhs during the year ended 31st March 2018 are revenues of approximately 16.85% which arose from sales to the Company''s largest customer. No customer individually contributed 10% or more to the Company''s revenue for the year ended 31st March, 2017.
9 Subsequent Events
The Board of Directors at its meeting held on 25th May, 2018 has recommended a dividend of Rs.1.80 per equity share of F10 each (total dividend Rs.299.99 lakhs) for the year ended 31st March, 2018, subject to approval of shareholders at the Annual General Meeting to be held on 10th August 2018.
10 Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act, 2013, a company meeting the applicable threshold, need to spend at least 2% of the average net profit for the immediate preceding three financial years on CSR activities as defined in schedule-VII of the Companies Act 2013.
(a) Gross amount required to be spent by the company during the year Rs.38.53 lakhs ( P.Y Rs.29.15 lakhs).
11. The company has strategy of entering into derivative instruments for hedging its foreign currency risk arising from underlying transactions and according to risk strategy of the company, It does not use derivative instruments for speculative purposes. The detail of underlying foreign currency transactions and outstanding hedging instruments as on 31.03.2018 are as under:
12 First time adoption of Ind AS and reconciliation notes
This financial statement is the first financial statement that has been prepared in accordance with Ind AS together with the comparative period data as at and for the year ended 31st March 2017, as described in the summary of significant accounting policies. The transition to Ind AS has been carried out in accordance with Ind AS 101 "First time adoption of Indian Accounting Standards" with 1st April 2016 as transition date.
This note explains the exemptions availed by the company on first time adoption of Ind AS and principal adjustments made by the Company in restating its previous GAAP financial statements as at 1st April 2016 and financial statements as at and for the year ended 31st March 2017 in accordance with Ind AS 101.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has, accordingly, applied following exemptions:
a) The company has elected to continue with the carrying value of all items of its property, plant and equipment and intangible asstes measured as per previous GAAP as recognized in the financial statements as at the date of transition, as deemed cost at the date of transition. The effect of consequential changes arising on the application of other Ind AS has been adjusted to the deemed cost of Property, Plant and Equipment.
b) The company has availed the exemption of fair value measurement of financial assets or liabilities at initial recognition and accordingly will apply fair value measurement of financial assets or liabilities at initial recognition prospectively to transactions entered into on or after 1st April 2016.
c) The estimates as at 1st April 2016 and at 31st March 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items under previous GAAP did not require estimation:
- Fair values of Financials Assets
- Impairment of financial assets based on expected credit loss modal
- Discount rates
The estimates used by the company to present these amounts in accordance with Ind AS reflect conditions as at 1st April 2016 and 31st March 2017.
1. Leasehold land
Under previous GAAP, land on lease was not covered under ''Leases'' and therefore it was shown as Property, Plant and Equipments. Under Ind AS, land on lease is considered as operating lease. Therefore, net block of leasehold land (31st March 2017 Rs.0.49 lakhs , 1st April 2016 Rs.0.50 lakhs ) has been re-classified under the head âOther non-current assetsâ (31st March 2017 Rs.0.48 lakhs, 1st April 2016 Rs.0.49 lakhs), and âOther current assetsâ (31st March 2017 Rs.0.01 lakhs, 1st April 2016 Rs.0.01 lakhs) as ''Prepayments of leasehold land''. Further, the amortization of leasehold payment for the year ended 31st March 2017 amounting Rs.0.01 lakhs has been reclassified from ''Depreciation and amortization'' to ''Other expenses''. However, the same has no impact on the total equity as at 31st March, 2017.
2. Fair valuation of Investments
Under previous GAAP, investments in equity instruments, mutual funds and debt securities were classified as long term investments or current investments based on the intended holding period and realisability. Long term investments were classified at cost less provision for other than temporary diminution in the value of investments. Current investments were carried at lower of cost and fair value. Ind AS requires such investments to be measured at fair value.
The company has designated such investments as investments measured at FVTPL/FVTOCI/amortized cost in accordance with Ind AS. The difference between the instrument''s fair value and carrying amount as per previous GAAP has been recognized in retained earnings. This has resulted in increase in retained earnings of Rs.557.58 lakhs and Rs.376.29 lakhs as at 31st March 2017 and 1st April 2016 respectively and increase in net profit of Rs.181.29 lakhs for the year ended 31st March 2017.
3. Financial instruments measured at amortized cost
Under previous GAAP, interest free loan to employees is recorded at their transaction value. Under Ind AS, these loans are to be measured at amortized cost on the basis of effective interest rate method. Due to this, loans to employees have been decreased and difference between carrying amount and amortized cost has been recognized as ''Deferred employee cost'' under the head ''Other noncurrent assets'' (31st March 2017 Rs.0.38 lakhs, 1st April 2016 Rs.0.28 Lakhs). Further, Employee benefit expense have been increased due to amortisation of the deferred employee benefit of Rs.0.36 lakhs which is offset by the notional interest income on loan to employee of Rs.0.36 Lakhs for the year ended 31st March 2017.
4. Derivative Instruments
The fair value of derivative instruments is recognized under Ind AS which was not recognized under previous GAAP. Derivative instruments at fair value through profit or loss reflect the positive change in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected sales and purchases. Accordingly, difference on account of fair valuation of these instruments has been adjusted in retained earnings in accordance with Ind AS. This has resulted in decrease in retained earnings of Rs.1.36 Lakhs and Rs.4.51 lakhs as at 31st March 2017 and 1st April 2016 respectively and increase in net profit of F3.15 lakhs for the year ended 31st March 2017.
5. Borrowings
Under previous GAAP, transaction costs incurred in connection with borrowings were capitalised to Property, Plant and Equipments or amortised upfront and charged to profit or loss for the period. Under Ind AS, transaction costs are included in the initial recognition amount of financial liability and charged to profit or loss using the effective interest method. This has resulted in :-
a) decrease in Property, Plant and Equipment (net of accumulated depreciaion by Rs.18.00 lakhs and Rs.18.66 lakhs as at 31st March 2017 and 1st April 2016 respectively, and increase in the net profit for the year ended 31st March 2017 by Rs.0.66 lakhs towards depreciation on Property, Plant and Equipment decapitalised.
b) decrease in long term borrowings on account of unamortized amount of processing charges with a corresponding adjustment in retained earnings of Rs.7.95 lakhs and Rs.12.82 lakhs as at 31st March 2017 and 1st April 2016 respectively and decrease in the net profit for the year ended 31st March 2017 by Rs.4.87 lakhs.
6. Capital grant
(I) Under previous GAAP, certain capital grant received from Government as ''Promoter Contribution'' is shown under the head ''Capital reserve''. Under Ind AS, such grant is treated as deferred income and is recognized as income over the useful life of the assets for which such grant is received. This has resulted in decrease in Capital reserve (31st March 2017 F64.49 Lakhs, 1st April 2016 Rs.64.49 lakhs) with a corresponding adjustment in retained earnings (31st March 2017 Rs.64.49 lakhs, 1st April 2016 Rs.64.49 lakhs)
(ii) Under previous GAAP, Government grant related to Property, plant and equipment is reduced from the cost of respective asset. Under Ind AS, Government grant related to Property, plant and equipment is treated as deferred income and is recognized in the statement of profit and loss on a systematic basis over the useful life of the asset. This has resulted in increase in Property, Plant and Equipment (net of accumulated depreciation) (31st March 2017 Rs.116.27 lakhs,1st April 2016 Rs.123.22 lakhs)
This further resulted in increase in Other Liablites towards deferred income for capital subsidy under the head "Non Current Liabilities" (31st March 2017 Rs.114.04 lakhs, 1st April 2016 Rs.121.89 lakhs) and "Current Liabilities" (31st March 2017 Rs.7.85 lakhs,1stApril 2016 Rs.7.85 lakhs). The differential amount has been adjusted in Retained Earnings.
The profit for the year ended 31st March 2017 has been increased with Rs. 0.90 lakhs on account of difference between income of capital grant amounting to Rs.7.85 lakhs and the depreciation amounting to Rs.6.95 lakhs pertaining to financial year 2015-16 related to the grant earlier decapitalized in fixed assets under previous GAAP.
7. Proposed Dividend
Under previous GAAP, proposed dividend (including Dividend Distribution Tax) is recognized as a liability in the period to which it relates, irrespective of when it is declared. Under Ind AS, proposed dividend is recognized as a liability in the period in which it is declared by the company (usually when approved by shareholders in a general meeting) or paid. In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability for the year ended 31st March 2016 recorded as proposed dividend as on 1st April, 2016 along with dividend distribution tax amounting to Rs.199.67 lakhs has been de-recognised with a corresponding adjustment in the retained earnings.
8. Defined benefit obligation
Under Ind AS, remeasurements i.e. actuarial gains and losses are to be recognized in ''Other comprehensive income'' and are not to be reclassified to profit and loss in a subsequent period. Under the previous GAAP, these remeasurements were forming part of the profit or loss. Therefore, actuarial gain/loss amounting to Rs. (133.08) Lakhs for the financial year 2016-17 has been recognized in OCI (net of tax Rs.46.06 lakhs) which was earlier recognised as Employee benefits expense. However, the same has no impact on the total equity as at 31st March, 2017.
9. Sale of goods
Under previous GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods included excise duty. Thus, sale of goods under Ind AS has increased by Rs.2601.68 lakhs with a corresponding increase in expenses during the financial year 2016-17.
10. Deferred tax
Under previous GAAP, deferred tax was recognized for the temporary timing differences which focus on differences between taxable profits and accounting profits for the period. Ind AS requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. Further, the application of Ind AS has resulted in recognition of deferred tax on certain temporary differences which was not required under previous GAAP. Accordingly, deferred tax adjustments have been recognised in correlation to the underlying transactions in retained earnings/OCI in accordance with Ind AS. This has resulted in decrease in retained earnings of Rs.187.55 lakhs and Rs 120.31 lakhs as at 31st March 2017 and 1st April 2016 respectively. The net profit has been decreased with Rs.67.24 lakhs for the year ended 31st March 2017 with a corresponding adjustment in ''Deferred tax liability''.
11 Statement of cash flows
The transition from previous GAAP to Ind AS has not made any material impact on statement of cash flows.
*** As the liabilities for gratuity, compensated absences are provided on an actuarial basis for the Company as a whole, the amount pertaining to key managerial personnel has not been included.
Mr. Rajneesh Oswal, Mr Vishal Oswal and Mr Kunal Oswal are related to each other.
The related party relationship is as identified by the Company and relied upon by the auditors.
13. Financial instruments and Risk management i Capital management
The capital structure of the Company consists of net debt (borrowings offset by cash and bank balances) and total equity of the Company. The Company manages its capital to ensure that the Company will be able to continue as going concern while maximising the return to stakeholders through an optimum mix of debt and equity within the overall capital structure. The Company''s management reviews it''s capital structure considering the cost of capital, the risks associated with each class of capital and the need to maintain adequate liquidity to meet its financial obligations when they become due. Accordingly the management and the Board of Directors periodically review and set prudent limit on overall borrowing limits of the Company.
iii. Financial risk management
The principal financial assets of the Company include loans, trade and other receivables and cash and bank balances that derive directly from its operations. The principal financial liabilities of the company, include loans and borrowings, trade and other payables and the main purpose of these financial liabilities is to finance the day to day operations of the company.
The Company is exposed to market risk, credit risk and liquidity risk. The Company''s senior management oversees the management of these risks and that advises on financial risks and the appropriate financial risk governance framework for the Company.
This note explains the risks which the company is exposed to and policies and framework adopted by the company to manage these risks:-
(A) Market risk management
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises of Currency risk, Interest rate risk and other price risk.
a.1 Foreign currency risk management
The Company is exposed to foreign currency risk arising mainly on import (of raw materials and capital items) and export (of finished goods). Foreign currency exposures are managed within approved policy parameters utilising forward contracts.
b) Interest rate risk management
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates.
As the Company has no significant interest-bearing assets, the income and operating cash flows are substantially independent of changes in market interest rates. The Company''s exposure to the risk of changes in market interest rates relates primarily to the Company''s debt obligations with floating interest rates, which are included in interest bearing loans and borrowings in these financial statements. The company''s fixed rate borrowings are carried at amortised cost. They are, therefore, not subject to interest rate risk, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.
Cash flow sensitivity analysis for variable rate instruments
The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of loans and borrowings affected. A change of 100 basis points in interest rates for variable rate instruments at the reporting date would have increased/(decreased) profit or loss for the below years by the amounts shown below. With all other variables held constant, the Company''s profit before tax is affected through the impact on floating rate borrowings, as follows:
c) Other Price Risk
The company is exposed to price risk arising from equity investments. The company manages equity price risk by investing in fixed deposits/Fixed Maturity Plan, debt instruments and Liquid funds. The company does not actively trade equity investments. Equity investments are mainly held for strategic rather than trading purposes. Protection principle is given high priority by limiting company''s investments top rated money market instruments only.
Equity price risk is related to change in market reference price of investments in equity shares held by the Company. The fair value of quoted investments held by the Company exposes it to equity price risks.
The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment in these mutual fund Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investment schemes.
Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to the very short tenor of the underlying portfolio in the liquid schemes, these do not hold any significant price risks.
c.1 Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the reporting period.
The Company''s exposure in Equity Investments is not material.
c.2 Mutual fund price sensitivity analysis
The sensitivity analysis below has been determined based on Mutual Fund Investment at the end of the reporting period. If NAV had been 1% higher/lower, the profit for year ended 31st March, 2018 would have increased/decreased by Rs /- 40.37 Lakhs (20162017: increase/decrease by Rs 37.64 lakhs) as a result of the changes in fair value of mutual funds.
(B) Credit risk management
Credit risk arises from the possibility that a counter party''s inability to settle its obligations as agreed in full and in time. The maximum exposure to credit risk in respect of the financial assets at the reporting date is the carrying value of such assets recorded in the financial statements net of any allowance for losses
a. Trade Receivables
The Company''s trade receivables consists of a large and diverse base customers including State owned Enterprises. Hence the Company is not exposed to concentration and credit risk. The company also assesses the credit worthiness of the customers internally to whom goods are sold on credit terms in the normal course of business. Outstanding customer receivables are regularly monitored and any shipments to overseas customers are generally covered by letters of credit.
In determining the allowances for expected credit losses of trade receivables, the company has used a practical expedient by computing the expected credit loss allowance for trade receivables based on a provision matrix. The provision matrix takes into account historical credit loss experience and is adjusted for forward looking information. The expected credit loss allowance is based on the ageing of the receivables that are due and rates used in the provision matrix. In addition to this Company provides for credit loss based on increase in credit risk on case to case basis.
The following is the detail of allowance for lifetime expected credit loss and revenues generated from top five customers of the company.
Trade Receivables
Out of the Trade receivables, Rs.2263.64 lakhs as at 31st March 2018 (Rs.1119.97 lakhs as at 31st March 2017 , Rs.1678.72 lakhs as at 01st April 2016 ) is due from the Company''s major customers i.e. having more than 5% of total outstanding trade receivables. There are no other customers who represent more than 5% of the total balance of trade receivables.
b. Other Financial Assets
The Company maintains exposure in cash and cash equivalents, time deposits with banks, investments in debt mutual funds. Investment of surplus funds are made only with approved counter parties. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets.
Write off policy
The financials assets are written off in case there is no reasonable expectation of recovering from the financial asset.
(C) Liquidity risk management
The objective of liquidity risk management is to maintain sufficient liquidity to meet financial obligations of the Company as they become due. The Treasury Risk Management Policy includes an appropriate liquidity risk management framework for the management of the short-term, medium-term and long term funding and cash management requirements. The Company manages the liquidity risk by maintaining adequate cash reserves, banking facilities and reserve borrowing facilities by continuously monitoring forecast and actual cash flows and by matching the maturity profiles of financial assets and liabilities.
The Company has access to various fund / non-fund based bank financing facilities. The amount of unused borrowing facilities (fund and non-fund based) available for future operating activities and to settle commitments as at 31st March, 2018 Rs.2827.80 lakhs, (as at 31st March, 2017 Rs.3660.67 lakhs, as at 1st April, 2016 Rs.2501.02 lakhs).
14 Figures in bracket indicate deductions.
15 Previous year figures have been regrouped/recasted/rearranged wherever necessary to confirm to its classification of the current year.
Mar 31, 2016
1. Terms/ rights attached to equity shares
The company presently has one class of equity shares having par value of F 10/- each. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting and entitlement to dividend to an equity shareholder shall arise after such approval.
In the event of liquidation of the company, the holders of equity shares will be entitled to receive any part of the remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholder.
The rate of dividend on preference shares will be decided by the Board of directors as and when issued. Preferential shares as and when issued shall have the cumulative right to receive dividend as and when declared and shall have preferential right of repayment of amount of capital.
The Board has recommended a Dividend of 12% (Previous year 12 %) (F 1.20 per equity share of F 10/-) for the financial year ended March 31, 2016 subject to the approval of the Shareholders in the ensuing Annual General Meeting. The aggregate amount of Proposed dividend is F 165.89 Lac and F 33.77 Lac towards Tax on dividend distribution.
2. Detail of Shares held by holding company/ ultimate holding company their subsidiaries and associates
There is no holding /ultimate holding company of the company and therefore no subsidiary/associate of holding / ultimate holding company.
3. Details of security of loans repayable on demand (secured)
4. Secured loans repayable on demand from banks for working capital (Rs. 1645.09 lac, previous year Rs. 2142.10 lac ) are secured by hypothecation of stocks of raw materials, finished goods, bills receivables, book debts and all other movable assets of the company and further secured by way of second charge on the immovable assets situated at village Banah and at Ahmedgarh and also personally guaranteed by the two promoter directors of the company.
5. Secured loans repayable on demand from banks against overdraft limit (Rs. 273.29 lac, previous year F 395.37 lac) are secured by lien on current investments.
6.Terms of repayment of short term borrowings
7. Working capital borrowings from banks are repayable on demand and carry interest up to 2.50% over base rate (Previous year 2.80% over base rate).
8. Unsecured loans from related parties repayable within one year carry interest up to 11% p.a (Previous year up to 11% p.a).
9. Unsecured loans from public repayable within one year carry interest up to 11% p.a (Previous year up to 11% p.a).
10. The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employment market.
11. The financial assumptions considered for the calculations are as under:-
Discount Rate: The discount rate has been chosen by reference to market yield on government bonds as on date of valuation.
Expected Rate of Return: In case of gratuity, the actual return has been taken.
Salary Increase: On the basis of past data provided by the company.
12. Short term employeeâs benefits:
13. The plan assets are maintained with Life Insurance Corporation of India (LIC). The detail of investments maintained by LIC have not been furnished to the Company. The same have therefore not been disclosed.
14. The Company has contributed Rs. 3.00 lac (previous year Rs. 4.50 lac) towards CSR activities to Shri Darshan Kumar Oswal Public Charitable Trust and Rs. 1.50 lac to Shri Parasnath Charitable Trust in which Directors and Relatives of Directors are Managing Trustees.
15. The related party relationship is as identified by the Company and relied upon by the auditors.
16. Corporate Social Responsibility
In accordance with the provisions of Section 135 of the Companies Act 2013, the Company has contributed a sum of rs. 35.72 lac (previous year Rs. 20.03 lac ) towards approved CSR activities. The said amount stands debited under the head âCSR Activitiesâ under the head âOther Expensesâ
17. The figures in brackets represent deductions.
18. The information required by the paragraph 5 of general instructions for preparation of the Statement of Profit and Loss as per Schedule III of the Companies Act, 2013 :
19. Previous yearâs figures have been regrouped/restated wherever necessary to confirm to its classification of the current year.
Mar 31, 2014
1 : Corporate Information
Shreyans Industries Limited (the Company) is a public company
incorporated under the provisions of the Companies Act, 1956 on 11th
June, 1979. The name of the company at its incorporation was Shreyans
Paper Mills Ltd. & subsequently changed to Shreyans Industries Limited
on 20th October 1992. The company is engaged in manufacturing of
Writing & Printing Paper.
2 Contingent liabilities and provisions ( to the extent not provided
for )
Contingent Liabilities (RS In lac)
As at As at
March 31, 2014 March 31, 2013
Claims against Company not
acknowledged as debt. 1052.25 1052.25
Bank Guarantees and Letters
of credit outstanding 2166.20 1093.94
II Commitments
Estimated amount of contracts remaining to be executed on capital
account and not provided for ( net of advances ) Rs. 806.72 lacs
(Previous yearRs. 147.84 lacs)
3 a) The company has contested the additional demand in respect of
excise duty amounting to Rs. 1107.96 lacs (Previous year Rs. 1119.12 lacs).
As against this, a sum of Rs. 92.51 lacs (Previous year Rs. 93.76 lacs) is
deposited under protest and has been included under Note No. 15 ''Long
Term Loans and Advances''. The company has filed an appeal/petition with
the appellate authorities and is advised that the demands are not in
accordance with the law. Pending decision thereof, no provision has
been made in books of account.
b) The company has contested the additional demand in respect of Income
Tax amounting to f 6.53 lacs (Previous year Rs. 6.53 lacs). Pending
appeal with appellate authorities, no provision has been made in the
books of account as the company is hopeful to get the desired relief in
appeal. As against this a sum of f 2.00 lacs (Previous year f 2.00
lacs) is deposited under protest
4 The company is a single segment company engaged in manufacture of
Writing and Printing Paper. Accordingly the disclosure requirement as
contained in the Accounting Standard AS - (17) on "Segment ReportingÂ
prescribed by the Companies (Accounting Standards) Rules 2006 are not
applicable.
5 The amount ofRs. 1766.89 lacs (Previous yearRs. 1624.06 lacs) being the
excise duty deducted from the sales is relatable to the sales made
during the year. Difference of increase / (decrease) of excise duty on
inventory amounting to Rs. (1.52) lacs (Previous year Rs. (0.07) lacs)
recognised in statement of profit and loss and shown under
Miscellaneous expenses in Note No. 29 other expenses is relatable to
difference between closing inventory and opening inventory.
6 In accordance with the Accounting Standard 28 on "Impairment of
Assets the company has assessed on the balance sheet date whether
there are any indications (as listed in paragraph 8 to 10 of the
Standard ) with regard to the impairment of any of the assets. Based on
such assessment, it has been ascertained that no potential loss is
present and therefore formal estimate of recoverable amount has not
been made. Accordingly no impairment loss has been provided in the
books of account.
7 The details of amounts outstanding to Micro, Small and Medium
Enterprises under the Micro, Small and Medium Enterprises Development
Act, 2006 (MSMED Act), based on the available information with the
Company are as under :
8 Intangible assets comprises of software have been amortized @ 20% on
straight line basis as the useful life thereof has been estimated to be
not more than five years.
9 The company has leased facilities under non cancellable operating
lease arrangements with a lease term of three years which are subject
to renewal at mutual consent thereafter. The lease rent expenses
recognised during the year amountsRs. 13.82 lac (previous year Rs.6.77
lac.)
The future minimum lease payment in respect of non cancellable
operating lease as at 31st March, 2014 for each of the following
periods,
(f) The estimates of future salary increases considered in actuarial
valuation, takes into account the inflation, seniority, promotion and
other relevant factors, such as supply and demand in employment market.
(g) The financial assumptions considered for the calculations are as
under:-
Discount Rate: The discount rate has been chosen by reference to market
yield on government bonds as on date of valuation.
Expected Rate of Return: In case of gratuity, the actual return has
been taken.
Salary Increase: On the basis of past data provided by the company
(i) The plan assets are maintained with Life Insurance Corporation of
India (LIC). The detail of investments maintained by LIC have not been
furnished to the Company. The same have therefore not been disclosed.
10 The related party disclosure as per Accounting Standard - 18
prescribed by the Companies(Accounting Standards) Rules 2006.
a) KEY MANAGEMENT PERSONNEL AND RELATIVES OF KEY MANAGEMENT PERSONNEL
Key Management Personnel : Sh Rajneesh Oswal, Sh. Vishal Oswal, Sh Anil
Kumar, Sh Kunal Oswal
Relatives of Key Management Personnel
Mrs. N.K. Oswal, Mrs. Preeti Oswal, Mrs. Shika Oswal Mrs. Neera, Ms
Namita, Ms Swati
b) ASSOCIATE
Adinath Textiles Limited
c) ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVE OF SUCH
PERSONNEL ARE ABLE TO EXERCISE SIGNIFICANT INFLUENCE OR CONTROL
Achin Investment & Mercantile Company Shreyans Financial and Capital
Services Limited Punctual Dealers (P) Ltd.
Jagvallabh Parasnath Capital Investments Pvt Ltd Virat Investment &
Mercantile Company Oasis Share Trading Pvt Ltd
Ojasvi Investment & Mercantile Company Lime Lite Consultants Private
Limited Levina Investment & Mercantile Company Adeep Investment
Company. Noble Share Trading Pvt Ltd Sulzer Investment Pvt Ltd
d) The following transaction were carried out with the related parties
in the ordinary course of business.
11 The information required by the paragraph 5 of general instructions
for preparation of the Statement of Profit and Loss as per Revised
Schedule VI of the Companies Act, 1956
12 Previous year''s figures have been regrouped/restated wherever
necessary to confirm to its classification of the current year.
Mar 31, 2013
1 : Contingent liabilities and provisions ( to the extent not provided
for )
Contingent Liabilities
As at As at
PARTICULARS 31 March
2013 31 March 2012
Rs.In lacs Rs.In lacs
(i) Claims against Company not
acknowledged as debt. 1052.25 1052.25
(ii) Bank Guarantees and Letters
of credit outstanding 1093.94 809.28
II Commitments
i) Estimated amount of contracts remaining to be executed on capital
account and not provided for ( net of advances ) Rs. 147.84 lacs
(Previous year Rs. 33.37 lacs)
ii) The company has executed bonds for an a ggregate amount of Rs. Nil
(Previous Year Rs. 15.00 lacs) in favour of Pre sident of India under
section 56(2) and 67 of the Cus t o m s Act, 1962 and Central Excise
and Salt Act, 1944, for fulfillment of the obligation under the said
Acts.
2 : a) The company has contested the additional demand in respect of
excise duty amounting to Rs. 1119.12 lacs (Previous years Rs. 1119.12
lacs). As against this, a sum of Rs. 93.76 lacs (Previous year Rs.
61.90 lacs) is deposited under protest and has been included under the
head Rs.Long Term Loans and Advances''. The company has filed an
appeal/petition with the appellate authorities and is advised that the
demands are not in accordance with the law. Pending decision thereof,
no provision has been made in books of account.
b)The company has contested the additional demand in respect of Income
Tax amounting to Rs. 6.53 lacs (Previous year 46.90 lacs). Pending
appeal with appellate authorities, no provision has been made in the
books of account as the company is hopeful to get the desired relief in
appeal. As against this a sum of Rs. 2.00 lacs (Previous year Rs. 23.50
lacs) is deposited under protest
3 : The company is a single segment company engaged in manufacture of
Writing and Printing Paper. Accordingly the disclosure requirement as
contained in the Accounting Standard AS Â (17) on "Segment Reporting"
prescribed by the Companies (Accounting Standards) Rules 2006 are not
applicable.
4 : The amount of Rs. 1624.06 lacs (Previous year Rs. 1179.33 lacs)
being the excise duty deducted from the sales is relatable to the sales
made during the year. Difference of increase / (decrease) of excise
duty on inventory amounting to Rs. (0.07) lacs ( Previous year Rs.
(0.38) lacs) recognised in statement of profit and loss and shown under
Miscellaneous expenses in note no. 28 other expenses is relatable to
difference between closing inventory and opening inventory.
5 : In accordance with the Accounting Standard 28 on "Impairment of
Assets" the company has assessed on the balance sheet date whether
there are any indications (as listed in paragraph 8 to 10 of the
Standard ) with regard to the impairment of any of the assets. Based on
such assessment, it has been ascertained that no potential loss is
present and therefore formal estimate of recoverable amount has not
been made. Accordingly no impairment loss has been provided in the
books of account.
6 : Intangible assets comprises of software have been amortized @ 20%
on straight line basis as the useful life thereof has been estimated to
be not more than five years.
7 : a) The Company uses forward contracts to hedge its risk associated
with fluctuation in foreign currency relating to foreign currency
assets and liabilities. The use of the aforsaid financial instruments
is governed by the Company''s overall strategy. The Company does not use
forward contracts for speculative purposes. The details of the
outstanding forward contracts as at 31 March 2013 are as under :
8 : The company has leased facilities under non cancellable operating
lease arrangements with a lease term of three years which are subject
to renewal at mutual consent thereafter. The lease rent expenses
recognised during the year amounts Rs. 6.77 lac (previous year Rs.6.55
lac.)
The future minimum lease payment in respect of non cancellable
operating lease as at 31st March, 2013 for each of the following
periods,
9 : Employee Benefits
The summarized position of post-employment benefits and long term
employee benefits recognized in the statement of profit and loss and
Balance Sheet in accordance with AS[15] is as under:-
10 : The related party disclosure as per Accounting Standard  18
prescribed by the Companies(Accounting Standards) Rules 2006.
a) KEY MANAGEMENT PERSONNEL AND RELATIVES OF KEY MANAGEMENT PERSONNEL
Key Management Personnel : Sh Rajneesh Oswal, Sh. Vishal Oswal, Sh Anil
Kumar, Sh Kunal Oswal
Relatives of Key Management
Personnel: Mrs. N.K. Oswal, Mrs. Preeti Oswal, Mrs. Shika Oswal
Mrs. Neera, Ms Namita, Ms Swati
b) ASSOCIATE Adinath Textiles Limited
c) ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVE OF SUCH
PERSONNEL ARE ABLE TO EXCERCISE SIGNIFICANT INFLUENCE OR CONTROL
Achin Investment & Mercantile Company Ojasvi Investment & Mercantile
Company Shreyans Financial and Capital Services Limited Lime Lite
Consultants Private Limited Punctual Dealers (P) Ltd.
Levina Investment & Mercantile Company
Jagvallabh Parasnath Capital Investments Private Limited Adeep
Investment Company. Virat Investment & Mercantile Company No
transaction carried out during the year with the enterprises stated
above.
11: The figures in brackets represent deductions.
12 : The information required by the paragraph 5 of general
instructions for preparation of the Statement of Profit and Loss as per
Revised Schedule VI of the Companies Act, 1956
Mar 31, 2012
A Terms/ rights attached to equity shares
The company presently has one class of equity shares having par value
of Rs.10/- each. Each holder of equity shares is entitled to one vote
per share. The dividend proposed by the Board of Directors is subject
to the approval of the shareholders in the ensuing Annual General
Meeting and then equity shareholder is entitled to the dividend.
In the event of liquidation of the company, the holders of equity
shares will be entitled to receive any of the remaining assets of the
company, after distribution of all preferential amounts. The
distribution will be in proportion to the number of equity shares held
by the shareholder.
The rate of dividend on preferential shares is decided by the Board of
directors as and when issued. Preferential shares as and when issued
shall have the cumulative right to receive dividend as and when
declared and shall have preferntial right of repayment of amount of
capital.
The company has not declared dividend during the year ended March 31,
2012.
b) Detail of Shares held by holding company, the ultimate holding
company their subsidiaries and associates
There is no holding /ultimate holding company of the company and
therefore no subsidiary/associate of holding / ultimate holding
Company.
a) Details of security for term loans
i) Term loans from banks and financial institutions are secured by a
joint equitable mortgage created or to be created on immovable
properties both present and future, situated at Ahmedgarh and Banah in
the state of Punjab and hypothecation of whole of movable plant and
machinery, machinery spares, tools and accessories and other movable,
both present and future ( save and except book debts ) subject to the
charge created or to be created by the company in favour of its bankers
for its working capital loans. Term loans from banks and financial
institutions are also personally guaranteed by promoter directors of
the company.
ii) Term loans from others are secured by way of hypothecation of
vehicles purchased out of such loans
b) Terms of repayment of term loans from banks
i) Term loan from iDbI Bank Limited amounting to Rs.89.04 lacs
(including current maturities of long term debt) carries interest @
12.25%. The loan is repayable in 3 quarterly instalments of Rs. 29.68
lacs each.
ii) Term loan from ICICI Bank Limited amounting to Rs.218.10 lacs
(including current maturities of long term debt) carries interest @
12.25%. The loan is repayable in 3 quarterly instalments of Rs. 72.70
lacs each.
iii) Term loan from State Bank of Patiala amounting to Rs.81.70 lacs
(including current maturities of long term debt) carries interest @
14.00%. The loan is repayable in 2 quarterly instalments of Rs. 50.00
lac and Rs. 31.70 lacs.
iv) Term loan from State Bank of Patiala amounting to Rs.600.00 lacs
(including current maturities of long term debt) carries interest @
13.25%. The loan is repayable in 8 quarterly instalments of Rs. 75.00
lacs each.
v) Term loan from State Bank of Patiala amounting to Rs.1400.00 lacs
(including current maturities of long term debt) carries interest @
14.00%. The loan is repayable in 20 quarterly instalments of Rs. 70.00
lacs each.
vi) Vehicle loan from ICICI Bank Limited amounting to Rs.2.61 lacs
(including current maturities of long term debt) carries interest @
9.26%. The loan is repayable in 20 monthly instalments (including
interest) of Rs. 14150/- each .
vii) Vehicle loan from ICICI Bank Limited amounting to Rs.7.56 lacs
(including current maturities of long term debt) carries interest @
11.19%. The loan is repayable in 59 monthly instalments (including
interest) of Rs. 16725/- each.
viii) Vehicle loan from ICICI Bank Limited amounting to Rs.15.48 lacs
(including current maturities of long term debt) carries interest @
10.57%. The loan is repayable in 35 monthly instalments (including
interest) of Rs. 51600/- each .
ix) Vehicle loan from HDFC Bank Limited amounting to Rs.1.95 lacs
(including current maturities of long term debt) carries interest @
11.00%. The loan is repayable in 20 monthly instalments (including
interest) of Rs. 10705/- each .
x) Vehicle loan from HDFC Bank Limited amounting to Rs. 2.76 lacs
(including current maturities of long term debt) carries interest @
11.10%. The loan is repayable in 24 monthly instalments (including
interest) of Rs. 12880/- each .
xi) Vehicle loan from HDFC Bank Limited amounting to Rs.2.99 lacs
(including current maturities of long term debt) carries interest @
11.25%. The loan is repayable in 26 monthly instalments (including
interest) of Rs. 13020/- each .
xii) Vehicle loan from HDFC Bank Limited amounting to Rs.9.05 lacs
(including current maturities of long term debt) carries interest @
10.73%. The loan is repayable in 29 monthly instalments (including
interest) of Rs. 35550/- each .
xiii) Vehicle loan from HDFC Bank Limited amounting to Rs.1.33 lacs
(including current maturities of long term debt) carries interest @
9.25%. The loan is repayable in 11 monthly instalments (including
interest) of Rs. 12650/- each .
c) Terms of repayment of term loans from financial institutions
i) Term loan from LIC of India amounting to Rs.13.80 lacs (including
current maturities of long term debt) carries interest @ 12.25%. The
loan is repayable in 3 quarterly instalments of Rs. 4.60 lacs each.
i i) Term loan from LIC of India amounting to Rs.4.14 lacs (including
current maturities of long term debt) carries interest @ 0%. The loan
is repayable in 3 quarterly instalments of Rs. 1.38 lacs each.
d) Terms of repayment of term loans from others
i) Vehicle loan from Kotak Mohindra Prime Limited amounting to Rs.1.84
lacs (including current maturities of long term debt) carries interest
@ 9.70%. The loan is repayable in 8 monthly instalments (including
interest) of Rs. 23827/- each .
ii) Vehicle loan from TATA Capital Serivce Limited amounting to Rs.
9.94 lacs (including current maturities of long term debt) carries
interest @ 9.95%. The loan is repayable in 22 monthly instalments
(including interest) of Rs. 49950/- each
Details of security of loans repayable on demand (secured)
*Secured loans repayable on demand from banks are secured by
hypothecation of stocks of raw materials,finished goods, bills
receivables, book debts and all other movable assets of the company and
further secured by way of second charge on the immovable assets
situated at village Banah and at Ahmedgarh and also personally
guaranteed by the two promotor directors of the company.
** Unsecured loan repayable on demand are secured by the personal
security of a promoter director of the company and carries interest @
14.75%
Terms of repayment of short term borrowings
i) Working capital borrowings from banks are repayable on demand and
carries interest @ 3% over base rate
ii) Unsecured loans from related parties repayable within one year
carries interest @ 0 to 11%.
iii) Unsecured loans from public repayable within one year carries
interest @ 0 to 11%
Notes
1 'Includes Rs 35.09 lacs being the cost of land exchanged with the
forest department land for providing an open drain for carrying
effulent
2 ** Represents proportionate premium for acquisition of lease hold
land being amortised over the period of lease.
3 Subsidy amounting to Rs. Nil (previous year Rs. 23.30 lacs) related
to fixed assets is deducted from the gross value of the asset concerned
4. Intangible assets are not internally generated.
Note 1 : Contingent liabilities and provisions (to the extent not
provided for)
I Contingent Liabilities
Particulars As at As at
31 March 2012 31 March 2011
(i) Monies for which company is
liable for payment 1052.25 34.83
(ii) Bank Guarantees and Letters
of credit outstanding 809.28 837.43
(iii) Ohers - -
II Commitments
I)Estimated amount of contracts remaini n g to be executed on capital
account and not provided for ( net of advances ) Rs. 33.37 lacs
(Previous year Rs. 971.90 lacs)
II)The company has executed bonds for an aggregate amount of Rs. 15.00
lacs (Previous Year Rs. 14.00 lacs) in favour of President of India
under section 56(2) and 67 of the Customs Act, 1962 and Central Excise
and Salt Act, 1944, for fulfillment of the obligation under the said
Acts
Note 2 : a) The company has contested the additional demand in respect
of excise duty amounting to Rs. 1119.12 lacs (Previous years Rs. 998.61
lacs). As against this, a sum of Rs. 61.90 lacs (Previous year Rs.
61.90 lacs) is deposited under protest and has been included under the
head 'Advances recoverable in cash or in kind'. The company has filed
an appeal/petition with the appellate authorities and is advised that
the demands are not in accordance with the law. Pending decision
thereof, no provision has been made in books of account.
*b)The company has contested the additional demand in respect of Income
Tax amounting to Rs. 46.90 lacs (Previous year 46.90 lacs). Pending
appeal with appellate authorities, no provision has been made in the
books of account as the company is hopeful to get the desired relief in
appeal. As against this a sum of Rs. 23.50 lacs (Previous year Rs.
11.50 lacs) is deposited under protest.
Note 3 : The company is a single segment company engaged in
manufacture of Writing and Printing Paper. Accordingly the disclosure
requirement as contained in the Accounting Standard AS (17) on
"Segment Reporting" prescribed by the Companies (Accounting
Standards) Rules 2006 are not applicable.
Note 4: The amount of Rs. 1179.33 lacs (Previous year Rs. 837.58
lacs) being the excise duty deducted from the sales is relatable to the
sales made during the year. Difference of increase / (decrease) of
excise duty on inventory amounting to Rs. (0.38) lacs ( Previous year
Rs. 7.00 lacs) recognised in statement of profit and loss and shown
under Miscellaneous expenses in note no. 27 other expenses is
relatable to difference between closing inventory and opening inventory
Note 32 : Earning Per Share.
Note 5: In accordance with the Accounting Standard 28 "on
Impairment of Assets" the company has assessed on the balance sheet
date whether there are any indications (as listed in paragraph 8 to 10
of the Standard ) with regard to the impairment of any of the assets.
Based on such assessment, it has been ascertained that no potential
loss is present and therefore formal estimate of recoverable amount has
not been made. Accordingly no impairment loss has been provided in the
books of account.
Note 6 : Intangible assets comprises of software have been amortized @
20% on straight line basis as the useful life thereof has been
estimated to be not more than five years.
Note 7 : The company has leased facilities under non cancellable
operating lease arrangements with a lease term of three years which are
subject to renewal at mutual consent thereafter. The lease rent
expenses recognised during the year amounts Rs. 6.55 lac (previous year
6.55 lac.)
The future minimum lease payment in respect of non cancellable
operating lease as at 31st March, 2012 for each of the following
periods,
Note 8 : Rs. 45.29 lacs (previous year Rs. Nil lacs) being amount of
borrowing cost capitalized during the year.
Note 9 : Employee Benefits
The summarized position of post-employment benefits and long term
employee benefits recognized in the profit and loss account and Balance
Sheet in accordance with AS[15] is as under:-
(i) No allowance for doubtful debts is required to be made for the year
in respect of debt due from related parties.
(ii) The related party relationship is as identified by the Company and
relied upon by the auditors
Note 10 : The financial statements for the year ended 31st March , 2012
has been prepared as per Revised Schedule VI to the Companies Act,
1956. Accordingly the previous year figures have been reclassified to
confirm to this year's classification.
Note 11 : The figures in brackets represent deductions.
Note 12 : The information required by the paragraph 5 of general
instructions for preparation of the Statement of Profit and Loss as per
Revised Schedule VI of the Companies Act, 1956
Mar 31, 2011
1. The company has contested the additional demand in respect of
excise duty amounting to Rs. 998.61 lacs (Previous years Rs. 1049.05
lacs).As against this, a sum of Rs. 61.90 lacs (Previous year Rs.
121.93 lacs) is deposited under protest and has been included under the
head `Advances recoverable in cash or in kind'. The company has filed
an appeal/petition with the appellate authorities and is advised that
the demands are not in accordance with the law. Pending decision
thereof, no provision has been made in books of account.
2. Fixed deposits of Rs. 162.40 Lacs (Previous Year Rs. 97.95 lacs)
are pledged with various departments as securities against the
performance of contracts, letter of credits and bank guarantees issued
by Bank.
3. The company is a single segment company engaged in manufacture of
Writing and Printing Paper. Accordingly the disclosure requirement as
contained in the Accounting Standard AS (17) on "Segment Reporting"
prescribed by the Companies (Accounting Standards) Rules 2006 are not
applicable.
4. The company has contested the additional demand in respect of
Income Tax amounting to Rs. 46.90 lacs (Previous year Nil). Pending
appeal with appellate authorities, no provision has been made in the
books of account as the company is hopeful to get the desired relief in
appeal.
5. The company has executed bonds for an aggregate amount of Rs. 14.00
lac (Previous Year Rs. Nil lac) in favour of President of India under
section 56(2) and 67 of the Customs Act, 1962 and Central Excise and
Salt Act, 1944, for fulfillment of the obligation under the said Acts.
6. The amount of Rs. 837.58 lacs (Previous year Rs. 682.55 lacs) being
the excise duty deducted from the turnover is relatable to the turnover
made during the year. Difference of excise duty amounting to Rs. 7.00
lacs ( Previous year Rs. 5.23 lacs) recognised in profit and loss
account and shown under the schedule of manufacturing expenses is
relatable to difference between closing stock and opening stock.
7. In accordance with the Accounting Standard 28 "on Impairment of
Assets" the company has assessed on the balance sheet date whether
there are any indications (as listed in paragraph 8 to 10 of the
Standard) with regard to the impairment of any of the assets. Based on
such assessment, it has been ascertained that no potential loss is
present and therefore formal estimate of recoverable amount has not
been made. Accordingly no impairment loss has been provided in the
books of account.
8. (a)The Company has identified Micro, Small and Medium Enterprises
on the basis of information made available. There are no dues to Micro,
Small and Medium Enterprises, that are reportable under the Micro,
Small and Medium Enterprises Development Act 2006.
9. Intangible assets comprises of software have been amortized @20% on
straight line basis as the useful life thereof has been estimated to be
not more than five years.
10. The company has leased facilities under non cancellable operating
lease arrangements with a lease term of three years which are subject
to renewal at mutual consent thereafter. The lease rent expenses
recognised during the year amounts Rs. 6.55 lac (previous year 4.10
lac.)
11. Employees Benefits
(f) The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in employment market.
(g)The financial assumptions considered for the calculations are as
under:-
Discount Rate: The discount rate has been chosen by reference to market
yield on government bonds as on date of valuation.
Expected Rate of Return: In case of gratuity, the actual return has
been taken.
Salary Increase: On the basis of past data provided by the company.
12. The related party disclosureas per Accounting Standard 18
prescribed by the Companies (Accounting Standards) Rules 2006.
a) KEY MANAGEMENT PERSONNEL AND RELATIVES OF KEY MANAGEMENT PERSONNEL
Key Management Personnel : Sh Rajneesh Oswal, Sh. Vishal Oswal,
Sh Anil Kumar, Sh Kunal Oswal
Relatives of Key
Management Personnel : Mrs. N.K. Oswal, Mrs. Preeti Oswal,
Mrs. Shika Oswal Mrs. Neera, Ms Namita,
Ms Swati
b) ASSOCIATE Adinath Textiles Limited
c) ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVE OF SUCH
PERSONNEL ARE ABLE TO EXCERCISE SIGNIFICANT INFLUENCE OR CONTROL
Achin Investment & Mercantile Company
Ojasvi Investment & Mercantile Company
Shreyans Financial and Capital Services Limited
Lime Lite Consultants Private Limited
Punctual Dealers (P) Ltd.
Levina Investment & Mercantile Company
Jagvallabh Parasnath Capital Investments Private Limited
Adeep Investment Company.
Virat Investment & Mercantile Company
No transaction carried out during the year with the enterprises stated
above.
d) The following transaction were carried out with the related parties
in the ordinary course of business.
(i) No provision for doubtful debts is required to be made for the year
in respect of debt due from related parties.
(ii) The related party relationship is as identified by the Company and
relied upon by the auditors
13. Previous year's figures have been recast/regrouped wherever
necessary, to make these comparable with current year
14. The figures have been rounded off to the nearest lac rupees
15. The figures in brackets represent deductions.
Mar 31, 2010
1. The company has contested the additional demand in respect of sales
tax and excise duty amounting to Rs. 1049.05 lacs (Previous years Rs.
1092.89 lacs). As against this, a sum of Rs. 121.93 lacs (Previous year
Rs. 162.68 lacs) is deposited under protest and has been included under
the head Advances recoverable in cash or in kind The company has
filed an appeal/petition with the appellate authorities and is advised
that the demands are not in accordance with the law. Pending decision
thereof, no provision has been made in books of account.
2. Fixed deposits of Rs. 97.95 Lacs (Previous Year Rs. 79.84 lacs) are
pledged with various departments as securities against the performance
of contracts, letter of credits and bank guarantees issued by Bank.
3. The company is a single segment company engaged in manufacture of
Writing and Printing Paper. Accordingly the disclosure requirement as
contained in the Accounting Standard AS (17) on "Segment Reporting"
prescribed by the Companies (Accounting Standards) Rules 2006 are not
applicable.
4. The amount of Rs. 682.55 lacs (Previous year Rs. 1111.08 lacs)
being the excise duty deducted fromthe turnover is relatable to the
turnover made during the year. Difference of excise duty amounting to
Rs. 5.23 lacs ( Previous year Rs. 0 65 lacs) recognised in profit and
loss account and shown under the schedule of manufacturing expenses is
relatable to difference between closing stock and opening stock.
5. In accordance with the Accounting Standard 28 "on Impairment of
Assets" the company has assessed on the balance sheet date whether the
re are any indications (as listed in paragraph 8 to 10 of the Standard)
with regard to the impairment of any of the assets. Based on such
assessment, it has been ascertained that no potential loss is present
and therefore formal estimate of recoverable a mount ha snot been made.
Accordingly no impairment loss has been provided in the books of
account.
6. The detail of deferred tax liability as on 31st March, 2010.
7. The tax paid under section 115 JB (MAT) of Income Tax Act, 1961 has
been treated as an asset in accordance with the provisions of the
guidance note on accounting for credit available in respect of Minimum
Alternate Tax under the Income Tax Act, 1961.
8. The Company has identified Micro, Small and Medium Enterprises on
the basis of information made available There are no dues to Micro,
Small and Medium Enterprises, that are reportable under the Micro.
Small and Medium Enterprises Development Act 2006.
9. The estimated useful life of the intangible assets [Software] had
been estimated to be six years. It has now been decided to amortize
such intangible assets over a period of five years so as to conform
with the requirements of Accounting Standards [AS] 26 "Intangible
Assets", Accordingly, the amount of amortization of intangible assets
for the year is higher by Rs 2.44 lac.
10. The company has allotted 27,50,000/- equity shares of Rs. 10/-
each at a premium of Rs. 22.50 per share on conversion of equivalent
number of warrants issued on preferential basis. The company had
utilized the proceeds received from this issue for the purpose these
were raised.
11. Exchange difference arising on realization of export bills
amounting to Rs. 4.58 lac (Previous Year Rs. 9.32 lac)
12. Detail of foreign currency exposure that has not been hedged by a
derivative instrument or otherwise is given below.
Currentyear Previous year
Against Debtors (US Dollars) 1,29,603.54 Nil
Against Loan (US Dollars) 4,50,000.00 7,50,000.00
13. The company has leased facilities under ndn cancellable operating
lease arrangements with a lease term of three years which are subject
to renewal at mutual consent thereafter. The lease rent expenses
recognised during the year amounts Rs. 4,10 lac. The future minimum
lease payment in respect of non cancellable operating lease as at 31
March, 2010 for each of the following periods,
(Rs. In lac) i) Not Laterthan one year 6.55
ii) Laterthanoneyearbutnotlaterthanthreeyear 11.96
iii) Laterthanthreeyear Nil
14. Employee Benefits
The summarized position of post-employment benefits and long term
employee benefits recognized in the profit and loss account and Balance
Sheet in accordance with AS[15] is as under:-
(f)The estimates of future salary increases, considered in actuarial
valuation, take account of inflation, seniority, promotion and other
relevant factors, such as supply and demand in employment market
(g) The financial assumptions considered for the calculations are as
under:-
Discount Rate: The discount rate has been chosen by reference to market
yield on government bonds as on date of valuation Expected Rate of
Return: In case of gratuity, the actual return has been taken
Salary Increase: On the basis of past data provided by the company.
(h) Short term employees benefits:
Current year Previous year
(Rs in lacs (Rs in lacs)
Short term leave encashment liability as on 31.03.2010 69.76 55.84
Contribution to Provident Fund 126.19 112 15
15. The related party disclosure as per Accounting Standard-18
prescribed by the Companies (Accounting Standards) Rules 2006
a) KEYMANAGEMENT PERSONNEL AND RELATIVES OF KEY MANAGEMENT PERSONNEL
Key Management Personnel : Sh Rajneesh Oswal, Sh. Vishal Oswal, Sh Anil
Kumar. Sh Kunal Oswal
Relatives of Key Management
Personnel: Mrs. N.K. Oswal, Mrs. Preeti Oswal, Mrs. Shika Oswal
Mrs. Neera, Ms Namita, Ms Swati
b) ASSOCIATE Adinath Textiles Limited
c) ENTERPRISES OVER WHICH KEY MANAGEMENT PERSONNEL AND RELATIVE OF SUCH
PERSONNEL ARE ABLE
EXCERCISE SIGNIFICANT INFLUENCE OR CONTROL
Achin Investment & Mercantile Company
jasvi Investment S Mercantile Company
Shreyaris Financial and Capital Services Limited
Lime Lite Consultants Private Limited
Punctual Dealers (P) Ltd.
Levina Investment & Mercantile Company
Jagvallabh Parasnath Capital Investments Private Limited
Adeep Investment Company.
Virat Investment & Mercantile Company
No transaction carried out during the year with the enterprises stated
above.
(i) No provision for doubtful debts is required to be made for the year
in respect of debt due from related parties. (ii) The related party
relationship is as identified by the Company and relied upon by the
auditors
17. Previous years figures have been wherever necessary, to make
these comparable with current year
18. The figures have been rounded off to the nearest lac rupees
23. The figures in brackets represent deductions.
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