Mar 31, 2018
Company Overview :
Golden Tobacco Limited ("the Company") is public limited company incorporated and domiciled in India and has registered office at Darjipura, Post - Amaliya Vadodara. It is incorporated under the Companies Act, 1956 Corporate Identification Number is (CIN) L16000GJ1955PLC067605 and its shares are listed on the Bombay Stock Exchange Limited and National Stock Exchange in India. The Company is engaged in the business of manufacturing of Tobacco Products and Real Estate.
1. SIGNIFICANT ACCOUNTING POLICIES
1.1 BASIS OF ACCOUNTING
These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ''Ind AS'') as notified under the Companies (Indian Accounting standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendments Rules 2016 prescribed under section 133 of the Companies Act, 2013 read with rule 7 of the Companies (Accounts) Rules, 2014.
The financial statements are prepared and presented on accrual basis and under the historical cost convention, except for the following material items that have been measured at fair value as required by the relevant Ind AS:
0 Certain financial assets and liabilities are measured at Fair value (refer accounting policy on financial instruments -Refer note 1.8 below
0 Defined Benefit and other Long term Employee Benefits - Refer note 1.9 below
1.2 USE OF ESTIMATES AND JUDGEMENTS
The preparation of the financial statements requires that the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The recognition, measurement, classification or disclosure of an item or information in the financial statements is made relying on these estimates.
The estimates and judgements used in the preparation of the financial statements are continuously evaluated and are based on historical experience and various other assumptions and factors (including expectations of future events) that the Company believes to be reasonable under the existing circumstances. Actual results could differ from those estimates. Any revision to accounting estimates is recognised prospectively in current and future periods.
All the assets and liabilities have been classified as current or non-current as per the company''s normal operating cycle of twelve months and other criteria set out in Schedule III to the Companies Act, 2013.
1.3 PROPERTY, PLANT AND EQUIPMENT & INTANGIBLE ASSETS
Property, Plant and Equipment
Certain Land & Buildings and Plant & Equipment were revalued from time to time and are stated at updated book values less depreciation, where applicable. All other items are measured at cost less accumulated depreciation and impairment losses, if any. Costs include freight, import duties, non-refundable purchase taxes and other expenses directly attributable to the acquisition of the asset.
Depreciation/amortisation:
Depreciation on Fixed Assets is provided on written down value method over the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013 (hereinafter referred to as the ''Act'').
Gains/Losses on disposals/de-recognition of property, plant and equipment are determined by comparing proceeds with carrying amount and these are recognized in statement of profit & Loss.
1.4 IMPAIRMENT OF NON FINANCIAL ASSETS
The Company assesses at each reporting date whether there is any objective evidence that a non-financial asset or a group of non-financial assets are impaired. If any such indication exists, the Company estimates the amount of impairment loss. For the purpose of assessing impairment, the smallest identifiable group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets is considered as a cash generating unit. If any such indication exists, an estimate of the recoverable amount of the individual asset/cash generating unit is made.
An impairment loss is calculated as the difference between an asset''s carrying amount and recoverable amount. Losses are recognised in profit or loss and reflected in an allowance account. When the Company considers that there are no realistic prospects of recovery of the asset, the relevant amounts are written off. If the amount of impairment loss subsequently decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, then the previously recognised impairment loss is reversed through profit or loss.
1.5 REVENUE RECOGNITION
Revenue is recognized to the extent that it is probable that the economic benefit will flow to the Company and the revenue can be measured reliably.
Sale of goods:
Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have been transferred to the buyer either at the time of dispatch or delivery or when the risk of loss transfers. Export sales are recognized based on the shipped on board date as per bill of lading, which is when substantial risks and rewards of ownership are passed to the customers.
Revenue from sale of goods is net of taxes and recovery of charges collected from customers like transport, packing etc. Provision is made for returns when appropriate. Revenue is measured at the fair value of consideration received or receivable and is net of price discounts, allowance for volume rebates and similar items.
Claims / Refunds not ascertainable with reasonable certainty are accounted for, on final settlement and are recognized as revenue on certainty of receipt on prudent basis.
Rendering of services:
Revenue from sale of services are recognized when the services are rendered.
Other Income
Dividend income on investments is recognised when the right to receive dividend is established.
Interest income is recognized on a time proportionate basis taking into account the amounts invested and the rate of interest. For all financial instruments measured at amortised cost, interest income is recorded using the Effective interest rate method to the net carrying amount of the financial assets.
1.6 INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at lower of estimated market value at the time of conversion as per the expert opinion received in the matter and estimated net realisable value.
(ii) Other Inventories are valued at lower of cost and estimated net realisable value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO basis.
c) Cost of finished goods, work-in-progress and other materials includes conversion and other costs incurred in bringing the inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to revenue as and when purchased.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and the estimated costs necessary to make the sale.
Adequate allowance is made for obsolete and slow moving items.
1.7 FINANCIAL INSTRUMENTS Financial assets - Initial recognition
Financial assets are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial assets other than trade receivables are initially recognised at fair value plus transaction costs for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Statement of Profit and Loss.
Subsequent measurement
Financial assets, other than equity instruments, are subsequently measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss on the basis of both:
(a) the entity''s business model for managing the financial assets and
(b) the contractual cash flow characteristics of the financial asset.
(a) Measured at amortised cost:
A financial asset is measured at amortised cost, if it is held under the hold to collect business model i.e. held with an objective of holding the assets to collect contractual cash flows and the contractual cash flows are solely payments of principal and interest on the principal outstanding. Amortised cost is calculated using the effective interest rate ("EIR") method by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in interest income in the Statement of Profit and Loss. The losses arising from impairment are recognised in the Statement of Profit and Loss. On derecognition, gain or loss, if any, is recognised to Statement of Profit and Loss.
(b) Measured at fair value through other comprehensive income (FVOCI):
A financial asset is measured at FVOCI, if it is held under the hold to collect and sell business model i.e. held with an objective to collect contractual cash flows and selling such financial asset and the contractual cash flows are solely payments of principal and interest on the principal outstanding. It is subsequently measured at fair value with fair value movements recognised in the OCI, except for interest income which recognised using EIR method. The losses arising from impairment are recognised in the Statement of Profit and Loss. On derecognition, cumulative gain or loss previously recognised in the OCI is reclassified from the equity to Statement of Profit and Loss.
(c) Measured at fair value through profit or loss (FVTPL):
Investment in financial asset other than equity instrument, not measured at either amortised cost or FVOCI is measured at FVTPL. Such financial assets are measured at fair value with all changes in fair value, including interest income and dividend income if any, recognised in the Statement of Profit and Loss.
Equity Instruments:
All investments in equity instruments classified under financial assets are subsequently measured at fair value. Equity instruments which are held for trading are measured at FVTPL.
For all other equity instruments, the Company may, on initial recognition, irrevocably elect to measure the same either at FVOCI or FVTPL. The Company makes such election on an instrument-by-instrument basis. Fair value changes on an equity instrument shall be recognised in Statement of Profit and Loss unless the Company has elected to measure such instrument at FVOCI. Fairvalue changes excluding dividends, on an equity instrument measured at FVOCI are recognised in the OCI. Amounts recognised in Other Comprehensive Income (OCI) are not subsequently transferred to Statement of Profit and Loss. Dividend income on the investments in equity instruments are recognised in Statement of Profit and Loss.
Impairment
The Company recognises a loss allowance for Expected Credit Losses (ECL) on financial assets that are measured at amortised cost and at FVOCI. The credit loss is difference between all contractual cash flows that are due to an entity in accordance with the contract and all the cash flows that the entity expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate. This is assessed on an individual or collective basis after considering all reasonable and supportable including that which is forward-looking.
The Company''s trade receivables or contract revenue receivables do not contain significant financing component and loss allowance on trade receivables is measured at an amount equal to life time expected losses i.e. expected cash shortfall, being simplified approach for recognition of impairment loss allowance.
Under simplified approach, the Company does not track changes in credit risk. Rather it recognizes impairment loss allowance based on the lifetime ECL at each reporting date right from its initial recognition. The Company uses a provision matrix to determine impairment loss allowance on the portfolio of trade receivables.
The provision matrix is based on its historically observed default rates over the expected life of the trade receivable and is adjusted for forward looking estimates. At every reporting date, the historical observed default rates are updated and changes in the forward-looking estimates are analysed.
For financial assets other than trade receivables, the Company recognises 12-month expected credit losses for all originated or acquired financial assets if at the reporting date the credit risk of the financial asset has not increased significantly since its initial recognition. The expected credit losses are measured as lifetime expected credit losses if the credit risk on financial asset increases significantly since its initial recognition. If, in a subsequent period, credit quality of the instrument improves such that there is no longer significant increase in credit risks since initial recognition, then the Company reverts to recognizing impairment loss allowance based on 12 months ECL.
The impairment losses and reversals are recognised in Statement of Profit and Loss. For equity instruments and financial assets measured at FVTPL, there is no requirement for impairment testing.
De-recognition
The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers rights to receive cash flows from an asset, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Financial Liabilities
Initial Recognition and measurement
Financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially recognised at fair value net of transaction costs for all financial liabilities not carried at fair value through profit or loss.
The Company''s financial liabilities includes trade and other payables, loans and borrowings including bank overdrafts and derivative instruments.
Subsequent measurement
Financial liabilities measured at amortised cost are subsequently measured at using EIR method. Financial liabilities carried at fair value through profit or loss are measured at fair value with all changes in fair value recognised in the Statement of Profit and Loss.
Loans & Borrowings:
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using EIR method. Gains and losses are recognized in profit & loss when the liabilities are derecognized as well as through EIR amortization process.
Financial Guarantee Contracts
Financial guarantee contracts issued by the Company are those contracts that requires a payment to be made or to reimburse the holder for a loss it incurs because the specified debtors fails to make payment when due in accordance with the term of a debt instrument. Financial guarantee contracts are recognized initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee.
Subsequently the liability is measured at the higher of the amount of loss allowance determined as per impairment requirements of Ind AS 109 and the amount recognized less cumulative adjustments.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
1.8 FAIR VALUE MEASUREMENT:
The Company measures financial instruments, such as, derivatives at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
u In the principal market for the asset or liability, or
u In the absence of a principal market, in the most advantageous market for the asset or liability
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant''s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
u Level 1 â Quoted (unadjusted) market prices in active markets for identical assets or liabilities
u Level 2 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
u Level 3 â Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
1.9 EMPLOYEE BENEFITS
The Company has provides following post-employment plans such as:
(a) Defined benefit plans such a gratuity and
(b) Defined contribution plans such as Provident fund & Superannuation fund a) Defined-benefit plan:
The liability or asset recognised in the balance sheet in respect of defined benefit gratuity plan is the present value of defined benefit obligations at the end of the reporting period less fair value of plan assets. The defined benefit obligations is calculated annually by actuaries through actuarial valuation using the projected unit credit method.
The Company recognises the following changes in the net defined benefit obligation as an expense in the statement of profit and loss:
(a) Service costs comprising current service costs, past-service costs, gains and losses on curtailment and non-routine settlements; and
(b) Net interest expense or income
The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and fair value of plan assets. This cost is included in employee benefit expenses in the statement of the profit & loss.
Re-measurement comprising of actuarial gains and losses arising from
(a) Re-measurement of Actuarial(gains)/losses
(b) Return on plan assets, excluding amount recognized in effect of asset ceiling
(c) Re-measurement arising because of change in effect of asset ceiling are recognised in the period in which they occur directly in Other comprehensive income. Re-measurement are not reclassified to profit or loss in subsequent periods.
Ind AS 19 requires the exercise of judgment in relation to various assumptions including future pay rises, inflation and discount rates and employee and pensioner demographics. The Company determines the assumptions in conjunction with its actuaries, and believes these assumptions to be in line with best practice, but the application of different assumptions could have a significant effect on the amounts reflected in the income statement, other comprehensive income and balance sheet. There may be also interdependency between some of the assumptions.
b) Defined-contribution plan:
Under defined contribution plans, provident fund, the Company pays pre-defined amounts to separate funds and does not have any legal or informal obligation to pay additional sums. Defined Contribution plan comprise of contributions to the employees'' provident fund with the government, superannuation fund and certain state plans like Employees'' State Insurance and Employees'' Pension Scheme. The Company''s payments to the defined contribution plans are recognised as expenses during the period in which the employees perform the services that the payment covers.
c) Other employee benefits:
(a) Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related services are recognised as a liability at the present value of the obligation as at the Balance sheet date determined based on an actuarial valuation.
(b) Undiscounted amount of short-term employee benefits expected to be paid in exchange for the services rendered by employees are recognised during the period when the employee renders the related services.
d) Expenses incurred towards voluntary retirement scheme are charged to the statement of profit and loss as and when incurred.
e) Other benefits comprising of discretionary long service awards are recognized as and when determined.
1.10 LEASES
A lease is classified at the inception date as a finance lease or an operating lease. Leases under which the Company assumes substantially all the risks and rewards of ownership are classified as finance leases. When acquired, such assets are capitalized at fair value or present value of the minimum lease payments at the inception of the lease, whichever is lower. Lease payments are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the statement of profit and loss
Other leases are treated as operating leases, with payments are recognised as expense in the statement of profit & loss on a straight-line basis over the lease term.
1.11 FOREIGN CURRENCY TRANSACTIONS
a) Initial Recognition
Transactions in foreign currency are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising on foreign exchange transactions settled during the year are recognized in the Statement of Profit and Loss of the year.
b) Measurement of Foreign Currency Items at the Balance Sheet Date
Foreign currency monetary items of the Company are restated at the closing exchange rates. Non monetary items are recorded at the exchange rate prevailing on the date of the transaction. Exchange differences arising out of these transactions are charged to the Statement of Profit and Loss.
1.12 TAXES ON INCOME
Income tax comprises current and deferred tax. Income tax expense is recognized in the statement of profit and loss except to the extent it relates to items directly recognized in equity or in other comprehensive income.
Current tax is based on taxable profit for the year. Taxable profit is different from accounting profit due to temporary differences between accounting and tax treatments, and due to items that are never taxable or tax deductible. Tax provisions are included in current liabilities. Interest and penalties on tax liabilities are provided for in the tax charge. The Company offsets, the current tax assets and liabilities (on a year on year basis) where it has a legally enforceable right and where it intends to settle such assets and liabilities on a net basis or to realise the assets and liabilities on net basis.
Deferred income tax is recognized using the balance sheet approach. Deferred income tax assets and liabilities are recognized for deductible and taxable temporary differences arising between the tax base of assets and liabilities and their carrying amount in financial statements. Deferred income tax asset are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax assets are not recognised where it is more likely than not that the assets will not be realised in the future.
The carrying amount of deferred income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.
Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Minimum Alternative Tax (''MAT'') credit is recognised as an asset only when and to the extent there is convincing evidence that the Company will pay normal income-tax during the specified period. The Company reviews the same at each balance sheet date and writes down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that Company will pay normal income-tax during the specified period.
1.13 RESEARCH AND DEVELOPMENT EXPENDITURE
Research costs are expensed as incurred. Product development costs are expensed as incurred unless technical and commercial feasibility of the project is demonstrated, further economic benefits are probable, the Company has an intention and ability to complete and use or sell the product and the costs can be measured reliably.
1.14 PROVISIONS AND CONTINGENCIES
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract.
A disclosure for contingent liabilities is made where there is a possible obligation or a present obligation that may probably not require an outflow of resources or an obligation for which the future outcome cannot be ascertained with reasonable certainty. When there is a possible or a present obligation where the likelihood of outflow of resources is remote, no provision or disclosure is made.
1.15 CASH AND CASH EQUIVALENTS
Cash and Cash equivalents include cash and Cheque in hand, bank balances, demand deposits with banks and other short-term highly liquid investments that are readily convertible to known amounts of cash & which are subject to an insignificant risk of changes in value where original maturity is three months or less.
1.16 CASH FLOW STATEMENT
Cash flows are reported using the indirect method where by the profit before tax is adjusted for the effect of the transactions of a non-cash nature, any deferrals or accruals of past and future operating cash receipts or payments and items of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the company are segregated.
1.17 BORROWING COST
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of Cost of that assets, during the period till all the activities necessary to prepare the Qualifying assets for its intended use or sale are complete during the period of time that is required to complete and prepare the assets for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Other borrowing costs are recognized as an expense in the period in which they are incurred.
1.18 EARNINGS PER SHARE
Basic EPS is arrived at based on net profit after tax available to equity shareholders to the weighted average number of equity shares outstanding during the year.
The diluted EPS is calculated on the same basis as basic EPS, after adjusting for the effects of potential dilutive equity shares unless impact is anti-dilutive.
1.19 SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to Chief Operating Decision Maker (CODM).The Company has identified its Managing Director as CODM which assesses the operational performance and position of the Company and makes strategic decisions.
Recent Accounting pronouncements
IND AS 115 - Revenue from Contracts with Customers
On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Ind AS 115, Revenue from Contract with Customers effective from April 1, 2018. The core principle of the new standard is that an entity should recognize revenue when (or as) the entity satisfies a performance obligation by transferring a promised good or service (ie an asset) to a customer. An asset is transferred when (or as) the customer obtains control of that asset. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers.
Control of an asset refers to the ability to direct the use of, and obtain substantially all of the remaining benefits from, the asset. Control includes the ability to prevent other entities from directing the use of, and obtaining the benefits from, an asset.
Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, Ministry of Corporate Affairs ("MCA") has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 effective from April 1, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The standard is applicable from 1st April 2018 i.e. Financial Year2018-19 and there is no impact on the financial statements
E. COMMODITY RISK
Principal Raw Material for Company''s products is variety of Tobacco (a product prepared from the leaves of the tobacco plant by curing them) which are procured from the Tobacco Board on auction basis once in year and partly is from local traders. The Company sources its most of the raw material requirement from Andhra Pradesh where the agriculture of tobacco leaf is cultivated. The prices of the tobacco may fluctuate depending upon the monsoon in the season.The Company effectively manages deals with availability of material as well as price volatility through:
1. Widening its sourcing base
2. Appropriate contracts and commitments
3. Well planned procurement & inventory strategy
33 CAPITAL RISK MANAGEMENT
Presently, the Company has overdue borrowings and in the process of settlement with the lenders as refer in note no 42(d) by monetization of the remaining unsold real estate in near future. Due to stressed financial position, the Company has already breached the financial covenants.
34 DISCLOSURE PURSUANT TO IND AS - 19 "EMPLOYEE BENEFITS"
i) Gratuity:
In accordance with the applicable laws, the Company provides for gratuity, a defined benefit retirement plan ("The Gratuity Plan") covering eligible employees. The Gratuity Plan provides for a lump sum payment to vested employees on retirement (subject to completion of five years of continuous employment), death, incapacitation or termination of employment that are based on last drawn salary and tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation on the reporting date.
35 FIRST-TIME ADOPTION OF IND AS
The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 1st, 2017, with a transition date of April 1st, 2016. The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements for the year ended 31st March, 2018, be applied retrospectively and consistently for all financial years presented. However, in preparing these Ind AS financial statements, the Company has availed of certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognised directly in equity (retained earnings or another appropriate category of equity).
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A. Optional Exemptions
(a) Deemed Cost
Ind AS 101 permits to measure all its property, plants equipments at their previous GAAP carrying value i.e. being deemed cost represented by Gross Block reduced by accumulated depreciation on April 1, 2016.
(b) Investments in subsidiaries
The Company present separate financial statement wherein Ind AS 27 requires it to measure its investment in subsidiaries and associate either at cost or in accordance with the Ind AS 109. The Company at first time adoption has measured such investment at cost in accordance with the Ind AS 27, wherein it has option to measure the investments in its separate opening Ind AS balance sheet at cost as determined in accordance with Ind AS 27 or deemed cost. Deemed cost shall be fair value at the entity''s date of transition to Ind AS in its separate financial statement or previous GAAP carrying amount as on that date. The Company has adopted deemed cost being previous GAAP carrying amount as on date of transition.
B. Mandatory Exceptions
(a) Estimates
An entity''s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies).
Ind AS estimates as at 1 April 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:- Investment in equity instruments carried at FVTPL or FVOCI; and- Impairment of financial assets based on expected credit loss model.
(b) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
C. Transition to Ind AS - Reconciliations
The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:
I. Reconciliation of Balance sheet as at April 1, 2016 and March 31, 2017
II. Reconciliation of Statement of Profit and Loss for the year ended March 31, 2017
III. Reconciliation of Equity as at April 1, 2016 and March 31, 2017
The presentation requirements under Previous GAAP differs from Ind AS and hence Previous GAAP information has been regrouped for ease of reconciliation with Ind AS. The Regrouped Previous GAAP information is derived from the Financial Statements of the Company prepared in accordance with Previous GAAP.
Mar 31, 2017
A. The financial statements are prepared under the historical cost convention (except for revaluation of certain Fixed Assets), on the accounting principles of a going concern, in accordance with the applicable accounting standards notified by the Companies Act, 2013 and on accrual basis.
All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result may sometime differ from these estimates. Any revision to accounting estimates is recognized prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Equipment were revalued from time to time and are stated at updated book values less depreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortization. Cost comprises of all expenses incurred up to commissioning/putting the assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to the statement of profit and loss. If at the Balance Sheet date, there is any indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.
D. DEPRECIATION / AMORTISATION
Depreciation on Fixed Assets is provided on written down value method over the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013 (hereinafter referred to as the ''Act'').
E. INVESTMENTS
Noncurrent investments are carried at cost less write offs, if any, for diminution other than temporary in the value of such investments, determined for each investment individually.
F. VALUATION OF INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at lower of estimated market value at the time of conversion as per the expert opinion received in the matter and estimated net realizable value.
(ii) Other Inventories are valued at lower of cost and estimated net realizable value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO basis.
c) Cost of finished goods, work-in-progress and other materials includes conversion and other costs incurred in bringing the inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognized when the property and all the significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales include Excise Duty and are net of Discounts / Margins (as considered appropriate by the management), Value Added Tax and Damaged & Dented stocks. Damaged & Dented stocks are accounted/ provided for as and when inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are made under defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner. The superannuation fund is administered by the Trustees of the GTL Management Staff Superannuation Scheme and is funded under Group Superannuation Scheme of Life Insurance Company Limited. The Company is required to contribute a specific percentage of payroll cost towards retirement benefits. The contributions are charged to Statement of profit and loss in the respective year.
(b) Leave entitlement liability is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss.
(c) Gratuity liability is defined benefit plan and is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the Statement of profit and loss and that of capital nature are shown as an addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign currency are restated at the rate of exchange prevailing at the year end.
c) In case of forward contracts, the premium/discount is dealt with in the Statement of profit and loss over the period of the contracts.
d) The exchange differences are adjusted to Statement of profit and loss.
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of such assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of profit and loss.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable/virtual certainty that these would be realized in future.
M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts. Disputed show cause notices / show cause-cum-demand notices are not considered as contingent liabilities. Contingent assets are not recognized or disclosed in the financial statements.
Mar 31, 2016
A. The financial statements are prepared under the historical cost convention (except for revaluation of certain Fixed Assets), on the accounting principles of a going concern, in accordance with the applicable accounting standards notified by the Companies Act, 2013 and on accrual basis.
All income and expenses to the extent considered receivable / payable with reasonable certainty are accounted for on accrual basis.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosures of contingent liabilities on the date of financial statements and reported amounts of revenue and expenses for that year. Actual result may some time differ from these estimates. Any revision to accounting estimates is recognized prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Equipment were revalued from time to time and are stated at updated book values less depreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortization. Cost comprises of all expenses incurred up to commissioning/putting the assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the carrying value of such asset is reduced to its recoverable amount and the impairment loss is charged to the statement of profit and loss. If at the Balance Sheet date, there is any indication that a previously assessed impairment loss no longer exists, then such loss is reversed and the asset is restated to that effect.
D. DEPRECIATION / AMORTISATION
Depreciation on Fixed Assets is provided on written down value method over the useful lives of assets as prescribed under Part C of Schedule II of the Companies Act, 2013 (hereinafter referred to as the ''Act'').
E. INVESTMENTS
Noncurrent investments are carried at cost less write offs, if any, for diminution other than temporary in the value of such investments, determined for each investment individually.
F. VALUATION OF INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at lower of estimated market value at the time of conversion as per the expert opinion received in the matter and estimated net realizable value.
(ii) Other Inventories are valued at lower of cost and estimated net realizable value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO basis.
c) Cost of finished goods, work-in-progress and other materials includes conversion and other costs incurred in bringing the inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognized when the property and all the significant risks and rewards of ownership are transferred to the buyer and no significant uncertainty exists regarding the amount of consideration that is derived from the sale of goods. Sales include Excise Duty and are net of Discounts / Margins (as considered appropriate by the management), Value Added Tax and Damaged & Dented stocks. Damaged & Dented stocks are accounted/ provided for as and when inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are made under defined contribution retirement benefit plans for qualifying employees. The provident fund plan is operated by the Regional Provident Fund Commissioner. The superannuation fund is administered by the Trustees of the GTL Management Staff Superannuation Scheme and is funded under Group Superannuation Scheme of Life Insurance Company Limited. The Company is required to contribute a specific percentage of payroll cost towards retirement benefits. The contributions are charged to Statement of profit and loss in the respective year.
(b) Leave entitlement liability is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss.
(c) Gratuity liability is defined benefit plan and is provided for on the basis of actuarial valuation carried out at the year-end. Actuarial gains and losses are recognized immediately in the statement of profit and loss.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the Statement of profit and loss and that of capital nature are shown as an addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign currency are restated at the rate of exchange prevailing at the year end.
c) In case of forward contracts, the premium/discount is dealt with in the Statement of profit and loss over the period of the contracts.
d) The exchange differences are adjusted to Statement of profit and loss.
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of qualifying assets are capitalized as part of the cost of such assets up to the date when such asset is ready for its intended use. Other borrowing costs are charged to the Statement of profit and loss.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable income for the current accounting year in accordance with the Income Tax Act, 1961. The deferred tax for timing differences between the book and tax profits for the year is accounted for, using the tax rates and laws that have been substantively enacted as of the Balance Sheet date. Deferred tax assets arising from timing differences are recognized to the extent there is reasonable/virtual certainty that these would be realized in future.
M. PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefits will be required to settle an obligation. Contingent liabilities, if material, are disclosed by way of notes to accounts. Disputed show cause notices / show cause-cum-demand notices are not considered as contingent liabilities. Contingent assets are not recognized or disclosed in the financial statements.
Mar 31, 2014
A. The financial statements are prepared under the historical cost
convention (except for revaluation of certain Fixed Assets), on the
accounting principles of a going concern, in accordance with the
applicable accounting standards prescribed by (Accounting Standards)
Rules 2006 and on accrual basis.
All income and expenses to the extent considered receivable / payable
with reasonable certainty are accounted for on accrual basis.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual result may some time differ from these
estimates. Any revision to accounting estimates is recognized
prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Equipment were revalued from
time to time and are stated at updated
book values less depreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortisation. Cost
comprises of all expenses incurred upto commissioning/putting the
assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any
indication that any asset may be impaired. If any such indication
exists, the carrying value of such asset is reduced to its recoverable
amount and the impairment loss is charged to the statement of profit
and loss. If at the Balance Sheet date, there is any indication that a
previously assessed impairment loss no longer exists, then such loss is
reversed and the asset is restated to that effect.
D. DEPRECIATION / AMORTISATION
a) Depreciation on Fixed Assets is provided for on written down value
method in accordance with Schedule XIV to the Companies Act, 1956
(hereinafter referred to as the ''Act''). In respect of assets whose
actual cost does not exceed Rupees Five thousand and acquired before
01.04.1993, depreciation is continued to be provided for at the general
rates applicable to them under the said Schedule and those acquired
thereafter, at the rate of 100% in the year of acquisition.
b) Depreciation on the revalued Fixed Assets is provided for on
straight line method on the increased book value of the assets (Net of
scrap/ salvage value) based on the balance life of the said assets as
estimated by the valuer. Out of the depreciation so calculated, the
amount of depreciation as stated in (a) above is charged to the
Statement of profit and loss and the balance is adjusted against a like
amount transferred from Revaluation Reserve.
c) Depreciation on spares purchased subsequently for specific machinery
and having irregular use is provided prospectively over the residual
life of the specific machinery.
E. INVESTMENTS
Noncurrent investments are carried at cost less write offs, if any, for
diminution other than temporary in the value of such investments,
determined for each investment individually.
F. VALUATION OF INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at lower of
estimated market value at the time of conversion as
per the expert opinion received in the matter and estimated net
realisable value.
(ii) Other Inventories are valued at lower of cost and estimated net
realisable value. Obsolete, defective and unserviceable stocks are
provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO
basis.
c) Cost of finished goods, work-in-progress and other materials
includes conversion and other costs incurred in bringing the
inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to
revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognised when the property and all the
significant risks and rewards of ownership are transferred to the buyer
and no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of goods. Sales include
Excise Duty and are net of Discounts / Margins (as considered
appropriate by the management), Value Added Tax and Damaged & Dented
stocks. Damaged & Dented stocks are accounted/ provided for as and when
inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of
Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are
made under defined contribution retirement benefit plans for qualifying
employees. The provident fund plan is operated by the Regional
Provident Fund Commissioner. The superannuation fund is administered by
the Trustees of the GTL Management Staff Superannuation Scheme and is
funded under Group Superannuation Scheme of Life Insurance Company
Limited. The Company is required to contribute a specific percentage
of payroll cost towards retirement benefits. The contributions are
charged to Statement of profit and loss in the respective year.
(b) Leave entitlement liability is provided for on the basis of
actuarial valuation carried out at the year-end. Actuarial gains and
losses are recognized immediately in the statement of profit and loss.
(c) Gratuity liability is defined benefit plan and is provided for on
the basis of actuarial valuation carried out at the year- end.
Actuarial gains and losses are recognized immediately in the statement
of profit and loss.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the
Statement of profit and loss and that of capital nature are shown as an
addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of
exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign
currency are restated at the rate of exchange prevailing at the year
end.
c) In case of forward contracts, the premium/discount is dealt with in
the Statement of profit and loss over the period of the contracts.
d) The exchange differences are adjusted to Statement of profit and
loss.
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of profit and loss.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961. The deferred tax for timing differences between the book
and tax profits for the year is accounted for, using the tax rates and
laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable/virtual certainty that these would be
realized in future.
M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities, if material,
are disclosed by way of notes to accounts. Disputed show cause notices
/ show cause-cum-demand notices are not considered as contingent
liabilities. Contingent assets are not recognized or disclosed in the
financial statements.
Mar 31, 2013
A. The financial statements are prepared under the historical cost
convention (except for revaluation of certain Fixed Assets), on the
accounting principles of a going concern, in accordance with the
applicable accounting standards prescribed by (Accounting Standards)
Rules 2006 and on accrual basis.
All income and expenses to the extent considered receivable / payable
with reasonable certainty are accounted for on accrual basis.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual result may some time differ from these
estimates. Any revision to accounting estimates is recognized
prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Equipment were revalued
from time to time and are stated at updated book values less
depreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortisation. Cost
comprises of all expenses incurred upto commissioning/putting the
assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any
indication that any asset may be impaired. If any such indication
exists, the carrying value of such asset is reduced to its recoverable
amount and the impairment loss is charged to the statement of profit
and loss. If at the Balance Sheet date, there is any indication that a
previously assessed impairment loss no longer exists, then such loss is
reversed and the asset is restated to that effect.
D. DEPRECIATION / AMORTISATION
a) Depreciation on Fixed Assets is provided for on written down value
method in accordance with Schedule XIV to the Companies Act, 1956
(hereinafter referred to as the A'' ct)''. In respect of assets whose
actual cost d oes not exceed Rupees Five thousand and acquired before
01.04.1993, depreciation is continued to be provided for at the general
rates applicable to them under the said Schedule and those acquired
thereafter, at the rate of 100% in the year of acquisition.
b) Depreciation on the revalued Fixed Assets is provided for on
straight line method on the increased book value of the assets (Net of
scrap/ salvage value) based on the balance life of the said assets as
estimated by the valuer. Out of the depreciation so calculated, the
amount of depreciation as stated in (a) above is charged to the
Statement of profit and loss and the balance is adjusted against a like
amount transferred from Revaluation Reserve.
c) Depreciation on spares purchased subsequently for specific machinery
and having irregular use is provided prospectively over the residual
life of the specific machinery.
E. INVESTMENTS
Noncurrent investments are carried at cost less write offs, if any, fo
r diminution other than temporary in the value of such investments,
determined for each investment individually.
F. VALUATION OF INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at estimated
market value as per the expert opinion received in the matter.
(ii) Other Inventories are valued at lower of cost and estimated net
realisable value. Obsolete, defective and unserviceable stocks are
provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO
basis.
c) Cost of finished goods, work-in-progress and other materials
includes conversion and other costs incurred in bringing the
inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to
revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognised when the property and all the
significant risks and rewards of ownership are transferred to the buyer
and no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of goods. Sales include
Excise Duty and are net of Discounts / Margins (as considered
appropriate by the management), Value Added Tax and Damaged & Dented
stocks. Damaged & Dented stocks are accounted/ provided for as and when
inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of
Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are
made under defined contribution retirement benefit plans for qualifying
employees. The provident fund plan is operated by the Regional
Provident Fund Commissioner. The superannuation fund is administered by
the Trustees of the GTL Management Staff Superannuation Scheme and is
funded under Group Superannuation Scheme of Life Insurance Company
Limited. The Company is required to contribute a specific percentage
of payroll cost towards retirement benefits. The contributions are
charged to Statement of profit and loss in the respective year.
(b) Leave entitlement liability is provided for on the basis of
actuarial valuation carried out at the year-end. Actuarial gains and
losses are recognized immediately in the statement of profit and loss.
(c) Gratuity liability is defined benefit plan and is provided for on
the basis of actuarial valuation carried out at the year- end.
Actuarial gains and losses are recognized immediately in the statement
of profit and loss.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the
Statement of profit and loss and that of capital nature are shown as an
addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of
exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign
currency are restated at the rate of exchange prevailing at the year
end.
c) In case of forward contracts, the premium/discount is dealt with in
the Statement of profit and loss over the period of the contracts.
d) The exchange differences are adjusted to Statement of profit and
loss.
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of
qualifying assets are capitalized as part of the cost of such assets up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of profit and loss.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961. The deferred tax for timing differences between the book
and tax profits for the year is accounted for, using the tax rates and
laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable/virtual certainty that these would be
realized in future.
M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities, if material,
are disclosed by way of notes to accounts. Disputed show cause notices
/ show cause-cum-demand notices are not considered as contingent
liabilities. Contingent assets are not recognized or disclosed in the
financial statements.
Mar 31, 2012
A. The financial statements are prepared under the historical cost
convention (except for revaluation of certain Fixed Assets), on the
accounting principles ofa going concern, in accordance with the
applicable accounting standards and on accrual basis except
specifically stated here below.
All income and expenses to the extent considered receivable / payable
with reasonable certainty are accounted for on accrual basis except
specifically stated here below.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual result may some time differ from these
estimates. Any revision to accounting estimates is recognized
prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Equipment were revalued
from time to time and are stated at updated book values less
depreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortisation. Cost
comprises of all expenses incurred upto commissioning/putting the
assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any
indication that any asset may be impaired. If any such indication
exists, the carrying value of such asset is reduced to its recoverable
amount and the impairment loss is charged to the statement of profit
and loss. If at the Balance Sheet date, there is any indication that a
previously assessed impairment loss no longer exists, than such loss is
reversed and the asset is restated to that effect.
D. DEPRECIATION/AMORTISATION
a) Depreciation on Fixed Assets is provided for on written down value
method in accordance with Schedule XIV to the Companies Act, 1956
(hereinafter referred to as the 'Act'). In respect of assets whose
actual cost does not exceed Rupees Five thousand and acquired before
01.04.1993, depreciation is continued to be provided for at the general
rates applicable to them under the said Schedule and those acquired
thereafter, at the rate of 100% in the year of acquisition.
b) Depreciation on the revalued Fixed Assets is provided for on
straight line method on the increased book value of the assets (Net of
scrap/ salvage value) based on the balance life of the said assets as
estimated by the valuer. Out of the depreciation so calculated, the
amount of depreciation as stated in (a) above is charged to the
Statement of profit and loss and the balance is adjusted against a like
amount transferred from Revaluation Reserve.
c) Depreciation on spares purchased subsequently for specific machinery
and having irregular use is provided prospectively over the residual
life of the specific machinery.
E. INVESTMENTS
Non current investments are carried at cost less write offs, if any,
for diminution other than temporary in the value of such investments,
determined for each investment individually.
F. VALUATION OF INVENTORIES
a) (i) Stock in Trade-Immovable Properties is valued at estimated
market value as per the expert opinion received in the matter.
(ii) Other Inventories are valued at lower of cost and estimated net
realisable value. Obsolete, defective and unserviceable stocks are
provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO
basis.
c) Cost of finished goods, work-in-progress and other materials
includes conversion and other costs incurred in bringing the
inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to
revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognised when the property and all the
significant risks and rewards of ownership are transferred to the buyer
and no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of goods. Sales include
Excise Duty and are net of Discounts / Margins (as considered
appropriate by the management), Value Added Tax and Damaged & Dented
stocks. Damaged & Dented stocks are accounted/ provided for as and when
inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of
Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are
made under defined contribution retirement benefit plans for qualifying
employees. The provident fund plan is operated by the Regional
Provident Fund Commissioner. The superannuation fund is administered by
the Trustees of the GTL Management Staff Superannuation Scheme and is
funded under Group Superannuation Scheme of Life Insurance Company
Limited. The Company is required to contribute a specific percentage of
payroll cost towards retirement benefits. The contributions are charged
to Statement of profit and loss in the respective year.
(b) Leave entitlement liability is provided for on the basis of
actuarial valuation carried out at the year-end. Actuarial gains and
losses are recognized immediately in the statement of profit and loss.
(c) Gratuity liability is paid in accordance to a defined benefit plan
but is accounted for as and when employees retire and the amount is
due.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the
Statement of profit and loss and that of capital nature are shown as an
addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of
exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign
currency are restated at the rate of exchange prevailing at the
yearend.
c) In case of forward contracts, the premium/discount is dealt with in
the Statement of profit and loss over the period of the contracts.
d) The exchange differences are adjusted to Statement of profit and
loss.
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets up
to the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Statement of profit and loss.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961. The deferred tax for timing differences between the book
and tax profits for the year is accounted for, using the tax rates and
laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable/virtual certainty that these would be
realized in future.
M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities, if material,
are disclosed by way of notes to accounts. Disputed show cause notices
/ show cause-cum-demand notices are not considered as contingent
liabilities. Contingent assets are not recognized or disclosed in the
financial statements.
Mar 31, 2010
A. The financial statements are prepared under the historical cost
convention (except for revaluation of certain Fixed Assets), on the
accounting principles of a going concern, in accordance with the
applicable accounting standards and on accrual basis except
specifically stated herebelow.
All income and expenses to the extent considered receivable / payable
with reasonable certainty are accounted for on accrual basis except
specifically stated herebelow.
B. USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) requires management to make
estimates and assumptions that affect the reported amounts of assets
and liabilities and the disclosures of contingent liabilities on the
date of financial statements and reported amounts of revenue and
expenses for that year. Actual result may some time differ from these
estimates. Any revision to accounting estimates is recognized
prospectively.
C. FIXED ASSETS
I. a) Certain Land & Buildings and Plant & Machinery were revalued
from time to time and are stated at updated book values
lessdepreciation, where applicable.
b) Other assets are stated at cost less depreciation/amortisation .
Cost comprises of all expenses incurred upto commission ing/ putting
the assets to use.
II. IMPAIRMENT OF ASSETS
The Company assesses at each Balance Sheet date whether there is any
indication that any asset may be impaired. If any such indication
exists, the carrying value of such asset is reduced to its recoverable
amount and the impairment loss is charged to the profit and loss
account. If at the Balance Sheet date, there is any indication that a
previously assessed impairment loss no longer exists, then such loss is
reversed and the asset is restated to that effect.
D. DEPRECIATION / AMORTISATION
a) Depreciation on Fixed Assets is provided for on written down value
method in accordance with Schedule XIV to the Companies Act, 1956
(hereinafter referred to as the ÃActÃ). In respect of assets whose
actual cost does not exceed Rupees Five thousand and acquired before
01.04.1993, depreciation is continued to be provided for at the general
rates applicable to them under the said Schedule and those acquired
thereafter, at the rate of 100% in the year of acquisition.
b) Depreciation on the revalued Fixed Assets is provided for on
straight line method on the increased book value of the assets (Net of
scrap/ salvage value) based on the balance life of the said assets as
estimated by the valuer. Out of the depreciation so calculated, the
amount of depreciation as stated in (a) above is charged to the Profit
and Loss Account and the balance is adjusted against a like amount
transferred from Revaluation Reserve.
c) Depreciation on spares purchased subsequently for specific machinery
and having irregular use is provided prospectively over the residual
life of the specific machinery.
E. INVESTMENTS
Long Term investments are carried at cost less write offs, if any, for
diminution other than temporary in the value of such investments,
determined for each investment individually.
F. VALUATION OF INVENTORIES
a) Inventories are valued at lower of cost and estimated net realisable
value. Obsolete, defective and unserviceable stocks are provided for.
b) Cost of Inventories is computed on moving weighted average /FIFO
basis.
c) Cost of finished goods, work-in-progress and other materials
includes conversion and other costs incurred in bringing the
inventories to their present location and condition.
d) Advertisement and Sales promotion materials/items are charged to
revenue as and when purchased.
G. REVENUE RECOGNITION
a) Sale of goods is recognised when the property and all the
significant risks and rewards of ownership are transferred to the buyer
and no significant uncertainty exists regarding the amount of
consideration that is derived from the sale of goods. Sales include
Excise Duty and are net of Discounts / Margins (as considered
appropriate by the management),Value Added Tax and Damaged & Dented
stocks. Damaged & Dented stocks are accounted/ provided for as and when
inspected and destroyed.
b) Export sales are accounted for on the basis of the date of Bill of
Lading / Mates Receipt.
c) Export Benefit Claims are accounted in the year of export.
H. EMPLOYEE BENEFITS
(a) Contributions towards provident fund and superannuation fund are
made under defined contribution retirement benefit plans for qualifying
employees. The provident fund plan is operated by the Regional
Provident Fund Commissioner. The superan nuation fund is administered
by the Trustees of the GTC Management Staff Superannuation Scheme and
is funded under Group Superannuation Scheme of Birla Sunlife Life
Insurance Company Limited. The Company is required to contribute a
specific percentage of payroll cost towards retirement benefits. The
contributions are charged to Profit and Loss account in the respective
year.
(b) Leave entitlement liability is provided for on the basis of
actuarial valuation carried out at the year-end. Actuarial gains and
losses are recognized immediately in the profit & loss account.
(c) Gratuity liability is paid in accordance to a defined benefit plan
but is accounted for as and when employees retire and the amount is
due.
I. RESEARCH AND DEVELOPMENT EXPENSES
Research & Development expenses of revenue nature are charged to the
Profit and Loss Account and that of capital nature are shown as an
addition to the respective Fixed Assets.
J. TRANSLATION OF FOREIGN CURRENCY ITEMS
a) Transactions in foreign currency are recorded at the rate of
exchange in force on the date of the transaction.
b) Assets, liabilities and capital commitments denominated in foreign
currency are restated at the rate of exchange prevailing at the year
end.
c) In case of forward contracts, the premium/discount is dealt with in
the Profit and Loss Account over the period of the contracts.
d) The exchange differences are adjusted to Profit and Loss Account .
K. BORROWING COSTS
Borrowing Costs attributable to acquisition or construction of
qualifying assets are capitalised as part of the cost of such assets
upto the date when such asset is ready for its intended use. Other
borrowing costs are charged to the Profit and Loss Account.
L. TAXATION
Provision for current tax is made on the basis of estimated taxable
income for the current accounting year in accordance with the Income
Tax Act, 1961. The deferred tax for timing differences between the book
and tax profits for the year is accounted for, using the tax rates and
laws that have been substantively enacted as of the Balance Sheet date.
Deferred tax assets arising from timing differences are recognised to
the extent there is reasonable/virtual certainty that these would be
realized in future.
M. PROVISIONS, CONTIGENT LIABILITIES AND CONTINGENT ASSETS
A provision is made based on a reliable estimate when it is probable
that an outflow of resources embodying economic benefits will be
required to settle an obligation. Contingent liabilities, if material,
are disclosed by way of notes to accounts. Disputed show cause notices
/ show cause- cum- demand notices are not considered as contingent
liabilities. Contingent assets are not recognized or disclosed in the
financial statements.
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