Mar 31, 2016
Company Background
Jenson & Nicholson (India) Ltd. (the âCompany'') is a public limited company incorporated under the Indian Companies Act, 1913. The Company is engaged in the business of manufacturing, selling and distribution of paints, coatings, products related to home decor and providing related services.
1.1 Basis of Presenting Financial Statements
a) Basis of Accounting
The financial statements are prepared on going concern basis under historical cost convention modified by the revaluation of certain fixed assets and are in accordance with the requirements of the Companies Act, 2013, and comply with the Mandatory Accounting Standards referred to in section 133 read with Rule 7 of Companies (Accounts), Rules, 2014, provisions of the Act (to the extent notified) and guidelines issued by SEBI. Accounting Policies, unless specifically stated to be otherwise, are consistent and are in consonance with generally accepted accounting principles.
b) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) in India requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent liabilities on the date of financial statements and the reported amount of revenue and expenses during the reporting period. Although these estimates are based on the management''s best knowledge of current events and actions, future results could differ due to these estimates and the difference between the actual results and the estimates are recognized in the periods in which are known/ materialized.
c) Classification of Assets and Liabilities
The Schedule III to the Companies Act, 2013 requires assets and liabilities to be classified as either Current or Non-current
a) An asset shall be classified as current when it satisfies any of the following criteria:
(i) It is expected to be realized or settled or is intended for sale or consumption in, the Company''s normal operating cycle;
(ii) It is held primarily for the purpose of being traded;
(iii) It is expected to be realized or settled within twelve months from the reporting date; or
(iv) It is cash or cash equivalent unless it is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting date.
b) All other assets are classified as non-current.
c) A liability shall be classified as current when it satisfies any of the following criteria:
(i) It is expected to be settled in the company''s normal operating cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is due to be settled within twelve months from the reporting date, or
(iv) The company does not have an unconditional right to defer settlement of the liability for at least twelve months from the reporting date.
d) All Other liabilities are classified as non-current.
1.2 Operating Cycle
An operating cycle is the time between the acquisition of assets for processing and their realization in cash or cash equivalents.
1.3 Previous Year Figures
The financial statements for the year ended 31st March, 2016 have been presented as per the Schedule III to the Companies Act, 2013. Accordingly, the previous year''s figures have also been reclassified to conform to this year''s classification.
1.4 Revenue Recognition
a) All revenues, costs, assets and liabilities are accounted for on accrual basis.
b) Dividend income is accounted when the right to receive payment is established and known.
c) Revenue from sale of goods is recognized when the significant risks and rewards of ownership of the goods are transferred to the customer and is stated net of trade discounts; excise duty sales returns and sales tax.
d) Revenue from interest is recognized on a time proportion basis taking into account the amount outstanding and the applicable rate of interest.
e) Non-compete fees received in a financial year are apportioned annually over the period of the Contract.
1.5 Fixed Assets/Depreciation/Amortization
a) Tangible Fixed Assets
Tangible fixed assets are carried at cost of acquisition or construction or revaluation value less accumulated depreciation/accumulated impairment. The cost of fixed assets comprises the purchase price , including import duties and other non-refundable taxes or levies and any attributable cost of bringing the assets to working condition for its intended use. Assets under installation or under construction / modernization including respective preoperative expenses at the Balance Sheet date are shown under capital work-in-progress. Interest on borrowing for acquisition of qualifying assets is capitalized. Profit or loss on disposal of fixed assets is recognized in profit and loss account.
Subsequent expenditures related to an item of fixed assets are added to its book value only if it increase the future benefits from the existing asset beyond its previously assessed standard of performance.
b) Intangible Fixed Assets
Intangible assets are recorded at the consideration paid for acquisition of such assets and are carried at cost less accumulated amortization and impairment.
Intangible assets are amortized on a straight line method basis over their estimated useful life.
Gain or losses arising from the retirement or disposal of intangible assets are recognised in the profit and loss account.
c) Depreciation
i) Depreciation on tangible fixed assets is provided on pro rata basis using Straight line method/Written Down method on the useful life of the assets as prescribed Schedule II of the Companies Act,2013 (the Act) and is charged to the Statement of Profit and Loss as per the requirement of Schedule II of the Companies Act,2013.
ii) Depreciation is provided on straight line/written down value method on prorata basis
1.6 Impairment Loss
Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment, recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assets either belonging to cash generating unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greater of asset''s net selling price or its value in use. In assessing value in use, the estimated future cash flows from the use of the assets are discounted to their present value at appropriate rate. Impairment loss in excess of Revaluation Surplus is recognized as expense in Profit & Loss Account. An impairment loss is reversed if there has been change in the recoverable amount and such loss either no longer exist or has decreased. Impairment loss/ reversal thereof is adjusted to the carrying value of the respective assets which in case of CGU, are allocated to its assets on pro-rata basis. Impairment loss on revalued assets/CGU previously charged as expenses is recognized as income in the Profit and Loss Account.
1.7 Investments
a) Investments are capitalized at actual cost including cost incidental to acquisition.
b) Investments are classified as long term and current on the basis decision taken by the Board of Directors at the time of making Investments.
c) Long term Investments are individually valued at cost less provision for diminution other than temporary.
d) Current Investments, if any, are valued at lower of cost or market value determined on category of investment basis.
e) Reclassification of Investments from current to long term categories is made at the lower of cost or market value at the date of transfer and resultant profit/loss, if any, are accounted for in the Profit & Loss Account.
1.8 Valuation of Inventories
a) Stores and spare parts are valued at cost less provisions as required on account of damages and obsolescence.
b) Raw materials, work-in-progress, finished goods, packing materials, and stock in trade are carried at the lower of cost and net realizable value less provisions as required on account of damages and obsolescence. Damaged, unserviceable and inert stocks are valued at net realizable value.
c) Cost in respect of raw materials, packing materials and stores and spares include expenses incidental to procurement thereof.
d) Cost of finished goods includes the cost of raw materials, packing materials, an appropriate share of fixed and variable production overheads, excise duty as applicable and other costs incurred in bringing the inventories to their present location and condition.
e) Cost in respect of work in progress represents costs up to the stage of completion.
f) Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.
g) Cost where applicable has been arrived at on weighted moving average method.
1.9 Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying rate of exchange ruling at the time of transaction and exchange differences arising on settlements except for acquisition of fixed assets are dealt with in the Profit & Loss Account. Unsettled transactions are converted at the year-end rate and gain or loss arising on such transaction is recognised in the Profit & Loss Account except in respect of exchange differences arising on repayment of foreign currency liabilities incurred for acquiring fixed assets which are adjusted in the carrying cost of the respective fixed assets.
1.10 Research & Development
Revenue expenditure on research & Development is charged to Profit & Loss Account in the year in which it is incurred. Capital expenditure on Research and Development is treated in the same way as additions to fixed assets.
1.11 Leased Equipment
Rental in respect of leased equipment acquired under financial lease is charged to the Profit & Loss Account.
1.12 Amortization of expenses
a) Expenses incurred in connection with issue of debentures are written off over the period of such debentures or ten years whichever is earlier.
b) Preference Share issue expenses are charged off to revenue over the period of such Preference Shares.
1.13 Retirement Benefits Provident Fund
Contributions to Provident Fund are defined contribution plans and are paid to appropriate authorities and charged to Profit and Loss Account on accrual basis. There are no other obligations other than the contribution payable to respective authorities.
Gratuity
The Company provides for gratuity, a defined benefit retirement plan (the âGratuity Planâ) covering eligible employees. In accordance with the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date. Actuarial gains and losses are adjusted to the profit and loss account in the period in which it arises.
Leave Encashment Plan
The Company provides for leave encashment on actuarial basis as of balance sheet date.
1.14 Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid, if any, to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. Unrecognized deferred tax assets of earlier years are re-assessed and recognized to the extent that it has become reasonably or virtually certain that future taxable income will be available against which such deferred tax assets can be realized.
1.15 Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events, it is probable that there will be an outflow of resources and a reliable estimate can be made of the amount of the obligation. These are reviewed at each balance sheet date and adjusted to reflect the current best estimate. Contingent Assets are neither recognized nor disclosed in the financial statements. Contingent liabilities are not provided for and are disclosed by way of notes.
1.16 CENVAT
Excise duty payments included in purchase of Raw Materials are considered as inputs for conversion and debited to CENVAT ACCOUNT, which is utilized against dispatch of finished goods after conversion of those raw materials into finished goods. Accordingly, purchase account is debited with the value of goods and other expenses but not the excise duty on purchase.
1.17 Events Occurring after the Balance Sheet Date Occurrences of events after the Balance Sheet date and having material effect on the revenue statements of the year under review have been considered in drawing-up the accounts.
Mar 31, 2015
(I) Basis of Presenting Financial Statements
The financial statements are prepared on going concern basis under
historical cost convention modified by the revaluation of certain fixed
assets and are in accordance with the requirements of the Companies
Act, 1956, and comply with the Mandatory Accounting Standards referred
to in sub-section (3C) of Section 211 of the said Act Accounting
Policies, unless specifically stated to be otherwise, are consistent
and are in consonance with generally accepted accounting principles.
(II) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent liabilities on
the date of financial statements and the reported amount of revenue and
expenses during the reporting period actual results could defer from
those estimates. Any revision to accounting estimates is recognised
prospectively in current and future period.
(III) Classification of Assets and Liabilities
The Revised Schedule VI to the Companies Act, 1956 requires assets and
liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be realized in, or is intended for sale or
consumption in, the Company's normal operating cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is expected to be realized within twelve months after the
reporting date, or
(iv) It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
(b) All assets other than current assets shall be classified as
non-current.
(c) A liability shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be settled in the company's normal operating
cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is due to be settled within twelve months after the reporting
date, or
(iv) The company does not have an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting date.
(d) All liabilities other than current liabilities shall be classified
as non-current.
(IV) Operating Cycle
An operating cycle is the time between the acquisition of assets for
processing and their realization in cash or cash equivalents.
(V) Previous Year Figures
The financial statements for the year ended 31st March, 2015 have been
presented as per the Revised Schedule VI to the Companies Act, 1956.
Accordingly, the previous year's figures have also been reclassified to
conform to this year's classification.
(VI) Revenue Recognition
(a) All revenues, costs, assets and liabilities are accounted for on
accrual basis.
(b) Dividend income is accounted when the right to receive payment is
established and known.
(c) Revenue from sale of goods is recognized when the significant risks
and rewards of ownership of the goods are transferred to the customer
and is stated net of trade discounts; excise duty sales returns and
sales tax.
(d) Revenue from interest is recognized on a time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
(e) Non compete fees received in a financial year are apportioned
annually over the period of the Contract.
(VII) Fixed Assets / Depreciation / Amortization
(a) Tangible / Fixed Assets Fixed Assets are stated at cost or
revaluation, net of CENVAT and VAT. Cost comprises the purchase price
and any attributable cost of bringing the assets to working condition
for its intended use. Assets under installation or under construction /
modernization including respective pre-operative expenses at the
Balance Sheet date are shown under capital work-in-progress. Interest
on borrowing for acquisition of qualifying assets is capitalised.
Profit or loss on disposal of fixed assets is recognized in Profit and
Loss Account
(b) Intangible: Trade Mark
i) Product under the brand name of "Instacolour" was launched in
earlier years for which a significant amount in terms of advertisement
etc. was incurred for promotion of the above brand. The company had
applied for registration of such brand as Trade mark, expenses incurred
on such brand from the date of launching till 31st March, 1999 was
capitalized but registration department has still not issued the
necessary registration certificate. ii) Intangible assets are
recognized only when future economic benefits arising out of the assets
flow to the enterprise and are amortised over their useful life ranging
from 3 to 6 years.
(c) Depreciation
i) Consequent to the enactment of the Companies Act,2013 (the Act) and
its applicability from accounting period commencing after 1st
April,2014, the company has reviewed and revised the estimated useful
lives of its fixed assets, generally in accordance with the provisions
of the Schedule II of the Act. The company has charged depreciation
based on useful lives as prescribed under the schedule.
(VIII) Impairment Loss
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to cash
generating unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset's net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. Impairment loss in excess of Revaluation Surplus
is recognised as expense in Profit & Loss Account. An impairment loss
is reversed if there has been change in the recoverable amount and such
loss either no longer exist or has decreased. Impairment loss/ reversal
thereof is adjusted to the carrying value of the respective assets
which in case of CGU, are allocated to its assets on pro-rata basis.
Impairment loss on revalued assets/CGU previously charged as expenses
is recognised as income in the Profit and Loss Account.
(IX) Investments
a) Investments are capitalized at actual cost including cost incidental
to acquisition.
b) Investments are classified as long term and current on the basis
decision taken by the Board of Directors at the time of making
Investments.
c) Long term Investments are individually valued at cost less provision
for diminution other than temporary.
d) Current Investments, if any, are valued at lower of cost or market
value determined on category of investment basis.
e) Reclassification of Investments from current to long term categories
is made at the lower of cost or market value at the date of transfer
and resultant profit/loss, if any, are accounted for in the Profit &
Loss Account.
(X) Valuation of Inventories
a) Stores and spare parts are valued at cost less provisions as
required on account of damages and obsolescence.
b) Stock in trade comprising of raw materials (including in transit),
packing materials, stock in process and finished goods are valued at
the lower of cost and net realizable value less provisions as required
on account of damages and obsolescence.
c) Cost in respect of raw materials, packing materials and stores and
spares include expenses incidental to procurement thereof.
d) Cost in respect of finished goods represents prime cost and includes
appropriate portion of overhead cost and excise duty.
e) Cost in respect of work in progress represents costs up to the stage
of completion.
f) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
g) Cost where applicable has been arrived at on weighted average
method.
(XI) Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying
rate of exchange ruling at the time of transaction and exchange
differences arising on settlements except for acquisition of fixed
assets are dealt with in the Profit & Loss Account. Unsettled
transactions are converted at the year-end rate and gain or loss
arising on such transaction is recognised in the Profit & Loss Account
except in respect of exchange differences arising on repayment of
foreign currency liabilities incurred for acquiring fixed assets which
are adjusted in the carrying cost of the respective fixed assets.
(XII) Research & Development
Revenue expenditure on research & Development is charged to Profit &
Loss Account in the year in which it is incurred. Capital expenditure
on Research and Development is treated in the same way as additions to
fixed assets.
(XIII) Leased Equipment
Rental in respect of leased equipment acquired under financial lease is
charged to the Profit & Loss Account.
(XIV) Amortization of expenses
a) Expenses incurred in connection with issue of debentures are written
off over the period of such debentures or ten years whichever is
earlier.
b) Preference Share issue expenses are charged off to revenue over the
period of such Preference Shares.
(XV) Retirement Benefits Provident Fund
Contributions to Provident Fund are defined contribution plans and are
paid to appropriate authorities and charged to Profit and Loss Account
on accrual basis. There are no other obligations other than the
contribution payable to respective authorities.
Gratuity
The Company provides for gratuity, a defined benefit retirement plan
(the "Gratuity Plan") covering eligible employees. In accordance with
the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump
sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee's salary and the tenure of employment. Liabilities with regard
to the Gratuity Plan are determined by actuarial valuation as of the
balance sheet date. Actuarial gains and losses are adjusted to the
profit and loss account in the period in which it arises.
Leave Encashment Plan
The Company provides for leave encashment on actuarial basis as of
balance sheet date.
(XVI) Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid, if any, to the tax
authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. Unrecognized
deferred tax assets of earlier years are re-assessed and recognized to
the extent that it has become reasonably or virtually certain that
future taxable income will be available against which such deferred tax
assets can be realized.
(XVII) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events, it is probable that there will be an outflow of resources and a
reliable estimate can be made of the amount of the obligation. These
are reviewed at each balance sheet date and adjusted to reflect the
current best estimate. Contingent Assets are neither recognized nor
disclosed in the financial statements. Contingent liabilities are not
provided for and are disclosed by way of notes.
(XVIII) CENVAT
Excise duty payments included in purchase of Raw Materials are
considered as inputs for conversion and debited to CENVAT ACCOUNT,
which is utilized against despatch of finished goods after conversion
of those raw materials into finished goods. Accordingly, purchase
account is debited with the value of goods and other expenses but not
the excise duty on purchase.
(XIX) Events Occurring after the Balance Sheet Date
Occurrences of events after the Balance Sheet date and having material
effect on the revenue statements of the year under review have been
considered in drawing-up the accounts.
Mar 31, 2014
(I) Basis of Presenting Financial Statements
The financial statements are prepared on going concern basis under
historical cost convention modified by the revaluation of certain fixed
assets and are in accordance with the requirements of the Companies
Act, 1956, and comply with the Mandatory Accounting Standards referred
to in sub-section (3C) of Section 211 of the said Act Accounting
Policies, unless specifically stated to be otherwise, are consistent
and are in consonance with generally accepted accounting principles.
(II) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent liabilities on
the date of financial statements and the reported amount of revenue and
expenses during the reporting period actual results could defer from
those estimates. Any revision to accounting estimates is recognised
prospectively in current and future period.
(III) Classification of Assets and Liabilities
The Revised Schedule VI to the Companies Act, 1956 requires assets and
liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be realized in, or is intended for sale or
consumption in, the Company''s normal operating cycle.
(ii) It is held primarily for the purpose of being traded.
(lii) It is expected to be realized within twelve months after the
reporting date, or
(iv) It is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
afterthe reporting date.
(b) All assets other than current assets shall be classified as
non-current.
(c) A liability shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be settled in the company''s normal operating
cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is due to be settled within twelve months after the reporting
date, or
(iv) The company does not have an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting date.
(d) All liabilities other than current liabilities shall be classified
as non-current.
(IV) Operating Cycle
An operating cycle is the time between the acquisition of assets for
processing and their realization in cash or cash equivalents.
(V) Previous Year Figures
The financial statements for the year ended 31st March, 2014 have been
presented as per the Revised Schedule VI to the Companies Act, 1956.
Accordingly, the previous year''s figures have also been reclassified to
conform to this year''s classification.
(VI) Revenue Recognition
(a) All revenues, costs, assets and liabilities are accounted for on
accrual basis.
(b) Dividend income is accounted when the right to receive payment is
established and known.
(c) Revenue from sale of goods is recognized when the significant risks
and rewards of ownership of the goods are
Transferred to the customer and is stated net of trade discounts;
excise duty sales returns and sales tax.
(d) Revenue from interest is recognized on a time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
(e) Non compete fees received in a financial year are apportioned
annually over the period of the Contract.
(VII) Fixed Assets
(a) Tangible:
Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT.
Cost comprises the purchase price and any attributable cost of bringing
the assets to working condition for its intended use. Assets under
installation or under construction / modernization including respective
pre-operative expenses at the Balance Sheet date are shown under
capital work-in-progress. Interest on borrowing for acquisition of
qualifying assets is capitalised. Profit or loss on disposal of fixed
assets is recognized in Profit and Loss Account
(b) Intangible: Trade Mark
A product under the brand name of "Instacolour" was launched in earlier
years for which a significant amount in terms of advertisement etc. was
incurred for promotion of the above brand. The company had applied for
registration of such brand as Trade mark, expenses incurred on such
brand from the date of launching till 31st March, 1999 was capitalized
but registration department has still not issued the necessary
registration certificate.
(c) Depreciation
Depreciation is provided on straight line/written down value method on
prorata basis at the rates specified in the Schedule XIV of the
companies Act,1956.
Types of Assets : Depreciation Policy :
Assets acquired up Written down method
to 30.06.1986
Assets acquired on Straight line method
and from 1.07.1986
Leasehold land Period of lease
Freehold land Not depreciated
Trade Mark
Impaired Assets
Revalued Assets
At Straight line method over a period of 10 years Straight line method
on revised carrying cost over its remaining useful life.
Depreciation on the amount added on revaluation is set off against
revaluation reserve.
(VIII) Impairment Loss
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to cash
generating unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset''s net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. Impairment loss in excess of Revaluation Surplus
is recognised as expense in Profit & Loss Account. An impairment loss
is reversed if there has been change in the recoverable amount and such
loss either no longer exist or has decreased. Impairment loss/ reversal
thereof is adjusted to the carrying value of the respective assets
which in case of CGU, are allocated to its assets on pro-rata basis.
Impairment loss on revalued assets/CGU previously charged as expenses
in recognised as income in the Profit and Loss Account.
(IX) Investments
a) Investments are capitalized at actual cost including cost incidental
to acquisition.
b) Investments are classified as long term and current on the basis
decision taken by the Board of Directors at the time of making
Investments.
c) Long term Investments are individually valued at cost less provision
for diminution other than temporary.
d) Current Investments, if any, are valued at lower of cost or market
value determined on category of investment basis.
e) Reclassification of Investments from current to long term categories
is made at the lower of cost or market value at the date of transfer
and resultant profit/loss, if any, are accounted for in the Profit &
Loss Account.
(X) Valuation of Inventories
a) Stores and spare parts are valued at cost less provisions as
required on account of damages and obsolescence.
b) Stock in trade comprising of raw materials (including in transit),
packing materials, stock in process and finished goods are valued at
the lower of cost and net realizable value less provisions as required
on account of damages and obsolescence.
c) Cost in respect of raw materials, packing materials and stores and
spares include expenses incidental to procurement thereof.
d) Cost in respect of finished goods represents prime cost and includes
appropriate portion of overhead cost and excise duty.
e) Cost in respect of work in progress represents costs up to the stage
of completion.
f) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
g) Cost where applicable has been arrived at on weighted average
method.
(XI) Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying
rate of exchange ruling at the time of transaction and exchange
differences arising on settlements except for acquisition of fixed
assets are dealt with in the Profit & Loss Account. Unsettled
transactions are converted at the year-end rate and gain or loss
arising on such transaction is recognised in the Profit & Loss Account
except in respect of exchange differences arising on repayment of
foreign currency liabilities incurred for acquiring fixed assets which
are adjusted in the carrying cost of the respective fixed assets.
(XII) Research & Development
Revenue expenditure on research & Development is charged to Profit &
Loss Account in the year in which it is incurred. Capital expenditure
on Research and Development is treated in the same way as additions to
fixed assets.
(XIII) Leased Equipment
Rental in respect of leased equipment acquired under financial lease is
charged to the Profit & Loss Account.
(XIV) Amortization of expenses
a) Expenses incurred in connection with issue of debentures are written
off over the period of such debentures or ten years whichever is
earlier.
b) Preference Share issue expenses are charged off to revenue over the
period of such Preference Shares.
(XV) Retirement Benefits Provident Fund
Contributions to Provident Fund are defined contribution
plans and are paid to appropriate authorities and charged to Profit and
Loss Account on accrual basis. There are no other obligations other
than the contribution payable to respective authorities.
Gratuity
The Company provides for gratuity, a defined benefit retirement plan
(the "Gratuity Plan") covering eligible employees. In accordance with
the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump
sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment. Liabilities with regard
to the Gratuity Plan are determined by actuarial valuation as of the
balance sheet date. Actuarial gains and losses are adjusted to the
profit and loss account in the period in which it arises.
Leave Encashment Plan
The Company provides for leave encashment on actuarial basis as of
balance sheet date.
(XVI) Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid, if any, to the tax
authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance , sheet date. Deferred
tax assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realized. Unrecognized
deferred tax assets of earlier years are re-assessed and recognized to
the extent that it has become reasonably or virtually certain that
future taxable income will be available against which such deferred tax
assets can be realized.
(XVII) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events, it is probable that there will be an outflow of resources and a
reliable estimate can be made of the amount of the obligation.
These are reviewed at each balance sheet date and adjusted to reflect
the current best estimate. Contingent Assets are neither recognized nor
disclosed in the financial statements. Contingent liabilities are not
provided for and are disclosed by way of notes.
(XVIII) CENVAT
Excise duty payments included in purchase of Raw Materials are
considered as inputs for conversion and debited to CENVAT ACCOUNT,
which is utilized against despatch of finished goods after conversion
of those raw materials into finished goods. Accordingly, purchase
account is debited with the value of goods and other expenses but not
the excise duty on purchase.
(XIX) Events Occurring after the Balance Sheet Date Occurrences of
events after the Balance Sheet date and having material effect on the
revenue statements of the year under review have been considered in
drawing-up the accounts Of the above Ordinary Shares :
1.1 Till 1982, 5,25,000 Ordinary Shares were allotted as fully paid up
by way of bonus shares, by capitalisation of Reserves.
1.2 7,50,000 Ordinary shares were allotted as fully paid bonus shares
in 1991-92 by capitalisation of General Reserves and
Share Premium Account.
1.3 1,14,17,057 Ordinary Shares of Rs.2/-each fully paid were allotted to
promoters'' group and overseas corporate bodies at a premium ofRs. 7.40
per share on conversion of the Optionally Convertible Debentures
amounting to Rs. 1000.42 lacs issued to them and interest thereon.
1.4 53,19,148 Ordinary Shares of Rs. 2/- each fully paid were allotted to
Unit Trust of India on conversion of the
Optionally Convertible Debentures amounting toRs. 500.00 lacs issued to
them at a premium of Rs. 7.40 per share.
Of the above Preference Shares:
1.5 10,00,00014.5% Cumulative Redeemable Preference Shares ofRs.
100/-each issued in three tranches in 1997-98 redeemable at par at the
end of the fifth year from the dates of allotment, i.e., 25.09.2002,
27.10.2002 and 08.12.2002 with option for early redemption not
exceeding 25% of the aggregate of the Preference Shares outstanding at
the end of the fourth year from the date of the allotment, i.e.,
25.09.2001,27.10.2001 and 08.12.2001. These Preference Shares have not
been redeemed as yet.
1.6 7,00,00014% Cumulative Redeemable Preference Shares of Rs. 100/-each
issued in two tranches in 1998-99 are redeemable at par at the end of
the fifth year, sixth year and seventh year from the respective dates
of allotment i.e., 01.02.2004 and 09.02.2004, 01.02.2005 and 09.02.2005
and 01.02.2006 and 09.02.2006 in the proportion of 30%, 30% and 40%
respectively. The Preference Shareholders had filed a notice for
redemption of the aforesaid preference shares.
1.7 The details of Share Holding more than 5% shares:
Name of Lenders : Sirius Financial Services Pvt. Ltd
Original Lendors : United Bank of India, Indian Overseas Bank, IDBI
Charge : United Bank of India - First charge on all
immovable properties of the company at Naihati and Sikandrabad together
with all building and infrastructure thereon and all Plant and
Machinery attched to the earth., and second charge on all moveable
assets. Personal Guarantee by the promoters of the company by Shri S P
Sinha and Shri Shailendra Prakash Sinha.
Indian Overseas Bank - First charge on all immovable properties of the
company at Naihati and Sikandrabad together with all building and
infrastructure thereon and all Plant and Machinery attched to the
earth., and second charge on all moveable assets. Personal Guarantee by
the promoters of the company by Shri S P Sinha.
IDBI - First charge on all immovable properties of the company at
Naihati and Sikandrabad together with all building and infrastructure
thereon and all Plant and Machinery attched to the earth, and second
charge on all moveable assets.
Name of Lenders : Vivid Colors Pvt. Ltd.
Original Lendors : IIBI, Dombivili Nagari Sahakari Bank Ltd., Punjab
Natinal Bank
Charge : IIBI - First charge on all immovable properties of the company
at Naihati and Sikandrabad together with all building and infrastructure
thereon and all Plant and Machinery attached to the earth, and second
charge on all moveable assets. Personal Guarantee by the promoters of
the company by Shri S P Sinha and Shir Shailendra Prakash Sinha.
Dombivili Nagari Sahakari Bank Ltd - Hypothecation of Plant and
Machinery.
Punjab Natinal Bank - Whole immovable properties of the company
including plant & machinery, spares, tools office equipments and
furniture & fixtures, and Personal guarantee by the promoter of the
company by Shri S P Sinha.
3.1 Term Loan from Banks and financial institutions (United Bank of
India, Dombivli Nagari Sahakari Bank Ltd.PNB, Indian Overseas
Bank,IIBI,and IDBI) are secured by equitable mortgage of immovable
properties of the Company and by way of charge on movable plant and
machinery, machinery spares, tools and accessories and other movables
both present and future. The Term Loan from IIBI included in the above
loans is also guaranteed by two of the Promoters of the Company.Term
loans from IDBI, United Bank of India and Indian Overseas Bank have
been assigned in favour of Sirius Financial Services Pvt. Ltd through
IFCI Ltd. The term loan from Dombivili Nagari Sahakari Bank Ltd, IIBI,
Canara Bank and Punjab National Bank has been assigned in favour of
Vivid Colors Pvt. Ltd. through Asset Care & Reconstruction Enterprise
Ltd (ACRE)
3.3 The company has stopped providing interest on all loans from Banks
and Financial Institutions whether secured and unsecured w.e.f.
01.04.2006 on the ground that these loans would have been declared
NPAby them.
3.4 Loans and advances from Related Parties are:
Advance received from M/s Maurya Management Pvt Ltd. Remaining
outstanding as on 31st March, 2014 Rs. 500 lacs. Refer note no. 3 of the
Note on the Financial Statements
Current Lendors : Sirius Financial Services Pvt. Ltd
Original Lendors : State Bank of India, Union Bank of India, Bank of
Baroda, Bank of India, SBI Home Finance Ltd, SIDBI
Charge : State Bank of India, Union Bank of India, Bank of Baroda,
Bank of India, SBI Home Finance Ltd - First Charge on all book debts,
money receivables, stocks, lab equipments furnitures and motor vehicles
at different sites of the company, and second charge on Land and
Building and Plant and Machinery attached to the earth at Sikandrabad
and Naihati
SIDBI - First charge on all immovable properties of the company at
Naihati and Sikandrabad together with all building and infrastructure
thereon and all Plant and Machinery attached to the earth, and second
charge on all moveable assets.
Current Lendores : ACRE
ORiginal Lendors : Canara Bank
Charge : First Charge on all book debts, money receivables,
stocks, lab equipments furnitures and motor vehicles at different sites
of the company, and second charge on Land and Building and Plant and
Machinery attached to the earth at Sikandrabad and Naihati.
Cuurent Lendors : Vivid Colors Pvt. Ltd.
Original Lendors : Allahabad Bank, National Co-Operative Bank,
Standard Chartered Bank, Global Trust Bank (OBC)
Charge : Allahabad Bank - First Charge on all book debts,
money receivables, stocks, lab equipments furnitures and motor vehicles
at different sites of the company, and second charge on Land and
Building and Plant and Machinery attached to the earth at Sikandrabad
an Naihati. National Co-Operative Bank - Includes 151.25 lacs secured
by pledge of various raw materials & components (imported or indigenous)
and guaranteed by one of the Directors of the Company. Security
documentation is pending.
Standard Chartered Bank - First charge on Insta Color Machines (Tinting
Machines) Global Trust Bank (OBC) - Second charge on all Fixed assets of
the company and Personal Guarantee of Shri S P Sinha.
6.1 Cash credit and working capital loan from banks are secured by way
of charge on Company''s stocks (not relatingto plant and machinery),
bills receivable, book debts and other movables both present and future
except for certain Jensomatic Automatic Machines hypothecated by way of
a first charge in favour of a banker. Temporary overlimit taken from a
bank is also guaranteed by one of the Directors of the Company. Cash
Credit and working capital loans from State Bank of India, Bank of
Baroda, Bank of India and Union Bank of India have been assigned in
favour of Sirius Financial Services Pvt. Ltd through IFCl Ltd. and for
Allahabad Bank & Standard Chartered Bank Global Trust Bank (OBC) have
been assigned in favour of Vivid Colors Pvt Ltd.
6.2 Bill Discounting facility from SIDBI is secured by a charge on
whole of the immovable properties of the Company together with
building, Plant and Machinery and other items attached to the earth or
permanently fastened to earth. Subsequently the entire loan has been
assigned in favour of Sirius Financial Services Pvt. Ltd through IFCl
Ltd.
6.3 Loans includeRs. 500 lacs received from Global Trust Bank (OBC)
originally as Shortterm in 1997-98 for a period of six months as
advance for issue of secured Redeemable Non-Convertible debentures ofRs.
100/- each which was subsequently renewed fora further period of six
months. No repayment has been made nor any debenture has been issued as
yet. Now it has been categorised as Short term as per Schedule VI
requirements. The entire loan has been assigned in favour of M/s Vivid
Colors Pvt Ltd.
6.4 IncludesRs. 500 lacs as Short Term loan from M/s SBI Home Finance
Ltd, the entire loan has been assigned in favour of Sirius Financial
Services Pvt. Ltd through IFCl Ltd.
6.5 The company has stopped providing interest on all loans from Banks
and Financial Institutions whether secured and unsecured w.e.f.
01.04.2006 on the ground that these loans would have been declared
NPAbythem.
6.6 Short Term Borrowings from other parties amounting toRs. 3452.25 lacs
(previous year 3177.25 lacs) secured by mortgaged
aTTradernarkandGoodwiti.
6.7 Period and amount of Continuing default
The amount due to the suppliers covered under the Micro, Small and
Medium Enterprises Development Act,2006, This information takes into
account only those suppliers who have responded to the enquiries made
by the company for this purpose
Trade payables are dues in respect of goods purchased or services
received (including from employees, professionals and others under
contract) in the normal course of business.
-There Is no amount due and outstanding to be credited to Investor
Eductation & Protection Fund as at 31.03.2014
8.1 78,00,00,000/-, 20.5% Non-Convertible Debentures ofRs. 1007-each
redeemable at 5% premium privately placed with IDBI are redeemable in
three tranches amounting to 7 200 lacs, 7 400 lacs and 7 200 lacs on
1st January, 2004,2005 and 2006. However the said debenture has not
been redeemed. Subsequently the entire loan has been assigned in favour
of Sirius Financial Services Pvt. Ltd through IFCI.
8.2 71,00,00,000,15% Non-Convertible Debentures of 7 100/-each
privately placed with NIA were redeemable attheendof the third year
from the date of allotment i.e., 25th February, 2003 at par. However
the said debenture has not been redeemed yet.
8.3 75,00,00,000,15% Non-Convertible Debentures of 7 100/- each
privately placed with UTI are redeemable in three tranches of equal
amount at the end of the 4th,5th and 6th year from the date of
allotmenti.e.,on 18th October,2003,2004,2005 respectively at par.
The entire loan has been assigned in favour of Vivid Colors Pvt. Ltd.
through ACRE.
8.5 All the Non-Convertible Debentures and Optionally Convertible
Debentures are to be secured by an equitable mortgage of the Company''s
all immovable properties both present and future and hypothecation of
other movable assets save and except stock and book debts (by way of
second charge) ranking pari-passu with mortgage /charge created in
favour of Sirius Financial Services Pvt. Ltd/Vivid Colors Pvt. Ltd.
Security documen- tations are pending for 15% NCD placed with NIA, 15%
NCD placed with UTI and 13.5% OCD placed with UTI.
Notes:
1. The Company revalued its freehold land, buildings and plant &
machinery as at 30.06.85 and thereafter on 30.09.95 further revalued
its land and building.These revaluations resulted in net increase in
value of assets by Rs. 334063 as at 30th September, 1995 which was
credited to Revaluation Reserve.
2 Freehold Land:
ACRE under the Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act,2002 has sold out the Panvel
property in excercise of powers conferred under section 13(4) of the
said act.
Description of Immovable Property taken by ACRE: ¦
Land admeasuring 24,195 sq yds situated at Panvel (Khanda), Taluka-
Panvel, Dist. Raigad (Maharashtra) and comprised in Survey No. 102 (P),
107 (P) and 780 (Part).
3 That the Asset care and Reconstruction Ltd. (ACRE) has acquired the
debt and financial assets from the Dombivili Nagari Sahkari Bank Ltd.,
Specified Undertaking of the Unit Trust of India, Industrial Investment
Bank of India, Punjab National Bank and Canara Bank under the deed of
assignment dated 28/02/2010,29/03/2011,21 /06/2011,22/06/2011 and
03/12/2012 respectively. The aforesaid debts/ financial assets are
secured by equitable mortgage of immovable properties of the company
and by way of charge on movable assets including current assets. The
ACRE under the Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act,2002 and in exercise of powers
confened under section 13(12) read with Rule 9 of the security interest
repay the amount mentioned in the said notice being Rs. 11770.50 Lacs.
The company have failed to repay the amount, so the ACRE has taken
possession of the Sikandrabad property, the entire movable assets
including current assets situated at plot no. 21 & 22, Sikandrabad
Industrial Area, Dist. Bullandshahar (U. P.) in exercise of powers
conferred under section 13(4) of the said acton the 21 st May, 2013.
Description of Immovable Property taken by ACRE:
Land admeasuring 67,144.44 sq meterbearing plot no. 21 & 22, situated
at Sikandrabad Industrial area, Dist. Bullandshahar(U. P.)
4 During the quarter ended 31st December, 2013, the Land & Building
situated at Panvel has been sold by Asset Care & Reconstruction
Enterprises Limited (ACRE) under Securitisation and Reconstruction of
Financial Assets and Enforcement of Security Interest (SARFAESI) Act.
The profit from sale of Land & Building amounting toRs. 4034.54 lacs and
included in other income for the quarter ended 31st December, 2013.
5 During the yearthe Company mortagaged Trade Mark and Goodwill in
favour of Vivid Colors Pvt. Ltd. against their Shortterm Loan amounting
to Rs. 3452.25 lacs.
Mar 31, 2013
(I) Basis of Presenting Financial Statements
The financial statements are prepared on going concern basis under
historical cost convention modified by the revaluation of certain fixed
assets and are in accordance with the requirements of the Companies
Act, 1956, and comply with the Mandatory Accounting Standards referred
to in sub- section (3C) of Section 211 of the said Act Accounting
Policies, unless specifically stated to be otherwise, are consistent
and are in consonance with generally accepted accounting principles.
(II) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent liabilities on
the date of financial statements and the reported amount of revenue and
expenses during the reporting period actual results could defer from
those estimates. Any revision to accounting estimates is recognised
prospectively in current and future period.
(III) Classification of Assets and Liabilities
The Revised Schedule VI to the Companies Act, 1956 requires assets and
liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be realized in, or is intended for sale or
consumption in, the Company''s normal operating cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is expected to be realized within twelve months after the
reporting date, or
(iv)lt is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
(b) All assets other than current assets shall be classified as
non-current.
(c) A liability shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be settled in the company''s normal operating
cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is due to be settled within twelve months after the reporting
date, or
(iv)The company does not have'' an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting date.
(d) All liabilities other than current liabilities shall be classified
as non-current.
(IV) Operating Cycle
An operating cycle is the time between the acquisition of assets for
processing and their realization in cash or cash equivalents.
(V) Previous Year Figures
The financial statements for the year ended 31st March, 2013 have been
presented as per the Revised Schedule VI to the Companies Act, 1956.
Accordingly, the previous year''s figures have also been reclassified to
conform to this year''s classification.
(VI) Revenue Recognition
(a) All revenues, costs, assets and liabilities are accounted for on
accrual basis.
(b) Dividend income is accounted when the right to receive payment is
established and known.
(c) Revenue from sale of goods is recognized when the significant risks
and rewards of ownership of the goods are transferred to the customer
and is stated net of trade discounts; excise duty sales returns and
sales tax.
(d) Revenue from interest is recognized on a time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
(e) Non compete fees received in a financial year are apportioned
annually over the period of the Contract.
(VII) Fixed Assets (a) Tangible:
Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT.
Cost comprises the purchase price and any attributable cost of bringing
the assets to working condition for its intended use. Assets under
installation or under construction / modernization including respective
pre- operative expenses at the Balance Sheet date are shown under
capital work-in-progress.. Interest on borrowing for acquisition of
qualifying assets is capitalised. Profit or loss on disposal of fixed
assets is recognized in Profit and Loss Account
(b) Intangible: Trade Mark
A product under the brand name of "Instacolour" was launched in earlier
years for which a significant amount in terms of advertisement etc. was
incurred for promotion of the above brand. The company had applied for
registration of such brand as Trade mark, expenses incurred on such
brand from the date of launching till 31st March, 1999 was capitalized
but registration department has still not issued the necessary
registration certificate.
(c) Depreciation
Depreciation is provided on straight line/written down value method on
prorata basis at the rates specified in the Schedule XIV of the
companies Act, 1956.
(VIII) Impairment Loss
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to cash
generating unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset''s net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. Impairment loss in excess of Revaluation Surplus
is recognised as expense in Profit & Loss Account. An impairment loss
is reversed if there has been change in the recoverable amount and such
loss either no longer exist or has decreased. Impairment loss/ reversal
thereof is adjusted to the carrying value of the respective assets
which in case of CGU, are allocated to its assets on pro- rata basis.
Impairment loss on revalued assets/CGU previously charged as expenses
is recognised as income in the Profit and Loss Account.
(IX) Investments
(a) Investments are capitalized at actual cost including cost
incidental to acquisition.
(b) Investments are classified as long term and current on the basis
decision taken by the Board of Directors at the time of making
Investments.
(c) Long term Investments are individually valued at cost less
provision for diminution other than temporary.
(d) Current Investments, if any, are valued at lower of cost or market
value determined on category of investment basis.
(e) Reclassification of Investments from current to long term
categories is made at the lower of cost or market value at the date of
transfer and resultant profit/loss, if any, are accounted for in the
Profit & Loss Account.
(X) Valuation of Inventories
(a) Stores and spare parts are valued at cost less provisions as
required on account of damages and obsolescence.
(b) Stock in trade comprising of raw materials (including in transit),
packing materials, stock in process and finished goods are valued at
the lower of cost and net realizable value less provisions as required
on account of damages and obsolescence.
(c) Cost in respect of raw materials, packing materials and stores and
spares include expenses incidental to procurement thereof.
(d) Cost in respect of finished goods represents prime cost and
includes appropriate portion of overhead cost and excise duty.
(e) Cost in respect of work in progress represents costs up to the
stage of completion.
(f) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
(g) Cost where applicable has'' been arrived at on weighted average
method.
(XI) Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying
rate of exchange ruling at the time of transaction and exchange
differences arising on settlements except for acquisition of fixed
assets are dealt with in the Profit & Loss Account. Unsettled
transactions are converted at the year-end rate and gain or loss
arising on such transaction is recognised in the Profit & Loss Account
except in respect of exchange differences arising on repayment of
foreign currency liabilities incurred for acquiring fixed assets which
are adjusted in the carrying cost of the respective fixed assets.
(XII) Research & Development
Revenue expenditure on research & Development is charged to Profit &
Loss Account in the year in which it is incurred. Capital expenditure
on Research and Development is treated in the same way as additions to
fixed assets.
(XHI) Leased Equipment
Rental in respect of leased equipment acquired under financial lease is
charged to the Profit & Loss Account.
(XIV) Amortization of Expenses
a) Expenses incurred in connection with issue of debentures are written
off over the period of such debentures or ten years whichever is
earlier.
b) Preference Share issue expenses are charged off to revenue over the
period of such Preference Shares.
(XV) Retirement Benefits Provident Fund
Contributions to Provident Fund are defined contribution plans and are
paid to appropriate authorities and charged to Profit and Loss Account
on accrual basis. There are no other obligations other than the
contribution payable to respective authorities. Gratuity
The Company provides for gratuity, a defined benefit retirement plan
(the "Gratuity Plan") covering eligible employees. In accordance with
the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump
sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee''s salary and the tenure of employment. Liabilities with regard
to the Gratuity Plan are determined by actuarial valuation as of the
balance sheet date.Actuarial gains and losses are adjusted to the
profit and loss account in the period in which it arises.. Leave
Encashment Plan
The Company provides for leave encashment on actuarial basis as of
balance sheet date.
(XVI) Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid, if any, to the tax
authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. Unrecognized deferred tax assets of earlier years are
re-assessed and recognized to the extent that it has become reasonably
or virtually certain that future taxable income will be available
against which such deferred tax assets can be realized.
(XVII) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events, it is probable that there will be an outflow of resources and a
reliable estimate can be made of the amount of the obligation. These
are reviewed at each balance sheet date and adjusted to reflect the
current best estimate. Contingent Assets are neither recognized nor
disclosed in the financial statements. Contingent liabilities are not
provided for and are disclosed by way of notes.
(XVIII) Cenvat
Excise duty payments included in purchase of Raw Materials are
considered as inputs for conversion and debited to CENVAT ACCOUNT,
which is utilized against despatch of finished goods after conversion
of those raw materials into finished goods. Accordingly, purchase
account is debited with the value of goods and other expenses but not
the excise duty on purchase.
(XIX) Events Occurring after the Balance Sheet Date Occurrences of
event after the Balance Sheet Date & having material effect on the
revenue statements of the year under review have been considered in
drawing up the accounts.
Mar 31, 2012
(I) Basis of Presenting Financial Statements
The financial statements are prepared on going concern basis under
historical cost convention modified by the revaluation of certain fixed
assets and are in accordance with the requirements of the Companies
Act, 1956, and comply with the Mandatory Accounting Standards referred
to in sub- section (3C) of Section 211 of the said Act Accounting
Policies, unless specifically stated to be otherwise, are consistent
and are in consonance with generally accepted accounting principles.
(II) Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles (GAAP) in India requires management to
make estimates and assumptions that affect the reported amount of
assets and liabilities and the disclosure of contingent liabilities on
the date of financial statements and the reported amount of revenue and
expenses during the reporting period actual results could defer from
those estimates. Any revision to accounting estimates is recognised
prospectively in current and future period.
(III) Classification of Assets and Liabilities
The Revised Schedule VI to the Companies Act, 1956 requires assets and
liabilities to be classified as either Current or Non-current.
(a) An asset shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be realized in, or is intended for sale or
consumption in, the Company's normal operating cycle.
(ii) It is held primarily for the purpose of being traded.
(iii)lt is expected to be realized within twelve months after the
reporting date, or
(iv)lt is cash or cash equivalent unless it is restricted from being
exchanged or used to settle a liability for at least twelve months
after the reporting date.
(b) All assets other than current assets shall be classified as
non-current.
(c) A liability shall be classified as current when it satisfies any of
the following criteria:
(i) It is expected to be settled in the company's normal operating
cycle.
(ii) It is held primarily for the purpose of being traded.
(iii) It is due to be settled within twelve months after the reporting
date, or
(iv)The company does not have' an unconditional right to defer
settlement of the liability for at least twelve months after the
reporting date.
(d) All liabilities other than current liabilities shall be classified
as non-current.
(IV) Operating Cycle
An operating cycle is the time between the acquisition of assets for
processing and their realization in cash or cash equivalents.
(V) Previous Year Figures
The financial statements for the year ended 31st March, 2012 have been
presented as per the Revised Schedule VI to the Companies Act, 1956.
Accordingly, the previous year's figures have also been reclassified to
conform to this year's classification.
(VI) Revenue Recognition
(a) All revenues, costs, assets and liabilities are accounted for on
accrual basis.
(b) Dividend income is accounted when the right to receive payment is
established and known.
(c) Revenue from sale of goods is recognized when the significant risks
and rewards of ownership of the goods are transferred to the customer
and is stated net of trade discounts; excise duty sales returns and
sales tax.
(d) Revenue from interest is recognized on a time proportion basis
taking into account the amount outstanding and the applicable rate of
interest.
(e) Non compete fees received in a financial year are apportioned
annually over the period of the Contract.
(VII) Fixed Assets (a) Tangible:
Fixed Assets are stated at cost or revaluation, net of CENVAT and VAT.
Cost comprises the purchase price and any attributable cost of bringing
the assets to working condition for its intended use. Assets under
installation or under construction / modernization including respective
pre- operative expenses at the Balance Sheet date are shown under
capital work-in-progress. . Interest on borrowing for acquisition of
qualifying assets is capitalised. Profit or loss on disposal of fixed
assets is recognized in Profit and Loss Account
(b) Intangible: Trade Mark
A product under the brand name of "Instacolour" was launched in earlier
years for which a significant amount in terms of advertisement etc. was
incurred for promotion of the above brand. The company had applied for
registration of such brand as Trade mark, expenses incurred on such
brand from the date of launching till 31st March, 1999 was capitalized
but registration department has still not issued the necessary
registration certificate.
(VIII) Impairment Loss
Fixed assets are reviewed at each balance sheet date for impairment. In
case events and circumstances indicate any impairment, recoverable
amount of fixed assets is determined. An impairment loss is recognized,
whenever the carrying amount of assets either belonging to cash
generating unit (CGU) or otherwise exceeds recoverable amount. The
recoverable amount is the greater of asset's net selling price or its
value in use. In assessing value in use, the estimated future cash
flows from the use of the assets are discounted to their present value
at appropriate rate. Impairment loss.in excess of Revaluation Surplus
is recognised as expense in Profit & Loss Account. An impairment loss
is reversed if there has been change in the recoverable amount and such
loss either no longer exist or has decreased. Impairment loss/ reversal
thereof is adjusted to the carrying value of the respective assets
which in case of CGU, are allocated to its assets on pro- rata basis.
Impairment loss on revalued assets/CGU previously charged as expenses
is recognised as income in the Profit and Loss Account.
(IX) Investments
(a) Investments are capitalized at actual cost including cost
incidental to acquisition.
(b) Investments are classified as long term and current on the basis
decision taken by the Board of Directors at the time of making
Investments.
(c) Long term Investments are individually valued at cost less
provision for diminution other than temporary.
(d) Current Investments, if any, are valued at lower of cost or market
value determined on category of investment basis.
(e) Reclassification of Investments from current to long term
categories is made at the lower of cost or market value at the date of
transfer and resultant profit/loss, if any, are accounted for in the
Profit & Loss Account.
(X) Valuation of Inventories
(a) Stores and spare parts are valued at cost less provisions as
required on account of damages and obsolescence.
(b) Stock in trade comprising of raw materials (including in transit),
packing materials, stock in process and finished goods are valued at
the lower of cost and net realizable value less provisions as required
on account of damages and obsolescence.
(c) Cost in respect of raw materials, packing materials and stores and
spares include expenses incidental to procurement thereof.
(d) Cost in respect of finished goods represents prime cost and
includes appropriate portion of overhead cost and excise duty.
(e) Cost in respect of work in progress represents costs up to the
stage of completion.
(f) Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion and estimated
costs necessary to make the sale.
(g) Cost where applicable has been arrived at on weighted average
method.
(XI) Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying
rate of exchange ruling at the time of transaction and exchange
differences arising on settlements except for acquisition of fixed
assets are dealt with in the Profit & Loss Account. Unsettled
transactions are converted at the year-end rate and gain or loss
arising on such transaction is recognised in the Profit & Loss Account
except in respect of exchange differences arising on repayment of
foreign currency liabilities incurred for acquiring fixed assets which
are adjusted in the carrying cost of the respective fixed assets.
(XII)Research & Development
Revenue expenditure on research & Development is charged to Profit &
Loss Account in the year in which it is incurred. Capital expenditure
on Research and Development is treated in the same way as additions to
fixed assets.
(XIII) Leased Equipment
Rental in respect of leased equipment acquired under financial lease is
charged to the Profit & Loss Account.
(XIV) Amortization of Expenses
a) Expenses incurred in connection with issue of debentures are written
off over the period of such debentures or ten years whichever is
earlier. b) Preference Share issue expenses are charged off to revenue
over the period of such Preference Shares.
(XV) Retirement Benefits Provident Fund
Contributions to Provident Fund are defined contribution plans and are
paid to appropriate authorities and charged to Profit and Loss Account
on accrual basis. There are no other obligations other than the
contribution payable to respective authorities. Gratuity
The Company provides for gratuity, a defined benefit retirement plan
(the "Gratuity Plan") covering eligible employees. In accordance with
the Payment of Gratuity Act, 1972, the Gratuity Plan provides a lump
sum payment to vested employees at retirement, death, incapacitation or
termination of employment, of an amount based on the respective
employee's salary and the tenure of employment. Liabilities with regard
to the Gratuity Plan are determined by actuarial valuation as of the
balance sheet date. Actuarial gains and losses are adjusted to the
profit and loss account in the period in which it arises.. Leave
Encashment Plan
The Company provides for leave encashment on actuarial basis as of
balance sheet date.
(XVI) Taxes on Income
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid, if any, to the tax
authorities in accordance with the Indian Income Tax Act. Deferred
income taxes reflect the impact of current year timing differences
between taxable income and accounting income for the year and reversal
of timing differences of earlier years. Deferred tax is measured based
on the tax rates and the tax laws enacted or substantively enacted at
the balance sheet date. Deferred tax assets are recognized only to the
extent that there is reasonable certainty that sufficient future
taxable income will be available against which such deferred tax assets
can be realized. Unrecognized deferred tax assets of earlier years are
re-assessed and recognized to the extent that it has become reasonably
or virtually certain that future taxable income will be available
against which such deferred tax assets can be realized.
(XVII) Provisions, Contingent Liabilities and Contingent Assets
Provisions involving substantial degree of estimation in measurement
are recognized when there is a present obligation as a result of past
events, it is probable that there will be an outflow of resources and a
reliable estimate can be made of the amount of the obligation. These
are reviewed at each balance sheet date and adjusted to reflect the
current best estimate. Contingent Assets are neither recognized nor
disclosed in the financial statements. Contingent liabilities are not
provided for and are disclosed by way of notes.
(XVIII) CENVAT
Excise duty payments included in purchase of Raw Materials are
considered as inputs for conversion and debited to CENVAT ACCOUNT,
which is utilized against despatch of finished goods after conversion
of those raw materials into finished goods. Accordingly, purchase
account is debited with the value of goods and other expenses but not
the excise duty on purchase.
Mar 31, 2010
1) Basis of Accounting
The financial statements are prepared under historical cost convention
modified by the revaluation of certain fixed assets, on the basis of a
going concern and are in accordance with the requirements of the
Companies Act, 1956, and comply with the Accounting Standards referred
to in sub-section (3C) of Section 211 of the said Act. The Company
follows mercantile system of accounting and recognizes income and
expenditure on accrual basis.
2) Fixed Assets
i) Freehold land, Buildings and Plant and Machinery as at 30th June,
1985 are stated at valuation which was done by an approved valuer at
the then current replacement value. Subsequent acquisition of these
assets and other fixed assets are stated at their purchase cost
together with any incidental expenses of acquisition. Further Land &
Buildings as at 30th September, 1995, was revalued by an approved
valuer and the net increase in such revaluation was credited to
revaluation reserve. Interest on borrowing for acquisition of
qualifying assets is capitalised. During the year 2005- 2006 the
company made an assessment for any indication of impairment in the
carrying amount of the companys fixed assets and determined the
impairment loss on certain fixed assets. As required by the Standard,
the impairment loss has been assessed and charged to the Profit & Loss
account after adjusting the revaluation reserve on the assets.
ii) Trade Mark
A product under the brand name of "instacolor" was launched in previous
years for which a significant amount in terms of advertisement etc. was
incurred for promotion of the above brand. The company had applied for
registration of such brand as Trade mark, expenses incurred on such
brand from the date of launching till 31st March, 1999 was capitalized
but registration department has still not issued the necessary
registration certificate.
iii) Depreciation
Depreciation is provided on straight line/written down value method on
pro rata basis at the rates specified in the Schedule XIV of the
Companies Act, 1956, except for following assets as under:
a) (i) Written down value method - on assets acquired upto 30th June,
1986.
(ii) Straight line method - on assets acquired on and from 1st July,
1986.
b) Leasehold land is amortised over the period of the lease.
c) Freehold land is not depreciated.
d) Trade Marks is written off on straight line method over a period of
ten years.
e) In respect of impaired assets depreciation is provided under
Straight Line Method based on assets revised carrying amount less its
residual value if any over its remaining estimated useful life.
f) In respect of revalued assets, depreciation on the amount added on
revaluation is set off against Revaluation Reserve.
g) Profit or loss on disposal of fixed assets is recognised in Profit
and Loss Account.
3) Impairment Loss
Impairment loss assessment is done at the balance sheet date to
determine whether there is any indication of impairment in the carrying
amount of the Companys fixed assets. If any such indication exists,
the assets recoverable amount is estimated. An impairment loss is
recognized whenever the carrying amount of an asset exceeds its
recoverable amount. After recognition of impairment loss, the
depreciation charge for the asset is adjusted in future periods to
allocate the assets revised carrying amount, less its residual value
(if any), on Straight Line basis over its remaining useful life.
4) Investments
a) Long Term Investments are stated at cost. In case, there is a
permanent diminution in the value of any investments, a provision for
the same is made in the accounts.
b) Current Investments are stated at lower of cost and market value /
repurchase price.
c) Dividend income is accounted when the right to receive payment is
established and known.
5) Valuation of Inventories
a) Stores and spare parts are valued at cost less provisions as
required on account of damaged and obsolete stocks.
b) Stock in trade comprising of raw materials (including in transit),
packing materials, stock in process and finished goods are valued at
the lower of cost and net realizable value after making such provisions
as required on account of damaged, unserviceable,inert and obsolete
stocks.
c) Cost has been arrived at on the basis of weighted average method.
6) Foreign Currencies
Transactions in foreign currency are recorded in rupees by applying
rate of exchange ruling at the time of transaction and exchange
differences arising on settlements except for acquisition of fixed
assets are dealt with in the Profit & Loss Account. Unsettled
transactions are converted at the year-end rate and gain or loss
arising on such transaction is recognised in the Profit & Loss Account
except in respect of exchange differences arising on repayment of
foreign currency liabilities incurred for acquiring fixed assets which
are adjusted in the carrying cost of the respective fixed assets.
7) Revenue Recognition
Revenue is recognised to the extent that it can be reliably measured
and is probable that the economic benefits will flow to the Company.
Sales of Goods:
Revenue from sale of goods is recognized when the significant risks and
rewards of ownership of the goods are transferred to the customer and
is stated net of trade discounts,excise duty.sales returns and sales
tax.
Interest:
Revenue is recognized on a time proportion basis taking into account
the amount outstanding and the applicable rate of interest.
Dividend:
Revenue is recognized when the right to receive is established.
8) Research & Development
Revenue expenditure on research & Development is charged to Profit &
Loss Account in the year in which it is incurred. Capital expenditure
on Research and Development is treated in the same way as expenditure
on fixed assets.
9) Leased Equipment
Rental in respect of leased equipment acquired under financial lease is
charged to the Profit & Loss Account.
10) Debenture and Share Issue Expenses
Expenses incurred in connection with issue of debentures are written
off over the period of such debentures or ten years whichever is
earlier.
Preference Share issue expenses are charged off over the period of such
Preference Shares.
11) Voluntary Retirement Scheme / Retrenchment Compensation
Payments under voluntary retirement scheme for employees is amortised
in equal instalments over a period of five years.
Retrenchment compensation to employees is amortised in equal
instalments over a period of 60 months.
12) Retirement Benefits
Contribution to defined contribution scheme such as provident fund etc.
are charged to the Profit and Loss Account as incurred. The Company
also provides for retirement benefits in the form of Gratuity and Leave
Encashment .Such defined benefits are charged to the Profit and Loss
Account based on actuarial valuation,as at the balance sheet date,made
by independent actuaries.
13) Deferred Taxation
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 virtual/reasonable certainty that these would be
realized in future.
14) 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. Contingent assets are not recognized or disclosed in the
financial statements.
15) CENVAT
Excise duty payments relating to purchases of input are being debited
to CENVAT account, which is utilized against despatch of finished goods
after conversion of those inputs into finished goods. Accordingly,
purchase account is debited with the value of goods and other expenses
but not the excise duty on purchase. This is being consistently
followed by the Company over the years..
16) Non Compete Fees
Non compete fees received apportioned annually over the period of the
Contract.