Notes to Accounts of Kansai Nerolac Paints Ltd.
Mar 31, 2023
Capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Share based Payment Reserve
This represents the fair value of the stock options granted by the Company under the Restricted Stock Unit Plan (âRSU 2022 Plan'') accumulated over the vesting period. The reserve will be utilised on exercise of the options.
Dividend
For the year 2021-2022, the Directors had recommended and Shareholders had approved a final dividend of 100% (? 1 per share), which has been accounted in current year. In addition, the Company had declared interim dividend of 125% (? 1.25 per share) paid on November 22, 2021.
The Board has recommended final dividend of 270% (? 2.70 per share) for the financial year ended March 31,2023 as compared to total dividend of 225% (? 2.25 per share) declared last year.
The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend of ? 145.50 Crores (2021-2022 ? 53.89 Crores) have not been recognised as liabilities.
Issue of Bonus Shares
The Board has considered and approved issue of 1 bonus equity shares of face value of ? 1 each against 2 equity share of the face value of ? 1 each. This is subject to shareholder''s approval. The approval of the Shareholders for the issue of Bonus Shares will be obtained by means of postal ballot.
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36. Contingent Liabilities and Commitments (to the extent not provided for) |
'' in Crores |
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Year ended 31st March, 2023 |
Year ended 31st March, 2022 |
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a. Claims against the Company not acknowledged as debt: |
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Excise and Service Tax......................................................................................... |
8.38 |
8.38 |
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Sales Tax............................................................................................................... |
18.15 |
18.15 |
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The Company has made adequate provisions in the accounts for claims against the Company related to direct and indirect taxes matters, except for certain claims not acknowledged as debts, totalling to ? 26.53 Crores (2021-2022 ? 26.53 Crores) from the Excise / Service Tax / Sales Tax / GST Authorities, in respect of disallowance of Cenvat Credit of Excise / Service Tax and Input Tax Credit of Sales Tax / GST. |
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In addition, the Company is subject to other legal proceedings in respect of other matters arisen in the ordinary course of business. The Company''s management is of the opinion that ultimate liability in respect of these litigations shall not exceed the amount provided in books of account, and shall not have any material adverse effect on the Company''s operation and financial position. |
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b. Commitments: |
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Estimated amount of contracts remaining to be executed on capital account and not provided for (Net of advances)....................................................................... |
36.09 |
63.93 |
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Company has entered into Share holding agreement (SHA) with M/s Amplus Energy Solutions Private Limited to source green power through Group Captive arrangement......................................................................................................... |
2.05 |
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Corporate guarantee |
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Stand by Letter of Credit (SBLC) given to Bank for loan taken by Kansai Nerolac Paints (Bangladesh) Limited (formerly known as RAK Paints Limited) - Subsidiary Company .............................................................................................................. |
22.76 |
25.83 |
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Corporate guarantee given to Bank for loan taken by Kansai Nerolac Paints (Bangladesh) Limited (formerly known as RAK Paints Limited) - Subsidiary Company.............................................................................................................. |
9.01 |
81.01 |
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Corporate guarantee given to Bank for Kansai Paints Lanka (Private) Limited -Subsidiary Company............................................................................................ |
8.73 |
8.92 |
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103.12 |
208.27 |
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c. Contribution to Provident Fund There are numerous interpretative issues relating to the Supreme Court (SC) judgment dated February 28, 2019 on Provident Fund (PF) on the inclusion of allowances for the purpose of PF contribution as well as its applicability of effective date. The impact is not expected to be material as per the assessment made by the Company. |
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel includes (1) Mr. P. P. Shah, Chairman (2) Mr. Anuj Jain, Managing Director w.e.f 1st April 2022 (Whole-time Director upto 31st March 2022) (3) Mr. N. N. Tata, Director upto 10th August 2022 (4) Ms. Sonia Singh, Director (5) Mr. Bhaskar Bhat, Director w.e.f 10th August 2022 (6) Mr. P. D. Pai, CFO and (7) Mr. G. T. Govindarajan, Company Secretary.
Related Party Transactions:
Related party transactions were made on terms equivalent to those that prevail in an arm''s length transactions. Outstanding balances at the year-end are unsecured, interest free and will be settled in cash.
# Includes commission paid for the previous year, company''s contribution to Provident Fund and Superannuation Fund and excludes accrual for commission for the current year and restricted stock units (RSU) granted during the year worth of ? 6.11 Crores (2021-2022 ? Nil) to KMP''s in accordance with the Kansai Nerolac Paints Limited - Restricted Stock Unit Plan (âRSU 2022 Plan''), However, such RSU''s units would vest after fulfillment of vesting conditions in accordance with the RSU Plan 2022.
* Employee Benefits to Mr. H M Bharuka include retirement benefits of ? 8.24 Crores towards Gratuity, Leave Encashment and Ex-gratia.
As the future liabilities for gratuity, leave encashment and Director pension along with medical benefits are provided on an actuarial valuation basis for the Company as a whole, the amount pertaining to individual is not ascertainable and therefore not included above.
During the year, the Company has given corporate guarantee of ? 8.60 Crores for short-term borrowing by the Kansai Nerolac Paints (Bangladesh) Limited and the same has been repaid by the end of the year.
Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.
The Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance Corporation of India.
The Company expects to contribute ? 2.70 Crores (2021-2022 ? Nil Crores) to the fund during the subsequent accounting year.
Provident fund (Managed by the Trust set up by the Company)
The Company has contributed ? 1.38 Crores (2021-2022 ? 1.37 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall.
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for paints and other related products of the Company. As the Management Committee monitors the business activity as a single business segment viz. âPaints'' and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.
(B) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
â Credit Risk
â Liquidity Risk
â Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Company''s risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.
The Company''s Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(B) Financial Risk Management (contd.)
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables:
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing more than 5% of the total balance of trade receivables. For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.
Financial Instruments and Cash Deposits
Credit risks from balances with banks and financial institutions is managed by the Company''s Treasury Department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
(iii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level.
Since the Company does not have any interest bearing borrowings, the exposure to risk of changes in market interest rates is not applicable. Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments, debentures and bonds. Since the investments in equity instruments and debentures is not material and bonds being debt instruments, the exposure to risk of changes in market rates is minimal. The details of such investments in equity instrument and debentures is given in Note 7 and details of investments in bonds is given in Note 11.
Exposure to Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due on timely basis. The Company does not enter into any derivative instruments for trading or speculative purposes. The carrying amounts of the Company''s foreign currency denominated monetary items are as follows:
Carrying amounts of cash and cash equivalents, trade receivables, loans, trade payables and other financial liabilities as at 31st March 2023 and 31st March 2022 approximate the fair value. Difference between carrying amounts and fair values of bank deposits, earmarked balances with banks, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified transaction with one struck off company i.e. Chemene Bombay Private Limited as Clearing and Forwarding Agent with whom transaction during the year amounts to ? 0.15 Crores (2021-2022 ? 0.13 Crores).
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
Mar 31, 2022
3.1. Figures in the brackets are the corresponding figures in respect of the previous year.
3.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
3.3. Nil amount of impairment loss is recognised during the current and comparative periods.
3.4. During the financial year, no rental income was generated from the investment properties whereas direct operating expenses of ? 0.26 Crores (2020-2021 ? 0.27 Crores) were incurred and recorded as expense in the Standalone Statement of Profit and Loss.
3.5. Total fair value of Investment Property is ? 1354.98 Crores (2020-2021 ? 1400.29 Crores).
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the valuation techniques used.
Description of Valuation Technique used
The Company obtains Independent Valuations of its investment property. The fair value of the investment property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.
Capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Dividend
For the year 2020-2021, the Directors had recommended and Shareholders had approved a interim and final dividend of 125% and 400% respectively (? 5.25 per share), which has been accounted in current year.
The Board has recommended a final dividend of 100% (? 1.00 per share) for the year, in addition the Company had declared interim dividend of 125% (? 1.25 per share) paid on November 22, 2021. Accordingly, the total dividend is 225% (? 2.25 per share) for the financial year ended March 31,2022 as compared to total dividend of 525% (? 5.25 per share) declared last year.
The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend of ? 53.89 Crores (2020-2021 ? 215.56 Crores) have not been recognised as liabilities.
b. Provident fund (Managed by the Trust set up by the Company)
The Company has contributed ? 1.37 Crores (2020-2021 ? 1.41 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall.
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for paints and other related products of the Company. As the Management Committee monitors the business activity as a single business segment viz. âPaints'' and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee thatadvises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Company''s risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.
The Company''s Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
41. Financial Instruments: Fair Values and Risk Management (contd.)
(B) Financial Risk Management (contd.)
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables:
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing more than 5% of the total balance of trade receivables. For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.
Financial Instruments and Cash Deposits
Credit risks from balances with banks and financial institutions is managed by the Company''s Treasury Department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
iii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level.
Since the Company does not have any interest bearing borrowings, the exposure to risk of changes in market interest rates is not applicable. Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments, debentures and bonds. Since the investments in equity instruments and debentures is not material and bonds being debt instruments, the exposure to risk of changes in market rates is minimal. The details of such investments in equity instrument and debentures is given in Note 5 and details of investments in bonds is given in Note 9.
Exposure to Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due on timely basis. The Company does not enter into any derivative instruments for trading or speculative purposes. The carrying amounts of the Company''s foreign currency denominated monetary items are as follows:
43. Disclosure of Lease as per Ind AS 116
The following is the summary of practical expedients elected on application:
(i) Applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
(ii) Applied the exemption not to recognize right-of-use assets and liabilities for leases with less than 12 months of lease term on the date of initial application.
(iii) Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application.
(iv) Applied the practical expedient to grandfather the assessment of which transactions are leases. Accordingly, Ind AS 116 is applied only to contracts that were previously identified as leases under Ind AS 17.
The Company has made an assessment of the recoverable amount for its long-term investment in Kansai Paints Lanka (Private) Limited after taking in to account its past performance, current change in economic and market conditions consequent to the severe detonation of political and economic conditions, currency devaluation and very high inflation. Accordingly, the Company determined the recoverable amount for this investment in subsidiary and recorded additional provision for impairment of ? 11.39 Crores (2020-2021 ? 10.82 Crores).
(a) Merger of Marpol Private Limited with Kansai Nerolac Paints Limited
(i) Pursuant to the scheme of Arrangement (''the Scheme'') approved by the National Company Law Tribunal (''the NCLT''), Mumbai Bench vide its order dated on 10th August 2021, Marpol Private Limited (the Merged Undertaking) wholly owned subsidiary of the Company, merged with the Company with effect from 1st July 2019 (''the appointed date''). Pursuant to necessary filings with the concerned Registrar of Companies, the Scheme has become effective from 21st October, 2021. In accordance with Appendix C of Ind AS 103 ''Business Combinations under common control'' and comparatives have been restated to give effect of the amalgamation from the beginning of the previous year, irrespective of the actual date of the combination. Accordingly, business combination is accounted with effect from 1st April 2020.
(ii) The Merged Undertaking is engaged in the business of manufacturing powder and paint. The acquisition is in-line with the Company''s strategy to grow the business and saving in costs of operations.
(iii) Accounting treatment of the arrangement
Business combination is accounted for using the ''pooling of interests'' method as per Appendix C of Ind AS 103 - Business Combinations as notified under Section 230 to 232 of the Companies Act, 2013 and same is in line with the approved scheme, which involves the following:
(a) The financial information in the financial statements in respect of prior periods is restated as if the business combination had occured from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations is accounted with effect from 1st April 2020.
(b) The Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme at the respective book values appearing in the books of the Merged Undertaking.
(c) The value of investment in the Merged Undertaking in the books of the Company shall be cancelled.
(d) No adjustments are made to reflect fair values, or recognise any new assets or liabilities.
(e) As per clarification in Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 9, goodwill has been recognised in the books of the Company.
(f) The difference between the net assets of the Merged Undertaking transferred to Company, after making adjustment specified in (c) and (d) shall be adjusted in ''Other Equity'' of the Company.
As per Appendix C of Ind AS 103 ''Business Combination'' for all the business combinations under common controls the financial information in the financial statements in respect of prior period should be restated as if the business combination had occurred from the beginning of the preceding period in the financial statements, irrespective of acrual date of the combination. Hence financial statements of the Merged Undertaking are merged with effect from 1 April 2020. Accordingly figures for the year ended 31 March 2021 reinstated are after giving effect to the merger.
45. (b) Merger of Perma Construction Aids Private Limited with Kansai Nerolac Paints Limited
(i) Pursuant to the scheme of Arrangement (''the Scheme'') approved by the National Company Law Tribunal (''the NCLT''), Ahemdabad Bench vide its order dated 27th September 2021, Perma Construction Aids Private Limited (the Merged Undertaking) wholly owned subsidiary of the Company, merged with the Company with effect from 1st July 2019 (''the appointed date''). Pursuant to necessary filings with the concerned Registrar of Companies, the Scheme has become effective from 21st October, 2021. In accordance with Appendix C of Ind AS 103 ''Business Combinations under common control'' and comparatives have been restated to give effect of the amalgamation from the beginning of the previous year, irrespective of the actual date of the combination. Accordingly, business combination is accounted with effect from 1st April 2020.
(ii) The Merged Undertaking is engaged in the business of manufacturing paint. The acquisition is in-line with the Company''s strategy to grow the business and saving in costs of operations.
(iii) Accounting treatment of the arrangement
Business combination is accounted for using the ''pooling of interests'' method as per Appendix C of Ind AS 103 - Business Combinations as notified under Section 230 to 232 of the Companies Act, 2013 and same is in line with the approved scheme, which involves the following:
(a) The financial information in the financial statements in respect of prior periods is restated as if the business combination had occured from the beginning of the preceding period in the financial statements, irrespective of the actual date of the combination. Accordingly, business combinations is accounted with effect from 1st April 2020.
(b) The Company has recorded the asset and liabilities of the Merged Undertaking vested in it pursuant to this Scheme at the respective book values appearing in the books of the Merged Undertaking.
(c) The value of investment in the Merged Undertaking in the books of the Company shall be cancelled.
(d) No adjustments are made to reflect fair values, or recognise any new assets or liabilities
(e) As per clarification in Ind AS Transition Facilitation Group (ITFG) Clarification Bulletin 9, goodwill has been recognised in the books of the Company
(f) The difference between the net assets of the Merged Undertaking transferred to Company, after making adjustment specified in (c) and (d) shall be adjusted in ''Other Equity'' of the Company.
As per Appendix C of Ind AS 103 ''Business Combination'' for all the business combinations under common controls the financial information in the financial statements in respect of prior period should be restated as if the business combination had occurred from the beginning of Ihe preceding period in the financial statements, irrespective of acrual date of the combination. Hence financial statements of the Merged Undertaking are merged with effect from 1st April 2020. Accordingly figures for the year ended 31st March 2021 reinstated are after giving effect to the merger.
The Company has considered the impact of COVID-19 pandemic on its business operations and financial results based on its review of current indicators of future economic conditions and expects that the carrying amount of the assets will be recovered. However, the impact assessment of this pandemic is a continuing process given the uncertainties associated with its nature and duration. Despite reduced cases of COVID-19 being reported in the country, there have been massive disruptions in supply chain especially from global. Accordingly, the Company will continue to monitor any material changes to future economic conditions.
(i) The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
(ii) The Company has identified transaction with one struck off company i.e. Chemene Bombay Private Limited as Clearing and Forwarding Agent with whom transaction during the year amounts to ? 0.13 Crores (2020-2021 - ? 0.12 Crores).
(iii) The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period,
(iv) The Company has not traded or invested in Crypto currency or Virtual Currency during the financial year.
(v) The Company has not advanced or loaned or invested funds to any other person(s) or entity, including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
(vi) The Company has not received any fund from any person or entity, including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries,
(vii) The Company has no such transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income-tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income-tax Act, 1961
Figures pertaining to 31st March, 2021 have been recast to give effect of merger of Marpol Private Limited and Perma Construction Aids Private Limited with Company.
Mar 31, 2021
Fair Value Hierarchy
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the valuation techniques used.
Description of Valuation Technique used
The Company obtains Independent Valuations of its investment property. The fair value of the investment property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.
General Reserve
Under the erstwhile Companies Act 1956, general reserve was created through an annual transfer of net income at a specified percentage in accordance with applicable regulations. The purpose of these transfers was to ensure that if a dividend distribution in a given year is more than 10% of the paid-up capital of the Company for that year, then the total dividend distribution is less than the total distributable results for that year. Consequent to introduction of Companies Act 2013, the requirement to mandatorily transfer a specified percentage of the net profit to general reserve has been withdrawn. However, the amount previously transferred to the general reserve can be utilised only in accordance with the specific requirements of Companies Act, 2013.
Dividend
For the year 2019-2020, the Directors had recommended and Shareholders had approved a normal dividend of 315% ('' 3.15 per share), which has been accounted in current year.
The Board has recommended a final dividend of 400% ('' 4.00 per share) which includes special dividend of 200% ('' 2.00 per share) for the year, in addition the Company had declared interim dividend of 125% ('' 1.25 per share) paid on November 27, 2020. Accordingly, the total dividend is 525% ('' 5.25 per share) for the financial year ended March 31,2021 as compared to total dividend of 315% ('' 3.15 per share) declared last year.
The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend of '' 215.56 Crores (2019-2020''169.76 Crores) have not been recognised as liabilities.
A related party is a person or entity that is related to the entity that is preparing its Financial Statements
(a) A person or a close member of that person''s family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member)
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
b. Provident fund (Managed by the Trust set up by the Company)
The Company has contributed '' 1.41 Crores (2019-2020''2.11 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall.
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for paints and other related products of the Company. As the Management Committee monitors the business activity as a single business segment viz. âPaints'' and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 "Operating Segmentsâ.
(B) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
â Credit Risk
â Liquidity Risk
â Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee thatadvises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Company''s risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.
The Company''s Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
Financial Instruments: Fair Values and Risk Management (contd.)
(B) Financial Risk Management (contd.)
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables:
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
The concentration of credit risk is limited due to the fact that the customer base is large. There is no customer representing more than 5% of the total balance of trade receivables. For trade receivables, as a practical expedient, the Company computes credit loss allowance based on a provision matrix. The provision matrix is prepared based on historically observed default rates over the expected life of trade receivables and is adjusted for forward-looking estimates.
Financial Instruments and Cash Deposits
Credit risks from balances with banks and financial institutions is managed by the Company''s Treasury Department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
i) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
(B) Financial Risk Management (contd.)
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level.
Since the Company does not have any interest bearing borrowings, the exposure to risk of changes in market interest rates is not applicable. Other price risk is the risk that the fair value of a financial instrument will fluctuate due to changes in market traded price. Other price risk arises from financial assets such as investments in equity instruments, debentures and bonds. Since the investments in equity instruments and debentures is not material and bonds being debt instruments, the exposure to risk of changes in market rates is minimal. The details of such investments in equity instrument and debentures is given in Note 5 and details of investments in bonds is given in Note 9.
Exposure to Currency Risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate due to changes in foreign exchange rates. The Company enters into forward exchange contracts to hedge against its foreign currency exposures relating to the recognised underlying liabilities and firm commitments. The Company''s policy is to hedge its exposures above predefined thresholds from recognised liabilities and firm commitments that fall due on timely basis. The Company does not enter into any derivative instruments for trading or speculative purposes. The carrying amounts of the Company''s foreign currency denominated monetary items are as follows:
The Company has considered the impact of COVID-19 pandemic on its business operations and financial statement based on its review of current indicators of future economic conditions and expects that the carrying amount of the assets will be recovered. However, the impact assessment of this pandemic is a continuing process given the uncertainties associated with its nature and duration. Accordingly, the Company will continue to monitor any material changes to future economic conditions. There is no significant impact on its financial statements as at 31st March 2021
The figures for the previous year have been regrouped/reclassified wherever necessary to confirm with the current year''s classification.
Mar 31, 2019
A. corporate Information
Kansai Nerolac Paints Limited (the âCompanyâ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act. The Companyâs shares are listed on National Stock Exchange and Bombay Stock Exchange. The registered office of the Company is located at Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400013. The Company is principally engaged in the manufacturing of Paints.
Kansai Paints Co. Ltd. is immediate and ultimate holding company of Kansai Nerolac Paints Limited and is based and listed in Japan.
The Standalone Financial Statements for the year ended 31st March, 2019 have been reviewed by the Audit Committee and approved by the Board of Directors at their meetings held on 2nd May, 2019.
B. Basis of preparation
1. Statement of compliance
The Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the âActâ) and other relevant provisions of the Act.
Details of the Companyâs Accounting Policies are included in Note 1.
2. Functional and presentation currency
The Standalone Financial Statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest crores, unless otherwise indicated.
3. Basis of measurement
The Standalone Financial Statements have been prepared on the historical cost basis except for investments in mutual funds, non-trade equity shares, bonds and provision for employee defined benefit plans, which are measured at fair values at the end of each reporting period.
4. use of estimates and judgements
Critical accounting judgments and key sources of estimation uncertainty:
The preparation of the Standalone Financial Statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the Standalone Financial Statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
(i) critical Judgments
I n the process of applying the Companyâs accounting policies, management has made the following judgments, which have the most significant effect on the amount recognised in the financial statements.
Discount rate used to determine the carrying amount of the Companyâs employee defined benefit obligation.
In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation. contingences and commitments
I n the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, we treat them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the Standalone Financial Statements. Although there can be no assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially adverse impact on our financial position or profitability.
(ii) Key Sources of Estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
useful Lives of property, plant and equipment
As described in Note 1(3)(c), the Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment.
Allowances for doubtful debts
The Company makes allowances for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts equires use of judgments and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.
Allowances for Inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.
c. Recent Accounting pronouncement
Standards issued but not yet effective
Ministry of Corporate Affairs (âMCAâ) through Companies (Indian Accounting Standards) Amendment Rules, 2019 has notified the following new and amendments to Ind AS which the Company has not applied as they are effective for annual period beginning on or after 1 April 2019.
Ind AS 116 - Leases
The Company is required to adopt Ind AS 116, Leases from 1 April 2019. Ind AS 116 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard - i.e. lessors continue to classify leases as finance or operating leases. It replaces existing leases guidance, Ind AS 17, Leases.
The Company has completed an initial assessment of the potential impact on its Standalone Financial Statements but has not yet completed its detailed assessment. The quantitative impact of adoption of Ind AS 116 on the Standalone Financial Statements in the period of initial application is not reasonably estimable as at present.
The Company does not expect this standard to have significant impact on the Standalone Financial Statements.
Following impacts are expected:
â the total assets and liabilities on the balance sheet will increase with a decrease in net total assets, due to the depreciation of right of use assets being on a straight-line basis whilst the lease liability reduces by the principal amount of repayments;
â Interest expense will increase due to the unwinding of the effective interest rate implicit in the lease liability. Interest expense will be greater earlier in a leaseâs life, due to the higher principal value, causing profit variability over the term of lease. This effect may be partially mitigated due to the number of leases held by the Company at various stages of their terms; and
â operating cash flows will be higher and financing cash flows will be lower, as repayment of the principal portion of all lease liabilities will be classified as financing activities.
In addition to the above, the following amendments to existing standards have been issued, are not yet effective and are not expected to have a significant impact on the Standalone Financial Statements:
â Amendments to Ind AS 103, Business Combinations, and Ind AS 111, Joint Arrangements: This interpretation clarifies how an entity accounts for increasing its interest in a joint operation that meets the definition of a business.
â Amendments to Ind AS 109, Financial Instruments: amendments relating to the classification of particular prepayable financial assets.
â Amendments to Ind AS 12, Income Taxes, clarify that all income tax consequences of dividends (including payments on financial instruments classified as equity) are recognized consistently with the transactions that generated the distributable profits - i.e. in profit or loss, other comprehensive income or equity. Further Appendix C, uncertainty over income tax treatments has been added to clarify how entities should reflect uncertainties over income tax treatments, in particular when assessing the outcome a tax authority might reach with full knowledge and information if it were to make an examination.
â Amendment to Ind AS 19, Employee Benefits - The amendment to Ind AS 19 clarifies that on amendment, curtailment or settlement of a defined benefit plan, the current service cost and net interest for the remainder of the annual reporting period are calculated using updated actuarial assumptions - i.e. consistent with the calculation of a gain or loss on the plan amendment, curtailment or settlement. This amendment also clarifies that an entity first determines any past service cost, or a gain or loss on settlement, without considering the effect of the asset ceiling. This amount is recognized in profit or loss. The entity then determines the effect of the asset ceiling after plan amendment, curtailment or settlement. Any change in that effect is recognized in other comprehensive income (except for amounts included in net interest).
â Amendments to Ind AS 23, Borrowing Costs, clarify that the general borrowings pool used to calculate eligible borrowing costs excludes only borrowings that specifically finance qualifying assets that are still under development or construction.
â Amendments to Ind AS 28, Investments in Associates and Joint Ventures: When applying the equity method, a non-investment entity that has an interest in an investment entity associate or joint venture can elect to retain the fair value accounting applied by the associate or joint venture to its subsidiaries. Venture capital and other qualifying organizations can elect to measure investments in associates or joint ventures at fair value through profit or loss instead of applying the equity method. The amendments clarify that both these elections apply for each investment entity associate or joint venture separately.
The Company does not expect this standard to have significant impact on the Standalone Financial Statements.
1.1. Figures in the brackets are the corresponding figures in respect of the previous year.
1.2. No items of Property, Plant and Equipment were pledged as security for liabilities during any part of the current and comparative period.
1.3. Nil amount of borrowing costs is capitalised during the current and comparative period.
1.4. Nil amount of impairment loss is recognised during the current and comparative period.
1.5 The Company has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at the Balance Sheet date are Rs. 309.55 Crores (2017-2018 Rs. 279.22 Crores) and Rs. 234.31 Crores (2017-2018 Rs. 207.12 Crores) respectively.
(ii) Depreciation recognised in the Standalone Statement of Profit and Loss is Rs. 27.19 Crores (2017-2018 Rs. 23.41 Crores).
(b) The Company enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered as â Nil. Accordingly, the disclosure of the present value of minimum lease payments receivable at the Balance Sheet date is not made.
2.1. Figures in the brackets are the corresponding figures in respect of the previous year.
2.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
2.3. Nil amount of impairment loss is recognised during the current and comparative periods.
2.4. During the financial year, no rental income was generated from the investment properties whereas direct operating expenses of Rs. 0.18 Crores (2017-2018 Rs. 0.18 Crores) were incurred and recorded as expense in the Standalone Statement of Profit and Loss.
2.5. Total fair value of Investment Property is Rs. 1381.20 Crores (2017-2018 Rs. 1381.20 Crores).
Fair Value Hierarchy
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the Investment Property has been categorised as a level 3 fair value based on the inputs to the valuation techniques used.
Description of Valuation Technique used:
The fair value of the Investment Property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the Investment Property to similar properties that have actually been sold in arms-length distance from Investment Property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.
3.1. Figures in the brackets are the corresponding figures in respect of the previous year.
3.2. Nil amount of borrowing costs is capitalised during the current and comparative periods.
3.3. Nil amount of impairment loss is recognised during the current and comparative periods.
Capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
General reserve was created by transfers of profits as per Companies (Transfer of Profits to Reserves) Rules, 1975. As general reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss.
Dividend
For the year 2017-2018, the Directors had recommended and Shareholders had approved a normal dividend of 260% (Rs. 2.60 per share), which has been accounted in current year. For the year 2018-2019, the Directors have recommended dividend of (Rs. 2.60 per share) for the year. The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend of Rs. 140.12 Crores (2017-2018 Rs. 140.12 Crores) alongwith dividend distribution tax of Rs. 28.80 (2017-2018 Rs. 28.80 Crores) have not been recognised as liabilities.
Note 4: Related Party Disclosures
A related party is a person or entity that is related to the entity that is preparing its Financial Statements
(a) A person or a close member of that personâs family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel includes (1) Mr. P P Shah, Chairman (2) Mr. H. M. Bharuka, Vice Chairman and Managing Director, (3) Mr. N. N. Tata, Director (4) Mrs. Brinda Somaya, Director (5) Mr. Anuj Jain, Wholetime Director, (6) Mr. P D. Pai, CFO and (7) Mr. G. T. Govindarajan, Company Secretary.
Note 5: Employee Benefits
A. Defined Contribution Plans:
Contribution to defined contribution plan, recognised in the Standalone Statement of Profit and Loss under Companyâs Contribution to Provident Fund and Other Funds in Employee Benefits Expenses for the year are as under:
B. Defined Benefit Plans:
a. Gratuity
The following tables setout the funded status of the gratuity plans and the amounts recognised in the Companyâs Financial Statements as at 31st March, 2019 and 31st March, 2018:
Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.
The Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance Corporation of India. The Company expects to contribute Rs. 0.78 Crores (2017-2018 Rs. 2.80 Crores) to the fund during the subsequent accounting year.
b. Provident fund (Managed by the Trust set up by the Company)
The Company has contributed Rs. 2.13 Crores (2017-2018 Rs. 2.09 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall.
Note 6: Segment Reporting
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Companyâs business activity falls within a single business segment viz. âPaintsâ and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.
Note 7: Corporate Social Responsibilities
During the year, the Company has spent Rs. 13.45 Crores (2017-2018 Rs. 11.03 Crores) towards âCorporate Social Responsibility Activitiesâ (CSR Activities).
(a) Gross amount required to be spent by the Company during the year : Rs. 13.35 Crores.
(b) Amount spent during the year on:
(B) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
â Credit Risk
â Liquidity Risk
â Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Companyâs risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives.
The Companyâs Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables and Loans
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
Financial Instruments and Cash Deposits
Credit risks from balances with banks and financial institutions is managed by the Companyâs Treasury Department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.
(iii) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
Maturities of Financial Liabilities
The table below analyse the Companyâs financial liabilities into relevant maturing grouping based on their contractual maturities:
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Companyâs policy is to ensure that its net exposure is kept to an acceptable level.
Carrying amounts of cash and cash equivalents, trade receivables, loans, trade payables and other financial liabilities as at 31st March, 2019 and 31st March, 2018 approximate the fair value. Difference between carrying amounts and fair values of bank deposits, earmarked balances with banks, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.
Note 8:
Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 are provided as under for the year 2018-19, to the extent the Company has received intimation from the âSuppliersâ regarding their status under the Act.
Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.
Note 9:
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investments made are given in Note 5.
(ii) There are no Loans given by the Company in accordance with section 186 of the Companies Act, 2013 read with rules issued thereunder.
(iii) Details of Guarantees issued by the Company in accordance with Section 186 of the Companies Act, 2013 read with rules issued thereunder.
Note 10:
Consequent to the issuance of âGuidance Note on Division II - Ind AS schedule III the Companies Act, 2013â certain items of Standalone Financial Statements have been regrouped/reclassified.
Mar 31, 2018
A. corporate Information
Kansai Nerolac Paints Limited (the âCompanyâ) is a public limited company domiciled in India and incorporated under the provisions of the Companies Act. The Companyâs shares are listed on National Stock Exchange and Bombay Stock Exchange. The registered office of the Company is located at Nerolac House, Ganpatrao Kadam Marg, Lower Parel, Mumbai-400013. The Company is principally engaged in the manufacturing of Paints.
Kansai Paints Co. Ltd. is immediate and ultimate holding company of Kansai Nerolac Paints Limited and is based and listed in Japan. Financial Statements of Kansai Paints Co. Ltd. are available in public domain.
B. Basis of preparation
1. Statement of compliance
The Standalone Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the âActâ) and other relevant provisions of the Act.
The Standalone Financial Statements for the year ended 31st March, 2018 have been reviewed by the Audit Committee and approved by the Board of Directors at their meetings held on 2nd May, 2018.
Details of the Companyâs Accounting Policies are included in Note 1.
2. Functional and presentation currency
The Standalone Financial Statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest crores, unless otherwise indicated.
3. basis of Measurement
The Standalone Financial Statements have been prepared on the historical cost basis except for investments in mutual funds, non-trade equity shares, bonds and provision for employee defined benefit plans.
4. use of Estimates and Judgements
Critical accounting judgments and key sources of estimation uncertainty:
The preparation of the financial statements in conformity with the Ind AS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities and disclosures as at date of the financial statements and the reported amounts of the revenues and expenses for the years presented. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates under different assumptions and conditions.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.
(i) critical Judgments
I n the process of applying the Companyâs accounting policies, management has made the following judgments, which have the most significant effect on the amounts recognised in the financial statements.
Discount rate used to determine the carrying amount of the Companyâs defined benefit obligation.
In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in currencies consistent with the currencies of the post-employment benefit obligation.
contingences and commitments
In the normal course of business, contingent liabilities may arise from litigations and other claims against the Company. Where the potential liabilities have a low probability of crystallising or are very difficult to quantify reliably, we treat them as contingent liabilities. Such liabilities are disclosed in the notes but are not provided for in the financial statements. Although there can be no assurance regarding the final outcome of the legal proceedings, we do not expect them to have a materially adverse impact on our financial position or profitability.
(ii) Key Sources of Estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:
useful Lives of property, plant and Equipment
As described in Note 1(3)(c), the Company reviews the estimated useful lives and residual values of property, plant and equipment at the end of each reporting period. During the current financial year, the management determined that there were no changes to the useful lives and residual values of the property, plant and equipment.
Allowances for doubtful debts
The Company makes allowances for doubtful debts based on an assessment of the recoverability of trade and other receivables. The identification of doubtful debts requires use of judgments and estimates. Where the expectation is different from the original estimate, such difference will impact the carrying value of the trade and other receivables and doubtful debts expenses in the period in which such estimate has been changed.
Allowances for Inventories
Management reviews the inventory age listing on a periodic basis. This review involves comparison of the carrying value of the aged inventory items with the respective net realizable value. The purpose is to ascertain whether an allowance is required to be made in the financial statements for any obsolete and slow-moving items. Management is satisfied that adequate allowance for obsolete and slow-moving inventories has been made in the financial statements.
liability for Sales Return
In making judgment for liability for sales return, the management considered the detailed criteria for the recognition of revenue from the sale of goods set out in Ind AS 18 and in particular, whether the Company had transferred to the buyer the significant risk and rewards of ownership of the goods. Following the detailed quantification of the Companyâs liability towards sales return, the management is satisfied that significant risk and rewards have been transferred and that recognition of the revenue in the current year is appropriate, in conjunction with the recognition of an appropriate liability for sales return.
Accruals for estimated product returns, which are based on historical experience of actual sales returns and adjustment on account of current market scenario is considered by Company to be reliable estimate of future sales returns.
c. Recent Accounting pronouncement
Standards issued but not yet effective
Ministry of Corporate Affairs (âMCAâ) through Companies (Indian Accounting Standards) Amendment Rules, 2018 has notified the following new and amendments to Ind ASs which the Company has not applied as they are effective subsequent years as mentioned below:
Ind AS 115 - Revenue from Contracts with Customers (applicable for annual periods beginning on or after April 1, 2018)
Ind AS 21 - The effect of changes in Foreign Exchange rates (applicable for annual periods beginning on or after April 1, 2018)
Ind AS 116 - Leases (applicable for annual periods beginning on or after April 1, 2019)
Ind AS 115 Revenue from contracts with customers
Ind AS 115 establishes a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. Ind AS 115 will supersede the current revenue recognition standard Ind AS 18 - Revenue, Ind AS 11 - Construction Contracts when it becomes effective.
The core principle of Ind AS 115 is that an entity should recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Specifically, the standard introduces a 5-step approach to revenue recognition:
- Step 1: Identify the contract(s) with a customer
- Step 2: Identify the performance obligation in contract
- Step 3: Determine the transaction price
- Step 4: Allocate the transaction price to the performance obligations in the contract
- Step 5: Recognise revenue when (or as) the entity satisfies a performance obligation
Under Ind AS 115, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e. when âcontrolâ of the goods or services underlying the particular performance obligation is transferred to the customer.
The Company is evaluating the requirements of the Ind AS 115 and the effect on the financial statements is being evaluated.
Ind AS 21 - The Effect of Changes in Foreign Exchange Rates
The amendment clarifies on the accounting of transactions that include the receipt or payment of advance consideration in a foreign currency. The appendix explains that the date of the transaction, for the purpose of determining the exchange rate, is the date of initial recognition of the non-monetary prepayment asset or deferred income liability. If there are multiple payments or receipts in advance, a date of transaction is established for each payment or receipt. The Company is evaluating the impact of this amendment on its financial statements.
Ind AS 116 - Leases
I n January 2016, the IASB issued Ind AS 116 - Leases which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract and replaces the previous standard on leasing, Ind AS 17 - Leases. Ind AS 116, which is not applicable to service contracts, but only applicable to leases or lease components of a contract, defines a lease as a contract that conveys to the customer (lessee) the right to use an asset for a period of time in exchange for consideration. Ind AS 16 eliminates the classification of leases for the lessee as either operating leases or finance leases as required by Ind AS 17 and instead, introduces a single lessee accounting model whereby a lessee is required to recognise assets and liabilities for all leases with a term that is greater than 12 months, unless the underlying asset is of low value, and to recognise depreciation of leased assets separately from interest on lease liabilities in the income statement. As Ind AS 116 substantially carries forward the lessor accounting requirements in Ind AS 17, a lessor will continue to classify its leases as operating leases or finance leases and to account for those two types of leases differently. Ind AS 116 is effective from April 1, 2019, with early adoption allowed only if Ind AS 115 - Revenue from Contracts with Customers is also adopted.
Note 1.1:
The Company has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at the Balance Sheet date are Rs.279.22 Crores (2016-2017 Rs.246.35 Crores) and Rs.207.12 Crores (2016-2017 Rs.183.71 Crores) respectively.
(ii) Depreciation recognised in the Standalone Statement of Profit and Loss is Rs.23.41 Crores (2016-2017 Rs.20.15 Crores).
(b) The Company enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered as â Nil. Accordingly, the disclosure of the present value of minimum lease payments receivable at the Balance Sheet date is not made.
2.1. Figures in the brackets are the corresponding figures in respect of the previous year
2.2. Nil amount of borrowing costs is capitalised during the current and comparative period.
2.3. Nil amount of impairment loss is recognised during the current and comparative period.
2.4. During the financial year, no rental income was generated from the investment properties whereas direct operating expenses of Rs.0.18 Crores (2016-2017 Rs.0.40 Crores) were incurred and recorded as expense in the Standalone Statement of Profit and Loss.
2.5. Total fair value of Investment Property is Rs.1381.20 Crores (2016-2017 Rs.1362.70 Crores).
Fair Value Hierarchy
The fair value of investment property has been determined by external independent property valuers, having appropriate recognised professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorised as a level 3 fair value based on the inputs to the valuation techniques used.
Description of Valuation Technique used:
The Company obtains Independent Valuations of its investment property as at the year end. The fair value of the investment property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their locational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property
3.1. Figures in the brackets are the corresponding figures in respect of the previous year.
3.2. Nil amount of borrowing costs is capitalised during the current and comparative period.
3.3. Nil amount of impairment loss is recognised during the current and comparative period.
capital Reserve
Capital reserve includes profit on re-issue of forfeited shares.
Securities premium Reserve
Securities premium reserve is used to record the premium received on issue of shares. It is utilised in accordance with the provisions of the Companies Act, 2013.
General Reserve
General reserve was created by transfers of profits as per Companies (Transfer of Profits to Reserves) Rules, 1975. As general reserve is created by transfer from one component of equity to another and is not an item of other comprehensive income, items included in the general reserve will not be reclassified subsequently to profit or loss. dividend
For the year 2016-2017, the Directors had recommended and Shareholders had approved a dividend of 300%, including special dividend of 50%, (Rs.0.50 per share), which has been accounted in current year. For the year 2017-2018, the Directors have recommended a normal dividend of 260% (Rs.2.60 per share) for the year. The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend of Rs.140.12 Crores (2016-2017 Rs.161.68 Crores) alongwith dividend distribution tax of Rs.29.66 (2016-2017 Rs.33.83 Crores) have not been recognised as liabilities.
Note 4: Related Party Disclosures
A related party is a person or entity that is related to the entity that is preparing its financial statements
(a) A person or a close member of that personâs family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel includes (1) Mr. P P Shah, Chairman (2) Mr. H. M. Bharuka, Vice Chairman and Managing Director, (3) Mr. N. N. Tata, Director (4) Mr. P. D. Chaudhari, Wholetime Director, (5) Mrs. Brinda Somaya, Director (6) Mr. P D. Pai, CFO and (7) Mr. G. T. Govindarajan, Company Secretary.
Note 5: Employee Benefits
A. Defined Contribution Plans:
Contribution to defined contribution plan, recognised in the Standalone Statement of Profit and Loss under Companyâs Contribution to Provident Fund and Other Funds in Employee Benefits Expenses for the year are as under:
B. Defined Benefit Plans:
a. Gratuity
The following tables setout the funded status of the gratuity plans and the amounts recognised in the Companyâs Financial Statements as at 31st March, 2018 and 31st March, 2017:
Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.
The Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance Corporation of India. The Company expects to contribute Rs.2.80 Crores (2016-2017 Rs.6.53 Crores) to the fund during the subsequent accounting year.
b. Provident Fund (Managed by the Trust set up by the Company)
The Company has contributed Rs.2.09 Crores (2016-2017 Rs.1.90 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trustâs investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall.
Note 6: Segment Reporting
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Companyâs business activity falls within a single business segment viz. âPaintsâ and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.
Note 7: Corporate Social Responsibilities
During the year, the Company has spent Rs.11.03 Crores (2016-2017 Rs.6.46 Crores) towards âCorporate Social Responsibility Activitiesâ (CSR Activities).
(a) Gross amount required to be spent by the Company during the year : Rs.11.00 Crores.
(b) Amount spent during the year on:
Note 8: Financial Instruments: Fair Values and Risk Management
(A) Accounting Classifications and Fair Values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities, including their levels in the fair value hierarchy.
(B) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
â Credit Risk
â Liquidity Risk
â Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Companyâs risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives.
The Companyâs Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables and Loans:
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analysed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
Financial Instruments and Cash Deposits:
Credit risks from balances with banks and financial institutions is managed by the Companyâs Treasury Department in accordance with the Companyâs policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimise the concentration of risks and therefore mitigate financial loss through counterpartyâs potential failure to make payments.
(iii) Liquidity Risk
Liquidity risk the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
Maturities of Financial Liabilities:
The table below analyse the Companyâs financial liabilities into relevant maturing grouping based on their contractual maturities:
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Companyâs policy is to ensure that its net exposure is kept to an acceptable level.
The Company determined the fair value measurements of investments -unquoted categorised in Level 2 based on price agreed in a sale transaction between unrelated parties.
Carrying amounts of cash and cash equivalents, trade receivables, loans and trade payables as at 31st March, 2018 and 31st March, 2017 approximate the fair value. Difference between carrying amounts and fair values of bank deposits, earmarked balances with banks, other financial assets, other financial liabilities and borrowings subsequently measured at amortised cost is not significant in each of the years presented.
Note 9: Disclosure as per Section 186 of the Companies Act, 2013
The details of loans, guarantees and investments under Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 are as follows:
(i) Details of Investments made are given in Note 5(I).
(ii) Details of loans given by the Company are as follows:
Note 10: Disclosure of Specified Bank Notes
Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R. 308(E) dated 30th March, 2017. The said amendment requires the Company to disclose the details of Specified Bank Notes held and transacted during the period from 8th November, 2016 to 30th December, 2016. For the purpose of this clause, the term âSpecific Bank Notesâ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated the 8th November, 2016.
Note 11:
Consequent to the issuance of âGuidance Note on Division II â Ind AS Schedule III to the Companies Act, 2013â, certain items of Financial Statements have been regrouped/reclassified.
Mar 31, 2017
Level 1 : quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3 : inputs for the asset or liability that are not based on observable market data (unobservable inputs).
When measuring the fair value of an asset or a liability, the Company uses observable market data as far as possible. If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement.
The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
* Net block includes BuildingsRs,0.35 Crores (2015-2016Rs,0.37 Crores, 1st April, 2015Rs,0.38 Crores), Plant and Equipment ? 14.08 Crores (2015-2016Rs,9.25 Crores, 1st April, 2015Rs,6.72 Crores) and Furniture and FixturesRs,0.24 Crores (2015-2016Rs,0.16 Crores, 1st April, 2015Rs,0.04 Crores).
3. Figures in the brackets are the corresponding figures in respect of the previous year.
4. No items of Property, Plant and Equipment were pledged as security for liabilities during any part of the current and comparative periods other than as disclosed in Note 19(a).
5. Nil amount of borrowing costs is capitalized during the current and comparative periods.
6. Nil amount of impairment loss is recognized during the current and comparative periods.
Note 7:
The Company has given Colour Dispenser Machines on operating lease to its dealers. Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at the Balance Sheet date areRs,246.35 Crores (2015-2016Rs,217.34
Crores, 1st April, 2015Rs,191.38 Crores) andRs,183.71 Crores (2015-2016Rs,163.56 Crores,1st April, 2015Rs,145.54 Crores) respectively.
(ii) Depreciation recognized in the Standalone Statement of Profit and Loss isRs,20.15 Crores (2015-2016Rs,18.02 Crores).
(b) The Company enters into three years cancellable lease agreements. However, the corresponding lease rentals may be receivable for a shorter period or may be waived off. The minimum aggregate lease payments to be received in future is considered asRs,Nil. Accordingly, the disclosure of the present value of minimum lease payments receivable at the Balance Sheet date is not made.
8. Figures in the brackets are the corresponding figures in respect of the previous year.
9. Nil amount of borrowing costs is capitalized during the current and comparative periods.
10. Nil amount of impairment loss is recognized during the current and comparative periods.
11. During the financial year, no rental income was generated from the investment properties whereas direct operating expenses ofRs,0.40 Crores (2015-2016Rs,0.30 Crores) were incurred and recorded as expense in the Standalone Statement of Profit and Loss.
12. Total fair value of Investment Property isRs,1362.70 Crores (2015-2016Rs,1223.70 Crores, 1st April, 2015Rs,1204.14 Crores).
Fair Value Hierarchy
The fair value of investment property has been determined by external independent property values, having appropriate recognized professional qualification and recent experience in the location and category of the property being valued.
The fair value measurement for all of the investment property has been categorized as a level 3 fair value based on the inputs to the valuation techniques used.
Description of Valuation Technique used:
The Company obtains Independent Valuations of its investment property as at the year end. The fair value of the investment property have been derived using the Direct Comparison Method. The direct comparison approach involves a comparison of the investment property to similar properties that have actually been sold in arms-length distance from investment property or are offered for sale in the same region. This approach demonstrates what buyers have historically been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market, and is particularly useful in estimating the value of the land and properties that are typically traded on a unit basis. This approach leads to a reasonable estimation of the prevailing price. Given that the comparable instances are located in close proximity to the investment property; these instances have been assessed for their vocational comparative advantages and disadvantages while arriving at the indicative price assessment for investment property.
13. Figures in the brackets are the corresponding figures in respect of the previous year.
14. Nil amount of borrowing costs is capitalized during the current and comparative periods.
15. Nil amount of impairment loss is recognized during the current and comparative periods.
Securities Premium
Securities premium is used to record the premium received on issue of shares. It is utilized in accordance with the provisions of the Companies Act, 2013.
Dividend
For the year 2014-2015, the Directors had recommended and Shareholders had approved a dividend of 140% ('' 1.40 per share). For the year 2015-2016, the Directors had recommended and Shareholders had approved a dividend of 305%, including special dividend of 125%, ('' 3.05 per share), which has been accounted in current year. For the year 2016-2017, the Directors have recommended a normal dividend of 250% ('' 2.50 per share) and a special dividend of 50% ('' 0.50 per share), thus aggregating to a total dividend of 300%('' 3.00 per share) for the year. The dividend proposed by the Directors is subject to approval of Shareholders at the annual general meeting. The proposed dividend ofRs,161.67 Crores alongwith dividend distribution tax ofRs,33.83 Crores have not been recognized as liabilities.
Note 16: Related Party Disclosures
A related party is a person or entity that is related to the entity that is preparing its financial statements
(a) A person or a close member of that person''s family is related to a reporting entity if that person:
(i) has control or joint control of the reporting entity;
(ii) has significant influence over the reporting entity; or
(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.
(b) An entity is related to a reporting entity if any of the following conditions applies:
(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.
(vi) The entity is controlled or jointly controlled by a person identified in (a).
(vii) A person identified in (a)(i) has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).
(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.
A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged.
Kansai Paints Co., Ltd. is the immediate and ultimate holding company of Kansai Nerolac Paints Ltd. and is based and listed in Japan. Financial Statements of Kansai Paints Co., Ltd. are available in public domain.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity. Key management personnel includes
(1) Mr. H. M. Bharuka, Managing Director, (2) Mr. P. D. Chaudhari, Wholetime Director, (3) Mr. P. D. Pai, CFO and (4) Mr. G.T. Govindarajan, Company Secretary.
Assumptions regarding future mortality experience are set in accordance with the published statistics by the Life Insurance Corporation of India.
The Company contributes all ascertained liabilities towards gratuity to the fund maintained by the Life Insurance Corporation of India. The Company expects to contributeRs,6.53 Crores to the fund during the accounting year 2017-2018.
b. Provident Fund (Managed by the Trust set up by the Company)
The Company has contributedRs,1.90 Crores (2015-2016Rs,1.61 Crores) to the Provident Fund Trust. The Company has an obligation to fund any shortfall on the yield of the trust''s investments over the guaranteed interest rates on an annual basis. These administered rates are determined annually predominantly considering the social rather than economic factors and in most cases the actual return earned by the Company has been higher in the past years. The actuary has provided a valuation for provident fund liabilities on the basis of guidance issued by Actuarial Society of India and based on the below provided assumptions there is no shortfall:
c. Compensated Absences
The increase in provision for compensated absences for the year isRs,3.06 Crores (2015-2016Rs,1.07 Crores).
Note 17: Segment Reporting
The Management Committee of the Company, approved by the Board of Directors and Audit Committee performs the function of allotment of resources and assessment of performance of the Company. Considering the level of activities performed, frequency of their meetings and level of finality of their decisions, the Company has identified that Chief Operating Decision Maker function is being performed by the Management Committee. The financial information presented to the Management Committee in the context of results and for the purposes of approving the annual operating plan is on a consolidated basis for various products of the Company. As the Company''s business activity falls within a single business segment viz. âPaints'' and the sales substantially being in the domestic market, the financial statement are reflective of the information required by Ind AS 108 âOperating Segmentsâ.
Note 18: Corporate Social Responsibilities
During the year, the Company has spentRs,6.46 Crores (2015-2016Rs,5.29 Crores) towards âCorporate Social Responsibility Activities'' (CSR Activities).
(a) Gross amount required to be spent by the Company during the year :Rs,8.32 Crores.
(b) Amount spent during the year on: Rs,in Crores
Note19:
During the previous year, management had detected some cases of fraudulent transfer of shares and wrongful payment of dividend by the Company''s Registrar and Transfer Agent M/s. Sharepro Services (India) Pvt. Ltd. Based on the current status of investigation conducted by the management, through Companyâs internal auditors, the estimated amount involved in the fraud as at balance sheet date isRs,1.28 Crores (2015-16Rs,1.28 Crores) and provision for the same is made in the Standalone Statement of Profit and Loss. Further adjustments, if any required, would be considered by the Company on completion of the investigation.
Note 20: Profit on Sale of Non-Current Assets held for Sale
The Board of Directors of the Company had approved on June 29, 2015 the sale of the Company''s land at Perungudi, Chennai. The said asset was reclassified as Non-current Asset held for Sale.
The non-recurring fair value measurement for the Non-current Assets held for Sale had been categorized as a Level 3 fair value based on the inputs to the valuation techniques used.
On 30th March, 2016, the Company has sold its Perungudi Fixed Assets for a consideration ofRs,537.86 Crores. The Profit ofRs,535.34 Crores is disclosed as an exceptional item in the Standalone Statement of Profit and Loss. The Company has executed the deed of indemnity with the purchaser on 30 March 2016 to indemnify and agrees to defend and keep indemnified to the purchaser against the losses that the Purchaser is likely to suffer on account of any kind of any claim made in connection with the issues.
Note21: Explanation of transition to Ind AS :
(I) First-time adoption of Ind AS
These Standalone Financial Statements, for the year ended 31st March, 2017, are the first Ind AS compliant Standalone Financial Statements prepared by the Company. For the period upto and including the year ended 31st March, 2016, the Company has prepared its Standalone Financial Statements in accordance with accounting standards notified under Section 133 of the Companies Act, 2013 (to the extent notified) read together with Rule 7 of the Companies (Accounts) Rules, 2014, and other generally accepted accounting principles (GAAP) in India, to the extent applicable, under the historical cost convention, on the accrual basis of accounting.
Accordingly, the Company has prepared its first Standalone Financial Statements which comply with Ind AS applicable for the year ended on 31st March, 2017, together with comparative period data as and for the year ended 31st March, 2016, as described in the summary of significant accounting policies. In preparing these Standalone Financial Statements, the Company''s opening balance sheet was prepared as at 1st April, 2015, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its previous GAAP Financial Statements, including the balance sheet as at 1st April, 2015 and the Standalone Financial Statements as at and for the year ended 31st March, 2016.
(II) Exemption Applied
Ind AS 101 - First-time adoption of Indian Accounting Standards allows first-time adopters certain exemptions from the retrospective application of certain adjustments under Ind AS. The Company has applied the following exemptions:
(i) Deemed cost
Ind AS 101 - First-time adoption of Indian Accounting Standards permits a first-time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment as recognized in the Financial Statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for Intangible Assets, Investment Property and investments in subsidiaries.
Accordingly, the Company has elected to measure all of its Property, Plant and Equipment, Intangible Assets, Investment Property and Investments in Subsidiaries at their previous GAAP carrying value.
(ii) Business Combination
I nd AS 101 - First-time adoption of Indian Accounting Standards provides the option to apply Ind AS 103 - Business Combinations prospectively from the transition date or from a specific date prior to the transition date.
Accordingly, the Company has elected to apply Ind AS 103 - Business Combination prospectively to Business Combinations occurring after its transition date.
(iii) Government Grants
Ind AS 101 - First-time adoption of Indian Accounting Standards permits the Company to apply the requirements in Ind AS 109 - Financial Instruments, and Ind AS 20 - Accounting for Government Grants and Disclosure of Government Assistance, prospectively to government loans existing at the date of transition to Ind AS.
Accordingly, the Company has opted for exemption from retrospective application for fair valuation of such Government Grants (i.e. Sales Tax Deferral Loan)
(B) Financial Risk Management
The Company has exposure to the following risks arising from financial instruments:
â Credit Risk
â Liquidity Risk
â Market Risk
(i) Risk Management Framework
Risk Management Committee oversees the management of these risks. Management is supported by Risk Management Committee that advises on financial risks and the appropriate financial risk governance framework for the Company. The Risk Management Committee provides assurance to the management that Company''s risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company''s policies and risk objectives.
The Company''s Risk Management Policies are established to identify and analyses the risks faced by the Company to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk Management Policies and Systems are reviewed regularly to reflect changes in market conditions and the Company''s activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
(ii) Credit Risk
Credit Risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, loans and investments in debt securities. The carrying amounts of financial assets represent the maximum credit risk exposure.
Trade Receivables and Loans:
The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The Risk Management Committee has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Company''s standard payment and delivery terms and conditions are offered. The Company''s review includes financial statements, credit agency information, industry information and in some cases bank references. Sales limits are established for each customer and reviewed constantly. Any sales exceeding those limits require approval from the management.
Financial Instruments and Cash Deposits:
Credit risks from balances with banks and financial institutions is managed by the Company''s Treasury Department in accordance with the Company''s policy. Investments of surplus funds are made only with approved counterparties and within credit limits assigned to each counterparty. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty''s potential failure to make payments.
(iii) Liquidity Risk
Liquidity risk the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.
Maturities of Financial Liabilities:
The table below analyze the Company''s financial liabilities into relevant maturing grouping based on their contractual maturities:
(iv) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market price comprises three types of risks: interest rate risk, currency risk and other price risk, such as equity price risk and commodity price risk. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. In respect of monetary assets and liabilities denominated in foreign currencies, the Company''s policy is to ensure that its net exposure is kept to an acceptable level.
Note 22:
Disclosure of Specified Bank Notes:
Schedule III of the Companies Act, 2013 was amended by Ministry of Corporate Affairs vide Notification G.S.R. 308(E) dated 30th March, 2017. The said amendment requires the Company to disclose the details of Specified Bank Notes held and transacted during the period from 8th November, 2016 to 30th December, 2016. For the purpose of this clause, the term âSpecific Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407 (E), dated the 8th November, 2016.
Details of Specified Bank Notes held and transacted during the period from 8th November, 2016 to 30th December, 2016 are as follows:
Mar 31, 2015
Note 1.1
The Company has given on lease, Colour Dispenser to its dealers.
Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at
the Balance Sheet date are Rs. 191.38 Crores (2013-2014Rs.168.57 Crores)
and Rs. 145.54 Crores (2013-2014Rs.130.18 Crores) respectively.
(ii) Depreciation recognised in the Statement of Profit and Loss is Rs.
15.56 Crores (2013-2014Rs.15.10 Crores)
(b) The lease agreements are generally for a period of three years.
However, the corresponding lease rentals may be receivable for a
shorter period or may be waived off. The minimum aggregate lease
payments to be received in future is considered as Rs. Nil. Accordingly,
the disclosure of the present value of minimum lease payments
receivable at the Balance Sheet date is not made.
Rs. in Crores
Year Ended Year Ended
31st March, 31st March,
2015 2014
Note 2.1:
Miscellaneous Expenses includes net loss of inventory due to flood Rs.
0.07 Crores (loss of inventory due to flood Rs. 5.21 Crores, netted off
with insurance claim received/receivable Rs. 5.14 Crores)
Note 3: contingent Liabilities and commitments (to the extent not
provided for)
Claims against the Company not acknowledged as debt:
Corporate guarantee given to HDFC
Bank for employee loans 1.41 1.41
Service Tax. 3.22 Â
Commitments:
Estimated amount of contracts remaining to be executed on capital
account and not provided for (Net of
advances) 3.68 5.21
8.31 6.62
The Company has made adequate provisions in the accounts for claims
against the Company related to direct and indirect taxes matters,
except for certain claims not acknowledged as debts, totalling to Rs.
3.22 Crores (2013-2014 Rs. Nil) from the Service Tax Authorities, in
respect of disallowance of Service Tax Cenvat Credit shown in Note 26.
In addition, the Company is subject to other legal proceedings in
respect of other matters arisen in the ordinary course of business. The
Company''s management is of the opinion that the ultimate liability in
respect of these litigations shall not exceed the amount provided for
in books of account, and shall not have any material adverse effect on
the Company''s operation and financial position.
Note 4: Related Party Disclosures
(i) (a) Names of related parties and nature of relationship where
control exists are as under:
Holding Company : Kansai Paint Co., Ltd., Japan
Subsidiary Company : Kansai Paints Nepal Pvt. Ltd.
(b) Names of other related parties and nature of relationship where
there are transactions with related parties:
Fellow Subsidiary Companies
: Kansai Paint Philippines Inc.
Kansai Coatings Malaysia SDN. BHD. Kansai Paints Europe Ltd.
Key Management Personnel
: Mr. H. M. Bharuka, Managing Director Mr. P D. Chaudhari, Wholetime
Director Mr. P D. Pai, Chief Financial Officer Mr. G. T. Govindarajan,
Company Secretary
B. Defined Benefit Plan:
(a) Contribution to Provident Fund managed by the Trust set up by the
Company:
The Company has contributed Rs. 1.48 Crores (2013-2014Rs.1.50 Crores) to
the Provident Fund Trust. In view of the issue of final guidance note
by the Acturial Society of India for measurement of provident fund
liabilities, the actuary has accordingly provided valuation and other
related information for disclosure as required by Accounting Standard
(AS) 15 (Revised) on Employee Benefits notified by the Companies
(Accounting Standards) Rules, 2006 read with the Guidance issued by the
Accounting Standard Board of the Institute of Chartered Accountants of
India.
vi. a. The estimates of rate of escalation in salary considered in
actuarial valuation takes into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market.
b. The discounting rate is considered based on market yield on
government bonds having currency and terms consistent with the currency
and terms of the post-employment benefit obligations.
c. Expected rate of return on assets is determined based on expectation
of the average long term rate of return expected on investments of the
fund during the estimated term of the obligations.
(c) Compensated Absences:
The increase in provision for compensated absences for the year is Rs.
0.18 Crores (decrease in provision 2013-2014Rs.0.25 Crores)
Note 5: Segment Reporting
As the Company''s business activity falls within a single business
segment viz. ''Paints'' and the sales substantially being in the domestic
market, the financial statement are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified
under Companies (Accounting Standard) Rules, 2006.
Note 6: Corporate Social Responsibilities
Sec. 135 of the Companies Act, 2013 requires the Board of Directors to
ensure that the Company spends in every financial year at least 2% of
the average net profits of the Company made during the three
immediately preceding financial years on Corporate Social
Responsibility. Accordingly, the Company has spent Rs. 4.51 Crores
towards Corporate Social Responsibility Activities. In accordance with
the ''FAQ on Provisions of Corporate Social Responsibility under Section
135 of the Companies Act, 2013 and Rules thereon'', issued by the
Institute of the Chartered Accountants of India, this amount has been
recorded and disclosed as an appropriation of profit in the Financial
Statements for the year ended 31st March, 2015.
(a) Gross amount required to be spent by the Company during the year Rs.
6.11 Crores.
(b) Amount spent during the year on:
Mar 31, 2014
Note 1: Contingent Liabilities
Claims against the Company not acknowledged as debt:
Notice from Haryana State Industrial and
Infrastructure Development Corporation for
enhanced costs for Bawal factory land - 39.01
Corporate guarantee given to HDFC Bank for
employee loan 11.16 11.16
11.16 50.17
Note 2: Related Party Disclosures
(i) (a) Names of related parties and nature of relationship where
control exists are as under:
Holding Company :Kansai Paint Co., Ltd., Japan
Subsidiary Company :Kansai Paints Nepal Pvt. Ltd.
(w.e.f. 01.10.2012)
(b) Names of other related parties and nature of relationship where
there are transactions with related parties: Fellow Subsidiary
Companies : Kansai Paint Philippines Inc.
Kansai Coatings Malaysia SDN. BHD. Kansai Paints Europe Ltd.
Key Management Personnel : Mr. H. M. Bharuka, Managing Director
Mr. P. D. Chaudhari, Wholetime Director
Note 31: Employee Benefits
A. Defined Contribution Plan:
Contribution to defined contribution plan, recognised in the Statement
of Profit and Loss under Contribution to Provident and Other Funds in
Employee Benefits for the year are as under:
B. Defined Benefit Plan:
(a) Contribution to Provident Fund managed by the Trust set up by the
Company:
The Company has contributed Rs. 14.96 Million (2012-2013 Rs. 14.79
Million) to the Provident Fund Trust. In view of the issue of final
guidance note by the Actuarial Society of India for measurement of
provident fund liabilities, the actuary has provided valuation and
other related information for disclosure as required by Accounting
Standard (AS) 15 (Revised) on Employee Benefits notified by the Companies
(Accounting Standards) Rules, 2006 read with the guidance issued by the
Accounting Standard Board of the Institute of Chartered Accountants of
India.
Note 3: Segment Reporting
As the Company''s business activity falls within a single business
segment viz. ''Paints'' and the sales substantially being in the domestic
market, the Financial Statement are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified under
Companies (Accounting Standard) Rules, 2006.
Mar 31, 2013
Note 1.1
The tangible assets at the Company''s pigment manufacturing unit at
Kavesar and paint manufacturing units at Lower Parel and at Vatwa, have
been retired from active use. Accordingly, the fixed assets (other than
land) at those manufacturing units had been written down to Rs. 2.22
Million on the basis of valuation reports [balance provision for write
down in the value of fixed assets as at the end of the year Rs. 5.89
Million (2011-2012 Rs. 7.00 Million)]. During the year, an amount of
Rs. 1.11 Million (2011-2012 Rs. 1.30 Million) has been written back
consequent to charge on account of depreciation of an equal amount.
Note 1.2
The Company has given on lease, Colour Dispenser to its dealers.
Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at
the Balance Sheet date are Rs. 1551.85 Million (2011-2012 Rs. 1518.91
Million) and Rs. 1174.95 Million (2011-2012 Rs. 1266.25 Million)
respectively.
(ii) Depreciation recognised in the Statement of Profit and Loss is Rs.
124.31 Million (2011-2012 Rs. 141.61 Million).
(b) The lease agreements are generally for a period of three years.
However, the corresponding lease rentals may be receivable for a
shorter period or may be waived off. The minimum aggregate lease
payments to be received in future is considered as Nil. Accordingly,
the disclosure of the present value of minimum lease payments
receivable at the Balance Sheet date is not made.
Figures in the brackets are the corresponding figures in respect of the
previous year.
* Excludes commission and related contribution to Provident Fund and
Superannuation Fund thereon for the year but includes commission and
such related contribution thereon for the previous year paid in the
current year. Note: No amounts pertaining to related parties have been
provided for as doubtful debts. Also, no amounts have been written off
or written back during the year.
B. Defined Benefit Plan:
(a) Contribution to Provident Fund managed by the Trust set up by the
Company:
The Company has contributed Rs. 14.79 Million (2011-2012 Rs. 13.53
Million) to the Provident Fund Trust. In view of the issue of final
guidance note by the Actuarial Society of India for measurement of
provident fund liabilities, the actuary has provided valuation and
other related information for disclosure as required by Accounting
Standard (AS) 15 (Revised) on Employee Benefits notified by the
Companies (Accounting Standards) Rules, 2006 read with the guidance
issued by the Accounting Standard Board of the Institute of Chartered
Accountants of India.
vi. a. The estimates of rate of escalation in salary considered in
actuarial valuation takes into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market.
b. The discounting rate is considered based on market yield on
government bonds having currency and terms consistent with the currency
and terms of the post-employment benefit obligations.
c. Expected rate of return on assets is determined based on
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
vii. The above information is certified by the actuary.
(c) Compensated Absences:
The decrease in provision for compensated absences for the year is Rs.
2.82 Million (2011-2012 decrease Rs. 0.90 Million)
Note 2: Segment Reporting
As the Company''s business activity falls within a single business
segment viz. ''Paints'' and the sales substantially being in the
domestic market, the financial statement are reflective of the
information required by Accounting Standard 17 "Segment Reporting",
notified under Companies (Accounting Standard) Rules, 2006.
Mar 31, 2012
Note 9.2
The tangible assets at the Company's pigment manufacturing unit at
Kavesar and paint manufacturing units at Lower Parel and at Vatwa, have
been retired from active use. Accordingly, the fixed assets (other than
land) at those manufacturing units had been written down to Rs 2.22
Million on the basis of valuation reports [balance provision for write
down in value of fixed assets as at the end of the year Rs 7.00 Million
(2010-2011 Rs 8.30 Million)]. During the year, an amount of Rs 1.30
Million (2010-2011 Rs 1.64 Million) has been written back consequent to
charge on account of depreciation of an equal amount.
Note 9.3
The Company has given on lease, Colour Dispenser to its dealers.
Particulars in respect of such leases are as follows:
(a) (i) The gross carrying amount and the accumulated depreciation at
the balance sheet date are Rs 1518.91 Million (2010-2011 Rs 1364.50
Million) and Rs 1266.25 Million (2010-2011 Rs 1124.64 Million)
respectively.
(ii) Depreciation recognised in the Statement of Profit and Loss is Rs
141.61 Million (2010-2011 Rs 121.56 Million)
(b) The lease agreements are generally for a period of three years.
However, the corresponding lease rentals may be receivable for a
shorter period or may be waived off. The minimum aggregate lease
payments to be received in future is considered as Nil. Accordingly,
the disclosure of the present value of minimum lease payment receivable
at the balance sheet date is not made.
Figures in the brackets are the corresponding figures in respect of the
previous year.
* Excludes commission and related contribution to Provident Fund and
Superannuation Fund thereon for the year but includes commission and
such related contribution thereon for the previous year paid in the
current year.
Note: No amounts pertaining to related parties have been provided for
as doubtful debts. Also no amounts have been written off or written
back during the year.
B. Defined Benefit Plan:
(a) Contribution to Provident Fund managed by the Trust set up by the
Company:
The Company has contributed Rs 13.53 Million (2010-2011: Rs 11.52
Million) to the Provident Fund Trust. In view of the issue of final
guidance note by the Actuarial Society of India during the year for
measurement of Provident Fund liabilities, the actuary has provided
valuation and other related information for disclosure as required by
Accounting Standard (AS) 15 (Revised) on Employee Benefits notified by
the Companies (Accounting Standards) Rules, 2006 read with the Guidance
issued by the Accounting Standard Board of the Institute of Chartered
Accountants of India.
i. a. The estimates of rate of escalation in salary considered in
actuarial valuation takes into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market.
b. The discounting rate is considered based on market yield on
government bonds having currency and terms consistent with the currency
and terms of the post-employment benefit obligations.
c. Expected rate of return on assets is determined based on
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
ii. The above information is certified by the actuary.
Note 31: Segment Reporting
As the Company's business activity falls within a single business
segment viz. 'Paints' and the sales substantially being in the domestic
market, the financial statements are reflective of the information
required by Accounting Standard 17 "Segment Reporting", notified under
the Companies (Accounting Standards) Rules, 2006.
Note 32: Profit on Sale of long-term Investment
The Company had divested its entire stake in its erstwhile Associate
Company, Nipa Chemicals Limited, for a consideration of Rs 257.25
Million.
Mar 31, 2011
(A) Post-employment benefits :
1. Provident and Family Pension Fund
The eligible employees of the Company are entitled to receive post
employment benefits in respect of provident and family pension fund, in
which both the employees and the Company make monthly contributions at
a specified percentage of the employees eligible salary (currently 12%
of employees eligible salary).
The contributions are made to the provident fund managed by the trust
set up by the Company or to the Regional Provident Fund Commissioner
(RPFC) which are charged to the profit and loss account as incurred.
In respect of contribution to RPFC, the Company has no further
obligations beyond making the contribution, and hence, such employee
benefit plan is classified as Defned Contribution Plan.
In respect of contribution to the trust set up by the Company, since
the Company is obligated to meet interest shortfall, if any, with
respect to covered employees, such employee benefit plan is classified
as Defned Benefit Plan in accordance with the Guidance on implementing
Accounting Standard (AS) 15 (Revised) on Employee Benefits.
2. Superannuation
The eligible employees of the Company are entitled to receive post
employment benefits in respect of superannuation fund in which the
Company makes annual contribution at a specified percentage of the
employees eligible salary (currently 15% of employees eligible
salary). The contributions are made to the Life Insurance Corporation
of India (LIC). Superannuation is classified as Defned Contribution
Plan as the Company has no further obligations beyond making the
contribution. The Companys contribution to Defned Contribution Plan is
charged to profit and loss account as incurred.
3. Gratuity
The Company has an obligation towards gratuity, a defned benefit
retirement plan covering eligible employees. The plan provides a lump
sum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to
15 days salary payable for each completed year of service or part
thereof in excess of six months. Vesting occurs upon completion of five
years of service. The Company has obtained insurance policies with the
Life Insurance Corporation of India (LIC) and makes an annual
contribution to LIC for amounts notified by LIC. The Company accounts
for gratuity benefits payable in future based on an independent
external actuarial valuation carried out at the end of the year.
Actuarial gains and losses are recognised in the profit and loss
account.
(c) Other Long-Term Employee Benefits à Compensated Absences :
The Company provides for encashment of leave or leave with pay subject
to certain rules. The employees are entitled to accumulate leave
subject to certain limits for future encashment / availment. The
Company makes provision for compensated absences based on an
independent actuarial valuation carried out at the end of the year.
Actuarial gains and losses are recognised in the profit and loss
account.
(i) Research and Development
Capital expenditure on Research and Development is treated in the same
way as expenditure on fixed assets. Revenue expenditure on Research and
Development is charged to the profit and loss account in the year in
which it is incurred.
(ii) Foreign Currency Transactions
(a) Transactions in foreign currencies are recorded at the exchange
rate that approximates the actual rate at the date of the transaction.
In respect of monetary assets and liabilities denominated in foreign
currencies, exchange differences arising out of settlement are
recognised in the profit and loss account. Monetary assets and
liabilities denominated in foreign currencies as at the balance sheet
date are translated at the exchange rates on that date, the resultant
exchange differences are recognised in the profit and loss account.
(b) Premiums or discounts arising at the inception of the forward
foreign exchange contracts, other than contracts to hedge a firm
commitment or a highly probable forecast transaction, are amortised and
recognised in the profit and loss account over the period of the
contract. Such forward foreign exchange contract outstanding as at the
balance sheet date are converted at the exchange rates prevailing on
that date. Exchange differences are recognised in the profit and loss
account.
(iii) Accounting for Derivatives
Forward contracts to which Accounting Standard (AS) 11 Ã The Effect of
Change in Foreign Exchange Rates is applicable, the accounting policy
as stated in Note (xii) (b) above is followed. In respect of other
derivative contracts including forward foreign exchange contracts to
which the aforesaid accounting standard is not applicable are marked to
market at the rate on the balance sheet date. The resultant exchange
differences are recognised in the profit and loss account.
(iv) Taxation
Tax expense comprises current and deferred tax. Current tax is measured
at the amount expected to be paid to the tax authorities in accordance
with the Income-tax Act, 1961. Deferred tax refects 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 rate and tax laws
enacted or substantially enacted as at the balance sheet date. Deferred
tax assets are recognised 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 realised in future;
however, where there is unabsorbed depreciation or carry forward of
losses, deferred tax assets are recognised only if there is virtual
certainty of realisation of such assets. Deferred tax assets are
reviewed as at each balance sheet date and written down or written up
to refect the amount that is reasonably / virtually certain (as the
case may be) to be realised.
(v) Provisions and Contingent Liabilities
(a) A provision is recognised when an enterprise has a present
obligation as a result of past event and it is probable that an outflow
of resources will be required to settle the obligation, in respect of
which a reliable estimate can be made. Provisions are not discounted to
their present values and are determined based on management estimate
required to settle the obligation at the balance sheet date. These are
reviewed at each balance sheet date and adjusted to refect the current
management estimates.
(b) Contingent liabilities are disclosed in respect of possible
obligations that have arisen from past events and the existence of
which will be confirmed only by the occurance or non-occurance of
future events not wholly within the control of the Company.
(c) When there is an obligation in respect of which the likelyhood of
outfow of resources is remote, no provision or disclosure is made.
(v) Leases
Leases where the lessor effectively retains substantially all the risks
and benefits of ownership of the leased assets are classified as
operating leases. Operating lease payments / receipts are recognised as
an expense / income in the profit and loss account on a straight-line
basis over the lease term.
3. The Company has made monthly payments aggregating Rs. 9.40 lacs
(2009-2010 Rs. 9.40 lacs) towards post retirement arrangements to
former wholetime directors.
* used for processing goods on behalf of Nipa Chemicals Limited, an
erstwhile associate company.
(a) Figures in brackets are in respect of the previous year.
(b) Installed capacity has been certified by the Works Manager and
accepted by the Auditors without verification, being a technical
matter.
(c) Production does not include goods processed outside. Sales, opening
stock and closing stock include goods processed and purchased from
outside. The closing stock is after adjustments for obsolescence and
shortages. Closing stock figures, if derived from opening stock plus
production / purchases and less sales would therefore be different.
4. As the Companys business activity falls within a single business
segment viz. Paints and the sales substantially being in the domestic
market, the financial statements are refective of the information
required by Accounting Standard 1 "Segment Reporting", notifed under
the Companies (Accounting Standards) Rules, 2006.
5. Related party disclosures
(i) (a) Names of related parties and nature of related party
relationship where control exists are as under:
Holding Company : Kansai Paint Co., Ltd., Japan
(b) Names of other related parties and nature of relationship where
there are transactions with related parties
Fellow Subsidiary Companies : Kansai Paint Philippines Inc
Kansai Resin (Thailand) Co. Ltd.
Kansai Coatings Malaysia SDN. BHD.
Sime Kansai Paints SDN. BHD.
Associate à company in
which the Company : Nipa Chemicals Limited
has substantial interest
(i.e. more than 20% in
voting power)
(Upto 14th January, 2011)
Key management personnel : Mr. H. M. Bharuka, Managing Director
Mr. P. D. Chaudhari, Wholetime Director
6. The Company has given on lease, colour dispenser to its dealers.
The particulars in respect of such leases are as follows: (a) (i) The
gross carrying amount and the accumulated depreciation at the balance
sheet date are Rs. 13644.98 lacs (2009-2010 Rs. 12137.52 lacs) and Rs.
11246.37 lacs (2009-2010 Rs. 10030.75 lacs) respectively.
(c) The lease agreements are generally for a period of three years.
However, the corresponding lease rentals may be receivable for a
shorter period or may be waived off.
7. (a) Provision for indirect taxes:
With restructuring of the production facilities, the timing of the
outflow of provision Rs. 2553.57 lacs (2009-2010 Rs. 2663.58 lacs)
recognised in respect of matters relating to indirect taxes is
dependent on the outcome of the settlement with the appropriate
authorities.
(b) Provision for warranty:
The Company is selling certain products with a warranty of four to
seven years. Accordingly, provision has been recognised on the basis of
managements expectation of warranty claims on such products.
B. Defned Benefit Plan
(a) Contribution to provident fund managed by the trust set up by the
Company:
According to the management, the actuary has opined that actuarial
valuation cannot be applied to reliably measure provident fund
liabilities in respect of fund managed by the trust set up by the
Company in the absence of guidance from the Actuarial Society of India.
Accordingly, the Company is currently not in a position to provide
other related disclosures as required by Accounting Standard (AS) 15
(Revised) on Employee Benefits notified by the Companies (Accounting
Standards) Rules, 2006 read with the Guidance issued by the Accounting
Standards Board of the Institute of Chartered Accountants of India.
Having regards to the assets of the fund and the return on investments,
the entity does not expect any significant deficiency in the
foreseeable future. Accordingly, no provision is required towards the
guarantee given for notified interest rates. During the year, the
Company has contributed Rs. 115.18 lacs (2009-2010: Rs. 103.89 lacs) to
the Provident Fund Trust.
vi. (a) The estimates of rate of escalation in salary considered in
actuarial valuation take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market.
(b) The discounting rate is considered based on market yield on
government bonds having currency and terms consistent with the currency
and terms of the post-employment benefit obligations.
(c) Expected rate of return on assets is determined based on
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
vii. The above information is certified by the actuary.
viii. Net assets / (liabilities) recognised in the balance sheet as at
respective year ends and experience adjustments:
(c) Compensated Absences
The increase in provision for compensated absences for the year is Rs.
33.05 lacs (2009-2010 Rs. 115.98 lacs).
8. Derivatives Instruments: (contd.)
B. The year-end foreign currency exposures that have not been hedged
by a derivative instrument or otherwise are given below:
(a) Amounts payable in foreign currency CHF 1.06 lac [2009-2010 Ã CHF
0.04 lac]
Euro 0.28 lac [2009-2010 Ã Euro
0.68 lac]
GBP 0.10 lac [2009-2010 Ã GBP
0.79 lac]
JPY 813.19 lacs [2009-2010 Ã
JPY 423.45 lacs]
SGD 0.09 lac [2009-2010 Ã SGD
Nil]
USD 44.93 lacs [2009-2010 Ã
USD 43.45 lacs]
(b) Advance payment in foreign
currency for supplies CHF 1.85 lac [2009-2010 Ã CHF
0.68 lac]
Euro 0.99 lac [2009-2010 Ã
Euro 0.50 lac]
GBP Nil [2009-2010 Ã
GBP 0.11 lac]
JPY 295.81 lacs [2009-2010 Ã
JPY 146.82 lacs]
SGD 0.18 lac [2009-2010 Ã
SGD Nil]
USD 11.66 lacs [2009-2010 Ã
USD 3.04 lacs]
9. The Company has divested its entire stake in its erstwhile
associate company, Nipa Chemicals Limited, for a consideration of Rs.
2572.51 lacs.
10. Prior years figures have been regrouped and rearranged wherever
necessary to confirm to current years classification.
Mar 31, 2010
1. The Company has made monthly payments aggregating Rs. 9.30 lacs
(2008-2009 Rs. 9.72 lacs) and payments in respect of medical
reimbursement aggregating Rs. 0.10 lac (2008-2009 Rs. 0.10 lac) towards
post retirement arrangements to former Wholetime Directors.
2. As the Companys business activity falls within a single business
segment viz. Paints and the sales substantially being in the domestic
market, the disclosure requirements of Accounting Standard - 17
"Segment Reporting", notified under the Companies Act, 1956 is not
applicable.
3. Related party disclosures
(i) (a) Names of related parties and nature of related party
relationship where control exists are as under:
Holding Company : Kansai Paint Co., Ltd., Japan
Subsidiary Company : Kansai Coatings Malaysia SDN. BHD.
30th June, 2008)
(b) Names of other related parties and nature of relationship where
there are transactions with related parties:
Fellow Subsidiary Companies : PT. Kansai Paint Indonesia
Kansai Paint Philippines Inc
Chongqing Kansai Paint Co.,Ltd.
Kansai Resin (Thailand) Co. Ltd.
Kansai Coatings Malaysia SDN. BHD.
(w.e.f. 1st July, 2008)
Associate - company in which
the Company has : Nipa Chemicals Limited
substantial interest
(i.e. more than 20% in
voting power)
Key management personnel : Mr. H. M. Bharuka, Managing Director
Mr.P.D.Chaudhari, Wholetime Director
(w.e.f. 1st May, 2008)
4. Employee Benefits
B. Defined Benefit Plan
(a) Contribution to provident fund managed by the trust set up by the
Company:
According to the management, the actuary has opined that actuarial
valuation cannot be applied to reliably measure provident fund
liabilities in respect of fund managed by the trust set up by the
Company in the absence of guidance from the Actuarial Society of India.
Accordingly, the Company is currently not in a position to provide
other related disclosures as required by Accounting Standard (AS) 15
(Revised) on Employee Benefits notified by the Companies (Accounting
Standards) Rules, 2006 read with the Guidance issued by the Accounting
Standards Board of the Institute of Chartered Accountants of India.
Having regards to the assets of the fund and the return on investments,
the entity does not expect any deficiency in the foreseeable future.
Accordingly, no provision is required towards the guarantee given for
notified interest rates. During the year, the Company has contributed
Rs. 103.89 lacs (2008-09: Rs. 94.10 lacs) to the Provident Fund Trust.
vi. a. The estimates of rate of escalation in salary considered in
actuarial valuation take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market.
b. The discounting rate is considered based on market yield on
government bonds having currency and terms consistent with the currency
and terms of the post-employment benefit obligations.
c. Expected rate of return on assets is determined based on
expectation of the average long term rate of return expected on
investments of the fund during the estimated term of the obligations.
vii. The above information is certified by the actuary.
5. Derivatives Instruments
B. The year-end foreign currency exposures that have not been hedged
by a derivative instrument or otherwise are given below:
(a) Amounts payable in foreign currency
Euro 0.68 lac [2008-2009 - Euro 1.96 lacs]
GBP 0.79 lac [2008-2009 - GBP Nil lac]
JPY 423.45 lacs [2008-2009 - JPY 116.39 lacs]
USD 45.45 lacs [2008-2009 - USD 1.15 lacs]
CHF 0.04 lac [2008-2009 - CHF Nil]
(b) Advance payment in foreign currency for supplies
CHF 0.68 lac [2008-2009 - CHF 0.15 lac]
Euro 0.50 lac [2008-2009 - Euro 0.95 lac]
GBP 0.11 lac [2008-2009 - GBP 0.01 lac]
JPY 146.82 lacs [2008-2009 - JPY 6.06 lacs]
SGD Nil [2008-2009 - SGD 0.13 lac]
USD 3.04 lacs [2008-2009 - USD 1.76 lacs]
6. Prior years figures were audited by a firm of chartered
accountants other than B S R & Co, which have been regrouped and
rearranged wherever necessary to confirm to current years
classification.
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