2.1 Basis of preparation
(a) Compliance with Indian Accounting Standards
The financial statements are prepared and presented in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting
Standards) Rules 2015, as amended from time to time as notified under Section 133 of the Companies Act 2013, the relevant provision of the Companies Act 2013 (“the
Act”).
(b) Historical cost convention
The financial statements have been prepared on the historical cost basis, except for the following assets and liabilities which have been measured at fair value:
• Certain financial assets and liabilities (refer accounting policy regarding financial instruments); and
• Defined employee benefit plans;
The financial statements are presented in Indian Rupees, which is the Company's functional currency.
(c) New and amended standards adopted by the Company
The Ministry of Corporate Affairs vide notification dated March 31, 2023 notified the Companies (Indian Accounting Standards) Amendment Rules, 2023, which amended
certain accounting standards (see below), and are effective April 1, 2023:
• Disclosure of accounting policies - amendments to Ind AS 1
• Definition of accounting estimates - amendments to Ind AS 8
• Deferred tax related to assets and liabilities arising from a single transaction - amendments to Ind AS 12
The other amendments to Ind AS notified by these rules are primarily in the nature of clarifications.
These amendments did not have any material impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.
These financial statements are presented in Indian Rupee (?) which is the functional currency of the Company. All amounts are rounded to two decimal places to the
nearest Lakh, unless otherwise stated.
All assets and liabilities have been classified as current or non-current as per the Company’s operating cycle and other criteria set out in the Schedule III (Division II) to
the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current - noncurrent classification of assets and liabilities.
2.2 Property, plant and equipment
Freehold land is carried at historical cost. All other items of property, plant and equipment are stated at cost, net of accumulated depreciation and accumulated
impairment losses, if any.
Capital work-in-progress is stated at cost, net of accumulated impairment losses, if any.
Depreciation on property, plant and equipment, net of their residual values (not more than 5% of the original cost of the asset), has been provided as per the useful life
prescribed in Schedule II to the Companies Act, 2013 except in the case of the certain categories of assets, in whose case the life of the assets has been assessed as
under based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of
replacement, anticipated technological changes, manufacturers warranties and maintenance support, etc.
The estimated useful life of various property, plant and equipment is as under:
Refer note 3.1 for the other accounting policies relevant to property, plant and equipment.
2.3 Inventories
Cost is determined on first-in-first-out formula for all categories of inventories except stores and spares for which it is determined under weighted average formula.
Inventories are valued at lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make
the sale.
Refer note 3.3 for the other accounting policies relevant to inventories.
2.4 Revenue recognition
Sale of goods
The Company manufactures/purchase and sells printing inks and lamination adhesive. Revenue from sale of goods (manufactured and traded) is recognized at point in
time when the control of the goods has transferred, being when the products are delivered to the customer, the customer has full discretion over the channel and price to
sell the goods, and there is no unfulfilled obligation that could affect the customer’s acceptance of the goods. Delivery occurs whent the goods have been shipped to the
customer location, the risk of obsolescence and loss have been transferred to the customer and either the customer has accepted the goods in accordance with the
sales contract, the acceptance provision has lapsed, or the Company has objective evidence that all the criteria for acceptance have been satisfied.
Revenue is recognised based on the price specified in the contract, net of the estimated discounts/incentive schemes. Accumulated experience is used to estimate and
provide for such variable consideration, and the revenue is only recognised to the extent that it is highly probable that a significant reversal in the revenue will not occur. A
refund liability (included in other current liabilities) and a right to recover the returned goods (included in other current assets) are recognised for the products expected to
be returned. Revenue is net of sales returns. The validity of assumptions used to estimate variable consideration and expected return of products is reassessed annually.
No element of financing is deemed present as the sales are made with a credit terms, which varies from 30 to 120 days, which is consistent with market practice.
2.5 Employee benefits
(i) Post-employment benefits:
Post employment benefit plans are classified into defined benefits plans and defined contribution plans as under:
(a) Defined contribution plans
Contributions to defined contribution schemes such as superannuation scheme are charged as an expense based on the amount of contribution required to be made as
and when services are rendered by the employees. The Company contributes a certain percentage of the eligible salary for employees covered under the scheme
towards superannuation fund administered by the Trustees. The Company has no further obligations for future superannuation benefits other than its contributions.
Payments to defined contribution plans are recognised as an expense when employees have rendered service entitling them to the contributions.
(b) Defined benefit plans
Defined benefit plans comprises gratuity, provident fund, pension fund and retirement benefit plan are explained as mentioned below:
Gratuity
In accordance with the Payment of Gratuity Act, 1972, applicable for Indian companies, the Company provides for a lump sum payment to eligible employees, at
retirement or termination of employment based on the last drawn salary and years of employment with the Company. The gratuity fund is managed by the Gratuity Fund
Trustees fund managers. The Company’s obligation in respect of the gratuity plan, which is a defined benefit plan, is provided for based on actuarial valuation using the
projected unit credit method.
Provident fund
Certain employees of the Company receive provident fund benefits, which are administered by the Provident Fund Trust set up by the Company. Aggregate contributions
along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employees and the Company make monthly contributions
at specified percentage of the employees’ salary to such Provident Fund Trust. The Contribution is a defined benefit plan to the extent that the Company has an obligation
to make good the shortfall, if any, between the return from the investments of the trust and the notified interest rate. The Company's obligation in this regard is determined
by an independent actuary and provided for if the circumstances indicate that the Trust may not be able to generate adequate returns to cover the interest rates notified
by the Government. Company's contribution to the provident fund is charged to Statement of Profit and Loss.
Pension fund
The Company has discontinued the Defined Pension Benefit scheme with effect from May 1, 2009 and all the employees who were members of the erstwhile Defined
Pension Benefit scheme have been brought under the Defined Contribution superannuation scheme. The Company's obligation in respect of pension plan till April 30,
2009 is actuarially determined at the end of each year by discounting the present value of crystallised pension as at April 30, 2009.
Other retirement benefits
Liability accrued during the year in respect of other retirement benefit payable to certain employees governed by agreement with the unions representing them are treated
as a defined benefit plan. As per the scheme, a lumpsum benefit is paid to the eligible employees on cessation of service with the Company.
For defined benefit plans, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each
annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets
(excluding net interest), is reflected immediately in the balance sheet with a charge or credit recognised in other comprehensive income in the period in which they occur.
Remeasurement recognised in other comprehensive income is reflected immediately in retained earnings and is not reclassified to profit or loss. Past service cost is
recognised in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are categorised as follows:
• service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
• net interest expense or income; and
• remeasurement
(ii) Other long-term employee benefits (unfunded)
As per the Company's policy, eligible leaves can be accumulated by the employees and carried forward to future periods to either be utilised during the service, or
encashed. Encashment can be made during service, on early retirement, on withdrawal of scheme, at resignation and upon death of the employee. Accumulated
compensated absences are treated as other long-term employee benefits. The cost of providing other long-term employee benefits (Leave Encashment) is determined
using Projected Unit Credit Method, with actuarial valuation being carried out at each Balance Sheet date. Actuarial gains and losses and past service cost are
recognised immediately in the Statement of Profit and Loss for the period in which they occur. Other long-term employee benefit obligation recognised in the Balance
Sheet represents the present value of related obligation.
Compensated absences which are not expected to occur within twelve months after the end of the period in which the employee renders the related service are
recognised based on actuarial valuation.
2.6 Leases
Company as a lessee
The Company leases various lands, buildings , plant and equipment and vehicles. Rental contracts are typically made for fixed periods of 2 to 5 years except in case of
leasehold lands where it is up to 99 years.
The Company measure the right-of-use asset at cost by recognition of a right-of-use asset and a lease liability on initial measurement of the right-of-use asset at the
commencement date of the lease.
The cost of the right-of-use asset will comprise:
i) the amount of the initial measurement of the lease liability,
ii) any lease payments made at or before the commencement date less any incentives received,
iii) any initial direct costs incurred
iv) an estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is located or restoring the underlying asset to the
condition required by the terms and conditions of the lease, unless those costs are incurred to produce inventories.
Lease iiaDiiuy is initially measurea at tne present value ot tne lease payments tnat are not paia at tnat aate. i ne lease payments are aiscountea using tne interest rate
implicit in tne lease, if tne rate cannot De reaaily aeterminea incremental borrowing rate will De consiaerea. Interest on lease liability in eacn perioa auring tne lease will De
tne amount tnat proauces a constant perioaic rate of interest on tne remaining balance of tne lease liability.
Lease payments will comprise tne following payments of tne unaerlying assets for tne rignt-of-use auring tne lease term tnat are not paia at tne commencement aate:
i) fixea payments less any lease incentives receivable
ii) variable lease payments
iii) amounts expectea to be payable unaer resiaual value guarantees
iv) tne exercise price of a purcnase option, if tne Company is reasonably certain to exercise tnat option
v) payments of penalties for terminating tne lease, if tne lease term reflects tne Company exercising an option to terminate tne lease.
Subsequent measurement of tne rignt-of-use asset is at cost, tne value of rignt-of-use asset is at cost less accumulatea aepreciation ana impairment loss ana aajustment
(if any), for re-measurement of tne lease liability.
Tne rignt-of-use asset is aepreciatea from tne commencement aate to tne earlier of tne ena of tne useful life of tne asset or tne ena of lease term, unless lease transfers
ownersnip of tne unaerlying asset to tne Company by tne ena of tne lease term or if tne cost of tne rignt-of-asset reflects tnat tne Company will exercise a purcnase
option, in sucn case tne Company will aepreciate asset to tne ena of tne useful life.
Subsequent measurement of tne lease liability after tne commencement aate will reflect tne initially measurea liability increasea by interest on lease liability, reaucea by
lease payments ana re-measuring tne carrying amount to reflect any reassessment or lease moaification.
Rignt-of-use asset ana lease liability are presentea on tne face of balance sneet. Depreciation cnarge on rignt-to-use is presentea unaer aepreciation expense as a
separate line item. Interest cnarge on lease liability is presentea unaer finance cost as a separate line item. Unaer tne casn flow statement, casn flow from lease
payments incluaing interest are presentea unaer financing activities.
Snort-term lease payments, payments for leases of low-value assets ana variable lease payments tnat are not incluaea in tne measurement of tne lease liabilities are
presentea as casn flows from operating activities.
2.7 Financial assets
All recognisea financial assets are subsequently measurea in tneir entirety at eitner amortisea cost or fair value, aepenaing on tne classification of tne financial assets.
All otner financial assets are subsequently measurea at fair value.
Financial assets at fair value through profit or loss (FVTPL)
Debt instruments tnat ao not meet tne amortisea cost criteria or FVTOCI criteria (see above) are measurea at FVTPL. In aaaition, aebt instruments tnat meet tne
amortisea cost criteria or tne FVTOCI criteria but are aesignatea as at FVTPL are measurea at FVTPL.
Financial assets at FVTPL are measurea at fair value at tne ena of eacn reporting perioa, witn any gains or losses arising on remeasurement recognisea in profit or loss.
Impairment of financial assets
Tne Company applies tne expectea creait loss moael for recognising impairment loss on financial assets measurea at amortisea cost ana otner financial assets.
Expectea Creait loss is tne aifference between all contractual casn flows tnat are aue to tne Company in accoraance witn tne contract ana all tne casn flows tnat tne
Company expects to receive (i.e. all casn snortfalls), aiscountea at tne original effective interest rate. Tne Company estimates casn flows by consiaering all contractual
terms of tne financial instrument tnrougn tne expectea life of tnat financial instrument.
For Traae receivables tne Company applies tne simplifiea aproacn requirea by Ina-AS 109 ana for otner financial assets loss allowances are measurea at an amount
equal to lifetime expectea creait losses. Lifetime expectea creait losses are tne expectea creait losses tnat result from all possible aefault events over tne expectea life of
a financial instrument. Lifetime expectea creait loss is computea basea on a provision matrix wnicn takes in to tne account risk profiling of customers ana nistorical creait
loss experience aajustea for forwara looking information.
For otner financial assets, expectea creait loss is measurea at tne amount equal to twelve montns expectea creait loss unless tnere nas been a significant increase in
creait risk from initial recognition, in wnicn case tnose are measurea at lifetime expectea creait loss.
Derecognition of financial assets
Tne Company aerecognises a financial asset wnen tne contractual rignts to tne casn flows from tne asset expire, or wnen it transfers tne financial asset ana substantially
all tne risks ana rewaras of ownersnip of tne asset to anotner party.
On aerecognition of a financial asset in its entirety, tne aifference between tne asset’s carrying amount ana tne sum of tne consiaeration receivea is recognisea in tne
statement of profit ana loss.
Foreign exchange gains and losses
Tne fair value of financial assets aenominatea in a foreign currency is aeterminea in tnat foreign currency ana translatea at tne spot rate at tne ena of eacn reporting
perioa.
For foreign currency aenominatea financial assets measurea at amortisea cost ana FVTPL, tne excnange aifferences are recognisea in profit or loss.
This note provides a list of other accounting policies adopted in the preparation of these financial statements to the extent they have not already been disclosed as part of
material accounting policy information (refer note 2). These policies have been consistently applied to all the years presented, unless otherwise stated.
3.1 Property, plant and equipment
The cost comprises purchase price, borrowing costs if capitalization criteria are met, directly attributable cost of bringing the asset to its working condition and location for
the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price. Subsequent costs are
included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item
will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component
accounted for as a separate asset is derecognised when replaced. The present value of the expected cost for decommissioning of an asset after its use is included in the
cost of the respective asset, if the recognition criteria for a provision are met.
On transition to Ind AS, the Company has elected to continue with the carrying value of all of its property plant and equipment recognised as at January 1, 2016,
measured as per the previous GAAP, and use that carrying value as the deemed cost of such property plant and equipment. The Company identifies and determines cost
of each component/ part of the asset separately, if the component/ part has a cost which is significant to the total cost of the asset and has useful life that is materially
different from that of the remaining asset.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected
from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of
the asset) is included in the statement of profit and loss when the asset is derecognised.
The estimated useful life, residual value and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being
accounted for on a prospective basis. In respect of assets whose useful lives has been revised, the unamortised depreciable amount is charged over the revised
remaining useful lives of the assets.
3.2 Intangible assets
Intangible assets are amortised over their estimated useful life on straight line method. Expenditure on computer software, which is not an integral part of hardware, is
capitalised as an intangible asset. The cost of software includes license fee and implementation cost and is capitalised in the year of its implementation. Computer
Software are amortised on a straight-line basis over their estimated useful life of four years.
Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses, if any. Internally generated
intangibles, excluding capitalised development costs, are not capitalised and the related expenditure is reflected in profit or loss in the period in which the expenditure is
incurred.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset
and are recognised in the statement of profit or loss when the asset is derecognised.
The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a
prospective basis.
3.3 Inventories
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
- Raw materials, Stock-in-trade, consumables and Stores and spares: Cost includes cost of purchase and other costs incurred in bringing the inventories to their present
location and condition.
- Finished goods and work-in-progress: Cost includes cost of direct materials, direct labour and a proportion of variable and fixed manufacturing overhead expenditure,
the latter being allocated based on the normal operating capacity.
3.4 Foreign currencies
The functional currency of the Company is Indian Rupees (INR) which represents the currency of the primary economic environment in which it operates.
Transactions in currencies other than the Company's functional currency are recognised at the rate prevailing at the date of the transaction. Foreign exchange gains and
losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at the year-end
exchange rates are recognised in statement of profit and loss.
Exchange gain and loss on debtors, creditors and other than financing and investing activities on a net basis are presented in the statement of profit and loss, as other
income and as other expenses respectively.
3.5 Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time
to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs
eligible for capitalization.
All other borrowing costs are recognized in profit or loss in the period in which they are incurred.
3.6 Taxation
(i) Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from ‘profit before tax’ as reported in the statement of profit and loss because of
items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Company’s current tax is calculated using tax
rates that have been enacted or substantively enacted by the end of the reporting period.
(ii) Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax base
used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally
recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable
profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax
rates (and laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities.
3.7 Impairment of non-financial assets
At the end of each reporting period, the company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those
assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment
loss (if any).
When it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which
the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or
otherwise they are allocated to the smallest Component of cash-generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their
present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates
of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit)
is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying value of the asset (or cash generating unit) is increased to the revised estimate of its recoverable amount
so that the increased carrying value does not exceed the carrying value that would have been determined had no impairment loss been recognised for the asset (or cash
generating unit) in prior years. A reversal of an impairment loss is recognised in the statement of profit and loss immediately.
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