I Provisions & Contingent Liabilities
(i) Provisions
Provisions are recognised when the Company has a present
obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic
benefits will be required to settle the obligation and a
reliable estimate can be made of the amount of the
obligation. Provisions are reviewed at each reporting period
and are adjusted to reflect the current best estimate.
(ii) Contingencies
Contingent liabilities are disclosed when there is a possible
obligation arising from past events, the existence of which will
be confirmed only by the occurrence or non-occurrence of one
or more uncertain future events not wholly within the control
of the Company or a present obligation that arises from past
events where it is either not probable that an outflow of
resources will be required to settle or a reliable estimate of the
amount cannot be made. Information on contingent liability is
disclosed in the Notes to the Financial Statements. Contingent
assets are not recognized in financial statements but are
disclosed, if any.
J Revenue Recognition
Revenue is measured at the fair value of the consideration
received or receivable and it is probable that future economic
benefits will flow to the entity. Amount of sales is net of goods and
services tax, sale returns, trade discounts and rebates but inclusive
of excise duty.
Revenue from sale of products is recognized when the significant
risks and rewards of ownership of the products have been
transferred to the buyer, and the amount of revenue can be
measured reliably.
Company continues to account for export benefits on an accrual
basis based upon the concept of accrual in the year of utilisation of
advance licences.
Dividend income is recognized when the right to receive the
income is established.
Interest income is recognised, when no significant uncertainty as
to measurability or collectblitiy exists, on a time proportion basis
taking into account the amount outstanding and the applicable
interest rate , using the effective interest rate method (EIR).
K Foreign Currency Conversions/Transactions
Foreign Currency Transactions are recorded at the exchange rates
prevailing on the date of the transactions. Gains and losses arising
out of subsequent fluctuations are accounted for on actual
payments or realisations as the case may be. Monetary assets and
liabilities denominated in foreign currency as on Balance Sheet
date are translated into functional currency at the exchange rates
prevailing on that date and Exchange differences arising out of
such conversion are recognised in the Statement of Profit and
Loss.
L Income Taxes
Income tax expense for the year comprises of current tax and
deferred tax. It is recognised in the Statement of Profit and Loss
except to the extent it relates to any business combination or to an
item which is recognised directly in equity or in other
comprehensive income.
a) Current Tax
Current tax expense is made on the basis of estimated taxable
income for the current accounting period in accordance with
the provisions of Income Tax Act, 1961 and judicial
interpretations thereof as at the Balance Sheet date and takes
into consideration various deductions and exemptions to
which the Company is entitled to as well as the reliance placed
by the Company on the legal advices received by it.
b) Deferred Tax
Deferred tax charge or credit reflects the tax effects of
temporary differences arising between the tax bases of assets
and liabilities and their carrying amounts in the financial
statements . The deferred tax charge or credit and the
corresponding deferred tax liabilities or assets are recognized
using the tax rates that have been enacted or substantively
enacted by the Balance Sheet date. Deferred tax assets are
reviewed at each Balance Sheet date and are written-down or
written-up to reflect the amount that is reasonably certain (as
the case may be) to be realized.
Deferred tax assets and deferred tax liabilities are offset when
there is a legally enforceable right to set off assets against
liabilities representing current tax and where the deferred tax
assets and the deferred tax liabilities relate to taxes on income
levied by the same governing taxation law.
Deferred tax assets are recognised for all deductible temporary
differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those
temporary differences and losses.
Current and deferred tax is recognised in profit or loss, except
to the extent that it relates to items recognised in other
comprehensive income or directly in equity. In that case, the
tax is recognised in other comprehensive income or directly in
equity, respectively.
M Employee Benefits
(i) Defined Contribution Plan
Employee benefits in the form of Provident Fund (with
Government Authorities) are considered as defined
contribution plan and the contributions are charged to the
statement of Profit & Loss of the year when the contributions
to the respective funds are due.
(ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity and Long term
compensated leaves are considered as defined benefit
obligations and employees’ gratuity fund scheme managed by
a trust. The present value of obligation is determined based on
Group Gratuity Statement of Life Insurance Corporation of
India using projected unit credit method. Company pays for
contribution amount as specified in Statement. Other short
term absences are provided based on past experience of leave
availed.
Actuarial Gains and losses arising from experience
adjustments and changes in actuarial assumptions are
recognized immediately in the Financial Statement on the
basis of an actuarial valuation with a corresponding debit or
credit to retained earnings through other comprehensive
income (OCI) in the period in which they occur. Re¬
measurements are not reclassified to profit or loss in
subsequent periods.
All other expenses related to defined benefit plans are
recognized in Statement of Profit and Loss as employee benefit
expenses.
N Borrowing Cost
General and Specific Borrowing Cost that are directly attributable
to the acquisition or construction or production of qualifying
assets are capitalized as part of the cost of such assets upto the date
when such assets are ready for intended use. Qualifying assets are
assets that necessarily take a substantial period of time to get ready
for their intended use or sale.
Other borrowing costs are charged as expenses in the year in which
they are incurred. Investment income earned on the temporary
investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing cost eligible for
capitalisation.
O Earnings Per Share
Basic Earning Per Share is calculated by dividing the net profit
for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, net profit
after tax during the year and the weighted average number of
shares outstanding during the year are adjusted for the effect of all
dilutive potential equity shares.
P Leases
The Company, as a lessee, recognises a right-of-use an asset and a
lease liability for its leasing arrangements, if the contract conveys
the right to control the use of an identified asset.
The contract conveys the right to control the use of an identified
asset, if it involves the use of an identified asset and the Company
has substantially all of the economic benefits from use of the asset
and has right to direct the use of the identified asset. The cost of the
right-of-use asset shall comprise of the amount of the initial
measurement of the lease liability adjusted for any lease payments
made at or before the commencement date plus any initial direct
costs incurred. The right-of-use assets is subsequently measured at
cost less any accumulated depreciation, accumulated impairment
losses, if any and adjusted for any re-measurement of the lease
liability. The right-of-use assets are depreciated using the straight¬
line method from the commencement date over the period of lease
term.
The Company measures the lease liability at the present value of
the lease payments that are not paid at the commencement date of
the lease. The lease payments are discounted using the incremental
borrowing rate of the company.
For short-term and low value leases, the Company recognises the
lease payments as an operating expense on a straight-line basis
over the lease term.
Q Research & Development
Research and development costs are recognized as expense in the
period in which it is incurred.
The company does not incur any development expenditure which
is eligible for capitalisation under Para 57 of IndAS 38.
R Statement of Cash Flows
Statement of cash flows is prepared in accordance with the indirect
method prescribed in Ind AS-7 ‘Statement of cash flows.
15.1 Reconciliation of the number of shares at the beginning and at the end of the year
There has been no change/movements in number of shares outstanding at the beginning and at the end of the year.
15.2 Terms/Rights attached to Equity Shares :
The Company has only one class of issued shares i.e., Ordinary Shares having par value of Rs. 10 per share. Each holder of the Ordinary Shares is
entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of the
shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the ordinary shareholders are
eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.
Note No. 32 : DISCLOSURE AS PER IND AS 19 'EMPLOYEE BENEFIT'
A) Defined benefits plan
Gratuity
The company has a defined benefit gratuity plan. Every employee who has rendered continuous service of 5 years or more is entitled to gratuity at
15 day salary (15/26 * last drawn basis salary) for each completed year for five years or more on superannuation, resignation, termination,
disablement or on death.
Leave encashment
The company has a policy to pay leave encashment. Every employee is entitled to claim leave encashment after his/her retirement/termination
which is calculated based upon no. of leaves not availed.
The employees’ gratuity fund scheme managed by a trust. The present value of obligation is determined based on Group Gratuity Statement of
Life Insurance Corporation of India using projected unit credit method. Company pay for contribution amount as specified in Statement .
The present value of obligation is determined based on Group Leave Statement of Life Insurance Corporation of India using projected unit credit
method. Company pay for contribution amount as specified in Statement .
IV) Risk exposure
Valuations are based on certain assumptions, which are dynamic in nature and vary over the time. As such company is exposed to various risks as
follow -
A) Salary Cost Inflation Risk: The present value of the Defined Benefit Plan liability is calculated with reference to the future salaries of
participants under the Plan. Increase in salary due to adverse inflationary pressures might lead to higher liabilities.
B) Investment Risk : Assets liabilities mismatch & actual investment return on assets lower than the discount rate assumed at the last valuation date
can impact the liability.
C) Discount Rate : Reduction in discount rate in subsequent valuations can increase the plan’s liability.
D) Mortality & disability : Actual deaths & disability cases proving lower or higher than assumed in the valuation can impact the liabilities.
E) Withdrawals : Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations
can impact Plan’s liability.
iii) Sitting Fees paid to Non executive/Independent Director Rs. 3.70 Lakhs (Previous Year Rs. 2.90 Lakhs)
Terms and conditions:
All the transactions were made on normal commercial terms and conditions and at market rates. All outstanding balances are unsecured and are
repayable on demand.
Note No. 37 : DISCLOSURE AS PER IND AS 107 'FINANCIAL INSTRUMENT DISCLOSURE'
A) Capital management
For the purpose of Company's Capital Management , Capital includes issued equity share capital.
B) Financial risk management
The Company's Financial Risk Management is an integral part of how to plan and execute its business strategies. The Company's financial risk
management is set by the Board of Directors. The Company's prinicipal financial liabilities comprise trade payables and other payables. The
company's principal financial assets include trade & other receivables and cash and short term deposits.
(i) 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 may result in a financial loss to the Company. Credit risk arises principally from trade receivables, loans & advances. _
Liquidity risk is defined as the risk that the Company will not be able to settle or meet its obligations on time at a reasonable price. The
Company's treasury department is responsible for liquidity, funding as well as settlement management. In addition, processes and policies
related to such risks are overseen by senior management. Management monitors the Company's net liquidity position through rolling forecasts
on the basis of expected cash flows.
Market Risk mainly relates to the investment & deposits. There is no regular business of company for making investment & deposits. However,
company manages the cash resources, borrowings strategies and ensuring compliance of the same with the guidelines & directions of the
Higher Management.
A) Foreign currency risk
The company operates internationally and portion of the business is transacted in several currencies and consequently the company is exposed
to foreign exchange risk through its sales in overseas and purchase from overseas suppliers in various foreign currencies.
The company evaluate exchange rate exposure arising from foreign currency transaction and the company follow established risk management
policies. Foreign exchange exposure risk is largely covered by natural hedging by linking export proceeds with import payments since
company has exposures for both exports & imports and also uses the derivative like foreign exchange forward contracts to hedge exposure to
foreign risk to minimise the risk of any possible adverse impact.
B) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument may fluctuate because of changes in market interest
rate. In order to optimize the Company's position with regards to interest income and interest expenses and to manage the interest rate risk,
treasury performs a comprehensive corporate interest rate risk management by balancing the proportion of fixed rate and floating rate financial
instruments in its total portfolio.
C) Other Price risk
The company's exposure towards price risk arises from investments held in Equity Shares & Mutual Funds are classified in balance sheet at fair
value through other comprehensive income & Fair value through Profit and Loss respectively. All of the company's equity investments are
publicaly traded and are listed on NSE and BSE .
Note No. 38 : DISCLOSURE AS PER IND AS 113 'FAIR VALUE MEASUREMENT'
Fair Value Hierarchy
Valuation Techniques used to determine fair values:
Specific valuation technique is used to determine the fair value of the financial instruments which include:
i) For Investments in Equity Investments-Quoted Market prices are used.
ii) For Investments in Mutual funds-Closing NAV is used.
iii) The carrying amount of trade payables, trade receivables, cash & cash equivalents and other financial assets and liabilities are considered to be the
same at their Fair values, due to their short term nature.
Basis of Fair Value Hierarchy
The carrying amount of short term borrowings, trade payables, trade receivables, Cash & cash equivalents and other financial assets and liabilities are
considered to be the same at their Fair values, due to their short term nature.
Fair value of the financial instruments are classified in various fair value hierarchies based on the following three levels:
Level 1: Quoted prices (unadjusted) in active market for identical assets or liabilities.
Level 2: Inputs other than quoted price included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices). The fair value of financial instruments that are not traded in an active market is determined using market approach and
valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If significant inputs
required to fair value an instrument is observable, the instrument is included in Level 2.
Level 3: Inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). If one or more of the significant inputs is
not based on observable market data, the fair value is determined using generally accepted pricing models based on a discounted cash flow analysis,
with the most significant inputs being the discount rate that reflects the credit risk of counterparty. The fair value of trade receivables, trade payables
and other Current financial assets and liabilities are considered to be equal to the carrying amounts of these items due to their short-term nature. Where
such items are Non-current in nature, the same has been classified as Level 3 and fair value determined using discounted cash flow basis. Similarly,
unquoted equity instruments where most recent information to measure fair value is insufficient, or if there is a wide range of possible fair value
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