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Accounting Policies of Hindustan Tin Works Ltd. Company
Mar 31, 2025
2.3 Summary of Material Accounting Policies
2.3.1 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as
separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to be sold or consumed in the normal operating cycle, or
⢠held primarily for the purpose of trading, or
⢠expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the normal operating cycle
⢠it is held primarily for the purpose of trading
⢠it is due to be settled within twelve months after the reporting period, or
⢠there is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are
classified as non-current assets and liabilities.
2.3.2 Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the
Company and the revenue can be reliably measured, regardless of when the payment is being
made. Revenue is measured at the fair value of the consideration received or receivable, taking
into account contractually defined terms of payment and excluding taxes or duties collected on
behalf of the government. The Company has concluded that it is the principal in all of its revenue
arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude
and is also exposed to inventory and credit risks.
The specific recognition criteria described below must also be met before revenue is recognized.
Sale of goods and scrap
The Company derives revenues primarily from sale of Tin Cans, Printed/Lacquered Sheet, Components
of tin cans and trading of Tin Plates.
Revenue is recognized at the point in time when the performance obligation is satisfied and control
of the goods is transferred to the customer in accordance with the terms of customer contracts. In
case of domestic customers, generally revenue recognition take place when goods are dispatched
and in case of export customers when goods are shipped onboard based on bill of lading as per the
terms of contract. Revenue is measured based on the transaction price, which is the consideration,
adjusted for trade discounts, if any, as specified in the contract with the customer. Revenue also
excludes taxes collected from customers.
A contract liability is the obligation to transfer goods to the customer for which the Company has
received consideration from the customer. Contract liabilities are recognized as revenue when the
Company performs under the contract.
The Company does not expect to have any contracts where the period between the transfer of the
promised goods to the customer and payment by the customer exceed one year. As a consequence,
the Company does not adjust any of the transaction prices for the time value of money.
Interest Income
For all financial assets measured at amortized cost interest income is recorded using the effective
interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts through
the expected life of the financial asset or a shorter period, where appropriate, to the net carrying
amount of the financial asset.
2.3.3 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment (if
any). Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the
total cost of the item is depreciated separately. Except for land, property, plant and equipment is
depreciated using the straight-line method over the useful lives of the related assets as presented in
Schedule 2 of Companies Act, 2013.
The estimated useful lives are as mentioned below:
|
Type of Asset |
Useful Lives |
|
Buildings (other than factory building) |
60 years |
|
Building (factory building) |
30 Years |
|
Plant & Equipment |
12 - 15 years |
|
Computer Equipment |
3 years |
|
Vehicles |
8 - 10 years |
|
Office Equipment |
5 years |
|
Furniture and Fixtures |
10 years |
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized,
while repairs and maintenance are expensed as incurred. Where a property, plant and equipment
comprise major components having different useful lives, these components are accounted for
as separate items. The depreciation expense is recognized in the statement of profit or loss in the
expense category consistent with the function of the property, plant and equipment.
Property, plant and equipment under construction is recorded as capital work- in-progress until it
is ready for its intended use; thereafter it is transferred to the related class of property, plant and
equipment and depreciated over its estimated useful life. Interest incurred during construction is
capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as
the difference between the net disposal proceeds and the carrying amount of the asset and are
recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting
date and adjusted if expectations differ from previous estimates. Depreciation methods applied
to property, plant and equipment are reviewed at each reporting date and changed if there has
been a significant change in the expected pattern of consumption of the future economic benefits
embodied in the asset.
2.3.4 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial
recognition, intangible assets are carried at cost less accumulated amortization and accumulated
impairment losses, if any. Internally generated intangible assets, excluding capitalized development
costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is
incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their
useful economic lives and assessed for impairment whenever there is an indication that the intangible
asset may be impaired. The amortization period and the amortization method are reviewed at least
at the end of each reporting period. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset are accounted for by changing
the amortization period or method, as appropriate, and are treated as changes in accounting
estimates. The amortization expense is recognized in the statement of profit or loss in the expense
category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognized in the
statement of profit or loss when the asset is derecognized.
2.3.5 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may
be impaired. If any indication exists, or when annual impairment testing for an asset is required, the
Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher
of an asset''s or Cash Generating Unit (CGU)''s fair value less costs of disposal and its value in use. It is
determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or group of assets. Where the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its
recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions
are taken into account. If no such transactions can be identified, an appropriate valuation model
is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly
traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are
prepared separately for each of the Company''s CGU to which the individual assets are allocated.
These budgets and forecast calculations are generally covering a period of five years. A long-term
growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories
consistent with the function of the impaired asset.
2.3.6 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
liability or equity instrument of another entity.
i. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit
or loss, fair value through OCI or at amortized cost as appropriate. The Company determines
the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value
through profit or loss, transaction costs that are attributable to the acquisition of the financial
asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described
below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and
financial assets designated upon initial recognition at fair value through profit or loss. Financial
assets are classified as held-for-trading if they are acquired for the purpose of selling or
repurchasing in the near term. Financial assets at fair value through profit and loss are carried
in the statement of financial position at fair value with net changes in fair value presented as
finance income (positive net changes in fair value) or finance costs (negative net changes
in fair value) in the statement of profit or loss. The Company has not designated any financial
assets upon initial recognition as at fair value through profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes
on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the
amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the
cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans
and Advances fall under this category. After initial measurement, such financial assets are
subsequently measured at amortised cost using the effective interest rate (EIR) method, less
impairment. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included
in finance income in the statement of profit or loss. The losses arising from impairment are
recognised in the statement of profit or loss in finance costs for loans and in cost of sales or
other operating expenses for receivables. This category generally applies to trade and other
receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar
financial assets) is derecognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed
an obligation to pay the received cash flows in full without material delay to a third party
under a ''pass-through'' arrangement, and either the Company has transferred substantially
all the risks and rewards of the asset, or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime
expected credit losses for all financial instruments for which there have been significant increases
in credit risk since initial recognition â whether assessed on an individual or collective basis â
considering all reasonable and supportable information, including that which is forward-looking.
Credit Losses are the difference between all contractual cash flows that are due to the company
in accordance with the contract and all the cash flows that the company expects to receive
(i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted
effective interest rate for purchased or originated credit-impaired financial assets). Expected
Credit Losses are the weighted average of credit losses with the respective risks of a default
occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that
is measured at amortized cost at each reporting date, at an amount equal to the lifetime
expected credit losses if the credit risk on that financial instrument has increased significantly
since initial recognition. When making the assessment, the company uses the change in the risk
of a default occurring over the expected life of the financial instrument instead of the change
in the amount of expected credit losses. To make that assessment, the company compares
the risk of a default occurring on the financial instrument as at the reporting date with the
risk of a default occurring on the financial instrument as at the date of initial recognition and
consider reasonable and supportable information, that is available without undue cost or effort,
that is indicative of significant increases in credit risk since initial recognition. The Company
assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly
since initial recognition, the company measures the loss allowance for that financial instrument
at an amount equal to 12-month expected credit losses. For Trade receivables the company
always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a group of debtors
is experiencing significant financial difficulty, default or delinquency in interest or principal
payments, the probability that they will enter bankruptcy or other financial reorganisation and
where observable data indicate that there is a measurable decrease in the estimated future
cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment
exists individually for financial assets that are individually significant, or collectively for financial
assets that are not individually significant. If the Company determines that no objective
evidence of impairment exists for an individually assessed financial asset, whether significant or
not, it includes the asset in a group of financial assets with similar credit risk characteristics and
collectively assesses them for impairment. Assets that are individually assessed for impairment
and for which an impairment loss is, or continues to be, recognised are not included in a
collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects
an unbiased and probability-weighted amount that is determined by evaluating a range of
possible outcomes, the time value of money; and the reasonable and supportable information
that is available without undue cost or effort at the reporting date about past events, current
conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the
amount of the loss is recognised in the statement of profit or loss. Interest income continues to
be accrued on the gross carrying amount using the effective rate of interest unless the financial
instrument is credit-impaired in which case the interest income is recognised on reduced
carrying amount. The interest income is recorded as part of finance revenue in the statement
of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect
of future recovery and all collateral has been realised or has been transferred to the Company.
If, in a subsequent year, the amount of the estimated impairment loss increases or decreases
because of an event occurring after the impairment was recognised, the previously recognised
impairment loss is increased or reduced by adjusting the allowance account. If a write-off is
later recovered, the recovery is credited to profit or loss.
ii. Financial Liabilities
The Company has the following financial liabilities in its statement of financial position
⢠Borrowings
⢠Trade payables
⢠Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through
profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments
in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings
and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading
and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling
in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement
of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit
or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are
satisfied. The Company has not designated any financial liabilities as at fair value through profit
or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are
subsequently measured at amortised cost using the effective interest rate method. Gains and
losses are recognised in the statement of profit or loss when the liabilities are derecognised as
well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance
costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated
statement of financial position only if there is a current enforceable legal right to offset the
recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the
liabilities simultaneously.
iv. Fair Value of Financial Instruments
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date. The fair values of the
financial instruments are not materially different at the reporting date.
2.3.7 Cash and Bank Balances
Cash and bank balances in the statement of financial position comprise cash at banks and on hand
and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash, bank
balances and short-term deposits with original maturity of less than 3 months, net of outstanding bank
overdrafts as they are considered an integral part of the Company''s cash management.
2.3.8 Leases
The Company as a lessee
The Company assesses whether a contract contains a lease, at inception of a contract. A contract
is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified assets, the Company
assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the
period of the lease and
(iii) the Company has the right to direct the use of the asset.
The Company recognises a right-of-use asset and a lease liability at the lease commencement
date. The right of-use asset is initially measured at cost, which comprises the initial amount of the
lease liability adjusted for any lease payments made at or before the commencement date, plus
any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying
asset or to restore the underlying asset or the site on which it is located, less any lease incentives
received.
The right-of-use asset is subsequently depreciated using the straight-line method from the
commencement date to the shorter of the end of the useful life of the right of- use asset or the end
of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis
as those of PPE. In addition, the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid
at the commencement date, discounted using the interest rate implicit in the lease or, if that rate
cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company
uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments,
including in substance fixed payments. The lease liability is measured at amortised cost using the
effective interest method.
The Company has used number of practical expedients when applying Ind AS 116:- Short-term
leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term
leases that have a lease term of 12 months or less and leases of low value assets. The Company
recognises the lease payments associated with these leases as an expense on a straight-line basis
over the lease term. The Company applied a single discount rate to a portfolio of leases of similar
assets in similar economic environment with a similar end date.
The Company''s leases mainly comprise land and buildings and Plant and equipment. The Company
leases land and buildings for warehouse facilities. The Company also has leases for equipment.
The Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever
the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the
contract is classified as a finance lease. All other leases are classified as operating leases.
The Intermediate lessor
For operating leases, rental income is recognized on a straight-line basis over the term of the relevant
lease.
2.3.9 Borrowing Cost
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing
of funds. Borrowing costs directly attributable to the acquisition, construction or production of an
asset that necessarily takes a substantial period of time to get ready for its intended use or sale are
capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the
period in which they occur.
Mar 31, 2024
1. Corporate Information
Hindustan Tin Works Limited ("the Company") is a public company incorporated on 11th December, 1958; equity shares of the company are listed on Bombay Stock Exchange, Calcutta Stock Exchange and Delhi Stock Exchange. The company is engaged mainly in the business of Manufacturing of Tin Cans, Printed/Lacquered Sheets, Components and Trading of Tin Plates. The financial statements are approved for issue by the Company''s Board of Directors on 28th May, 2024.
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 ("the Act") (to the extent notified) and the guidelines issued by Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015 and relevant amendments issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
These financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest rupees, except when otherwise indicated.
These financial statements are authorized for issue in accordance with a resolution of the directors on 28th May, 2024.
2.2 Use of Estimates and judgements
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
2.3 Summary of Material Accounting Policies2.3.1 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to be sold or consumed in the normal operating cycle, or
⢠held primarily for the purpose of trading, or
⢠expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the normal operating cycle
⢠it is held primarily for the purpose of trading
⢠it is due to be settled within twelve months after the reporting period, or
⢠there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
The specific recognition criteria described below must also be met before revenue is recognized. Sale of goods and scrap
The Company derives revenues primarily from sale of Tin Cans, Printed/Lacquered Sheet, Components of tin cans and trading of Tin Plates.
Revenue is recognized at the point in time when the performance obligation is satisfied and control of the goods is transferred to the customer in accordance with the terms of customer contracts. In case of domestic customers, generally revenue recognition take place when goods are dispatched and in case of export customers when goods are shipped onboard based on bill of lading as per the terms of contract. Revenue is measured based on the transaction price, which is the consideration, adjusted for trade discounts, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
A contract liability is the obligation to transfer goods to the customer for which the Company has received consideration from the customer. Contract liabilities are recognized as revenue when the Company performs under the contract.
The Company does not expect to have any contracts where the period between the transfer of the promised goods to the customer and payment by the customer exceed one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Interest Income
For all financial assets measured at amortized cost interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset or a shorter period, where appropriate, to the net carrying amount of the financial asset.
2.3.3 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment (if any). Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Except for land, property, plant and equipment is depreciated using the straight-line method over the useful lives of the related assets as presented in Schedule 2 of Companies Act, 2013.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprise major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Property, plant and equipment under construction is recorded as capital work- in-progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Unit (CGU)''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset
or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Company''s CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position
⢠Investments
⢠Cash
⢠Bank Balances
⢠Trade Receivables
⢠Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes
in fair value) in the statement of profit or loss. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement, and either the Company has transferred substantially all the risks and rewards of the asset, or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition â whether assessed on an individual or collective basis â considering all reasonable and supportable information, including that which is forward-looking.
Credit Losses are the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
The Company has the following financial liabilities in its statement of financial position
⢠Borrowings
⢠Trade payables
⢠Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of the financial instruments are not materially different at the reporting date.
Cash and bank balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash, bank balances and short-term deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
The Company as a lessee
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a
period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the shorter of the end of the useful life of the right of- use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of PPE. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in substance fixed payments. The lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116: - Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
The Company''s leases mainly comprise land and buildings and Plant and equipment. The Company leases land and buildings for warehouse facilities. The Company also has leases for equipment.
The Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
The Intermediate lessor
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
General Provisions are recognized 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. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits include: short-term employee benefits, post-employment benefits and other long-term employee benefits.
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid and as an expense. Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
The Company''s financial statements are presented in Indian Rupees (INR), which is also the company''s functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.3.15 Segment Reporting Identification of segments
The Company''s operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.
A provision is recognized 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 its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
2.3.18 Derivative financial instruments and hedge Accounting Initial recognition and subsequent measurement.
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried
as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.
For the purpose of hedge accounting, hedges are classified as:
(i) Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment
(ii) Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment
(iii) Hedges of a net investment in a foreign operation.
Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:
(i) Fair value hedges: The change in the fair value of a hedging instrument is recognised in the statement of profit and loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit and loss. If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit and loss.
(ii) Cash flow hedges: The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit and loss. The ineffective portion relating to foreign currency contracts is recognised in finance costs and the ineffective portion relating to commodity contracts is recognised in other income or expenses. Amounts recognised as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or nonfinancial liability, the amounts recognised as OCI are transferred to the initial carrying amount of the non-financial asset or liability. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in equity until the forecast transaction occurs or the foreign currency firm commitment is met.
3. Recent accounting pronouncements
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. For the year ended March 31, 2024, MCA has not notified any new standards or amendments to the existing standards applicable to the Company.
Mar 31, 2023
1. Corporate Information
Hindustan Tin Works Limited ("the Company") is a public company incorporated on 11th December, 1958; equity shares of the company are listed on Bombay Stock Exchange, Calcutta Stock Exchange and Delhi Stock Exchange. The company is engaged mainly in the business of Manufacturing of Tin Cans, Printed/Lacquered Sheets, Components and trading in Tin Plates.
2. Significant Accounting Policies2.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS), under the historical cost convention on the accrual basis except for certain financial instruments which are measured at fair values, the provisions of the Companies Act, 2013 ("the Act") (to the extent notified) and the guidelines issued by Securities and Exchange Board of India (SEBI). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standard) Rules, 2015 and relevant amendments issued thereafter.
Accounting policies have been consistently applied except where a newly issued accounting standard is adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.
These financial statements are presented in Indian Rupees (INR) and all values are rounded to the nearest rupees, except when otherwise indicated.
These financial statements are authorized for issue in accordance with a resolution of the directors on 30th May 2023.
2.2 Summary of Significant Accounting Policies2.2.1 New and amended standards adopted by the Company
Ind AS 115, Revenue from Contracts with Customers
The Company has adopted Ind AS 115, Revenue from Contracts with Customers, effective April 1, 2018, on a modified retrospective basis, applying the standard to all contracts that are not completed as such date. The adoption of Ind AS 115 did not have any significant financial impact and accordingly, no adjustments are made to the amounts recognized in the financial statements. The adoption has resulted in changes to accounting policies and mandated certain disclosures. Refer note no 2.2.4 below for accounting policies.
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
2.2.3 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
⢠expected to be realized or intended to sold or consumed in the normal operating cycle
⢠held primarily for the purpose of trading
⢠expected to be realized within twelve months after the reporting period, or
⢠cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
⢠it is expected to be settled in the normal operating cycle
⢠it is held primarily for the purpose of trading
⢠it is due to be settled within twelve months after the reporting period, or
⢠there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
The specific recognition criteria described below must also be met before revenue is recognized. Sale of goods and scrap
The Company derives revenues primarily from sale of Tin Cans, Printed/Lacquered Sheet, Components of tin cans and trading in Tin Plates.
Revenue is recognized at the point in time when the performance obligation is satisfied and control of the goods is transferred to the customer in accordance with the terms of customer contracts. In case of domestic customers, generally revenue recognition take place when goods are dispatched and in case of export customers when goods are shipped onboard based on bill of lading as per the terms of contract. Revenue is measured based on the transaction price, which is the consideration, adjusted for trade discounts, if any, as specified in the contract with the customer. Revenue also excludes taxes collected from customers.
A contract liability is the obligation to transfer goods to the customer for which the Company has received consideration from the customer. Contract liabilities are recognized as revenue when the Company performs under the contract.
The Company does not expect to have any contracts where the period between the transfer of the promised goods to the customer and payment by the customer exceed one year. As a consequence, the Company does not adjust any of the transaction prices for the time value of money.
Interest Income
For all financial assets measured at amortized cost interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts through
the expected life of the financial asset or a shorter period, where appropriate, to the net carrying amount of the financial asset.
Others
Income from export incentives such as duty export incentives are recognized on the eligibility and when there is no uncertainty in receiving the same.
2.2.5 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Except for land, property, plant and equipment is depreciated using the
straight-line method over the useful lives of the related assets as presented in Schedule 2 of Companies Act, 2013.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprise major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Property, plant and equipment under construction is recorded as capital work- in-progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Unit (CGU)''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or group of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Company''s CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position
⢠Investments
⢠Cash
⢠Bank Balances
⢠Trade Receivables
⢠Loans
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of profit or loss. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the Company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when:
⢠The rights to receive cash flows from the asset have expired, or
⢠The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement, and either the Company has transferred substantially all the risks and rewards of the asset, or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition â whether assessed on an individual or collective basis â considering all reasonable and supportable information, including that which is forward-looking.
Credit Losses are the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the company expects to receive (i.e. all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses.For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
The Company has the following financial liabilities in its statement of financial position
⢠Borrowings
⢠Trade payables
⢠Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss.Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of the financial instruments are not materially different at the reporting date.
Cash and Bank Balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and shortterm deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
Company as a lessee
The Company assesses whether a contract contains a lease, at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of an identified assets, the Company assesses whether:
(i) the contract involves the use of an identified asset
(ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and
(iii) the Company has the right to direct the use of the asset.
The Company recognises a right-of-use asset and a lease liability at the lease commencement date. The right of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right of- use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company''s incremental borrowing rate. Generally, the Company uses its incremental borrowing rate as the discount rate.
Lease payments included in the measurement of the lease liability comprise the fixed payments, including in substance fixed payments; The lease liability is measured at amortised cost using the effective interest method.
The Company has used number of practical expedients when applying Ind AS 116: - Short-term leases, leases of low-value assets and single discount rate.
The Company has elected not to recognise right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. The Company recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. The Company applied a single discount rate to a portfolio of leases of similar assets in similar economic environment with a similar end date.
The Company''s leases mainly comprise land and buildings and Plant and equipment. The Company leases land and buildings for warehouse facilities. The Company also has leases for equipment.
Company as lessor
Leases for which the Company is a lessor is classified as a finance or operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight line basis over the term of the relevant lease.
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
General Provisions are recognized 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. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits include: short-term employee benefits, post-employment benefits and other long-term employee benefits
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid and as an expense. Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
The Company''s financial statements are presented in Indian Rupees (INR), which is also the company''s functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.2.17 Segment Reporting Identification of segments
The Company''s operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
A provision is recognized 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 its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
2.2.20 Derivative financial instruments and hedge Accounting Initial recognition and subsequent measurement.
Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently re-measured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. The purchase contracts that meet the definition of a derivative under Ind AS 109 are recognised in the statement of profit and loss. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss, except for the effective portion of cash flow hedges, which is recognised in OCI and later reclassified to profit or loss when the hedge item affects profit or loss or treated as basis adjustment if a hedged forecast transaction subsequently results in the recognition of a non-financial asset or non-financial liability.
For the purpose of hedge accounting, hedges are classified as:
(i) Fair value hedges when hedging the exposure to changes in the fair value of a recognised asset or liability or an unrecognised firm commitment
(ii) Cash flow hedges when hedging the exposure to variability in cash flows that is either attributable to a particular risk associated with a recognised asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognised firm commitment
(iii) Hedges of a net investment in a foreign operation.
Hedges that meet the strict criteria for hedge accounting are accounted for, as described below:
(i) Fair value hedges: The change in the fair value of a hedging instrument is recognised in the statement of profit and loss. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the carrying value of the hedged item and is also recognised in the statement of profit and loss. If the hedged item is derecognised, the unamortised fair value is recognised immediately in profit or loss. When an unrecognised firm commitment is designated as a hedged item, the subsequent cumulative change in the fair value of the firm commitment attributable to the hedged risk is recognised as an asset or liability with a corresponding gain or loss recognised in profit and loss.
(ii) Cash flow hedges: The effective portion of the gain or loss on the hedging instrument is recognised in OCI in the cash flow hedge reserve, while any ineffective portion is recognised immediately in the statement of profit and loss. The ineffective portion relating to foreign currency contracts is recognised in finance costs and the ineffective portion relating to commodity contracts is recognised in other income or expenses. Amounts recognised as OCI are transferred to profit or loss when the hedged transaction affects profit or loss, such as when the hedged financial income or financial expense is recognised or when a forecast sale occurs. When the hedged item is the cost of a non-financial asset or nonfinancial liability, the amounts recognised as OCI are transferred to the initial carrying amount of the non-financial asset or liability. If the hedging instrument expires or is sold, terminated or exercised without replacement or rollover (as part of the hedging strategy), or if its designation as a hedge is revoked, or when the hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss previously recognised in OCI remains separately in equity until the forecast transaction occurs or the foreign currency firm commitment is met.
3. Recent changes in accounting policies and disclosures
Ministry of Corporate Affairs ("MCA") notifies new standards or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 23, 2022, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2022, as below.
Ind AS 16- Property Plant and equipment- The amendment clarifies that excess of net sale proceeds of items produced over the cost of testing, if any, shall not be recognised in the profit or loss but deducted from the directly attributable costs considered as part of cost of an item of property, plant ,and equipment . The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022. The Company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 37 - Provisions, Contingent Liabilities and Contingent Assets- The amendment specifies that the ''cost of fulfilling ''a contract comprises the ''costs that relate directly to the contract''. Costs that relate directly to a contract can either be incremental costs of fulfilling that contract (examples would be direct labour, materials) or an allocation of other costs that relate directly to fulfilling contracts (an example would be the allocation of the depreciation charge for an item of property, plant and equipment used in fulfilling the contract). The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2022, although early adoption is permitted. The Company has evaluated the amendment and there is no impact on its financial statements.
Mar 31, 2018
1. Significant Accounting Policies
1.1 Basis of Preparation
These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) notified under Companies (Indian Accounting Standards) Rules 2015, read with Section 133 of Companies Act 2013.
For all periods, up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with the Companies (Accounts) Rules 2014, read with Section 133 of Companies Act, 2013 (Previous GAAP). These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. The transition from Previous GAAP to the Ind AS has been done in accordance Ind AS 101, First Time Adoption of Indian Accounting Standards. Refer Note No 2.3 for information on how the Company has adopted Ind AS.
These financial statements have been prepared on historical cost basis, except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair value of the consideration given in exchange for goods and services. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
These financial statements are authorized for issue in accordance with a resolution of the directors on 30th May, 2018.
2.2 Summary of Significant Accounting Policies
2.2.1 Use of Estimates
The preparation of financial statements in conformity with Ind AS recognition and measurement principles and, in particular, making the critical accounting judgments require the use of estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management reviews its estimates on an ongoing basis using currently available information. Changes in facts and circumstances or obtaining new information or more experience may result in revised estimates, and actual results could differ from those estimates.
2.2.2 Classification of Assets and Liabilities as Current or Non-Current
The Company presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position on the basis of realization of assets.
An asset is classified as current when it is:
- expected to be realized or intended to sold or consumed in the normal operating cycle
- held primarily for the purpose of trading
- expected to be realized within twelve months after the reporting period, or
- cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
A liability is classified as current when:
- it is expected to be settled in the normal operating cycle
- it is held primarily for the purpose of trading
- it is due to be settled within twelve months after the reporting period, or
- there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period
All other assets and liabilities are classified as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
2.2.3 Revenue Recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duties collected on behalf of the government. The Company has concluded that it is the principal in all of its revenue arrangements since it is the primary obligor in all the revenue arrangements as it has pricing latitude and is also exposed to inventory and credit risks.
Based on the Educational Material on Ind AS 18 issued by the ICAI, the Company has assumed that recovery of excise duty flows to the company on its own account. This is for the reason that it is a liability of the manufacturer which forms part of the cost of production, irrespective of whether the goods are sold or not. Since the recovery of excise duty flows to the company on its own account, revenue includes excise duty.
However, sales tax/ value added tax (VAT)/goods and service tax(GST) is not received by the company on its own account. Rather, it is tax collected on value added to the commodity by the seller on behalf of the government. Accordingly, it is excluded from revenue.
The specific recognition criteria described below must also be met before revenue is recognised.
Sale of goods and scrap
The Company derives revenues primarily from sale of Tin Cans, Printed / Lacquered Sheet, Components of tin Cans and trading in Tin Plates.
Revenue from sale of goods is recognized when all the significant risks and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. The Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable, after deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government which are levied on sales such as sales tax, value added tax, and Goods & Service Tax.
Interest income
For all financial assets measured at amortized cost interest income is recorded using the effective interest rate (EIR). The EIR is the rate that exactly discounts the estimated future cash receipts through the expected life of the financial asset or a shorter period, where appropriate, to the net carrying amount of the financial asset.
Others
Income from export incentives such as duty export incentives are recognized on accrual basis.
2.2.4 Property, Plant and Equipment
Property, plant and equipment is recorded at cost less accumulated depreciation and impairment. Cost includes all related costs directly attributable to the acquisition or construction of the asset.
Each part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item is depreciated separately. Except for land, property, plant and equipment is depreciated using the straight-line method over the useful lives of the related assets as presented in Schedule 2 of Companies Act, 2013.
Major improvements, which add to productive capacity or extend the life of an asset, are capitalized, while repairs and maintenance are expensed as incurred. Where a property, plant and equipment comprises major components having different useful lives, these components are accounted for as separate items. The depreciation expense is recognized in the statement of profit or loss in the expense category consistent with the function of the property, plant and equipment.
Property, plant and equipment under construction is recorded as capital work- in-progress until it is ready for its intended use; thereafter it is transferred to the related class of property, plant and equipment and depreciated over its estimated useful life. Interest incurred during construction is capitalized if the borrowing cost is directly attributable to the construction.
Gains or losses arising from de-recognition of a property, plant and equipment are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
The residual values and useful lives of property, plant and equipment are reviewed at each reporting date and adjusted if expectations differ from previous estimates. Depreciation methods applied to property, plant and equipment are reviewed at each reporting date and changed if there has been a significant change in the expected pattern of consumption of the future economic benefits embodied in the asset.
2.2.5 Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortization and accumulated impairment losses, if any. Internally generated intangible assets, excluding capitalized development costs, are not capitalized and expenditure is recognized in the statement of profit or loss when it is incurred.
The useful lives of intangible assets are assessed as finite. Intangible assets are amortized over their useful economic lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are accounted for by changing the amortization period or method, as appropriate, and are treated as changes in accounting estimates. The amortization expense is recognized in the statement of profit or loss in the expense category consistent with the function of the intangible assets.
Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit or loss when the asset is derecognized.
2.2.6 Impairment of Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset''s recoverable amount. An asset''s recoverable amount is the higher of an asset''s or Cash Generating Unit (CGU)''s fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or company of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
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. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecasts which are prepared separately for each of the Company''s CGU to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year.
Impairment losses are recognized in the statement of profit or loss in those expense categories consistent with the function of the impaired asset.
2.2.7 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
i. Financial assets
Initial recognition and measurement
Financial assets are classified, at initial recognition, as financial assets at fair value through profit or loss, fair value through OCI or at amortized cost as appropriate. The Company determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus, in the case of assets not at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
The Company has the following financial assets in its statement of financial position
- Investments
- Cash
- Bank Balances
- Trade Receivables
- Loans
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below:
Financial assets at FVTPL or FVTOCI
Financial assets at fair value through profit or loss include financial assets held for trading and financial assets designated upon initial recognition at fair value through profit or loss. Financial assets are classified as held-for-trading if they are acquired for the purpose of selling or repurchasing in the near term. Financial assets at fair value through profit and loss are carried in the statement of financial position at fair value with net changes in fair value presented as finance income (positive net changes in fair value) or finance costs (negative net changes in fair value) in the statement of profit or loss. The Company has not designated any financial assets upon initial recognition as at fair value through profit or loss.
If the company decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to P&L, even on sale of investment. However, the company may transfer the cumulative gain or loss within equity.
Financial assets at amortised cost
This category is the most relevant to the Company. All Trade and Other Receivables, Loans and Advances fall under this category. After initial measurement, such financial assets are subsequently measured at amortised cost using the effective interest rate (EIR) method, less impairment. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the statement of profit or loss. The losses arising from impairment are recognised in the statement of profit or loss in finance costs for loans and in cost of sales or other operating expenses for receivables. This category generally applies to trade and other receivables.
De-recognition
A financial asset (or, where applicable, a part of a financial asset or part of a company of similar financial assets) is derecognised when:
- The rights to receive cash flows from the asset have expired, or
- The Company has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a ''pass-through'' arrangement, and either the Company has transferred substantially all the risks and rewards of the asset or transferred control of the asset.
Impairment of Financial Assets
The objective of the company in recognising the impairment allowance is to recognise lifetime expected credit losses for all financial instruments for which there have been significant increases in credit risk since initial recognition - whether assessed on an individual or collective basis - considering all reasonable and supportable information, including that which is forward-looking.
Credit Losses are the difference between all contractual cash flows that are due to the company in accordance with the contract and all the cash flows that the company expects to receive (ie all cash shortfalls), discounted at the original effective interest rate (or credit-adjusted effective interest rate for purchased or originated credit-impaired financial assets). Expected Credit Losses are the weighted average of credit losses with the respective risks of a default occurring as the weights.
The Company recognises a loss allowance for expected credit losses on a financial asset that is measured at amortized cost at each reporting date, at an amount equal to the lifetime expected credit losses if the credit risk on that financial instrument has increased significantly since initial recognition. When making the assessment, the company uses the change in the risk of a default occurring over the expected life of the financial instrument instead of the change in the amount of expected credit losses. To make that assessment, the company compares the risk of a default occurring on the financial instrument as at the reporting date with the risk of a default occurring on the financial instrument as at the date of initial recognition and consider reasonable and supportable information, that is available without undue cost or effort, that is indicative of significant increases in credit risk since initial recognition. The Company assumes that the credit risk on a financial instrument has not increased significantly since initial recognition if it is determined to have low credit risk at the reporting date.
If, at the reporting date, the credit risk on a financial instrument has not increased significantly since initial recognition, the company measures the loss allowance for that financial instrument at an amount equal to 12-month expected credit losses. For Trade receivables the company always measure the loss allowance at an amount equal to lifetime expected credit losses.
Evidence of impairment may include indications that the debtors or a company of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.
For financial assets carried at amortised cost, the Company first assesses whether impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Company determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a company of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continues to be, recognised are not included in a collective assessment of impairment.
The Company measures expected credit losses of a financial instrument in a way that reflects an unbiased and probability-weighted amount that is determined by evaluating a range of possible outcomes, the time value of money; and the reasonable and supportable information that is available without undue cost or effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
The carrying amount of the asset is reduced through the use of an allowance account and the amount of the loss is recognised in the statement of profit or loss. Interest income continues to be accrued on the gross carrying amount using the effective rate of interest unless the financial instrument is credit-impaired in which case the interest income is recognised on reduced carrying amount. The interest income is recorded as part of finance revenue in the statement of profit or loss.
Loans, together with the associated allowance are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Company. If, in a subsequent year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the allowance account. If a write-off is later recovered, the recovery is credited to profit or loss.
ii. Financial Liabilities
The Company has the following financial liabilities in its statement of financial position
- Borrowings
- Trade payables
- Other Financial Liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as financial liabilities at fair value through profit or loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs.
Subsequent measurement
The measurement of financial liabilities depends on their classification, as follows:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held-for-trading and financial liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities are classified as held-for-trading if they are acquired for the purpose of selling in the near term. Gains or losses on liabilities held-for-trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in Ind AS109 are satisfied. The Company has not designated any financial liabilities as at fair value through profit or loss.
Financial liabilities at amortised cost
This is the category most relevant to the Company. After initial recognition, financial liabilities are subsequently measured at amortised cost using the effective interest rate method. Gains and losses are recognised in the statement of profit or loss when the liabilities are derecognised as well as through the effective interest rate method (EIR) amortisation process.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the statement of profit or loss.
This category generally applies to notes payable, short-term loans and overdrafts.
iii. Offsetting of financial instruments
Financial assets and financial liabilities are offset with the net amount reported in the consolidated statement of financial position only if there is a current enforceable legal right to offset the recognised amounts and an intent to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.
iv. Fair Value of Financial Instruments
Fair Value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair values of the financial instruments are not materially different at the reporting date.
2.2.8 Cash and Bank Balances
Cash and Bank Balances in the statement of financial position comprise cash at banks and on hand and fixed deposits with banks, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits with original maturity of less than 3 months, net of outstanding bank overdrafts as they are considered an integral part of the Company''s cash management.
2.2.9 Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date. The arrangement is assessed for whether fulfilment of the arrangement is dependent on the use of a specific asset or assets or the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Company as a lessee
Finance leases that transfer to the Company substantially all of the risks and benefits incidental to ownership of the leased item, are capitalised at the commencement of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are apportioned between finance charges and a reduction in the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognized in finance costs in the statement of profit or loss.
Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.
2.2.10 Borrowing Cost
Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period in which they occur.
2.2.11 Provisions
General Provisions are recognized 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. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognized as a finance cost.
2.2.12 Employee Benefits
Employee benefits are all forms of consideration given by the company in exchange for service rendered by employees. Employee benefits include: short-term employee benefits, post-employment benefits and other long-term employee benefits
Short Term Employee Benefits
When an employee has rendered service to the company during an accounting period, the company recognises the undiscounted amount of short-term employee benefits expected to be paid in exchange for that service as a liability (accrued expense), after deducting any amount already paid and as an expense. Accumulated leave, which is expected to be utilized within the next twelve months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
Defined Contribution Plan
Defined contribution plans are post-employment benefit plans under which an entity pays fixed contributions into a separate entity (a fund) and will have no legal or constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
When an employee has rendered service during the year, the company recognises the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense) and as an expense.
Defined Benefit Plan
Defined benefit plans are those plans that provide guaranteed benefits to certain categories of employees, either by way of contractual obligations or through a collective agreement.
The company operates unfunded defined benefit plan. The cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at each fiscal year end. The obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income in the period in which they arise.
Current service cost, which is the increase of the present value of the defined benefit obligation resulting from the employee service in the current period, is recorded as an expense as part of cost of sales and selling, general and administrative expenses in the statement of profit and loss. The interest cost, which is the change during the period in the defined benefit liability that arises from the passage of time, is recognized as part of financing costs in the statement of profit and loss.
2.2.13 Foreign Currencies
The Company''s financial statements are presented in Indian Rupees (INR), which is also the company''s functional currency. Transactions in foreign currencies are initially recorded by the Company at the functional currency spot rate at the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date. Differences arising on settlement or translation of monetary items are recognized in profit or loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary measured at fair value is treated in line with the recognition of gain or loss on change in fair value in the item.
2.2.14 Income Tax
Tax expense comprises of current tax and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act, 1961 enacted in India and tax laws prevailing in the respective tax jurisdictions where the Company operates. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date. Deferred Tax Expense or Income arises due to temporary differences are differences between the carrying amount of an asset or liability in the statement of financial position and its tax base. Temporary differences may be either taxable temporary differences, which are temporary differences that will result in taxable amounts in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled or deductible temporary differences, which are temporary differences that will result in amounts that are deductible in determining taxable profit (tax loss) of future periods when the carrying amount of the asset or liability is recovered or settled. A deferred tax asset is recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which the deductible temporary difference can be utilised. A deferred tax liability is recognised for all taxable temporary differences.
2.2.15 Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
i. Raw materials and Stores and spares: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on first in, first out basis.
ii. Finished goods and work in progress: cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity but excluding borrowing costs. Cost is determined on first in, first out basis.
iii. Traded goods: cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
2.2.16 Segment Reporting Identification of segments
The Company''s operating business are organized and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products/services. The Company operates in two geographical segments: Domestic and International markets.
Allocation of common costs
Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.
Unallocated items
Unallocated items include general corporate income and expense items which are not allocated to any business segment.
Segment accounting policies
The Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.
2.2.17 Earnings per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
2.2.18 Contingent Liabilities
A provision is recognized 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 its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates.
2.3 First-time adoption of Ind AS
These financial statements, for the year ended 31 March 2018, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company''s opening balance sheet was prepared as at 1 April 2016, the Company''s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at 1 April 2016 and the financial statements as at and for the year ended 31 March 2017.
Exemptions applied
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions
(i) Estimates exception - On an assessment of the estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS (except for adjustments to reflect any difference in accounting policies), as there is no objective evidence that those estimates were in error. However, estimates, that were required under Ind AS but not required under Previous GAAP are made by the Company for the relevant reporting dates, reflecting conditions existing as at that date without using any hindsight.
(ii) De-recognition of financial assets and liabilities exception - Financial assets and liabilities derecognized before transition date are not re-recognized under Ind AS.
Reconciliations and explanations of the significant effect of the transition from Previous GAAP to Ind AS on the Company''s equity, statement of profit and loss and statement of cash flow are provided in Note 36.
3. Recent Indian Accounting Standards (Ind AS)
Ministry of Corporate Affairs ("MCA") 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 for annual periods beginning on or after April 1, 2018:
Ind AS 115 - Revenue from Contracts with Customers
Ind AS 21 - The Effect of Changes in Foreign Exchange Rates
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.
The core principle of Ind AS 115 is that an entity should recognize 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: Recognize revenue when (or as) the entity satisfies a performance obligation
Under Ind AS 115, an entity recognizes revenue when (or as) a performance obligation is satisfied, i.e. when ''control'' of the goods or services underlying the particular performance obligation is transferred to the customer.
The Company has completed its evaluation of the possible impact of Ind AS 115 and will adopt the standard with allrelated amendments to all contracts with customers retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. Under this transition method, cumulative effect of initially applying Ind AS 115 is recognized as an adjustment to the opening balance of retained earnings of the annual reporting period. The standard is applied retrospectively only to contracts that are not completed contracts at the date of initial application. The Company does not expect the impact of the adoption of the new standard to be material on its retained earnings and to its net income on an ongoing basis.
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.
Mar 31, 2016
26. COMPANY OVERVIEW
Hindustan Tin Works Limited ("the company") is a public company incorporated on 11th December, 1958 under the Companies Act, 1956; equity shares of the company are listed on Bombay Stock Exchange, Calcutta Stock Exchange and Delhi Stock Exchange. The company is engaged mainly in the business of Manufacturing of Tin Cans, Printed / Lacquered Sheets, Components and trading in Tin Plates.
27. SIGNIFICANT ACCOUNTING POLICIES:
27.1 Basis of Preparation of Financial Statements
The financial statement has been prepared to comply in all material respect with the mandatory Accounting Standard notified by the Central Government as per Companies (Accounting Standard ) Rules 2006 ( as amended ) read with Circular No. 15/2013 dated September 13, 2013 and General Circular No. 8/2014 dated 04th April 2014 issued by the Ministry of Corporate Affair and the relevant provision of Companies Act 2013. These financial statements have been prepared on an accrual basis and under historical cost convention on the basis of going concern. The accounting policies adopted in the preparation of financial statement are consistent with those of previous year.
27.2 Recognition of Income and Expenditure:
Revenues /Income and Costs/Expenditure are generally accounted on accrual, as they are earned or incurred. Sales of Goods are recognized on transfer of significant risks and rewards of Ownership which is generally on the dispatch of goods. Company makes export sales by using custom / cenvat paid material against which Company is entitled to import duty free raw material or duty draw back. The accounting for export benefits are on accrual basis and same is reduced from the cost of raw material consumed in the financial statement. In case of advance authorization the estimated amount of export benefits have been recognized in the financial statement and suitable adjustment for the difference arising on actual receipt of material would be made in the year of receipt of material.
27.3 Uses of Estimates:
The preparation of financial statements in conformity with generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Differences between actual results and estimates are recognized in the period in which the results are known/materialized.
27.4 Fixed Assets
Fixed assets are stated at cost except Plant & Machinery shifted from erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets of erstwhile Conwel Cans India Ltd. which has been taken on fair market value as per the approved valueâs report. If any fixed assets have a Component the value of which is more than 10% of the value of machine and the life of the component is different from the life of machine will be capitalized separately.
27.5 Method of Depreciation:
Depreciation is provided on straight line method with NIL residual value (except in respect of assets belonging to Registered Office Depreciation on which has been provided at Written Down Value with 5.00% residual value) and at the rates and in the manner specified in the Schedule II of the Companies Act, 2013, (net of cenvat/vat as applicable.) Depreciation on additions to assets or on sale/discardment of assets is calculated pro rata from the Date of such addition or up to the Date of such sale/discardment, as the case may be.
27.6 Investment
The company has sold the shares in Joint Venture Company for Rs.12,44,40,000/- and earn Long Term Capital gain Rs. 9,15,87,500/-. Investment in Punjab National Bank and State Bank of India has also been disposed off during the financial year. Total Long Term Capital Gain during the Year is Rs. 9, 17,29,962/-.
27.7 Value of Inventory
Inventories are valued at cost or net realizable value whichever is lower. The bases of valuation are as follows:-
Raw material, stores & spares : At cost or Net realizable value whichever is lower.
Work-in-process : At raw material cost plus Process cost.
Finished goods : At Market Price or Cost whichever is lower
Accounting of Raw Material purchase & closing stock is net of CENVAT & VAT credit. Claims & refunds, if any, shall be accounted for in the year of determination. The excise duty in respect of closing inventory of finished goods is not included in the valuation of finished goods inventory.
27.8 Foreign Currency Transaction
(i) Transactions in foreign currency are recorded at the exchange rate published by Custom department for the particular period on which the transaction recorded.
(ii) Current monetary Assets and Liabilities denominated in foreign currency are translated at the exchange rate prevailing at the date of balance sheet and gains or losses (net) on translation are recognized in profit and Loss Account.
(iii) In respect of forward exchange contract assigned to foreign currency Assets / Liabilities, the difference due to change in exchange rate between the inception of forward contract and date of the balance sheet, the proportionate premium / discount for the period up to the date of balance sheet is recognized in the profit loss Account. Any profit or loss arising on settlement / cancellation of forward contract is recognized as income or expense for the year in which they arise.
(iv) Any gain or loss arising on account of exchange difference either on settlement or on translation is accounted for in the Profit & Loss account except in case of long term foreign currency monetary items relating to acquisition of depreciable capital asset (other than regarded as borrowing cost) in which case they are adjusted to the carrying cost of such assets.
27.9 Research & Development
Revenue expenditure charged to Profit and Loss Account under respective heads of account and capital expenditure added to the cost of Fixed Assets in the year in which it is incurred.
27.10 Employees Benefits
(i) Defined Contribution Plans such as Provident Fund etc. are charged to the Profit & Loss Account as incurred.
(ii) Defined Benefit Plans - The present value of the obligation under such plan is determined based on an actuarial valuation using the Projected Unit Credit Method. Actuarial gains and losses arising on such valuation are recognized in the Profit & Loss Account. In case of funded defined benefit plans, the fair value of the plan assets is reduced from the gross obligation under the defined benefit plans, to recognize the obligation on net basis.
(iii) Other Long term Employee Benefits are recognized in the same manner as Defined Benefit Plans.
27.11 Accounting for Past Events
A provision is recognized when the Company 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 except those disclosed elsewhere in the financial statements, are not discounted to their present value and are determined based on best estimate required to settle the obligation at each Balance Sheet date and are adjusted to reflect the current best estimates.
27.12 Borrowing Cost
Borrowing costs includes interest cost and all ancillary costs incurred in connection with the arrangement of borrowings. Borrowing cost is considered as expenditure in the period and charge of to Profit and Loss Account. Fund borrowed for acquisition of qualifying fixed assets are capitalized till the date of commissioning and thereafter charged to Profit and Loss Account.
27.13 Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are not recognized in the accounts but are disclosed by way of notes. Contingent assets are neither recognized nor disclosed in the financial statements.
27.14 Taxes on Income
Provision for tax is made as per Income Tax Act, 1961. Deferred tax assets/liabilities resulting from timing difference between book and taxable profit is accounted for considering the tax rate and laws that have been enacted or substantively enacted as on the balance sheet date. Deferred tax assets if any, are recognized and carry forward only to the extent that there is virtual certainty that the asset will be realized in future.
27.15 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets exceeds its recoverable value. Impairment is charged to the Profit & Loss Account in the year in which an asset is identified as impaired. The impairment loss recognized in the prior accounting periods is reversed if there has been a change in the estimate of recoverable amount.
Mar 31, 2015
1.1 Basis of Preparation of Financial Statements
The financial statement has been prepared to comply in all material
respect with the mandatory Accounting Standard notified by the Ceneral
Government as per Companies (Accounting Standard) Rules 2006 ( as
amended ) read with Circular No. 15/2013 dated September 13, 2013 and
General Circular No. 8/2014 dated 04th April 2014 issued by the
Ministry of Corporate Affair and the relevant provision of Companies
Act 2013. These financial statements have been prepared on an accrual
basis and under historical cost convention on the basis of going
concern The accounting policies adopted in the preparation of financial
statement are consistent with those of previous year.
2.2 Recognition of Income and Expenditure:
Revenues /Income and Costs/Expenditure are generally accounted on
accrual, as they are earned or incurred. Sales of Goods are recognized
on transfer of significant risks and rewards of ownership which is
generally on the dispatch of goods. Company makes export sales by using
custom / cenvat paid material against which Company is entitled to
import duty free raw material and duty draw back. The accounting for
export benefits are on accrual basis and same is reduced from the cost
of raw material consumed in the financial statement. In case of advance
authorization the estimated amount of export benefits have been
recognized in the financial statement and suitable adjustment for the
difference arising on actual receipt of material would be made in the
year of receipt of material.
2.3 Uses of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialized.
2.4 Fixed Assets
Fixed assets are stated at cost except Plant & Machinery shifted from
erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets
of erstwhile Conwel Cans India Ltd. which has been taken on fair market
value as per the approved valuer''s report.
2.5 Method of Depreciation:
Depreciation is provided on straight line method with NIL residual
value (except in respect of assets belonging to Registered Office
Depreciation on which has been provided at Written Down Value with
5.00% residual value) and at the rates and in the manner specified in
the Schedule II of the Companies Act, 2013, (net of cenvat as
applicable.) Depreciation on additions to assets or on sale/discardment
of assets is calculated pro rata from the Date of such addition or up
to the Date of such sale/discardment, as the case may be. Difference of
Rs.314.66 lacs has been debited to the retain earning as on beginging
of the financial year 2014-15 and its Deferred tax effect amounting to
Rs. 106.95 lacs has been debited to Deferred Tax Liability by crediting
in retained earning.
2.6 Investment
The Company has made long term investments shown under the Head " Non
Current Investment" which are stated at cost. Provision for diminishing
in value of the long term investment is made only if such a decline is
other than temporary in the opinion of the management.
The investment in unquoted equity shares in JV company has now been
classified under Current Investment as the same has been disposed off
in the Financial Year 2015-16.
2.7 Value of Inventory
Inventories are valued at cost or net realizable value whichever is
lower. The bases of valuation are as follows:-
Raw material, stores & spares : At cost or Net realizable value which
ever is lower.
Work-in-process : At raw material cost plus Process cost.
Finished goods : At Market Price or Cost which ever is lower
Accounting of Raw Material purchase & closing stock is net of CENVAT &
VAT credit. Claims & refunds, if any, shall be accounted for in the
year of determination. The excise duty in respect of closing inventory
of finished goods is not included in the valuation of finished goods
inventory.
2.8 Foreign Currency Transaction
(i) Transactions in foreign currency are recorded at the exchange rate
published by Custom department for the particular period on which the
transaction recorded.
(ii) Current monetary Assets and Liabilities denominated in foreign
currency are translated at the exchange rate prevailing at the date of
balance sheet and gains or losses on translation are recognized in
profit and Loss Account in the respective heads.
(iii) In respect of forward exchange contract assigned to foreign
currency Assets / Liabilities, the difference due to change in exchange
rate between the inception of forward contract and date of the balance
sheet and proportionate premium / discount for the period up to the
date of balance sheet is recognized in the profit loss Account. Any
profit or loss arising on settlement / cancellation of forward contract
is recognized as income or expense for the year in which they arise.
(iv) Any gain or loss arising on account of exchange difference either
on settlement or on translation is accounted for in the Profit & Loss
account except in case of long term foreign currency monetary items
relating to acquisition of depreciable capital asset (other than
regarded as borrowing cost) in which case they are adjusted to the
carrying cost of such assets.
2.9 Research & Development
Revenue expenditure charged to Profit and Loss Account under respective
heads of account and capital expenditure added to the cost of Fixed
Assets in the year in which it is incurred.
2.10 Employees Benefits
(i) Defined Contribution Plans such as Provident Fund etc. are charged
to the Profit & Loss Account as incurred.
(ii) Defined Benefit Plans - The present value of the obligation under
such plan isdetermined based on an actuarial valuation using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognised in the Profit & Loss Account. In case of
funded defined benefit plans, the fair value of the plan assets is
reduced from the gross obligation under the defined benefit plans, to
recognize the obligation on net basis.
(iii) Other Long term Employee Benefits are recognised in the same
manner as Defined Benefit Plans.
2.11 Accounting for Past Events
A provision is recognized when the Company 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 except those disclosed
elsewhere in the financial statements, are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date and are adjusted to
reflect the current best estimates.
2.12 Borrowing Cost
Borrowing costs includes interest cost and all ancillary costs incurred
in connection with the arrangement of borrowings. Borrowing cost is
considered as expenditure in the period and charge of to Profit and
Loss Account. Fund borrowed for acquisition of qualifying fixed assets
are capitalized till the date of commissioning and thereafter charged
to Profit and Loss Account.
2.13 Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are not recognized in the accounts but
are disclosed by way of notes. Contingent assets are neither
recognized nor disclosed in the financial statements.
2.14 Taxes on Income
Provision for tax is made as per Income Tax Act, 1961. Deferred tax
assets/liabilities resulting from timing difference between book and
taxable profit is accounted for considering the tax rate and laws that
have been enacted or substantively enacted as on the balance sheet
date. Deferred tax assets if any, are recognized and carry forward only
to the extent that there is virtual certainty that the asset will be
realized in future.
2.15 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. Impairment is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2014
1 Basis of Preparation of Financial Statements
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standards notified under Section 211(3C ) and the
other relevant provisions of the Companies Act, 1956.
All the assets and liabilities have been classified as current or non
current as per the Company''s normal operating cycle and other criteria
set out in Schedule VI to the Companies Act, 1956.
2 Recognition of Income and Expenditure:
Revenues /Income and Costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
Sales of Goods are recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods.
Company makes export sales by using custom / cenvat paid material
against which Company is entitled to import duty free raw material and
duty draw back.
The accounting for export benefits are on accrual basis and same is
reduced from the cost of raw material consumed in the financial
statement.
In case of advance authorization the estimated amount of export
benefits have been recognized in the financial statement and suitable
adjustment for the difference arising on actual receipt of material
would be made in the year of receipt of material.
3 Uses of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialized.
4 Fixed Assets
Fixed assets are stated at cost except Plant & Machinery shifted from
erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets
of erstwhile Conwel Cans India Ltd. which has been taken on fair market
value as per the approved valuer''s report.
5 Method of Depreciation:
Depreciation is provided on straight line method (except in respect of
assets belonging to Registered Office Depreciation on which has been
provided at Written Down Value) and at the rates and in the manner
specified in the Schedule XIV of the Companies Act, 1956, (net of
cenvat as applicable.) Depreciation on additions to assets or on
sale/discardment of assets is calculated pro rata from the Date of such
addition or up to the Date of such sale/discardment, as the case may
be.
6 Investment
The Company has made long term investments which are stated at cost.
Provision for diminishing in value of the long term investment is made
only if such a decline is other than temporary in the opinion of the
management.
7 Value of Inventory
Inventories are valued at cost or net realizable value whichever is
lower. The basis of valuation are as follows:-
Raw material, stores & spares : At cost or Net realizable value which
ever is lower.
Work-in-process : At raw material cost plus Process cost.
Finished goods : At Market Price or Cost which ever is
lower
Accounting of Raw Material purchase & closing stock is net of CENVAT &
VAT credit. Claims & refunds, if any, shall be accounted for in the
year of determination. The excise duty in respect of closing inventory
of finished goods is not included in the valuation of finished goods
inventory.
8 Foreign Currency Transaction
(i) Transactions in foreign currency are recorded at the exchange rate
published by Custom department for the particular month in which the
transaction recorded.
(ii) Current monetary Assets and Liabilities denominated in foreign
currency are translated at the exchange rate prevailing at the date of
balance sheet and gains or losses on translation are recognized in
profit and Loss Account in the respective heads.
(iii) In respect of forward exchange contract assigned to foreign
currency Assets / Liabilities, the difference due to change in exchange
rate between the inception of forward contract and date of the balance
sheet and proportionate premium / discount for the period up to the
date of balance sheet is recognized in the profit loss Account . Any
profit or loss arising on settlement / cancellation of forward contract
is recognized as income or expense for the year in which they arise.
(iv) Any gain or loss arising on account of exchange difference either
on settlement or on translation is accounted for in the Profit & Loss
account except in case of long term foreign currency monetary items
relating to acquisition of depreciable capital asset (other than
regarded as borrowing cost) in which case they are adjusted to the
carrying cost of such assets.
9 Research & Development
Revenue expenditure charged to Profit and Loss Account under respective
heads of account and capital expenditure added to the cost of Fixed
Assets in the year in which it is incurred.
10 Employees Benefits
(i) Defined Contribution Plans such as Provident Fund etc. are charged
to the Profit & Loss Account as incurred.
(ii) Defined Benefit Plans - The present value of the obligation under
such plan is determined based on an actuarial valuation using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognised in the Profit & Loss Account. In case of
funded defined benefit plans, the fair value of the plan assets is
reduced from the gross obligation under the defined benefit plans, to
recognize the obligation on net basis.
(iii) Other Long term Employee Benefits are recognised in the same
manner as Defined Benefit Plans.
11 Accounting for Past Events
A provision is recognized when the Company 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 except those disclosed
elsewhere in the financial statements, are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date and are adjusted to
reflect the current best estimates.
12 Borrowing Cost
Borrowing costs includes interest cost and all ancillary costs incurred
in connection with the arrangement of borrowings. Borrowing cost is
considered as expenditure in the period and charge of to Profit and
Loss Account. Fund borrowed for acquisition of qualifying fixed assets
are capitalized till the date of commissioning and thereafter charged
to Profit and Loss Account.
13 Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are not recognized in the accounts but
are disclosed by way of notes. Contingent assets are neither
recognized nor disclosed in the financial statements.
14 Taxes on Income
Provision for tax is made as per Income Tax Act, 1961. Deferred tax
assets/liabilities resulting from timing difference between book and
taxable profit is accounted for considering the tax rate and laws that
have been enacted or substantively enacted as on the balance sheet
date. Deferred tax assets if any, are recognized and carry forward only
to the extent that there is virtual certainty that the asset will be
realized in future.
15 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. Impairment is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2012
1.1 Basis of Preparation of Financial Statements
These financial statements have been prepared on an accrual basis and
under historical cost convention and in compliance, in all material
aspects, with the applicable accounting principles in India, the
applicable accounting standards notified under Section 211(3C ) and the
other relevant provisions of the Companies Act,1956.
All the assets and liabilities have been classified as current or non
current as per the Company's normal operating cycle and other criteria
set out in Schedule VI to the Companies Act, 1956.
1.2 Recognition of Income and Expenditure:
Revenues /Income and Costs/Expenditure are generally accounted on
accrual, as they are earned or incurred.
Sales of Goods are recognized on transfer of significant risks and
rewards of ownership which is generally on the dispatch of goods.
Company makes export sales by using custom / cenvat paid material
against which Company is entitled to import duty free raw material/duty
exemption pass book (DEPB) and duty draw back.
The accounting for export benefits are on accrual basis and same is
reduced from the cost of raw material consumed in the financial
statement.
In case of advance authorization the estimated amount of export
benefits have been recognized in the financial statement and suitable
adjustment for the difference arising on actual receipt of material
would be made in the year of receipt of material.
1.3 Uses of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialized.
1.4 Fixed Assets
Fixed assets are stated at cost except Plant & Machinery shifted from
erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets
of erstwhile Conwel Cans India Ltd. which has been taken on fair market
value as per the approved valuer's report.
1.5 Method of Depreciation
Depreciation is provided on straight line method (except in respect of
assets belonging to Registered Office Depreciation on which has been
provided at Written Down Value) and at the rates and in the manner
specified in the Schedule XIV of the Companies Act, 1956, (net of
cenvat as applicable.) Depreciation on additions to assets or on
sale/discardment of assets is calculated pro rata from the month of
such addition or up to the month of such sale/discardment, as the case
may be.
1.6 Investment
The Company has made long term investments which are stated at cost.
Provision for diminishing in value of the long term investment is made
only if such a decline is other than temporary in the opinion of the
management.
1.7 Value of Inventory
Inventories are valued at cost or net realizable value whichever is
lower. The bases of valuation are as follows:-
Raw material, stores & spares : At cost or Net realizable value which
ever is lower.
Work-in-process : At raw material cost plus Process cost.
Finished goods : At Market Price or Cost which ever is lower
(Determination of cost Selling Price less 10%)
Accounting of Raw Material purchase & closing stock is net of CENVAT &
VAT credit. Claims & refunds, if any, shall be accounted for in the
year of determination. The excise duty in respect of closing inventory
of finished goods is not included in the valuation of finished goods
inventory.
1.8 Foreign Currency Transaction
(i) Transactions in foreign currency are recorded at the exchange rate
published by Custom department for the particular month in which the
transaction recorded.
(ii) Current monetary Assets and Liabilities denominated in foreign
currency are translated at the exchange rate prevailing at the date of
balance sheet and gains or losses on translation are recognized in
profit and Loss Account in the respective heads.
(iii) In respect of forward exchange contract assigned to foreign
currency Assets / Liabilities, the difference due to change in exchange
rate between the inception of forward contract and date of the balance
sheet and proportionate premium / discount for the period up to the
date of balance sheet is recognized in the profit loss Account . Any
profit or loss arising on settlement / cancellation of forward contract
is recognized as income or expense for the year in which they arise.
(iv) Any gain or loss arising on account of exchange difference either
on settlement or on translation is accounted for in the Profit & Loss
account except in case of long term foreign currency monetary items
relating to acquisition of depreciable capital asset (other than
regarded as borrowing cost) in which case they are adjusted to the
carrying cost of such assets.
1.9 Research & Development
Revenue expenditure charged to Profit and Loss Account under respective
heads of account and capital expenditure added to the cost of Fixed
Assets in the year in which it is incurred.
1.10 Employees Benefits
(i) Defined Contribution Plans such as Provident Fund etc. are charged
to the Profit & Loss Account as incurred.
(ii) Defined Benefit Plans - The present value of the obligation under
such plan is determined based on an actuarial valuation using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognised in the Profit & Loss Account. In case of
funded defined benefit plans, the fair value of the plan assets is
reduced from the gross obligation under the defined benefit plans, to
recognize the obligation on net basis.
(iii) Other Long term Employee Benefits are recognised in the same
manner as Defined Benefit Plans.
1.11 Accounting for Past Events
A provision is recognized when the Company 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 except those disclosed
elsewhere in the financial statements, are not discounted to their
present value and are determined based on best estimate required to
settle the obligation at each Balance Sheet date and are adjusted to
reflect the current best estimates.
1.12 Borrowing Cost
Borrowing costs includes interest cost and all ancillary costs incurred
in connection with the arrangement of borrowings. Borrowing cost is
considered as expenditure in the period and charge of to Profit and
Loss Account. Fund borrowed for acquisition of qualifying fixed assets
are capitalized till the date of commissioning and thereafter charged
to Profit and Loss Account.
1.13 Provisions, Contingent Liabilities and Contingent Assets
Contingent liabilities, if any, are not recognized in the accounts but
are disclosed by way of notes. Contingent assets are neither
recognized nor disclosed in the financial statements.
1.14 Taxes on Income
Provision for tax is made as per Income Tax Act, 1961. Deferred tax
assets/liabilities resulting from timing difference between book and
taxable profit is accounted for considering the tax rate and laws that
have been enacted or substantively enacted as on the balance sheet
date. Deferred tax assets if any, are recognized and carry forward only
to the extent that there is virtual certainty that the asset will be
realized in future.
1.15 Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. Impairment is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
Mar 31, 2011
1. Accounting Convention :
The Financial Statements are prepared on accrual & historical cost
convention basis and in accordance with Accounting Standards issued by
the Institute of Chartered Accountants of India and the requirements of
the companies Act 1956.
2. Uses of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialized.
3. Employee Benefit:
(a) Defined Contribution Plans such as Provident Fund etc. are charged
to the Profit & Loss Account as incurred.
(b) Defined Benefit Plans - The present value of the obligation under
such plan is determined based on an actuarial valuation using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognised immediately in the Profit & Loss Account.
In case of funded defined benefit plans, the fair value of the plan
assets is reduced from the gross obligation under the defined benefit
plans, to recognize the obligation on net basis.
(c) Other Long term Employee Benefits are recognised in the same manner
as Defined Benefit Plans.
4. Revenue Recognition:
Revenue in respect of sale of products is recognized at the point of
dispatch of materials to customers. Claims & Returns, if any, is
accounted for in the year of determination. Sales includes sale of Tin
Containers, lacquered sheet, printed sheet, tinplate, component, scrap.
Sales are exclusive of sales tax & excise.
Company makes export sales by using custom paid material against which
Company is entitled to import custom free raw material/duty exemption
pass book (DEPB). The estimated amount of eligible custom duty is
treated as receivables/ actual amount of DEPB is accounted for in the
statement of affairs and accordingly cost of raw material is reduced.
5. Fixed Assets:
Fixed assets are stated at cost except Plant & Machinery shifted from
erstwhile Sahibabad unit which were revalued on 30.6.92 and the assets
of erstwhile Conwel Cans India Ltd. which has been taken on fair market
value as per the approved valuer's report.
6. Depreciation :
Depreciation is provided on straight line method (except in respect of
assets belonging to Registered Office Depreciation on which has been
provided at Written Down Value) and at the rates and in the manner
specified in the Schedule XIV of the Companies Act, 1956, (net of
cenvat as applicable.) Depreciation on additions to assets or on
sale/discardment of assets is calculated pro rata from the month of
such addition or up to the month of such sale/discardment, as the case
may be;
7. Inventories:
Inventories are valued at cost or net realizable value whichever is
lower. The bases of valuation are as follows:- Raw material, stores &
spares : At Cost or Net realisable value which ever is lower.
Work-in-process : At raw material cost plus Process cost. Finished
goods : At selling price less 10%
Accounting of Raw Material purchase & closing stock is net of CENVAT &
VAT credit. Claims & refunds, if any, shall be accounted for in the
year of determination.
8. Foreign Currency Transactions:
(i) Transactions in foreign currency are recorded at the exchange rate
published by Custom department for the particular month date of
transaction. Current monetary Assets and Liabilities denominated in
foreign currency are translated at the exchange rate prevailing at the
date of balance sheet and gains or losses on translation are recognized
in profit and Loss Account.
(ii) In respect of forward exchange contacts assigned to foreign
currency Assets / Liabilities, the difference due to change in exchange
rate between the inception of forward contact and date of the balance
sheet and proportionate premium / discount for the period up to the
date of balance sheet is recognized in the profit loss Account . Any
profit or loss arising on settlement / cancellation of forward contact
is recognized as income or expense for the year in which they arise.
9. A provision is recognized when the Company 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 except those
disclosed elsewhere in the financial statements, are not discounted to
their present value and are determined based on best estimate required
to settle the obligation at each Balance Sheet date and are adjusted to
reflect the current best estimates.
10. Investment
The Company has made long term investments which are stated at cost.
Provision for diminishing in value of the long term investment is made
only if such a decline is other than temporary in the opinion of the
management.
11. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. Impairment is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
12. Borrowing costs
Borrowing costs includes interest cost and all ancillary costs incurred
in connection with the arrangement of borrowings. Borrowing cost is
considered as expenditure in the period and charge of to Profit and
Loss Account.
Mar 31, 2010
1. Accounting Convention :
The Financial Statements are prepared on accrual & historical cost
convention basis and in accordance with Accounting Standards issued by
the Institute of Chartered Accountants of India and the requirements of
the companies Act 1956.
2. Uses of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires estimates and assumptions to be
made that affect the reported amounts of assets and liabilities on the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Differences between actual
results and estimates are recognised in the period in which the results
are known/materialized,
3. Employee Benefit:
(a) Defined Contribution Plans such as Provident Fund etc. are charged
to the Profit & Loss Account as incurred.
(b) Defined Benefit Plans - The present value of the obligation under
such plan is determined based on an actuarial valuation using the
Projected Unit Credit Method. Actuarial gains and losses arising on
such valuation are recognised immediately in the Profit & Loss Account.
In case of funded defined benefit plans, the fair value of the plan
assets is reduced from the gross obligation under the defined benefit
plans, to recognize the obligation on net basis.
(c) Other Long term Employee Benefits are recognised in the same manner
as Defined Benefit Plans.
4. Revenue Recognition:
Revenue in respect of sale of products is recognized at the point of
dispatch of materials to customers. Claims & Returns, if any, is
accounted for in the year of determination, Sales includes sale of Tin
Containers, lacquered sheet, printed sheet, tinplate, component, scrap.
Sales are exclusive of sales tax & excise.
Company makes export sales by using custom paid material against which
Company is entitled to import custom free raw material/duty exemption
pass book (DEPB). The estimated amount of eligible custom duty is
treated as receivables/ actual amount of DEPB is accounted for in the
statement of affairs and accordingly cost of raw material is reduced.
5. Fixed Assets:
Fixed assets are stated at cost except Plant & Machinery shifted from
erstwhile Sahibabad which were revalued on 30.6.92 and the assets of
erstwhile Conwel Cans India Ltd. which has been taken on fair market
value as per the approved valuers report.
6. Depreciation:
Depreciation is provided on straight line method (except in respect of
assets belonging to Registered Office Depreciation on which has been
provided at Written Down Value) and at the rates and in the manner
specified in the Schedule XIV of the Companies Act, 1956, (net of
cenvat as applicable.) Depreciation on additions to assets or on
sale/discardment of assets is calculated pro rata from the month of
such addition or up to the month of such sale/discardment, as the case
may be;
7. Inventories:
Inventories are valued at cost or net realizable value whichever is
lower. The bases of valuation are as follows:-
Raw material, stores & spares : At Cost or Net realisable value which
ever is lower.
Work-in-process : At raw material cost plus Process cost.
Finished goods : At selling price less 10% as per previous practice.
Accounting of Raw Material consumption is net of CENVAT & VAT credit.
Claims & refunds, if any, shall be accounted for in the year of
determination.
8. Foreign Currency Transactions:
(i) Transactions in foreign currency are recorded at the exchange rate
prevailing on the date of transaction. Current monetary Assets and
Liabilities denominated in foreign currency are translated at the
exchange rate prevailing at the date of balance sheet and gains or
losses on translation are recognized in profit and Loss Account.
(ii) In respect of forward exchange contacts assigned to foreign
currency Assets / Liabilities, the difference due to change in exchange
rate between the inception of forward contact and date of the balance
sheet and proportionate premium / discount for the period up to the
date of balance sheet is recognized in the profit loss Account. Any
profit or loss arising on settlement / cancellation of forward contact
is recognized as income or expense for the year in which they arise.
9. A provision is recognized when the Company 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 except those
disclosed elsewhere in the financial statements, are not discounted to
their present value and are determined based on best estimate required
to settle the obligation at each Balance Sheet date and are adjusted to
reflect the current best estimates
10. Investment
The Company has made long term investments which are stated at cost.
Provision for diminishing in value of the long term investment is made
only if such a decline is other than temporary in the opinion of the
management.
11. Impairment of Assets
An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable value. Impairment is charged to the Profit &
Loss Account in the year in which an asset is identified as impaired.
The impairment loss recognized in the prior accounting periods is
reversed if there has been a change in the estimate of recoverable
amount.
12. Borrowing costs
Borrowing costs includes interest cost and all ancillary costs incurred
in connection with the arrangement of borrowings. Borrowing cost is
considered as expenditure in the period and charge of to Profit and
Loss Account.
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