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Accounting Policies of JK Paper Ltd. Company
Mar 31, 2025
II. Material Accounting Policies for the year ended 31st March,2025.
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are
no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the
terms agreed with the respective customers.
Revenue from the sale of goods is measured on transaction price excluding estimates of variable consideration that is allocated
to performance obligations. Sales as disclosed, are exclusive of Goods and Services Tax.
The company considers the terms of the contract and its customary business practices to determine the transaction price. The
transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring
promised goods to a customer, excluding amount collected on behalf of third parties (for example taxes collected on behalf of
government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration
(if reversal is less likely in future), or both.
The transaction price is allocated by the company to each performance obligation in an amount that depicts the amount of
consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer.
Export Incentives
Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the
amount of consideration that would be derived and as to its ultimate collection exist.
Interest income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when
shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC''s.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy
Certificates are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value).
The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs
incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of
three months or less which are subject to an insignificant risk of change in value.
(iv) Property Plant and Equipment
On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and
Equipment (PPE) at fair value. Consequently the fair value had been assumed to be deemed cost of PPE on the date of transition.
Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes
expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment
losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to
be capable of operating in the manner intended by management
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances
paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other non¬
current assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated
with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are
recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are
eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in
the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method
over their useful lives as prescribed under Schedule II of Companies Act, 2013. However, in respect of certain property, plant
and equipment, depreciation is provided as per their useful lives as assessed by the management supported by technical advice
ranging from 10 to 40 years for plant and machinery and 8 to 60 years for buildings.
Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on
assets costing up to Rs.5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary
for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of
depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the
useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company
and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the
expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment
losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the
end of each reporting period and adjusted prospectively, if appropriate.
Intangible assets with indefinite useful lives like goodwill acquired in business combination are not amortised but are tested for
impairment annually. The assessment of indefinite useful life is reviewed annually to determine whether indefinite life continues
to be supportable. The change in useful life from indefinite to finite life if any, is made on prospective basis.
(v) Research and Development Costs
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the
criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of Property, Plant and equipment and acquired intangible assets utilised for research and development are capitalised and
depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
(vi) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right
to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of
low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right
to use the underlying assets.
The Company had adopted Ind AS 116"Leases"effective April 1,2019(Transition date) using the simplified approach (Retrospective
cumulative was effective from 1st April 2019)
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is
available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives
received. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease
term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a
purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments)
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be
paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company
exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses
(unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement
date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of
lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments
(e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a
change in the assessment of an option to purchase the underlying asset.
Lease liabilities and Right-of-use assets have been presented as a separate line in Note 2 of Property, Plant and Equipment (PPE)
and Note 18 of Non-current Financial Liabilities -Borrowings. Lease payments have been classified as cash used in financing
activities.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets 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.
(vii) Impairment
The carrying amount of PPEs, Intangible assets, Goodwill and Investment property are reviewed at each Balance Sheet date to
assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset
exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense
in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior
accounting period is reversed, if there has been an improvement in recoverable amount.
(viii) Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under
following three categories according to the purpose for which they are held. The classification is reviewed at the end of each
reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, Financial assets are held to collect contractual cash flows of principal and interest on
principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore,
they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying
amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from
impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, Financial asset are held to collect contractual cash flows of principal and interest on
principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at
each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest
income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or
loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously
recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor
at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value
movements recognised in the Statement of Profit and Loss.
Trade Receivables.
With the exception of trade receivables that do not contain a significant financing component, the Company initially
measures financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, net of
transaction costs. Trade receivables do not contain a significant financing component and are measured at the transaction
price determined under Ind AS 115. Refer to the accounting policies in section (i) Revenue recognition.
In respect of trade receivables, the company applies the simplified approach of IND AS 109 "Financial Instruments", which
requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses
are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Investment in Equity Shares.
Investment in equity instruments which are held for trading are classified as at fair value through profit or loss (''FVTPL'').
For all other equity instruments, the company makes an irrevocable choice upon initial recognition, on an instrument by
instrument basis, to classify the same as fair value through other comprehensive income (''FVTOCI'') or fair value through
profit or loss (''FVTPL''). Amount presented in other comprehensive income are not subsequently transferred to profit or loss.
Investment in Joint Ventures and Subsidiaries.
The Company has accounted for its investment in subsidiaries and joint venture at cost less diminution in value of Investment.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at fair value through profit and loss. Any subsequent fair value gain or loss
is recognized through Profit or Loss Account.
Derecognition.
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) The Company has transferred its right 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:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through
arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the
Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case,
the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a
basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original
carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities.
Initial Recognition and Measurement.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of
directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and
borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement.
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not
designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial
liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement
of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using
the effective interest rate method ("EIR") except for those designated in an effective hedging relationship. The carrying
value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at
amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective
hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an
integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings.
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective
interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the
establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the
liability for at least twelve months after the reporting period.
d) Trade and Other Payables.
A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services
received in the normal course of business. These amounts represent liabilities for goods and services provided to
the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability.
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The
difference between the carrying amount of a financial liability that has been extinguished or transferred to another
party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit
or loss as other income or finance costs.
Offsetting of Financial Instruments.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a
currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to
realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments.
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to
hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair
value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end
of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated
as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in
the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments.
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability
that does not have an equity component. The equity component is recognised initially as the difference between the
fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly
attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their
initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest rate method. The equity component of a compound financial instrument is
not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company''s functional currency. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial
instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting
date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations
including on forward contracts are dealt with in Profit and Loss Statement except exchange differences on borrowings taken for
qualifying assets are treated as borrowing cost and adjusted with qualifying assets. Non Monetary Foreign Currency items are
stated at cost.
The Company has continued capitalisation of foreign currency fluctuation on long term foreign currency liabilities outstanding
on Ind AS transition date.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in
the statement of Profit and Loss
b) Defined Benefit Plan:
The Company''s Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end
of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with
the measurement procedure as per Indian Accounting Standard (INDAS)-19., ''Employee Benefits''. Liability against Gratuity
are funded on year-to-year basis by contribution to respective fund. The costs of providing benefits under these plans are
also determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for defined benefit plans
are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in
subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made to trust
administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared
by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall
make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit.
All employees'' benefits payable wholly within twelve months rendering services are classified as short term employee
benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the
expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the
employee renders the related services are recognized as a liability at the present value of the defined benefit obligation
at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a
liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of
termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the
weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by
the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted
average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive
potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e.
the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the
beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each
period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any
share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board
of Directors.
(xii) Income Tax
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation
authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the
reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and
loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax
bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax
assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance
sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be
recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or
expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized
to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences
and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable
right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the
liability simultaneously.
Mar 31, 2024
I. CORPORATE INFORMATION
JK Paper Ltd (the Company) is a Public Limited Company listed on the National Stock Exchange of India Ltd and the Bombay Stock Exchange Limited. The Registered office of the Company is situated at Fort Songadh, Dist- Tapi- 394660, Gujarat. The Company is India''s largest producer of branded papers and JK Group has over eight decades of Industry experience. The Company is a leading player in segments like Office Paper, Writing & Printing, Packaging Boards, Coated Paper and Specialty Paper. The Company''s state -of -the art manufacturing units are located at strategic locations: Unit JKPM in East (Rayagada, Odisha), Unit CPM in West (Songadh, Gujarat). It has a pan India Sales presence and exports to several countries. It is a carbon and wood positive Company.
These financial statements were approved and adopted by the Board of Directors of the Company in their meeting held on May 16,2024.
I. Basis of Preparation of Financial Statements
(i) Statement of Compliance:
The Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.
(ii) Basis of Preparation:
The separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (India Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) (Amendment) Rules, 2016. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013 ("the Act").
The financial statements have been prepared on an accrual basis and under the historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The financial statements are presented in INR and all values are rounded to the nearest INR Crore (10 Million), except when otherwise indicated.
(iii) Use of Estimates
The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
(iv) Classification of Assets and Liabilities as Current and Non Current
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
III. Material Accounting Policies for the year ended 31st March,2024.
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the terms agreed with the respective customers.
Revenue from the sale of goods is measured on transaction price excluding estimates of variable consideration that is allocated to performance obligations. Sales as disclosed, are exclusive of Goods and Services Tax.
The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods to a customer, excluding amount collected on behalf of third parties (for example taxes collected on behalf of government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.
The transaction price is allocated by the company to each performance obligation in an amount that depicts the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer.
Export Incentives
Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Interest income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC''s.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy Certificates are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.
(iv) Property Plant and Equipment
On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and Equipment (PPE) at fair value. Consequently the fair value had been assumed to be deemed cost of PPE on the date of transition. Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other noncurrent assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as prescribed under Schedule II of Companies Act, 2013. However, in respect of certain property, plant and equipment, depreciation is provided as per their useful lives as assessed by the management supported by technical advice ranging from 10 to 40 years for plant and machinery and 8 to 60 years for buildings.
Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on assets costing up to H5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
(v) Research and Development Costs
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of Property, Plant and equipment and acquired intangible assets utilised for research and development are capitalised and depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
(vi) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The Company had adopted Ind AS 116 "Leases" effective April 1, 2019(Transition date) using the simplified approach (Retrospective cumulative was effective from 1st April 2019)
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Lease liabilities and Right-of-use assets have been presented as a separate line in Note 2 of Property, Plant and Equipment (PPE) and Note 18 of Non-current Financial Liabilities -Borrowings. Lease payments have been classified as cash used in financing activities.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets 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.
(vii) Impairment
The carrying amount of PPEs, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.
(viii) Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, Financial assets are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, Financial asset are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.
Trade Receivables.
With the exception of trade receivables that do not contain a significant financing component, the Company initially measures financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, net of transaction costs. Trade receivables do not contain a significant financing component and are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section (i) Revenue recognition.
In respect of trade receivables, the company applies the simplified approach of IND AS 109 "Financial Instruments", which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Investment in Equity Shares.
Investment in equity instruments which are held for trading are classified as at fair value through profit or loss (''FVTPL''). For all other equity instruments, the company makes an irrevocable choice upon initial recognition, on an instrument by
instrument basis, to classify the same as fair value through other comprehensive income (''FVTOCI'') or fair value through profit or loss (''FVTPL''). Amount presented in other comprehensive income are not subsequently transferred to profit or loss.
Investment in Joint Ventures and Subsidiaries.
The Company has accounted for its investment in subsidiaries and joint venture at cost less diminution in value of Investment.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at fair value through profit and loss. Any subsequent fair value gain or loss is recognized through Profit or Loss Account.
Derecognition.
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) The Company has transferred its right 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:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities.
Initial Recognition and Measurement.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement.
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss.
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost.
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method ("EIR") except for those designated in an effective hedging relationship. The carrying value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings.
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
d) Trade and Other Payables.
A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability.
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Offsetting of Financial Instruments.
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments.
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments.
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component.
Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company''s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences on borrowings taken for qualifying assets are treated as borrowing cost and adjusted with qualifying assets. Non Monetary Foreign Currency items are stated at cost.
The Company has continued capitalisation of foreign currency fluctuation on long term foreign currency liabilities outstanding on Ind AS transition date.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in the statement of Profit and Loss
b) Defined Benefit Plan:
The Company''s Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (INDAS)-19., ''Employee Benefits''. Liability against Gratuity are funded on year-to-year basis by contribution to respective fund. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit.
All employees'' benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(xii) Income Tax Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
(xiii) Provisions and Contingent Liabilities /Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and 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 recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.
Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(xv) Borrowing Costs
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 asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(xvi) Fair Value Measurements
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
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 value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
Q In the principal market for the asset or liability.
Or
Q In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
Q Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Q Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly
or indirectly observable.
Q Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xvii) Significant Accounting Judgments, Estimates and Assumptions
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:
a. Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.
c. Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.
d. Defined Benefit Plans.
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
e. Fair Value Measurement of Financial Instruments.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Mar 31, 2023
NOTE 1. COMPANY OVERVIEW, BASIS OF PREPARATION & SIGNIFICANT ACCOUNTING POLICIES.
JK Paper Ltd ( the Company) is a Public Limited Company listed on the National Stock Exchange of India Ltd and the Bombay Stock Exchange Limited. The Registered office of the Company is situated at Fort Songadh, Dist- Tapi- 394660, Gujarat. The Company is India''s largest producer of branded papers and JK Group has over eight decades of Industry experience. The Company is a leading player in segments like Office Paper, Writing & Printing, Packaging Boards, Coated Paper and Specialty Paper. The Company''s state -of -the art manufacturing units are located at strategic locations: Unit JKPM in East (Rayagada, Odisha), Unit CPM in West (Songadh, Gujarat). It has a pan India Sales presence and exports to several countries. It is a carbon and wood positive Company.
These financial statements were approved and adopted by the Board of Directors of the Company in their meeting held on May 16, 2023.
II. Basis of Preparation of Financial Statements
(i) Statement of Compliance:
The Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.
(ii) Basis of Preparation:
The separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (India Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) (Amendment) Rules, 2016. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013 ("the Act").
The financial statements have been prepared on an accrual basis and under the historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The financial statements are presented in INR and all values are rounded to the nearest INR Crore (10 Million), except when otherwise indicated.
(iii) Use of Estimates
The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
(iv) Classification of Assets and Liabilities as Current and Non Current
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
III. Significant Accounting Policies for the year ended 31st March, 2023.
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the terms agreed with the respective customers.
Revenue from the sale of goods is measured on transaction price excluding estimates of variable consideration that is allocated to performance obligations. Sales as disclosed, are exclusive of Goods and Services Tax.
The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods to a customer, excluding amount collected on behalf of third parties (for example taxes collected on behalf of government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.
The transaction price is allocated by the company to each performance obligation in an amount that depicts the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer.
Export Incentives
Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Interest income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC''s.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy Certificates are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.
(iv) Property Plant and Equipment
On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and Equipment (PPE) at fair value. Consequently the fair value had been assumed to be deemed cost of PPE on the date of transition.
Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other noncurrent assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as prescribed under Schedule II of Companies Act, 2013. However, in respect of certain property, plant and equipment, depreciation is provided as per their useful lives as assessed by the management supported by technical advice ranging from 10 to 40 years for plant and machinery and 8 to 60 years for buildings.
Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on assets costing up to H5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
(v) Research and Development Costs
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of Property, Plant and equipment and acquired intangible assets utilised for research and development are capitalised and depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
(vi) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The Company had adopted Ind AS 116 "Leases"effective April 1,2019(Transition date) using the simplified approach (Retrospective cumulative was effective from 1st April 2019)
Right-of-use assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Lease liabilities and Right-of-use assets have been presented as a separate line in Note 2 of Property, Plant and Equipment (PPE) and Note 18 of Non-current Financial Liabilities -Borrowings. Lease payments have been classified as cash used in financing activities.
Short-term leases and leases of low-value assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets 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.
(vii) Impairment
The carrying amount of PPEs, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.
(viii)Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, Financial assets are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, Financial asset are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.
Trade Receivables.
With the exception of trade receivables that do not contain a significant financing component, the Company initially measures financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, net of transaction costs. Trade receivables do not contain a significant financing component and are measured at the transaction price determined under Ind AS 115. Refer to the accounting policies in section (i) Revenue recognition.
In respect of trade receivables, the company applies the simplified approach of IND AS 109 "Financial Instruments", which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the expected credit losses that result from all possible default events over the expected life of a financial instrument.
Investment in Equity Shares.
Investment in equity instruments which are held for trading are classified as at fair value through profit or loss (''FVTPL). For all other equity instruments, the company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same as fair value through other comprehensive income (''FVTOCI'') or fair value through profit or loss (''FVTPL''). Amount presented in other comprehensive income are not subsequently transferred to profit or loss.
Investment in Associates, Joint Ventures and Subsidiaries.
The Company has accounted for its investment in subsidiaries, associates and joint venture at cost less diminution in value of Investment.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at fair value through profit and loss. Any subsequent fair value gain or loss is recognized through Profit or Loss Account.
Derecognition.
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) The Company has transferred its right 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:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities
Initial Recognition and Measurement.
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement.
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method (''''EIR'''') except for those designated in an effective hedging relationship. The carrying value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
d) Trade and Other Payables
A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company''s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences on borrowings taken for qualifying assets are treated as borrowing cost and adjusted with qualifying assets. Non Monetary Foreign Currency items are stated at cost.
The Company has continued capitalisation of foreign currency fluctuation on long term foreign currency liabilities outstanding on Ind AS transition date.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in the statement of Profit and Loss
b) Defined Benefit Plan:
The Company''s Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (INDAS)-19., ''Employee Benefits''. Liability against Gratuity are funded on year-to-year basis by contribution to respective fund. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each year end. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit.
All employees'' benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e.
the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(xii) Income Tax Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Minimum Alternate Tax
Minimum Alternate Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.
(xiii) Provisions and Contingent Liabilities /Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and 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 recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.
Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(xv) Borrowing Costs
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 asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(xvi) FairValue Measurements
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
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 value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
¦ In the principal market for the asset or liability.
Or
¦ In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
¦ Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
¦ Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
¦ Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xvii) Significant Accounting Judgments, Estimates and Assumptions
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:
a. Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.
c. Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.
d. Defined Benefit Plans.
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
e. Fair Value Measurement of Financial Instruments.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
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. On March 31,2023, MCA amended the Companies (Indian Accounting Standards) Amendment Rules, 2023, as below:
Ind AS 1 - Presentation of Financial Statements - This amendment requires the entities to disclose their material accounting policies rather than their significant accounting policies. The effective date for adoption of this amendment is annual periods beginning on or after April 1, 2023. The company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - This amendment has introduced a definition of''accounting estimates'' and included amendments to Ind AS 8 to help entities distinguish changes in accounting policies from changes in accounting estimates. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The company has evaluated the amendment and there is no impact on its financial statements.
Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences. The effective date for adoption of this amendment is annual periods beginning on or after April 1,2023. The Company has evaluated the amendment and there is no impact on its financial statement.
Mar 31, 2022
I. The Company Overview
JK Paper Limited, a Public Limited Company listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The registered office of the Company is situated at Fort Songadh , Dist- Tapi- 394660, Gujarat. The Company is India''s largest producer of branded papers and a leading player in Coated Papers and High-end Packaging Boards. The Company has two integrated Pulp and Paper Plants at Strategic Locations Unit JKPM in East (Rayagada, Odisha) and Unit CPM in West (Songadh, Gujarat). The Company has expanded its capacity multifold over the years and has been able to bring in state of the art technology as well. It is the 1st Indian paper company to introduce Colorlok Technology in its complete range of Copier papers in India,1st Indian paper company to get TPM certification from JIPM, Japan; 3rd Paper Company in the World and also 1st Paper Mill in India to get ISO 9001,ISO 14001 and OHSAS 18000.
These financial statements were approved and adopted by the Board of Directors of the Company in their meeting held on May 13, 2022.
II. Basis of Preparation of Financial Statements
(i) Statement of Compliance :
The Financial Statements have been prepared in accordance with Indian Accounting Standards (IND AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.
(ii) Basis of Preparation:
The separate financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (India Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standard) (Amendment) Rules, 2016. The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under Section 133 of the Companies Act 2013 ("the Act").
The financial statements have been prepared on an accrual basis and under the historical cost basis except for certain financial assets and financial liabilities which are measured at fair values as explained in relevant accounting policies. Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The financial statements are presented in INR and all values are rounded to the nearest INR Crore (10 Million), except when otherwise indicated.
(iii) Use of Estimates
The preparation of financial statements in conformity with Ind AS requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based upon management''s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.
Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
(iv) Classification of Assets and Liabilities as Current and Non Current
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. Deferred Tax Assets and Liabilities are classified as non-current assets and liabilities.
III. Significant Accounting Policies for the year ended March 31,2022.
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of Goods
Revenue from the sale of goods is recognised, when control of goods being sold is transferred to customer and where there are no longer any unfulfilled obligations. The performance obligations in contracts are considered as fulfilled in accordance with the terms agreed with the respective customers.
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Sales as disclosed, are exclusive of Goods and Services Tax.
The company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which the company expects to be entitled in exchange for transferring promised goods to a customer, excluding amount collected on behalf of third parties (for example taxes collected on behalf of government). The consideration promised in a contract with a customer may include fixed consideration, variable consideration (if reversal is less likely in future), or both.
The transaction price is allocated by the company to each performance obligation in an amount that depicts the amount of consideration to which it expects to be entitled in exchange for transferring the promised goods to the customer.
Export Incentives
Income from export incentives and duty drawbacks is recognised on accrual basis when no significant uncertainties as to the amount of consideration that would be derived and as to its ultimate collection exist.
Interest Income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established by the reporting date, which is generally when shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC''s.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy Certificates are valued at the lower of cost or net realisable value (except scrap/waste which are value at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.
(iv) Property, Plant and Equipment
On transition to IND AS, the company had adopted optional exception under IND AS 101 to measure Property, Plant and Equipment (PPE) at fair value. Consequently the fair value had been assumed to be deemed cost of PPE on the date of transition. Subsequently PPE were carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other noncurrent assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as prescribed under Schedule II of Companies Act, 2013. However, in respect of certain property, plant and equipment, depreciation is provided as per their useful lives as assessed by the management supported by technical advice ranging from 10 to 40 years for plant and machinery and 8 to 60 years for buildings.
Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on assets costing up to H.5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the asset is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
(v) Research and Development Costs
Expenditure on research is recognized as an expense when it is incurred. Expenditure on development which does not meet the criteria for recognition as an intangible asset is recognized as an expense when it is incurred.
Items of Property, Plant and equipment and acquired intangible assets utilised for research and development are capitalised and depreciated / amortized in accordance with the policies stated for Property, Plant and Equipment and Intangible Assets.
(vi) Leases
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as a Lessee
The Company applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Company recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
The Company had adopted Ind AS 116 "Leases" effective April 1, 2019 (Transition date) using the simplified approach (Retrospective cumulative was effective from April 1,2019)
Right-of-use Assets
The Company recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of-use assets are depreciated on a straight-line basis from the commencement date over the shorter of the lease term and the estimated useful lives of the assets.
If ownership of the leased asset transfers to the Company at the end of the lease term or the cost reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset.
Lease Liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating the lease, if the lease term reflects the Company exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Company uses its existing borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.
Lease liabilities and Right-of-use assets have been presented as a separate line in Note 2 of Property, Plant and Equipment (PPE) and Note 17 of Non-current Financial Liabilities -Borrowings. Lease payments have been classified as cash used in financing activities.
Short-Term Leases and Leases of Low-Value Assets
The Company has elected not to recognise right-of-use assets and lease liabilities for short term leases of all assets 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.
(vii) Impairment
The carrying amount of PPEs, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial Assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.
Trade Receivables
In respect of trade receivables the company applies the simplified approach of IND AS 109 "Financial Instruments", which requires measurement of loss allowance at an amount equal to lifetime expected credit losses. Lifetime expected credit losses are the ecpected credit losses that result from all possible default events over the expected life of a financial instrument.
Investment in Equity Shares
Investment in equity instruments which are held for trading are classified as at fair value through profit or loss (''FVTPL''). For all other equity instruments, the company makes an irrevocable choice upon initial recognition, on an instrument by instrument basis, to classify the same as fair value through ther comprehensive income (''FVTOCI'') or fair value through profit or loss (''FVTPL''). Amount presented in other comprehensive income are not subsequently transferred to profit or loss.
Investment in Associates, Joint Ventures and Subsidiaries
The Company has accounted for its investment in subsidiaries, associates and joint venture at cost less provision for diminution, if any.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at fair value through profit and loss. Any subsequent fair value gain or loss is recognized through Profit or Loss Account.
Derecognition
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) (ii) The Company has transferred its right 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 â pass-through" arrangement and either:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities
Initial Recognition and Measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method (''''EIR'''') except for those designated in an effective hedging relationship. The carrying value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
d) Trade and Other Payables
A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company''s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences on borrowings taken for qualifying assets are treated as borrowing cost and adjusted with qualifying assets. Non Monetary Foreign Currency items are stated at cost.
The Company has continued capitalisation of foreign currency fluctuation on long term foreign currency liabilities outstanding on Ind AS transition date.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in the statement of Profit and Loss
b) Defined Benefit Plan:
The Company''s Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (INDAS)-19., ''Employee Benefits'' These liabilities are funded on year-to-year basis by contribution to respective funds. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each yearend. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short Term Employee Benefit
All employees''benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long Term Employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
c) Termination Benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
(xi) Earnings Per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(xii) Income Tax Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred Tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Minimum Alternate Tax
Minimum Alternate Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.
(xiii) Provisions and Contingent Liabilities /Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and 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 recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.
Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(xv) Borrowing Costs
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 asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(xvi) Fair Value Measurements
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
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 value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability.
Or
⢠In the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
⢠Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xvii) Significant Accounting Judgments, Estimates and Assumptions
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:
a. Income Taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/litigations against the company as it is not possible to predict the outcome of pending matters with accuracy
c. Allowance for uncollected Accounts Receivable and Advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.
d. Defined Benefit Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
e. Fair Value Measurement of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where
this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
Mar 31, 2018
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of goods
Revenue from the sale of goods is recognised, when all the significant risks and rewards of ownership of the goods have passed to the buyer, the Company no longer has effective control over the goods sold, the amount of revenue and costs associated with the transaction can be measured reliably and no significant uncertainty exists regarding the amount of Consideration that will be derived from the sales of Goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss.
Interest income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established, which is generally when shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of RECâs.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy Certificates are valued at the lower of cost and net realisable value (except scrap/waste which are value at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.
(iv) Property Plant and Equipment
On transition to IND AS, the company has adopted optional exception under IND AS 101 to measure Property, Plant and Equipment (PPE) at fair value. Consequently the fair value has been assumed to be deemed cost of PPE on the date of transition. Subsequently PPE are carried at cost less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
PPE acquired are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Capital work-in-progress includes cost of PPE under installation / under development as at the balance sheet date. Advances paid towards the acquisition of PPE outstanding at each balance sheet date is classified as capital advances under other non-current assets.
Subsequent expenditures relating to PPE is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as prescribed under Schedule II of Companies Act, 2013. Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on assets costing up to Rs.5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the assets is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of depreciation of PPE are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
(v) Research and Development Costs
Revenue expenditure on Research and Development is charged to statement of Profit and loss in the year in which it is incurred and capital expenditure is added to Fixed Asset.
(vi) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Finance Lease
Finance Lease that transfer 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 recognised in finance costs in the statement of profit and loss unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Companyâs policy on borrowing costs.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset or the lease term.
Operating Lease
Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by lessor are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset. Payments under operating lease are recorded in the Statement of Profit and Loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
(vii) Impairment
The carrying amount of PPEs, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.
(viii) Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, Financial Assets are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, Financial Assets are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.
Trade Receivables
A Receivable is classified as a âtrade receivableâ if it is in respect to the amount due from customers on account of goods sold or services rendered in the ordinary course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. For some trade receivables the Company may obtain security in the form of guarantee, security deposit or letter of credit which can be called upon if the counterparty is in default under the terms of the agreement.
Impairment is made on the expected credit losses, which are the present value of the cash shortfalls over the expected life of financial assets. The estimated impairment losses are recognised in a separate provision for impairment and the impairment losses are recognised in the Statement of Profit and Loss within other expenses.
Subsequent changes in assessment of impairment are recognised in provision for impairment and the change in impairment losses are recognised in the Statement of Profit and Loss within other expenses.
Investment in Equity Shares
Investments in Equity Securities are initially measured at cost. Any subsequent fair value gain or loss is recognized through Profit or
Loss if such investments in Equity Securities are held for trading purposes. The fair value gains or losses of all other Equity Securities are recognized in Other Comprehensive Income.
Investment in Associates, Joint Ventures and Subsidiaries
The Company has accounted for its investment in subsidiaries, associates and joint venture at cost.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at cost. Any subsequent fair value gain or loss is recognized through Profit or Loss Account.
Derecognition
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or.
(ii) The Company has transferred its right 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 â pass-throughâ arrangement and either:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Companyâs continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities
Initial Recognition and Measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Companyâs financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below :
a) Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method (âEIRâ) except for those designated in an effective hedging relationship. The carrying value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
d) Trade and Other Payables
A payable is classified as âtrade payableâ if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Companyâs functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date.
Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences arising on those Long term foreign currency monetary items, related to acquisition of depreciable capital assets being carried forward from previous GAAP, which are adjusted to cost of such assets and depreciated over their balance life pursuant to the option in Notification No.G.S.R 914(E) dated 29th December, 2011 issued by Ministry of Corporate Affairs. Non Monetary Foreign Currency items are stated at cost.
(x) Employee Benefits
a) Defined Contribution Plan:
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in the statement of Profit and Loss.
b) Defined Benefit Plan:
The Companyâs Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (INDAS)-19., âEmployee Benefitsâ These liabilities are funded on year-to-year basis by contribution to respective funds. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each yearend. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employeesâ Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employeesâ Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit
All employeesâ benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(xii) Income Tax Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Minimum Alternate Tax
Minimum Alternate Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.
(xiii) Provisions and Contingent Liabilities /Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and 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 recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.
Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(xv) Borrowing Costs
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 asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(xvi) Fair Value Measurements
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
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 value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
- In the principal market for the asset or liability.
Or
- In the absence of a principal market , in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
- Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
- Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
- Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable. For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xvii) Significant Accounting Judgments, Estimates and Assumptions
In the process of applying the Companyâs accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:
a. Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/ claim/litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.
c. Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.
d. Defined Benefit Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
e. Fair Value Measurement of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(xviii) Recent Accounting Pronouncements
Appendix B to Ind AS 21, Foreign currency transactions and advance consideration:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 containing Appendix B to Ind AS 21, Foreign currency transactions and advance consideration which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from April 1, 2018. The Company is evaluating the requirement of the amendment and the effect of this on the financial statements will be given in the due course.
Ind AS 115- Revenue from Contract with Customers:
On March 28, 2018, Ministry of Corporate Affairs (âMCAâ) has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard 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. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entityâs contracts with customers.
The standard permits two possible methods of transition:
- Retrospective approach Under this approach the standard will be applied retrospectively to each prior reporting period presented in accordance with Ind AS 8- Accounting Policies, Changes in Accounting Estimates and Errors.
- Retrospectively with cumulative effect of initially applying the standard recognized at the date of initial application (Cumulative catch - up approach) The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.
The Company will adopt the standard on April 1, 2018 by using the cumulative catch-up transition method and accordingly comparatives for the year ending or ended March 31, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 is expected to be insignificant.
Mar 31, 2017
Note - 1 Company Overview, Basis of preparation and Significant Accounting Policies
I. The Company Overview
JK Paper Limited, a Public Limited Company listed on the National Stock Exchange of India Limited and the Bombay Stock Exchange Limited. The registered office of the Company is situated at Fort Songadh , Dist- Tapi- 394660,Gujarat. The Company is India''s largest producer of branded papers and a leading player in Coated Papers and High-end Packaging Boards. The Company has two integrated Pulp and Paper Plants at Strategic Locations Unit JKPM in East (Rayagada, Odisha) and Unit CPM in West (Songadh, Gujarat). The Company has expanded its capacity multifold over the years and has been able to bring in state of the art technology as well. It is the 1st Indian Paper Company to introduce Colorlok Technology in its complete range of Copier papers in India,1st Indian Paper Company to get TPM certification from JIPM, Japan; 3rd Paper Company in the World and also 1st Paper Mill in India to get ISO 9001,ISQ 14001 and OHSAS 18000.
These financial statements were approved and adopted by Board of Directors of the Company in their meeting held on May 16, 2017.
II. Basis of Preparation of Financial Statements
(i) Statement of Compliance :
The Financial Statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as prescribed under Section 133 of the Companies Act, 2013 read with Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and relevant provisions of the Companies Act, 2013.
(ii) Basis of Preparation:
These financial statements have been prepared in accordance with Ind AS 101, "First Time Adoption of Ind AS", as these are the Company''s first Ind AS compliant Financial Statements for the year ended March 31, 2017.
The Financial Statements correspond to the classification provisions contained in Ind AS-1 (Presentation of Financial Statements). The transition to Ind AS has been carried out from the Accounting Principles generally accepted in India (Indian GAAP), which is considered as the "Previous GAAP", for purposes of Ind AS - 1.
The preparation of these Financial Statements resulted in changes to the Company''s Accounting Policies as compared to the most recent Annual Financial Statements prepared under Previous GAAP, wherever necessary. All Accounting Policies and applicable Ind AS have been applied consistently and retrospectively to all periods, including the previous financial year presented and the Ind AS opening balance sheet as at April 01, 2015 (Transition Date). The resulting difference between the carrying amounts under Ind AS and Previous GAAP as on the Transition Date has been recognised directly in Equity. An explanation of the effect of the transition from Previous GAAP to Ind AS on the Company''s equity and profit is provided in Note 58.
Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use. The financial statements are presented in INR and all values are rounded to the nearest INR Crore (10 Million), except when otherwise indicated.
(iii) Use of Estimates
The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Application of accounting policies that require critical accounting estimates involving complex and subjective judgments and the use of assumptions in these financial statements have been disclosed in Note.
Accounting estimates could change from period to period. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.
(iv) Classification of Assets and Liabilities as Current and Non Current
All 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 the Schedule III to the Companies Act, 2013. Based on the nature of product & activities of the Company and their realisation in cash and cash equivalent, the Company has determined its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities. Deferred tax assets and liabilities are classified as non-current assets and liabilities.
III. Significant Accounting Policies for the year ended March 31, 2017.
(i) 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. The specific recognition criteria described below also be met before revenue is recognised.
Sale of Goods
Revenue from the sale of goods is recognised, when all the significant risks and rewards of ownership of the goods have passed to the buyer, the Company no longer has effective control over the goods sold, the amount of revenue and costs associated with the transaction can be measured reliably and no significant uncertainty exists regarding the amount of Consideration that will be derived from the sales of Goods. Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. The sales include the excise duty and exclude Value added tax/sales tax. Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit and Loss.
Interest Income
Interest income is recognized on time proportion basis using the effective interest method.
Dividend Income
Dividend income is recognized when the right to receive payment is established, which is generally when shareholders approve the same.
Renewal Energy Certificate
Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on sale of REC''s.
(ii) Inventory Valuation
Inventories such as Raw Materials, Work-in-Progress, Finished Goods, Stock in Trade, Stores & Spares and Renewable Energy Certificates are valued at the lower of cost and net realisable value (except scrap/waste which are value at net realisable value). The cost is computed on weighted average basis. Finished Goods and Process Stock include cost of conversion and other costs incurred in bringing the inventories to their present location and condition.
(iii) Cash and Cash Equivalents
Cash and cash equivalents comprise cash on hand, cash at bank and demand deposits with banks with an original maturity of three months or less which are subject to an insignificant risk of change in value.
(iv) Property, Plant and Equipment (PPE)
On transition to Ind AS, the company has adopted optional exception under Ind AS 101 to measure Property, Plant and Equipment at fair value. Consequently the fair value has been assumed to be deemed cost of Property, Plant and Equipment on the date of transition. Subsequently Property, Plant and Equipment are carried at cost less accumulated depreciation and accumulated losses, if any. Cost includes expenditure that is directly attributable to the acquisition of the items.
Property, plant and equipment acquired after the transition date are stated at cost net of tax/duty credit availed, less accumulated depreciation and accumulated impairment losses, if any. Cost includes expenses directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.
Capital work-in-progress includes cost of property, plant and equipment under installation / under development as at the balance sheet date. Advances paid towards the acquisition of property, plant and equipment outstanding at each balance sheet date is classified as capital advances under other non-current assets.
Subsequent expenditures relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Company and the costs to the item can be measured reliably. Repairs and maintenance costs are recognized in net profit in the statement of profit and loss when incurred. The cost and related accumulated depreciation are eliminated from the financial statements upon sale or retirement of the asset and the resultant gain or losses are recognized in the statement of profit and loss.
Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is provided as per straight line method over their useful lives as prescribed under Schedule II of Companies Act, 2013. Depreciation on additions due to exchange rate fluctuation is provided on the basis of residual life of the assets. Depreciation on assets costing up to H5000/- and on Temporary Sheds is provided in full during the year of additions.
Depreciation will be charged from the date the assets is available for use, i.e., when it is in the location and condition necessary for it to be capable of operating in the manner intended by management. The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
Leased Assets
Leasehold lands are amortized over the period of lease, Buildings constructed on leasehold land are depreciated based on the useful life specified in Schedule II to the Companies Act, 2013, where the lease period of land is beyond the life of the building.
Intangible Assets
Intangible Assets are recognised, if the future economic benefits attributable to the assets are expected to flow to the company and cost of the asset can be measured reliably. All other expenditure is expensed as incurred. The same are amortised over the expected duration of benefits. Such intangible assets are measured at cost less any accumulated amortisation and impairment losses, if any and are amortised over their respective individual estimated useful life on straight line method.
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period and adjusted prospectively, if appropriate.
(v) Research and Development Costs
Revenue expenditure on Research and Development is charged to statement of Profit and loss in the year in which it is incurred and capital expenditure is added to Fixed Asset.
(vi) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
Finance Lease
Finance Lease that transfer 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 recognised in finance costs in the statement of profit and loss unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Company''s policy on borrowing costs.
A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Company will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.
Operating Lease
Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by lessor are classified as operating leases. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset. Payments under operating lease are recorded in the Statement of Profit and Loss on a straight line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the expected inflationary cost increases.
(vii) Impairment
The carrying amount of Property, plant and equipments, Intangible assets and Investment property are reviewed at each Balance Sheet date to assess impairment if any, based on internal / external factors. An asset is treated as impaired, when the carrying cost of asset exceeds its recoverable value, being higher of value in use and net selling price. An impairment loss is recognised as an expense in the Statement of Profit and Loss in the year in which an asset is identified as impaired. The impairment loss recognised in prior accounting period is reversed, if there has been an improvement in recoverable amount.
(viii) Financial Assets & Liabilities
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.
At initial recognition, all financial assets are measured at fair value. Such financial assets are subsequently classified under following three categories according to the purpose for which they are held. The classification is reviewed at the end of each reporting period.
(a) Financial Assets at Amortised Cost
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates. These financial assets are intended to be held until maturity. Therefore, they are subsequently measured at amortised cost by applying the Effective Interest Rate (EIR) method to the gross carrying amount of the financial asset. The EIR amortisation is included as interest income in the profit or loss. The losses arising from impairment are recognised in the profit or loss.
(b) Financial Assets at Fair value through Other Comprehensive Income
At the date of initial recognition, are held to collect contractual cash flows of principal and interest on principal amount outstanding on specified dates, as well as held for selling. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in Other Comprehensive Income (OCI). Interest income calculated using the effective interest rate (EIR) method, impairment gain or loss and foreign exchange gain or loss are recognised in the Statement of Profit and Loss. On derecognition of the asset, cumulative gain or loss previously recognised in Other Comprehensive Income is reclassified from the OCI to Statement of Profit and Loss.
(c) Financial Assets at Fair value through Profit or Loss
At the date of initial recognition, Financial assets are held for trading, or which are measured neither at Amortised Cost nor at Fair Value through OCI. Therefore, they are subsequently measured at each reporting date at fair value, with all fair value movements recognised in the Statement of Profit and Loss.
Trade Receivables
A Receivable is classified as a''trade receivable''if it is in respect to the amount due from customers on account of goods sold or services rendered in the ordinary course of business. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. For some trade receivables the Company may obtain security in the form of guarantee, security deposit or letter of credit which can be called upon if the counterparty is in default under the terms of the agreement.
Impairment is made on the expected credit losses, which are the present value of the cash shortfalls over the expected life of financial assets. The estimated impairment losses are recognised in a separate provision for impairment and the impairment losses are recognised in the Statement of Profit and Loss within other expenses.
Subsequent changes in assessment of impairment are recognised in provision for impairment and the change in impairment losses are recognised in the Statement of Profit and Loss within other expenses.
Investment in Equity Shares
Investments in Equity Securities are initially measured at cost. Any subsequent fair value gain or loss is recognized through Profit or Loss if such investments in Equity Securities are held for trading purposes. The fair value gains or losses of all other Equity Securities are recognized in Other Comprehensive Income.
Investment in Associates, Joint Ventures and Subsidiaries
The Company has accounted for its investment in subsidiaries, associates and joint venture at cost.
Investments in Mutual Funds
Investments in Mutual Funds are accounted for at cost. Any subsequent fair value gain or loss is recognized through Profit or Loss Account.
Derecognition
Financial Asset is primarily derecognised when:
(i) The right to receive cash flows from asset has expired, or
(ii) The Company has transferred its right 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:
a) The Company has transferred substantially all the risks and rewards of the asset, or
b) The Company has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.
When the Company has transferred its right to receive cash flows from an asset or has entered into a pass through arrangement, it evaluates if and to what extent it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Company continues to recognise the transferred asset to the extent of the Company''s continuing involvement. In that case, the Company also recognises an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the Company has retained.
Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Company could be required to repay.
Financial Liabilities
Initial Recognition and Measurement
All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. The Company''s financial liabilities include trade and other payables, loans and borrowings including bank overdrafts, and derivative financial instruments.
Subsequent Measurement
The measurement of financial liabilities depends on their classification, as described below:
a) Financial Liabilities at Fair Value through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading. The Company has not designated any financial liabilities upon initial measurement recognition at fair value through profit or loss. Financial liabilities at fair value through profit or loss are at each reporting date with all the changes recognized in the Statement of Profit and Loss.
b) Financial Liabilities measured at Amortised Cost
After initial recognition, interest bearing loans and borrowings are subsequently measured at amortised cost using the effective interest rate method (''''EIR'''') except for those designated in an effective hedging relationship. The carrying value of borrowings that are designated as hedged items in fair value hedges that would otherwise be carried at amortised cost are adjusted to record changes in fair values attributable to the risks that are hedged in effective hedging relationship.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fee or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs in the Statement of Profit and Loss.
c) Loans and Borrowings
After initial recognition, interest-bearing borrowings are subsequently measured at amortised cost using the effective interest rate method. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.
Borrowings are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.
d) Trade and Other Payables
A payable is classified as ''trade payable'' if it is in respect of the amount due on account of goods purchased or services received in the normal course of business. These amounts represent liabilities for goods and services provided to the Company prior to the end of financial year which are unpaid. Trade and other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognised initially at their fair value and subsequently measured at amortised cost using the effective interest method.
De-recognition of Financial Liability
A Financial Liability is derecognised when the obligation under the liability is discharged or cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Offsetting of Financial Instruments
Financial Assets and Financial Liabilities are offset and the net amount is reported in the balance sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative Financial Instruments
The Company uses derivative financial instruments, such as forward currency contracts and interest rate swaps to hedge its foreign currency risks and interest rate risks. Derivative financial instruments are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value at the end of each period. The method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, on the nature of the item being hedged. Any gains or losses arising from changes in the fair value of derivatives are taken directly to profit or loss.
Compound Financial Instruments
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that does not have an equity component. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and the equity components, if material, in proportion to their initial carrying amounts.
Subsequent to the initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
(ix) Foreign Exchange Transactions / Translations / Hedge Accounting
Financial statements are presented in Indian Rupee, which is Company''s functional currency. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Financial instruments designated as Hedge Instruments are mark to market using the valuation given by the bank on the reporting date. Exchange differences arising on settlement of monetary items on actual payments / realisations and year end translations including on forward contracts are dealt with in Profit and Loss Statement except exchange differences arising on those Long term foreign currency monetary items, related to acquisition of depreciable capital assets being carried forward from previous GAAP, which are adjusted to cost of such assets and depreciated over their balance life pursuant to the option in Notification No.G.S.R 914(E) dated 29th December, 2011 issued by Ministry of Corporate Affairs. Non Monetary Foreign Currency items are stated at cost.
(x) Employee Benefits
a) Defined Contribution Plan
The Company makes defined contribution to Superannuation Funds, which are accounted on accrual basis as expenses in the statement of Profit and Loss.
b) Defined Benefit Plan
The Company''s Liabilities on account of Gratuity and Earned Leave on retirement of employees are determined at the end of each financial year on the basis of actuarial valuation certificates obtained from Registered Actuary in accordance with the measurement procedure as per Indian Accounting Standard (INDAS)-19., ''Employee Benefits'' These liabilities are funded on year-to-year basis by contribution to respective funds. The costs of providing benefits under these plans are also determined on the basis of actuarial valuation at each yearend. Actuarial gains and losses for defined benefit plans are recognized through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
The Provident Fund Contribution other than contribution to Employees'' Regional Provident Fund, is made to trust administered by the trustees. The interest rate to the members of the trust shall not be lower than the statutory rate declared by the Central Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. The Employer shall make good deficiency, if any.
The Defined Benefit Plan can be short term or Long terms which are defined below:
i) Short-term Employee Benefit
All employees'' benefits payable wholly within twelve months rendering services are classified as short term employee benefits. Benefits such as salaries, wages, short-term compensated absences, performance incentives etc., and the expected cost of bonus, ex-gratia are recognized during the period in which the employee renders related service.
ii) Long-term employee Benefits
Compensated absences which are not expected to occur within 12 months after the end of the period in which the employee renders the related services are recognized as a liability at the present value of the defined benefit obligation at the balance sheet date.
c) Termination benefits
Termination benefits are recognized as an expense in the period in which they are incurred. The Company shall recognise a liability and expense for termination benefits at the earlier of the following dates:
(a) When the entity can no longer withdraw the offer of those benefits; and
(b) When the entity recognises costs for a restructuring that is within the scope of Ind AS 37 and involves the payment of termination benefits.
(xi) Earnings per Share (EPS)
Basic earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares outstanding during the period.
Diluted earnings per equity share is computed by dividing the net profit attributable to the equity holders of the company by the weighted average number of equity shares considered for deriving basic earnings per equity share and also the weighted average number of equity shares that could have been issued upon conversion of all dilutive potential equity shares. The dilutive potential equity shares are adjusted for the proceeds receivable had the equity shares been actually issued at fair value (i.e. the average market value of the outstanding equity shares). Dilutive potential equity shares are deemed converted as of the beginning of the period, unless issued at a later date. Dilutive potential equity shares are determined independently for each period presented.
The number of equity shares and potentially dilutive equity shares are adjusted retrospectively for all periods presented for any share splits and bonus shares issues including for changes effected prior to the approval of the financial statements by the Board of Directors.
(xii) Income Tax Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date.
Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit and loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.
Deferred tax
Deferred tax is provided using the balance sheet approach on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purpose at reporting date. Deferred income tax assets and liabilities are measured using tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of changes in tax rates on deferred income tax assets and liabilities is recognized as income or expense in the period that includes the enactment or the substantive enactment date. A deferred income tax asset is recognized to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences and tax losses can be utilized. The Company offsets current tax assets and current tax liabilities, where it has a legally enforceable right to set off the recognized amounts and where it intends either to settle on a net basis, or to realize the asset and settle the liability simultaneously.
Minimum Alternate Tax
Minimum Alternate Tax credit is recognized, as an asset only when and to the extent there is convincing evidence that the Company will pay normal income tax during the specified period.
(xiii) Provisions and Contingent Liabilities /Assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit and 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 recognised as a finance cost.
Contingent Liability is disclosed after careful evaluation of facts, uncertainties and possibility of reimbursement. Contingent liabilities are not recognised but are disclosed in notes.
Contingent Assets are not recognised in financial statements but are disclosed, since the former treatment may result in the recognition of income that may or may not be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
(xiv) Cash Flow Statement
Cash flows are reported using the indirect method, whereby profit for the period is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments and item of income or expenses associated with investing or financing cash flows. The cash flows from operating, investing and financing activities of the Company are segregated.
(xv) Borrowing Costs
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 asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
(xvi) Fair Value Measurements
The Company measures financial instruments such as derivatives and certain investments, at fair value at each balance sheet date.
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 value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
⢠In the principal market for the asset or liability.
Or
⢠In the absence of a principal market , in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Company.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole;
⢠Level 1- Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
⢠Level 2- Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
⢠Level 3- Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.
(xvii)Significant Accounting Judgments, Estimates and Assumptions
In the process of applying the Company''s accounting policies, management has made the following estimates, assumptions and judgements which have significant effect on the amounts recognized in the financial statement:
a. Income taxes
Judgment of the Management is required for the calculation of provision for income taxes and deferred tax assets and liabilities. The company reviews at each balance sheet date the carrying amount of deferred tax assets. The factors used in estimates may differ from actual outcome which could lead to significant adjustment to the amounts reported in the standalone financial statements.
b. Contingencies
Judgment of the Management is required for estimating the possible outflow of resources, if any, in respect of contingencies/claim/ litigations against the company as it is not possible to predict the outcome of pending matters with accuracy.
c. Allowance for uncollected accounts receivable and advances
Trade receivables do not carry any interest and are stated at their normal value as reduced by appropriate allowances for estimated irrecoverable amounts. Individual trade receivables are written off when management deems them not collectible. Impairment is made on ECL, which are the present value of the cash shortfall over the expected life of the financial assets.
d. Defined Benefit Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in future. These Includes the determination of the discount rate, future salary increases, mortality rates and attrition rate. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
e. Fair Value Measurement of Financial Instruments.
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(xviii)Recent Accounting Pronouncements
a) Standards Issued but not yet effective
Amendments to Ind AS 7, ''Statement of cash flows'' as per notification issued by the Ministry of Corporate Affairs in March, 2017 in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, ''Statement of Cash Flows'' is applicable to the Company from April 1, 2017.
b) Amendment to Ind AS 7
The amendment to Ind As 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement. The Company is evaluating the requirements of the amendment.
(b) Equity Shares:
The equity shareholders have:
- The right to receive dividend out of balance of net profits remaining after payment of dividend to the preference shareholders. The dividend proposed by Board of Directors is subject to approval of shareholders in the ensuing general meeting.
- The Company has only one class of Equity Shares having face value of H 10/- each and each shareholder is entitled to one vote per share.
- In the event of winding up, the equity shareholders will be entitled to receive the remaining balance of assets if any, after preferential payments and to have a share in surplus assets of the Company, proportionate to their individual shareholding in the paid up equity capital of the Company.
A. Term Loans of H 499.66 Crore (FIs - H109.91 Crore, Banks H389.75 Crore) are secured by means of first pari passu mortgage/charge on the fixed assets of the company . Out of the above Term Loan, H415.78 Crore (FIs - H109.91 Crore, Banks H305.87 Crore) are further secured by second charge on the current assets of the Company. These Term Loans are/shall repayable as under:-
1 Term Loans of H6.48 Crore is repayable in 3 equal half-yearly instalments from June 2017 to June 2018.
2 Term Loans aggregating to H484.30 Crore are repayable in total 194 quarterly instalments from June 2017 to October 2024.
3 Term Loan of H8.88 Crore is repayable in 4 equal quarterly instalments from June 2017 to March 2018.
B. Term Loans of H890.99 Crore (FIs - HNil, Banks H890.99 Crore) is secured by means of first pari passu mortgage/charge on the fixed assets, both present and future, of Unit JKPM of the company. These Term Loans are/shall repayable as under :-
1 Term Loans aggregating to H201.20 Crore are repayable in total 31 equal Quarterly-instalments from June 2017 to June 2021.
2 Term Loans aggregating to H349.07 Crore are repayable in total 44 equal half-yearly instalments from May 2017 to August 2023.
3 Term Loans aggregating to H340.72 Crore are repayable in total 60 quarterly instalments from May 2017 to March 2024.
C. Term Loan of H18.58 Crore (FIs - H18.58 Crore, Banks HNil) is secured by equitable mortgage of townships of the subsidiaries of the company namely Jaykaypur Infrastructure & Housing Limited located at Jaykaypur, Rayagada & Songadh Infrastructure & Housing Limited located at Songadh, Tapi and are repayable in 57 monthly instalment from April 2017 to December 2021.
D. Term Loans aggregating to H1.10 Crore (FIs - HNil, Banks H1.10) are secured by specific charge on the Vehicle hypothecated against these loans. These Term Loans are repayable in total 40 monthly instalments from April 2017 to July 2020.
E. Secured Term loans from Financial Institutions and Banks have been netted off by H22.07 Crore (FIs - H1.36 Crore, Banks H20.71 Crore) due to effective rate of interest.
F. Certain charges are in the process of satisfaction. Secured Term loans from Financial Institutions and Banks include H383.55 Crore foreign currency loans.
G. FCCB''s of EURO 17.10 Million @ 6.455% issued on 30th May, 2011 are convertible into equity shares of the company at an initial conversion price of H65 per share, subject to price adjustment as per agreement, after 3 years and 6 months from the date of issue. If not converted then the FCCBs will be redeemed at par between 15th May 2017 to 15th May 2018 in 3 half yearly instalments. The amount of FCCB has been netted off by H0.69 Crore due to effective rate of interest.
H. Term Loan of H40 Crore from related party is repayable in 47 monthly instalment from June 2018 to April 2022. The amount of Loan from related party has been netted off by H0.37 Crore due to effective rate of interest.
I. Public deposits are due for repayment in 2017-18, 2018-19 & 2019-20.
In respect of certain disallowances and additions made by the income tax authorities, appeals are pending before the appellate authorities and adjustments , if any, will be made after the same are finally determined.
In respect of levy of Octroi pertaining to Unit - CPM by Songadh Group Gram Panchayat, the Company has paid H1.25 Crore till 31st March 1997 under protest and also created a liability of the similar amount. As the matter is still pending in the court of law, the necessary adjustment, if any, would be made after its disposal.
iii) Details of loans given, investments made and guarantee given covered U/s 186(4) of the Companies Act 2013
The company has given loan to Subsidiaries and other parties mentioned above in the ordinary course of business for general business purpose
Advances recoverable shown under "Other Current Assets" in Note No.16 ,includes H4.27 Crore ( Previous Year H6.90 Crore) payments made for various development projects being undertaken by the Company. The same will be adjusted once these projects are finalised.
a) Sales include export incentives of H9.29 Crore (Previous year H9.06 Crore).
b) Interest Income includes H0.98 Crore (Previous year H0.65 Crore) on Deposits with Banks, H0.28 Crore (Previous year H0.01 Crore) on Income Tax refund and H9.80 Crore (Previous year H9.63 Crore) on others.
c) Scrap sale of H7.34 Crore (Previous year H6.62 Crore) has been netted off from consumption of stores and spares.
Mar 31, 2016
a) Accounts are maintained on accrual basis. Claims/Refunds not ascertainable with reasonable
certainty are accounted for on settlement basis.
b) Cash flows are reported using the indirect method.
c) Fixed Assets are stated at cost adjusted by revaluation of certain assets.
d) Expenditure during construction/erection period is included under Capital Work-in-Progress and
allocated to the respective fixed assets on completion of construction/erection.
e) i) Foreign currency transactions are recorded at exchange rates prevailing on the date of
transaction. Monetary assets and liabilities in foreign currencies as at the Balance Sheet date are
translated at exchange rate prevailing at the year end. Premium or discount in respect of forward
contracts covered under AS 11 (revised 2003) is recognized over the life of contract. Exchange
differences arising on actual payments / realizations and year end translations including on
forward contracts are dealt with in Statement of Profit and Loss. The foreign exchange loss/gain on
reporting of long- term foreign currency monetary items and forward contracts, held as on reporting
date to be used for, or actually used for repayment of loan taken for depreciable assets,
recapitalized. Non Monetary Foreign Currency items are stated at cost.
ii) In accordance with Announcement issued by the Institute of Chartered Accountants of India all
outstanding derivatives except covered under AS 11 (revised 2003) are marked to market on Balance
Sheet date and loss, if any, is recognized in Statement of Profit & Loss and gains are ignored.
f) Long term investments are stated at cost. Provision for diminution in the value of long term
investments is made only if such a decline is other than temporary in the opinion of the
management. The current investments are stated at lower of cost and quoted / fair value computed
category-wise. When investment is made in partly convertible debentures with a view to retain only
the convertible portion of the debentures, the excess of the face value of the non-convertible
portion over the realization on sale of such portion is treated as a part of the cost of
acquisition of the convertible portion of the debenture. Income in respect of securities with
long-term maturities is accounted for as per contractual obligation.
g) Inventories are valued at the lower of cost and net realizable value (except scrap/waste which
are valued at net realizable value). The cost is computed on weighted average basis. Finished Goods
and Process Stock include cost of conversion and other costs incurred in bringing the inventories
to their present location and condition.
h) i) Revenue from operation is recognized when significant risk and reward of ownership is passed
on to the customer.
ii) Interest Income is recognized on time proportion basis.
iii) Dividend Income on investment is accounted for when the right to receive the payment is
established.
iv) Export incentives, Duty drawbacks and other benefits are recognized in the Statement of Profit
and Loss. Project subsidy is credited to Capital Reserve.
v) Renewable Energy Certificate (REC) benefits are recognized in Statement of Profit & Loss on
receipt of certificate from the relevant authority.
i) Revenue expenditure on Research and Development is charged to Statement of Profit and Loss in
the year in which it is incurred and capital expenditure is added to Fixed Assets.
j) Borrowing cost is charged to Statement of Profit and Loss except cost of borrowing for
acquisition of qualifying assets which is capitalized till the date of commercial use of the asset.
The ancillary costs incurred in connection with the arrangement of borrowings are amortized over
the life of underlying borrowings.
k) i) Depreciation on Buildings, Plant & Machinery, Railway Siding and Other Assets of all Units is
provided as per straight line method over their useful lives as prescribed under Schedule II of
Companies Act, 2013. Depreciation on additions due to exchange rate fluctuation is provided on the
basis of residual life of the assets. Depreciation on assets costing up to Rs.50007- and on
Temporary Sheds is provided in full during the year of additions. Intangible Assets are amortized
over their respective individual estimated useful lives on Straight Line Method.
ii) Depreciation on the increased amount of assets due to revaluation is computed on the basis of
the residual life of the assets as estimated by the values on straight-line method.
iii) Leasehold Land is being amortized over the lease period.
I) An asset is treated as impaired when the carrying cost of assets exceeds its recoverable amount.
An impairment loss is charged to the Statement of Profit and Loss when an asset is identified as
impaired. Reversal of impairment loss recognized in prior periods is recorded when there is an
indication that the impairment losses recognized for the assets no longer exist or have decreased.
Post impairment, depreciation is provided on the revised carrying value of the asset over its
remaining useful life.
m) Employee Benefits:
i) Defined Contribution Plan
Employee benefit in the form of Superannuation Fund is considered as defined contribution plan and
charged to the Statement of Profit and Loss in the year when the contribution to the respective
fund is due.
ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity is considered as defined benefit obligation and
provided for on the basis of an actuarial valuation, using the projected unit credit method, as at
the date of Balance Sheet.
The Provident Fund Contribution is made to trust administered by the trustees. The interest rate to
the members of the trust shall not be lower than the statutory rate declared by the Central
Government under Employees'' Provident Fund and Miscellaneous Provision Act, 1952. Shortfall, if
any, shall be made good by the Company.
iii) Other long-term benefits Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Statement of Profit and Loss.
n) Lease rentals in respect of assets taken on Operating/finance lease are accounted for in
reference to lease terms.
o) Share issue expense is charged to Securities Premium Reserve in the year of issue. ECA Premium
on loans is to be mortised over the tenure of loan.
p) Intangible Assets are being recognized if the future economic benefits attributable to the asset
are expected to flow to the company and the cost of the asset can be measured reliably. The same
are being mortised over the expected duration of benefits.
q) Current tax is the amount of tax payable on the estimated taxable income for the current year as
per the provisions of Income Tax Act, 1961. Deferred tax assets and liabilities are recognized in
respect of current year and prospective years. Deferred Tax Assets are recognized on the basis of
reasonable certainty / virtual certainty as the case may be, that sufficient future taxable income
will be available against which the same can be realized.
r) Provisions involving substantial degree of estimation in measurement are recognized when there
is a present obligation as a result of past events and it is probable that there will be an outflow
of resources. Contingent liabilities are not recognized but are disclosed in the notes.
s) Premium on redemption of preference shares is accounted for in the year of redemption.
(b) Equity Shares:
The equity shareholders have:-
The right to receive dividend out of balance of net profits remaining after payment of dividend to
the preference shareholders. The dividend proposed by Board of Directors is subject to approval of
shareholders in the ensuing general meeting. The Company has only one class of Equity Shares
having face value of Rs. 10/- each and each shareholder is entitled to one vote per share.
In the event of winding up, the equity shareholders will be entitled to receive the remaining
balance of assets if any, after preferential payments and to have a share in surplus assets of the
Company, proportionate to their individual shareholding in the paid up equity capital of the
Company.
Notes :
(a) During the year 1,19,10,000 Equity Shares have been issued at a premium of Rs. 32 per Share.
(b) As per Rule 18(10) of Companies (Share Capital & Debentures) Rules, 2014 Debenture Redemption
Reserve is not required to be created, hence Rs. 1.48 Crore (Previous year Rs. Nil) has been
reversed.
(c) (i) Rs. 57.00 Crore (Previous year Rs. Nil) transferred from Surplus in Statement of Profit &
Loss Account, (ii) Rs.0.29 Crore (Previous year Rs.0.29 Crore) transferred to General Reserve
towards additional Depreciation arising out of revaluation of Fixed Assets.
(d) Details of surplus in Statement of Profit and Loss from Previous year :
Notes :
A Term Loans of Rs 364.97 Crore (FIs - Rs I 16.72 Crore and Banks Rs 248.25 Crore) are secured by
means of first pari passu mortgage/charge on the fixed assets of the Company. Out of the above Term
Loan Rs. 291.22 Crore (FIs - Rs. I 16.72 Crore and Banks Rs. 174.50 Crore) are further secured by
second charge on the current assets of the Company. These Term Loans are/shall be repayable as
under :-
1 Term Loan of Rs. 0.66 Crore is repayable in I half-yearly installment in June 2016,
2 Term Loan of Rs. I 1.06 Crore is repayable in 5 equal half-yearly installments from June-2016 to
June-2018,
3 Term Loans aggregating to Rs. 320.00 Crore are repayable in total I 17 quarterly instilments from
September-2016 to October-2024,
4 Term Loan of Rs. 33.25 Crore is repayable in 7 equal quarterly installments from September-2016
to March-2018.
B Term Loans of Rs. 1006.22 Crore (FIs - Rs. Nil and Banks Rs. 1006.22 Crore) is secured by means
of first pari passu mortgage/charge on the fixed assets, both present and future, of Unit JKPM of
the company. These Term Loans are/shall repayable as under :-
1 Term Loans aggregating to Rs. 561.55 Crore are repayable in total I 10 quarterly installments
from May-2016 to March-2024,
2 Term Loans aggregating to Rs. 444.67 Crore are repayable in total 54 half-yearly installments
from May-2016 toAugust-2023.
C Term Loans aggregating to Rs 78.30 Crore (FIs - Rs. Nil and Banks Rs 78.30 Crore) is secured by
means of first pari passu mortgage/charge on the fixed assets, both present and future, of Unit CPM
of the company. These Term Loans are repayable in total 28 quarterly installments from April-2016
to January-2021.
D Term Loan of Rs. 21.25 Crore (FIs - Rs. 21.25 Crore, Banks Rs. Nil) is secured by equitable
mortgage of townships of the subsidiaries of the company namely Jaykaypur Infrastructure & Housing
Limited located at Jaykaypur, Rayagada and Songadh Infrastructure & Housing Limited located at
Songadh, Tapi and are repayable in 73 monthly installment from April-2016 to April-2022.
E Term Loans aggregating to Rs. 3.16 Crore (Fl - Rs. Nil, Banks Rs. 3.16 Crore) are secured by the
specific charge on the vehicles hypothecated against these loans. These term loans are repayable in
total 106 monthly installment from April-2016 to September-2020.
F Certain charges are in the process of satisfaction. Secured Term Loans from Financial
Institutions and Banks include Rs. 456.39 Crore foreign currency loans.
G Finance Lease of Rs. 0.34 Crore is repayable in 3 quarterly installments from June-2016 to
December-2016.
H FCCB~s of EURO 35 Million @ 6.455% issued on 30th May, 201 I are convertible into equity shares
of the company at an initial conversion price of Rs. 65 per share, subject to price adjustment as
per agreement, after 3 years and 6 months from the date of issue. If not converted then the FCCBs
will be redeemed at par between 15th May 2016 to 15th May 2018 in 5 half yearly installments.
I Term Loan of Rs.40 Crore from related party is repayable in 47 monthly installment from June 2018
to April 2022.
J Public deposits are due for repayment in 2016-17,2017-18 & 2018-19.
Mar 31, 2015
A) Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
b) Cash flows are reported using the indirect method.
c) Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
d) Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/erection.
e) i) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction. Monetary assets and liabilities
in foreign currencies as at the Balance Sheet date are translated at
exchange rate prevailing at the year end. Premium or discount in
respect of forward contracts covered under AS 11 (revised 2003) is
recognized over the life of contract. Exchange differences arising on
actual payments / realizations and year end translations including on
forward contracts are dealt with in Statement of Profit and Loss. The
foreign exchange loss/gain on reporting of long-term foreign currency
monetary items and forward contracts, held as on reporting date to be
used for, or actually used for repayment of loan taken for depreciable
assets, are capitalized. Non Monetary Foreign Currency items are stated
at cost.
ii) In accordance with Announcement issued by the Institute of
Chartered Accountants of India all outstanding derivatives except
covered under AS 1 1 {revised 2003) are marked to market on Balance
Sheet date and loss, if any, is recognized in Statement of Profit &
Loss and gains are ignored.
f) Long term investments are stated at cost Provision for diminution in
the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management The current
investments are stated at lower of cost and quoted / fair value
computed category-wise. When investment is made in partly convertible
debentures with a view to retain only the convertible portion of the
debentures, the excess of the face value of the non-convertible portion
over the realization on sale of such portion is treated as a part of
the cost of acquisition of the convertible portion of the debenture.
Income in respect of securities with long-term maturities is accounted
for as per contractual obligation.
g) Inventories are valued at the lower of cost and net realizable value
(except scrap/waste which are valued at net realizable value). The cost
is computed on weighted average basis. Finished Goods and Process Stock
include cost of conversion and other costs incurred in bringing the
inventories to their present location and condition.
h) i) Revenue from operation is recognized when significant risk and
reward of ownership is passed on to the customer.
ii) Interest Income is recognized on time proportion basis.
iii) Dividend Income on investment is accounted for when the right to
receive the payment is established.
iv) Export incentives, Duty drawbacks and other benefits are recognized
in the Statement of Profit and Loss. Project subsidy is credited to
Capital Reserve.
v) Renewable Energy Certificate (REC) benefits are recognized in
Statement of Profit & Loss on receipt of certificate from the relevant
authority.
i) Revenue expenditure on Research and Development is charged to
Statement of Profit and Loss in the year in which it is incurred and
capital expenditure is added to Fixed Assets.
j) Borrowing cost is charged to Statement of Profit and Loss except
cost of borrowing for acquisition of qualifying assets which is
capitalized till the date of commercial use of the asset The ancillary
costs incurred in connection with the arrangement of borrowings are
amortized over the life of underlying borrowings.
k) i) Depreciation on Buildings, Plant & Machinery, Railway Siding and
Other Assets of all Units is provided as per straight line method over
their useful lives as prescribed under Schedule II of Companies Act,
2013.
Depreciation on additions due to exchange rate fluctuation is provided
on the basis of residual life of the assets. Depreciation on assets
costing up to Rs, 5000/- and on Temporary Sheds is provided in full
during the year of additions. Intangible Assets are amortized over
their respective individual estimated useful lives on Straight Line
Method.
ii) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the values on straight-line method.
iii) Leasehold Land is being amortized over the lease period.
I) An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss when an asset is identified as impaired.
Reversal of impairment loss recognized in prior periods is recorded
when there is an indication that the impairment losses recognized for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
m) Employee Benefits:
i) Defined Contribution Plan
Employee benefit in the form of Superannuation Fund is considered as
defined contribution plan and charged to the Statement of Profit and
Loss in the year when the contribution to the respective fund is due.
ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity is considered as defined
benefit obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet
The Provident Fund Contribution is made to trust administered by the
trustees. The interest rate to the members of the trust shall not be
lower than the statutory rate declared by the Central Government under
Employees' Provident Fund and Miscellaneous Provision Act, 1952.
Shortfall, if any, shall be made good by the Company.
iii) Other long-term benefits
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the
Statement of Profit and Loss.
n) Lease rentals in respect of assets taken on Operating/Finance lease
are accounted for in reference to lease terms.
o) Expenditure incurred against which benefit is expected to flow into
future periods, are treated as Deferred Revenue Expenditure and charged
to Revenue Account over the expected duration of benefit. Share issue
expense is charged to Securities Premium Reserve in the year of issue.
ECA Premium on loans is to be amortized over the tenure of loan.
p) Intangible Assets are being recognized if the future economic
benefits attributable to the asset are expected to flow to the company
and the cost of the asset can be measured reliably. The same are being
amortized over the expected duration of benefits.
q) Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Tax Act,
1961. Deferred tax assets and liabilities are recognized in respect of
current year and prospective years. Deferred Tax Assets are recognized
on the basis of reasonable certainty / virtual certainty as the case
may be, that sufficient future taxable income will be available against
which the same can be realized.
r) Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognized but are disclosed in the
notes.
s) Premium on redemption of preference shares is accounted for in the
year of redemption.
Mar 31, 2014
A) Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
b) Cash flows are reported using the indirect method.
c) Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
d) Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/erection.
e) i) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction.
Monetary assets and liabilities in foreign currencies as at the Balance
Sheet date are translated at exchange rate prevailing at the year end.
Premium or discount in respect of forward contracts covered under AS 11
(revised 2003) is recognized over the life of contract. Exchange
differences arising on actual payments / realizations and year end
translations including on forward contracts are dealt with in Statement
of Profit and Loss. The foreign exchange loss/gain on reporting of
long-term foreign currency monetary items and forward contracts, held
as on reporting date to be used for, or actually used for repayment of
loan taken for depreciable assets, are capitalized. Non Monetary
Foreign Currency items are stated at cost.
ii) In accordance with Announcement issued by the Institute of
Chartered Accountants of India all outstanding derivatives except
covered under AS 11 (revised 2003) are marked to market on Balance
Sheet date and loss, if any, is recognized in Statement of Profit &
Loss and gains are ignored.
f) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management. The current
investments are stated at lower of cost and quoted / fair value
computed category-wise. When investment is made in partly convertible
debentures with a view to retain only the convertible portion of the
debentures, the excess of the face value of the non-convertible portion
over the realisation on sale of such portion is treated as a part of
the cost of acquisition of the convertible portion of the debenture.
Income in respect of securities with long-term maturities is accounted
for as per contractual obligation.
g) Inventories are valued at the lower of cost and net realisable value
(except scrap/waste which are valued at net realisable value). The cost
is computed on weighted average basis. Finished Goods and Process Stock
include cost of conversion and other costs incurred in bringing the
inventories to their present location and condition.
h) i) Revenue from operation is recognized when significant risk and
reward of ownership is passed on to the customer.
ii) Interest Income is recognized on time proportion basis.
iii) Dividend Income on investment is accounted for when the right to
receive the payment is established.
iv) Export incentives, Duty drawbacks and other benefits are recognized
in the Statement of Profit and Loss. Project subsidy is credited to
Capital Reserve.
i) Revenue expenditure on Research and Development is charged to
Statement of Profit and Loss in the year in which it is incurred and
capital expenditure is added to Fixed Assets.
j) Borrowing cost is charged to Statement of Profit and Loss except
cost of borrowing for acquisition of qualifying assets which is
capitalised till the date of commercial use of the asset.
k) i) Depreciation on Buildings, Plant & Machinery, Railway Siding and
Other Assets of all Units is provided as per straight line method
considering the rates in force at the time of respective additions of
the assets made before 02.04.1987 and on additions thereafter at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956. Continuous Process Plants as defined in Schedule XIV have been
considered on technical evaluation. Depreciation on additions due to
exchange rate fluctuation is provided
on the basis of residual life of the assets. Depreciation on assets
costing up to Rs.5000/- and on Temporary Sheds is provided in full
during the year of additions. Intangible Assets are being depreciated @
20% p.a. on Straight Line Method.
ii) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the valuers on straight-line method.
iii) Leasehold Land is being amortised over the lease period.
l) An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss when an asset is identified as impaired.
Reversal of impairment loss recognised in prior periods is recorded
when there is an indication that the impairment losses recognised for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
m) Employee Benefits:
i) Defined Contribution Plan
Employee benefit in the form of Superannuation Fund is considered as
defined contribution plan and charged to the Statement of Profit and
Loss in the year when the contribution to the respective fund is due.
ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity is considered as defined
benefit obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet.
The Provident Fund Contribution is made to trust administered by the
trustees. The interest rate to the members of the trust shall not be
lower than the statutory rate declared by the Central Government under
Employees'' Provident Fund and Miscellaneous Provision Act, 1952.
Shortfall, if any, shall be made good by the Company.
iii) Other long-term benefits
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the
Statement of Profit and Loss.
n) Lease rentals in respect of assets taken on finance lease are
accounted for in reference to lease terms.
o) Expenditure incurred against which benefit is expected to flow into
future periods, are treated as Deferred Revenue Expenditure and charged
to Revenue Account over the expected duration of benefit. Share issue
expense is charged to Securities Premium Reserve in the year of issue.
ECA Premium on loans is to be amortised over the tenure of loan.
p) Intangible Assets are being recognised if the future economic
benefits attributable to the asset are expected to flow to the company
and the cost of the asset can be measured reliably. The same are being
amortised over the expected duration of benefits.
q) Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Tax Act,
1961. Deferred tax assets and liabilities are recognised in respect of
current year and prospective years. Deferred Tax Assets are recognised
on the basis of reasonable certainty / virtual certainty as the case
may be, that sufficient future taxable income will be available against
which the same can be realised.
r) Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes.
s) Premium on redemption of preference shares is accounted for in the
year of redemption.
Mar 31, 2013
A) Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
b) Cash flows are reported using the indirect method.
c) Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
d) Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/erection.
e) i) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction. Monetary assets and liabilities
in foreign currencies as at the Balance Sheet date are translated at
exchange rate prevailing at the year end. Premium or discount in
respect of forward contracts covered under AS 11 (revised 2003) is
recognized over the life of contract. Exchange differences arising on
actual payments/realizations and year end translations including on
forward contracts are dealt with in Statement of Profit and Loss except
foreign exchange loss/gain on reporting of long-term foreign currency
monetary items used for depreciable assets, which are capitalized. Non
Monetary Foreign Currency items are stated at cost.
ii) In accordance with Announcement issued by the Institute of
Chartered Accountants of India all outstanding derivatives except
covered under AS 11 (revised 2003) are marked to market on Balance
Sheet date and loss, if any, is recognized in Statement of Profit &
Loss and gains are ignored.
f) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management. The current
investments are stated at lower of cost and quoted/fair value computed
category-wise. When investment is made in partly convertible debentures
with a view to retain only the convertible portion of the debentures,
the excess of the face value of the non-convertible portion over the
realisation on sale of such portion is treated as a part of the cost of
acquisition of the convertible portion of the debenture. Income in
respect of securities with long-term maturities is accounted for as per
contractual obligation.
g) Inventories are valued at the lower of cost and net realisable value
(except scrap/waste which are valued at net realisable value). The cost
is computed on weighted average basis. Finished Goods and Process Stock
include cost of conversion and other costs incurred in bringing the
inventories to their present location and condition.
h) Revenue from operation is recognized when significant risk and
reward of ownership is passed on to the customer.
Interest Income is recognized on time proportion basis.
Dividend Income on investment is accounted for when the right to
receive the payment is established. Export incentives, Duty drawbacks
and other benefits are recognized in the Statement of Profit and Loss.
Project subsidy is credited to Capital Reserve.
i) Revenue expenditure on Research and Development is charged to
Statement of Profit and Loss in the year in which it is incurred and
capital expenditure is added to Fixed Assets.
j) Borrowing cost is charged to Statement of Profit and Loss except
cost of borrowing for acquisition of qualifying assets which is
capitalised till the date of commercial use of the asset.
k) i) Depreciation on Buildings, Plant & Machinery, Railway Siding and
Other Assets of all Units is provided as per straight line method
considering the rates in force at the time of respective additions of
the assets made before 02.04.1987 and on additions thereafter at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956. Continuous Process Plants as defined in Schedule XIV have been
considered on technical evaluation. Depreciation on additions due to
exchange rate fluctuation is provided on the basis of residual life of
the assets. Depreciation on assets costing up to Rs.5000/- and on
Temporary Sheds is provided in full during the year of additions.
Intangible Assets are being depreciated @ 20% p.a. on Straight Line
Method.
ii) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the valuers on straight-line method.
iii) Leasehold Land is being amortised over the lease period.
l) An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss when an asset is identified as impaired.
Reversal of impairment loss recognised in prior periods is recorded
when there is an indication that the impairment losses recognised for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
m) Employee Benefits:
i) Defined Contribution Plan
Employee benefit in the form of Superannuation Fund is considered as
defined contribution plan and charged to the Statement of Profit and
Loss in the year when the contribution to the respective fund is due.
ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity is considered as defined
benefit obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet. The Provident Fund Contribution is made to trust
administered by the trustees. The interest rate to the members of the
trust shall not be lower than the statutory rate declared by the
Central Government under Employees'' Provident Fund and Miscellaneous
Provision Act, 1952. Shortfall, if any, shall be made good by the
Company.
iii) Other long-term benefits
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the
Statement of Profit and Loss.
n) Lease rentals in respect of assets taken on finance lease are
accounted for in reference to lease terms.
o) Expenditure incurred against which benefit is expected to flow into
future periods, are treated as Deferred Revenue Expenditure and charged
to Revenue Account over the expected duration of benefit. Share issue
expense is charged to Securities Premium Reserve in the year of issue.
ECA Premium on loans is to be amortised over the tenure of loan.
p) Intangible Assets are being recognised if the future economic
benefits attributable to the asset are expected to flow to the company
and the cost of the asset can be measured reliably. The same are being
amortised over the expected duration of benefits.
q) Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Tax Act,
1961. Deferred tax assets and liabilities are recognised in respect of
current year and prospective years. Deferred Tax Assets are recognised
on the basis of reasonable certainty/virtual certainty as the case may
be, that sufficient future taxable income will be available against
which the same can be realised.
r) Provisions involving substantial degree of estimation in measurement
are recognised when there is a present obligation as a result of past
events and it is probable that there will be an outflow of resources.
Contingent liabilities are not recognised but are disclosed in the
notes.
s) Premium on redemption of preference shares is accounted for in the
year of redemption.
Mar 31, 2012
(a) Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
(b) Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
(c) Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/ erection.
(d) (i) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction.
Monetary assets and liabilities in foreign currencies as at the Balance
Sheet date are translated at exchange rate prevailing at the year end.
Premium or discount in respect of forward contracts covered under AS 11
(revised 2003) is recognized over the life of contract. Exchange
differences arising on actual payments/ realizations and year end
translations including on forward contracts are dealt with in Statement
of Profit and Loss except foreign exchange loss/gain on reporting of
long-term foreign currency monetary items used for depreciable assets,
which are capitalized. Non Monetary Foreign Currency items are stated
at cost.
(ii) In accordance with Announcement issued by the Institute of
Chartered Accountants of India all outstanding derivatives except
covered under AS 11 (revised 2003) are marked to market on Balance
Sheet date and loss, if any, is recognized in Statement of Profit and
Loss, and gains are ignored.
(e) Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management. The current
investments are stated at lower of cost and quoted/fair value computed
category-wise. When investment is made in partly convertible debentures
with a view to retain only the convertible portion of the debentures,
the excess of the face value of the non-convertible portion over the
realisation on sale of such portion is treated as a part of the cost of
acquisition of the convertible portion of the debenture. Income in
respect of securities with long-term maturities is accounted for as per
contractual obligation.
(f) Inventories are valued at the lower of cost and net realisable
value (except scrap/ waste which are valued at net realisable value).
The cost is computed on weighted average basis. Finished Goods and
Process Stock include cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.
(g) Export incentives, Duty drawbacks and other benefits are
recognized in the Statement of Profit and Loss. Project subsidy is
credited to Capital Reserve.
(h) Revenue expenditure on Research and Development is charged to
Statement of Profit and Loss in the year in which it is incurred and
capital expenditure is added to Fixed Assets.
(i) Borrowing cost is charged to Statement of Profit and Loss except
cost of borrowing for acquisition of qualifying assets which is
capitalised till the date of commercial use of the asset.
(j) (i) Depreciation on Buildings, Plant & Machinery, Railway Siding
and Other Assets of all Units is provided as per straight line method
considering the rates in force at the time of respective additions of
the assets made before 02.04.1987 and on additions thereafter at the
rates and in the manner specified in Schedule XIV of the Companies Act
1956. Continuous Process Plants as defined in Schedule XIV have been
considered on technical evaluation. Depreciation on additions due to
exchange rate fluctuation is provided on the basis of residual life of
the assets. Depreciation on assets costing up to Rs. 5000/- and on
Temporary Sheds is provided in full during the year of additions.
(ii) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the valuers on straight-line method.
(iii) Leasehold Land is being amortised over the lease period.
(k) An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
Statement of Profit and Loss when an asset is identified as impaired.
Reversal of impairment loss recognised in prior periods is recorded
when there is an indication that the impairment losses recognised for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
(l) Employee Benefits:
(i) Defined Contribution Plan
Employee benefit in the form of Superannuation Fund is considered as
defined contribution plan and charged to the Statement of Profit and
Loss in the year when the contribution to the respective fund is due.
(ii) Defined Benefit Plan
Retirement benefits in the form of Gratuity is considered as defined
benefit obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet.
The Provident Fund Contribution is made to trust administered by the
trustees. The interest rate to the members of the trust shall not be
lower than the statutory rate declared by the Central Government under
Employees' Provident Fund and Miscellaneous Provision Act, 1952. Any
shortfall, if any, shall be made good by the Company.
(iii) Other long-term benefits
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the
Statement of Profit and Loss.
(m) Lease rentals in respect of assets taken on finance lease are
accounted for in reference to lease terms.
(n) Expenditure incurred against which benefit is expected to flow
into future periods, are treated as Deferred Revenue Expenditure and
charged to Revenue Account over the expected duration of benefit.
Share issue expense is charged to Securities Premium Reserve in the
year of issue. ECA Premium on loans is to be amortised over the tenure
of loan.
(o) Intangible Assets are being recognised if the future economic
benefits attributable to the asset are expected to flow to the
company and the cost of the asset can be measured reliably. The same
are being amortised over the expected duration of benefits.
(p) Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Ta x Act,
1961. Deferred tax assets and liabilities are recognised in respect of
current year and prospective years. Deferred tax assets are recognised
on the basis of reasonable certainty / virtual certainty as the case
may be, that sufficient future taxable income will be available
against which the same can be realised.
(q) Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outflow
of resources. Contingent liabilities are not recognised but are
disclosed in the notes.
(r) Premium on redemption of preference shares is accounted for in the
year of redemption.
Mar 31, 2011
1. Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
2. Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
3. Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fixed assets
on completion of construction/ erection.
4. a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction.
Monetary assets and liabilities in foreign currencies as at the Balance
Sheet date are translated at exchange rate prevailing at the year end.
Premium or discount in respect of forward contracts covered under AS I
I (Revised 2003) is recognized over the life of contract. Exchange
differences arising on actual payments / realizations and year end
translations including on forward contracts are dealt with in Profit
and Loss Account except foreign exchange loss/gain on reporting of
long- term foreign currency monetary items used for depreciable assets,
which are capitalized. Non Monetary Foreign Currency items are stated
at cost.
b) In accordance with Announcement issued by the Institute of Chartered
Accountants of India all outstanding derivatives except covered under
AS I I (Revised 2003) are mark to market on Balance Sheet date and
loss, if any, is recognized in Profit & Loss Account and gain being
ignored.
5. Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management. The current
investments are stated at lower of cost and quoted / fair value
computed category-wise.When investment is made in partly convertible
debentures with a view to retain only the convertible portion of the
debentures, the excess of the face value of the non-convertible portion
over the realisation on sale of such portion is treated as a part of
the cost of acquisition of the convertible portion of the debenture.
Income in respect of securities with long-term maturities is accounted
for as per contractual obligation.
6. Inventories are valued at the lower of cost and net realisable
value (except scrap/ waste which are valued at net realisable
value).The cost is computed on weighted average basis. Finished Goods
and Process Stock include cost of conversion and other costs incurred
in bringing the inventories to their present location and condition.
7. Export incentives, Duty drawbacks and other benefits are recognized
in the Profit and Loss Account. Project subsidy is credited to Capital
Reserve.
8. Revenue expenditure on Research and Development is charged to
Profit and Loss Account in the year in which it is incurred and capital
expenditure is added to Fixed Assets.
9. Borrowing cost is charged to Profit and Loss Account except cost of
borrowing for acquisition of qualifying assets which is capitalised
till the date of commercial use of the asset.
10. (a) Depreciation on Buildings, Plant & Machinery, Railway Siding
and Other Assets of all Units is provided as per straight line method
considering the rates in force at the time of respective additions of
the assets made before 02.04.1987 and on additions thereafter at the
rates and in the manner specified in Schedule XIV of the Companies Act,
1956. Continuous Process Plants as defined in Schedule XIV have been
considered on technical evaluation. Depreciation on additions due to
exchange rate fluctuation is provided on the basis of residual life of
the assets. Depreciation on assets costing up to Rs.5,000/- and on
Temporary Sheds is provided in full during the year of additions.
(b) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the valuers on straight-line method.
(c) Leasehold Land is being amortised over the lease period.
11. An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
profi t and loss account when an asset is identifi ed as impaired.
Reversal of impairment loss recognised in prior periods is recorded
when there is an indication that the impairment losses recognised for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
12. Employee Benefi ts:
(a) Defined Contribution Plan
Employee benefi t in the form of Superannuation Fund is considered as
Defined contribution plan and charged to the Profi t and Loss Account
in the year when the contribution to the respective fund is due.
(b) Defined Benefi t Plan
Retirement benefi ts in the form of Gratuity is considered as Defined
benefi t obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet.
The Provident Fund Contribution is made to trust administered by the
trustees. The interest rate to the members of the trust shall not be
lower than the statutory rate declared by the Central Government under
Employeesà Provident Fund and Miscellaneous Provision Act, 1952. Any
shortfall, if any, shall be made good by the Company.
(c) Other long-term benefi ts
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Profi
t and Loss Account.
13. Lease rentals in respect of assets taken on fi nance lease are
accounted for in reference to lease terms.
14. Miscellaneous expenditure are amortised as under:
Expenditure incurred against which benefi t is expected to fl ow into
future periods, are treated as Deferred Revenue Expenditure and charged
to Revenue Account over the expected duration of benefi t. Share issue
expenses will be charged to Profi t & Loss account in the year of
issue.
15. Intangible Assets are being recognised if the future economic
benefi ts attributable to the asset are expected to fl ow to the
company and the cost of the asset can be measured reliably. The same
are being amortised over the expected duration of benefi ts.
16. Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Ta x Act,
1961. Deferred tax assets and liabilities are recognised in respect of
current year and prospective years. Deferred tax assets are recognised
on the basis of reasonable certainty / virtual certainty as the case
may be, that suffi cient future taxable income will be available
against which the same can be realised.
17. Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outfl ow
of resources. Contingent liabilities are not recognised but are
disclosed in the notes.
18. Premium on redemption of preference shares is accounted for in the
year of redemption.
Mar 31, 2010
1. Accounts are maintained on accrual basis. Claims/Refunds not
ascertainable with reasonable certainty are accounted for on settlement
basis.
2. Fixed Assets are stated at cost adjusted by revaluation of certain
assets.
3. Expenditure during construction/erection period is included under
Capital Work-in-Progress and allocated to the respective fi xed assets
on completion of construction/ erection.
4. a) Foreign currency transactions are recorded at exchange rates
prevailing on the date of transaction.
Monetary assets and liabilities in foreign currencies as at the Balance
Sheet date are translated at exchange rate prevailing at the year end.
Premium or discount in respect of forward contracts covered under AS 11
(revised 2003) is recognized over the life of contract. Exchange
differences arising on actual payments / realizations and year end
translations including on forward contracts are dealt with in Profi t
and Loss Account except foreign exchange loss/gain on reporting of
long-term foreign currency monetary items used for depreciable assets,
which are capitalized. Non Monetary Foreign Currency items are stated
at cost. b) In accordance with Announcement issued by the Institute of
Chartered Accountants of India all outstanding derivatives except
covered under AS 11 (revised 2003) are mark to market on Balance Sheet
date and loss, if any, is recognized in Profi t & Loss Account and gain
being ignored.
5. Long term investments are stated at cost. Provision for diminution
in the value of long term investments is made only if such a decline is
other than temporary in the opinion of the management. The current
investments are stated at lower of cost and quoted / fair value
computed category-wise. When investment is made in partly convertible
debentures with a view to retain only the convertible portion of the
debentures, the excess of the face value of the non-convertible portion
over the realisation on sale of such portion is treated as a part of
the cost of acquisition of the convertible portion of the debenture.
Income in respect of securities with long-term maturities is accounted
for as per contractual obligation.
6. Inventories are valued at the lower of cost and net realisable
value (except scrap/ waste which are valued at net realisable value).
The cost is computed on weighted average basis. Finished Goods and
Process Stock include cost of conversion and other costs incurred in
bringing the inventories to their present location and condition.
7. Export incentives, Duty drawbacks and other benefi ts are
recognized in the Profi t and Loss Account. Project subsidy is credited
to Capital Reserve.
8. Revenue expenditure on Research and Development is charged to Profi
t and Loss Account in the year in which it is incurred and capital
expenditure is added to Fixed Assets.
9. Borrowing cost is charged to Profi t and Loss Account except cost
of borrowing for acquisition of qualifying assets which is capitalised
till the date of commercial use of the asset.
10. (a) Depreciation on Buildings, Plant & Machinery, Railway Siding
and Other Assets of all Units is provided as per straight line method
considering the rates in force at the time of respective additions of
the assets made before 02.04.1987 and on additions thereafter at the
rates and in the manner specifi ed in Schedule XIV of the Companies Act
1956. Continuous Process Plants as defi ned in Schedule XIV have been
considered on technical evaluation. Depreciation on additions due to
exchange rate fl uctuation is provided on the basis of residual life of
the assets. Depreciation on assets costing up to Rs.5,000/- and on
Temporary Sheds is provided in full during the year of additions.
(b) Depreciation on the increased amount of assets due to revaluation
is computed on the basis of the residual life of the assets as
estimated by the valuers on straight-line method.
(c) Leasehold Land is being amortised over the lease period.
11. An asset is treated as impaired when the carrying cost of assets
exceeds its recoverable amount. An impairment loss is charged to the
profi t and loss account when an asset is identifi ed as impaired.
Reversal of impairment loss recognised in prior periods is recorded
when there is an indication that the impairment losses recognised for
the assets no longer exist or have decreased. Post impairment,
depreciation is provided on the revised carrying value of the asset
over its remaining useful life.
12. Employee Benefi ts:
(a) Defi ned Contribution Plan
Employee benefi t in the form of Superannuation Fund is considered as
defi ned contribution plan and charged to the Profi t and Loss Account
in the year when the contribution to the respective fund is due.
(b) Defi ned Benefi t Plan
Retirement benefi ts in the form of Gratuity is considered as defi ned
benefi t obligation and provided for on the basis of an actuarial
valuation, using the projected unit credit method, as at the date of
Balance Sheet.
The Provident Fund Contribution is made to trust administered by the
trustees. The interest rate to the members of the trust shall not be
lower than the statutory rate declared by the Central Government under
Employeesà Provident Fund and Miscellaneous Provision Act, 1952. Any
shortfall, if any, shall be made good by the Company.
(c) Other long-term benefi ts
Long term compensated absences are provided for on the basis of an
actuarial valuation, using the projected unit credit method, as at the
date of Balance Sheet.
Actuarial gain/losses, if any, are immediately recognized in the Profi
t and Loss Account.
13. Lease rentals in respect of assets taken on fi nance lease are
accounted for in reference to lease terms.
14. Miscellaneous expenditure are amortised as under:
Expenditure incurred against which benefi t is expected to fl ow into
future periods, are treated as Deferred Revenue Expenditure and charged
to Revenue Account over the expected duration of benefi t.
15. Intangible Assets are being recognised if the future economic
benefi ts attributable to the asset are expected to fl ow to the
company and the cost of the asset can be measured reliably. The same
are being amortised over the expected duration of benefi ts.
16. Current tax is the amount of tax payable on the estimated taxable
income for the current year as per the provisions of Income Ta x Act,
1961. Deferred tax assets and liabilities are recognised in respect of
current year and prospective years. Deferred Tax Assets are recognised
on the basis of reasonable certainty / virtual certainty as the case
may be, that suffi cient future taxable income will be available
against which the same can be realised.
17. Provisions involving substantial degree of estimation in
measurement are recognised when there is a present obligation as a
result of past events and it is probable that there will be an outfl ow
of resources. Contingent liabilities are not recognised but are
disclosed in the notes.
18. Premium on redemption of preference shares is accounted for in the
year of redemption.
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