NOTES FORMING PART OF THE FINANCIAL STATEMENTS NOTE NO.1 SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accounts have been brpared in accordance with historical cost convention and on accrual basis. Use of Estimates The brsentation of financial statements in conformity with the generally accepted accounting principles requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities on the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Difference between the actual and estimates are recognised in the period in which the results are known/materialised. Fixed Assets a) Fixed Assets are stated at cost less debrciation. Cost comprises of purchase price and attributable expenses (including financing charges) and is net of permissible credits/set offs. b) Expenditure (including financing charges) incurred for fixed assets, the construction / installation/acquisition of which is not completed, is included under the Capital Work-in-Progress and the same is related/classified to the respective fixed assets on the completion. Debrciation/Amortisation a) Effective from 1st April 2014, Debrciation on fixed assets (other than leasehold land) has been provided based on useful life of the assets in accordance with Schedule II to the Companies Act, 2013, on Straight Line Method except in respect of Plant and Equipment where the useful life is considered differently based on an independent technical evaluation as 10 to 15 years. b) Premium on Leasehold Land is amortised over the duration of the Lease. Investments Investments are valued at cost plus attributable expenses of acquisition and are classified as Long Term Investments and Current Investments (investments intended to be held for not more than one year). Long Term Investments are stated at cost. However, where there is a diminution, other than temporary, in the value of a long-term investment, necessary provision is made to recognise the decline. Current Investments are stated at lower of cost and fair value, computed on individual investment basis. Valuation of Inventories Inventories are valued at lower of the cost and net realisable value. Cost of inventories is computed on moving weighted average basis. Cost comprises of all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their brsent location and condition. Revenue Recognition Sales are inclusive of Excise Duty but excluding Value Added Tax/Central Sales Tax and are net of Trade Discounts, Rebates and Incentives. Export Benefits Consumption of Raw Materials is arrived at after taking into account the duty saved on imported raw material against which export has yet to be made. Export Incentives under Focus Product Scheme, Focus Market Scheme and MEIS - Merchandise Exports from India Scheme under EXIM policy/ Foreign Trade Policy are accounted for on the basis of its utilization. Profit/Loss on sale of such licenses, if any, is accounted in the year of sale. Foreign Currency Transactions Transactions in foreign currencies are accounted at the exchange rates brvailing on the day of the transaction. Gains and losses arising out of subsequent fluctuations are accounted on actual payment/realisation. Monetary items related to foreign currency transactions, remaining unsettled at the end of the year are adjusted at the rates brvailing at the year end or are stated at the amounts likely to be realised or required to be disbursed, except for those considered doubtful of recovery. The exchange fluctuation arising on account of such adjustments are dealt in Profit and Loss Account. Non-monetary items are reported by using the exchange rate at the date of transaction. The Company enters into Forward Contracts to hedge its Foreign Currency Exposures. Premium/ Discount in respect of outstanding forward contracts at the year end are amortised as expense or income over the life of the contract. Employee Benefits: A) Short-term employee benefits: Short-term employee benefits consisting of wages, salaries, social security contributions, ex-gratia and accrued leave are recognised in the year to which it relates. B) Post employment benefits: i) Benefits in the nature of contribution to provident fund, superannuation scheme, employee state insurance scheme etc. provided by the company to the employees have been identified as defined contribution plans in terms of provisions of AS-15 on "Employee Benefits" where the obligation of the company is limited to a br-agreed amount as fixed by the administrator of those plans. Such contributions are recognised in the year to which they relate. ii) Benefit in the nature of gratuity paid by company to the employees has been identified as defined benefit plan in terms of provisions of AS-15 on "Employee Benefits". The gratuity scheme in respect of the employees of the company is administered through Life Insurance Corporation of India (LIC). Annual contributions as determined by LIC are charged to profit and loss account. The liability of the company is also determined through actuarial valuation technique at balance sheet date and the additional liability, if any, arising out of the difference between the actuarial valuation and the plan assets as at the balance sheet date is provided for at the year end. Research and Development Revenue expenditure on Research and Development is charged to Profit and Loss Account as incurred. Capital expenditure on assets acquired for Research and Development is added to Fixed Assets. Government Grants Special Capital Incentive received from the Government for setting up/expansion of an industrial undertaking in underdeveloped area of the State, is credited to Capital Reserve (Capital Incentive Reserve). Government grants/subsidy related to specific fixed assets is reduced from the cost of the asset concerned. Borrowing Cost Borrowing costs directly attributable to the acquisition/construction/installation of fixed assets are capitalised as part of the cost of the assets up to the date the assets are put to use. Other borrowing costs are charged to Profit and Loss Account. Taxation a) Provision for current tax is made and retained in the accounts on the basis of estimated tax liability as per the applicable provisions of the Income Tax Act, 1961. b) Deferred tax assets and liabilities are recognised for timing differences between the accounting and taxable income, based on tax rates that have been enacted or substantively enacted by the Balance Sheet date. Deferred tax assets, subject to the consideration of prudence, are recognised only if there is reasonable certainty that sufficient future taxable income will be available, against which they can be realised. At each Balance Sheet date, the carrying amount of deferred tax assets is reviewed to reassure its realisation. Leases Assets acquired on leases where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Lease rentals are charged to the Profit and Loss Account on accrual basis. Assets leased out under operating lease are capitalised, debrciation thereon is provided in the books and rental income is recognised on accrual basis over the lease term. Assets leased out are stated at original cost and the debrciation thereon is provided in the books. Impairment The carrying amount of an asset is reviewed at each balance sheet date for any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value at the weighted average cost of capital. Provisions, Contingent Liabilities and Contingent Assets A provision is made based on a reliable estimate when it is probable that an outflow of resources embodying economic benefit will be required to settle an obligation. Contingent Liabilities, if material, are disclosed by way of notes to accounts. Contingent Assets are not recognised or disclosed in the financial statements. NOTE NO.2 (a) As at 31st March,2016, there are no Micro, Small and Medium Enterprises, as defined in the Micro, Small, Medium Enterprises Development Act, 2006, to whom the Company owes dues on account of principal amount together with interest and accordingly no additional disclosures have been made. (b) The above information regarding Micro, Small and Medium Enterprises has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors. NOTE NO.3 (a) The figures for the year ended 31st March 2016 are not comparable with the corresponding figures of the current year consequent to amalgamation of Balkrishna Paper Mills Limited into the company and its subsequent de-merger to Nirvikara Paper Mill Limited during the brvious year. (b) The board has in principle approved a proposal of amalgamation of its wholly owned subsidiary company viz. BKT Exim Limited into the company subject to necessary approvals from relevant authorities. NOTE NO.4 (i) Figures in brackets in notes 34,39 and 41 pertain to brvious year. (ii) Previous year’s figures have been regrouped/reclassified wherever necessary to correspond with the current year’s classification/ disclosure. As per our report of even date attached For JAYANTILAL THAKKAR & CO. Chartered Accountants VIRAL A. MERCHANT Partner For and on behalf of the Board of Directors Arvind PODDAR Chairman & Managing Director Rajiv PODDARJoint Managing Director Basant BANSALDirector (Finance) Vipul SHAHDirector & Company Secretary Mumbai, Dated: 18th May, 2016 |