1. STATEMENT OF ACCOUNTING POLICIES AND PRACTICES A. Basis of Preparation of Financial Statements: The financial statements have been brpared under the historical cost convention on the accrual basis of accounting, in accordance with the generally accepted accounting principles in India to comply with the accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) and the relevant provisions of the Companies Act, 2013 ("the Act")("Indian GAAP"). The accounting policies adopted in the brparation of the financial statements are consistent with those of the brvious year. All assets and liabilities have been classified as current and non - current as per the Company's normal operating cycle and other criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of services and their realization in cash and cash equivalents, the company has ascertained its operating cycle as 12 months for the purpose of current - noncurrent classification of assets and liabilities. B. Use of Estimates: The brparation of financial statements requires estimates and assumptions to be made that affect the reported amount of assets and liabilities (including contingent liabilities) on the date of financial statements and the reported amount of revenues and expenses, during the reported period. Actual results could differ from those estimates. C. Fixed Assets : i. Fixed Assets are recorded at cost of acquisition or construction and they are stated at historical cost (net of Cenvat and Vat). Interest on project loans and all direct expenses attributable to acquisition of Fixed Assets are capitalised, upto the date of installation. Capitalised hardware/ software costs of Enterprise Resource Planning (ERP) System include cost of designing software, which provides significant future economic benefits over an extended period. The cost comprises of license fee, cost of system integration and initial customization. The costs are capitalised in the year in which the relevant system is ready for intended use. The upgradation/enhancements are also capitalised and assimilated with the initial capitalisation cost. ii. In compliance with Accounting Standard (AS-28)- "Impairment of Assets" issued by the Institute of Chartered Accountants of India (ICAI), the Company assesses at each Balance Sheet date whether there is any indication that any asset may be impaired. If any such indication exists, the recoverable amount of the asset is estimated. Impairment loss is recognised wherever carrying amount exceeds the recoverable amount. iii. The debrciation on all assets of the company excluding freehold land & leasehold land has been charged to write off the cost less residual value using the straight-line basis over the expected/estimated useful life in the manner as specified in Schedule II of the Companies Act 2013.Residual values have been reviewed and considered by the management. The normal expected/estimated useful lives of major categories of Fixed Assets are as follows: D. Investments : Long-term investments are stated at cost and provision is made when there is decline, other than temporary, in the value thereof. Current investments are stated at cost or fair value whichever is lower. F. Excise Duty : Excise duty on finished goods manufactured is accounted on clearance of goods from factory brmises and also in respect of year end stocks in bonded warehouse. CENVAT credit is accounted by adjustment against cost immediately upon receipt of the relevant input. Input credit not recoverable is charged to the Statement of Profit and Loss. G. Foreign Currency Transactions : i. Transactions in foreign currencies are recorded at the exchange rates brvailing on the date of transaction. Foreign currency assets and liabilities are translated at year end exchange rates. Exchange difference arising on settlement of transactions and translation of monetary items are recognised as income or expense in the year in which they arise. ii. In respect of forward exchange contracts the difference between the forward rate and the exchange rate at the inception of contract is recognised as income or expense over the period of the contract. iii. Gains or losses on cancellation/settlement of forward exchange contracts are recognised as income or expense. H. Research and Development : Revenue expenditure incurred on Research and Development is charged to Statement of Profit and Loss for the year. Capital expenditure on Research and Development is accounted as Fixed Assets. I. Employee Benefits : i. Short term employee benefits are recognised as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. ii. Post-employment and other long-term employee's benefits are recognised as an expense in the Statement of Profit and Loss for the year in which the employee has rendered the service. The expense is recognised at the brsent value of the amount payable determined using actuarial valuation techniques. Actuarial gains and losses in respect of post-employment and other long-term benefits are charged to the Statement of Profit and Loss for the year. J. Revenue / Expense Recognition : i. Revenue from sale of goods is accounted for on the basis of dispatch of goods. Sales are inclusive of excise duty and net of sales returns / Trade Discount. ii. Revenue in respect of overdue interest, insurance claim, etc is recognized to the extent the Company is reasonably certain of its ultimate realisation. iii. Remission from Excise Duty paid in respect of clearance from Jammu Plant is recognised as revenue based on legal advice obtained by the Company [Refer Note No.16]. iv. Expenses are accounted for on accrual basis. v. Provisions are recognised when a brsent legal or constructive obligation exists and the payment is probable and can be reliably estimated. vi. Lease Rentals in respect of assets taken on "operating lease" are charged to the Statement of Profit and Loss on straight line basis over the lease term. Government Grants : i. Where the grants are of the nature of promoters' contribution with reference to total investment in the undertaking or total capital outlay, they are treated as capital reserve. ii. Grants related to specific fixed assets are deducted from the book value of the related asset. iii. Grants related to revenue are credited to the Statement of Profit and Loss and brsented as income from operations. L. Borrowing Cost: Borrowing cost attributable to acquisition of qualifying fixed assets which takes substantial period of time to get ready for its intended use is capitalised as part of the cost of such fixed assets. All other borrowing costs are charged to revenue. M. Share Issue Expenses Expenses incurred in connection with fresh issue of share capital are adjusted against Securities brmium reserve in the year in which they are incurred. N. Contingent Liabilities : Liabilities are disclosed by way of Notes appended to the Balance Sheet in case there is an obligation that probably may not require cash outflow. O. Accounting for Taxes on Income : Current tax is determined as the amount of tax payable in respect of taxable income for the period. Deferred tax on timing differences, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods is accounted for using the tax rates and tax laws enacted or substantively enacted as on the balance sheet date. Deferred tax assets arising on account of unabsorbed debrciation or carry forward of tax losses are recognised only to the extent that there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Other deferred tax assets are recognised only when there is a reasonable certainty of their realisation. P. Earnings per share: The Company reports basic and diluted earnings per share in accordance with Accounting Standard (AS-20) on Earning per share issued by the Institute of Chartered Accountants of India (ICAI). Basic earnings per equity share is computed by dividing net income by weighted average number of equity shares outstanding for the period. Diluted earnings per equity share is computed by dividing net income by the weighted average number of equity shares outstanding including shares pending allotment. 16 EXCISE REMISSION AT JAMMU : a. The Jammu and Kashmir High Court delivered a judgment dated December 23, 2010 quashing the Excise Notification, applicable to the undertakings set up in Jammu, which restricted the quantum of excise duty remission and upheld the entitlement to total exemption from excise duty. In view of the legal advice confirming the Company's right to such total exemption on the grounds laid down in the judgment of the High Court, rebate of excise duty being the duty on assessable value of goods, net of Cenvat Credit of t 293.09 lacs (t 306.20 lacs), is recognized as revenue and accrued as income from operations. The cumulative amount of remission as on March 31, 2016, so recognised is t 2,078.41 lacs (t 1,785.31 lacs). b. A writ petition was filed by the Company praying the quashing of the impugned notification in its case. Pending final disposal of the petition filed by the Company, the Hon'ble High Court had modified the earlier interim order, passed on May 4, 2011, in OWP 601/2011 on March 11, 2013. Consequently the Hon'ble High Court has directed the department to release 50% of the amount due to the manufacturers, subject to the approval of Jurisdictional Commissioner of Excise for manufacturers' solvency. Post such order the Company has claimed excise rebate as per the earlier notification. 25 RETIREMENT BENEFITS: Defined Contribution Plans Company's contributions paid/payable during the year to Provident Fund, Superannuation Fund are recognised in the Statement of Profit and Loss. Defined Benefit Plan Company's liabilities towards gratuity and leave encashment are determined on actuarial basis using the projected unit credit method, which consider each period of service as giving rise to an additional unit of benefit and measure each unit separately to build up the final obligation. Past services are recognised on straight-line basis over the average period until the amended benefits become vested. Actuarial gain and losses are recognised immediately in the Statement of Profit and Loss as income or expense. Obligation is measured at the brsent value of estimated future cash flow using a discount rate that is determined by reference to market yields at the Balance Sheet date on government bonds where the currency and terms of the government bonds are consistent with the currency and estimated terms of the defined benefit obligation. Retirement Benefits Gratuity Description of the Plan The Company has covered its gratuity liability by a Group Gratuity Policy named 'Employee Group Gratuity Assurance Scheme' issued by LIC of India. Under the plan, employee at retirement is eligible for benefit, which will be equal to 15 days salary for each completed year of service. Thus, it is a defined benefit plan and the aforesaid insurance policy is the plan asset. 27 SEGMENT REPORTING: As the entire operations of the Company relate to products categorized under 'Consumer Products' as the single primary reportable segment, no separate segment reporting is required under Accounting Standard (AS-17) issued by the Institute of Chartered Accountants of India (ICAI). 2 Previous year's figures, shown separately as such or in brackets are recast / regrouped wherever necessary. As per our report of even date annexed For B.K. Khare & Co. Chartered Accountants Firm Registration No. 105102W Himanshu Chapsey Partner Membership No. 105731 Mumbai Dated: May 12, 2016 Ayyadurai Srikanth Chief Executive Officer Dilip Dandekar Chairman & Executive Director Shriram Dandekar Vice Chairman & Executive Director Nobuchika Doi Executive Director Chetan Badal Chief Financial Officer Takeo Iguchi Executive Director Shishir B. Desai Director Ravindra Damle V.P. (Corporate) & Company Secretary Mumbai Dated: May 12, 2016 |