1 Securities premium
Securities premium reserve represents premium received on equity share issued,which can be utilised only in accordance with the provisions of the companies Act, 2013 (the Act) for specified purposes.
2 Capital reserve
Capital reserve represent reserve created pursuant to the business combinations upto year end.
3 Revaluation reserve
Revaluation reserve represents reserve created on revaluation of some of property, plant and equipment (PPE) of the company which can be transfer to general reserve only on disposal of those assets
4 General reserve
General reserve is created from time to time by transfering profits from retain earning and can be utilised for purposes such as dividend pay out, bonus issued etc.and it is not an item of other comprehensive income.
5 Other comprehensive income (OCI)
OCI presents the cumulative gain and losses arising on the revaluation of equity instruments measured at fair value through other comprehensive income (FVTOCI), under an irrevocable options, net of amount reclassified to retained earnings when such assets are disposed off.
6. EMPLOYEE BENEFITS
(a) Defined contribution plan
The company makes contribution towards recognized providend fund to defined contribution retirement benefit plan for qualifying employee. Under the plan, the company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefit.
The company has recognized an amount of Rs. 135.47 Lakhs (31st March, 2017 - Rs.102.45 Lakhs) as expense under the defined contribution plan in the statement of profit and loss for the year.
(b) Defined benefit plan
The company makes annual contributions to employees group gratuity with lic, a funded defined benefit plan for employees of the company.
Actuarial value of plan assets and the present value of the defined benefit obligations for gratuity were carried out as on 31st March every year.the present value of the defined benefit obligations and the related current service cost and past service cost were measured using the projected unit credit method,which recognizes each period of service as giving rise to additional unit of benefit entitlement and measures each unit separately to built up the final obligation.
(c) OTHER EMPLOYEE BENEFITS
The liabilities for leave encashment based on actuarial valuation as at the year ended on 31st March 2018 is Rs.237.35 Lakhs (31st March’17, Rs.201.90 Lakhs, 31st March’16 Rs.163.65 Lakhs).
7. SEGMENT INFORMATION
In accordance with para-4 of Ind AS-1 08 ‘Operating Segment’, the company has presented segment information only on the basis of consolidated financial statement (ref note no 35 of consolidated financial statement)
8. EXPENDITURE RELATED TO CORPORATE SOCIAL RESPONSIBILITY AS PER SECTION 135 OF THE COMPANIES ACT, 2013 READ WITH SCHEDULE VII THERE OF:
(a) Gross amount required to be spent (refer note below) by the company during the year Rs.191.15 Lakhs (31st March, 2017 Rs.252.82 Lakhs).
(c) Related party transaction in relation to Corporate Social Responsibility Rs.10.27 Lakhs (31st March, 2017 Rs.27.46 Lakhs) to Banco Product Trust Registration No-E/7946/VADODARA.
9. FIRST TIME ADOPTION OF Ind AS
These are the Company’s first financial statements prepared in accordance with Ind AS. The significant accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017, and in the preparation of an opening Ind AS balance sheet as at 1st April, 2016 (the Company’s date of transition). In preparing its opening Ind AS Balance Sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and the other relevant provisions of the Act (previous IGAAP or Indian IGAAP).
Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions applied in the transition from previous IGAAP to Ind AS
Ind AS optional exemptions
(i) Business combinations
The Company has elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date.
Business Combinations occuring prior to the transition date have not been restated.
The Company has elected not to apply Ind AS 21 retrospectively to fair value adjustment and goodwill arising in business combination that occurred prior to the transition date
(ii) Deemed cost
The Company has elected to measure all of its property, plant and equipment at their previous IGAAP carrying value i.e deemed cost.
(iii) Investments in subsidiaries.
The Company has elected to measure all of its investments in subsidiaries, at their previous IGAAP carrying value.
An explanation of how the transition from previous IGAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.
Reconciliations
The following reconciliations provides the effect of transaction to Ind AS from IGAAP in accordance with Ind AS 101
1. Equity as at 1st April 2016 and 31st March 2017
2. Net Profit for the year ended 31 st March 2017
Foot Notes
10. Property plant and equipments
In the financial statements prepared under Previous IGAAP, Investment Property was grouped in PPE. Under Ind AS the same is reclassified as Investment Property as required by Ind AS-40.
Under Previous IGAAP some selected Plant & Machineries were Revalued , this Revaluation Reserve is Reversed Under Ind AS , as the Company has elected to measure all of its Property, Plant and Equipment at their Previous IGAAP carring value i.e.deemed cost
11. Inventories
Under the Previous IGAAP Machinery Spares which meet the definition of PPE was included in Inventories now reclassified to CWIP of Property , Plant and Equipments as per Ind AS-2
12. Non current investment
Under the Previous IGAAP , Non Current Investment of the Company were measured at Cost less Provision for diminution (Other then temporary). Under Ind AS the Company has recognised such Investments as under
(a) Unquoted Equity Shares of Subsidiaries-At Cost
(b) Unquoted Equity Shares-at FVTOCI through an irrevocable election
(c) Quoted Equity Shares-at FVTOCI through an irrevocable election
13. Current investment
Under the Previous IGAAP, Current Investment of the Company were measured at Cost or fair value whichever is lower.Under Ind AS the Company has reclassified such Investments as FVTPL on the date of transition.The fair value changes are recognised in the statement of Profit and Loss.
14. Proposed dividend
In the financial statement prepared under Previous IGAAP,dividend and DDT on equity shares recommended by the Board of Directors after the end of reporting period but before the financial statements were approved for issue ,was recognised as a liability in the financial statements in the reporting period relating to which dividend was proposed.Under Ind AS ,such dividend and DDT is recognised in the reporting period in which the same is approved by the members in a general meeting.
15. Revenue from operations
In the financial Statement prepared under previous IGAAP , Cash Discount ,Commission on Sales and Promotional expenses were shown as a part of other expenses. Same is reduced from revenue from operation under Ind AS
16. Remeasurement benefit of defined benefit plan
In the financial Statement prepared under previous IGAAP , remeasurment benefit of defined plans (gratuity), arising primarily due to change in actuarial assumptions was recognised as employee benefits expenses in the statement of Profit and Loss.under Ind AS such remeasurment benefit relating to defined benefit plans is recognised in OCI as per requirement of Ind AS-19.Consequently,the related tax effect of the same has also been recognised in OCI.
17. Deferred tax
In the Financial Statement prepared under Previous IGAAP,Deffered Tax was accounted as per Income Statement approach which require creation of deferred tax Assets / Liabilities on temporary differences between taxable profit and accounting profit.Under Ind AS deferred tax is accounted as per the Balance Sheet approach which requires creation of deferred tax assets / Liabilities on temporary difference between the carrying amount of an assets / liabilities in the Balance Sheet and it’s corresponding tax base
18. Effect of Ind AS adoption on statement of cash flow for the year ended 31st March 2017
Under Ind AS-7 , Cash Credit ,which are repayable on demand and form an integral part of cash management ,are classified in cash and cash equivalents.under previous IGAAP same was shown under short term borrowing considering financing activities.
(ii) Financial instrument measured at amortised cost
The carrying amount of financial assets and financial liabilities measured at amortised cost in the financial statements are a reasonable approximation of their fair values since the Company does not anticipate that the carrying amounts would be significantly different from the values that would eventually be received or settled.
The Company’s financial liabilities comprise mainly of borrowings, trade payables and other payables. The Company’s financial assets comprise mainly of investments, cash and cash equivalents, other balances with banks, trade receivables and other receivables.
19(A) CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, capital includes issued capital and all other equity reserves attributable to the equity shareholders of the Company. The primary objective of the Company when managing capital is to safeguard its ability to continue as a going concern and to maintain an optimal capital structure so as to maximize shareholder value.As at 31st March, 2018, the Company has only one class of equity shares and has low debt. Consequent to such capital structure, there are no externally imposed capital requirements. In order to maintain or achieve an optimal capital structure, the Company allocates its capital for distribution as dividend or re-investment into business based on its long term financial plans.
20. Previous year’s figures have been regrouped /reclassified wherever necessary to correspond with the current year classification/disclosure as per Ind AS requirement.
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