1. COMPANY INFORMATION
- KRBL Limited (the Company) is a Domestic Public Limited company and listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The Company is World’s leading Basmati Rice player with milling capacity of 195 MT per hour. The company has fully integrated operations with involvement in every aspect of Basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands launched by the company “India Gate” is the flagship brand both in Domestic and International Markets.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation
- These financial statements have been prepared in accordance with the Indian Accounting Standards (hereinafter referred to as the ‘Ind AS’) as notified by Ministry of Corporate Affairs pursuant to section 133 of the Companies Act, 2013 read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016. These financial statements for the year ended March 31, 2017 are prepared by the company under Ind AS for the first time. For all periods upto and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (hereinafter referred to as ‘Previous GAAP’) used for its statutory reporting requirement in India immediately before adopting Ind AS. The financial statements for the year ended March 31, 2016 and the opening Balance Sheet as at April 01, 2015 have been restated in accordance with Ind AS for comparative information. Reconciliations and explanations of the effect of the transition from Previous GAAP to Ind AS on the Company’s Balance Sheet, Statement of Profit and Loss and Statement of Cash Flows are provided in Other Notes Forming part of the financial statements.
- The Financial Statements have been prepared on the historical cost convention on going concern basis. The accounting policies are applied consistently to all the periods presented in the financial statements, including the preparation of the opening Ind AS Balance Sheet as at April 01, 2015 being the ‘date of transition to Ind AS’.
2.2 Use of Estimates and Judgments
- The preparation of Financial Statements requires management to make certain assumptions and estimates that affect the reported amount, the Financial Statements and Notes thereto. Difference between actual results and estimates are recognized in the period in which they materialize.
2.3 Property, Plant & Equipment including Intangible Assets
- Property, Plant & Equipment are stated at cost of acquisition / installation inclusive of freight, duties, and taxes and all incidental expenses and net of accumulated depreciation. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. All up gradation / enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
- Property, plant and equipment which are not ready for intended use as on the date of Balance Sheet are disclosed as “Capital work-in-progress” and stated at the amount spent upto the date of Balance Sheet.
- Freehold Land is stated at original cost of acquisition.
- Intangible assets are stated at their cost of acquisition.
2.4 Depreciation
- Depreciation on fixed assets has been provided on straight line method, in terms of useful life of the Assets as prescribed in Schedule II to the Companies Act 2013.
- Computer software charges, patent, trademark & design and goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
2.5 Investment Properties
- Property that is held for long-term rental yields or for capital appreciation or both, and that is not occupied by the Company, is classified as investment property. Investment property is measured at its cost, including related transaction costs and where applicable borrowing costs less depreciation and impairment if any.
2.6 Investments and Other Financial Assets
- Classification: The Company classifies its financial assets in the following measurement categories:
(i) those to be measured subsequently at fair value (either through other comprehensive income, or through the Statement of Profit and Loss), and
(ii) those measured at amortized cost.
The classification depends on the Company’s business model for managing the financial assets and the contractual terms of the cash flows.
- Measurement: At initial recognition, the Company measures a financial asset at its fair value. Transaction costs of financial assets carried at fair value through the Profit and Loss are expensed in the Statement of Profit and Loss.
2.6.1 Investments
- Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as “Current Investments”. All other Investments are classified as “Non-Current Investments”. The Company measures its Current investments at fair value through profit and loss. Non-current investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of noncurrent investments. Upon first-time adoption of Ind AS, the Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS i.e., April 01,2015.
2.7 Dividend to equity shareholders
- Dividend to equity shareholders is recognized as a liability and deducted from shareholders’ equity, in the period in which the dividends are approved by the equity shareholders in the general meeting.
2.8 Inventories
- Items of inventories are measured at lower of cost or net realizable value. Raw material on shop floor and work-in process is taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it comprises expenditure incurred in normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving & defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of Excise Duty.
2.9 Cash and Cash Equivalent
- Cash and cash equivalents are short-term, highly liquid investments that are readily convertible into cash and which are subject to an insignificant risk of changes in value.
2.10 Revenue Recognition and Accounting for Sales &
Services
- Revenue from sale of goods is recognized when all the significant risk and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract, there is no continuing managerial involvement with the goods and the amount of revenue can be measured reliably. On recognition of revenue the Company retains no effective control of the goods transferred to a degree usually associated with ownership and no significant uncertainty exists regarding the amount of the consideration that will be derived from the sale of goods. Revenue is measured at fair value of the consideration received or receivable. Export sales are adjusted for exchange fluctuations on exports realized during the year and the trade receivable in foreign exchange which are restated at the year end. Domestic sales are recognized net of discounts, Scheme on Sales, Sales Tax, Sale Returns and Excise Duty.
- Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL.
- Dividend income is recognized when the right to receive Dividend is established. Revenue and Expenditure are accounted for on going concern basis. Interest Income / Expenditure is recognized using the time proportion method based on the rates implicit in the transaction.
- Revenue in respect of Insurance / others claims, Interest, Commission, etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
2.11 Research and Development
- Revenue expenditure on Research & Development is written off in the year in which it is incurred. Capital Expenditure on Research & Development is included under Fixed Assets.
2.12 Employee Benefits
- Contributions to defined provident fund are charged to the statement of profit and loss on accrual basis. Present liability for future payment of gratuity and unveiled leave benefits are determined on the basis of actuarial valuation at the balance sheet date and charged to the statement of profit and loss. Gratuity fund is managed by the Kotak Life Insurance.
2.13 Derivative financial instruments
- Derivative financial instruments such as forward contracts, option contracts and cross currency swaps, to hedge its foreign currency risks are initially recognized at fair value on the date a derivative contract is entered into and are subsequently premeasured at their fair value with changes in fair value recognized in the Statement of Profit and Loss in the period when they arise.
2.14 Foreign Currency Transactions
- Transactions in foreign currencies are recognized at the prevailing exchange rates on the transaction dates. Realized gains and losses on settlement of foreign currency transactions are recognized in the Statement of Profit and Loss.
- Monetary foreign currency assets and liabilities at the year-end are translated at the year-end exchange rates and the resultant exchange differences are recognized in the Statement of Profit and Loss.
- In respect of Non integral foreign operation - both monetary and non-monetary items are translated at the closing rate and resultant difference is accumulated in foreign currency translation reserve, until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.15 Government Grant
- Grants from the government are recognized when there is reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Grant received from government towards fixed assets acquired/constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
2.16 Borrowing
- Borrowings are initially recognized at net of transaction costs incurred and measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in the Statement of Profit and Loss over the period of the borrowings using the effective interest method.
2.17 Borrowing Costs
- Interest and other borrowing costs attributable to qualifying assets are capitalized as a part of such assets till such time the assets are ready for use. Other interest and borrowing costs are charged to Statement of Profit and Loss.
2.18 Income taxes
- The income tax expense or credit for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate adjusted by changes in deferred tax assets and liabilities attributable to temporary differences. Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax bases of assets and liabilities and their carrying amount in the financial statement. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are excepted to apply when the related deferred income tax assets is realized or the deferred income tax liability is settled. Deferred tax assets are recognized for all deductible temporary differences and unused tax losses, only if, it is probable that future taxable amounts will be available to utilize those temporary differences.
- Current and deferred tax is recognized in the Statement of Profit and Loss, except to the extent that it relates to items recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly in equity, respectively the liability of Company on Account of Income Tax is estimated considering the provisions of Income tax Act, 1961.
- Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between book and tax profits that originate in one year and capable of reversal in one or more subsequent years.
2.19 Leases
i) As a lessee:
- Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company, as lessee, are classified as operating leases. Payments made under operating leases are charged to the Statement of Profit and Loss on a straight-line basis over the period of the lease.
ii) As a less or:
- Lease income from operating leases where the Company is a less or is recognized in income on a straight-line basis over the lease term.
2.20 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets neither recognized nor disclosed in the Financial Statement.
2.21 Segment Reporting
- Segments are identified based on dominant source and nature of risks and returns and internal financial reporting system to the management Inter segment revenue are accounted for on the basis of transactions which are primarily market led. Revenue and expenses which relate to enterprises as a whole and are not attributable to segments are included under “Other Unallowable Expenditure Net of Unallowable Income”.
2.22 Financial and Management Information System
- An Integrated Accounting System has been put to practice which unifies both Financial Books and Costing Records. The books of account and other records have been designated to facilitate compliance with the relevant provisions of the Companies Act on one hand and provide Internal Financial Reporting System for Planning, Review and Internal Control on the other. The Cost Accounts are designed to adopt Costing Systems appropriate to the business carried out by the Division, with each Division incorporating into its costing system, the basic tenets and principles of Standard Costing, Budgetary Control and Marginal Costing as appropriate.
2.23 Impairment of Financial Asset
- Expected credit losses are recognized for all financial assets subsequent to initial recognition other than financials assets in FVTPL category.
2.24 Impairment of Non-Financial Asset
- The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such Indication exists; the Company estimates the recoverable amount of assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the statement of Profit & Loss. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets is reflected at recoverable amount.
2.25 Mergers/Amalgamation
- Mergers / Amalgamations (in the nature of Merger) of other company / body Corporate with the company are accounted for on the basis of purchase method, the Asset / Liabilities being incorporated in terms of values of assets and Liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of Goodwill or capital reserve.
3. FIRST TIME ADOPTION OF IND AS
- The Company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01, 2016, with a transition date of April 01, 2015. These financial statements for the year ended March 31, 2017 are the first financial statements the Company has prepared under Ind AS. For all periods upto and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with the accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (‘Previous GAAP’).
- The adoption of Ind AS has been carried out in accordance with Ind AS 101, First-time Adoption of Indian Accounting Standards. Ind AS 101 requires that all Ind AS standards and interpretations that are issued and effective for the first Ind AS financial statements be applied retrospectively and consistently for all financial years presented. Accordingly, the Company has prepared financial statements which comply with Ind AS for year ended March 31, 2017, together with the comparative information as at and for the year ended March 31, 2016 and the opening Ind AS Balance Sheet as at April 01, 2015, the date of transition to Ind AS.
- In preparing these Ind AS financial statements, the Company has availed certain exemptions and exceptions in accordance with Ind AS 101, as explained below. The resulting difference between the carrying values of the assets and liabilities in the financial statements as at the transition date under Ind AS and Previous GAAP have been recognized directly in retained earnings.
(a) Optional exemptions from retrospective application
Ind AS 101 permits first-time adopters certain exemptions from retrospective application of certain requirements under Ind AS. The Company has elected to apply the following optional exemptions from retrospective application:
(i) Deemed cost for property, plant and equipment and intangible assets
The Company has elected to measure all its property, plant and equipment and intangible assets at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.
(ii) Investment in subsidiaries
The Company has elected to measure its investments in subsidiaries at the Previous GAAP carrying amount as its deemed cost on the date of transition to Ind AS.
(b) Mandatory Exceptions to retrospective application
The Company has applied the following exceptions to the retrospective application of Ind AS as mandatorily required under Ind AS 101:
(i) Estimates
On assessment of the estimates made under the Previous GAAP financial statements, the Company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence that those estimates were in error. However, estimates that were required under Ind AS but not required under Previous GAAP are made by the Company for the relevant reporting dates reflecting conditions existing as at that date.
(ii) Classification and measurement of financial assets
The classification of financial assets to be measured at amortized cost or fair value through profit/loss is made on the basis of the facts and circumstances that existed on the date of transition to Ind AS.
(For more details kindly refer Note No. 31.10 transition to Ind AS Reconciliations)
Premises given on operating lease:
The Company has given a warehouse in Kandla, Gujarat on cancellable operating lease. The lease is renewable for further period on mutually agreeable terms.
Estimation of fair value:
The fair valuation is based on current prices in the active market for similar properties. The main inputs used are quantum, area, location, demand, restrictive entry to the complex, age of building and trend of fair market rent in Gandhi Dham, Gujarat area.
This valuation is based on valuations performed by an accredited independent valuer. Fair valuation is based on replacement cost method. The fair value measurement is categorized in level 2 fair value hierarchy.
1. COMPANY INFORMATION
- KRBL Limited (the Company) is a Domestic Public Limited company and listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock Exchange of India Ltd. (NSE). The Company is World’s leading Basmati Rice player with milling capacity of 195 MT per hour. The company has fully integrated operations with involvement in every aspect of Basmati value chain, right from seed development, contact farming, procurement of paddy, storage, processing, packaging, branding and marketing. Among the many brands launched by the company “India Gate” is the flagship brand both in Domestic and International Markets.
2. SIGNIFICANT ACCOUNTING POLICIES
2.1 Accounting Convention
- The Financial Statements are prepared on the historical cost convention on going concern basis and in accordance with the applicable accounting standards notified under relevant provisions of the Companies Act, 2013 and other Accounting principles generally accepted in India, to the extent applicable.
2.2 Use of Estimates
- The preparation of Financial Statements requires management to make certain assumptions and estimates that affect the reported amount the Financial Statements and Notes thereto. Difference between actual results and estimates are recognized in the period in which they materialize.
2.3 Fixed Assets including intangible Assets
- Fixed Assets are stated at cost of acquisition / installation inclusive of freight, duties, taxes and all incidental expenses and net of accumulated depreciation. In respect of major projects involving construction, related pre-operational expenses form part of the value of assets capitalized. Expenses capitalized also include applicable borrowing costs. All up gradation / enhancements are generally charged off as revenue expenditure unless they bring similar significant additional benefits.
- Intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work- in- progress is stated at amount spent up to the date of Balance Sheet.
2.4 Depreciation and Amortization
- Depreciation on fixed assets has been provided on straight line method, in terms of useful life of the
Assets as prescribed in Schedule II to the Companies Act 2013.
- Computer software charges, patent, trademark & design and Goodwill are recognized as intangible assets and amortized on straight line method over a period of 10 years except one software which is depreciated in 6 years on straight line method based upon life of servers where it is installed.
- Leasehold land is amortized on straight line method over the lease period.
2.5 Investments
- Investments that are readily realizable and are intended to be held for not more than one year at the point of acquisition are classified as “Current Investments”. All other Investments are classified as “Non-Current Investments”. Current investments are stated at lower of cost and fair value. Non-current investments are stated at cost. A provision for diminution is made to recognize a decline, other than temporary, in the value of noncurrent investments.
2.6 Inventories
- Items of inventories are measured at lower of cost or net realizable value. Raw material on shop floor and work-in process is taken as part of raw material and valued accordingly.
- The cost is calculated on weighted average cost method and it comprises expenditure incurred in normal course of business in bringing such inventories to its location and includes, where applicable, appropriate overheads based on normal level of activity. Obsolete, slow moving & defective inventories are identified at the time of physical verification and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of Excise Duty.
2.7 Revenue Recognition and Accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading and adjusted for exchange fluctuations on exports realized during the year and the trade receivable in foreign exchange which are restated at the year end. Domestic sales are recognized on the dispatch of goods to the customers and are net of discounts, Sales Tax,
Excise Duty, Returns. Gross sales includes Excise Duty and then reduced thereafter to compute net sales in conformity with AS-14 on disclosure of the revenue from sale transaction. Sale of energy is accounted for on basis of energy supplied. Sale of Certified Emission Reduction (CER) is recognized as income on delivery of CERs to the customer. Sale of Renewable Energy Certificate (REC) is recognized as income on sale of REC on the IEX/PXIL. Dividend income is recognized when the right to receive Dividend is established. Revenue and Expenditure are accounted for on going concern basis. Interest Income / Expenditure is recognized using the time proportion method based on the rates implicit in the transaction.
- Revenue in respect of Insurance / others claims, Interest, Commission, etc. is recognized only when it is reasonably certain that the ultimate collection will be made.
2.8 Proposed Dividend
- Dividend (including Dividend Tax thereon, if any) are provided for in the books of account as proposed by the Directors pending for approval at the ensuing Annual General Meeting.
2.9 Research and Development
- Revenue expenditure on Research & Development is written off in the year in which it is incurred. Capital Expenditure on Research & Development is included under Fixed Assets.
2.10 Treatment of Employee Benefits
- Contributions to defined provident fund are charged to the profit and loss account on accrual basis. Present liability for future payment of gratuity and unveiled leave benefits are determined on the basis of actuarial valuation at the balance sheet date and charged to the profit and loss account. Gratuity fund is managed by the Kotak Life Insurance.
2.11 Foreign Currency Transactions
- The transactions in foreign currencies are recognized at rate of overseas currencies ruling on the date of transaction. Gain / ( loss) arising on account of rise or fall in overseas currencies vis a vis reporting currencies between the date of transaction and that of payment is charged to statement of Profit& loss account.
- Year-end balance of foreign currency monetary items is translated at the year-end rates and the corresponding effect is given in the respective accounts. Transactions completed during the year are adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit & Loss Account on change of Exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled on future dates are recognized at the year-end rates of the underlying foreign currency. Effects arising from swap contracts are adjusted on the date of settlement.
- In respect of Non integral foreign operation - both monetary and non-monetary items are translated at the closing rate and resultant difference is accumulated in foreign currency translation reserve, until the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.12 Government Grant
- Government grant is considered for inclusion in accounts only when conditions attached to them are complied with and it is reasonably certain that ultimate collection will be made. Grant received from government towards fixed assets acquired/constructed by the Company is deducted out of gross value of the asset acquired/ constructed and depreciation is charged accordingly.
2.13 Borrowing Costs
- Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets are capitalized as a part of such assets till such time as the assets are ready for their intended use or sale. All other borrowing costs are recognized as expense in the period in which they are incurred.
2.14 Taxes on Income
- The liability of Company on Account of Income Tax is estimated considering the provisions of Income tax Act 1961.
- Deferred tax is recognized subject to the consideration of prudence on timing differences being the difference between book and tax profits that originate in one year and capable of reversal in one or more subsequent years.
2.15 Leases
- In respect of Operating leases, rentals are expensed with reference to lease terms and other considerations.
2.16 Provisions, Contingent Liability and Contingent Assets
- The Company creates a provision when there is a present obligation as a result of past event that probably requires an outflow of resources and a reliable estimate can be made of the amount of obligation. A disclosure of contingent liability is made when there is a possible obligation or a present obligation that will probably not require outflow of resources or where a reliable estimate of the obligation cannot be made. Contingent Assets neither recognized nor disclosed in the Financial Statement.
2.17 Segment Reporting
- Segments are identified based on dominant source and nature of risks and returns and internal financial reporting system to the management Inter segment revenue are accounted for on the basis of transactions which are primarily market led. Revenue and expenses which relate to enterprises as a whole and are not attributable to segments are included under “Other Unallocable Expenditure Net of Unallocable Income”.
2.18 Financial and Management Information System
- An Integrated Accounting System has been put to practice which unifies both Financial Books and Costing Records. The books of account and other records have been designated to facilitate compliance with the relevant provisions of the Companies Act on one hand and provides Internal Financial Reporting System for Planning, Review and Internal Control on the other. The
Cost Accounts are designed to adopt Costing Systems appropriate to the business carried out by the Division, with each Division incorporating into its costing system, the basic tenets and principles of Standard Costing, Budgetary Control and Marginal Costing as appropriate.
2.19 Impairment of Assets
- The Company assesses at each Balance Sheet date whether there is any indication that an assets may be impaired. If any such Indication exists; the Company estimates the recoverable amount of assets. If such recoverable amount of the assets or the recoverable amount of the cash generating unit to which the assets belong is less than its carrying amount, the carrying amount is reduced to its recoverable amount. The reduction is treated as an impairment loss and is recognized in the Profit & Loss Account. If at the Balance Sheet date there is an indication that if a previously assessed impairment loss no longer exists, the recoverable amount is reassessed and the assets is reflected at recoverable amount.
2.20 Mergers/Amalgamation
- Mergers / Amalgamations (of the nature of Merger) of other company / body Corporate with the company are accounted for on the basis of purchase method, the Asset / Liabilities being incorporated in terms of values of assets and Liabilities appearing in the books of transferor entity on the date of such merger / amalgamation for the purpose of arriving at the figure of Goodwill or capital reserve.
1. Company information
- KRBL Limited (the Company) is a Domestic Public Limited company and
listed on the Bombay Stock Exchange Ltd. (BSE) and National Stock
Exchange of India Ltd. (NSE). Te Company is World''s leading Basmati
Rice player with milling capacity of 195 MT per hour. Te company has
fully integrated operations with involvement in every aspect of Basmati
value chain, right from seed development, contact farming, procurement
of paddy, storage, processing, packaging, branding and marketing. Among
the many brands launched by the company "India Gate" is the flagship
brand both in Domestic and International Markets.
2.1 accounting Convention
- Te Financial Statements are prepared on the historical cost
convention on going concern basis and in accordance with the applicable
accounting standards notified under relevant provisions of the Companies
Act, 2013 and other Accounting principles generally accepted in India,
to the extent applicable.
2.2 use of estimates
- Te preparation of Financial Statements requires management to make
certain assumptions and estimates that affect the reported amount the
Financial Statements and Notes thereto. Difference between actual
results and estimates are recognized in the period in which they
materialize.
2.3 Fixed assets including intangible assets
- Fixed Assets are stated at cost of acquisition / installation
inclusive of freight, duties, taxes and all incidental expenses and net
of accumulated depreciation. In respect of major projects involving
construction, related pre-operational expenses form part of the value
of assets capitalized. Expenses capitalized also include applicable
borrowing costs. All up gradation / enhancements are generally charged
of as revenue expenditure unless they bring similar signifcant
additional benefts.
- Intangible assets are stated at their cost of acquisition.
- Freehold Land is stated at original cost of acquisition.
- Capital work-in-progress is stated at amount spent up to the date of
Balance Sheet.
2.4 depreciation and amortization
- Depreciation on fixed assets has been provided on straight line
method, in terms of useful life of the Assets as prescribed in Schedule
II of Companies Act, 2013.
- Computer software charges, patent, trademark & design and Goodwill
are recognized as intangible assets and amortized on straight line
method over a period of 10 years except one software which is
depreciated in 6 years on straight line method based upon life of
servers where it is installed.
- Leasehold land is amortized on straight line method over the lease
period.
2.5 investments
- Investments that are readily realizable and are intended to be held
for not more than one year at the point of acquisition are classified as
"Current Investments". All other Investments are classified as
"Non-Current Investments". Current investments are stated at lower of
cost and fair value. Non-current investments are stated at cost. A
provision for diminution is made to recognize a decline, other than
temporary, in the value of non-current investments.
2.6 inventories
- Items of inventories are measured at lower of cost or net realizable
value. Raw material on shop for and work- in process is taken as part
of raw material and valued accordingly.
- Te cost is calculated on weighted average cost method and it
comprises expenditure incurred in normal course of business in bringing
such inventories to its location and includes, where applicable,
appropriate overheads based on normal level of activity. Obsolete, slow
moving & defective inventories are identifed at the time of physical
verifcation and wherever necessary a provision is made.
- By-products are valued at net realizable value and are deducted from
the cost of main product.
- Inventory of Finished Excisable products are valued inclusive of
Excise Duty.
2.7 Revenue Recognition and accounting for Sales & Services
- Export sales are accounted for on the basis of date of bill of lading
and adjusted for exchange fluctuations on exports realized during the
year and the trade receivable in foreign exchange which are restated at
the year end. Domestic sales are recognized on the dispatch of goods to
the customers and are net of discounts, Sales Tax, Excise Duty,
Returns. Gross sales includes Excise Duty and then reduced thereafter
to compute net sales in conformity with AS-14 on disclosure of the
revenue from sale transaction. Sale of energy is accounted for on basis
of energy supplied. Sale of Certified Emission Reduction (CER) is
recognized as income on delivery of CERs to the customer. Sale of
Renewable Energy Certificate (REC) is recognized as income on sale of
REC on the IEX / PXIL. Dividend income is recognized when the right to
receive Dividend is established. Revenue and Expenditure are accounted
for ongoing concern basis. Interest Income / Expenditure is
recognized using the time proportion method based on the rates implicit
in the transaction.
- Revenue in respect of Insurance / others claims, Interest,
Commission, etc. is recognized only when it is reasonably certain that
the ultimate collection will be made.
2.8 proposed dividend
- Dividend (including Dividend Tax thereon, if any) are provided for in
the books of account as proposed by the Directors pending for approval
at the ensuing Annual General Meeting.
2.9 Research and development
- Revenue expenditure on Research & Development is written of in the
year in which it is incurred. Capital Expenditure on Research &
Development is included under Fixed Assets.
2.10 treatment of employee benefits
- Contributions to defend provident fund are charged to the profit and
loss account on accrual basis. Present liability for future payment of
gratuity and unavailed leave benefts are determined on the basis of
actuarial valuation at the balance sheet date and charged to the proft
and loss account. Gratuity fund is managed by the Kotak Life
Insurance.
2.11 Foreign Currency transactions
- Te transactions in foreign currencies are recognized at rate of
overseas currencies ruling on the date of transaction. Gain / ( loss)
arising on account of rise or fall in overseas currencies vis a vis
reporting currencies between the date of transaction and that of
payment is charged to statement of Profit& loss account.
- Year-end balance of foreign currency monetary items is translated at
the year-end rates and the corresponding effect is given in the
respective accounts. Transactions completed during the year are
adjusted on actual basis.
- Exchange difference on forward contract is also recognized in Profit &
Loss Account on change of Exchange rate at the reporting date.
- Transactions covered by cross currency swap contracts to be settled
on future dates are recognized at the year-end rates of
the underlying foreign currency. Effects arising from swap contracts are
adjusted on the date of settlement.
- In respect of Non integral foreign operation-both monetary and
non-monetary items are translated at the closing rate and resultant
diference is accumulated in foreign currency translation reserve, until
the disposal of net investment.
- Non monetary foreign currency item are carried at cost.
2.12 government grant
- Government grant is considered for inclusion in accounts only when
conditions attached to them are complied with and it is reasonably
certain that ultimate collection will be made. Grant received from
government towards fixed assets acquired / constructed by the Company is
deducted out of gross value of the asset acquired / constructed and
depreciation is charged accordingly.
2.13 borrowing Costs
- Borrowing costs that are attributable to the acquisition,
construction or production of qualifying assets are capitalized as a
part of such assets till such time as the assets are ready for their
intended use or sale. All other borrowing costs are recognized as
expense in the period in which they are incurred.
2.14 taxes on income
- Te liability of Company on Account of Income Tax is estimated
considering the provisions of Income tax Act 1961.
- Deferred tax is recognized subject to the consideration of prudence
on timing differences being the difference between book and tax profits
that originate in one year and capable of reversal in one or more
subsequent years.
2.15 leases
- In respect of Operating leases, rentals are expensed with reference
to lease terms and other considerations.
2.16 provisions, Contingent liability and Contingent assets
- Te Company creates a provision when there is a present obligation as
a result of past event that probably requires an outflow of resources
and a reliable estimate can be made of the amount of obligation. A
disclosure of contingent liability is made when there is a possible
obligation or a present obligation that will probably not require
outflow of resources or where a reliable estimate of the obligation
cannot be made. Contingent Assets neither recognized nor disclosed in
the Financial Statement.
2.17 Segment Reporting
- Segments are identifed based on dominant source and nature of risks
and returns and internal fnancial reporting system to the management
Inter segment revenue are accounted for on the basis of transactions
which are primarily market led. Revenue and expenses which relate to
enterprises as a whole and are not attributable to segments are
included under "Other Unallocable Expenditure Net of Unallocable
Income".
2.18 Financial and management information System
- An Integrated Accounting System has been put to practice which unifies
both Financial Books and Costing Records. Te books of account and other
records have been designated to facilitate compliance with the relevant
provisions of the Companies Act on one hand and provides Internal
Financial Reporting System for Planning, Review and Internal Control on
the other. Te Cost Accounts are designed to adopt Costing Systems
appropriate to the business carried out by the Division, with each
Division incorporating into its costing system, the basic tenets and
principles of Standard Costing, Budgetary Control and Marginal Costing
as appropriate.
2.19 impairment of assets
- Te Company assesses at each Balance Sheet date whether there is any
indication that an assets may be impaired. If any such Indication
exists; the Company estimates the recoverable amount of assets. If such
recoverable amount of the assets or the recoverable amount of the cash
generating unit to which the assets belong is less than its carrying
amount, the carrying amount is reduced to its recoverable amount. Te
reduction is treated as an impairment loss and is recognised in the
Proft & Loss Account. If at the Balance Sheet date there is an
indication that if a previously assessed impairment loss no longer
exists, the recoverable amount is reassessed and the assets is refected
at recoverable amount.
2.20 mergers / amalgamation
- Mergers / Amalgamations (of the nature of Merger) of other company /
body Corporate with the company are accounted for on the basis of
purchase method, the Assets / Liabilities being incorporated in terms
of values of assets and Liabilities appearing in the books of
transferor entity on the date of such merger / amalgamation for the
purpose of arriving at the figure of Good will or amalgamation reserve.
