KRBL Notes to Accounts

b) Terms/ rights attached to ordinary Equity shares


The Company has only one class of Equity Shares having a par value of Re.1 per share. Each holder of Equity Shares is entitled to have one vote per share. The Company declares dividend in Indian Rupees and pays in INR to Resident Shareholders and in USD to the Foreign Shareholders under FDI Catagory.


The Board of Directors of the Company in their meeting held on May 29, 2017, had recommended a final dividend @ 210% i.e. Rs, 2.10 per equity share of face value of Rs, 1/- each for the year ended March 31, 2017 (March 31, 2016- '''' 1.90 per share, April 01, 2015 - '''' 1.70 per share). The same shall be paid subject to the approval of shareholders in the ensuing Annual General Meeting of the Company.


I n the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.


* Due to inter-se promoter group share transfer from Anoop Kumar Gupta to Binita Gupta and Arun Kumar Gupta to Anulika Gupta and also upon receipt of shares pursuant to the Amalgamation of Radha Raj Ispat Private Limited with KRBL Limited, the shareholding of Anulika Gupta and Binita Gupta was increased and both of them became the shareholders holding more than 5% shares in the company as on March 31, 2017.


** Upon receipt of shares pursuant to the Amalgamation of Radha Raj Ispat Private Limited with KRBL Limited, the shareholding of Preeti Mittal was increased and she became the shareholder holding more than 5% shares in the company as on March 31, 2017.


*** Radha Raj Ispat Private Limited was merged with KRBL Limited vide the order of Hon’ble High Court of Delhi dated May 24, 2016. The Scheme was effective w.e.f June 01, 2016.


# Due to interse promoter group share transfer from Anoop Kumar Gupta to Binita Gupta and Arun Kumar Gupta to Anulika Gupta, the shareholding of Anoop Kumar Gupta and Arun Kumar Gupta was reduced and both of them were not part of the catagory of shareholders holding more than 5% shares in the company as on March 31, 2017.


d) Aggregate number of bonus shares issued, Shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the reporting date: During the Buy-Back period i.e. March


4, 2013 to February 11, 2014, the Company has Bought Back and Extinguished 7,722,048 Equity Shares at an average price of '''' 23.58 per share, utilizing a sum of Rs, 18.21 Crores (Rupees Eighteen Crores Twenty One Lacs) excluding Transaction Cost. Aggregate number of Bonus shares issued in last 5 years immediately preceding the reporting date is Nil.


(b) The Company has classified the various benefits provided to employees as under:


Gratuity: The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and the Company makes contributions to recognized funds in India.


Leave Encashment: The Company provides for Leave Encashment for during the year on an arithmetical basis and the same is payable to the employees on separation from the Company due to death, retirement, superannuation or resignation. The Company’s liability is actuarially determined (using the Projected Unit Credit method) at the Balance Sheet date.


Provident Fund: Retirement benefit in the form of provident fund is a defined contribution scheme. All the employees of the Company are entitled to receive benefits under the provident fund, a defined contribution plan in which both the employee and the Company contribute monthly at a stipulated rate. Contributions are made to PF in India for employees at the rate of 12% of the basic salary as per the rules and regulations. The Company has no liability for future provident fund benefits other than its annual contribution and recognizes such contributions as an expense in the period in which employee renders the related service. The contributions are made to recognized provident fund administered by the government.


Significant estimates with respect to Defined benefit plans:


The cost of the defined benefit gratuity plan and other post-employment benefits and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.


The parameter most subject to change is the discount rate. In determining the appropriate discount rate for plans operated in India, the management considers the interest rates of government bonds in India.


The mortality rate is based on publicly available mortality tables for the specific countries. Those mortality tables tend to change only at interval in response to demographic changes. Future salary increases and gratuity increases are based on expected future inflation rates in India.


(d) The following tables summaries the components of net benefit expense recognized in the statement of profit or loss and the funded status and amounts recognized in the balance sheet for the respective plans:


Significant Leasing arrangement:


The Company has entered into leasing arrangements in respect of god owns/premises. Further, some lands are also taken on lease for power generation projects at different locations which has been classified as operating lease.


- Basis of determining contingent rent:


- Contingent rents are payable for excessive, improper or unauthorized use of the assets, beyond the terms of the lease agreement, prejudicially affecting the resale value of the asset, either by way of increase in lease rentals or by way of lump- sum amount, as agreed between the parties.


- Renewal/purchase options & escalation clauses:


-Lease agreements are renewable for further period or periods on terms and conditions mutually agreed between the parties. Variations in lease rentals are made in the event of a change in the basis of computation of lease rentals by the less or.


- There are no restrictions imposed by the lease arrangements, concerning dividend and additional debt.


Note:


* The matter was decided in favour of company by the Hon’ble VAT Tribunal, Punjab and the amount paid against this liability ('''' 226.37 Lacs) was refunded to the company on May 15, 2017. However, Punjab VAT Department has gone into appeal with Hon’ble High Court of Punjab and Haryana against the said order of VAT Tribunal.


** The appeal is pending before Hon’ble Deputy Excise and Taxation Commissioner (DETC), Punjab. As per the legal opinion the demand created by VAT department is arbitrary and the matter will be decided in favour of company.


31.04 . DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 24: RELATED PARTY DISCLOSURES NATURE OF RELATIONSHIP AND TRANSACTION WITH RELATED PARTIES: 1 Related Parties and their Relationship:


a) Subsidiary Company : KRBL DMCC


: K B Exports Private Limited


b) Key Management Personnel:


Mr. Anil Kumar Mittal : Chairman & Managing Director


Mr. Arun Kumar Gupta : Joint Managing Director


Mr. Anoop Kumar Gupta : Joint Managing Director


Ms. Priyanka Mittal : Whole Time Director


Mr. Ashok Chand : Whole Time Director


Mr. Rakesh Mehrotra : Chief Financial Officer


Mr. Raman Sapra : Company Secretary


c) Independent Non-Executive Directors:


Mr. Vinod Ahuja : Independent Non Executive Director


Mr. Ashwani Dua : Independent Non Executive Director


Mr. Shyam Arora : Independent Non Executive Director


Mr. Devendra Kumar Aggawal : Independent Non Executive Director


Mr. Alok Sabharwal : Additional Director, Independent Non Executive


d) Employee benefit plans where there in significant influence:


KRBL Limited Employees Group Gratuity Trust


e) Relatives of Key Management Personnel:


Mrs. Preeti Mittal : Wife of Mr. Anil Kumar Mittal


Mrs. Anulika Gupta : Wife of Mr. Arun Kumar Gupta


Mrs. Binita Gupta : Wife of Mr. Anoop Kumar Gupta


Mr. Ashish Mittal : Son of Mr. Anil Kumar Mittal


Mrs. Sonali Gupta : Wife of Mr. Ashish Mittal


Mrs. Neha Gupta : Daughter of Mr. Arun Kumar Gupta


Mr. Kunal Gupta : Son of Mr. Arun Kumar Gupta


Mrs. Avantika Gupta : Wife of Mr. Kunal Gupta


Mrs. Rashi Gupta : Daughter of Mr. Anoop Kumar Gupta


Mr. Akshay Gupta : Son of Mr. Anoop Kumar Gupta


Mrs. Anushree Gupta : Wife of Mr. Akshay Gupta


Mr. Ayush Gupta : Son of Mr. Anoop Kumar Gupta


Mrs. Sanchi Jain : Wife of Mr. Ayush Gupta


Anil Kumar Mittal HUF : Mr. Anil Kumar Mittal is Karta of HUF


Arun Kumar Gupta HUF : Mr. Arun Kumar Gupta is Karta of HUF


Anoop Kumar Gupta HUF : Mr. Anoop Kumar Gupta is Karta of HUF


Bhagirath Lal Gupta HUF : Mr. Anil Kumar Mittal is Karta of HUF


BanwariLal Bhagirath Lal HUF : Mr. Anil Kumar Mittal is Karta of HUF


f) Enterprises over which key management personnel are able to exercise significant influence:


Khushi Ram Behari Lal : Partnership Firm in which Mr. Anil K. Mittal, Mr. Arun K. Gupta & Mr.


Anoop K. Gupta are Partners.


Aakash Hospitality Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K. Gupta


& Mr. Anoop K. Gupta are Directors.


Anurup Exports Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K. Gupta


& Mr. Anoop K. Gupta are Directors.


Adwet Warehousing Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K. Gupta


& Mr. Anoop K. Gupta are Directors.


Holistic Farms Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K. Gupta


& Mr. Anoop K. Gupta are Directors.


India Gate Foods Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K. Gupta


& Mr. Anoop K. Gupta, Ms. Priyanka Mittal and Mr. Kunal Gupta and Mr. Ashish Mittal are Directors.


KRBL Foods Ltd. : Public Limited Company in which Mr. Anil K. Mittal, Mr. Arun K.


Gupta & Mr. Anoop K. Gupta, Mrs. Preeti Mittal, Mrs. Anulika Gupta & Mrs. Binita Gupta are Directors.


Radha Raj Logistics Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Arun K. Gupta &


Mr. Anoop K. Gupta are Directors.


Radha Raj Infrastructure Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K.


Gupta, Mr. Anoop K. Gupta, Mr. Ashwani Dua, Mr. Manav Dua and Mr. Balbir Kapoor are Directors.


Padmahasta Warehousing Pvt. Ltd. : Private Limited Company in Which Mr. Anil K. Mittal, Mr. Arun K.


Gupta & Mr. Anoop K. Gupta are Directors.


KRBL Infrastructure Ltd. : Public Limited Company in which Mr. Anil K. Mittal, Mr. Arun K.


Gupta & Mr. Anoop K. Gupta, Mrs. Preeti Mittal, Mrs. Anulika Gupta & Mrs. Binita Gupta are Directors.


Radha Raj I T City & Parks Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Mr. Arun K.


Gupta & Mr. Anoop K. Gupta are Directors.


Solid Infradevelopers Pvt. Ltd. : Private Limited Company in which Mr. Anil K. Mittal, Arun K. Gupta &


Mr. Anoop K. Gupta and Mr. Sanjeev Gupta are Directors.


g) Trust/Society over which key management personnel are able to exercise significant influence:


Seth Banwari Lal Charitable Trust : Trust in which Mr. Anil K. Mittal, Mr. Arun K. Gupta & Mr. Anoop K.


Gupta are Trustees.


Seth Khushi Ram Charitable Trust : Trust in which Mr. Anil K. Mittal, Mr. Arun K. Gupta & Mr. Anoop K.


Gupta are Trustees.


Seth Banwari Lal Education Society : Society in which Mr. Anil K. Mittal, Mr. Arun K. Gupta & Mr. Anoop K.


Gupta are Trustees.


Anil Kumar Mittal Children Welfare Trust : Trust in which Mr. Arun K. Gupta & Mr. Anoop K. Gupta are trustees.


Arun Kumar Gupta Children Welfare Trust : Trust in which Mr. Anil K. Mittal & Mr. Anoop K. Gupta are trustees.


Anoop Kumar Gupta Children Welfare Trust : Trust in which Mr. Anil K. Mittal & Mr. Arun K. Gupta are trustees.


Anil Mittal Family Trust : Trust in which Mr. Anil Kumar Mittal and Mrs. Preeti Mittal are trustees.


Anoop Kumar Gupta Family Trust : Trust in which Mr. Anoop Kumar Gupta, Mr. Akshay Gupta and Mr.


Ayush Gupta are trustees.


Arun Kumar Gupta Family Trust : Trust in which Mr. Arun Kumar Gupta and Mr. Kunal Gupta are


trustees.


Anulika Gupta Family Trust : Trust in which Mr. Arun Kumar Gupta and Mrs. Anulika Gupta are


trustees.


Binita Gupta Family Trust : Trust in which Mr. Anoop Kumar Gupta and Mrs. Binita Gupta are


trustees.


1. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 108: OPERATING SEGMENTS Segmental Reporting:


For management purposes, the Company is organized into business units based on its products and services and has two reportable segments, as follows:


- Agri - Comprises of agricultural commodities such as rice, Furfural, seed, bran, bran oil, etc.


- Energy - Comprises of power generation from wind turbine, husk based power plant & solar power plant.


No operating segment have been aggregated to form the above reportable operating segments.


The chief operational decision maker monitors the operating results of its Business segment separately for the purpose of making decision about resource allocation and performance assessment. Segment performance is evaluated based on profit or loss and is measured consistently with profit or loss in the financial statements, Operating segment have been identified on the basis of nature of products and other quantitative criteria specified in the Ind AS 108.


2. DISCLOSURE IN RESPECT OF FINANCIAL RISK MANAGEMENT:


1 Credit risk


Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including cash and cash equivalents and deposits with banks and financial institutions.


Credit risk management: i) Trade receivable related credit risk


Concentrations of credit risk with respect to trade receivables are limited, due to the customer base being large and diverse. All trade receivables are reviewed and assessed for default on routine basis. Our historical experience of collecting receivables, supported by the level of default, is that credit risk is low and so trade receivables are considered to be a single class of financial assets.


ii) Other financial assets


The Company maintains exposure in cash and cash equivalents, term deposits with banks, money market liquid mutual funds with financial institutions and derivative financial instruments. The Company’s maximum exposure to credit risk as at March 31, 2017, March 31, 2016 and April 01, 2015 is the carrying value of each class of financial assets.


iii) Treasury related credit risk


Credit risk from balances with banks is managed by the Company’s treasury department in accordance with the Company’s policy. The Company actively manages its exposure to credit risk, reducing surplus cash balances wherever possible through investment in bank deposits. Further, the company ensures it diversifies its treasury related credit risk by investing in bank deposits in different banks. Limits are set for maximum investment in deposits in each bank.


3. Liquidity Risk:


Liquidity risk is the risk that the Company will face in meeting its obligations associated with its financial liabilities. The Company’s approach in managing liquidity is to ensure that it will have sufficient funds to meet its liabilities when due without incurring unacceptable losses.


The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits and other highly marketable debt investments with appropriate maturities to optimize the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.


A Maturities of financial liabilities


The table below analyses the Company’s financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.


4 DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 21: THE EFFECT OF CHANGES IN FOREIGN EXCHANGE RATES:


Potential Impact of Risk:


A) Currency Risk


The Company operates internationally and consequently the Company is exposed to foreign exchange risk through its sales in overseas market. The Company evaluates exchange rate exposure arising from foreign currency transactions and the Company follows policies which includes the use of derivatives like foreign exchange forward contracts to hedge exposure to foreign currency risk.


The Company has Outstanding Forward contracts as on March 31, 2017 and there is Marked to Market (MTM) unrealized gain/(loss) on forward contracts of '''' Nil as at March 31, 2017, (March 31, 2016- Rs, 1.22 Lacs, April 01, 2015 - Rs, 80.86 Lacs), which has been accounted for accordingly in the books of accounts.


Apart from above Company has foreign currency Liability (PCFC/Advances received from customers/ECB) of Rs, 30,380.79 Lacs as at March 31, 2017, (March 31, 2016- Rs, 35,704.45 Lacs, April 01, 2015- Rs, 74,105.46 Lacs) at the year end, further as per the Ind AS the effect of change in foreign exchange gain/(loss) as on March 31,2017, is amounting to Rs, (109.56 Lacs) {(March 31, 2016- Rs, (305.19) April 01, 2015- Rs, (32.46 Lacs)}has been taken to statement of profit and loss.


B) Interest Risk


Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. As at March 31, 2017, the Company had long term borrowings amounting to Rs, 12,502.00 Lacs (March 31, 2016: Rs, 27,606.06 Lacs and April 01, 2015: Rs, 31,430.25 Lacs)


Sensitivity is calculated based on the assumption that amount outstanding as at reporting dates (after considering repayments) were utilized for the whole financial year.


C) Price Risk


The Company is mainly exposed to the price risk due to its investment in equity shares and mutual funds. The price risk arises due to uncertainties about the future market values of these investments.


The table below summarizes the impact of increases/decreases of the index on the Company’s equity and profit for the year. The analysis is based on the assumption that the index has increased by 5% or decreased by 5% with all other variables held constant, and that all the Company’s equity instruments moved in line with the index.


31.07. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND AS) 113: FAIR VALUE MEASUREMENT: Significant estimates with respect to fair value 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 present valuation technique. 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.


B Fair value hierarchy


This section explains the judgments and estimates made in determining the fair value of financial instruments that are (a) recognized and measured at fair value (b) measured at amortized cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three level prescribed under the accounting standard. An explanation each level follows underneath the table.


Assets and liabilities measured at amortized cost, for which fair value are disclosed


Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices, for example listed equity instruments, traded bonds and mutual funds that have quoted prices.


Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques that maximize the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable the instrument is included in level 2.


Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.


There are no transfers among levels 1, 2 and 3 during the year.


The Company’s policy is to recognize transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.


C Valuation technique used to determine fair value


Specific valuation techniques used to value financial instruments include the use of discount cash flows for estimating fair value of loans to employees, security deposits and borrowings.


The carrying amounts of trade receivables, cash and cash equivalents, consignment debtors, interest accrued, other receivables, other bank balances, trade payables, employee payables and other current payables are considered to be the same as fair values, due to their short term nature


The fair value for loans and security deposits were calculated based on cash flow discounted using a current lending rate. They are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs, including own credit risk. The fair value of loans to employees and security deposits approximates the carrying amount


The fair value for borrowings was calculated based on cash flow discounted using a current borrowing rate. They are classified as level 3 fair value in the fair value hierarchy due to the inclusion of unobservable inputs, including own credit risk. The fair value of borrowings approximates the carrying amount.


31.08. DISCLOSURE IN RESPECT OF CAPITAL MANAGEMENT:


A Risk management


Equity share capital and other equity are considered for the purpose of Company’s capital management.


The Company manages its capital so as to safeguard its ability to continue as a going concern and to optimize returns to shareholders. The capital structure of the Company is based on management’s judgment of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.


The management and the Board of Directors monitors the return on capital as well as the level of dividend to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.


B Dividend


Under Previous GAAP, proposed dividend and related dividend distribution tax was recognized as a provision in the year to which they relate, irrespective of when they are declared. Under Ind AS, dividend and related dividend distribution tax are recognized as a liability in the year in which it is approved by the shareholders in the Annual General Meeting of the Company.


31.10. TRANSITION TO IND AS - RECONCILIATIONS:


The following reconciliations provide the explanations and quantification of the differences arising from the transition from Previous GAAP to Ind AS in accordance with Ind AS 101:


* The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.


A Property, plant & equipment


Under previous GAAP, all leasehold lands are classified as Property, plant & equipment. Under Ind AS, leasehold land is to be recognized as an Operating or a Finance lease as per the definition and classification criteria under Ind AS 17. Accordingly deemed cost of the leasehold land is required to be reclassified from property plant and equipment and to be disclosed as operating leases prepayments under “current assets” and “non-current assets” to be amortized annually. Therefore, Property, plant & equipment has been reduced by Rs, 600.44 lacs (April 01, 2015- Rs, 628.74 lacs) and Prepayments have increased by the same amount.


Depreciation has decreased by Rs, 28.29 lacs and lease expenses have increased by the same amount.


B Investment property


Under previous GAAP, building given for the purpose of earning rental income was a part of property, plant & equipment, however as per Ind AS, the same needs to be disclosed as a part of investment property. Hence, warehouse at Kandla has been reclassified from Property, plant & equipment to Investment property Rs, 446.39 lacs (April 01, 2015-464.28 lacs).


C Discounting of security deposit


Under the previous GAAP, interest free security deposits are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the Company has fair valued the security deposits under IND AS. Difference between fair value of security deposits and the carrying value (transaction value) as per Previous GAAP has been recognized as prepaid rent. Consequently, the amount of security deposit has been decreased by Rs, 808.65 lacs (April 01, 2015 - Rs, 824.42 lacs). The prepaid rent increased by Rs, 705 lacs as at March 31, 2016 (April 01, 2015- Rs, 747 lacs). Total equity decreased by Rs, 77.42 lacs as at April 01, 2015. The profit for the year ended March 31, 2016 decreased by Rs, 24.90 due to amortisation of prepaid rent Rs, 41.07 lacs which is partially set off by notional interest income of Rs, 16.17 lacs recognized on these security deposits.


D Fair valuation of Investments


Under the previous GAAP, investments in equity instruments and mutual funds were classified as longterm investments or current investments based on the intended holding period and realisability. Longterm investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. At the date of transition to Ind AS, difference between the fair value of the instruments and its Previous GAAP carrying amount has been recognized in retained earnings for Rs, 157.63 lacs. Fair value changes are recognized in the Statement of Profit and Loss for the year ended March 31, 2016 (Rs, 91.26 lacs)


E Derivative instruments


Under the Ind AS 109, Forward Contracts are carried at fair value and the resultant gains and losses are recorded in the statement of Profit and Loss. Accordingly, the same has been fair valued resulting in increase of in equity by Rs, 1,379.02 lacs as at March 31, 2016 (increase 602.71 lacs as at April 01, 2015). Derivative assets and derivative liabilities are presented on gross basis.


F Proposed dividend


Under the previous GAAP, dividend proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events and accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividend are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of Rs, 4,001.26 lacs as at April 01, 2015 included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity has been increased by an equivalent amount.


G Borrowings


As required under the Ind AS 109 transactions costs incurred towards origination of borrowings have been deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit and loss over the tenure of the borrowing as interest expense, computed using the effective interest rate method corresponding effect being in Long term borrowings and to the extent attributable to Current maturity of long term debts.


Under the previous GAAP, these transaction costs were charged to the profit and loss as and when incurred. As per Ind AS 32 and Ind AS 109, a debt instruments are required to be fair valued. Accordingly, debt instruments in foreign currency (external commercial borrowings) were restated at the balance sheet date, resulting in increase in borrowings.


The net impact of above resulted in decrease in amount of borrowings by Rs, 144.18 lacs as at March 31, 2016. However, the impact as at April 01, 2015 was increase in borrowings by Rs, 843.51 lacs) with corresponding impact on equity as at April 01, 2015.


I ncrease in interest on borrowings due to effective interest rate method is Rs, 82.14 lacs for the year ended March 31, 2016.


H Remeasurements of post employment benefit obligation


Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increase by '''' 100.89 lacs along with tax amounting to '''' 35 lacs. There is no impact on the total equity as at March 31, 2016.


I Retained earnings


Retained earnings as at April 01, 2015 has been adjusted consequent to the above Ind AS transition adjustments. Refer Reconciliation of Equity on note no. 31.10 (iv).


J Other comprehensive income


Under Ind AS, all items of income and expense recognized in a period should be included in statement of profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as ‘other comprehensive income’ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP


K Deferred Tax


Under Previous GAAP, deferred taxes were recognized for the tax effect of timing differences between accounting profit and taxable profit for the year using the income statement approach. Under Ind AS, deferred taxes are recognized using the balance sheet for future tax consequences of temporary differences between the carrying value of assets and liabilities and their respective tax bases. The above difference, together with the consequential tax impact of the other Ind AS transitional adjustments lead to temporary differences. Deferred tax adjustments are recognized in correlation to the underlying transaction either in retained earnings or through other comprehensive income.


L Excise duty


Under Previous GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of Statement of Profit and Loss. Thus, sale of goods under Ind AS has increased with a corresponding increase in expenses of Rs, 87.16 lacs.


M Revenue from sale of goods


a) Under Previous GAAP, revenue is recognized net of trade discounts, rebates, sales taxes and excise duties. Under Ind AS, revenue is recognized at the fair value of the consideration received or receivable, after the deduction of any trade discounts, volume rebates and any taxes or duties collected on behalf of the government such as sales tax and value added tax except excise duty. Discounts given include cash coup scheme, quantity discount, cash discount, target incentives etc. which have been classified under “Other expenses” as per previous GAAP have been netted from revenue under Ind AS. Accordingly, Gross revenue has decreased by Rs, 3,034.11 lacs with corresponding effect on “Other expense”. There is no impact on profit for the year.


b) Under previous GAAP, revenue from export sale was recognized on the date of bill of lading. However, under Ind AS, the Company is recognizing the revenue from export sale when all the significant risk and rewards of ownership in the goods are transferred to the buyer as per the terms of the contract. Hence, some export sales were derecognized as at April 01, 2015. The net impact resulted in decrease in retained earnings by Rs,1,004.63 lacs increase in trade receivables by Rs, 11,582.67 lacs, increase in inventories by Rs, 10,110 lacs and in prepayments by Rs, 472.45 lacs.


As at March 31, 2016, sales derecognized in 2015 were now recognized and hence, as at March 31, 2016, net impact resulted in decreased trade receivables by Rs, 9,913.81 lacs and increase in inventories by Rs, 5,141.88 lacs.


N Financial assets and liabilities have been reclassified/regrouped wherever necessary according to their definitions.


O Current tax liability has been disclosed on the face of balance sheet by reclassifying it from Provisions.


P Staff welfare expenses have been reclassified to “Employee benefit expenses” from “Other expenses” as the nature of such expenses is related to employee welfare.


Q Certain assets amounting to Rs, 694.30 lacs have been considered as not recoverable, therefore company has made a provision of the aforesaid amount as per Expected Credit Loss (ECL) model.


R The Ind AS adjustments are either non cash adjustments or are regrouping among the cash flows from operating, investing and financing activities. Consequently, Ind AS adoption has no impact on the net cash flow for the year ended March 31, 2016 as compared with the previous GAAP.


* For the purpose of this clause ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 8, 2016.


The disclosures with respects to ‘Permitted Receipts’, ‘Permitted Payments’, ‘Amount Deposited in Banks’ and ‘Closing Cash in Hand as on December 30, 2016, is understood to be applicable in case of SBNs only.


4. DISCLOSURE IN RESPECT OF SUBSIDY RECEIVED/RECEIVABLE:


A sum of Rs, 203.06 Lacs (P.Y. Rs, 52.11 Lacs) has been received from DMI through NABARD towards construction of rural go down and a sum of Rs, Nil (P.Y. Rs, 203.06 Lacs) is receivable from DMI through NABARD towards construction of rural go down. The entire grant so received / receivable has been deducted from the respective cost of the Capital Expenditure.


5. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND-AS) 10: EVENT AFTER THE REPORTING PERIOD:


The Board of Directors has recommended Equity dividend of 2.10 per share (Previous year Rs, 1.90 per share) for the financial year 2016-17.


6. DISCLOSURES AS REQUIRED BY INDIAN ACCOUNTING STANDARD (IND-AS) 38: INTANGIBLE ASSETS:


I n accordance with Accounting Standard AS - 38 on Rs,Intangible Assets’, during the year ended March 31, 2017 '''' 1.63 Lacs (March 31, 2016 - Rs, 25.17 Lacs, April 01, 2015 - Rs, 53.17 Lacs) have been capitalized account of computer software development charges.


7. DURING CONSTRUCTION PHASE COMPANIES GENERALLY TEMPORARILY INVEST THE SURPLUS FUNDS TO REDUCE THE COST OF CAPITAL OR FOR OTHER BUSINESS REASONS. HOWEVER SUBSEQUENTLY THE SAME ARE UTLISED FOR THE STATED OBJECTIVE.


8. THE FIGURES ARE ROUNDED OFF TO NEAREST RUPEES IN LACS.


9. THE CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY AND ITS SUBSIDIARIES ARE ENCLOSED SEPARATELY IN ACCORDANCE WITH INDIAN ACCOUNTING STANDARD (IND-AS) 110 “CONSOLIDATED FINANCIAL STATEMENTS”.


CIN: U67190WB2003PTC096617. Trading in Commodities is done through our Group Company Dynamic Commodities Pvt. Ltd. The company is also engaged in Proprietory Trading apart from Client Business.
“2019 © COPYRIGHT DYNAMIC EQUITIES PVT. LTD.”

Disclaimer: There is no guarantee of profits or no exceptions from losses. The investment advice provided are solely the personal views of the research team. You are advised to rely on your own judgment while making investment / Trading decisions. Past performance is not an indicator of future returns. Investment is subject to market risks. You should read and understand the Risk Disclosure Documents before trading/Investing.

Disclosure: We, Dynamic Equities Private Limited are also engaged in Proprietory Trading apart from Client Business. In case of any complaints/grievances, clients may write to us at compliance@dynamiclevels.com

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