a) Change in accounting policy
Presentation and disclosure of financial statements
During the year ended March 31, 2012, the Revised Schedule VI notified
under the Companies Act, 1956, has become applicable to the Company,
for preparation and presentation of its financial statements. The
adoption of revised Schedule VI does not impact recognition and
measurement principles followed for preparation of financial
statements. However, it has significant impact on presentation and
disclosures made in the financial statements. The Company has also
reclassified the previous year figures in accordance with the
requirements applicable in the current year.
b) Use of estimates
The preparation of financial statements in conformity with Indian GAAP
requires the management to make judgements, estimates and assumptions
that affect the reported amounts of revenues, expenses, assets and
liabilities and the disclosure of contingent liabilities, at the end of
the reporting period. Although these estimates are based on the
management''s best knowledge of current events and actions, uncertainty
about these assumptions and estimates could result in the outcomes
requiring a material adjustment to the carrying amounts of assets or
liabilities in future periods.
c) Tangible fixed assets
Fixed assets are stated at cost, less accumulated depreciation and
impairment losses if any. Cost comprises the purchase price and
directly attributable cost of bringing the assets to its working
condition for its intended use. Borrowing costs relating to acquisition
of fixed assets which takes substantial period of time to get ready for
its intended use are also included to the extent they relate to the
period till such assets are ready for its intended use.
From accounting periods commencing on or after December 7, 2006, the
Company adjusts exchange differences arising on translation/settlement
of long-term foreign currency monetary items pertaining to the
acquisition of a depreciable asset to the cost of the asset and
depreciates the same over the remaining life of the asset.
d) Depreciation on tangible fixed assets
Depreciation is provided using the Straight Line Method, using the
rates arrived at based on the useful lives of the fixed assets
estimated by the management, which corresponds to the rate prescribed
under Schedule XIV of the Companies Act, 1956.
Leasehold improvements are amortised over the period of the lease or
its estimated useful life whichever is lower.
Leasehold land is amortised on a straight line basis over the period of
lease (95 years for land at Mahape and 77 years for land at Surat).
Assets acquired on hire purchase/finance lease are generally
depreciated over the period of useful life of assets on a straight-
line basis unless there is no reasonable certainty that the ownership
of the asset would be obtained at the end of the agreement term. Where
there is no reasonable certainty that the ownership of the asset would
be obtained at the end of the agreement term such assets are
depreciated over the shorter of the contract term or the asset''s useful
life in accordance with the Company''s normal depreciation policy.
e) Intangible assets
Intangible assets are stated at cost less accumulated amortization and
accumulated impairment losses if any. Software is amortized over its
estimated useful life of six years on straight-line method.
Raw materials, packing materials, stores and spares
Lower of cost or net realizable value. However, materials and other
items held for use in the production of inventories are not written
down below cost if the finished products in which they will be
incorporated are expected to be sold at or above cost. Custom Duty on
imported stock lying at custom bonded warehouse is not provided pending
decision on clearance under export incentive scheme. Cost is determined
on a FIFO basis by applying specific identification method for paper
and on FIFO basis for other raw materials, packing materials, stores
Work-in-progress and finished goods
Lower of cost or net realizable value. Cost includes materials and
labour and a proportion of manufacturing overheads based on normal
operating capacity. Cost of finished goods includes excise duty
wherever applicable. Cost is determined on FIFO basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated cost of completion and estimated
costs necessary to make the sale.
Investments, which are readily realizable and intended to be held for
not more than one year from the date on which such investments are
made, are classified as current investments. All other investments are
classified as long-term investments.
On initial recognition, all investments are measured at cost. The cost
comprises purchase price and directly attributable acquisition charges
such as brokerage, fees and duties.
Current investments are carried in the financial statements at lower of
cost and fair value determined on an individual investment basis.
Long-term investments are carried at cost. However, provision for
diminution in value is made to recognize a decline other than temporary
in the value of the investments.
On disposal of an investment, the difference between its carrying
amount and net disposal proceeds is charged or credited to the
statement of profit and loss.
h) Revenue recognition
Revenue is recognized to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognized:
Sale of Goods:
Sales of printed material and fulfillment product are recognized on
transfer of property in goods and performance of service. Sales are
inclusive of excise duty, wherever applicable, but net of trade
discount and other applicable taxes. Export sales are net of freight
expense. The Company collects sales taxes and value added taxes (VAT)
on behalf of the government and, therefore, these are not economic
benefits flowing to the Company. Hence, they are excluded from revenue.
Income from Services:
Revenue from services is recognized as and when the services are
Export incentive principally comprises of duty drawback, Duty
Entitlement Pass Book credit, excise duty rebate and other benefits
available to the Company based on guidelines formulated for the
respective schemes by the government authorities.
These incentives are recognized as revenue on accrual basis to the
extent it is probable that realization is certain.
Revenue is recognized on a time proportion basis taking in to account
the amount outstanding and the rate applicable.
Revenue is recognized when the shareholders right to receive payment is
established by the balance sheet date.
i) Borrowing costs
Borrowing cost includes interest, amortization of ancillary costs
incurred in connection with the arrangement of borrowings and exchange
differences arising from foreign currency borrowings to the extent they
are regarded as an adjustment to the interest cost.
Borrowing costs directly attributable to the acquisition, construction
or production of an asset that necessarily takes a substantial period
of time to get ready for its intended use or sale are capitalized as
part of the cost of the respective asset. All other borrowing costs
are expensed in the period they occur.
j) Foreign currency translation
Foreign currency transactions and balances
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount, the exchange rate between
the reporting currency and the foreign currency at the date of the
Foreign currency monetary items are translated using the exchange rates
prevailing at the reporting date. Non-monetary items which are carried
in terms of historical cost denominated in a foreign currency are
reported using the exchange rate at the date of the transaction and
non-monetary items which are carried at fair value or other similar
valuation denominated in a foreign currency are reported using the
exchange rates that existed when the values were determined.
From accounting periods commencing on or after December 7, 2006, the
Company accounts for exchange differences arising on translation/
settlement of foreign currency monetary items as below:
1. Exchange differences arising on long-term foreign currency monetary
items related to acquisition of a fixed asset are capitalized and
depreciated over the remaining useful life of the asset. For this
purpose, the Company treats a foreign monetary item as long-term
foreign currency monetary item, if it has a term of 12 months or more
at the date of its origination.
2. Exchange differences arising on other long-term foreign currency
monetary items are accumulated in the Foreign Currency Monetary Item
Translation Difference Account and amortized over the remaining life
of the concerned monetary item but not beyond accounting period ended
on or before March 31, 2020.
All other exchange differences are recognized as income or as expenses
in the period in which they arise.
Forward exchange contracts entered into to hedge foreign currency risk
of an existing asset/liability
The premium or discount arising at the inception of forward exchange
contract is amortized and recognized as an expense/ income over the
life of the contract. Exchange differences on such contracts, except
the contracts which are long-term foreign currency monetary items, are
recognized in the statement of profit and loss in the period in which
the exchange rates change. Any profit or loss arising on cancellation
or renewal of such forward exchange contract is also recognized as
income or as expense for the period. Any gain/loss arising on forward
contracts which are long-term foreign currency monetary items is
recognized in accordance with paragraphs 1 and 2 above.
k) Retirement and other employee benefits
Retirement benefits in the form of Provident Fund and Superannuation
fund are defined contribution schemes and the contributions are charged
to the Profit and Loss Account of the year when the contributions to
the respective funds are due. There are no other obligations other
than the contribution payable to the respective trusts.
Gratuity liability is a defined benefit obligation and the cost is
provided for on the basis of an actuarial valuation on Projected Unit
Credit method made at the end of each financial year.
Short term compensated absences are provided for based on estimates.
Long-term compensated absences are provided for based on actuarial
valuation. The actuarial valuation is done as per Projected Unit Credit
Actuarial gains/losses are immediately taken to statement of profit and
loss and are not deferred.
I) Leases (where the Company is lessee)
Finance leases, which effectively transfer to the Company substantially
all the risks and benefits incidental to ownership of the leased item,
are capitalized at the inception of lease term at the lower of the fair
value and present value of the minimum lease payments. Lease payments
are apportioned between the finance charges and reduction of the lease
liability based on the implicit rate of return. Finance charges are
recognized as finance cost in the profit and loss account. Lease
management fees, legal charges and other initial direct costs are
Leases, where the lessor effectively retains substantially all the
risks and benefits of ownership of the leased term, are classified as
operating leases. Operating lease payments are recognized as an expense
in the Profit and Loss Account on a straight-line basis over the lease
m) Impairment of Tangible and Intangible assets
The Company assesses at each reporting date whether there is an
indication that an asset may be impaired. If any indication exists, or
when annual impairment testing for an asset is required, the Company
estimates the asset''s recoverable amount. An asset''s recoverable
amount is the higher of an asset''s or cash-generating unit''s (CGU) net
selling price and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate
cash inflows that are largely independent of those from other assets or
groups of assets. Where the carrying amount of an asset or CGU exceeds
its recoverable amount, the asset is considered impaired and is written
down to its recoverable amount. In assessing value in use, the
estimated future cash flows are discounted to their present value using
a pre-tax discount rate that reflects currency market assessments of
the time value of money and the risks specific to the asset. In
determining net selling price, recent market transactions are taken
into account, if available. If no such transactions can be identified,
an appropriate valuation model is used.
After impairment, depreciation is provided on the revised carrying
amount of the asset over its remaining useful life.
An assessment is made at each reporting date as to whether there is any
indication that previously recognized impairment losses may no longer
exist or may have decreased. If such indication exists, the Company
estimates the asset''s or cash- generating unit''s recoverable amount. A
previously recognized impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset''s
recoverable amount since the last impairment loss was recognized. The
reversal is limited so that the carrying amount of the asset does not
exceed its recoverable amount, nor exceed the carrying amount that
would have been determined, net of depreciation, had no impairment loss
been recognized for the asset in prior years. Such reversal is
recognized in the statement of profit and loss unless the asset is
carried at a revalued amount, in which case the reversal is treated as
a revaluation increase.
n) Income taxes
Tax expense comprises current and deferred tax. Current income-tax is
measured at the amount expected to be paid to the tax authorities in
accordance with the Income-tax Act, 1961 enacted in India and tax laws
prevailing in the respective tax jurisdictions where the Company
operates. The tax rates and tax laws used to compute the amount are
those that are enacted or substantively enacted, at the reporting date.
Deferred income taxes reflect the impact of timing differences between
taxable income and accounting income originating during the currency
year and reversal of timing differences for the earlier years. Deferred
tax is measured using the tax rates and the tax laws enacted or
substantively enacted at the balance sheet date. Deferred tax assets
and deferred tax liabilities are offset, if a legally enforceable right
exists to set off current tax assets against current tax liabilities
and the deferred tax assets and deferred tax liabilities relate to the
taxes on income levied by same governing taxation laws.
Deferred tax liabilities are recognized for all taxable timing
differences. Deferred tax assets are recognized for deductible timing
differences only to the extent that there is reasonable certainty that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. In situations where the Company
has unabsorbed depreciation or carry forward tax losses, all deferred
tax assets are recognized only if there is virtual certainty supported
by convincing evidence that they can be realized against future taxable
In the situations where the Company is entitled to a tax holiday under
the Income-tax Act, 1961 enacted in India or tax laws prevailing in the
respective tax jurisdictions where it operates, no deferred tax (asset
or liability) is recognized in respect of timing differences which
reverse during the tax holiday period, to the extent the Company''s
gross total income is subject to the deduction during the tax holiday
period. Deferred tax in respect of timing differences which reverse
after the tax holiday period is recognized in the year in which the
timing differences originate. However, the Company restricts
recognition of deferred tax assets to the extent that it has become
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available against which such
deferred tax assets can be realized. For recognition of deferred taxes,
the timing differences which originate first are considered to reverse
At each balance sheet date, the Company re-assesses unrecognized
deferred tax assets. It recognizes unrecognized deferred tax asset to
the extent that it has become reasonably certain or virtually certain,
as the case may be, that sufficient future taxable income will be
available against which such deferred tax assets can be realized.
The carrying amount of deferred tax assets are reviewed at each
reporting date. The Company writes-down the carrying amount of deferred
tax asset to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
Minimum alternate tax (MAT) paid in a year is charged to the statement
of profit and loss as current tax. The Company recognizes MAT credit
available as an asset only to the extent that there is convincing
evidence that the Company will pay normal income tax during the
specified period, i.e., the period for which MAT credit is allowed to
be carried forward. In the year in which the Company recognizes MAT
credit as an asset in accordance with the Guidance Note on Accounting
for Credit Available in respect of Minimum Alternative Tax under the
Income-tax Act, 1961, the said asset is created by way of credit to the
statement of profit and loss and shown as MAT Credit Entitlement. The
Company reviews the MAT credit entitlement asset at each reporting
date and writes down the asset to the extent the Company does not have
convincing evidence that it will pay normal tax during the specified
o) Employee Stock Option Plan
The measurement and disclosure of employee share-based payment plans is
done in accordance with SEBI (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999 and the Guidance Note on
Accounting for Employee Share-based Payments, issued by the Institute
of Chartered Accountants of India. The Company measures compensation
cost relating to employee stock options using the intrinsic value
method. Compensation expense is amortized over the vesting period of
the option on a straight line basis.
p) Segment reporting
Identification of segments
The Company operates in a single business segment in view of the nature
of the products and services provided. The analysis of geographical
segments is based on the areas in which major operating divisions of
the Company operate.
Segment Accounting Policies
The Company prepares its segment information in conformity with the
accounting policies adopted for preparing and presenting the financial
statements of the Company as a whole.
q) Earnings per Share
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by the weighted
average number of equity shares outstanding during the period. The
weighted average number of equity shares outstanding during the period
is adjusted for events such as bonus issue, bonus element in a rights
issue, share split, and reverse share split (consolidation of shares)
that have changed the number of equity shares outstanding, without a
corresponding change in resources.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
A provision is recognized when the Company has a present obligation as
a result of past event, it is probable that an outflow of resources
embodying economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the obligation.
Provisions are not discounted to their present value and are determined
based on the best estimate required to settle the obligation at the
reporting date. These estimates are reviewed at each reporting date and
adjusted to reflect the current best estimates.
s) Cash and cash equivalents
Cash and cash equivalents for the purposes of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
t) Contingent liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. A contingent liability also arises
in extremely rare cases where there is a liability that cannot be
recognized because it cannot be measured reliably. The Company does not
recognize a contingent liability but discloses its existence in the
u) Derivative instruments
In accordance with ICAI announcement, derivative contracts, other than
foreign currency forward contracts covered under AS 11 are marked to
market on a portfolio basis, and the net loss, if any, after
considering the offsetting effect of gain on the underlying hedged
item, is charged to the statement of profit and loss. Net gain, if any,
after considering the offsetting effect of loss on the underlying
hedged item, is ignored.
v) Measurement of EBITDA
As permitted by the Guidance Note on the Revised Schedule VI to the
Companies Act, 1956, the Company has elected to present earnings before
interest, tax, depreciation and amortization (EBITDA) as a separate
line item on the face of the statement of profit and loss. The Company
measures EBITDA on the basis of proW(loss) from continuing operations.
In its measurement, the Company does not include depreciation and
amortization expense, finance costs and tax expense.