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BSE: 522295|NSE: CONTROLPR|ISIN: INE663B01015|SECTOR: Trading
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Notes to Accounts Year End : Mar '18

A) Corporate Information : The Company is a Public Limited Company domiciled in India and incorporated under the Companies Act, 1956, having its registered office at C-106, Hind Saurashtra Industrial Estate, Andheri-Kurla Road, Marol Naka, Andheri (East), Mumbai 400059, India and is listed on BSE Limited and National Stock Exchange of India Limited (NSE). The Company is engaged in manufacturing and supplying of Coding and Marketing Machines and Consumables thereof. It has Country wide Service Network to cater its Customers. It has manufacturing facilities at Nalagarh (Himachal Pradesh), Guwahati (Assam) and R&D Centre/Warehouse at Vasai(Maharashtra), apart from Overseas Branch at Colombo(Sri Lanka).

The Financial Statements for the year ended March 31, 2018 were approved and adopted by the Board on May 25, 2018.

Note:-

1. These figures are inclusive of Assets at Sri Lanka Branch. Depreciation for Assets at Sri Lanka Branch is charged as per standards applicable according to local laws of Sri Lanka and not as per Sch-II of Companies Act, 2013.

2. Deduction in Cost of Asset & Deduction in accumulated depreciation for Sri Lanka Branch Assets are due to foreign exchange conversion.

Note:

1. Of above 5,224,124 Equity Shares were alloted as fully paid up bonus share by Capitalization of General Reserve of the Company on January 14, 2016.

2. On January 08, 2018, the Company has issued and allotted 6,59,340 Equity Shares of Rs. 10/- each at an issue price of Rs. 455 per share to raise Rs. 30 Crore by way of Qualified Institutional Placement (“QIP”) under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities Rules, 2014). Expenses related to the issue amounting to Rs. 63.22 lakhs have been adjusted against Securities Premium. Use of the net proceeds of the Qualified Institutional Placement is intended for capital expenditure for ongoing and future expansion projects, acquisition, working capital and general corporate purposes and any other purposes as may be permissible under applicable law. The proceeds (net of issue expenses) has been utilised towards reduction of short term bank borrowing for working capital.

Terms/ Rights attached to Equity Shares:

The company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

1 Financial Statements of the Sri Lanka Branch of the Company for the year ended March 31, 2018 is part of Standalone Ind As Financial Statement and the same has been translated in accordance with Ind AS-21 “The effects of changes in the Foreign exchange Rates”. The Branch has incurred a Loss ofRs. 46.25 Lakhs during the financial year ended March 31, 2018.

2 The Company operates in a single Reportable segment, viz Coding & Marking Machines and Consumables thereof.

3 During the year Company has spent ‘ 52.70 Lakhs (PY Rs. 39.49 Lakhs) towards the corporate social responsibility activities in accordance with the section 135 of the companies Act 2013.The Company could not spend entire 2% of its average profit of last three years due to delay in granting permissions by the hospitals for the nutrition project and nonexecution of project for children with special needs.

4 On January 08, 2018, the Company has issued and allotted 659,340 Equity Shares of Rs. 10/- each at an issue price of Rs. 455 per share to raise Rs. 30 Crore by way of Qualified Institutional Placement (“QIP”) under Chapter VIII of the Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities Rules, 2014). Expenses related to the issue amounting to Rs. 63.22 lakhs have been adjusted against Securities Premium. Use of the net proceeds of the Qualified Institutional Placement is intended for capital expenditure for ongoing and future expansion projects, acquisition, working capital and general corporate purposes and any other purposes as may be permissible under applicable law. The proceeds (net of issue expenses) has been utilised towards reduction of short term bank borrowing for working capital.

5 EMPLOYEE BENEFIT OBLIGATIONS

(A) Defined Benefit Plans:

Gratuity Plan

In accordance with the provisions of the Payment of Gratuity Act, 1972, the Company has a defined benefit plan which provides for gratuity, covering eligible employees. The Plan provided a lump sum gratuity amount to eligible employees at retirement, termination or death. Liabilities with regard to Gratuity plan are determined by actuarial valuation, performed by an independent actuary, at each Balance Sheet date using the projected unit credit method.

Assumptions regarding future mortality have been based on published statistics and mortality tables. The discount rate is based on the Government securities yield.

(vi) Sensitivity Analysis:

The sensitivity of the defined benefit obligation to changes in the weighted principal assumptions is:

The sensitivity analysis have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

The sensitivity analysis presented above may not be representative of the actual change in the projected benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.

(viii) Characteristics ofdefined benefit plans and associated risks:

The Company has an unfunded Defined benefit gratuity plan. Gratuity is paid from company as and when it becomes due and is paid as per company scheme for Gratuity. During the year, the company has changed the benefit scheme in line with Payment of Gratuity Act, 1972 by increasing monetary ceiling from Rs. 10 Lakhs to Rs. 20 Lakhs. Change in liability (if any) due to this scheme change is recognised as past service cost.

Gratuity is a defined benefit plan and company is exposed to following Risks:

- Salary Risk- The Present value of the defined benefit plan liability is calculated by reference to the future salaries of members. As such, an increase in the salary of the members more than assumed level will increase the plan’s liability.

- Interest Rate Risk- A falls in the discount rate which is linked to the Government securities. Rate will increase the present value of the liability requiring higher provision.

- Asset Liability Matching Risk- The plan faces the ALM risk as to the matching cash flow. Company has to manage payout based on pay as you go basis from own funds.

- Mortality Risk- Since the benefits under the plan is not payable for life time and payable till retirement age only, plan does not have any longevity risk.

6 FIRST TIME ADOPTION OF IND AS

These are the Company’s first financial statements prepared in accordance with Ind AS. The company has prepared the opening balance sheet as per Ind AS as of April 01, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required, not recognising items of assets or liabilities which are not permitted, reclassifying items from previous GAAP to Ind AS and applying Ind AS in measurement of recognised assets and liabilities. However this principle is subject to the certain exception and certain optional exemptions availed by the company as detailed below.

Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.

A. Optional Exemptions

Investments in subsidiaries, joint ventures and associates

The Company has opted and accordingly considered the Previous GAAP carrying amount of Investments as deemed cost as at the transition date.

B. Applicable Mandatory Exceptions

(a) Estimates

An entity’s estimates in accordance with Ind AS at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies). Ind AS estimates as at April 01, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:

1. Investments in equity instruments carried at FVTPL; and

2. Impairment offinancial assets based on expected credit loss model.

(b) Classification and measurement of financial assets

Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

C. Transition to Ind AS - Reconciliations

The following reconciliations provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS in accordance with Ind AS 101:

1. The Reconciliation of Standalone Balance Sheet as previously reported under Indian GAAP and Ind AS as at March 31,2017 and April 01, 2016

2. The Reconciliation of Net Profit reported under Indian GAAP for the year ended March 31, 2017

3. The Reconciliation of Other Equity reported under Indian GAAP for the year ended March 31, 2017

Use of fair value as deemed cost

The Company has revalued all it’s property, plant and equipment as on April 01, 2016 (transition date) and considered the fair value as deemed cost. As per provision of the Ind AS “Property, Plant and Equipment held for use in supply of goods or services, for rental to others or for administrative purpose and expected to be used during more than one period”. In accordance of the same company has capitalised coding and marking machines used for Rental, CPC in opening Ind AS balance sheet. Detailed list of property, plant and equipment is disclosed here in below as required by Ind AS.

Notes:

1. All Property, Plant and Equipment revalued as on April 01, 2016.

2. Independent valuer has been appointed for valuation of immovable properties for Land, Factory & Office Premise, etc.

3. Other Assets like Furniture & Fixtures, Office Equipments etc are revalued on the basis of certificates received from branch head. Equity Investment at FVTPL

Under previous GAAP, investments were measured at cost less diminution in value which is other than temporary. Under Ind AS, Company has designated these Investments at Fair Value Through Profit or Loss (FVTPL), accordingly 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 recognised in retained earnings.

Investment in subsidiaries, joint venture and associates

The Company has carried its investment in subsidiary at cost (as appearing in previous GAAP).

Proposed Dividend

Under the previous GAAP, dividends 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 recognised as a liability. Under Ind AS, such dividends are recognised when the same is declared by the shareholders in the general meeting.

Other Comprehensive Income

Under Ind AS, remeasurements gains or losses (i.e. actuarial gains and losses, excluding interest expense on the net defined benefit liability) are recognised 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.

Retained Earnings

Any difference on account of transition from previous GAAP to Ind As while preparing opening Ind AS Balance Sheet as on April 01, 2016 is adjusted under the head retained earnings.

Deferred Tax

Under Previous GAAP, deferred taxes were recognised 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 recognised using the balance sheet approach 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 and deferred tax has been recognised on the same.

Gratuity

Under the previous GAAP, cost relating to post employment benefit obligations including actuarial gain/losses were recognised in Profit & Loss. Under Ind AS, actuarial gain/losses on the net defined benefit liability are recognised in other comprehensive income instead of profit & loss.

7 Previous year figures have been regrouped, reclassified wherever necessary.

Source : Dion Global Solutions Limited
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