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Uniply Industries

BSE: 532646|NSE: UNIPLY|ISIN: INE950G01023|SECTOR: Miscellaneous
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Notes to Accounts Year End : Mar '18

Note 1. Explanation to Exceptional Item

a) During the year, pursuant to the approval of the Shareholders and other authorities as required, the Company has transferred its Manufacturing business to Uniply Decor Limited on a slump sale basis with effect from the close of business on 30th Sept. 2017 for a consideration of RS,1,47,00,00,000. Gain on such sale amounts to RS,1,40,50,430/-

b) Gain on sale of the 26% of Company’s stake in ETA Technopark Limited is RS,10,00,00,000/-

Note 33. Segment Reporting

The Company''s reportable segments are organized based on the nature of products and services offered by these segments.

- Manufacturing & Trading of Plywood & Allied Products

- Construction ( w.e.f 01st Oct 2017 )

The Business Group Management Committee headed by Managing Director consisting of Chief financial officer, Leaders of Strategic Business Units and Human resources have identified the above two reportable business segments. It reviews and monitors the operating results of the business segments for the purpose of making decisions about resource allocation and performance assessment using profit or loss and return on capital employed.

Sales between operating segments are carried out at arm''s length basis and are eliminated at entity level consolidation.

The accounting policies of the reportable segments are the same as that of Company’s accounting policies described in Note: 4.20; Segment profit represents the profit before tax earned by each segment . This is the measure reported to the chief operating decision maker for the purposes of resource allocation and assessment of segment performance.

Segment assets and liabilities:

For the purposes of monitoring segment performance and allocating resources between segments:

i) All assets other than investments, loans, current and deferred tax assets, unallocable current and non-current assets, are allocated to reportable segments

ii) All liabilities other than borrowings, current and deferred tax liabilities, and unallocable current and non-current liabilities, are allocated to reportable segments

Information about major customers:

Customer contributed 10% or more to the Company''s revenue during the years 2017-18:-

a) Construction Revenue - One Customer for RS,28,04,06,000/-

b) Manufacturing & Trading of Plywood & Allied Products - One Customer for RS,55,59,27,712.

No single customer contributed 10% or more to the Company''s revenue during the years 2016-17.

Note 2. Employee Benefits

i. Defined contribution plans:

Employee benefits in the form of Provident Fund is considered as defined contribution plan and the contributions to Employees’ Provident Fund Organization established under The Employees’ Provident Fund and Miscellaneous Provisions Act 1952 is charged to the Statement of Profit and Loss of the year when the contributions to the respective funds are due.

ii. Defined Benefit Plan:

Retirement benefits in the form of Gratuity and Leave Encashment are considered as defined benefit obligations and is provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. Every Employee who has completed five years or more of service is entitled to Gratuity on terms not less favorable than the provisions of The Payment of Gratuity Act, 1972.

Note 3. Related Party Disclosures List of Related Parties

Related party relationships are as identified by the Management and relied upon by the Auditors

a) Names of related parties and description of relationship

Sl.No Relationship Name

List of related parties where control exists

i) Subsidary Company 1 M/s. Vector Projects (India) Private Limited

2 M/s. Uniply Blaze Private Limited

ii) Associate Company 1 M/s. Uniply Decor Limited ( Formely UV Boards Limited)

iii) Enterprise where key managerial personnel along

with their relatives exercise significant influence 1 M/s.Vector Infrastructure Project Solutions Limited

2 M/s. Vector Properties (India) Private Limited

3 M/s. Vector Estates Private Limited

4 M/s. Vector Design International (I) Private Limited

5 M/s. Vector Infrastructure Project Solutions Limited

6 M/s. Vector Cyber Parks Private Limited

Sl.No Relationship Name

7 M/s. Protocol 7 Network Private Limited

8 M/s. Vector Lifespace LLP

9 M/s. Chitter Chatter Educare LLP

10 M/s. Guru Properties LLP

11 M/s. MI Collab Workspace LLP

12 M/s. MI Workspace LLP

13 M/s. MI Officespace LLP

14 M/s. Guru Workspace LLP

15 M/s. Teamsec Consultancy Services Private Limited

16 M/s. Teamsec Insurance Broking Private Limited

17 M/s. Reso Agro Products Private Limited

18 M/s. Teamsec Energy Private Limited

19 M/s. Ragam Credit And Leasing Company Private Limited

20 M/s. Dugar Mercandise Private Limited

21 M/s. RLR & Co legal Private Limited

22 M/s. KASG Finnaissance Consulting Private Limited

23 M/s. Foundation Outsourcing India Private Limited

24 M/s. Fourshore Advanced Metal Forgings Private Limited

25 M/s. Forge Point Limited

26 M/s. Artmatrix Furnitures Private Limited

27 M/s. Fourshore Bpo Private Limited

28 M/s. Globality Partners Private Limited

29 M/s. KKN Advisors LLP

iv) Key Managerial Personnel (KMP) 1 Mr. Keshav Narayan Kantamneni - Chairman

2 Mr. Sethuraman Srinivasan - Managing Director

3 Mr. Umesh Prabhakar Rao - Joint Managing Director (w.e.f14.11.2017)

4 Mr. MR Jhunjhunwala - Whole Time Director (Resigned on 01.10.2017)

5 Mr. Narendra Kumar Jain - Chief Financial Officer

6 Ms. S.S.Deepthi - Company Secretary (Resigned on 24.04.2017)

7 Mr. Raghuram Nath - Company Secretary (w.e.f 31.01.2018)

v) Relatives Of Key Managerial Personnel (KMP) 1 M/s. Meenu Jain

2 M/s. Padma M Jhunjhunwala

vi) Non-executive directors 1 Mr. Sudhir Kumar Jena

2 Mrs. Reena Bhatwal

3 Mr. Ramgopal lakshmi Ratan

Terms and conditions of transactions with related parties:

All transactions with these related parties are priced on an arm''s length basis and resulting outstanding balances are to be settled in due course. None of the balance is secured. No trade or other receivables are due by directors or other officers of the Company or any of them either severally or jointly with any other persons or amounts due by firms or private limited companies respectively in which any director is a partner or a director or a member.

Note 4. Financial Instruments

(i) Capital management

For the purpose of the Company''s capital management, capital includes issued equity capital, securities premium and all other equity reserves attributable to the equity
holders of the Company. The primary objective of the Company’s Capital management is to maximize the shareholder value

The Company''s objective when managing capital are to

- Safeguard their ability to continue as a going concern, so that they can continue to provide return for shareholders and benefits for other stakeholders and

- Maintain an optimal capital structure to reduce the weighted average cost of capital.

In order to maintain or adjust the capital structure, the Company may adjust the amount of dividend paid to shareholders, return capital to shareholders, issue new shares, or sell non-core assets to reduce the debt.

In addition to the above dividends, at year end the directors have recommended the payment of a final dividend of Hi/- per fully paid equity share of H10/- each. This proposed dividend is subject to the approval of shareholders in the ensuing annual general meeting.

Note 5. Risk Management Framework

The management of the Company has implemented a risk management system that is monitored by the Board of Directors. The general conditions for compliance with the requirements for proper and future-oriented risk management within the Company are set out in the risk management policies. These policies aim at encouraging all members of staff to responsibly deal with risks as well as supporting a sustained process to improve risk awareness. The guidelines on risk management specify risk management processes, compulsory limitations, and the application of financial instruments. The risk management system aims at identifying, analyzing, managing, controlling and communicating risks promptly throughout the Company. Risk management reporting is a continuous process and part of regular Group reporting. In addition, our Corporate Function Internal Auditing regularly checks whether Company complies with risk management system requirements.

The Company is exposed to credit, liquidity and market risks (foreign currency risk and interest risk) during the course of ordinary activities. The aim of risk management is to limit the risks arising from operating activities and associated financing requirements by applying selected derivative and non-derivative hedging instruments. In order to minimize any adverse effects on the financial performance of the Company, it has taken various measures. This note explains the source of risk which the entity is exposed to and how the entity manages the risk and impact of the same in the financial statements.

Credit Risk

Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Company. Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis to mitigate impairment loss on receivables. Credit evaluations are performed on all customers requiring credit over a certain amount. The Company does not secure its financial assets with collaterals.

Cash and cash equivalents are neither past due nor impaired.

In case of other financial assets, there are no indicators as at March 31, 2018 that defaults in payment obligations will occur.

Note 40. Transition to Ind AS

These financial statements, for the year ended 31 March 2018, are the first financial statements the Company has prepared in accordance with Ind AS. For periods up to and including the year ended 31 March 2017, the Company prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP).

Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31 March 2018, together with the comparative period data as at and for the year ended 31 March 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening Balance Sheet was prepared as at 1 April 2016, the Company’s date of transition to Ind AS.

An explanation of how the transition from previous GAAP to Ind AS has affected the Company’s financial position, financial performance and cash flows is set out below:

(i) Transition election

(ii) Reconciliation of Profits as previously reported under previous GAAP to Ind AS

(iii) Reconciliation of Balance Sheet as previously reported under previous GAAP to Ind AS

(iv) Reconciliation of Statement of Profit and Loss account as previously reported under previous GAAP to Ind AS

(v) Adjustments to the Statement of Cash Flows (i) Transition election (a) Optional exemptions

The Company in applying Ind AS principle for measurement of recognized assets and liabilities is subject to certain optional exemptions, apart from mandatory exceptions, availed by the Company as detailed below:-

I. Deemed Cost for property, plant and equipment, investment property, and intangible assets:

Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.

Accordingly, the Company has elected to measure all of its property, plant & equipment and intangible assets at their previous GAAP carrying value

II. Designation of previously recognized financial instruments:

An entity may designate an investment in an equity instrument as at fair value through other comprehensive income in accordance with Ind AS 109 on the basis of the facts and circumstances that exist at the date of transition to Ind AS.

As per Ind AS 109, an entity can make an irrevocable election to present in Other Comprehensive Income the subsequent changes in the fair value of an investment in an equity instrument that is not held for trading.

In accordance with Ind AS transition provision, the Company has designated the equity investment in Shalivahana Wind Energy Limited as fair value through Other comprehensive income.

III. Fair value measurement of financial assets or financial liabilities at initial recognition:

In accordance with Ind AS transitional provisions, the Company opted to apply the provisions of day one gain or loss provisions retrospectively on transactions occurring on or after the date of transition to Ind AS.

I. 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.

Ind AS estimates as at 1 April 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:

- Investment in equity instruments carried at FVOCI

- Investment in equity instruments carried at FVPL

- Impairment of financial assets based on expected credit loss model.

II. De-recognition of financial assets and liabilities:

Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first-time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity’s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.

The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS

III. 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.

IV. Impairment of financial assets:

The Company has applied the impairment requirements of Ind AS 109 retrospectively; however, as permitted by Ind AS 101, it has used reasonable and supportable information that is available without undue cost or effort to determine the credit risk at the date that financial instruments were initially recognized in order to compare it with the credit risk at the transition date.

Notes:-

i) Under Ind AS the actuarial gains and losses on post retirement defined employee benefits are recognized in other comprehensive income. Under previous Indian GAAP such actuarial gains and losses were recognized in the statement of profit and loss.

ii) Under the previous GAAP excise duty on sale of goods was reduced from sales to present the revenue from operations. Whereas, under Ind AS, this excise duty is included in the revenue from the operations and corresponding expenses is included as part of total expenses. The change does not affect total equity as at April 01, 2016 and March 31, 2017, profit before tax or total profit for the year ended March 31, 2017.

iii) The transition from previous Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.

Note 6. Events after the reporting period

No significant event is to be reported between the closing date and that of the meeting of Board of Directors.

Note 7. Approval of financial statements

The financial statements were reviewed and recommended by the Audit Committee and has been approved by the Board of Directors in their meeting held on May 29, 2018.

Source : Dion Global Solutions Limited
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