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Alstom T&D India Ltd. Notes to Accounts, Alstom T&D India Ltd. Company
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Notes to Accounts of Alstom T&D India Ltd.

Mar 31, 2014

1. GENERAL INFORMATION

ALSTOM T&D India Limited (''ATDIL'' or ''the Company'') is a publicly listed company, incorporated on March 13, 1957 as The English Electric Company of India (Private) Limited with its registered office at NCT of Delhi and Haryana. The Company''s operations encompass the operations of some of the erstwhile companies (inter-alia including the operations of The General Electric Company of India Limited formed in the year 1911) which merged into the Company.

The Company has been building the power transmission and distribution infrastructure to support economic growth in the country. It has a portfolio of products, solutions and services, comprising the entire range of transmission equipment up to Extra and Ultra High Voltages (765 kV and beyond) including air-insulated switchgear (AIS) and locally manufactured power transformers and gas-insulated switchgear (GIS). It also provides power electronics solutions (HVDC, FACTS) to create super highways and offers highly advanced power management Smart Grid solutions for transmission and distribution including renewable energies integration.

2. SHARE CAPITAL

a. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs.2/- per share. Each equity share holder is eligible for one vote per share held. 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 of 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.

e. Pursuant to the ''Open Offer'' made by Alstom Holdings, France (Acquirer) in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 which was completed in February 2013, the Acquirer/ Promoter Group shareholding increased from 73.40% to 80.31% as a result of their acquisition of 16,542,372 equity shares. Consequently, the public shareholding reduced to 19.69%.

During the current year, in order to comply with the Securities Contracts (Regulation) Rules, 1957 and clause 40A of the Equity Listing Agreement with Stock Exchanges, which requires the Company to maintain a minimum public shareholding of 25%, the Company issued and allotted 16,942,500 equity shares of face value of Rs.2 each at an Issue Price of Rs.165 per equity share (including a premium of Rs.163 per equity share) by way of an Institutional Placement Programme (IPP) to Qualified Institutional Buyers in terms of Chapter VIII-A of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009. Upon issue and allotment of the above mentioned equity shares, (i) the promoters shareholding in the Company got reduced from 80.314% as hitherto to 74.999998% and public shareholding increased from 19.686% to 25.000002%. (ii) the Company''s paid up share capital and securities premium account stood at Rs.512.1 million and Rs.2,761.6 million, respectively.

f. The original equity shares of Rs.10/- each of the Company were sub-divided into five shares of Rs.2/- each with effect from October 31, 2008.

g. Prior to sub-division of shares: (i) 15,750,000 equity shares of Rs.10/- each were allotted as fully paid bonus shares by capitalisation of General Reserve, Securities Premium Account and Surplus in Statement of Profit and Loss.

(ii) 19,871,327 equity shares of Rs.10/- each were issued and allotted as fully paid up shares pursuant to the scheme of amalgamation with The General Electric Company of India Limited in 1992-93 (11,520,000 shares), GEC Power Engineering Services of India Limited (PESIL) in 1993-94 (330,000 shares), ALSTOM T&D Distribution Transformers Limited in 2000-01 (87,992 shares) and with AREVA T&D Systems India Limited, AREVA T&D Instrument Transformers India Private Limited and AREVA T&D Lightning Arresters Private Limited in 2007 (7,933,335 shares) without payment being received in cash.

(iii) During 1994-95, the Company offered 9,950,000 equity shares of Rs.10/- each to the existing shareholders in the ratio of 1 share for every 3 shares held at a premium of Rs.40/- per share as per letter of offer dated May 10, 1994. The shares, barring 1,034 shares, which were kept in abeyance for technical reasons, were allotted at the meeting of Committee of Directors held on July 28, 1994. Of the 1,034 shares of Rs.10/- each, kept in abeyance, 514 shares of Rs.10/- each, were allotted upto 2001-02.

3. DEFINED CONTRIBUTION PLANS AND DEFINED BENEFIT PLANS

3.1 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

3.2 Provident Fund

a) Provident Fund - defined contribution plan

The Company contributes Provident Fund for certain eligible employees to the Regional Provident Fund Commissioner. The amounts debited to the Statement of Profit and Loss in this regard during the current year were Rs.20.1 million (Previous year - Rs.19.6 million).

b) Provident Fund - defined benefit plan

The Company also contributes Provident Fund for other employees into a recognised Provident Fund Trust set up for the Company and contributions to the Trust are expensed to the Statement of Profit and Loss when such amounts are due. The Company has an obligation to make good the shortfall of income on investments earned by the Trust, if any, with regard to the interest due on contributions as per the rate notified by the Government.

3.3 Others

In respect of other defined contribution plans, the Company has recognized the following amounts in the Statement of Profit and Loss. (i) Employer''s Contribution to Superannuation Fund Rs.74.4 million (Previous year Rs.69.4 million) (ii) Employer''s Contribution to ESI Rs 2.0 million (Previous year Rs.1.8 million)

4. EMPLOYEE SHARE BASED PAYMENTS

Certain employees of the Company have been granted stock options, stock appreciation rights and free performance shares by the Company''s ultimate parent ALSTOM SA France. However, cost for such grant is not recharged by the ultimate parent to the Company. Accordingly, the Company has not accounted for such options in its books of account.

As at As at March 31, 2014 March 31, 2013

5. CONTINGENT LIABILITIES

(i) Demands relating to Sales tax matters 256.5 125.0

Excise duty and Service tax matters 236.3 211.8

(ii) Claims against the Company not acknowledged as debts pertaining to legal cases 69.9 65.8 and provident fund.

6. UTILISATION OF IPP PROCEEDS AND SHARE ISSUE EXPENSES

Out of the proceeds of Rs.2,795.5 million from the issue of shares, Rs.2,493.2 million has been utilised for repayment of loans (including interest) and balance proceeds was used to meet the working capital requirement as envisioned in the Prospectus dated 30th November 2013.

Expenses amounting to Rs.44.0 million incurred in connection with the issue is set off against securities premium account.

7. EXCEPTIONAL ITEMS

Exceptional item in previous year represents profit on sale of land and building at Perungudi for a consideration of Rs.223.6 million.

8. PREVIOUS YEAR CORRESPONDING FINANCIAL INFORMATION

Previous year figures have been regrouped/ reclassified wherever necessary to correspond with the current year''s classification.


Mar 31, 2013

1. GENERAL INFORMATION

ALSTOM T&D India Limited (''ATDIL'' or ''the Company'') is a publicly listed Company, incorporated on March 13, 1957 as The English Electric Company of India (Private) Limited with its registered office at NCT of Delhi and Haryana. The Company''s operations encompass the operations of some of the erstwhile companies (inter-alia including the operations of The General Electric Company of India Limited formed in the year 1911) which merged into the Company.

The Company has been building the power transmission and distribution infrastructure to support economic growth in the country. It has a portfolio of products, solutions and services, comprising the entire range of transmission equipment up to Extra and Ultra High Voltages (765 kV and beyond) including air-insulated switchgear (AIS) and locally manufactured power transformers and gas-insulated switchgear (GIS). It also provides power electronics solutions (HVDC, FACTS) to create super highways and offers highly advanced power management Smart Grid solutions for transmission and distribution including renewable energies integration.

During the year 2009, ALSTOM Holdings, France and Schneider Electric Industries SAS entered into consortium agreement to acquire the global T&D business of AREVA SA, the then holding Company, such that transmission business would be allocated to ALSTOM group and the distribution business to Schneider group of companies.

During the previous period, the demerger of the distribution business of the Company was completed. The name of the Company was changed to ALSTOM T&D India Limited from AREVA T&D India Limited on January 31, 2012.

a. Rights, preferences and restrictions attached to equity shares:

The Company has one class of equity shares having a par value of Rs. 2/- per share. Each equity share holder is eligible for one vote per share held. 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 of 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.

b. The process of ''Open Offer'' made by Alstom Holdings, France (Acquirer) in terms of Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 was completed in February 2013 and in terms of the same, 16,585,241 equity shares of the Company were tendered by the Shareholders of the Company and 16,542,372 equity shares were acquired by the Acquirer. The shareholding in the Company of the Acquirer/Promoter Group, as a result increased to 80.31% from 73.40% as hitherto.

The Acquirer/Promoter Group have committed themselves to reduce their shareholding in the Company within the regulatory time frame, such that the minimum public shareholding of the voting share capital of the Company is maintained, to enable the Company''s Shares continuing to be listed.

c. The original equity shares of Rs. 10/- each of the Company were sub-divided into five shares of Rs. 2/- each with effect from October 31, 2008.

d. Prior to sub-division of shares:

i. 15,750,000 equity shares of Rs.10/- each were allotted as fully paid bonus shares by capitalisation of General Reserve, Securities Premium Account and Surplus in Statement of Profit and Loss.

ii. 19,871,327 equity shares of Rs.10/- each were issued and allotted as fully paid up shares pursuant to the scheme of amalgamation with The General Electric Company of India Limited in 1992-93 (11,520,000 shares), GEC Power Engineering Services of India Limited (PESIL) in 1993-94 (330,000 shares), ALSTOM T&D Distribution Transformers Limited in 2000-01 (87,992 shares) and with AREVA T&D Systems India Limited, AREVA T&D Instrument Transformers India Private Limited and AREVA T&D Lightning Arresters Private Limited in 2007 (7,933,335 shares) without payment being received in cash.

iii. During 1994-95, the Company offered 9,950,000 equity shares of Rs.10/- each to the existing shareholders in the ratio of 1 share for every 3 shares held at a premium of Rs. 40/- per share as per letter of offer dated May 10, 1994. The shares, barring 1,034 shares, which were kept in abeyance for technical reasons, were allotted at the meeting of Committee of Directors held on July 28, 1994. Of the 1,034 shares of Rs.10/- each, kept in abeyance, 514 shares of Rs.10/- each, were allotted upto 2001-02.

2.1 Provident Fund

a) The Company contributes Provident Fund for certain eligible employees to the Regional Provident Fund Commissioner. The amounts debited to the Statement of Profit and Loss in this regard during the current year were Rs.20 million (Previous period - Rs. 24 million).

b) Provident Fund - defined benefit plan

The Company also contributes Provident Fund for other employees into a recognised Provident Fund Trust set up for the Company and contributions to the Trust are expensed to the Statement of Profit and Loss when such amounts are due. The Company has an obligation to make good the shortfall of income on investments earned by the Trust, if any, with regard to the interest due on contributions as per the rate notified by the Government.

* As the Provident Fund Trust follows the April to March year for accounting, the information provided by the Actuary is for the twelve months period ended March 31, 2012.

c) Total contribution charged to the Statement of Profit and Loss for the aforesaid schemes amounts to Rs. 86.35 million (Previous period - Rs. 120.25 million).

Notes:

(i) In the absence of relevant information from the Actuary, the above details do not include the composition of Plan Assets.

(ii) The excess of the Plan Assets over the liability for the Benefit Obligation as at March 31, 2013 has not been recognised in the books in line with the principle of prudence enunciated in Accounting Standard 1 on Disclosure of Accounting Policies.

3. EMPLOYEE SHARE BASED PAYMENTS

Certain employees of the Company have been granted stock options, stock appreciation rights and free performance shares by the Company''s ultimate parent ALSTOM SA France. However, cost for such grant is not recharged by the ultimate parent to the Company. Accordingly, the Company has not accounted for such options in its books of account.

4. CONTINGENT LIABILITIES IN RESPECT OF

(i) Sales tax, Service tax and Excise matters. 336.82 172.12

(ii) Claims against the Company not acknowledged as debts pertaining to legal cases and provident fund. 65.79 46.77

5. SEGMENT INFORMATION

Based on the dominant source and nature of risks and returns of the Company, management has identified its business segment as its primary reporting format. The Company is engaged in the business relating to products, projects and systems for electricity transmission and related activities only, which has been defined as one business segment and accordingly disclosure requirement as per Accounting Standard 17 on Segment Reporting for primary basis segment are not applicable.

Note: Figures in brackets are for the previous period.

The accounting policies applicable to the reportable geographical segments are the same as those used in the preparation of the financial statements as setout above. Segment revenue from external customers includes amounts which can be directly identified to the geographical segment or allocated on a reasonable basis and does not include interest income. Segment assets include all operating assets used by the segment and consist primarily of trade receivables, inventories and fixed assets. Capital expenditure comprises additions to fixed assets including capital work-in-progress by geographical area in which assets are located.

6. RELATED PARTY DISCLOSURES

6.1 Names of related parties and nature of relationship:

(i) Ultimate Holding Company ALSTOM SA, France

(ii) Intermediate Holding Companies ALSTOM Grid Finance BV, Netherlands (w.e.f. February 1, 2012)

ALSTOM Holdings, France

T&D Holding, France (upto January 23, 2012)

ALSTOM Sexant 5 SAS, France (upto March 30, 2012)

(iii) Immediate Holding Company Grid Equipments Limited, India (w.e.f. February 1, 2012)

ALSTOM Grid SAS, France (upto January 23, 2012)

(iv) Other related parties with whom transactions have taken place during the period:

7. Non Funded Facilities from Certain Banks are Secured by way of First Charge on Inventories, Book Debts and Other Moveable Assets.

8. CAPITAL GAINS TAX

During the year, the Company sold certain immovable properties. Capital gains tax on such sale has been provided based on the actual sales considerationas per the sale deed. The Registering Authority has not accepted the value as per the sale deed and is in the process of fixing the appropriate value for these properties for the purpose of stamp duty. Pending such determination, the actual sale consideration is treated as the market value of the properties. The Company has also obtained a valuation report from a professional valuer for the subject properties and the same is comparable with the actual sale consideration.

9. EXCEPTIONAL ITEMS

Exceptional item represents profit on sale of land and building at Perungudi for a consideration of Rs. 223.61 million. In the previous period, the exceptional items represents profit on sale of land and building at Puducherry and Bengaluru for a consideration of Rs. 33 million and Rs. 122.43 million respectively.

10. REORGANISATION OF ALSTOM TRANSMISSION AND DISTRIBUTION BUSINESS DURING THE PREVIOUS PERIOD:

During the previous period ended March 31, 2012, a Scheme of Arrangement (the "Scheme") between the Company (Transferor Company), Smartgrid Automation Distribution and Switchgear India Limited (now called Schneider Electric Infrastructure Limited) (the Transferee Company) and their respective Shareholders and Creditors for demerger of Company''s "Distribution business" into the Transferee Company under Section 391-394 of The Companies Act,1956 with an appointed date of April 1, 2011, was sanctioned by the Hon''ble High Courts of Gujarat and Delhi, respectively on September 19, 2011 and October 24, 2011.

The Scheme has been given effect to on November 26, 2011 (effective date) with the filing of certified true copies of orders of Hon''ble High Courts with therespective Registrar of Companies at ''Gujarat, Dadra and Nagar Havelli'' and ''NCT of Delhi and Haryana''.

The demerged business undertaking has been transferred and vested as of the appointed date being April 1, 2011 and the Company has accounted for the same by recording the transfer of relevant assets and liabilities of the demerged business in terms of the approved Scheme at their book values as on the appointed date with an equivalent withdrawal from the Company''s reserves for Rs. 2,383.32 million resulting in no net gain or loss to the Company as follows:

11. PREVIOUS PERIOD CORRESPONDING FINANCIAL INFORMATION

During the previous period, the Company''s financial year was changed from calendar year to April through following March. Accordingly, the previous period figures represent the period of fifteen months from January 1, 2011 to March 31, 2012 whereas the current year financial statements are for the year ended March 31, 2013.

As described in note 50 above, the distribution business of the Company was demerged during the previous period effective from November 26, 2011, with the appointed date of April 1, 2011. The previous period financial statements include the financial information for the demerged business for the quarter ended March 31, 2011.

Therefore, the current year and previous period financial information is not strictly comparable.

The financial statements for the 15 months period ended March 31, 2012 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2013 are prepared as per Revised Schedule VI. Accordingly, the previous period figures have also been reclassified to conform to this year''s classification. The adoption of Revised Schedule VI for previous period figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2012

1 BACKGROUND

ALSTOM T&D India Limited ('ATDIL' or 'the Company') (formerly AREVA T&D India Limited) is a publicly listed company, incorporated on March 13,1957 as The English Electric Company of India (Private) Limited with its registered office at NCT of Delhi and Haryana. The Company's operations encompass the operations of some of the erstwhile companies (inter-alia including the operations of The General Electric Company of India Limited formed in the year 1911) which merged into the Company.

The Company has been building the power transmission and distribution infrastructure to support economic growth in the country. It has a portfolio of products, solutions and services, comprising the entire range of transmission equipment up to Extra and Ultra High Voltages (765 kVand beyond) including air-insulated switchgear (AIS) and locally manufactured power transformers and gas-insulated switchgear (GIS). It also provides power electronics solutions (HVDC, FACTS) to create super highways and offers highly advanced power management Smart Grid solutions for transmission and distribution including renewable energies integration.

During the year 2009, ALSTOM Holdings, France and Schneider Electric Industries SAS entered into consortium agreement to acquire the global T&D business of AREVA SA, the then holding company, such that transmission business would be allocated to ALSTOM group and the distribution business to Schneider group of companies.

During the current period, the demerger of the distribution business of the Company was completed. The name of the Company was changed to ALSTOM T&D India Limited from AREVAT&D India Limited on January 31, 2012. As at As at

March 31, 2012 December 31, 2010

2. CONTINGENT LIABILITIES IN RESPECT OF

(i) Income Tax matters relating to disallowances which are under litigation before the - 150,051 various appellate forums for various assessment years up to March 31, 2012

(Net of provisions)

(ii) Sales tax matters primarily relating to demands on account of non collection of 172,123 138,897 declaration forms

(iii) Claims against the Company not acknowledged as debts 46,770 123,575

The amounts shown above represents the best possible estimates arrived at on the basis of available information. The uncertainties and possible outflows are dependent on the outcome of the legal proceedings and therefore cannot be predicted.

The Company engages reputed professional advisers to protect its interest and has been advised that it has reasonable chances of success in these appeals.

3. REORGANISATION OF ALSTOM TRANSMISSION AND DISTRIBUTION BUSINESS

On January 20,2010, ALSTOM Holdings and Schneider Electric Industries SAS ("acquirers") entered into a share purchase agreement with AREVA SA., through ALSTOM Sextant 5 SAS, a special purpose vehicle, for acquisition of the Global T&D Business of AREVA SA effective from June 7, 2010. In terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, in India, the acquirers during the previous year made a public announcement on May 28, 2010 to the shareholders of the Company and made an open offer to purchase up to 20% of the issued share capital of the Company. The offer opened on November 6, 2010 and closed on November 25, 2010. On December 3, 2010, the acquirers had informed the Company confirming the completion of the open offer formalities. Thereafter the Promoter Group's holding stood increased to 175,492,524 (73.40%) equity shares after acquiring 2,906,624 (1.22%) equity shares from the open offer.

Pursuant to the open offer, a Scheme of Arrangement (the "Scheme") between the Company (Transferor Company), Smart grid Automation Distribution and Switchgear Limited (now called Schneider Electric Infrastructure Limited) (the Transferee Company) and their respective Shareholders and Creditors for demerger of Company's "Distribution business" into the Transferee Company under Section 391-394 of The Companies Act, 1956, was sanctioned by the Hon'ble High Courts of Gujarat and Delhi, respectively on September 19, 2011 and October 24,2011.

The Scheme contained a detailed plan for separation of operations and under the Scheme, ALSTOM T&D India Limited (formerly AREVA T&D India Limited) shareholders will continue to remain the shareholders of ALSTOM T&D India Limited (formerly AREVA T&D India Limited), and they will also be issued shares in Smart grid Automation Distribution and Switchgear Limited in the ratio of i:l. The Scheme has been given effect to on November 26, 2011 (effective date) with the filing of certified true copies of orders of Hon'ble High Courts with respective Registrar of Companies at'Gujarat, Dadraand Nagar Haveli' and 'NCT of Delhi and Haryana'.

The transfer of demerged business undertaking has been transferred and vested as of the effective date and the Company has accounted for the same by recording the transfer of relevant assets and liabilities ofthe demerged business in terms of the approved Scheme at their book values as on the appointed date with an equivalent withdrawal from the Company's reserves for Rs. 2,383,318 thousand resulting in no net gain or loss to the Company as follows:

4. INVESTMENT IN SUBSIDIARY COMPANIES

(i) A wholly owned subsidiary company, Smart grid Automation Distribution and Switchgear Limited (now called Schneider Electric Infrastructure Limited, the Transferee company) was incorporated to vest the Company's' distribution business with 500,000 shares of Rs 2/- each as issued, subscribed and nil-paid up share capital for which the Company contributed Rs 1000 thousands. Following issuance and allotment of shares by the Transferee company in terms of the Scheme, the shares held by the Company and its nominees in the Transferee company were cancelled and the liability, if any, of the Company and its nominees stood discharged. Accordingly, Smart grid Automation Distribution and Switchgear Limited (now called Schneider Electric Infrastructure Limited) ceased to be a subsidiary of the Company following the Scheme having been given effect to on November 26, 2011, with an appointed date April l, 2011.

(ii) The entire shareholding of 500,000 (Previous year - 500,000) Equity Shares of Rs. 2 each in the wholly owned subsidiary - Energy Grid Automation Transformers and Switchgear India Limited have been transferred as part of Net Assets of the 'Distribution business' to the Transferee Company, Smart grid Automation Distribution and Switchgear Limited (now called Schneider Electric Infrastructure Limited).

(iii) The entire shareholding of 500,000 (Previous year - 500,000) Equity Shares of Rs. 2 each in wholly owned subsidiary, Grid Equipments Limited has been transferred by way of sale at face value, with requisite approvals, on January 4, 2012 to ALSTOM Grid Finance BV, a member of the promoter group.

Following above, the Company does not have any subsidiaries as at March 31, 2012. During the current period, there were no transactions with the subsidiaries other than those described above including final divestiture in them by the Company.

5. SEGMENT INFORMATION

Based on the dominant source and nature of risks and returns of the Company, management has identified its business segment as primary reporting format. The Company has been engaged in the business of designing, manufacturing and commissioning products, projects and systems for electricity transmission and distribution and accordingly had only one business segment. As described in detail in note 5 above, during the current financial period, pursuant to obtaining the Court orders and their filing with the Registrar of Companies on November 26, 2011, the Company demerged its distribution business with the appointed date being April l, 2011. However, having regard to the in- principle approval to the proposed Scheme of Arrangement for demerger of the Distribution Undertaking of the Company in April 2011, the Company decided to identify and report the Transmission and Distribution businesses as segments for the quarter ended March 31, 2011. Thereafter the Distribution business comprised discontinuing operations till November 26,2011 when the Court Orders were filed with the Registrar of Companies. Following the vesting of the Distribution business to the transferee company during the quarter ended December 31, 2011 with the appointed date being April 1, 2011, within the current period, the Company has only one business segment i.e. business relating to products, projects and systems for electricity transmission. Accordingly, disclosures requirements as per Accounting Standard 17 - Segment Reporting, are not applicable.

The accounting policies applicable to the reportable geographical segments are the same as those used in the preparation of the financial statements as set out above. Segment revenue from external customers includes amounts which can be directly identified to the geographical segment or allocated on a reasonable basis and does not include interest income. Segment assets include all operating assets used by the segment and consist primarily of debtors, inventories and fixed assets. Capital expenditure comprises additions to fixed assets including capital work in progress by geographical area in which assets are located.

6. EMPLOYEE BENEFITS

6.1 Gratuity

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognized in the Profit and Loss Account and the funded status and amounts recognized in the balance sheet for the respective plans.

The details of actuarial valuation as per the certificate furnished by independent actuary are given below:

6.2 Provident Fund

a) The Company contributes Provident Fund for certain selected employees to the Regional Provident Fund Commissioner. The amounts debited to the Profit and Loss Account in this regard during the current period were Rs 24,003 thousand.

b) Provident Fund - defined benefit plan

The Company also contributes Provident Fund for other selected employees into a recognized Provident Fund Trust set up for the Company and contributions to the Trust are expensed to Profit and Loss Account when such amounts are due. The Company has an obligation to make good the shortfall of income on investments earned by the Trust, if any, with regard to the interest due on contributions as per the rate notified by the Government.

During the current period, the liability for the interest differential has been recognized based on its actuarial valuation. The details of actuarial valuation as per the certificate furnished by independent actuary are given below:

Notes:

(i) In the absence of relevant information from the Actuary, the above details do not include the composition of Plan assets.

(ii) The current year is the first year of actuarial valuation being done for Provident Fund, in view of the issuance of the Guidance Note by the Institute of Actuaries of India. Accordingly, previous year figures have not been provided.

(iii) The excess of the plan assets over the liability for the benefit obligation as at March 31, 2012 has not been recognized in the books in line with the principle of prudence enunciated in Accounting Standard on Disclosure of Accounting Policies AS-1.

7. EMPLOYEE SHARE BASED PAYMENTS

Certain employees of the Company have been granted stock options, stock appreciation rights and free performance shares by the Company's ultimate parent ALSTOM SA France. However, cost for such grant is not recharged by the ultimate parent to the Company. Accordingly, the Company has not accounted for such options in its books of account.

Notes :

1. Provision for Warranties are estimated based on past obligations and are expected to be settled within next 15 to 24 months with the average period being 18 months.

2. Provision for Contract losses are based on difference between total estimated revenues and total estimated costs.

Pursuant to the announcement by The Institute of Chartered Accountants of India in respect of Accounting for Derivatives in March 2008 and in view of the principle of prudence as enunciated in Accounting Standard 1 - "Disclosure of Accounting Policies", the entity has provided for losses in respect of all outstanding derivative contracts at the balance sheet date by marking them to market. The Company has recognized mark to market net losses Rs.73,817 thousand (Previous year- Rs.199,136 thousand) relating to foreign exchange derivatives in the Profit and Loss Account and included in foreign exchange fluctuation (net)' in Schedule 17 above.

8. Non funded facilities from certain banks are secured by way of first charge on inventories, book debts and other moveable assets

Notes : Remuneration to Executive Directors excludes:

(i) Expenditure for compensated leave and gratuity, as actuarial valuation is done on a total Company basis.

(ii) Cost of employee share based payments for stocks of ALSTOM SA France, the ultimate parent Company not recharged to the Company (Refer Note HonSchedulel9)

* Includes supplementary bonus of Rs. Nil (Previous year - Rs 6,353 thousand), reimbursed by the ultimate parent company.

** Commission provided for in the books for Non Executive Directors resident in India is subject to approval of shareholders in the ensuing Annual General Meeting.

9. EXCEPTIONAL ITEMS

Exceptional items represent profit on sale of land and building at Puducherry, and a portion of the land including part of the building appurtenant thereto at Bangalore which was acquired by the National Highway Authority, fore consideration of Rs.33,000 thousand and Rs.122,431 thousand respectively.

10. PREVIOUS YEAR CORRESPONDING FINANCIAL INFORMATION

The Company's financial year was changed from calendar year to April through following March. Accordingly, the current period figures represent the period of fifteen months from January 01, 2011 to March 31, 2012 whereas the previous year financial statements were for The year ended December3l, 2010.

As described in note 5 above, the distribution business of the Company was demerged during the current period effective from 26 November 2011, with the appointed date of April 1, 2011. The current period financial statements include the financial information for the demerged business only for the quarter ended March 31, 2011 whereas the previous year financial statements include the financial information for the demerged business for the full year.

Therefore, the current period and previous year financial information is not strictly comparable.

The previous year figures have been regrouped / reclassified, wherever necessary, to conform with current period's presentation.


Dec 31, 2010

(Rs. in thousands)

1. CONTINGENT LIABILITIES IN RESPECT OF Dec 2009 Dec 2010

(a) Legal cases against the Company not acknowledged as debts 123,575 23,012

(b) Sales tax and Excise demands against which the Company has filed appeals 138,897 65,627

2. ACCOUNTING OF DERIVATIVES

Pursuant to the announcement by the Institute of Chartered Accountants of India in respect of Accounting for Derivatives in March 2008 and in view the principle of prudence as enunciated in Accounting Standard 1 - "Disclosure of Accounting Policies", the entity has provided for losses in respect of all outstanding derivative contracts at the balance sheet date by marking them to market. The Company has recognised mark to market net losses of Rs. 199,136 thousand (Rs 99,519 thousand) relating to foreign exchange derivatives in the profit and loss account and included in Bank Charges and foreign exchange variation cost (net) under Note 18.

3. AREVA TRANSMISSION AND DISTRIBUTION BUSINESS SALE:

On January 20, 2010 between ALSTOM Holdings and Schneider Electric Industries SAS ("acquirers") entered into a share purchase agreement with AREVA SA, through ALSTOM Sextant 5 SAS, a special purpose vehicle, acquired the Global T&D Business of AREVA SA effective from June 7, 2010. In terms of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, in India, the acquirers during the year made a public announcement on May 28, 2010 to the shareholders of the Company and made an open offer to purchase up to 20% of the issued share capital of the Company. The offer opened on November 6,2010 and closed on November 25, 2010. On December 3,2010, the acquirers had informed the Company confirming the completion of the open offer formalities. The acquirers had acquired 2,906,624 (1.22%) equity shares tendered by the aforesaid erstwhile shareholders. These shares were held in Trust by the Registrar to the Offer, though not formally transferred in the Companys records. Consequently on completion of formalities, the Promoters holding stands increased to 175,492,524 (73.40%) equity shares. In the above open offer, the shareholders were also informed about the intention of proposed transfer of the Distribution business to Schneider group. The broad outline for giving effect to as aforesaid is under examination and upon firming up, necessary steps will be taken.

4. SUBSIDIARY COMPANIES

Two wholly owned subsidiaries - Grid Equipments Limited and Energy Grid Automation Transformers and Switchgears India Limited were incorporated on December 29, 2010. As subscribers to the Memorandum of Association of these wholly owned subsidiaries, the Company has agreed to subscribe Rs. 1,000 thousands each in the equity share capital. A sum of Rs.103 thousands incurred towards incorporation of these companies are shown as recoverable balances in these financial statements. There were no transactions in these companies during the period.

5. PRIOR YEAR COMPARATIVES

Prior years figures have been recast/regrouped wherever considered necessary for comparative purposes.


Dec 31, 2009

1. SHARE CAPITAL

a) 15,750,000 equity shares of Rs 10/- each (before sub-division of shares) were allotted as fully paid bonus shares by capitalisation of general reserve, share premium and profit and loss account balance.

b) 19,871,327 equity shares of Rs 10/- each (before sub-division of shares) were issued and allotted as fully paid up pursuant to the scheme of amalgamation with The General Electric Company of India Limited in 1992-93 (11,520,000 shares), GEC Power Engineering Services of India Limited (PESIL) in 1993-94(330,000 shares), ALSTOM T&D Distribution Transformers Limited in 2000-01 (87,992 shares) and with AREVAT&D Systems India Limited, AREVAT&D Instrument Transformers India Private Limited and AREVAT&D Lightning Arresters Private Limited, in 2007, (7,933,335 shares), without payment being received in cash.

c) During 1994-95, the Company offered 9,950,000 equity shares of Rs 10/- (before sub-division of shares) each to the existing shareholders in the ratio of 1 share for every 3 shares held at a premium of Rs 40/- per share as per letter of offer dated May 10, 1994.

The shares, barring 1,034 shares, which were kept in abeyance for technical reasons, were allotted at the Committee of Directors meeting held on July 28,1994. Of the 1,034 shares kept in abeyance, 514 shares were allotted upto 2001/02.

e) Pursuant to the approval of the shareholders through postal ballot, the equity shares of Rs 10/- each of the Company were sub- divided into five shares of Rs 2/- each with effect from the record date October 31,2008.

2. RESTRUCTURING AND RELOCATION COSTS

In 2008, construction of three greenfield sites were substantially completed resulting in certain set-up costs and costs associated with shifting of machineries, materials and employee transfers/separations. In 2009, these projects were completed and commercial production has commenced and additional costs incurred have been charged to profit & loss account.

3. COMMITMENTS December 2009 December 2008

4. CONTINGENT LIABILITIES IN RESPECT OF

(a) Legal cases against the Company not acknowledged as debts 23,012 13,012

(b)Sales tax and Excise demands against which the Company has filed appeals 65,627 49,738

Name of the Statute Nature of Dues Rupees Period Forum where

thousands dispute is pending

Central Sales Tax Act Disallowance of C forms 5,271 2002-03, 2004-05, 2006-07, 2008-09 Deputy Commis -sioner (Appeals)

Central Sales Tax Act Non receipt of Forms 28,760 2005-06 to 2008-09 Joint Commissio -ner(Appeals)

Central Sales Tax Act Non receipt of Forms 5,609 2005-06 Revisional Board

Central Sales Tax Act Non receipt of Forms 25,016 2006-07 Joint Commissio -ner(Appeals)

Local Sales Tax Act (Various States) Non receipt of Forms 971 1991-92 Dy. Commissioner (Appeals)

65,627 Amount deposited as at December 31, 2009 is Rs 2,608 thousand (December 2008 - Rs 2,780 thousand)

(c) The Company has received demand for excise/ service tax amounting to 455,300 thousand for various years. The Company has preferred appeals against these demands which is pending before various appellate authorities, and has been advised that there are reasonable chances of success in these appeals.

(d) Demands for pending concessional sales tax forms for various years amounts to Rs 703,500 thousand. The company has, an ongoing process for collection and submission of these forms to the concerned authorities and does not foresee any liability in this regard.

Note: Show cause notices received have not been considered as contingent liabilities.

5. CHARGE ON ASSETS

Non funded facilities from certain banks are secured by way of a first charge on inventories, book debts and other movable assets.

6. ACCOUNTING OF DERIVATIVES

Pursuant to the announcement by the Institute of Chartered Accountants of India in respect of Accounting for Derivatives in March 2008 and in view the principle of prudence as enunciated in Accounting Standard 1 - "Disclosure of Accounting Policies", the entity has provided for losses in respect of all outstanding derivative contracts at the balance sheet date by marking them to market. The Company has recognized mark to market net losses of Rs. 99,519 thousand relating to foreign exchange derivatives in the profit and loss account and included in Bank Charges and foreign exchange variation cost (net) account under Note 18.

7. RELATED PARTY DISCLOSURES - As identified by the management and relied upon by the auditors

a) List of Related parties and description of relationship

(i) Parties where control exists: AREVAT&DSAS, France (Holding Company),

AREVA SA, France (Ultimate Holding Company) AREVA T&D Holdings SA, France (Parent of Holding Company)

(ii) Other related parties with whom transactions have taken place during the year: Fellow subsidiaries:

AREVA T&D Australia Limited AREVA T&D De Energia Ltd, Brazil

AREVA T&D Canada Inc. AREVAT&Dlnc.USA

AREVA T&D Protection & Control, Stafford AREVA Hellas, AE, Greece

AREVA T&D Xiamen, China AREVA T&D U.K Limited, England

AREVA T&D SAdeC.V, Mexico AREVA T&D Middle East FZE, Dubai

AREVAT&D Enerjis Endustrisi AS, Turkey Long & Crawford Limited

AREVA Energietechnic, Gmbh, Germany Zao AREVA Transmission and Distribution

AREVAT&D ChileS.A AREVA Sachsenwerk, Gmbh, Germany

Ritz MeBwandler Ludwigslust GmbH, Germany AREVA Parafoudres S.A, France

AREVAT&D MalaysiaSdnBhd AREVAT&DTransformateursde MesuresSA, France

AREVAT&D AG, Switzerland AREVAT&D Sp.z.o.o., Poland

AREVA Hungariakft AREVA T&D Suzhou High Voltage Switchgear Company Limited

AREVAT&D Pte Limited, Singapore AREVAT&D Shanghai Power Automation Company Limited

AREVA Belgium S.A. AREVAT&D Iberica.SA, Spain

AREVAT&D FIRSpA, Italy AREVAT&D Yangzhou

AREVAT&D Austria AG Shanghai RITZ High Voltage Instrument Transformers Company Limited

AREVAHuadian Switchgear AREVAT&D Indonesia

AREVAT&D Limited, Finland AREVA T&D Thailand Limited

(iii) Key management personnel : Rathindra Nath Basu

8. INCOME TAX

a. The company in an earlier year was constrained not to make investment in capital gains bonds in respect of the capital gains that arose on disposal of non T&D business because of the notification dated December 22, 2006 issued by the Central Government capping the investment in capital gains bonds at Rs 5,000 thousand. Hence the company had challenged by way of a writ petition in the Madras High Court the said notification. This writ was dismissed by the High Court as infructuous, since the notification under challenge was legalised by the Finance Act 2007 through a retrospective amendment to Sec 54EC of the Income Tax Act 1961. Against this decision of Madras High Court the company preferred a special leave petition before the Supreme Court of India which was also dismissed. Consequently the company has now filed a fresh writ petition before the Madras High Court challenging the constitutional validity of the retrospective amendment to Section 54EC itself. The said writ is admitted and pending disposal.

b. The company has estimated Rs 42,256 thousand of potential income tax risk relating to certain disallowances and consequential interest relating to various assessment years.

c. The Company has received tax demand (including interest) of Rs 369,284 thousand on completion of assessment for the assessment year 2006-07. The Company has preferred appeal against this demand which is pending before the appellate authority, and is of the opinion that there are reasonable chances of success in the appeal.

9. AREVAGLOBAL TRANSMISSION AND DISTRIBUTION BUSINESSSALE:

During the year, AREVA, the ultimate holding company decided to exit T&D business and consequent to the decision, AREVA Executive Board has begun negotiations with Alstom-Schneider Consortium. In January 2010, the management in India has been informed that a Share Purchase Agreement was signed between AREVA Group and Alstom-Schneider Electric and the completion of the sale transaction is subject to obtaining the merger clearances from EU Commission and other Competition authorities. When the transaction is cleared by the said authorities, the acquirers in compliance with SEBI regulations in India, will need to communicate to the shareholders their detailed plans, wherein possible reorganisation of the T&D business in India is expected.

10. CHANGE IN REGISTERED OFFICE

During the year, the registered office of the Company was shifted from Kolkata to New Delhi after obtaining necessary approvals.

11. PRIOR YEAR COMPARATIVES

Prioryearfigures have been reclassified wherever necessary for comparative purposes.

 
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