Home  »  Company  »  Bajaj Electrical  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Bajaj Electricals Ltd.

Mar 31, 2016

Nature of Security

1.1 Secured :

Loans from Consortium Banks are secured by :

i. First pari passu charge by way of hypothecation of inventories and book debts, excluding project specific assets exclusively charged to IDBI Bank Ltd.

ii. First pari passu charge on the Company''s immovable properties at Wardha and Mumbai (Reay Road);

iii. Second pari passu charge over present and future Fixed Assets of the Company, situated at;

a) Ranjangaon Units : Village Dhoksanghvi, Taluka Shirur, Ranjangaon, Dist. Pune - 412210;

b) Chakan Unit : Village Mahalunge, Chakan Talegaon Road, Khed, Pune - 410501;

c) Wind Farm : Village Vankusawade, Tal. Patan, Dist. Satara, Maharashtra 415206;

d) Showroom on Ground floor and Office Premises on Second Floor at Bajaj Bhawan 226, Jamnalal Bajaj Marg, Nariman Point, Mumbai 400 021.

e) Residential Flat No.183 & 193 - Naperol Tower, Rafi Ahmed Kidwai Marg, Wadala, Mumbai - 400 031.

These securities also extend to the various credit facilities including Bank Guarantees and Letters of Credit of Rs. 107,274.33 lacs (Previous year Rs. 112,636.47 Lacs) executed on behalf of the Company in the normal course of business. Further Company has availed facilities for Bank Guarantees and Letters of Credit of Rs. 14,690.65 Lacs (Previous Year Rs. 13,112.69 Lacs) from IDBI Bank Ltd. which are secured by exclusive first charge on Company''s movable properties and entire current assets pertaining to specific projects and subservient charge on the Company''s entire movable assets including Stocks and Book Debts etc.

The Consortium banks have issued their NOC for substitution of charge on some of the aforesaid properties (Pending Creation) as follows

A Release of charge on the following Properties :

a) Company''s immovable property at Mumbai (Reay Road).

b) Residential Flat No.183 & 193 - Naperol Tower, Rafi Ahmed Kidwai Marg, Wadala, Mumbai - 400 031.

B Creation of pari passu charge over following Residential, Office and Factory premises of the Company, situated at;

I On First Charge basis :

Hari Kunj Flat No. 103 and 104, ''B'' wing, Sindhi Society, Chembur East, Mumbai - 400 071.

II On Second Charge basis :

Delhi Office : No. DSM-514 to DSM-521, DLF Tower, 5th Floor, 15 Shivaji Marg, Nazafgarh Road Industrial Area, Delhi-West, Delhi -110015.

Office Premises No : 001, 501, 701 and 801, ''Rustomjee Aspiree'', Bhanu Shankar Yagnik Marg, Off Eastern Highway, Sion (East), Mumbai - 400 022.

Kosi Factory Unit at Khasra No.647,648, NH 02, Km 109 Mile Stone, Village Dautana, Chhatta, Kosi Kallan, Mathura 281403.

R & D centre (proposed) at Plot no. 27/ pt 2 at Millennium Business Park, TTC Industrial area, Mahape, Navi Mumbai.

Terms of repayment for current year

2: Information about Business Segments:

The Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. ''Lighting'' includes Lamps, Tubes, Luminaries; ''Consumer Durables'' includes Appliances & Fans; Engineering & Projects'' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and ''Others'' includes Die- casting and Wind Energy.

ii) Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the Company. In terms of the Guidance Note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined the liability as given below.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are: Remaining term of maturity - 6.0 years Expected guaranteed interest rate - 8.80% Discount rate for the remaining term to maturity of interest portfolio - 7.80%

3 : Consolidated Financial Statement

The consolidated financial statements of the Company alongwith its Associate is attached to the standalone financial statement. The details of the Group regarding the nature of relationship and the basis of consolidation can be referred to in Note 1 to the said consolidated financial statements.

4 : Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.


Mar 31, 2014

Basis of preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"]. Pursuant to circular 15/2013 dated 13.09.2013 read with circular 08/2014 dated 04.04.2014, till the standards of Accounting or any addendum thereto are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1: Contingent liabilities

Particulars 2013-14 2012-13

(i) Contingent Liabilities not provided for :

Claims against the Company not acknowledged as debts 1,386.39 1,391.15

Net of tax 915.16 918.30

Guarantees / Letter of Comfort given on behalf of Companies Rs.13,560.53 Lacs (Previous Year Rs.10,560.53 Lacs) 9,711.62 9,757.06

Liability towards Banks in respect of Bill Discounting / Channel Finance Facility 2,387.37 1,559.77

Excise and Customs demand - matters under dispute and Claims for refund of Excise Duty, if any, against Excise Duty Refund received in the earlier year 25.48 32.74

Net of tax 16.82 21.61

Service Tax matters under dispute and Claims 134.68 -

Net of tax 88.90 -

Income Tax matters - Appeal by company 479.76 480.30

Sales Tax matters under dispute 2,797.95 747.21

Net of tax 1,846.93 493.23

Penalty/damages/interest, if any, due to non-fulfillment of any of the terms of Liability Liability works contracts unascert -ained unascer -tained

(ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

The Company has arranged channel finance facility for its dealers and distributors from Axis Bank Limited. The outstanding in respect of this facility as at Balance Sheet date is Rs. 5,593.87 Lacs (Previous Year Rs. 4,987.54 Lacs). Accordingly, Trade Receivables at the end of the year stands reduced by the said amount. However, the Company has provided a recourse of 33% of the outstanding that may be overdue and irrecoverable from the dealers, which works out to Rs. 7.44 Lacs (Previous Year Rs. 15.64 lacs)

The Company has been sanctioned Sales Bills / Receivables Factoring facility by few banks for discounting the bills raised on its customers. The said facilities are with full recourse to the Company. The outstanding in respect of this facility as at Balance Sheet date is Rs. 2,379.93 Lacs (Previous Year Rs. 1,544.13 Lacs). Accordingly, Trade Receivables at the end of the year stands reduced by the said amount.

Disclosure in Respect of Material Related Party Transactions during the year :

1 Purchases include Hind Lamps Limited Rs. 4,943.44 Lacs (Previous Year Rs. 5,678.92 Lacs), Starlite Lighting Limited Rs. 7,281.30 Lacs (Previous Year Rs. 11,094.67 Lacs)

2 Purchase of DEPB Licenses include Bajaj Auto Ltd. Rs. Nil (Previous Year Rs. 343.63 Lacs)

3 Sales include Mukand Ltd. Rs. Nil (Previous Year Rs. 91.76 Lacs), Hindustan Housing Co. Ltd. Rs. Nil (Previous Year Rs. 4.31 Lacs) , Bajaj Finance Ltd. Rs. 64.28 Lacs (Previous year Rs. Nil)

4 Commission include commission paid to Shri Madhur Bajaj Rs. 2.50 Lacs (Previous Year Rs. 2.50 Lacs)

5 Directors'' sitting fees include fees paid to Shri Madhur Bajaj Rs. 1.00 Lacs (Previous Year Rs. 1.00 Lacs)

6 Insurance premium paid include premium paid to Bajaj Allianz General Insurance Co. Ltd. Rs. 689.31 Lacs (Previous Year Rs. 463.44 Lacs)

7 Reimbursement of expenses include expense reimbursed to Hind Musafir Agency Ltd. Rs.1,295.53 Lacs (Previous Year Rs. 1,036.40 Lacs)

8 Other expenses include expenses paid to Mukand Ltd Rs. 5.02 Lacs (Previous Year Rs. Nil)

9 Amount paid for transfer of deposit in the Company''s name include deposit reimbursed to Hind Lamps Ltd. Rs.13.63 Lacs (Previous Year Rs. Nil)

10 Services received include services received from Hind Musafir Agency Ltd. Rs. 19.63 Lacs (Previous Year Rs. 13.86 Lacs), Hindustan Housing Co. Ltd.Rs. 23.48 Lacs (Previous Year Rs. 20.16 Lacs), Hind Lamps Ltd. Rs. 164.01 Lacs (Previous Year Rs. Nil )

11 Remuneration paid to Directors include remuneration paid to Shri Shekhar Bajaj Rs. 211.64 Lacs (Previous Year Rs. 253.10 Lacs), Shri Anant Bajaj Rs. 143.39 Lacs (Previous Year Rs.158.92 Lacs).

12 Rent paid include rent paid to Jamnalal Sons Pvt. Ltd. Rs. 34.65 Lacs (Previous Year Rs. 31.33 Lacs), Smt. Kiran Bajaj Rs. 9.00 Lacs (Previous Year Rs. 9.00 Lacs).

13 Claims received include claims received from Bajaj Allianz General Insurance Co. Ltd.Rs. 132.54 Lacs (Previous Year Rs. 95.00 Lacs)

14 Incentives & other income include incentive received from Hind Musafir Agency Ltd. Rs. 3.90 Lacs (Previous Year Rs. 2.70 Lacs)

15 Interest received include interest received from Hind Lamps Ltd. Rs. 71.34 Lacs (Previous Year Rs. 114.45 Lacs), Starlite Lighting Ltd. Rs. 389.37 Lacs (Previous Year Rs. 238.22 Lacs)

16 Lease rent received include rent received from Starlite Lighting Ltd. Rs. 103.28 Lacs (Previous Year Rs. 103.28 Lacs)

17 Dividend received include dividend received from Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs. 142.41 Lacs)

18 Contribution to Gratuity Fund include contribution paid to Bajaj Allianz Life Insurance Co Ltd. Rs. 224.63 Lacs (Previous Year Rs. 400.00 Lacs)

19 Contribution to equity include Hind Lamps Ltd. Rs. 756.00 Lacs (Previous Year Rs. Nil)

20 Loan given include loan given to Starlite Lighting Ltd. Rs. Nil (Previous Year Rs. 1,000.00 Lacs)

21 Trade advance given include advances given to Starlite Lighting Ltd. Rs. 6,470.00 Lacs (Previous Year Rs. 3,200.00 Lacs)

22 Security Deposit advanced include Hindustan Housing Co. Ltd. Rs. Nil deposit refund received (Previous Year Rs. 0.90 Lacs)

23 Capital asset purchase include purchase of Hind Lamps Ltd.''s Kosi Unit Rs. Nil (Previous Year Rs. 2,263.14 Lacs)

24 Fixed asset purchase include purchase from Hind Lamps Ltd. Rs.. 5.01 Lacs (Previous Year Rs. Nil)

25 Advance for capital asset include advance given to Bajaj Auto Ltd. Rs. 40.88 Lacs (Previous Year Rs. Nil)

26 Redemption of 2% Non-Convertible Cumulative Redeemable Preference Shares include redemption of investment in preference shares of Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs. 1,000.00 Lacs)

27 Non Convertible Redeemable Preference Shares include investment in preference shares of Hind Lamps Ltd. Rs. Nil (Previous Year Rs. 700.00 Lacs) Starlite Lighting Ltd. Rs. 3,000.00 Lacs (Previous Year Rs. Nil)

ii) Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the company. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined that there is no shortfall as at 31 March 2014.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 6.78 years

Expected guaranteed interest rate - 8.75%

Discount rate for the remaining term to maturity of interest portfolio - 9.28%

The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange and Bombay Stock Exchange Limited over a period prior to the date of grant corresponding with the expected life of the options.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 01 April 2005.

Stock Options exercised after the Balance Sheet date rank pari passu with the equity shares as on the Balance Sheet date and hence are entitled to dividend, if exercised before the dividend is declared. Accordingly proposed dividend includes dividend on such equity shares issued and allotted up to the date these financial statements are drawn up. Dividend on subsequently allotted equity shares is accounted under "Appropriations" as ''Dividend paid on exercise of Stock Options''.

2 : Exceptional item of Rs. Nil (Previous Year Rs. 2,472.32 Lacs) represents profit realised on divestment of Company''s entire shareholding in Bajaj Venture Ltd.

3 : Advertisement and Publicity expenses includes Rs. 1,353.11 Lacs, incurred for 75th year Platinum Jubilee celebration (Previous Year Rs. Nil).

4 : Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.


Mar 31, 2013

Basis of preparation

The Company maintains its accounts on accrual basis following the historical cost convention in accordance with generally accepted accounting principles ["GAAP"] in compliance with the provisions of the Companies Act, 1956 and the Accounting Standards as specified in the Companies (Accounting Standards) Rules, 2006 prescribed by the Central Government. Further, the guidance notes/ announcements issued by the Institute of Chartered Accountants of India (ICAI) are also considered, wherever applicable except to the extent where compliance with other statutory promulgations viz. SEBI guidelines override the same requiring a different treatment. All assets and liabilities have been classified as current or non-current as per the Company''s normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1: Information about Business Segments :

The Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. ''Lighting'' includes Lamps, Tubes, Luminaries; ''Consumer Durables'' includes Appliances & Fans; Engineering & Projects'' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and ''Others'' includes Die-casting and Wind Energy.

2: Related Party Transactions

1. Relationships

(A) Other related parties where control exists :

Hind Lamps Limited

Bajaj Ventures Limited*

Starlite Lighting Limited

(B) Associates, Joint ventures, Investing Party :

Jamnalal Sons Pvt. Ltd.

(C) Individuals Controlling Voting power/ Excercising Significant influence & their relatives :

Mr. Madhur Bajaj

(D) Key Management Personnel :

Mr. Shekhar Bajaj - Chairman & Managing Director

Mr. Anant Bajaj - Joint Managing Director

Mr. R. Ramakrishnan - Executive Director ( Upto 29th Feb,2012) #

(E) Relatives of Key Management Personnel and their enterprises where transactions have taken place:

Mrs. Kiran Bajaj

Mrs. Swarnalatha Ramakrishnan #

Hind Musafir Agency Limited

Bajaj Auto Limited Mukand Ltd.

Bajaj International Pvt. Ltd.

Hindustan Housing Co.Ltd.

Bajaj Allianz General Insurance Co. Ltd.

Bajaj Allianz Life Insurance Co Ltd.

Bajaj Finance Ltd.

Bajaj Finserv Ltd.

Bajaj Financial Solutions Ltd.

Hercules Hoists Ltd.

Disclosure in Respect of Material Related Party Transactions during the year :

1 Purchases include Hind Lamps Limited Rs.5,678.92 Lacs (Previous Year Rs.5,522.56 Lacs), Starlite Lighting Limited Rs.11,094.67 Lacs (Previous Year Rs.7,901.12 Lacs)

2 Purchase of DEPB Licenses include Bajaj Auto Ltd. Rs.343.63 Lacs (Previous Year Rs. Nil)

3 Sales include Mukand Ltd. Rs.91.76 Lacs (Previous Year Rs.43.49 Lacs), Hindustan Housing Co. Ltd. Rs.4.31 Lacs (Previous Year Rs.93.25 Lacs)

4 Commission include commission paid to Mr. Madhur Bajaj Rs.2.50 Lacs (Previous Year Rs.2.00 Lacs)

5 Commission paid on Imports include commission paid to Bajaj International Pvt. Ltd. Rs. Nil (Previous Year Rs.192.06 Lacs)

6 Directors'' Sitting Fees include fees paid to Mr. Madhur Bajaj Rs.1 Lac (Previous Year Rs.1 Lac)

7 Insurance Premium paid include premium paid to Bajaj Allianz General Insurance Co. Ltd. Rs.463.44 Lacs (Previous Year Rs.337.97 Lacs)

8 Reimbursement of Expenses include expenses reimbursed to Hind Musafir Agency Ltd. Rs.1,036.40 Lacs (Previous Year Rs.1,109.85 Lacs)

9 Services Received include services from Hind Musafir Agency Ltd. Rs.13.86 Lacs (Previous Year Rs.13.90 Lacs), Hindustan Housing Co. Ltd. Rs. 20.16 Lacs (Previous Year Rs.15.65 Lacs)

10 Remuneration paid to Directors include remunerations paid to Mr. Shekhar Bajaj Rs.253.10 Lacs (Previous Year Rs.485.17 Lacs), Mr. Anant Bajaj Rs.158.92 Lacs (Previous Year Rs.244.23 Lacs), Mr. R. Ramakrishnan # Rs. Nil (Previous Year Rs.217.08 Lacs)

11 Rent Paid include rent paid to Jamnalal Sons Pvt. Ltd Rs.31.33 Lacs (Previous Year Rs.30.90 Lacs), Mrs. Kiran Bajaj Rs.9.00 Lacs (Previous Year Rs.9.00 Lacs), Mrs. Swarnalatha Ramakrishnan# Rs. Nil (Previous Year Rs.5.50 Lacs)

12 Claims Received include claims received from Bajaj Allianz General Insurance Co. Ltd. Rs.95.00 Lacs (Previous Year Rs.52.97 Lacs)

13 Incentives & Other income include incentives received from Hind Musafir Agency Ltd. Rs.2.70 Lacs (Previous Year Rs.0.81 Lacs)

14 Interest Received include interest received from Hind Lamps Ltd. Rs.114.45 Lacs (Previous Year Rs.146.49 Lacs), Starlite Lighting Ltd Rs.238.22 Lacs (Previous Year Rs.323.17 Lacs)

15 Lease Rent Received include rent received from Starlite Lighting Ltd. Rs.103.28 Lacs (Previous Year Rs.103.28 Lacs)

16 Royalty received include royaty received from Bajaj International Pvt. Ltd. Rs. Nil (Previous Year Rs.28.93 Lacs)

17 Rent Received include rent received from Bajaj Auto Ltd. Rs. Nil (Previous Year Rs.0.44 Lacs)

18 Dividend Received include dividend received from Bajaj Ventures Ltd. Rs.142.41 Lacs (Previous Year Rs. Nil)

19 Contribution to Gratuity Fund include contribution paid to Bajaj Allianz Life Insurance Co Ltd. Rs.400.00 Lacs (Previous Year Rs.1,000.00 Lacs)

20 Contribution to Equity include Bajaj Ventures Ltd. Rs. Nil (Previous Year Rs.750.00 Lacs)

21 Loan Given include loans given to Starlite Lighting Ltd. Rs.1,000.00 Lacs (Previous Year Rs. Nil)

22 Trade Advance Given include advances given to Starlite Lighting Ltd. Rs.3,200.00 Lacs (Previous Year Rs.1,500.00 Lacs)

23 Advance for Insurance Premium include payment made to Bajaj Allianz General Insurance Co. Ltd. Rs. Nil (Previous Year Rs.239.41 Lacs)

24 Security Deposit Advanced include Hindustan Housing Co. Ltd. Rs.0.90 Lacs deposit refund received (Previous Year Rs.6.03 Lacs)

25 Capital Asset Purchase include purchase of Hind Lamps Ltd.''s Kosi Unit - Rs.2,263.14 Lacs (Previous Year Rs. Nil)

26 Redemption of 2% Non-Convertible Cummulative Redeemable Preference Shares include redemption of investment in Preference Shares of Bajaj Ventures Ltd Rs.1,000.00 Lacs (Previous Year Rs. Nil)

27 Non Convertible Redeemable Preferance Shares include investment in Preference Shares of Hind Lamps Ltd. Rs.700.00 Lacs (Previous Year Rs. Nil)

# Mr. R. Ramakrishnan - Executive Director up to 29th February, 2012, considered for previous year figures.

3: Employee benefits

Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard 15 (Revised) the details of which are as hereunder.

Provident Fund :

In case of certain employees, the provident fund contribution is made to a trust administered by the Company. In terms of the guidance note issued by the Institute of Actuaries of India, the actuary has provided a valuation of provident fund liability based on the assumptions listed below and determined that there is no shortfall as at 31 March 2013.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are:

Remaining term of maturity - 6 years Expected guaranteed interest rate - 7.98%

Discount rate for the remaining term to maturity of interest portfolio - 8.09%

4: Exceptional Item of Rs. 2,472.32 Lacs represents profit realized on divestment of Company''s entire shareholding in Bajaj Ventures Ltd.

5: Previous year figures

The previous year figures have been regrouped / reclassified, wherever necessary to conform to the current year presentation.


Mar 31, 2012

Basis of Preparation

These financial statements have been prepared in accordance with the generally accepted accounting principles in India under the historical cost convention on accrual basis. These financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the other relevant provisions of the Companies Act, 1956.

All assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in the Revised Schedule VI to the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current or non-current classification of assets and liabilities.

1.1 The Company has reserved issuance of 3,616,121 (Previous year 2,171,632) Equity Shares of Rs. 2/- each for offering to eligible employees of the Company under Employees Stock Options Scheme. During the year, the Company has granted 2,595,000 (Previous Year 695,000) options to the eligible employees which includes 2,455,000 options at a price of Rs. 164.85 per option and 140,000 option at a price of Rs. 182.20 per option (Previous year 695,000 options at a price of Rs. 313.95 per option) plus all applicable taxes, as may be levied in this regard on the Company. The options would vest over a maximum period of 4 years or such other period as may be decided by the Remuneration & Compensation Committee from the date of Grant based on specified criteria.

1.2 Terms/Rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 2/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

1.3 For the Period of Five years immediately preceding the date as at which the Balance sheet is prepared

During the Financial year 2007-08 Company issued 8,642,880/- Equity Shares of Rs. 10/- each as Bonus shares in the ratio of 1:1 (43,214,400 equity shares of Rs. 2/- each) by capitalising reserves.

*On 500 Equity Shares of Rs. 2/- each (Previous Year 46,000 Equity Shares of Rs. 2/- each) issued at a premium of Rs. 28/- per Equity Share under Loyalty Plan and 767,022 Equity Shares of Rs. 2/- each (Previous year 1,254,312 Equity Shares of Rs. 2/- each) issued at a premium of Rs. 41.11 each and 28,000 Equity Shares of Rs. 2/- each issued at a premium of Rs. 171.35 each under Growth Plan to eligible employees under Employees Stock Options Scheme.

*The Company had advanced loans aggregating to Rs.2,372 lacs to Hind Lamps Ltd. (HLL) in which Company holds 50% of Equity Share Capital as a promoter and HLL is a major dedicated vendor of lamps and tubes to the Company. The loans are a result of continued financial support to HLL in view of substantial losses incurred by HLL in past many years. The Company based on its own assessment of the financial condition of HLL has in the past, as a matter of prudence, made a provision for doubtful advance to the extent of Rs.1,000 lacs.

The Draft Rehabilitation Scheme (DRS) submitted by HLL to the Board for Industrial and Financial Reconstruction (BIFR) envisaging its revival was approved in January 2012 and according to which HLL has repaid to the Company loans of Rs. 520 lacs during the year and the loan amount of Rs. 700 lacs would be converted into Non Convertible Cumulative Redeemable Preference Shares in FY 2012-13.

In terms of the Scheme approved by BIFR, HLL has sold its Kosi Unit and the proceeds received from the sale are being utilized to reduce part of its high cost debt obligations and to meet working capital requirements. Further, HLL has approached various authorities for grant of other reliefs as per the scheme approved by BIFR. With these reliefs the management of HLL is confident in executing the revival plan successfully to turn around its operations.

Note 2. Contingent liabilities

(i) Contingent Liabilities not provided for : (Rs. In Lacs) 2011-12 2010-11

Claims against the Company not acknowledged as debts 1,360.55 1,155.00

Net of tax 919.12 771.34

Guarantees / Letter of Comfort given on behalf of Companies 10,950.00 5,200.00

Excise and Customs demand - matters under dispute and Claims for refund of Excise Duty, if any, against Excise Duty Refund received in the earlier year 32.74 32.74

Net of tax 22.12 21.86

Income Tax matters - Appeal by company 443.19 478.42

Sales Tax matters under dispute 791.54 725.93

Net of tax 534.72 484.79

Penalty/damages/interest, if any, due to non-fulfilment of any of the terms of Liability Liability works contracts unascertained un ascertained

Letter of support given to Associate Company Liability Liability unascertained un ascertained

(ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

Note 3. Information about Business Segments :

Company has identified its Primary Reportable Business Segments comprising of i) Lighting ii) Consumer Durables iii) Engineering & Projects and iv) Others. 'Lighting' includes Lamps, Tubes, Luminaries; 'Consumer Durables' includes Appliances & Fans; Engineering & Projects' includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and 'Others' includes Die-casting and Wind Energy.

1. Providend Fund Liability

In case of certain employees, the Providend Fund contribution is made to a trust administered by the Company. In terms of the Guidance note issued by the Institute of Actuaries of India, the Actuary has provided a valuation of Providend Fund liability based on the assumptions listed below and determined net liability of Rs. 28.67 Lacs as at 31st March 2012, the same has been provided for in the books of accounts of the Company.

The assumptions used in determining the present value of obligation of the interest rate guarantee under deterministic approach are :- Remaining term of maturity - 6.89 years Expected Guaranteed interest rate - 8.25%

Discount rate for the remaining term to maturity of interest portfolio - 8.60%

The volatility is calculated considering the daily volatility of the stock prices on National Stock Exchange and Bombay Stock Exchange Limited over a period prior to the date of grant corresponding with the expected life of the options.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share-based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 1st April 2005.

Stock Options exercised after the Balance Sheet date rank pari passu with the equity shares as on the Balance Sheet date and hence are entitled to dividend, if exercised before the dividend is declared. Accordingly proposed dividend includes dividend on such equity shares issued and allotted up to the date these financial statements are drawn up. Dividend on subsequently allotted equity shares is accounted under "Appropriations" as 'Dividend paid on exercise of Stock Options'.

Note 4. Previous year figures

The financial statements for the year ended 31 March 2011 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 31 March 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to confirm to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2010

1. 2009-10 2008-09 (i) Contingent Liabilities not provided for: (a) Disputed Income-tax Matters 300.30 119.40 (b) Disputed Excise Matters - Gross 68.02 68.02 - Net of tax 44.90 44.90 (c) Disputed Sales Tax Matters - Gross 645.63 752.02 - Net of tax 426.18 496.41 (d) Claims against the Company not acknowledged as debts - Gross 1558.43 1534.18 - Net of tax 1028.72 1012.71 (e) Guarantees/Letter of Comfort given on behalf of Companies 5055.46 2,750.00 (f) Penalty/damages/interest, if any due to non- fulfillment of any of the terms of works contracts Amounts not ascertainable (g) Letter of Support given to Associate Company Amounts not ascertainable (ii) Uncalled liability in respect of partly paid Shares held as investments 7.20 7.20

2. Ownership premises include the sum of Rs. 0.01 (Previous Year Rs. 0.01) being the Face Value of Shares in co-operative societies required to be held under their respective bye-laws.

3. The buildings (including leasehold land appurtenant thereto) and ownership premises had been revalued as on 1 st January, 1985 then resulting in the net increase in the book value by Rs. 321.01 which had been transferred to Revaluation Reserve. All the freehold land, leasehold land, buildings (including leasehold land appurtenant thereto) and premises on ownership basis had been revalued as on 30th September, 1994 resulting in a further net increase in the book value of the said assets as on 1st October, 1994 by Rs. 2,305.87 which also had been transferred to the Revaluation Reserve. As a result of the above, the total net increase in the book value of the said assets aggregates to Rs. 2,626.88 (Rs. 62.51 on freehold land and Rs. 13.69 on leasehold land, Rs. 816.49 on building and Rs. 1,734.19 on ownership premises).

The depreciation on the increased value has resulted in an additional charge for the year of Rs.26.26 (Previous Year Rs. 26.26). An amount equivalent to the additional charge has been transferred from Revaluation Reserve to Profit & Loss Account. Such transfer, according to an authoritative professional view, is an acceptable practice for the purpose of true and fair presentation of the Companys financial statements. The balance depreciation charged on original cost of assets is in accordance with the SLM rates specified in Schedule XIV to the Companies Act, 1956.

4. In respect of Investments made in M. P. Lamps Ltd., a call of Rs. 2.50 per share on 48,000 equity shares and Rs. 3.75 per share on 95,997 equity shares aggregating to Rs. 4.80 Lacs has not been paid by the Company. On principles of prudence the entire investment in M. P. Lamps is considered as diminished and accordingly valued at Rs. NIL.

5. Estimated amount of contracts remaining to be executed on capital account Rs. 406.52 (Previous Year Rs. 475.12) net of advances.

6. Acceptances include Rs. 1,762.07 (Previous Year Rs. 2,205.50 ) for bills accepted by the Company and discounted by the suppliers with Small Industries Development Bank of India under a line of credit extended to the Company, which are secured by a second charge on raw materials, goods in process, semi-finished goods, finished goods and book debts and also on the collateral security created by way of equitable mortgage on the Companys properties at Mumbai and Wardha.

7. a. Provision for taxation includes Rs. 4.00 (Previous Year Rs. 2.50), provided in respect of wealth tax liability for the year.

b. The Company had paid taxes with regards to certain disallowances in respect of Assessment Years 2007-08, 2008-09 and 2009-10 against which the Company is in the process of making representations to appropriate authorities to reclaim the same. As a matter of prudence a provision has been made during the year in the books of account without prejudice to the Companys right to contest and reclaim the same.

8. Information about Business Segments:

Company has identified its Primary Reportable Business Segments comprising of i) Lighting, ii) Consumer Durables, iii) Engineering & Projects and iv) Others. Lighting includes Lamps, Tubes, Luminaries; Consumer Durables includes Appliances & Fans; Engineering & Projects includes Transmission Line Towers, Telecommunications Towers, Highmast, Poles and Special Projects and Others includes Die-casting and Wind Energy.

9. Related Party Transactions :

Details of Transactions with Related Parties during the year as required by Accounting Standard -18 on Related Party Transactions have been disclosed on the basis of parties identified by the key management personnel to be within the definition of Related Parties as per the Standard and noted by the Board of Directors. Accordingly, the information is disclosed hereunder:

1. Relationships

(a) Other related parties where control exists : Hind Lamps Limited Bajaj Ventures Limited Starlite Lighting Limited

(b) Key Management Personnel:

Mr. Shekhar Bajaj - Chairman & Managing Director Mr. Anant Bajaj - Executive Director Mr. R. Ramakrishnan - Executive Director

(c) Relatives of key management personnel and their enterprises where transactions have taken place: Mr. Madhur Bajaj

Mrs. Kiran Bajaj Mrs. Pooja Bajaj Mrs. Swarnalatha Ramakrishnan Hind Musafir Agency Ltd. Bajaj Auto Ltd. Bajaj Hindusthan Ltd. Jamnalal Bajaj Seva Trust Maharashtra Scooters Ltd. Mukand Engineers Ltd. Mukand Ltd. Bajaj International Pvt. Ltd. Hindustan Housing Co. Ltd. Hindustan Construction Co. Ltd. Jamnalal Sons Pvt. Ltd. Hercules Hoist Ltd. Bajaj Allianz General Insurance Co. Ltd. Bajaj Consumer Care Ltd.

Note : Related party relationship is as identified by the Company and relied upon by the Auditors.

10. Miscellaneous Income includes Rs. 44.83 (Previous Year Rs. 269.03) being the liabilities no longer payable.

11. Employee Benefits and Employee Stock Options.

A) Disclosures pursuant to Accounting Standard -15 ( Revised )" Employee Benefits":

a. Defined Contribution Plans:

Amount of Rs. 602.06 (Previous Year Rs. 479.25) (Provident Fund, Pension Fund, Superannuation Fund) is recognised as expense and included in "Employee Emoluments" - Schedule 11 in the Profit and Loss Account.

b. Defined Benefit Plans:

i) General Descriptions of significant Defined plans:

a. Gratuity Plan

b. Leave Plan

B) Employee Stock Options Scheme:

On 30th April, 2009, 5,55,000 outstanding options out of the Growth Options that were granted on 25th October, 2007, 24th July, 2008 and 6,h August, 2008 were cancelled and the Remuneration & Compensation Committee of the Company in its meeting held on 30th April, 2009 re-granted 4,66,385 Stock Options under Growth Plan to the Eligible Employees, at an exercise price of Rs. 215.55 per option, in consideration of the unusal meltdown of the stock market, which had resulted in a steep fall in the market price of the Companys shares compared to the price prevalent when the Stock Options were granted, and to achieve the basic objectives of the ESOP Scheme viz. to motivate the employees to contribute to the growth and profitability of the Company as also to attract and retain talent in the organization.

The Remuneration & Compensation Committee has also, in its meeting held on 28* January, 2010, granted 1,44,000 incremental Stock Options under Growth Plan to the eligible employees consisting of promotees and new joinees, at a price of Rs. 866.75 per option, being the closing equity price of the Company on the National Stock Exchange of India Ltd, as per their eligibility under ESOP 2007 of the Company.

In respect of Options granted under the Employee Stock Options Plan, in accordance with guidelines issued by the SEBI, the accounting value of the options is accounted as deferred employee compensation, which is amortised on a straight line basis over a period between the date of grant of options and eligible dates for conversion into equity shares.

The above disclosures have been made consequent to the issue of Guidance Note on Accounting for Employee Share- based Payments issued by the Institute of Chartered Accountants of India in the year 2005 and applicable for the period on or after 1st April 2005.

12. Company has advanced loan aggregating to Rs.2,372 as on 31st March 2010 (Previous Year Rs.1,947) to Hind Lamps Ltd. (HLL) in which Company holds 50% of Equity Shares Capital as a promoter and HLL being major dedicated vendor of lamps and tubes to the Company. The loans are a result of continued financial support to HLL in view of substantial losses incurred in past many years. HLL has referred a scheme of revival before the Board for Industrial and Financial Reconstruction (BIFR) envisaging its revival by disposal of some of the assets thereby settling its debt obligation and raising its net worth and profitability. Keeping the revival plan in mind, the Company has estimated a part repayment of the above loan once the scheme is approved by BIFR and implemented by HLL and thereby determining the potential disability to recover the amount of Rs. 500 for substantial period of time. Accordingly the company has as a matter of prudence made a provision for this irrecoverability during the year.

13. In respect of Debtors relating to Engineering & Projects Business Unit balance confirmations have not been called for by the Company.

14. Statement of Abstract of Financial Statements and Companys General Business Profile, as compiled by the Company, is attached hereto.

15. (i) During the year, the Company has come up with a Qualified Institutional Placement (QIP) offer for issue of additional 20,48,339 equity shares @ Rs.785 per share (including premium of Rs.775 per share). Entire proceeds of Rs.16,079 net of share issue expenses, have been utilized in repayment debts in accordance with the terms of issue.

Share issue expenses amounting to Rs.348.30 have been adjusted against the Share Premium Account as per Section 78 of the Companies Act, 1956.

(ii) The Company, pursuant to the approval of the shareholders granted by postal ballot on November 18, 2009, sub-divided equity shares to 5 shares of a face value of Rs.2 for every share of a face value of Rs.10 as on January 29, 2010, the record date fixed for the purpose. Accordingly, EPS for the financial year 2008-09 has been recomputed on the basis of face value at Rs.2 per share.

16. Previous years figures have been regrouped wherever necessary to make them comparable with those of the current year.

 
Subscribe now to get personal finance updates in your inbox!