Mar 31, 2016
1. Unsecured Term Loan from Sowraj Investments Pvt. Ltd., and Easun Products of India Pvt. Limited do not carry any interest. The Company is making necessary efforts to repay this loan against business realization.
2. Working Capital a. Primary Security
Hypothecation of entire current assets including stocks, receivables and other current assets of the Company on pari-passu basis favouring Axis Bank, DBS Bank, Standard Chartered Bank, Canara Bank and State Bank of India.
3. The company has been sanctioned to avail interest free sales tax deferral scheme for an aggregate amount of Rs.69.45 lakhs by the Department of Sales tax, Government of Tamilnadu.
The same has been repaid in September, 2015 with interest.
4. Gratuity and Leave for AS 15 Disclosure
A Defined Benefit Plan:
(i) Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering all permanent employees. The gratuity plan provides for, at retirement or termination of employment, an amount based on the respective employees last drawn salary and the years of employment with the company. The company provides the gratuity benefit through annual contributions to a gratuity trust which in turn mainly contributes to Life Insurance Corporation of India (LIC) for this purpose. Under this plan the settlement obligation remains with the gratuity trust. Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the trust.
(ii) Leave Encashment (Unfunded)
In accordance with applicable rules, the liability for leave encashment was actuarially valued and provided in the books of accounts, covering permanent employees.
B Defined Contribution Plan (Funded)
Provident Fund
All employees are entitled to provident fund benefits. For all categories of employees the company makes contributions to Regional Provident Fund Commissioners as per law.
5. The Company has incurred expenditure aggregating to Rs. NIL during the year (Rs.95.29 lakhs) on development of products. The expenditure has been capitalized and carried in the financial statements under the head Intangible Asset Product Development as on 31st March 2016. Based on the process of establishing the technical and economic feasibility of the product, the management is confident that the products developed would be commercially viable and there is no uncertainty regarding the establishment of feasibility of the product. Management believes that the expenditure capitalized is in the nature of development costs and can be capitalized as per AS 26 â Intangible Assetsâ and its carrying value is appropriate.
6. a) In respect of companyâs operations which includes execution of the turnkey projects. These
turnkey projects significantly involve supply of equipment dealt with by the company in the ordinary course of operations. The activities that are additionally carried out while executing the turnkey projects are in the nature of civil construction and erection services which are significantly less when compared with the overall project value. No information is furnished in terms of segment reporting in as much the project execution essentially involves supply of Transmission and Distribution equipment manufactured by the company carrying similar risks and rewards which are not different from main products.
b) Revenue from operations includes invoicing on customers towards execution of turnkey projects. These turnkey project invoicing is predominantly milestone associated and is independent of customer acceptance of agreement, Revenue recognized in this regard with appropriate provision for anticipated procurement / cost of manufacturing components the outcome of eventual acceptability of the claims of the company is ascertained at the closure of the respective project and is accounted accordingly.
7. Personnel expenses and other expenses are net off recovery of overheads from direct and indirect overseas subsidiaries amounting to Rs. NIL (Rs.NIL) and net off product development expenses Rs. NIL (Rs.95.29 lakhs).
8. Reconciliation of Excise and Service Tax Records / VAT Records with the Financial Records are under Progress. Adjustments if any which may arise are not ascertainable and would be carried out in the Books upon completion of Reconciliation.
9. Trade Receivables includes an amount of Rs.1,224.75 lakhs (Rs.1,191.69 lakhs) being the Liquidated Damages recovered by some customers. The Company is in the process of recovering the said amount and pending recovery, no provision is considered in the accounts towards Liquidated Damages. During this financial year Rs.0.14 Lakhs (Rs.59.50 Lakhs) recovered from Customers against written off in earlier years has been adjusted against Liquidated Damages recoverable.
10. Trade Receivables includes an amount of Rs.487.52 lakhs (Rs.626.88 Lakhs) being the outstanding from Foreign Debtors for more than One Year. The Company is in the process of getting necessary approval from Reserve Bank of India towards extension of time limit for collection. Out of which Rs. Nil (Rs.509.85 Lakhs) received subsequently.
11. The Company has made an investment of Rs.15,502.10 lakhs in its wholly owned subsidiary at Singapore and for onward investment into its wholly owned subsidiaries. Considering the long term nature of investment and future plans of the management, no provision towards any impairment of investment is considered necessary as the management is of the opinion that this investments represents appropriate carrying value.
12. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has relaxed the requirement of the immediate debit / credit of Foreign Exchange translation differences on long term foreign currency monetary items to the Statement of Profit & Loss till 31st March 2020. Further the MCA inserting a new para 46A in AS11 allowed Companies to defer foreign exchange translation differences on long term foreign currency monetary items for entities which had not opted for such relaxation earlier. The Company during the financial year 2012-13 has opted for the relaxation as given in Para 46A and has deferred an amount of Rs.721 lakhs being the foreign exchange difference on long term external commercial borrowing from Standard Chartered Bank. The amount would be written-off over the period of 3 years, being the loan tenure. During the financial year 2015-16, the Company has written off Rs.801.45 lakhs towards loss on foreign exchange and reinstated the liability by Rs.322.37 lakhs.
13. Operating Lease
The Company has entered into operating lease arrangements for its office facilities. These leases are for a period ranging from 1 to 5 years with an option to the Company for renewing at the end of the initial term. Rental expenses for operating leases included in the income statement for the year is Rs.68.14 lakhs (Rs.94.48 lakhs).
14. The value of inventory pertaining to the âMetering Businessâ amounting to Rs.215.41 lacs is continued to be carried at cost despite no activity in the business for considerable period and realizable value has not been ascertained consequently the impact on the financial statements is not quantifiable.
15. In respect of certain turnkey contracts which have been terminated by the customers resulting in encashment of bank guarantees given by the company amounting to Rs.4,603.99 lacs has been shown recoverable from parties in respect of which negotiation with customers are stated to be in progress. Pending the outcome of negotiations no adjustment in the financial statements has been made.
16. Confirmation of balance has not been obtained from some of the supply creditors and debtors to certain parties to whom the Company has given advances.
17. The Company has applied for the extension of time limit under FEMA rules for material advances given to the associate enterprises amounting Rs.624.19 lakhs as on 31st March 2016.
18. As a matter of prudence, the Deferred Tax Assets arising predominantly on account of Carry over of Business Loss is not recognized in the books of account in line with Accounting Standard 22 âTaxes on Incomeâ.
19. Previous yearâs figures have been re-grouped / re-classified, wherever necessary to conform to the current yearâs presentation.
Mar 31, 2015
1. Rights, preferences and restrictions attached to shares
Equity Shares: The company has one class of equity shares having a par
value of Rs 2. per share. Each shareholder is eligible for one vote per
share held. The dividend proposed by the board is subject to the
approval of the shareholders in the ensuing Annual General Meeting,
except in case of interim dividend. In the event of liquidation, the
equity shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amount, in proportion to
their shareholding.
2. The company has been sanctioned to avail interest free sales tax
deferral scheme for an aggregate amount of Rs.69.45 lakhs by the
department of Sales tax, Government of Tamilnadu. The underlying
deferred sales tax payable by the company from the financial year
commencing from 2013-14.( which is not paid and interest @24% p.a on
the same is provided in the books.
3. Gratuity and Leave for AS 15 Disclosure A Defined Benefit Plan:
(i) Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity,
a defined benefit retirement plan (Gratuity Plan) covering all
permanent employees. The gratuity plan rovides for, at retirement or
termination ofemployment, an amount based on the respective employees
last drawn salary and the years of employment with the company. The
company provides the gratuity benefit through annual contributions to a
gratuity trust which in turn mainly contributes to Life Insurance
Corporation of India (LIC) for this purpose. Under this plan the
settlement obligation remains with the gratuity trust. Life Insurance
Corporation of India administers the plan and determines the
contribution premium required to be paid by the trust.
(ii) Leave Encashment (Unfunded)
In accordance with applicable rules, the liability for leave encashment
was actuarially valued and provided in the books of accounts, covering
permanent employees.
B Defined Contribution Plan (Funded)
Provident Fund
All employees are entitled to provident fund benefits. For all
categories of employees the company makes contributions to Regional
Provident Fund commissioners as per law.
4. Contingent Liabilities and Commitments
A. Contingent Liabilities 2015 2014
1 Letters of Credit opened by Bank for
purchase of raw materials 2,111.30 1,321.74
and components
2 Counter Guarantee given to bankers in
respect of Guarantees 11,381.66 15,186.60
given by them
Counter Guarantee given to bankers in
respect of Standby LC - 377.13
given by them
3 Bonds executed in favour of President of
India for import of 8.95 8.95
material at concessional rate of duty
4 Sales effected under CST - liability
towards submission of C 745.60 1,766.93
Forms
5 Disputed amounts of Income Tax
Assessment year
2003- 04 - Paid 47.85 47.85
2004- 05 - Paid 26.13 26.13
2006-07 - Paid 55.42 55.42
2008- 09 - Paid 306.33 306.33
2009- 10 - Unpaid 525.00 525.00
2010- 11 - Unpaid 178.18 178.18
Rs Lacs
6 Disputed amount of Sales Tax
Karnataka
FY 2007-08 Paid - 63.65
FY 2008-09 Paid - 41.78
FY 2009-10 (Rs.3.00 Paid, Rs.17.62 Unpaid) 20.62 20.62
Tamil Nadu (Unpaid)
FY 2006-07 (Rs.19.21 - Paid, Rs.18.77 Unpaid) 37.98 37.98
FY 2007-08 8J8 8.38
FY 2008-09 29.63 29.63
FY 2009-10 30.44 -
FY 2010-11 144.43 -
FY 2011-12 337.06
TN VAT - Enforcement
FY 2010-11 ( Rs 3.94 Lac Paid ) 11.97 -
FY 2011-12 ( Rs 5.09 Lac Paid ) 17.69 -
7 Disputed Customs Duty Paid Under Protest 66.38 66.38
8 Disputed VAT Demand of West Bengalfor
FY 2009-10 Unpaid 6.18 6.18
B Capital Commitment
Estimated amount of capital commitment on 115.20 135.63
account of Fixed Assets
5. The Company has incurred expenditure aggregating to Rs.95.25 lakhs
during the year (Rs.165.249 lakhs) on development of products. The
expenditure has been capitalised and carried in the financial
statements under the head Intangible Asset Product Development as on
31st March, 2015. Based on the process of establishing the technical
and economic feasibility of the product, the management is confident
that the products developed would be commercially viable and there is
no uncertainty regarding the establishment of feasibility of the
product. Management believes that the expenditure capitalized is in the
nature of development costs and can be capitalized as per AS 26 Â
Intangible Assets and its carrying value is appropriate.
6. a) In respect of companyÂs operations which includes execution of
the turnkey projects. These turnkey projects significantly involve
supply of equipment dealt with by the company in the ordinary course of
operations. The activities that are additionally carried out while
executing the turnkey projects are in the nature of civil construction
and erection services which are significantly less when compared with
the overall project value. No information is furnished in terms of
segment reporting in as much the project execution essentially involves
supply of Transmission and Distribution equipment manufactured by the
company carrying similar risks and rewards which are not different from
main products.
b) Revenue from operations includes invoicing on customers towards
execution of turnkey projects. These turnkey project invoicing is
predominantly milestone associated and is independent of customer
acceptance of agreement, Revenue recognised in this regard with
appropriate provision for anticipated procurement / cost of
manufacuring components the outcome of enentual acceptability of the
claims of the company is ascertained at the closure of the respective
project and is accounted accordingly.
7. During the financial year 2012-13 the company has sold land at
Jigani for Rs.1800 Lacs based on an agreement to sale and handing over
of possession of buyer pending registration of sale deed.
The Company has recognized a profit of Rs.1747.12 Lacs towards such
sale. Subsequently no objection from bank has been obtained and the
sale deed has been registered.
8. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs. NIL (Rs.NIL) and net off product development expenses Rs.165.24
lakhs (Rs.153.39 lakhs).
9 Reconciliation of Excise and Service Tax Records / VAT Records with
the Financial Records are under Progress. Adjustments if any which may
arise are not ascertainable and would be carried out in the Books upon
completion of Reconciliation.
10. Trade Receivables includes an amount of Rs.1191.69 lacs (Rs.1012.27
lacs) being the Liquidated Damages recovered by some customers. The
Company is in the process of recovering the said amount and pending
recovery, no provision is considered in the accounts towards Liquidated
Damages. During this financial year Rs 59.50 Lacs recovered from
Customers against written off in earlier years has been adjusted
against Liquidated Damages recoverable.
11. Trade Receivables includes an amount of Rs. 626.88 lacs (Rs.388.89
lacs) being the outstanding from Foreign Debtors for more than 1 Year.
The Company is in the process of getting necessary approval from
Reserve Bank of India towards extension of time limit for collection.
Out of which Rs.509.85 Lacs received subsequently
12. The Company has made an investment of Rs.15,502.10 lacs in its
wholly owned subsidiary at Singapore and for onward investment into its
wholly owned subsidiaries. Considering the long term nature of
investment and future plans of the management, no provision towards any
impairment of investment is considered necessary as the management is
of the opinion that this investments represents appropriate carrying
value.
13. Expenditure incurred on account of borrowing costs amounting to
Rs.NIL (Rs.NIL) is capitalized towards new projects.
14. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has
relaxed the requirement of the immediate debit / credit of Foreign
exchange translation differences on long term foreign currency monetary
items to the Statement of Profit & Loss till 31st March 2020. Further
the MCA inserting a new para 46A in AS11 allowed Companies to defer
foreign exchange translation differences on long term foreign currency
monetary items for entitites which had not opted for such relaxation
earlier. The Company during the financial year 2012-13 has opted for
the relaxation as given in Para 46A and has deferred an amount of
Rs.721 lacs being the foreign exchange difference on long term external
commercial borrowing from Standard Chartered Bank. The amount would be
written-off over the period of 3 years, being the loan tenure. During
the financial year 2014-15, the Company has written off Rs.600.72 lacs
towards loss on foreign exchange and reinstated the liability by
Rs.982.84 lacs. Total outstanding as on 31st March, 2015 amounts to
Rs.1110.07 lacs which is to be written off in Six quarterly
installments.
15. Operating Lease
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to the Company for renewing at the end of the
initial term. Rental expenses for operating leases included in the
income statement for the year is Rs.94.48 lacs (Rs.131.68 lacs).
16. The value of inventory pertaining to the ÂMetering BusinessÂ
amounting to Rs.215.41 lacs is continued to be carried at cost despite
no activity in the business for considerable period and realisable
value has not been ascertained consequently the impact on the financial
statements is not quantifiable.
17. In respect of certain turnkey contracts which have been terminated
by the customers resulting an encashment of bank guarantees given by
the company amounting to Rs.526.95 lacs (net) has been shown
recoverable from parties in respect of which negotiation with customers
stated to be in progress. Pending the outcome of negotiations the no
adjustment in the financial statements has been made.
18. Confirmation of balance has not been obtained from some of the
supply creditors and debtors to certain parties to whom the Company has
given advances.
19. The company is engaged in power transmission and distribution
segment and the same is being reported
20. Pursuant to the notification of schedule II of the companies
act,2013 (Âthe Act), by the Ministry of Corporate Affairs effective
from 1st April 2014, the management has internally reassessed and
changed, wherever necessary the useful lives of fixed assets for the
purpose of computing depreciation, so as to conform with the
requirements of the Act. Accordingly, the carrying amount of Fixed
Assets as at April 1, 2014 is being depreciated over the remaining
useful life of the asset and where the remaining life of an asset is
nil as on April 1, 2014, the carrying amount of such asset has been
recognised as adjustment to the retained earnings as on that date. Had
the company continued with the previously assessed useful lives, charge
for depreciation and amortization expense for the quarter and year
ended March 31, 2015 would have been higher by Rs. 15 lacs and Rs. 33
lacs respectively and the profit before tax for the periods would have
been lower by such amount. Further, the carrying value of Rs.261.66 Lac
in case of assets with nil revised remaining useful life as at April 1,
2014 has been reduced from the retained earnings as on such date.
21. The Company is applied for the extension of time limit under FEMA
rules for material advances given to the associate enterprises
amounting Rs.624.19 lakhs as on 31st March 2015
22. Previsous year's figures have been re-grouped / re-classified,
wherever necessary to conform to the current year's presentation
Mar 31, 2014
1. Contingent Liabilities and Commitments
A. Contingent Liabilities 2014 2013
1 Letters of Credit opened by Bank for
purchase of raw materi- 1,321.74 2,728.26
als and components
2 Counter Guarantee given to bankers in
respect of Guarantees 15,186.60 17,002.08
given by them
Counter Guarantee given to bankers in
respect of Standby LC 377.13 1,253.66
given by them
3 Bonds executed in favour of President of
India for import of 8.95 8.95
material at concessional rate of duty
4 Sales effected under CST - liability towards
submission of0 C Forum 1,766.93 2,735.04
5 Disputed amounts of Income Tax
Assessment year
2003-04 - Paid 47.85 47.85
2004-05 - Paid 26.13 26.13
2006-07 - Paid 55.42 55.42
2008-09 - Paid 306.33 306.33
2009-10 - Unpaid 525.00 -
2010-11 - Unpaid 178.18 178.18
30.The Company has incurred expenditure aggregating to Rs.165.24 Lacs
during the year (Rs.153.39 Lacs) on development of products. The
expenditure has been capitalized and carried in the financial
statements under the head Intangible Asset Product Development as on
31st March 2014. Based on the process of establishing the technical and
economic feasibility of the product, the management is confident that
the products developed would be commercially viable and there is no
uncertainty regarding the establishment of feasibility of the product.
Management believes that the expenditure capitalized is in the nature
of development costs and can be capitalized as per AS 26 " Intangible
Assets" and its carrying value is appropriate.
2. a) In respect of company''s operations which includes execution of
the turnkey projects.
These turnkey projects significantly involve supply of equipment dealt
with by the company in the ordinary course of operations. The activities
that are additionally carried out while executing the turnkey projects
are in the nature of civil construction and erection services which are
significantly less when compared with the overall project value. No
information is furnished in terms of segment reporting in as much the
project execution essentially involves supply of Transmission and
Distribution equipment manufactured by the company carrying similar
risks and rewards which are not different from main products.
b) Revenue from operations includes invoicing on customers towards
execution of turnkey projects. These turnkey project invoicing is
predominantly milestone associated and is independent of customer
acceptance of agreement, Revenue recognized in this regard with
appropriate provision for anticipated procurement / cost of
manufacturing components the outcome of eventual acceptability of the
claims of the company is ascertained at the closure of the respective
project and is accounted accordingly.
3. During the previous financial year 2012-13 the company has sold
land at Jigani for Rs.1800 Lacs based on an agreement to sale and
handing over of possession of buyer pending registration of sale
deed. The Company has recognized a profit of Rs.1747.12 Lacs towards
such sale.
4. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs. NIL (Rs.NIL) and net off product development expenses Rs.165.24
Lacs (Rs.153.39 Lacs).
5 Reconciliation of Excise and Service Tax Records / VAT Records with
the Financial Records are under Progress. Adjustments if any which may
arise are not ascertainable and would be carried out in the Books upon
completion of Reconciliation.
6 Trade Receivables includes an amount of Rs.1,012.27 Lacs (Rs.731.15
Lacs) being the Liquidated Damages recovered by some customers. The
Company is in the process of recovering the said amount and pending
recovery, no provision is considered in the accounts towards Liquidated
Damages. During this financial year Rs.16.73 lacs recovered from
Customers against written off in earlier years has been adjusted
against Liquidated Damages recoverable.
7 Trade Receivables includes an amount of Rs. 388.89 lacs (Rs.160.91
Lacs) being the outstanding from Foreign Debtors for more than 1 Year.
The Company is in the process of getting necessary approval from
Reserve Bank of India towards extension of time limit for collection.
8 The Company has made an investment of Rs.15,502.10 Lacs in its
wholly owned subsidiary at Singapore and for onward investment into its
wholly owned subsidiaries. Considering the long term nature of
investment and future plans of the management, no provision towards any
impairment of investment is considered necessary as the management is
of the opinion that this investments represents appropriate carrying
value.
9 Expenditure incurred on account of borrowing costs amounting to
Rs.NIL (Rs.206.76 Lacs) is capitalized towards new projects.
10 The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has
relaxed the requirement of the immediate debit / credit of Foreign
exchange translation differences on long term foreign currency monetary
items to the Statement of Profit & Loss till 31st March 2020. Further
the MCA inserting a new Para 46A in AS11 allowed Companies to defer
foreign exchange translation differences on long term foreign currency
monetary items for entities which had not opted for such relaxation
earlier. The Company during the financial year 2012-13 has opted for
the relaxation as given in Para 46A and has deferred an amount of
Rs.721 Lacs being the foreign exchange difference on long term external
commercial borrowing from Standard Chartered Bank. The amount would be
written-off over the period of 3 years, being the loan tenure. During
the financial year 2013-14, the Company has written off Rs.369.04 Lacs
towards loss on foreign exchange and reinstated the liability by
Rs.375.99 Lacs. Total outstanding as on 31st March 2014 amounts to
Rs.727.95 Lacs which is to be written off in Eight quarterly
installments.
11 Operating Lease
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to the Company for renewing at the end of the
initial term. Rental expenses for operating leases included in the
income statement for the year is Rs.131.68 Lacs (Rs.117.86 Lacs).
12. Earnings Per Share
The earnings considered in ascertaining Earning per share comprise the
profit after tax. The number of shares used in computing Basic Earning
per share is the weighted average number of shares outstanding during
the year as follows:
13. The value of inventory pertaining to the "Metering Business"
amounting to Rs.215.41 lacs is continued to be carried at cost despite
no activity in the business for considerable period and realisable
value has not been ascertained consequently the impact on the financial
statements is not quantifiable.
14. In respect of certain turnkey contracts which have been terminated
by the customers resulting an encashment of bank guarantees given by
the company amounting to Rs.134.82 lacs (net) has been shown
recoverable from parties in respect of which negotiation with customers
stated to be in progress. Pending the outcome of negotiations the no
adjustment in the financial statements has been made.
15. The liquidated damages levied by the customers amounting to
Rs.1012.27 lacs, is under negotiations with customers seeking waiver of
the same. Pending the outcome of the same the Liquidated damages so
levied has not been provided for.
16. Confirmation of balance has not been obtained from some of the
supply creditors and debtors to certain parties to whom the Company has
given advances.
17. The company is engaged in power transmission and distribution
segment and the same is being reported
Mar 31, 2013
1. Gratuity and Leave for AS 15 Disclosure
A Defined Benefit Plan:
(i) Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity,
a defined benefit retirement plan (Gratuity Plan) covering all
permanent employees. The gratuity plan rovides for, at retirement or
termination of employment, an amount based on the respective employees
last drawn salary and the years of employment with the company. The
company provides the gratuity benefit through annual contributions to a
gratuity trust which in turn mainly contributes to Life Insurance
Corporation of India (LIC) for this purpose. Under this plan the
settlement obligation remains with the gratuity trust. Life Insurance
Corporation of India administers the plan and determines the
contribution premium required to be paid by the trust.
(ii) Leave Encashment (Unfunded)
In accordance with applicable rules, the liability for leave encashment
was actuarially valued and provided in the books of accounts, covering
permanent employees.
B Defined Contribution Plan (Funded) Provident Fund
All employees are entitled to provident fund benefits. For all
categories of employees the company makes contributions to Regional
Provident Fund commissioners as per law.
2. Employee Stock Option Scheme
a. During the year 2010-11 the Compensation Committee has granted
1,97,245 options to its senior employees and non-promoter directors.
The options granted vest over a period of 1 to 2 years; and can be
exercised over a maximum period of 6 months from the date of vesting.
The difference between the market price of the share underlying the
value of options granted on the date of grant and the exercise price of
the option are expensed over the vesting period as per the SEBI
guidelines.
b. Method Used for Accounting for Share Based Payment Plan:
The Company has used Intrinsic Value Method to account for the
compensation cost of stock option to employees of the Company.
Intrinsic Value is the amount by which the quoted market price of the
underlying share exceeds the exercise price of the option.
3. Other Income includes an amount of Rs.426.24 lacs being the gain on
surrender of Currency swap entered into with Standard Chartered Bank.
4. During the financial year the Company has sold land at Jigani for
Rs.1800 lacs based on an agreement to sale and handing over of
possession to the buyer pending registration of sale deed. The Company
has recognised a profit of Rs.1747.12 lacs towards such sale.
5. The Company has incurred expenditure aggregating to Rs.153.39 lakhs
during the year (Rs.168.96 lakhs) on development of products. The
expenditure has been capitalised and carried in the financial
statements under the head Intangible Asset Product Development as on
31st March 2013. Based on the process of establishing the technical and
economic feasibility of the product, the management is confident that
the products developed would be commercially viable and there is no
uncertainty regarding the establishment of feasibility of the product.
Management believes that the expenditure capitalized is in the nature
of development costs and can be capitalized as per AS 26 " Intangible
Assets".
6. In respect of company''s operations which includes execution of the
turnkey projects. These turnkey projects significantly involve supply
of equipment dealt with by the company in the ordinary course of
operations. The activities that are additionally carried out while
executing the turnkey projects are in the nature of civil construction
and erection services which are significantly less when compared with
the overall project value. No information is furnished in terms of
segment reporting in as much the project execution essentially involves
supply of Transmission and Distribution equipment manufactured by the
company carrying similar risks and rewards which are not different from
main products.
7. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs. NIL (Rs.188.17 lakhs) and net off product development expenses
Rs.153.39 lakhs (Rs.168.96 lakhs).
8. Reconciliation of Excise and Service Tax Records / VAT Records with
the Financial Records are under Progress. Adjustments if any which may
arise are not ascertainable and would be carried out in the Books upon
completion of Reconciliation.
9. During the Year the company has completed installation and
commenced production from 01.07.2012 in the new facility at Harohali,
Bangalore. Company has capitalised an amount of Rs.6,277.06 lacs
towards the project including preoperative expenses of Rs.1,771.11 lacs
comprising of (a) Interest and Bank Charges Rs.1,246.41 lacs (b) Proto
type development Rs.214.38 lacs (c) Employee expenses Rs.104.85 lacs
and (d) Other expenses Rs.205.47 lacs.
10. Trade Receivables includes an amount of Rs.731.15 lacs being the
Liquidated Damages recovered by some customers. The Company is in the
process of recovering the said amount and pending recovery, no
provision is considered in the accounts towards Liquidated Damages.
11. Trade Receivables includes an amount of Rs.160.91 lacs being the
outstanding from Foreign Debtors for more than 1 Year. The Company is
in the process of getting necessary approval from Reserve Bank of India
towards extension of time limit for collection.
12. The Company has made an investment of Rs.15502.10 lacs in its
wholly owned subsidiary at Singapore. Considering the long term
prospective and future plans by the management, no provision towards
impairment of investment has been.
13. Expenditure incurred on account of borrowing costs amounting to
Rs.206.76 lakhs (Rs.593.81 lakhs) is capitalized towards new projects.
14. The Ministry of Corporate Affairs (MCA) vide Para 46 of AS11 has
relaxed the requirement of the immediate debit / credit of Foreign
exchange translation differences on long term foreign currency monetary
items to the Statement of Profit & Loss till 31st March 2020. Further
the MCA inserting a new para 46A in AS11 allowed Companies to defer
foreign exchange translation differences on long term foreign currency
monetary items for entitites which had not opted for such relaxation
earlier. The Company during the financial year has opted for the
relaxation as given in Para 46A and has deferred an amount of Rs.721
lacs being the foreign exchange difference on long term external
commercial borrowing from Standard Chartered Bank. The amount would be
written off over a period of three years, being the loan tenure.
15. Operating Lease
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to the Company for renewing at the end of the
initial term. Rental expenses for operating leases included in the
income statement for the year is Rs.117.86 lakhs (Rs.89.81 lakhs)
16. Earnings Per Share
The earnings considered in ascertaining Earning per share comprise the
profit after tax.The number of shares used in computing Basic Earning
per share is the weighted average number of shares outstanding during
the year as follows:
17. Confirmation of balance has not been obtained from some of the
creditors, debtors and to certain parties to whom the Company has given
advances.
18. The company is engaged in power transmission and distribution
segment and the same is being reported.
Mar 31, 2012
1.1 Rights, preferences and restrictions attached to shares Equity
Shares: The company has one class of equity shares having a par value
of Rs.2 per share. Each shareholder is eligible for one vote per share
held. The dividend proposed by the board is subject to the approval of
the shareholders in the ensuing Annual General Meeting, except in case
of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
Company after distribution of all preferential amount, in proportion to
their shareholding.
1.2 Shares Reserved for issue under Options and Contracts /Commitments
for sale of Shares
(a) Employee Stock Option Scheme
During 2009-10, the Company established "Easun Rerolled Employee Stock
Option Plan 2009" under which 10,00,000 options have been allocated for
being granted to the employees and non promoter directors . The Company
has obtained in-principle approval from National Stock Exchange Limited
, Mumbai (NSE) and Bombay Stock Exchange Limited, Mumbai (BSE) for
listing upto a maximum of 10,00,000 shares pursuant to exercise of
options granted under the Scheme. Each option comprises one underlying
Equity Shares of Rs.10/- each. This scheme has been formulated in
accordance with the Securities and Exchange Board of India (Employee
Stock Option Scheme and Employee Stock Purchase Scheme)
Guidelines,1999. As per the Scheme, the Compensation Committee grants
options to senior employees and non promoter directors. The options
are granted at a price, which shall not be less than the par value of
equity shares of the Company and shall not be more than the Market
price as defined in the Guidelines.
(b) Issue of Share Warrants
During 2010-11, the Company has issued 20,00,000 Convertible Equity
Warrants at Rs.133.76 per warrant in terms of the extant guidelines of
SEBI on preferential issue. Each warrant is convertible into one equity
shares of Rs.2 each within 18 months from the date of allotment. The
Company has received Rs.668.80 Lacs towards 25% of the warrant as
advance money. The balance amount is payable at the time of exercise of
the option i.e., on 31st July 2012.
2 .1 For the year 2011-12, the Board of Directors have recommended a
dividend of Rs.0.20 per share, which is subject to the approval by
shareholders. During the previous year 2010-11, the Company had
declared and distributed a dividend of Rs.1.20 per share.
2.2 Unsecured Loans
(a) The company has been sanctioned to avail interest free sales tax
deferral scheme for an aggregate amount of Rs.74.53 lacs by the
department of Sales tax, Government of Tamilnadu. The underlying
deferred sales tax payable by the company from the financial year
commencing from 2013-14.
(b) During the year 2007-08 the company raised funds through issue of
Zero Coupon Foreign currency Convertible Bond aggregating to USD 35
million (Rs.13,846 lacs) with an option to the investor to convert the
FCCBs into equity shares of the company at an initial conversion price
of Rs.400 per share at a fixed rate of exchange on conversion
Rs.39.45=USD 1, at any time after December 5, 2007 and prior to
November 28, 2012 and 34,51,875 shares would be issuable on November
28, 2012 unless previously converted, redeemed, repurchased and
cancelled, the balance FCCBs will be redeemed on December 05, 2012 at
142.56% of their principal amount. The amount of premium on such
redemption will be to the tune of Rs.674 lacs. Out of the aforesaid
FCCBs, there were no FCCBs converted to equity shares as at the year
end.
(c) During the year 2009-10, the company has bought back and cancelled
310 Nos of 5 years FCCB of the face value of USD 100,000 each, as per
the notification of Reserve Bank of India, at a discount to the face
value. Consequent to this the company is absolved of its liability
towards the bond holders whose bonds stands cancelled.
3.1 The interoperate deposits are repayable with in 6 months/12
months from the date of the acceptance and carry an interest rate in
the range of 13.5% - 14.5% p.a
4. Gratuity and Leave for AS 15 Disclosure
A. Defined Benefit Plan:
(i) Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity,
a defined benefit retirement plan (Gratuity Plan) covering all
permanent employees. The gratuity plan provides for, on retirement or
termination of employment, an amount based on the respective employees
last drawn salary and the years of employment with the company. The
company provides the gratuity benefit through annual contributions to a
gratuity trust which in turn mainly contributes to Life Insurance
Corporation of India (LIC) for this purpose. Under this plan the
settlement obligation remains with the gratuity trust. Life Insurance
Corporation of India administers the plan and determines the
contribution premium required to be paid by the trust.
(ii) Leave Encashment (Unfunded)
In accordance with applicable rules, the liability for leave encashment
was actuarially valued and provided in the books of accounts, covering
permanent employees.
B. Defined Contribution Plan (Funded)
Provident Fund
All employees are entitled to provident fund benefits. For all
categories of employees the company makes contributions to Regional
Provident Fund commissioners as per law.
5. Employee Stock Option Scheme
5.1 During the year 2010-11 the Compensation Committee has granted
1,97,245 options to its senior employees and non-promoter directors.
The options granted vest over a period of 1 to 2 years; and can be
exercised over a maximum period of 6 months from the date of vesting.
The difference between the market price of the share underlying the
value of options granted on the date of grant and the exercise price of
the option are expensed over the vesting period as per the SEBI
guidelines. The net impact of the movement in option granted during
the period resulted in a charge of Rs.17.81 lacs (Previous Year-
Rs.24.41 Lacs) to the Statement of Profit and Loss during the year.
5.2 Method Used for Accounting for Share Based Payment Plan:
The Company has used Intrinsic Value Method to account for the
compensation cost of stock option to employees of the Company.
Intrinsic Value is the amount by which the quoted market price of the
underlying share exceeds the exercise price of the option.
5.3 Method Used for Accounting for Share Based Payment Plan:
The Company has used Intrinsic Value Method to account for the
compensation cost of stock option to employees of the Company.
Intrinsic Value is the amount by which the quoted market price of the
underlying share exceeds the exercise price of the option.
6. Contingent Liabilities and Commitments Rs Lacs
A. Contingent Libilities 2012 2011
(a) Letters of Credit opened
by Bank for
purchase of raw materials
and components 3,736.97 5,308.56
(b) Bills Discounted with bank 39.84 516.40
(c) Counter Guarantee given to
bankers in respect
of Guarantees given by them 14,183.85 13,020.01
(d) Bonds executed in favour of
President - -
of Inda for import of
material at concessional
rate of duty 8.95 49.98
(e) Sales effected under CST -
liability towards submission
of C Forms 2,785.36 2,555.68
(f) Disputed amounts of
Income Tax paid
Assessment year
2001-02 30.02 30.02
2003-04 47.85 47.85
2004-05 26.13 26.13
2005-06 70.28 70.28
2006-07 55.42 55.42
2008-09 306.33 306.33
(g) Disputed amounts of
Sales Tax, Karnataka for
the FY
2007-08 63.65 63.65
(h) Disputed amounts of
Sales Tax,
Karnataka for the FY
2008-09 41.78 41.78
(i) Disputed Customs Duty
paid under protest 66.38 66.38
(j) VAT Demand of West Bengal for FY
2009-10 7.99 -
B. Capital Commitment (a)
Estimated amount of capital
commitment
on account of Fixed Assets 695.21 1,809.51
7. The Company has incurred expenditure aggregating to Rs.168.97 lacs
during the year (Rs.229.35 lacs) on development of products. The
expenditure has been capitalized and carried in the financial
statements under the head Intangible Asset Product Development as on
31st March 2012. Based on the process of establishing the technical and
economic feasibility of the product, the management is confident that
the products developed would be commercially viable and there is no
uncertainty regarding the establishment of feasibility of the product.
Management believes that the expenditure capitalized is in the nature
of development costs and can be capitalized as per AS 26 " Intangible
Assets".
8. In respect of company's operations which includes execution of
the turnkey projects. These turnkey projects significantly involve
supply of equipment dealt with by the company in the ordinary course of
operations. The activities that are additionally carried out while
executing the turnkey projects are in the nature of civil construction
and erection services which are significantly less when compared with
the overall project value. No information is furnished in terms of
segment reporting in as much the project execution essentially involves
supply of Transmission and Distribution equipment manufactured by the
company carrying similar risks and rewards which are not different from
main products.
9. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs.188.17 lacs (Rs.327.17 lacs) and net off product development
expenses Rs.168.97 lacs (Rs.229.35 lacs).
10. Expenditure incurred on account of borrowing costs amounting to
Rs.593.81 lacs (Rs.263.79 lacs ) is capitalized towards new projects
and disclosed under Capital Works in Progress.
11. Operating Lease
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to the Company for renewing at the end of the
initial term. Rental expenses for operating leases included in the
income statement for the year is Rs.89.81 lacs (Rs.88.06 lacs)
12. Confirmation of balance has not been obtained from some of the
creditors, debtors and to certain parties to whom the Company had given
advances.
13. The company has recognized
Rs.87.72 lacs as on 31st March 2012 as Minimum Alternate Tax (MAT)
credit entitlement (Previous Year - Rs.82.60 lacs), which represents
the portion of MAT Liability, the credit which would be available
based on the provisions of Sec 115 JAA of the Income Tax Act, 1961.
14. The company is engaged in power transmission and distribution
segment and the same is being reported.
15. The Financial Statements for the year ended 31st 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 31st March 2012 are prepared as per Revised Schedule VI.
Accordingly, previous year's figures have also been reclassified to
confirm to this year's classification.
Mar 31, 2011
1. Contingent Liabilities not provided for in the Accounts:
a) Letters of credit opened by Bank for purchase of raw materials and
components Rs.53,08,55,861 (Rs.29,13,13,542).
b) Bills discounted with bank Rs.5,16,40,097 (Rs.1,02,22,125).
c) Counter Guarantee given to bankers in respect of Guarantees given by
them Rs.130,20,00,891 (Rs. 112,07,29,906).
d) Bonds executed in favour of President of India for import of
material at concessional rate of duty Rs.49,97,725 (Rs.78,68,647).
e) Estimated amount of Capital commitment on account of Fixed Assets
(Net of advances) amount to Rs. 18,09,50,768 (Nil).
f) In respect of sales effected under CST towards submission of C-Forms
Rs.25,55,68,000 (Rs. 12,34,90,668).
g) Disputed amounts of income tax
Assessment year Disputed amount of Income tax
2001-02 Rs.30,02,382
2003-04 Rs.47,85,258
2004-05 Rs.26,12,561
2005-06 Rs.70,28,103
2006-07 Rs.55,41,946
2008-09 Rs.3,06,33,157
h) Disputed amount of Sales Tax, Karnataka of Rs.63,64,825 for the
financial year 2007-08
2. Confirmation of balance has not been obtained from some of the
creditors, debtors and to certain parties to whom the company has given
advances.
3. Foreign Currency Convertible Bonds
a) During the year 2007-08 the company raised funds through issue of
Zero Coupon Foreign currency Convertible Bond aggregating to USD35
million (Rs. 13,846 lakhs) with an option to the investor to convert
die FCCBs into equity shares of the company at an initial conversion
price of Rs.400 per share at a fixed rate of exchange on conversion
Rs.39.45 =USD 1, at any time after December 5, 2007 and prior to
November 28, 2012 and 34, 51,875 shares would be issuable on November
28.2012.
b) During the previous year, the company has bought back and cancelled
310 Nos of 5 years FCCB of the face value of USD 1,00,000 each, as per
the notification of Reserve Bank of India, at a discount to the face
value. Consequent to this the company is absolved of its liability
towards the bond holders whose bonds are cancelled.
c) Unless previously converted, redeemed, repurchased and cancelled,
the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of
their principal amount. The amount of premium on such redemption will
be to the tune of Rs.674 lakhs. Out of the aforesaid FCCBs, there were
no FCCBs converted to equity shares as at the year end. The FCCBs
pending conversion as at the year end aggregating to Rs. 1,582 lakhs
(without considering exchange fluctuation) are grouped under "Unsecured
Loans".
4. The Company issued 20,00,000 share warrants of Rs.2 each @ Rs.
133.76 per warrant to the promotors against which initial deposit of
Rs.6,68,80,000 has been received during die year.
5. Employee Stock Option Scheme
During 2009 2010, the Company established the "Easun Reyrolle Employee
Stock Option Plan 2009" under which 10,00,000 options have been
allocated for being granted to the employees and non-promoter
Directors. The Company has obtained in-princi pie approval from both
National Stock Exchange of India Limited, Mumbai (NSE) and Bombay Stock
Exchange Limited, Mumbai (BSE) for listing up to a maximum of 10,00,000
shares pursuant to exercise of options granted under the Scheme. Each
option comprises one underlying Equity Share of Rs.10/- each. This
Scheme has been formulated in accordance with the Securities and
Exchange Board of India (Employee Stock Option Scheme and Employee
Stock Purchase Scheme) Guidelines, 1999. As per die Scheme, die
Compensation Committee grants options to senior employees and
non-promoter Directors. . The options are granted at a price, which
shall not be less than the par value of equity share of the Company and
shall not be more than the Market price as defined in the Guidelines.
During the financial year 2010-11 the Compensation Committee has
granted 1,97,245 options to its senior employees and non-promoter
directors. The options granted vest over a period of 1 to 2 years; and
can be exercised over a maximum period of 6 months from the date of
vesting.
The difference between the market price of the share underlying the
options granted on the date of grant and the exercise price of the
option are expensed over die vesting period as per the SEBI guidelines.
The net impact of the movement in option granted during die period
resulted in a charge of Rs.24,40,907 (Previous Year NIL) to the Profit
& Loss Account during the year.
Method Used for Accounting for Share Based Payment Plan:
The Company has used Intrinsic Value Method to account for the
compensation cost of stock option to employees of the Company.
Intrinsic Value is the amount by which the quoted market price of the
underlying share exceeds the exercise price of the option.
6. The company has incurred expenditure aggregating to Rs.2,23,65,902
during the year (Rs. 1,68,83,843) on development of products. The
expenditure has been capitalised and carried in the financial
statements under the head Intangible Asset Product Development as on
31s' March 2011. Based on the process of establishing the technical and
economic feasibility of the product, the management is confident that
the products developed would be commercially viable and there is no
uncertainty regarding the establishment of feasibility of the product.
Management believes that the expenditure capitalized is in the nature
of development costs and could be capitalized as per AS-26 "Intangible
Assets".
7. In respect of company's operations which includes execution of the
turnkey projects. These turnkey projects significantly involve supply
of equi pment dealt with by the company in the ordinary course of
operations. The activities that are additionally carried out while
executing the turnkey projects are in the nature of civil construction
and erection services which are significantly less when compared with
the overall project value. No information is furnished in terms of
segment reporting in as much the project execution essentially involves
supply of Transmission and Distribution equipment manufactured by the
company carrying similar risks and rewards which are not different from
main products.
8. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs.3,27,17,105 (Rs.2,47,67,949) and net off product development
expenses Rs.2,23,65,902 (Rs.1,68,83,843).
9. Expenditure incurred on account of borrowing costs amounting to
Rs.2,63,79,207 (Rs.46,863) is capitalized towards new projects and
disclosed under Capital Work-in Progress.
10. AS-15, Employee Benefits
a. Defined Benefit Plan: Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity,
a defined benefit retirement plan (Gratuity Plan) covering all
permanent employees. The gratuity plan provides for, at retirement or
termination of employment, an amount based on the respective employees
last drawn salary and the years of employment with the company. The
company provides the gratuity benefit through annual contributions to a
gratuity trust which in turn mainly contributes to Life Insurance
Corporation of India (LIC) for this purpose. Under this plan the
settlement obligation remains with the gratuity trust. Life Insurance
Corporation of India administers the plan and determines me
contribution premium required to be paid by the trust.
Leave Encashment Liability (Unfunded)
In accordance with applicable rules, the liability for leave encashment
was actuarially valued and provided in me books of accounts, covering
permanent employees.
Detailed Annexure A enclosed
b. Defined Contribution Plan Provident Fund
All employees are entided to provident fund benefits. For all
categories of employees the company makes contributions to Regional
Provident Fund commissioners as per law.
11. The company has been sanctioned to avail interest free sales tax
deferral scheme for an aggregate amount of Rs.74,53,000 by the
department of Sales tax, Government of Tamilnadu. The underlying
deferred sales tax payable by the company from the financial year
commencing from 2013-14.
12. The company is engaged in power transmission and distribution
segment and the same is being reported.
13. Operating lease
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to die Company for renewing at the end of the
initial term. Rental expenses for operating leases included in die
income statement for die year is Rs.88,06,256 (Rs.64,55,350).
14. Income Tax
The Company has recognized Rs.82,59,877 as on 31st March 2011 as
Minimum Alternate Tax (MAT) credit entitlement (previous year Nil),
which represents the portion of MAT Liability, the credit of which
would be available based on the provisions of Section 115JAA of the
Income Tax Act, 1961. The management based on the future profitability
projections and also profit earned during the year is confident that
there would be sufficient taxable profit in future which will enable
the Company to utilize the above MAT credit entitlement.
14. Previous year's fiqures have been regrouped wherever necessary to
conform to current year's classifications. Previous year's figures are
shown in brackets.
15. Figures have been rounded off to the nearest rupee.
Mar 31, 2010
1 . Contingent Liabilities not provided for in the Accounts:
a) Letters of credit opened by Bank for purchase of raw materials and
components Rs.29,13,13,542 (Rs.12,96,05,782).
b) Bills discounted with bank Rs.1,02,22,125 (Rs.7,19,88,700).
c) Counter Guarantee given to bankers in respect of Guarantees given by
them Rs 1,12,07,29,906 (Rs.45,96,12,936).
d) Bonds executed in favour of President of India for payment of excise
duty Rs Nil ( Nil) and for import of material at concessional rate of
duty Rs.78.68,647 (Rs.62,78,350).
e) Estimated amount of Capital commitment on account of Fixed Assets (
Net of advances) amount to Rs Nil ( Rs.1,17,66,294)
f) In respect of sales effected under CST towards submission of
C-Forms- Rs.12,34,90,668 (Rs.10,57,30,573)
2. Confirmation of balance has not been obtained from some of the
creditors, debtors and to certain parties to whom the company has given
advances.
3. Foreign Currency Convertible Bonds
a) During the year 2007-08 the company raised funds through issue of
Zero Coupon Foreign currency Convertible Bond aggregating to USD 35
million (Rs13846 lakhs) with an option to the investor to convert the
FCCBs into equity shares of the company at an initial conversion price
of Rs. 400 per share at a fixed rate of exchange on conversion Rs.39.45
= USD 1, at any time after December 5, 2007 and prior to November 28,
2012 and 34, 51,875 shares would be issuable on November 28, 2012.
b) During the year, the company has bought back and cancelled 310 nos
of 5 years FCCB of the face value of USD 1,00,000 each, as per the
notification of Reserve Bank of India, at a discount to the face value.
The company has achieved a reduction in liability of bonds aggregating
Rs. 6113 lakhs which has been disclosed as an exceptional income.
Consequent to this the company is absolved of its liability towards the
bond holders whose bonds are cancelled.
c) Unless previously converted, redeemed, repurchased and cancelled,
the balance FCCBs will be redeemed on December 05, 2012 at 142.56% of
their principal amount. The amount of premium on such redemption will
be to the tune of Rs. 674 lakhs. Out of the aforesaid FCCBs, there were
no FCCBs converted to equity shares as at the year end. The FCCBs
pending conversion as at the year end aggregating to Rs. 1,582 lakhs
(without considering exchange fluctuation) are grouped under "Unsecured
Loans".
4 The company has incurred expenditure aggregating to Rs. 1,68,83,843
during the year (Rs.1,58,19,514) on development of products. The
expenditure has been capitalised and carried in the financial
statements under the head Intangible Asset Product Development as on
31st March 2010. Based on the process of establishing the technical and
economic feasibility of the product, the management is confident that
the products developed would be commercially viable and there is no
uncertainty regarding the establishment of feasibility of the product.
Management believes that the expenditure capitalized is in the nature
of development costs and could be capitalized as per AS-26 "Intangible
Assets".
5. In respect of companys operations which includes execution of the
turnkey projects which significantly involve supply of equipment dealt
with by the company in the ordinary course of operations. The
activities that are additionally carried out while executing the
turnkey projects are in the nature of civil construction and erection
services which are significantly less when compared with the overall
project value. No information is furnished in terms of segment
reporting in as much the project execution essentially involves supply
of Transmission and Distribution equipment manufactured by the company
carrying similar risks and rewards which are not different from main
products.
6. Personnel expenses and other expenses are net off recovery of
overheads from direct and indirect overseas subsidiaries amounting to
Rs.2,47,67,949 (Rs.2,05,73,670) and net off product development
expenses Rs.1,68,83,843 (Rs.1,58,19,514).
7. Expenditure incurred on account of borrowing costs amounting to
Rs.46.863 is capitalized towards new projects and disclosed under
Capital Works in Progress.
8 . Managerial Remuneration:
Commission to Non-Executive Directors
9 . Disclosure under AS-15, Employee Benefits
a . Defined Benefit Plan:
Gratuity (Funded)
In accordance with applicable laws, the company provides for gratuity,
a defined benefit retirement plan (Gratuity Plan) covering all
permanent employees. The gratuity plan provides for, at retirement or
termination of employment, an amount based on the respective employees
last drawn salary and the years of employment with the company. The
company provides the gratuity benefit through annual contributions to a
gratuity trust which in turn mainly contributes to Life Insurance
Corporation of India (LIC) for this purpose. Under this plan the
settlement obligation remains with the gratuity trust. Life Insurance
Corporation of India administers the plan and determines the
contribution premium required to be paid by the trust.
Leave Encashment Liability (Unfunded)
In accordance with applicable rules, the liability for leave encashment
was actuarially valued and provided in the books of accounts, covering
permanent employees.
b . Defined Contribution Plan
Provident Fund
For all categories of employees the company makes contributions to
Regional Provident Fund commissioners as per law.
10. The company has been sanctioned to avail interest free sales tax
deferral scheme for an aggregate amount of Rs.74,53,000 by the
department of Sales tax, Government of Tamilnadu. The underlying
deferred sales tax payable by the company from the financial year
commencing from 2013-14.
11. The company is engaged in power transmission and distribution
segment and the same is being reported.
12. Disclosures as AS 18 for the year 2009-10 Related Party Disclosures
of Associate Companies
13.Operating leases
The Company has entered into operating lease arrangements for its
office facilities. These leases are for a period ranging from 1 to 5
years with an option to the Company for renewing at the end of the
initial term. Rental expenses for operating leases included in the
income statement for the year is Rs.64,55,350 (Rs.80,09,500)
14. Financial Lease
**Based on the information available with the company in respect of
micro, small and medium enterprises (as defind in The Micro, Small and
Medium Enterprises Development Act, 2006). The company is generally
regular making payments of dues to such enterprises. Hence, the
question of payments of interest or provision thereof towards belated
payments does not arise.
* Including Micro processor / Non-Micro processor based Products -
25,773 (20,478) Wind Energy - 4,49,977(4,87,197) used for Captive
Consumption
**Kilowatt/hour units
# Details of Licensed capacity are not provided in view of de-licensing
of Products.
* Including Micro processor / Non-Micro processor based Products -
25,773 (20,478) Wind Energy - 4,49,977 (4,87,197) used for Captive
Consumption
15 Earnings Per Share
The earnings considered in ascertaining Earning per share comprise the
profit after tax. The number of shares used in computing Basic earning
per share is the weighted average number of shares outstanding during
the year as follows:
16. Previous years
have been regrouped wherever necessary to conform to current years
classifications. Previous years figures are shown in brackets.
17. Figures have been rounded off to the nearest rupee.