Dec 31, 2022
Estimation of fair value
The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company consider information from a variety of sources including:
⢠current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.
⢠discounted cash flow projections based on reliable estimates of future cash flows
⢠capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.
The fair values of investment properties have been determined by an independent valuer. The fair value is measured using external expert appraisals, by applying input factors for comparable assets not traded on active markets (fair value hierarchy level 2).
A Defined contribution plan
Provident and superannuation fund
The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered provident fund administered by the government and superannuation trust administered through Life Insurance Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan (provident fund) is Rs. 124.76 lakhs (December 31, 2021 - Rs. 113.45 lakhs) and defined contribution plan (superannuation fund) is Rs. 107.16 lakhs (December 31, 2021 - Rs. 123.44 lakhs).
B Defined benefit plan
I Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and is administered through group gratuity scheme with Life Insurance Corporation of India.
II Cash rewards at retirement
The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, Rs. 2,500 is payable to employees for each year of service rendered. The scheme is unfunded.
(vi) Risk Exposure
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility
The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.
Changes in bond yields
A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.
Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.
Asset-Liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.
The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(iv) Risk Exposure
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which is detailed below:
Changes in bond yields
A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.
a. During the year, the Company has sold a portion of land situated in Ankleshwar for a total consideration of Rs.2265.00 lakhs which has resulted in a profit of Rs.1072.04 lakhs.
b. On September 16, 2021, The Company sold the office space ("EDP Building") at Pimpri for a consideration of Rs. 2132.45 lakhs which resulted in a profit of Rs.1918.72 lakhs.
c. The Company terminated the Memorandum of Understanding (MoU) which was entered with Talegaon industrial Parks Private Limited (TIPPL) for acquisition of land situated at Navlakhumbre, Tal. Maval, Pune. The Company has made a provision of Rs 960 lakhs for expenditure incurred so far in relation to this project.
d. A fire incident occurred at the Company''s factory situated at Pimpri, Pune. The Company accounted for a loss of Rs.44.44 Lakhs on account of destruction of machinery and inventory in this fire.
35 Contingencies and commitments a) Contingent liabilities |
||
As at |
As at |
|
December 31, 2022 |
December 31, 2021 |
|
(i) Excise and service tax matters |
320.55 |
311.76 |
(ii) Income Tax matters |
88.07 |
- |
Total |
408.62 |
311.76 |
(iii) On March 6, 2019, the Company was directed for closure of its operations in Ankleshwar by the Gujarat Pollution Control Board (GPCB) due to a suspected ground water contamination issue. The GPCB through its subsequent orders had granted temporary revocation of the closure order. The Company has represented to the GPCB for a permanent revocation of the closure order and is expecting a favourable response
Note:
The Company''s pending litigations comprise of proceedings pending with Excise and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
The Supreme Court had issued a Judgment in case of "Vivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengal" and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 was issued by the Employees'' Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of "basic wages" of the relevant employees for the purposes of determining contribution to provident fund under the Employees'' Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, the aforesaid matter is not likely to have a significant impact.
The Code on Social Security, 2020 (''Code'') relating to employee benefits received Presidential assent in September 2020. However, the date on which the Code will come into effect has not yet been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
b) Capital commitments
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 223.29 lakhs (December 31, 2021 : Rs. 580.46 lakhs)
c) Lease commitments
There were no non-cancellable operating leases as on December 31, 2022 and December 31, 2021.
37 Segment reporting
(a) Description of segments and principal activities
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).
The Managing Director of the Company have been identified as the chief operating decision maker.
The CODM evaluates the performance based on the revenues and operating profit for the two segments, the composition of which is explained below:
Segment Products covered
Electrical Insulations The Electrical Insulation System business line comprises three product groups: wire
enamels, insulating varnishes and resins, and casting and poffing compounds. These products are used in the light and heavy electrical industries.
Engineering & Electronic Resins This comprises of complete solutions for printed circuit boards (PCBs), PCB and Materials protection solutions, construction chemicals used for post-construction coating
applications and flexible electrical insulations.
i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments. The fair value of all equity instruments which are traded in the stock exchange is valued using the closing price as at the end of the reporting period.
Level 2: Level 2 valuations are determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. This includes mutual funds whose closing NAV is
provided by Asset Management Company (AMC) and is also available on Association of Mutual Funds in India (AMFI) website.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
The use of quoted market prices or dealer quotes for similar instruments
iii) Valuation process
The finance department of the company performs the valuation of financial assets and liabilities required for financial reporting purposes including level 3 fair values. Changes in fair values are analyzed at the end of each reporting period and an explanation for the reason for fair values are discussed.
iv) Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, security deposits, loans and advances to employees, fixed deposits with banks, interest accrued on fixed deposits, cash and cash equivalents, other bank balances, trade payables, security deposits received, capital creditors, payable to employees, unpaid dividend and others are considered to be reasonable approximation of their fair values.
39 Financial risk management
The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
(A) Credit risk
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to related parties, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, for eg, external credit rating (to the extent available), actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet its obligations.
Trade receivables
Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly.
The ageing of trade receivable as on balance sheet date is given below. The age analysis has been considered from the date when the invoices were due for payment.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk , being the total of the carrying amount of balances with bank, short term deposits with banks, trade receivables and other financial assets is disclosed at the end of the each reporting period. Refer relevant notes for details. At the reporting date, there were no significant arrangements which reduced the maximum credit risk.
(C) Market risk
I) Foreign currency risk
The company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The Company''s exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign exchange rates are generally not significant and consequently limiting the company''s exposure.
II) Interest rate risk
The Company''s main interest rate risk arises from deposits placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.
The loan to related party is carried at amortised cost. The Company recovers interest as per the terms of the agreement. The interest rate approximates the market rate of interest and hence the interest risk for loan given to related party is not considered to be substantial.
40 Capital Management a) Risk management
The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2022 and December 31, 2021.
43 Pursuant to the amendments in the rule 3 of the Companies (Accounts) Rules, 2014 , the back-up of the books of account and other books and papers of the company maintained in electronic mode, including at a place outside India, if any, shall be kept in servers physically located in India on a daily basis .Data centre for the ERP used by the management is hosted in a place outside India. Considering the requirement of the amendments , the Company planned and developed a mechanism to take daily backup of the books of accounts in India which has been implemented subsequent to the year end.
44 Additional regulatory information required by Schedule III
(i) Details of benami property held
No proceedings have been initiated on or are pending against the company for holding benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
(ii) Wilful defaulter
The company has not been declared wilful defaulter by any bank or financial institution or government or any government authority.
(iii) Relationship with struck off companies
The company has no transactions with the companies struck off under Companies Act, 2013 or Companies Act, 1956.
(iv) Compliance with number of layers of companies
The company doesn''t have any investment in associate or subsidiary, hence this disclosure is not applicable.
(v) Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current or previous financial year.
(vi) Utilisation of borrowed funds and share premium
The company has not advanced or loaned or invested funds to any other person(s) or enti''ty(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries
The company has not received any fund from any person(s) or enti''ty(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the company shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries
(vii) Undisclosed income
There is no income surrendered or disclosed as income during the current or previous year in the tax assessments under the Income Tax Act, 1961, that has not been recorded in the books of account.
(viii) Details of crypto currency or virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or previous year.
(ix) Valuation of PP&E, intangible asset and investment property
The company has not revalued its property, plant and equipment (including right-of-use assets) or intangible assets or both during the current or previous year.
Dec 31, 2018
(ii) Contractual Obligations
There are no contractual obligations to purchase, construct or develop investment properties or for repairs, maintenance and enhancements.
(iii) Leasing arrangements
Certain investment properties are leased to related parties under long-term operating lease with rentals payable monthly. Minimum lease payments receivable under non-cancellable operating leases of investment properties are as follows:
Estimation of fair value
The company obtains independent valuations for its investment properties at least annually. The best evidence of fair value is current prices in an active market for similar properties. Where such information is not available, the Company consider information from a variety of sources including:
- current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences.
- discounted cash flow projections based on reliable estimates of future cash flows
- capitalised income projections based upon a property''s estimated net market income, and a capitalisation rate derived from an analysis of market evidence.
The fair values of investment properties have been determined by an independent valuer. The fair value is measured using external expert appraisals, by applying input factors for comparable assets not traded on active markets (fair value hierarchy level 2).
Notes:
1 Intangible assets under development included cost incurred towards SAP implementation project.
2 Net book value of Intangible assets as on January 1, 2017, has been taken as deemed cost on the date of adoption of "Ind AS" w.e.f. January 1, 2017.
The disclosure relating to Specified Bank Notes* (SBNs) is not applicable to the Company for the year ending December 31, 2018 and December 31, 2017.
* Specified Bank Notes (SBNs) mean the bank notes of denominations of the existing series of the value of five hundred rupees and one thousand rupees as defined under the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs no. S.O. 3407(E), dated 8th November, 2016.
Amounts recognized in profit or loss
Provision for excess and obsolete inventory amounted to Rs. 43.16 lakhs (December 31, 2017 : Rs. 55.52 lakhs, January 1, 2017 : Rs. 67.32 lakhs).
Increase/(decrease) in provisions were recognized in respective years in statement of profit or loss and included in ''Cost of materials consumed''.
Non-recurring fair value measurements
Pursuant to the Board of Directors'' in principle approval in the year ended December 31, 2016, for the sale of the surplus office space ("Beck House"), at Pune, the Company had classified the written down value of the property amounting to Rs. 521.08 lakhs as ''Assets held for sale''. The Company has executed sale deed for the said property on January 5, 2018 for a consideration of Rs. 2,500 lakhs which is the fair value. This is a level 2 measurement as per the fair value hierarchy set out in the fair value measurement disclosure (Note 38). The key inputs under this approach are price per square metre of comparable lots of building in the area of similar location and size. The resultant profit on sale of the property has been treated as an exceptional item.
(b) Terms/ rights attached to equity shares
The Company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.
(e) The Company has not issued any bonus shares in 5 years immediately preceding year ended December 31, 2018.
(f) There were no shares bought back nor allotted either as fully paid-up bonus shares or under any contract without payment being received in cash during five years immediately preceding December 31, 2018.
Nature and purpose of reserves Securities premium account
Securities premium account is used to record the premium on issue of shares. The reserve is to be utilised in accordance with the provisions of the Companies Act, 2013.
General reserve
"General reserve represents amounts transferred from retained earnings in earlier years as per the requirements of the erstwhile Companies Act 1956.
Note:
Retained earnings include balance of government grants amortised in accordance with requirement of Ind AS 20. These grants were received between 1982 to 2002 for setting up manufacturing units in specified areas under various incentive schemes. There are no unfulfilled conditions or other contingencies attached to these grants. Under Companies Act, grants of such nature are treated as capital reserve and cannot be distributed as dividend. Also refer note 42 of the financial statement for impact of government grant on financial statement on transition date.
Notes:
(i) There is no amount due and outstanding as on December 31, 2018 to be credited to Investor Education and Protection Fund u/s 125 of the Companies Act, 2013.
(ii) Other payables include commission payable to directors, retention money payable, etc. Also refer note 36 for other balances payable to related parties which are included above.
A Defined contribution plan
Provident and superannuation fund
The Company has certain defined contribution plans. Contributions are made to provident fund for employees at the rate of 12% of basic salary as per regulations as well as to superannuation fund. The contributions are made to registered provident administered by the government and superannuation trust administered through Life Insurance Corporation of India (LIC). The obligation of the Company is limited to the amount contributed and it has no further contractual nor any constructive obligation. The expense recognised during the period towards defined contribution plan (provident fund) is Rs. 95.56 lakhs (December 31, 2017 - Rs. 88.96 lakhs) and defined contribution plan (superannuation fund) is Rs. 104.69 lakhs (December 31, 2017 - Rs. 97.87 lakhs).
B Defined benefit plan
I Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. The gratuity plan is a funded plan and is administered through group gratuity scheme with Life Insurance Corporation of India.
The Payment of Gratuity (Amendment) Act, 2018 was notified by the Central Government on March 29, 2018. The amendment increases the existing ceiling limit of the amount of gratuity payable to employees who have completed five years of continuous service from rupees 10 lakhs to rupees 20 lakhs. The amendment has also increased the maximum maternity leave from 12 weeks to 26 weeks in the Payment of Gratuity Act 1972 consistent with the requirement in the Maternity Benefit Act, 1961. Maternity leave to the extent specified in the act shall be excluded while determining the period of continuous service for women employees. Due to the change, the Company has recognized past service cost of Rs. 167 lakhs for the year ended December 31, 2018.
II Cash rewards at retirement
The Company has a defined benefit plan of cash rewards whereby at the time of normal retirement, Rs. 2,500 is payable to employees for each year of service rendered. The scheme is unfunded.
The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(vi) Risk Exposure
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
Asset volatility
The plan liabilities are calculated using a discount rate set with reference to bond yields; if plan assets underperform this yield, this will create a deficit. All plan assets are maintained in a trust fund managed by a public sector insurer i.e., LIC of India. LIC has a sovereign guarantee and has been providing consistent and competitive returns over the years. The Company has opted for a traditional fund wherein all assets are invested primarily in risk averse markets. The Company has no control over the management of funds but this option provides a high level of safety for the total corpus. A single account is maintained for both the investment and claim settlement and hence, 100% liquidity is ensured. Also, interest rate and inflation risk are taken care of.
Changes in bond yields
A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.
Future salary escalation and inflation risk
Since price inflation and salary growth are linked economically, they are combined for disclosure purposes. Rising salaries will often result in higher future defined benefit payments resulting in higher present value of liabilities. Further, unexpected salary increases provided at the discretion of the management may lead to uncertainties in estimating this increasing risk.
Asset-Liability mismatch risk
Risk which arises if there is a mismatch in the duration of the assets relative to the liabilities. By matching duration with the defined benefit liabilities, the Company is successfully able to neutralize valuation swings caused by interest rate movements. Hence, companies are encouraged to adopt asset-liability management.
The above sensitivity analyses are based on a change in an assumption while holding all the other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the defined benefit liability recognised in the balance sheet.
The methods and types of assumptions used in preparing the sensitivity analysis did not change compared to the prior period.
(iv) Risk Exposure
Through its defined benefit plan, the Company is exposed to a number of risks, the most significant of which are detailed below:
Changes in bond yields
A decrease in bond yields will increase plan liabilities, although this will be partially offset by an yields increase in the value of the plans'' bond holdings.
Note : Goods and Service Tax (GST) has been effective from July 1, 2017. Consequently, excise duty, value added tax (VAT), service tax, etc. have been replaced with GST with effect from July 1, 2017. Until June 30, 2017, ''Sale of products'' included the amount of excise duty recovered on sales. ''Sale of products'' excludes the amount of GST recovered. Accordingly, revenue from ''Sale of products'' and ''Revenue from operations'' for the year ended December 31, 2018 are not comparable with those of the previous year.
Note : Government grants are in the form of export incentives available to the Company. There are no unfulfilled conditions or other contingencies attached to these grants. The Company did not benefit directly from any other forms of government assistance.
Note:
1. During the year ended December 31, 2017, the Company had received two show cause notices from the Collector Office, Bharuch in respect of its two raw materials (Solvents), which are covered under the Essential Commodities Act, covering the period from January 2009 to December 2017. The management made the required submissions in respect of the same and a final order was received on February 27, 2018 where the Collector has rejected the application for renewal of licenses. During the current year, the Company filed appeal with Bharuch District Court against the said order and is awaiting next date of hearing. The Company does not expect a significant impact on the financial statements on account of the matter.
2. During the current year, the Company received order from Labour Court for termination of four employees in December 2014. Against the said order, the Company has filed appeal with Labour Court, Pune and is awaiting next date of hearing. The management had terminated those employees in the best interest of the Company. The Company does not expect a significant impact on the financial statements on account of the matter.
3. The Company''s pending litigations comprise of proceedings pending with Excise, Sales/VAT tax and other authorities. The Company has reviewed all its pending litigations and proceedings and has adequately provided for cases where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.
b) Capital commitments
Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 211.84 lakhs (December 31, 2017 : Rs. 890.03 lakhs, January 1, 2017 : Rs. 297.36 lakhs)
c) Lease commitments
There were no non-cancellable operating leases as on December 31, 2018, December 31, 2017 and January 1, 2017.
Notes:
(1) Key Managerial Personnel who are under the employment of the Company are entitled to post employment benefits and other long term employee benefits recognised as per Ind AS 19 - ''Employee Benefits'' in the financial statements. As these employee benefits are lump sum amounts provided on the basis of actuarial valuation, the same is not presented above.
(2) Transactions during the year reported above include impact of increase/(decrease) in provision for expenses accounted for as on year end.
III Terms and conditions for outstanding balances
Transactions with related parties were made on normal commercial terms and conditions. All outstanding balances are unsecured and payable in cash.
1 Segment reporting
(a) Description of segments and principal activities
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker (CODM).
The Managing Director of the Company have been identified as the chief operating decision maker.
The CODM evaluates the performance based on the revenues and operating profit for the two segments, the composition of which is explained below:
Segment
Electrical Insulations
Products covered
The Electrical Insulation System business line comprises three product groups: wire enamels, insulating varnishes and resins, and casting and potting compounds. These products are used in the light and heavy electrical industries.
Engineering & Electronic Resins and Materials
This comprises of complete solutions for printed circuit boards (PCBs), PCB protection solutions, construction chemicals used for post construction coating applications and flexible electrical insulations.
i) Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments. The fair value of all equity instruments which are traded in the stock exchange is valued using the closing price as at the end of the reporting period.
Level 2: Level 2 valuations are determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in Level 2. This includes mutual funds whose closing NAV is provided by Asset Management Company (AMC) and is also available on Association of Mutual Funds in India (AMFI) website.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
The use of quoted market prices or dealer quotes for similar instruments
iii) Valuation process
The finance department of the company performs the valuation of financial assets and liabilities required for financial reporting purposes including level 3 fair values. Changes in fair values are analyzed at the end of each reporting period and an explanation for the reason for fair values are discussed.
iv) Fair value of financial assets and liabilities measured at amortised cost
The carrying amounts of trade receivables, security deposits, loans and advances to employees, fixed deposits with banks, interest accrued on fixed deposits, cash and cash equivalents, other bank balances, trade payables, security deposits received, capital creditors, payable to employees, unpaid dividend and others are considered to be reasonable approximation of their fair values.
2 Financial risk management
The Company''s activities exposes it to market risk, liquidity risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
(A) Credit risk
The Company is exposed to credit risk from its operating activities (primarily trade receivables) and deposits with banks and other financial instruments. For banks and other financial institutions, only high rated banks/ financial institutions are accepted. The balances with banks, loans given to related parties, loans given to employees, security deposits are subject to low credit risk and the risk of default is negligible or nil. Hence, no provision has been created for expected credit loss for credit risk arising from these financial assets. The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in the credit risk on an ongoing basis throughout each reporting period. To assess whether there is a significant increase in credit risk the company compares the risk of a default occurring on the asset as at the reporting date with the risk of default as at the date of initial recognition. It considers available reasonable and supportive forward-looking information, for eg, external credit rating (to the extent available), actual or expected significant adverse changes in business, financial or economic conditions that are expected to cause a significant change to borrower''s ability to meet its obligations.
Trade receivables
Credit risk arises from the possibility that customer will not be able to settle their obligations as and when agreed. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts, ageing of accounts receivable and forward looking information. Individual credit limits are set accordingly.
Exposure to credit risk
The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk , being the total of the carrying amount of balances with bank, short term deposits with banks, trade receivables and other financial assets is disclosed at the end of the each reporting period. Refer relevant notes for details. At the reporting date, there were no significant arrangements which reduced the maximum credit risk.
(B) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. To assure the solvency and financial flexibility, the Company retains a liquidity reserve through cash and cash equivalents and lines of credit. The tables below analyse the Company''s financial liabilities into relevant maturity group based on their contractual maturities for :
(C) Market risk
I) Foreign currency risk
The company is engaged in international trade and thereby exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD, EUR and GBP. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the company''s functional currency (INR). The Company''s exposure to foreign currency arises from short term receivables and payables where fluctuations in the foreign exchange rates are generally not significant and consequently limiting the company''s exposure.
ii) Sensitivity
The sensitivity of profit and loss to changes in the exchange rates arises mainly from foreign currency denominated financials instruments:
II) Interest rate risk
The Company''s main interest rate risk arises from deposits placed over a period of time on frequent basis thereby exposing the Company to interest rate risk. The Company''s policy is to have fixed interest rate at the time of deal execution.
The loan to related party is carried at amortised cost. The Company recovers interest as per the terms of the agreement. The interest rate approximates the market rate of interest and hence the interest risk for loan given to related party is not considered to be substantial.
The exposure of Company''s loans to interest rate change at the end of the reporting period is described below
3 Capital Management
a) Risk management
The Company''s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and maintain an optimal capital structure to reduce the cost of capital. For the purpose of the Company''s capital management, capital includes issued equity capital and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Company''s capital management is to maximise the shareholders value. The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants.
No changes were made in the objectives, policies or processes for managing capital during the years ended December 31, 2018 and December 31, 2017.
4 At the year end, the Company has long term contracts for which there were no material foreseeable losses. The Company does not have any derivative contracts.
5 First-time adoption
Transition to Ind AS
These are the Company''s first financial statements prepared in accordance with Ind AS.
The accounting policies set out in Note 1 have been applied in preparing the financial statements for the year ended December 31, 2018, the comparative information presented in these financial statements for the year ended December 31, 2017 and in the preparation of an opening Ind AS balance sheet at January 1, 2017 (the Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.
I Exemptions availed
a) Business combinations
Ind AS 101 provides the option to apply Ind AS 103 prospectively from the transition date or from a specific date prior to the transition date. This provides relief from full retrospective application that would require restatement of all business combinations prior to the transition date.
The company elected to apply Ind AS 103 prospectively to business combinations occurring after its transition date. Business combinations occurring prior to the transition date have not been restated.
b) Deemed cost - Property, plant and equipment (PPE), intangible assets and investment properties
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment and intangible assets as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties. Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
II Exceptions applied Estimates
An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at January 1, 2017 are consistent with the estimates as at the same date made in conformity with previous GAAP.
Note:
(i) The Previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purpose of this note.
(ii) There is no change in cash and cash equivalents on account of adoption of Ind AS. Also, there is no impact of Ind AS on the Statement of Cash Flows.
Notes to first-time adoption
1 Excise Duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as a part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended 31 December 2017 by Rs. 2,344 lakhs. There is no impact on the total equity and profit.
2 Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of profit or loss. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended December 31, 2017 decreased by Rs. 37.88 lakhs. There is no impact on the total equity as at 31 December 2017.
3 Fair valuation of investments
Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments have been recognized in retained earnings as at the date of transition and subsequently in the profit or loss for the year ended December 31, 2017. This increased the retained earnings by Rs. 70.88 lakhs as at December 31, 2017 (January 1, 2017 : Rs. 70.20 lakhs)
4 Proposed dividend
Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognised as a liability. Under Ind AS, such dividends are recognised when the same is approved by shareholders in the general meeting. Accordingly, the liability for proposed dividend (including tax thereon) of Rs. 429.37 lakhs as at January 1, 2017 included under short term provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
5 Other Comprehensive Income
Under Ind AS, all items of income and expenses recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expenses that are not recognized in profit or loss but are shown in statement of profit or loss as ''Other Comprehensive Income'' includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP.
6 Deferred tax
Deferred tax have been recognised on the adjustments made on transition to Ind AS.
7 Government Grants
Under previous GAAP, government grants in the nature of promoters'' contribution were treated as capital reserve which can be neither distributed as dividend nor considered as deferred income. Under Ind AS, in accordance with requirement of Ind AS 20, such grants are treated as deferred income and are amortised to profit or loss on a systematic basis over the useful life of the asset. As on January 1, 2017, grants amounting to Rs. 40 lakhs have been disclosed as part of retained earnings since these would be completely amortised as on transition date. There is no impact on the total equity and profit.
Dec 31, 2016
1. Employee benefits:
2. Defined contribution plans
Amount of 7 81.03 lakhs (previous year: 76.68 lakhs) is recognized as an expense towards provident fund & 7 89.95 lakhs (previous year : 88.01 lakhs) is recognized as an expense towards superannuation and included in the ''Contributions to provident and other funds'' under note no 24.
3. Defined benefit plan (Gratuity)
The Company operates a gratuity plan wherein every employee is entitled to the benefit based on last drawn salary for each completed year of service. The same is payable on termination of service or retirement whichever is earlier. The benefit vests after five years of continuous service. The same is funded with the Life Insurance Corporation of India.
4. Defined benefit plan (Cash rewards at retirement)
As per the plan, at the time of normal retirement, 7 2,500 (previous year 7 2,500) is payable to employees for each year of service rendered. The scheme is unfunded.
5. Segment reporting
The Company has disclosed business segments as the primary segment. Segments have been identified by the management taking into account the nature of products, manufacturing process, customer profiles, risk and reward parameters and other relevant factors.
The Company''s operations have been classified into two primary segments," Electrical Insulations" and "Engineering and Electronic Resins and Materials". Segment assets include all operating assets used by the business segment and consist primarily of fixed assets, debtors and inventories. Segment liabilities primarily include creditors and other liabilities. Assets and liabilities that cannot be allocated between the segments are shown as a part of unallocable assets and liabilities. Secondary segments have been identified with reference to geographical location of the customers. The Company has identified India and outside India as the two geographical segments for secondary segmental reporting. Geographical sales are segregated based on the location of the customer who is invoiced. Assets other than receivables used in the Company''s business or liabilities contracted have not been identified to any of the reportable geographical segments, as these are used interchangeably between geographical segments. All assets other than receivables are located in India. Similarly, capital expenditure is incurred towards fixed assets in India.
6. At the year end, the Company did not have any long term contracts for which there were any material foreseeable losses. The Company does not have any derivative contracts.
7. Operating Lease as lessor
The Company has leased out its surplus office space. The lease term is 5 years. There is an escalation and renewal clause in the lease agreement and sub-letting is not permitted. The carrying amount of the building given on operating lease and depreciation thereon for the period is: ......
8. The Board of Directors of the Company vide its resolution dated October 4,2016 has granted in principle approval for the sale of the Company''s property ("Beck House") at Pune admeasuring approximately 2,238.25 square meters, subject to the terms and conditions as mentioned in the Memorandum of Understanding executed between the Company and the buyer. Consequently, the written down value of the said property amounting to Rs. 521.08 lakhs has been classified as ''Assets held for sale'' under ''Other current assets''.
9. Previous year''s figures have been regrouped/reclassified, wherever necessary, to conform to current year''s classification.
Dec 31, 2014
1. Contingent liabilities not provided for
(Currency : Rs. in lacs)
2014 2013
a) Claims against the Company not
acknowledged as debts 182.63 185.74
b) Excise duty matters 233.14 226.96
c) Income tax matters 23.93 23.93
d) Sales tax matters 448.56 334.23
e) Guarantee in favour of Gujarat
Industrial Development Corporation 12.24 12.24
2. Employee benefits :
a) Defined contribution plans
Amount of Rs. 163.63 (previous year : Rs. 154.68) is recognised as an
expense towards superannuation & provident fund and included in the
''Contributions to provident and other funds'' under note no 24.
b) Defined benefit plan (Gratuity)
The Company operates a gratuity plan wherein every employee is entitled
to the benefit based on last drawn salary for each completed year of
service. The same is payable on termination of service or retirement
whichever is earlier. The benefit vests after five years of continuous
service. The same is funded with the Life Insurance Corporation of
India.
c) Defined benefit plan (Cash rewards at retirement)
As per the plan, at the time of normal retirement, Rs. .025 (previous
year .025) is payable to employees for each year of service rendered.
The scheme is unfunded.
3. Segment reporting
The Company has disclosed business segments as the primary segment.
Segments have been identified by the management taking into account the
nature of products, manufacturing process, customer profiles, risk and
reward parameters and other relevant factors.
The Company''s operations have been classified into two primary
segments, "Electrical Insulations" and "Engineering and Electronic
Resins and Materials". Segment assets include all operating assets used
by the business segment and consist primarily of fixed assets, debtors
and inventories. Segment liabilities primarily include creditors and
other liabilities. Assets and liabilities that cannot be allocated
between the segments are shown as a part of unallocable assets and
liabilities.
Secondary segments have been identified with reference to geographical
location of the customers. The Company has identified India and outside
India as the two geographical segments for secondary segmental
reporting. Geographical sales are segregated based on the location of
the customer who is invoiced. Assets other than receivables used in the
Company''s business or liabilities contracted have not been identified
to any of the reportable geographical segments, as these are used
interchangeably between geographical segments. All assets other than
receivables are located in India. Similiarly, capital expenditure is
incurred towards fixed assets in India.
4. A. Key management personnel and relatives of key management
personnel Key management personnel :
Mr Ravindra Kumar (with effect from 1 January 2014)
Mr. Rajeev Bhide (upto 31 December 2013)
Mr. Sharadkumar Shetye (Upto 27 May 2014)
Relatives of key management personnel :
Mrs. M. R. Shetye (Upto 27 May 2014)
5. Management believes that the Company''s international transactions
with related parties post 31 March 2014 (last period upto which an
Accountants'' report has been submitted as required under the Income tax
Act, 1961) continue to be at arm''s length and that the transfer pricing
legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for
taxation.
Dec 31, 2013
1. Contingent liabilities not provided for (Currency : Rs. in lacs)
2013 2012
a) Claims against the Company not
acknowledged as debts 185.74 185.74
b) Excise duty matters 226.96 127.15
c) Income tax matters 23.93 23.93
d) Sales tax matters 334.23 304.40
e) Guarantee in favour of Gujarat Industrial
Development Corporation 12.24 12.24
d) Notes :
1) The plan assets comprises entirely of "Insurer Managed Funds".
2) The expected return on plan assets is based on market expectations,
at the beginning of the year, for returns over the entire life of
related obligations.
3) The estimates of future salary increases considered takes into
account the inflation, seniority, promotion and other relevant factors
on a long term basis.
4) Changes enacted before the Balance Sheet date are considered while
determining the obligation.
5) Expected Employer''s contribution in next year ` 18.00 (Previous year
` 30.00) .
6) Salary escalation rate is 12 % for first 2 years and 10.50%
thereafter.
2. Segment reporting
The Company has disclosed business segments as the primary segment.
Segments have been identified by the Management taking into account the
nature of products, manufacturing process, customer profiles, risk and
reward parameters and other relevant factors.
The Company''s operations have been classified into two primary
segments, "Electrical Insulations" and "Engineering and Electronic
Resins and Materials". Segment assets include all operating assets used
by the business segment and consist primarily of fixed assets, debtors
and inventories. Segment liabilities primarily include creditors and
other liabilities. Assets and liabilities that cannot be allocated
between the segments are shown as a part of unallowable assets and
liabilities.
Secondary segments have been identified with reference to geographical
location of the customers. The Company has identified India and outside
India as the two geographical segments for secondary segmental
reporting. Geographical sales are segregated based on the location of
the customer who is invoiced. Assets other than receivables used in the
Company''s business or liabilities contracted have not been identified
to any of the reportable geographical segments, as these are used
interchangeably between geographical segments. All assets other than
receivables are located in India. Similarly, capital expenditure is
incurred towards fixed assets in India.
3. Management believes that the Company''s international transactions
with related parties post 31 March 2013 (last period upto which an
Accountants'' report has been submitted as required under the Income tax
Act, 1961) continue to be at arm''s length and that the transfer pricing
legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for
taxation.
Dec 31, 2012
1. Segment reporting
The Company has disclosed business segments as the primary segment.
Segments have been identified by the Management taking into account the
nature of products, manufacturing process, customer profiles, risk and
reward parameters and other relevant factors.
The Company''s operations have been classified into two primary
segments, "Electrical Insulations" and "Engineering and Electronic
Resins and Materials". Segment assets include all operating assets used
by the business segment and consist primarily of fixed assets, debtors
and inventories. Segment liabilities primarily include creditors and
other liabilities. Assets and liabilities that cannot be allocated
between the segments are shown as a part of unallowable assets and
liabilities.
Secondary segments have been identified with reference to geographical
location of the customers. The Company has identified India and outside
India as the two geographical segments for secondary segmental
reporting. Geographical sales are segregated based on the location of
the customer who is invoiced. Assets other than receivables used in the
Company''s business or liabilities contracted have not been identified
to any of the reportable geographical segments, as these are used
interchangeably between geographical segments. All assets other than
receivables are located in India. Similarly, capital expenditure is
incurred towards fixed assets in India.
2.1 A. Key management personnel and relatives of key management
personnel Key management personnel:
Mr. RajeevBhide
Mr. Prashant Deshpande (upto9July2012)
Mr. Sharad kumar Shetye
Relatives of key management personnel:
Mrs. M.R.Shetye
3. Management believes that the Company''s international transactions
with related parties post 31 March 2012 (last period up to which an
Accountants'' report has been submitted as required under the Income tax
Act, 1961) continue to beat arm''s length and that the transfer pricing
legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for
taxation.
4. The financial statements for the year ended 31 December 2011 had
been prepared as per the then applicable pre revised Schedule VI of the
Companies Act 1956. Consequent to the notification of revised Schedule
VI under Company''s Act 1956, the financial statements for the year
ended 31 December 2012 are prepared as per revised Schedule VI.
Accordingly, the previous year''s figures have also been reclassified to
conform to this year''s classification.
Dec 31, 2011
1. Employee benefits:
a) Defined benefit plan (Gratuity)
The Company operates a gratuity plan wherein every employee is entitled
to the benefit based on last drawn salary for each completed year of
service. The same is payable on termination of service or retirement
whichever is earlier. The benefit vests after five years of continuous
service. The same is funded with the Life Insurance Corporation of
India.
b) Defined benefit plan (Cash rewards at retirement)
As per the plan, at the time of normal retirement, Rs. 1 is payable to
employees for each year of service rendered. The scheme is unfunded.
c) Defined contribution plans
Amount of Rs. 12,785 (previous year: Rs. 11,667) is recognised as an
expense and included in the 'Contributions to provident and other funds'
under note no 14.
d) Notes:
1) The plan assets comprises entirely of "Insurer Managed Funds".
2) The expected return on plan assets is based on market expectations,
at the beginning of the year, for returns over the entire life of
related obligations.
3) The estimates of future salary increases considered takes into
account the inflation, seniority, promotion and other relevant factors
on a long term basis.
4) Expected Employer's contribution in next year Rs. 1,800 (Previous year
Rs. 2,000).
5) Salary escalation rate is 12 % for first 3 years and 10.50%
There after.
Dec 31, 2009
(Currency : Indian Rupees, OOP) 2009 2008
1. Contingent liabilities not
provided for
a) Claims against the Company not
acknowledged as debts 19,278 1,015
b) Excise duty matters 8,606 6,057
c) Income tax matters 8,234 8,076
d) Sales tax matters 37,905 32,384
e) Guarantee in favour of Gujarat
Industrial Development Corporation 1,224 1,224
2. Employee benefits :
a) Defined benefit plan (Gratuity)
The Company operates a gratuity plan wherein every employee is entitled
to the benefit based on last drawn salary for each completed year of
service. The same is payable on termination of service or retirement
whichever is earlier. The benefit vests after five years of continuous
service. The same is funded with the Life Insurance Corporation of
India.
b) Defined benefit plan (Cash rewards at retirement)
As per the plan, at the time of normal retirement, Rs. 1 is payable to
employees for each year of service rendered. The scheme is unfunded.
c) Defined contribution plans
Amount of Rs 10,634 (previous year: Rs. 9,797) is recognised as an
expense and included in the Contributions to provident and other
fundsunder note no 14
3. Segment reporting
The Company has disclosed business segments as the primary segment.
Segments have been identified by the management taking into account the
nature of products, manufacturing process, customer profiles, risk and
reward parametersand other relevant factors.
The Companys operations have been classified into two primary
segments, "Electrical Insulations" and "Engineering and Electronic
Resins and Materials". Segment assets include all operating assets used
by the business segment and consist primarily of fixed assets, debtors
and inventories. Segment liabilities primarily include creditors and
other liabilities. Assets and liabilities that cannot be allocated
between the segments are shown as a part of unallocable assets and
liabilities.
Secondary segments have been identified with reference to geographical
location of the customers. The Company has identified India and outside
India as the two geographical segments for secondary segmental
reporting. Geographical sales are segregated based on the location of
the customer who is invoiced. Assets other than receivables used in the
Companys business or liabilities contracted have not been identified
to any of the reportable geographical segments, as these are used
interchangeably between geographical segments. All assets other than
receivables are located in India. Similarly, capital expenditure is
incurred towards fixed assets in India.
4. Related party disclosures
4.1 A. List of related parties & relationship
SKion GmbH Holding company of ALTANA AG
ALTANA AG Holding company of Altana Chemie GmbH
ALTANA Chemie GmbH Holding company of ELANTAS GmBH
ELANTAS GmbH Holding company (88.55%)
BYK-Chemie GmbH Fellow Subsidiary
ELANTAS Beck GmbH Fellow Subsidiary
ELANTAS UK Ltd. Fellow Subsidiary
ELANTAS PDG Inc. Fellow Subsidiary
ELANTAS Deatech Sri Fellow Subsidiary
ELANTAS Tongling Co Ltd Fellow Subsidiary
ELANTAS Zhuhai Co., Ltd. Fellow Subsidiary
ELANTAS Isolantes
Electricos Do Brasil LTDA Fellow Subsidiary
BYK Chemie Asia Pacific
PTE Ltd Fellow Subsidiary
5. Management believes that the Companys international transactions
with related parties post March 2009 (last period upto which an
Accountants report has been submitted as required under the Income tax
Act, 1961) continue to be at arms length and that the transfer pricing
legislation will not have any impact on these financial statements,
particularly on the amount of tax expense and that of provision for
taxation.
6. The previous years figures have been regrouped / reclassified
wherever necessary to conform to the current years classification.