Mar 31, 2023
Corporate Information
Exide Industries Limited (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 2013. Its shares are listed on three recognised stock exchanges in India. The registered office of the company is located at Exide House, 59E Chowringhee Road, Kolkata, 700020. The Company is primarily engaged in the manufacturing of Storage Batteries and allied products in India.
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the âActâ) and other relevant provisions of the Act.
The financial statements were authorised for issue by the Companyâs Board of Directors on 08 May 2023.
These financial statements are presented in Indian Rupees (INR), which is also the Companyâs functional currency. All amounts have been rounded-off to the nearest crore, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis except for:
- Certain financial assets and liabilities, which are measured at fair value
- Net defined benefit (asset)/ liability, which are measured at Fair Value of plan assets less present value of defined benefit obligations
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import
duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for it intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit and loss.
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of transition.
Refer Note 2a to the Financial Statements
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss.
The estimated useful lives of items of property, plant and equipment are as follows:
Particular |
Useful economic life |
Buildings |
28.5 / 58.5 years |
Plant and machinery (including electrical installation) |
10/15 years |
Moulds |
8.5 years |
Furniture and fittings |
10 years |
Office equipment |
5 years |
Vehicles |
6 years |
Computers |
3 to 6 years |
Based on technical assessment done by experts and managementâs estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are different than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery including electrical installation, moulds and computers has been considered to be 2% of the cost. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rate basis i.e. from (upto) the date on which asset is ready for use (disposed of).
Refer Note 34 to the Financial Statements
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated amortisation and accumulated impairment loss, if
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognised in profit or loss as incurred.
Goodwill is not amortised and is tested for impairment annually.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method and is included in depreciation and amortisation in the Statement of Profit and Loss.
The estimated useful lives are as follows:
Particular |
Useful economic life |
Computer Software / Trademark |
5 years |
Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Research costs are expensed as incurred.
Refer Note 4 and 34 to the Financial Statements
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials and Components, Stores, Spares parts, loose tools etc: These are valued at weighted average cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
(ii) Finished goods and work in progress: These are valued at lower of cost and net realisable value. Cost includes an appropriate share of production overheads based on the normal operating capacity.
(iii) Stock-in-trade: These are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 9 to the Financial Statements.
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property
is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
The Company depreciates investment properties over a period of 28.5 years on a straight-line basis, which is different from the indicative useful life of relevant type of buildings mentioned in Part C of Schedule II to the Act.
Any gain or loss on disposal of an investment property is recognised in the statement of profit and loss.
Refer Note 3 to the Financial Statements.
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Refer Notes 21 and 27 to the Financial Statements.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
Post-retirement benefits to employees can either be through defined contribution plans or defined benefit plans.
A defined contribution plan is a postemployment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund and pension schemes.
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The Company operates the following defined benefit plans:
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the statement of profit and loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (âpast service costâ or âpast service gainâ) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto 31st March 2003 for employees as on that date is in the nature of defined benefit plan. From 1st April 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
The Companyâs net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual Independent actuarial valuation using the projected unit credit method. Re-measurements gains or losses are recognised in profit or loss in the period in which they arise.
Refer Notes 21, 27, 32 and 38 to the Financial Statements.
Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in the statement of profit and loss.
Refer Notes 29 to the Financial Statements.
The Company earns revenue primarily from sale of batteries and HUPS.
At contract inception, Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue is recognised upon transfer of control of promised products or services to customers in an amount of the transaction price that is allocated to that performance obligation and that reflects the consideration which the Company expects to receive in exchange for those products or services.
The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer net of returns, excluding amounts collected on behalf of third parties (for example, taxes) and excluding discounts and incentives, as specified in the contract with customer.
With respect to sale of products and rendering of certain services revenue is recognised at a point in time when the performance obligation is satisfied and the customer obtains the control of goods or services. There is no significant financing components involved on contract with customers. Invoices are usually payable within the credit period as agreed with respective customers.
Revenue from certain services are generated over a period of time, during which services are rendered based on contractual milestones. Revenue recognition takes place when a milestone is completed.
The Company recognises revenue only when it is probable that it will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
The Company has a customer loyalty programme for selected customers. The Company grants credit points to those customers as part of a sales transaction which allows them to accumulate and redeem those credit points.
The Company allocates a portion of the consideration received to loyalty points. This allocation is based on the relative stand-alone selling prices. The amount allocated to the loyalty programme is deferred, and is recognised as revenue when loyalty points are redeemed or the likelihood of the customer redeeming the loyalty points becomes remote.
The deferred revenue is included in contract liability.
Warranty
The Company provides only assurance types warranty in conjunction with sale of product and hence same is not considered as separate performance obligation.
Refer Note 25,26,27,28, 35 and 37 to the Financial Statements.
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current-tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognised on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax Liabilities and assets, and they relate to income taxes levied by the same tax authority on the same. Taxable entity, or on different tax entities, but they
intend to settle current tax liabilities and assets on a Net basis or their tax assets and liabilities will be realised simultaneously.
For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.
Refer Notes 22 to the Financial Statements.
The Company assesses whether a contract contains a lease as per the requirements of Ind AS 116 âLeasesâ at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
The Company recognizes a right-of-use asset (âROUâ) and a lease liability at the lease commencement date, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straightline basis over the term of the lease.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the company. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight basis over the term of the relevant lease.
Refer Note 2a, 29, 33, 34, 35 and 46 to the financial statements.
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable
to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 36 to the Financial Statements.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 39 to the Financial Statements.
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
On initial recognition, a financial asset is classified as measured at amortised cost; Fair value through other comprehensive income (FVOCI) - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both the conditions and is not designated
as at FVTPL: (i) The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The subsequent measurement of gains and losses of various categories of financial instruments are as follows: (i) Financial assets at amortised cost: these assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
(ii) Equity investments at FVOCI: these assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
(iii) Financial assets at FVTPL: these assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and Losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Financial assets: The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities: The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company
currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in profit or loss.
Refer Note 43 and 44 to the Financial Statements.
The Companyâs non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and associates, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Refer Note 5 to the Financial Statements.
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.
Refer Note 28 to the Financial Statements.
Dividend income is recognised in profit or loss on the date on which the Companyâs right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The âeffective interest rateâ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
Refer Note 29 and Note 33 to the Financial Statements.
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠All other assets are classified as non-current. A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
⢠The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
The Company presents EBITDA in the statement of profit or loss; this is not specifically required by Ind AS 1. The term EBITDA are not defined in Ind AS. Ins AS compliant schedule III allows companies to present Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the financial statement when such presentation is relevant to an understanding of the companyâs financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Indian Accounting Standard.
Accordingly, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of statement of profit or loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance cost and tax expenses.
Ministry of Corporate Affairs (MCA), on March 31,2023, through the Companies (Indian Accounting Standards (Ind AS)) Amendment Rules, 2023 amended certain existing Ind ASs on miscellaneous issues with effect from 1st April 2023. Following are few key amendments relevant to the Company:
⢠Ind AS 1 - Presentation of Financial Statements & Ind AS 34 - Interim Financial Reporting - Material accounting policy information (including focus on
how an entity applied the requirements of Ind AS) shall be disclosed instead of significant accounting policies as part of financial statements.
⢠Ind AS 107 - Financial Instruments: Disclosures - Information about the measurement basis for financial instruments shall be disclosed as part of material accounting policy information.
⢠Ind AS 8 - Accounting policies, changes in accounting estimate and errors-Clarification on what constitutes an accounting estimate provided.
⢠Ind AS 12 - Income Taxes - This amendment has narrowed the scope of the initial recognition exemption so that it does not apply to transactions that give rise to equal and offsetting temporary differences.
The Company does not expect the effect of this on the financial statements to be material, based on preliminary evaluation.
Mar 31, 2022
Corporate Information
Exide Industries Limited (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 2013. Its shares are listed on three recognised stock exchanges in India. The registered office of the company is located at Exide House, 59E Chowringhee Road, Kolkata, 700020. The Company is primarily engaged in the manufacturing of Storage Batteries and allied products in India.
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act.
The financial statements were authorised for issue by the Company''s Board of Directors on 05 May 2022.
These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest crore, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis except for:
- Certain financial assets and liabilities, which are measured at fair value
- Net defined benefit (asset)/ liability, which are measured at Fair Value of plan assets less present value of defined benefit obligations
1. Significant accounting policies
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labour, any other costs directly attributable to bringing the item to working condition for it intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are
accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in statement of profit and loss.
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of transition.
Refer Note 2a to the Standalone Financial Statements.
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss.
The estimated useful lives of items of property, plant and equipment are as follows:
Particular |
Useful economic life |
Buildings |
28.5 / 58.5 years |
Plant and machinery |
10/15 years |
(including electrical |
|
installation) |
|
Moulds |
8.5 years |
Furniture and fittings |
10 years |
Office equipment |
5 years |
Vehicles |
6 years |
Computers |
3 to 6 years |
Based on technical assessment done by experts and management''s estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are different than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery including electrical installation, moulds and computers has been considered to be 2% of the cost. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rate basis i.e. from (upto) the date on which asset is ready for use (disposed of).
Refer Note 33 to the Standalone Financial Statements.
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated amortisation and accumulated impairment loss, if any.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognised in profit or loss as incurred.
Goodwill is not amortised and is tested for impairment annually.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method and is included in depreciation and amortisation in the Statement of Profit and Loss.
The estimated useful lives are as follows:
Particular |
Useful economic life |
Computer Software / Trademark |
5 years |
Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Research costs are expensed as incurred.
Refer Note 3 and 33 to the Standalone Financial Statements.
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials and Components, Stores, Spares parts, loose tools etc: These are valued at weighted average cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
(ii) Finished goods and work in progress: These are valued at lower of cost and net realisable value. Cost includes an appropriate share of production overheads based on the normal operating capacity. Cost is determined on weighted average basis.
(iii) Stock-in-trade: These are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 9 to the Standalone Financial Statements.
f. Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
The Company depreciates investment properties over a period of 28.5 years on a straight-line basis, which is different from the indicative useful life of relevant type
of buildings mentioned in Part C of Schedule II to the Act.
Any gain or loss on disposal of an investment property is recognised in the Statement of Profit and Loss.
Refer Note 2b to the Financial Statements.
g. Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax
rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Refer Notes 21 and 26 to the Standalone Financial Statements.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
(ii) Post-retirement benefits
Post-retirement benefits to employees can either be through defined contribution plans or defined benefit plans.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund and pension schemes.
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The Company operates the following defined benefit plans:
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the statement of profit and loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto 31st March 2003 for employees as on that date is in the nature of defined benefit plan. From 1st April 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
(iii) Other long-term employee benefits
The Company''s net obligation in respect of long-term employee benefits other than post-
employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual Independent actuarial valuation using the projected unit credit method. Re-measurements gains or losses are recognised in profit or loss in the period in which they arise.
Refer Notes 21, 26, 31 and 37 to the Standalone Financial Statements.
Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in the Statement of Profit and Loss.
Refer Notes 28 to the Standalone Financial Statements.
The Company earns revenue primarily from sale of batteries and HUPS.
At contract inception, Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue is recognised upon transfer of control of promised products or services to customers in an amount of the transaction price that is allocated to that performance obligation and that reflects the consideration which the Company expects to receive in exchange for those products or services.
The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer net of returns, excluding amounts collected on behalf of third parties (for example, taxes) and excluding discounts and incentives, as specified in the contract with customer.
With respect to sale of products and rendering of certain services revenue is recognised at a point in time when the performance obligation is satisfied and the customer obtains the control of goods or services. There is no significant financing component involved on contract with customers. Invoices are usually payable within the credit period as agreed with respective customers.
Revenue from certain services are generated over a period of time, during which services are rendered based on contractual milestones. Revenue recognition takes place when a milestone is completed.
The Company recognises revenue only when it is probable that it will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
The Company has a customer loyalty programme for selected customers. The Company grants credit points to those customers as part of a sales transaction which allows them to accumulate and redeem those credit points.
The Company allocates a portion of the consideration received to loyalty points. This allocation is based on the relative stand-alone selling prices. The amount allocated to the loyalty programme is deferred, and is recognised as revenue when loyalty points are redeemed or the likelihood of the customer redeeming the loyalty points becomes remote.
The deferred revenue is included in contract liability. Warranty
The Company provides only assurance types warranty in conjunction with sale of product and hence same is not considered as separate performance obligation.
Refer Note 24, 25, 26, 27, 34 and 36 to the Standalone Financial Statements.
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current-tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognised on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same. Taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a Net basis or their tax assets and liabilities will be realised simultaneously.
For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.
Refer Notes 22 to the Standalone Financial Statements.
The Company assesses whether a contract contains a lease as per the requirements of Ind AS 116 "Leases" at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
The Company recognizes a right-of-use asset ("ROU") and a lease liability at the lease commencement date, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these shortterm and low value leases, the Company recognizes the lease payments as an operating expense on a straightline basis over the term of the lease.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the company. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight basis over the term of the relevant lease.
Refer Note 2a, 2b, 28, 32, 33, 34 and 45 to the Standalone Financial Statements.
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 35 to the Standalone Financial Statements.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 38 to the Standalone Financial Statements.
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
On initial recognition, a financial asset is classified as measured at amortised cost; Fair value through other comprehensive income (FVOCI) - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both the conditions and is not designated as at FVTPL: (i) The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The subsequent measurement of gains and losses of various categories of financial instruments are as follows:
(i) Financial assets at amortised cost: these assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
(ii) Equity investments at FVOCI: these assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
(iii) Financial assets at FVTPL: these assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and Losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition
Financial assets: The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers
assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities: The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in profit or loss.
Refer Note 42 to the Standalone Financial Statements.
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at
each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of
investments in subsidiaries and associates, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Refer Note 4 to the Standalone Financial Statements.
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.
Refer Note 27 to the Standalone Financial Statements.
Dividend income is recognised in profit or loss on the date on which the Company''s right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to
the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
Refer Note 28 and Note 32 to the Standalone Financial Statements.
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the
settlement of the liability for at least twelve months after the reporting period.
⢠The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
The Company presents EBITDA in the Statement of Profit and Loss; this is not specifically required by Ind AS 1. The term EBITDA are not defined in Ind AS. Ins AS compliant schedule III allows companies to present Line items, subline items and sub-totals shall be presented as an addition or substitution on the face of the financial statement when such presentation is relevant to an understanding of the company''s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Indian Accounting Standard.
Accordingly, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of Statement of Profit and Loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance cost and tax expenses.
1.1 Standards Issued but not yet Effective
On 23 March 2022, the Ministry of Corporate Affairs ("MCA") through notifications, amended to existing Ind AS. The same shall come into force from annual reporting period beginning on or after 1st April 2022. Key Amendments relating to the same whose financial statements are required to comply with Companies (Indian Accounting Standards) Rules 2015 are:
- Ind AS 16 Property, Plant and Equipment - For items produced during testing/trail phase, clarification added that revenue generated out of the same shall not be recognised in Statement of Profit and Loss and considered as part of cost of PPE.
- Ind AS 37 Provisions, Contingent Liabilities & Contingent Assets - Guidance on what constitutes cost of fulfilling contracts (to determine whether the contract is onerous or not) is included.
- Ind AS 103 - Business Combination - Reference to revised Conceptual Framework. For contingent liabilities / levies, clarification is added on how to apply the principles for recognition of contingent liabilities from Ind AS 37. Recognition of contingent assets is not allowed.
- Ind AS 109 Financial Instruments - The amendment clarifies which fees an entity includes when it applies the ''10 per cent'' test in assessing whether to derecognise a financial liability.
The amendments are extensive, and the Company will evaluate the same to give effect to them as required by law.
Mar 31, 2021
Corporate Information
Exide Industries Limited (the company) is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 2013. Its shares are listed on three recognised stock exchanges in India. The registered office of the company is located at Exide House, 59E Chowringhee Road, Kolkata, 700020. The Company is primarily engaged in the manufacturing of Storage Batteries and allied products in India.
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act.
The financial statements were authorised for issue by the Company''s Board of Directors on 29 April 2021.
These financial statements are presented in Indian Rupees (H), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest crore, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis except for:
- Certain financial assets and liabilities, which are measured at fair value
- Net defined benefit (asset)/ liability, which are measured at Fair Value of plan assets less present value of defined benefit obligations
1. Significant accounting policies
Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties
and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for it intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced.
Any gain or loss on disposal of an item of property, plant and equipment is recognised in Statement of Profit and Loss.
When the use of a property changes from owner-occupied to investment property, the property is reclassified as investment property at its carrying amount on the date of transition.
Refer Note 2a to the Financial Statements
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the Statement of Profit and Loss.
The estimated useful lives of items of property, plant and equipment are as follows:
for the year ended March 31, 2021 |
|
Particulars |
Useful economic life |
Buildings |
28.5 / 58.5 years |
Plant and machinery (including electrical installation) |
10/15 years |
Moulds |
8.5 years |
Furniture and fittings |
10 years |
Office equipment |
5 years |
Vehicles |
6 years |
Computers |
3 to 6 years |
Based on technical assessment done by experts and management''s estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are different than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery including electrical installation, moulds and computers has been considered to be 2% of the cost. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
Depreciation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate. Based on technical evaluation, the management believes that its estimates of useful lives as given above best represent the period over which management expects to use these assets.
Depreciation on additions (disposals) is provided on a pro-rate basis i.e. from (upto) the date on which asset is ready for use (disposed of).
Refer Note 32 to the Financial Statements
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated amortisation and accumulated impairment loss, if any.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognised in profit or loss as incurred.
Goodwill is not amortised and is tested for impairment annually.
Amortisation is calculated to write off the cost of intangible assets less their estimated residual values over their estimated useful lives using the straight-line method and is included in depreciation and amortisation in the Statement of Profit and Loss.
The estimated useful lives are as follows:
Particulars |
Useful economic life |
Computer Software / Trademark |
5 years |
Amortisation method, useful lives and residual values are reviewed at each financial year-end and adjusted if appropriate.
Research costs are expensed as incurred.
Refer Note 3 and 32 to the Financial Statements
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials and Components, Stores, Spares parts, loose tools etc: These are valued at weighted average cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Raw materials,
components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
(ii) Finished goods and work in progress: These are valued at lower of cost and net realisable value. Cost includes an appropriate share of production overheads based on the normal operating capacity.
(iii) Stock-in-trade: These are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 8 to the Financial Statements. f. Investment property
Investment property is property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Upon initial recognition, an investment property is measured at cost. Subsequent to initial recognition, investment property is measured at cost less accumulated depreciation and accumulated impairment losses, if any.
The Company depreciates investment properties over a period of 28.5 years on a straight-line basis, which is different from the indicative useful life of relevant type of buildings mentioned in Part C of Schedule II to the Act.
Any gain or loss on disposal of an investment property is recognised in the Statement of Profit and Loss.
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pretax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Refer Notes 20 and 25 to the Financial Statements.
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
(ii) Post-retirement benefits
Post-retirement benefits to employees can either be through defined contribution plans or defined benefit plans.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund and pension schemes.
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The Company operates the following defined benefit plans:
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in the Statement of Profit and Loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (''past service cost'' or ''past service gain'') or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto 31st March 2003 for employees as on that date is in the nature of defined benefit plan. From 1st April 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
The Company''s net obligation in respect of long-term employee benefits other than postemployment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual Independent actuarial valuation using the projected unit credit method. Re-measurements gains or losses are recognised in profit or loss in the period in which they arise.
Refer Notes 20, 25, 30 and 36 to the Financial Statements.
Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in the Statement of Profit and Loss.
Refer Notes 27 to the Financial Statements.
The Company earns revenue primarily from sale of batteries and HUPS.
At contract inception, Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue is recognised upon transfer of control of promised products or services to customers in an amount of the transaction price that is allocated to that performance obligation and that reflects the consideration which the Company expects to receive in exchange for those products or services.
The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer net of returns, excluding amounts collected on behalf of third parties (for example, taxes) and excluding discounts and incentives, as specified in the contract with customer.
With respect to sale of products and rendering of certain services revenue is recognised at a point in time when the performance obligation is satisfied and the customer obtains the control of goods or services. There is no significant financing components involved on contract with customers. Invoices are usually payable within the credit period as agreed with respective customers.
Revenue from certain services are generated over a period of time, during which services are rendered based on contractual milestones. Revenue recognition takes place when a milestone is completed.
The Company recognises revenue only when it is probable that it will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
The Company has a customer loyalty programme for selected customers. The Company grants credit points
to those customers as part of a sales transaction which allows them to accumulate and redeem those credit points.
The Company allocates a portion of the consideration received to loyalty points. This allocation is based on the relative stand-alone selling prices. The amount allocated to the loyalty programme is deferred, and is recognised as revenue when loyalty points are redeemed or the likelihood of the customer redeeming the loyalty points becomes remote.
The deferred revenue is included in contract liability.
The Company provides only assurance types warranty in conjunction with sale of product and hence same is not considered as separate performance obligation.
Refer Note 23, 24, 25, 26, 33 and 35 to the Financial Statements.
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current-tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognised on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same. Taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a Net basis or their tax assets and liabilities will be realised simultaneously.
For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.
Refer Notes 21 to the Financial Statements.
The Company as a lessee
The Company assesses whether a contract contains a lease as per the requirements of Ind AS 116 "Leases" at inception of a contract. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Company assesses whether: (i) the contract involves the use of an identified asset (ii) the Company has substantially all of the economic benefits from use of the asset through the period of the lease and (iii) the Company has the right to direct the use of the asset.
The Company recognizes a right-of-use asset ("ROU") and a lease liability at the lease commencement date, except for leases with a term of twelve months or less (short-term leases) and low value leases. For these short-term and low value leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease.
Certain lease arrangements include the options to extend or terminate the lease before the end of the lease term. ROU assets and lease liabilities includes these options when it is reasonably certain that they will be exercised.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Company by the end of the lease term or the cost of the right-of-use asset reflects that the Company will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the incremental borrowing rate of the company. Lease liabilities are remeasured with a corresponding adjustment to the related right of use asset if the Company changes its assessment if whether it will exercise an extension or a termination option.
When the Company acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. Whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee, the contract is classified as a finance lease. All other leases are classified as operating leases.
For operating leases, rental income is recognized on a straight basis over the term of the relevant lease.
Refer Note 2a, 2b, 27, 31, 32, 33 and 44 to the financial statements.
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 34 to the Financial Statements.
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 37 to the Financial Statements.
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
On initial recognition, a financial asset is classified as measured at amortised cost; Fair value through other comprehensive income (FVOCI) - equity investment; or
FVTPL. Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both the conditions and is not designated as at FVTPL: (i) The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The subsequent measurement of gains and losses of various categories of financial instruments are as follows:
(i) Financial assets at amortised cost: these assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
(ii) Equity investments at FVOCI: these assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
(iii) Financial assets at FVTPL: these assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and Losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition
Financial assets: The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities: The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in profit or loss.
Refer Note 41 to the Financial Statements.
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the Statement of Profit and Loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Investments in subsidiaries and associates are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries and associates, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Refer Note 4 to the Financial Statements.
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the Statement of Profit and Loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the Statement of Profit and Loss on a systematic basis over the useful life of the asset.
Refer Note 26 to the Financial Statements.
Dividend income is recognised in profit or loss on the date on which the Company''s right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The ''effective interest rate'' is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
Refer Note 27 and Note 31 to the Financial Statements.
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it is:
⢠Expected to be realised or intended to be sold or consumed in normal operating cycle
⢠Held primarily for the purpose of trading
⢠Expected to be realised within twelve months after the reporting period, or
⢠Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
⢠All other assets are classified as non-current.
A liability is current when:
⢠It is expected to be settled in normal operating cycle
⢠It is held primarily for the purpose of trading
⢠It is due to be settled within twelve months after the reporting period, or
⢠There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
⢠The Company classifies all other liabilities as noncurrent.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
The Company presents EBITDA in the statement of profit or loss; this is not specifically required by Ind
AS 1. The term EBITDA are not defined in Ind AS. Ins AS compliant schedule III allows companies to present Line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the financial statement when such presentation is relevant to an understanding of the company''s financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Indian Accounting Standard.
Accordingly, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of statement of profit or loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance cost and tax expenses.
1.1 Standards Issued but not yet Effective
Ministry of Corporate Affairs ("MCA") notifies new standard or amendments to the existing standards. There is no such notification which would have been applicable from April 1, 2021.
Mar 31, 2019
1 SIGNIFICANT ACCOUNTING POLICIES
a. Property, Plant and Equipment
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any.
Cost of an item of property, plant and equipment comprises its purchase price, including import duties and non-refundable purchase taxes, after deducting trade discounts and rebates, any directly attributable cost of bringing the item to its working condition for its intended use and estimated costs of dismantling and removing the item and restoring the site on which it is located.
The cost of a self-constructed item of property, plant and equipment comprises the cost of materials and direct labor, any other costs directly attributable to bringing the item to working condition for it intended use, and estimated costs of dismantling and removing the item and restoring the site on which it is located.
I f significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Gain or loss arising on disposal of an asset is treated as income or expense.
Refer Note 2 to the Financial Statements.
b. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognised in the statement of profit and loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the company will obtain ownership by the end of the lease term.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Based on technical assessment done by experts and managementâs estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are different than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery including electrical installation, moulds and computers has been considered to be 2% of the cost as against 5% specified in Schedule II of the Companies Act, 2013. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
The management believes that these estimated useful lives and residual values are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Refer Note 32 to the Financial Statements.
c. Intangible assets and Amortisation
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated amortisation and accumulated impairment loss, if any.
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditures are recognised in profit or loss as incurred.
Intangible assets are amortised over their respective useful economic lives and assessed for impairment whenever there is an impairment indicator, except goodwill which is tested for impairment annually whether or not impairment conditions exist. The amortisation expense and the gain or loss on disposal, is recognised in the statement of profit and loss. Intangible assets with infinite useful lives are tested for impairment annually.
d. Borrowing costs
Borrowing costs are interest and other costs (including exchange differences relating to foreign currency borrowings to the extent that they are regarded as an adjustment to interest costs) incurred in connection with the borrowing of funds. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.
e. Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials, Components, Stores and Spares:
These are valued at weighted average cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the finished products will exceed their net realisable value.
(ii) Finished goods and work-in-progress: These are valued at lower of cost and net realisable value. Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity.
(iii) Stock-in-trade: These are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 8 to the Financial Statements.
f. Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise of cash at banks and on hand and shortterm deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
Refer Note 11 to the Financial Statements.
g. Provisions
A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as finance cost. Expected future operating losses are not provided for.
Refer Notes 20 and 25 to the Financial Statements.
h. Employee benefits
(i) Short term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
(ii) Post-retirement benefits
Post-retirement benefits to employees can either be through defined contribution plans or defined benefit plans.
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. The Company makes specified monthly contributions towards Government administered provident fund and pension schemes.
The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The Company operates the following defined benefit plans:
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
The calculation of defined benefit obligation is performed annually by a qualified actuary using the projected unit credit method.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised in OCI. The Company determines the net interest expense (income) on the net defined benefit liability (asset) for the period by applying the discount rate used to measure the defined benefit obligation at the beginning of the annual period to the then-net defined benefit liability (asset), taking into account any changes in the net defined benefit liability (asset) during the period as a result of contributions and benefit payments. Net interest expense and other expenses related to defined benefit plans are recognised in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service (âpast service costâ or âpast service gainâ) or the gain or loss on curtailment is recognised immediately in profit or loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto 31st March 2003 for employees as on that date is in the nature of defined benefit plan. From 1st April 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
(iii) Other long-term employee benefits
The Companyâs net obligation in respect of long-term employee benefits other than postemployment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual Independent actuarial valuation using the projected unit credit method. Remeasurements gains or losses are recognised in profit or loss in the period in which they arise.
Refer Notes 20, 25, 30 and 36 to the Financial Statements.
i. Foreign Currency
Transactions in foreign currencies are translated into the functional currency of the Company at the exchange rates at the dates of the transactions or an average rate if the average rate approximates the actual rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Exchange differences are recognised in profit or loss.
Refer Notes 27 to the Financial Statements.
j. Revenue Recognition
The Company earns revenue primarily from sale of batteries and HUPS.
Effective 1 April 2018, the Company has applied Ind AS 115 which establishes a comprehensive framework for determining whether, how much and when revenue is to be recognised. Ind AS 115 replaces Ind AS 18 Revenue and Ind AS 11 Construction Contracts. The Company has adopted Ind AS 115 using the cumulative effect method. The effect of initially applying this standard is recognised at the date of initial application (i.e. 1 April 2018) in retained earnings, if any. The comparative information in the statement of profit and loss is not restated - i.e. the comparative information continues to be reported under Ind AS 18. Refer note 1(j) of the Standalone Financial Statement -Significant accounting policies - Revenue recognition in the Annual report of the Company for the year ended 31 March 2018, for the revenue recognition policy as per Ind AS 18. The impact of the adoption of the standard on the financial statements of the Company is insignificant.
Sale of products and rendering of services
At contract inception, Company assess the goods or services promised in a contract with a customer and identify as a performance obligation each promise to transfer to the customer. Revenue is recognised upon transfer of control of promised products or services to customers in an amount of the transaction price that is allocated to that performance obligation and that reflects the consideration which the Company expects to receive in exchange for those products or services.
The Company considers the terms of the contract and its customary business practices to determine the transaction price. The transaction price is the amount of consideration to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer net of returns, excluding amounts collected on behalf of third parties (for example, taxes) and excluding discounts and incentives, as specified in the contract with customer.
With respect to sale of products and rendering of certain services revenue is recognised at a point in time when the performance obligation is satisfied and the customer obtains the control of goods or services. There is no significant financing components involved on contract with customers. Invoices are usually payable within the credit period as agreed with respective customers.
Revenue from certain services are generated over a period of time, during which services are rendered based on contractual milestones. Revenue recognition takes place when a milestone is completed.
The Company recognises revenue only when it is probable that it will collect the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.
Customer Loyalty programme
The Company has a customer loyalty programme for selected customers. The Company grants credit points to those customers as part of a sales transaction which allows them to accumulate and redeem those credit points.
The Company allocates a portion of the consideration received to loyalty points. This allocation is based on the relative stand-alone selling prices. The amount allocated to the loyalty programme is deferred, and is recognised as revenue when loyalty points are redeemed or the likelihood of the customer redeeming the loyalty points becomes remote.
The deferred revenue is included in contract liability.
Warranty
The Company provides only assurance types warranty in conjunction with sale of product and hence same is not considered as separate performance obligation.
Refer Note 23, 24, 25, 26 and 33 to the Financial Statements.
k. Income Taxes
Income tax comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination or to an item recognised directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognised amounts, and it is intended to realise the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognised on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax Liabilities and assets, and they relate to income taxes levied by the same tax authority on the same. Taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a Net basis or their tax assets and liabilities will be realised simultaneously.
For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.
Refer Notes 21 to the Financial Statements.
l. Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of the arrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset or assets, even if that right is not explicitly specified in an arrangement.
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. All other leases are operating lease.
Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Payments made under operating leases are generally recognised in profit or loss on a straight-line basis over the term of the lease unless such payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
Refer Notes 2 and 33 to the Financial Statements.
m. Earnings per share
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 34 to the Financial Statements.
n. Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 37 to the Financial Statements.
o. Financial instruments
Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at amortised cost; Fair value through other comprehensive income (FVOCI) - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both the conditions and is not designated as at FVTPL: (i) The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investmentâs fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.
All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The subsequent measurement of gains and losses of various categories of financial instruments are as follows:
(i) Financial assets at amortised cost: these assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.
(ii) Equity investments at FVOCI: these assets are subsequently measured at fair value. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are not reclassified to profit or loss.
(iii) Financial assets at FVTPL: these assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in profit or loss.
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held- for- trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit or loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.
Derecognition
Financial assets: The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognised on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognised.
Financial liabilities: The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognised at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognised in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.
Impairment
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognised is recognized as an impairment gain or loss in profit or loss.
Refer Note 41 to the Financial Statements.
p. Impairment of non-financial assets
The Companyâs non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the assetâs recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognised in the statement of profit and loss. Impairment loss recognised in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
In respect of other assets for which impairment loss has been recognised in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the assetâs carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
q. Investments in Subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
Refer Note 4 to the Financial Statements.
r. Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognised in the statement of profit and loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognised in the statement of profit and loss on a systematic basis over the useful life of the asset.
Refer Note 26 to the Financial Statements.
s. Recognition of dividend income, interest income or expense
Dividend income is recognised in profit or loss on the date on which the Companyâs right to receive payment is established.
Interest income or expense is recognised using the effective interest method.
The âeffective interest rateâ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to:
- the gross carrying amount of the financial asset; or
- the amortised cost of the financial liability.
In calculating interest income and expense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. However, for financial assets that have become credit-impaired subsequent to initial recognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.
Refer Note 27 and Note 31 to the Financial Statements.
t. Current versus non-current classification
The Company presents assets and liabilities in the balance sheet based on current/non-current classification.
An asset is treated as current when it is:
- Expected to be realised or intended to be sold or consumed in normal operating cycle
- Held primarily for the purpose of trading
- Expected to be realised within twelve months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period
- All other assets are classified as non-current.
A liability is current when:
- It is expected to be settled in normal operating cycle
- It is held primarily for the purpose of trading
- It is due to be settled within twelve months after the reporting period, or
- There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.
- The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as noncurrent assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation in cash and cash equivalents. The Company has identified twelve months as its operating cycle.
u. Earnings before interest, tax, depreciation and amortisation (EBITDA)
The Company presents EBITDA in the statement of profit or loss; this is not specifically required by Ind AS 1. The term EBITDA are not defined in Ind AS. Ind AS compliant schedule III allows companies to present line items, sub-line items and sub-totals shall be presented as an addition or substitution on the face of the financial statement when such presentation is relevant to an understanding of the companyâs financial position or performance or to cater to industry/sector-specific disclosure requirements or when required for compliance with the amendments to the Companies Act or under the Indian Accounting Standard.
Measurement of EBITDA
Accordingly, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of statement of profit or loss. The Company measures EBITDA on the basis of profit / (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance cost and tax expenses.
1.1 STANDARDS ISSUED BUT NOT YET EFFECTIVE
Ministry of Corporate Affairs (âMCAâ), through Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, has notified the following new standards/amendments to the existing standards, which the Company has not applied as they are effective from April 1, 2019:
i. Ind AS 116 - Leases
I nd AS 116 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of low-value items. Lessor accounting remains similar to the current standard - i.e. lessors continue to classify leases as finance or operating leases. It replaces existing leases guidance, Ind AS 17- Leases.
The Company has completed an initial assessment of the potential impact on its financial statements but has not yet completed its detailed assessment. The quantitative impact of adoption of Ind AS 116 on the financial statements in the period of initial application is not reasonably estimable as at present.
The Company will recognise new assets and liabilities for its operating leases of offices, factory and residential premises facilities (refer note 33). The nature of expenses related to those leases will now change because the Company will recognise a depreciation charge for right-of-use assets and interest expense on lease liabilities.
Previously, the Company recognised operating lease expense on a straight-line basis over the term of the lease, and recognised assets and liabilities only to the extent that there was a timing difference between actual lease payments and the expense recognised.
On preliminary assessment, for leases other than shortterm leases and leases of low value assets, it is expected that the impact arising out of Ind AS 116 on the financial statements of the Company will not be significant.
Transition
The Company plans to apply Ind AS 116 initially on 1 April 2019, using the modified retrospective approach. Therefore, the cumulative effect of adopting Ind AS 116 will be recognised as an adjustment to the opening balance of retained earnings at 1 April 2019, with no restatement of comparative information.
The Company plans to apply the practical expedient to grandfather the definition of a lease on transition. This means that it will apply Ind AS 116 to all contracts entered into before 1 April 2019 and identified as leases in accordance with Ind AS 17.
ii. I nd AS 12 Appendix C, Uncertainty over Income Tax Treatments
The amendment to Appendix C of Ind AS 12 specifies that the amendment is to be applied to the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates, when there is uncertainty over income tax treatments under Ind AS 12. It outlines the following: (1) the entity has to use judgement, to determine whether each tax treatment should be considered separately or whether some can be considered together. The decision should be based on the approach which provides better predictions of the resolution of the uncertainty (2) the entity is to assume that the taxation authority will have full knowledge of all relevant information while examining any amount (3) entity has to consider the probability of the relevant taxation authority accepting the tax treatment and the determination of taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates would depend upon the probability. The Company does not expect any significant impact of the amendment on its financial statements.
iii. Ind AS 19 - Plan Amendment, Curtailment or Settlement
The amendments clarify that if a plan amendment, curtailment or settlement occurs, it is mandatory that the current service cost and the net interest for the period after the re-measurement are determined using the assumptions used for the re-measurement. In addition, amendments have been included to clarify the effect of a plan amendment, curtailment or settlement on the requirements regarding the asset ceiling. The Company does not expect this amendment to have any significant impact on its financial statements.
Mar 31, 2018
CORPORATE INFORMATION
Exide Industries Limited (the company), having CIN No.: L31402WB1947PLC014919, is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 2013. Its shares are listed on two recognized stock exchanges in India. The registered office of the company is located at Exide House, 59E Chowringhee Road, Kolkata, 700020. The Company is primarily engaged in the manufacturing of Storage Batteries and allied products in India.
BASIS OF PREPARATION
These financial statements have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 notified under Section 133 of Companies Act, 2013, (the ''Act'') and other relevant provisions of the Act.
The financial statements were authorized for issue by the Company''s Board of Directors on May 7, 2018.
These financial statements are presented in Indian Rupees (INR), which is also the Company''s functional currency. All amounts have been rounded-off to the nearest crore, unless otherwise indicated.
The financial statements have been prepared on the historical cost basis except for:
- Certain financial assets and liabilities, which are measured at fair value
- Net defined employee benefit asset/ (liability), which are measured at Fair Value of plan assets less present value of defined benefit obligations
1. SIGNIFICANT ACCOUNTING POLICIES a. Property, Plant and Equipment
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of purchase price inclusive of taxes, commissioning expenses, etc. up to the date the asset is ready for its intended use.
Expenditure directly attributable to expansion projects is capitalized. Administrative, general overheads and other indirect expenditure (including borrowing costs) incurred during the project period which are not related to the project nor are incidental thereto, are expensed.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment.
Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with the expenditure will flow to the Company.
Gain or loss arising on disposal of an asset is treated as income or expense.
Refer Note 2 to the Financial Statements.
b. Depreciation
Depreciation is calculated on cost of items of property, plant and equipment less their estimated residual values over their estimated useful lives using the straight-line method, and is generally recognized in the Statement of Profit and Loss. Assets acquired under finance leases are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the company will obtain ownership by the end of the lease term.
Based on technical assessment done by experts and management''s estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are lower than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery, moulds and computers has been considered to be 2% of the cost as against 5% specified in Schedule II of the Companies Act, 2013. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
The management believes that these estimated useful lives and residual values are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Refer Note 33 to the Financial Statements.
c. Intangible assets and Amortization
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated Amortization and accumulated impairment loss, if any.
Intangible assets are amortized over their respective useful economic lives and assessed for impairment whenever there is an impairment indicator, except goodwill which is tested for impairment annually whether or not impairment conditions exist. The Amortization expense and the gain or loss on disposal, is recognized in the Statement of Profit and Loss. Intangible assets with infinite useful lives are tested for impairment annually.
Research costs are expensed as incurred.
Refer Note 3 and 33 to the Financial Statements.
d. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
e. Inventories
Inventories are valued at the lower of cost and net realizable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials, Components, Stores and Spares: These are valued at weighted average cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Raw materials, components and other supplies held for use in the production of finished products are not written down below cost except in cases where material prices have declined and it is estimated that the cost of the respective finished products will exceed their net realizable value.
(ii) Finished goods and work-in-progress: These are valued at lower of cost and net realizable value. Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity.
(iii) Traded goods: These are valued at lower of cost and net realizable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 8 to the Financial Statements.
f. Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise of cash at banks and in hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the Statement of Cash Flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
Refer Note 11 to the Financial Statements.
g. Provisions
A provision is recognized if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows (representing the best estimate of the expenditure required to settle the present obligation at the balance sheet date) at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as finance cost. Expected future operating losses are not provided for.
Refer Notes 20 and 26 to the Financial Statements.
h. Retirement and other employee benefits
(i) Short term employee benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid
e.g., under short-term cash bonus, if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the amount of obligation can be estimated reliably.
(ii) Post-retirement benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
The Company operates
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
Gratuity and Post-Retirement Medical Benefit liability are provided for on the basis of actuarial valuation, using the projected unit credit method, made at the end of each financial year.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognized immediately
in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognizes the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:
(i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
(ii) Net interest expense or income
Long term compensated absences are provided for based on an actuarial valuation done at the end of each financial year.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto March 31, 2003 for employees as on that date is in the nature of defined benefit plan. From April 1, 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
(iii) Other long-term employee benefits
The Company''s net obligation in respect of long-term employee benefits other than post-employment benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods; that benefit is discounted to determine its present value, and the fair value of any related assets is deducted. The obligation is measured on the basis of an annual Independent actuarial valuation using the projected unit credit method. Pre-measurements gains or losses are recognized in profit or loss in the period in which they arise.
Refer Notes 20, 26, 31 and 37 to the Financial Statements.
i. Foreign Currency
Transactions in foreign currencies are initially recorded in reporting currency by the Company at spot rates at the date of transaction.
Foreign currency monetary items are reported using the closing rate. Foreign currency non-monetary items measured at historical cost are translated using the exchange rates at the dates of the initial transactions. Exchange differences arising on settlement or translation of monetary items are recognized in Statement of Profit and Loss.
j. Revenue Recognition Sale of goods
Revenue from the sale of goods in the course of ordinary activities is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. This inter alia involves discounting of the consideration due to the present value if payment extends beyond normal credit terms. Revenue is recognized when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing effective control over, or managerial involvement with, the goods, and the amount of revenue can be measured reliably.
Refer Note 27 to the Financial Statements.
Dividend Income
Revenue is recognized when the Company''s right to receive the payment is established, which is generally when shareholders approve the dividend.
Refer Note 28 to the Financial Statements.
Deferred revenue
The Company has a customer loyalty programme for selected customers. The Company grants credit points to those customers as part of a sales transaction which allows them to accumulate and redeem those credit points. Consideration received from these customers have been allocated between the goods sold and the credit points granted. The consideration allocated to the credit points have been deferred and will be recognized as revenue when the reward points are redeemed or lapsed.
k. Income Taxes
Income tax comprises current and deferred tax. It is recognized in profit or loss except to the extent that it relates to a business combination or to an item recognized directly in equity or in other comprehensive income.
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax reflects the best estimate of the tax amount expected to be paid or received after considering the uncertainty, if any, related to income taxes. It is measured using tax rates (and tax laws) enacted or substantively enacted by the reporting date.
Current tax assets and current tax liabilities are offset only if there is a legally enforceable right to set off the recognized amounts, and it is intended to realize the asset and settle the liability on a net basis or simultaneously.
Deferred tax is recognized on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognized to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax Liabilities and assets, and they relate to income taxes levied by the same tax authority on the same, taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a Net basis or their tax assets and liabilities will be realized simultaneously.
For items recognized in OCI or equity, deferred / current tax is also recognized in OCI or equity.
Refer Notes 7 and 21 to the Financial Statements.
l. Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. All other leases are operating lease. Operating lease payments, as per terms of the agreement, are recognized as an expense in the Statement of Profit and Loss on a straight line basis.
Refer Notes 2 and 34 to the Financial Statements.
m. Earnings per share
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 35 to the Financial Statements.
n. Segment reporting
The Company has identified two operating segments viz, Automotive and Industrial. As per Ind AS - 108: Operating Segments, due to similar nature of products, production process, customer types, etc., the two operating segments have been aggregated as single operating segment of âstorage batteries and allied products" during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
Refer Note 41 to the Financial Statements.
o. Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 38 to the Financial Statements.
p. Financial instruments
Trade receivables and debt securities issued are initially recognized when they are originated. All other financial assets and financial liabilities are initially recognized when the Company becomes a party to the contractual provisions of the instrument.
A financial asset or financial liability is initially measured at fair value plus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue.
Classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at amortized cost; Fair value through other comprehensive income (FVOCI) - equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition, except if and in the period the company changes its business model for managing financial assets.
A financial asset is measured at amortized cost if it meets both the conditions and is not designated as at FVTPL: (i) The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and (ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in the investment''s fair value in OCI (designated as FVOCI - equity investment). This election is made on an investment by investment basis.
All financial assets not classified as measured at amortized cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.
The subsequent measurement of gains and losses of various categories of financial instruments are as follows:
(i) Financial assets at amortized cost: these assets are subsequently measured at amortized cost using the effective interest method. The amortized cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognized in profit or loss. Any gain or loss on derecognition is recognized in profit or loss.
(ii) Equity investments at FVOCI: these assets are subsequently measured at fair value. Dividends are recognized as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognized in OCI and are not reclassified to profit or loss.
(iii) Financial assets at FVTPL: these assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognized in profit or loss.
Financial liabilities are classified as measured at amortized cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, or it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and Losses, including any interest expense, are recognized in profit or loss. Other financial liabilities are subsequently measured at amortized cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognized in profit or loss. Any gain or loss on derecognition is also recognized in profit or loss.
Derecognition
Financial assets: The Company derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Company neither transfers nor retains substantially all of the risks and rewards of ownership and does not retain control of the financial asset. If the Company enters into transactions whereby it transfers assets recognized on its balance sheet, but retains either all or substantially all of the risks and rewards of the transferred assets, the transferred assets are not derecognized.
Financial liabilities: The Company derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Company also derecognises a financial liability when its terms are modified and the cash flows under the modified terms are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability extinguished and the new financial liability with modified terms is recognized in profit or loss.
Offsetting
Financial assets and financial liabilities are offset and the net amount presented in the balance sheet when, and only when, the Company currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realize the asset and settle the liability simultaneously.
Impairment
The Company recognizes loss allowances using the expected credit loss (ECL) model for the financial assets which are not fair valued through profit or loss. Loss allowance for trade receivables with no significant financing component is measured at an amount equal to lifetime ECL. For all other financial assets, expected credit losses are measured at an amount equal to the 12-month ECL, unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. The amount of expected credit losses (or reversal) that is required to adjust the loss allowance at the reporting date to the amount that is required to be recognized is recognized as an impairment gain or loss in profit or loss.
q. Impairment of non-financial assets
The Company''s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset''s recoverable amount is estimated.
For impairment testing, assets that do not generate independent cash inflows are combined together into cash-generating units (CGUs). Each CGU represents the smallest Company of assets that generates cash inflows that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of a CGU (or an individual asset) is the higher of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the CGU (or the asset).
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its estimated recoverable amount. Impairment losses are recognized in the Statement of Profit and Loss. Impairment loss recognized in respect of a CGU is allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets of the CGU (or Company of CGUs) on a pro rata basis.
I n respect of other assets for which impairment loss has been recognized in prior periods, the Company reviews at each reporting date whether there is any indication that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. Such a reversal is made only to the extent that the asset''s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or Amortization, if no impairment loss had been recognized.
r. Investments in Subsidiaries
Investments in subsidiaries are carried at cost less accumulated impairment losses, if any. Where an indication of impairment exists, the carrying amount of the investment is assessed and written down immediately to its recoverable amount. On disposal of investments in subsidiaries, the difference between net disposal proceeds and the carrying amounts are recognized in the Statement of Profit and Loss.
s. Government grants
Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to revenue, it is recognized in the Statement of Profit and Loss on a systematic basis over the periods to which they relate. When the grant relates to an asset, it is treated as deferred income and recognized in the Statement of Profit and Loss on a systematic basis over the useful life of the asset.
1.1 Standards Issued but not yet Effective
Amendments to Ind AS 21 - On March 28, 2018, Ministry of Corporate Affairs (MCA) has notified Companies (Indian Accounting Standard) Amendment Rules, 2018.
The rules notified Appendix B of Ind AS 21 - which clarifies the date of the transaction for the purpose of determining the exchange rate to use on initial recognition of the related asset, expense or income, when an entity has received or paid advance consideration in a foreign currency.
The amendment will come into force from April 1, 2018. The Company has evaluated the effect of this on the financial statements and the impact is not material.
Ind AS 115 - Revenue from Contracts with customers:
On March 28, 2018, Ministry of Corporate Affairs (âMCA") has notified the Ind AS 115, Revenue from Contract with Customers. The core principle of the new standard is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Further the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity''s contracts with customers. The effective date for adoption of Ind AS 115 is financial periods beginning on or after April 1, 2018.
The Company has completed an initial assessment of the potential impact of the adoption of Ind AS 115 on accounting policies followed in its financial statements. The Company has done a preliminary assessment and do not expect a significant impact due to the adoption of the standard.
The Company plans to apply Ind AS 115 using the cumulative effect method, with the effect of initially applying this standard recognized at the date of initial application (i.e. April 1, 2018) in retained earnings. As a result, the Company will not present relevant individual line items appearing under comparative period presentation.
(i) Sales are net of price adjustments settled during the year by the Company and discounts, trade incentives, VAT, Sales Tax, GST, etc.
(ii) Sale of goods includes excise duty collected from customers of Rs. 273.48 crs (PY: Rs. 970.27 crs).
(iii) Post the applicability of Goods and Service Tax (GST) with effect from July 1, 2017, revenue from operations are disclosed net of GST. Accordingly, the revenue from operations for year ended March 31, 2018 are not comparable with the previous years figure.
i) The Company has a full-fledged Research and Development Centre. During the year, a sum of Rs. 28.08 crs. (PY Rs. 22.67 crs), including capital expenditure Rs. 6.27 crs. (PY Rs. 4.23 crs), was spent on Research and Development work.
ii) Rent and Hire charges include Rs. 32.47 crs (PY Rs. 25.53 crs) towards lease of residential apartments, Office premises and God owns. These are cancellable leases, renewable by mutual agreement. The lease term is for various number of years and renewable for further periods as per the lease agreements at the option of the company. In lease agreements, escalation clauses are present; however there are no restrictions imposed by the lease arrangements. There are no sub-leases.
Mar 31, 2017
a. Property, Plant and Equipment
Property, Plant and Equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Cost comprises of purchase price inclusive of taxes, commissioning expenses, etc. upto the date the asset is ready for its intended use.
Expenditure directly attributable to expansion projects is capitalised. Administrative, general overheads and other indirect expenditure (including borrowing costs) incurred during the project period which are not related to the project nor are incidental thereto, are expensed.
Depreciation / Amortization is calculated on a straight-line basis over the estimated useful lives of the assets as follows:
Based on technical assessment done by experts and managementâs estimate,
(i) the useful life of factory buildings, other buildings, moulds and vehicles are lower than those indicated in Schedule II to the Companies Act, 2013,
(ii) residual value of plant & machinery, moulds and computers has been considered to be 2% of the cost as against 5% specified in Schedule II of the Companies Act, 2013. For buildings, office equipment, furniture & fittings and vehicles, residual value has been estimated at 5% of the cost.
The management believes that these estimated useful lives and residual values are realistic and reflect fair approximation of the period over which the assets are likely to be used.
Gain or loss arising on disposal of an asset is treated as income or expense.
The carrying amounts of assets are reviewed at each Balance Sheet date to determine if there is any indication of impairment based on external or internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their âvalue in useâ The estimated future cash flows are discounted to their present value using pre-tax discount rates and risks specific to the asset.
Refer Notes 2 and 33 to the Financial Statements.
b. Intangible assets
Acquired intangible assets are initially measured at cost and subsequently at cost less accumulated amortisation and accumulated impairment loss, if any.
Intangible assets are amortised over their respective useful economic lives and assessed for impairment whenever there is an impairment indicator, except goodwill which is tested for impairment annually whether or not impairment conditions exist. The amortisation expense and the gain or loss on disposal, is recognised in the Statement of Profit and Loss. Intangible assets with infinite useful lives are tested for impairment annually.
The amortisation policies applied to the Companyâs intangible assets are as follows:
Research costs are expensed as incurred.
Refer Notes 3 and 33 to the Financial Statements.
c. Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as an adjustment to the borrowing costs.
Refer Notes 2, 22 and 32 to the Financial Statements.
d. Investments
Investments in subsidiaries are measured at cost as per Ind AS 27: Separate Financial Statements. Investment in other equity shares / units are measured at fair value. The fair value changes, excluding dividends, are recognized in OCI. There is no recycling of the amounts from OCI to Statement of Profit and Loss, even on sale of an investment. Investments in units of mutual funds are accounted for at fair value and the changes in fair value are recognised in the Statement of Profit and Loss.
Refer Notes 4 and 9 to the Financial Statements.
e. Impairment of financial assets
I n accordance with Ind AS 109: Financial Instruments, the Company recognizes impairment loss allowance on trade receivables based on historically observed default rates. Impairment loss allowance recognized during the year is charged to Statement of Profit and Loss.
Refer Note 10 to the Financial Statements.
f. Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
(i) Raw materials, Components, Stores and Spares: These are valued at lower of cost and net realisable value. However, material and other items held for use in production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
(ii) Finished goods and work-in-progress: These are valued at lower of cost and net realisable value. Cost includes cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity. Cost of finished goods also includes excise duty. Cost is determined on weighted average basis.
(iii) Traded goods: These are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their present location and condition. Cost is determined on weighted average basis.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs to completion and the estimated costs necessary to sell them.
Refer Note 8 to the Financial Statements.
g. Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise of cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above.
Refer Note 11 to the Financial Statements.
h. Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made.
Provision for product related warranty/ guarantee costs is based on the claims received upto the year end, as well as management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
Refer Notes 20 and 26 to the Financial Statements.
i. Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme as an expense, when an employee renders the related service.
The Company operates
(a) Defined benefit gratuity plan, which requires contributions to be made to a separately administered fund and
(b) Post-retirement medical benefit plan which is unfunded.
Gratuity and Post-Retirement Medical Benefit liability are provided for on the basis of actuarial valuation, using the projected unit credit method, made at the end of each financial year.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets (excluding amounts included in net interest on the net defined benefit liability), are recognised immediately in the Balance Sheet with a corresponding debit or credit to retained earnings through OCI in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods.
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset. The Company recognises the following changes in the net defined benefit obligation as an expense in the Statement of Profit and Loss:
(i) Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements; and
(ii) Net interest expense or income
Long term compensated absences are provided for based on an actuarial valuation done at the end of each financial year.
Pension liability is split into a defined benefit portion and a defined contribution portion. The part of the liability towards pension plan upto March 31, 2003 for employees as on that date is in the nature of defined benefit plan. From April 1, 2003, the pension remains as a defined contribution liability. The Defined benefit portion is provided for on the basis of an actuarial valuation done at the end of each financial year. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service.
The current and non-current bifurcation is done as per Actuarial report.
Refer Notes 20, 26, 31 and 37 to the Financial Statements.
j. Foreign Currency
Transactions in foreign currencies are initially recorded in reporting currency by the Company at spot rates at the date of transaction. The Companyâs functional currency and reporting currency is the same i.e. Indian Rupees.
Foreign currency monetary items are reported using the closing rate. Foreign currency non-monetary items measured at historical cost are translated using the exchange rates at the dates of the initial transactions. Exchange differences arising on settlement or translation of monetary items are recognised in Statement of Profit and Loss.
k. Revenue Recognition Sale of goods
Revenue is recognised to the extent that it is probable that economic benefits will flow to the Company and the revenue can be reliably measured, regardless of when the payment for them is made. Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer, in accordance with the Sale of Goods Act, 1930. Revenue is measured at the fair value of the consideration received or receivable excluding taxes or duties collected on behalf of the government.
Excise duty is a liability of the manufacturer irrespective of whether the goods are sold or not. Hence, the recovery of excise duty flows to the Company on its own account and accordingly revenue includes excise duty. However, Sales tax/ value added tax (VAT) are collected on behalf of the government and accordingly, it is excluded from revenue.
The Company operates customer incentive programmes, which allows dealers to accumulate points when they purchase products from the Company and which can be redeemed for free products or gifts.
Consideration received by the Company on sale of goods is allocated between the products sold and the points issued based on their fair values. Fair value of the points is determined by applying past trend and managementâs estimate of the value of the products / gifts proposed to be issued against such points. The fair value of the points issued is deferred and recognised as revenue when the points are redeemed by the dealers.
Refer Note 27 to the Financial Statements.
Dividend Income
Revenue is recognised when the Companyâs right to receive the payment is established, which is generally when shareholders approve the dividend.
Refer Note 28 to the Financial Statements.
l. Taxes
Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with Indian Income Tax Act. Management periodically evaluates positions taken in the tax returns vis-a-vis positions taken in books of account, which are subject to interpretation, and creates provisions where appropriate.
Deferred tax is recognised on temporary differences between the tax bases and accounting bases of assets and liabilities at the tax rates and laws that have been enacted or substantively enacted at the Balance Sheet date.
Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each Balance Sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
For items recognised in OCI or equity, deferred / current tax is also recognised in OCI or equity.
Refer Notes 7 and 21 to the Financial Statements.
m. Leases
A lease is classified at the inception date as a finance lease or an operating lease. A lease that transfers substantially all the risks and rewards incidental to ownership to the Company is classified as a finance lease. All other leases are operating lease. Operating lease payments, as per terms of the agreement, are recognised as an expense in the Statement of Profit and Loss on a straight line basis.
Refer Notes 2 and 34 to the Financial Statements.
n. Earning per share
Earnings per share is calculated by dividing the net profit or loss before OCI for the year by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss before OCI for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
Refer Note 35 to the Financial Statements.
o. Segment reporting
The Company has identified two operating segments viz, Automotive and Industrial. As per Ind AS - 108: Operating Segments, due to similar nature of products, production process, customer types, etc., the two operating segments have been aggregated as single operating segment of âstorage batteries and allied productsâ during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
Refer Note 41 to the Financial Statements.
p. Contingent Liabilities
A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognized because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognize a contingent liability but discloses its existence in the financial statements.
Refer Note 38 to the Financial Statements.
q. Measurement of EBITDA
The Company has elected to present earnings before interest, tax expenses, depreciation and amortization expenses (EBITDA) as a separate line item on the face of the Statement of Profit or Loss.
r. Standards Issued but not yet Effective
In March 2017, the Ministry of Corporate Affairs issued the Companies (Indian Accounting Standards) (Amendments) Rules, 2017, notifying amendments to Ind AS 7, âStatement of cash flowsâ. These amendments are in accordance with the recent amendments made by International Accounting Standards Board (IASB) to IAS 7, âStatement of cash flowsâ. The amendments are applicable from April 1, 2017.
Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities, to meet the disclosure requirement.
The company is evaluating the requirements of the amendment and their effect on the financial statements.
Mar 31, 2016
A. Basis of Preparation
The financial statements of the Company have been prepared in accordance
with the generally accepted accounting principles in India (Indian
GAAP). The Company has prepared these financial statements to comply in
all material respects with the accounting standards notified under
section 133 of the Companies Act, 2013, read together with paragraph 7
of the Companies (Accounts) Rules, 2014. The financial statements have
been prepared on an accrual basis and under the historical cost
convention except for Land, Building, Plant and Machinery acquired on
and before March 31, 1999, which are carried at revalued amounts.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
Starting from April 01, 2016, IND-AS Accounting Standards as prescribed
by Ministry of Corporate Affairs have become applicable to the Company
and the Accounting Policies would undergo necessary changes.
b. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
c. Revenue Recognition
Revenue is recognised to the extent that it is probable that the
economic benefits will flow to the Company and the revenue can be
reliably measured. The following specific recognition criteria must
also be met before revenue is recognised:
Sale of Goods
Revenue from sale of goods including manufactured products is
recognised upon passage of title to the customers, in accordance with
the Sale of Goods Act, 1930.
The Company collects Sales taxes and Value added Taxes (VAT) on behalf
of the Government and therefore, these are not economic benefits flowing
to the Company. Hence they are excluded from Revenue.
Customs Duty benefits in the form of advance license entitlements are
recognised on export of goods and are set of from materials cost.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholder''s right to receive payment
is established by the balance sheet date.
d. Fixed Assets
Fixed Assets are stated at cost (or revalued amounts, as the case may
be) less accumulated depreciation and impairment losses, if any. Cost
comprises of purchase price inclusive of duties (net of Cenvat), taxes,
incidental expenses, erection/commissioning expenses, etc. up to the
date the asset is ready for its intended use. In case of revaluation of
fixed assets, the original cost as written up by the valuer, is
considered in the accounts and the differential amount is transferred to
revaluation reserve.
The Company identifies and determines cost of each component of the
asset separately, if the component has a cost which is significant to
the total cost of the asset and has useful life that is materially
different from that of the remaining asset. These components are
depreciated separately over their useful lives; the remaining
components are depreciated over the life of the principal asset.
The carrying amounts of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on external
/ internal factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and their
''Value in use''. The estimated future cash flows are discounted to their
present value using pre tax discount rates and risks specific to the
asset.
e. Investments
Investments that are readily realisable and intended to be held for not
more than a year, from the date on which such investments are made, are
classified as current investments. All other investments are classified
as Long-Term investments. Current Investments are stated at lower of
cost or fair value on individual investment basis. Long Term
Investments are considered at cost, unless there is other than
temporary decline in value thereof, in which case adequate provision is
made for diminution in the value of Investments. Investments in foreign
companies are carried at exchange rates prevailing on the date of their
acquisition.
f. Depreciation and Amortisation
i) a) Depreciation on fixed assets is calculated on a straight-line
basis using the rates arrived at based on the useful lives estimated by
the management. The Company has used the following useful lives to
provide depreciation on its fixed assets.
The useful life of Factory buildings, Other buildings, Moulds and
Vehicles, as estimated by the management, are lower than those
indicated in Schedule II to the Companies Act, 2013.
b) The Company has estimated the residual value of Plant & Machinery,
Moulds and Computers to be 2% of the cost as against 5% specified in
Schedule II of the Companies Act, 2013, based on past trends. For
Buildings, Office equipments, Furniture & Fittings and Vehicles, residual
value has been estimated at 5% of the cost.
ii) Depreciation includes amount amortised on a straight-line basis in
respect of leasehold properties over the respective lease period.
iii) Depreciation on fixed assets added/disposed of during the year is
provided on pro-rata basis with reference to the month of
addition/disposal.
iv) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
g. Intangible Assets
i) Research costs are expensed as incurred. Development expenditure
incurred on an individual project is capitalised when its future
recoverability can reasonably be regarded as assured. Any expenditure
capitalised is amortised over the period of expected future sales from
the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment
annually when the asset is not yet in use or otherwise when events or
changes in circumstances indicate that the carrying value may not be
recoverable.
ii) Acquired computer software''s and licenses are capitalised on the
basis of costs incurred to bring the specific intangibles to their
intended use. These costs are amortised on a straight- line pro rata
basis over their estimated useful life of five years.
iii) Acquired Goodwill / Trademark is amortised on a straight-line pro
rata basis over a period of five years. Goodwill is also tested for
impairment every year, if there are any indicators for impairment.
h. Operating leases
Assets acquired under Operating Leases represent assets where the
lessor effectively retains substantially all the risks and benefits of
their ownership. Operating lease payments are recognised as an expense
in the Statement of Profit and Loss on a straight-line basis over the
lease term.
i. Foreign Currency Transactions (i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount, the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
Non- monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction.
Non-monetary items which are carried at fair value or other similar
valuation denominated in a foreign currency are reported using the
exchange rates that existed when the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement/ conversion of monetary
items, are recognised as income or expenses in the year in which they
arise.
(iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognised in the
statement of profit and loss in the year, in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of forward
exchange contract is recognized as income or as expense for the year.
j. Inventories
i) Raw materials, components, stores and spares are valued at lower of
cost and net realisable value. However, materials and other items held
for use in the production of inventories are not written down below
cost, if the finished products, in which they will be incorporated, are
expected to be sold at or above cost. Cost is determined on a weighted
average basis.
ii) Work-in-progress and finished goods are valued at lower of cost and
net realisable value. Cost includes direct materials, labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty. Cost is
determined on a weighted average basis.
iii) Traded goods are valued at lower of cost and net realisable value.
Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined
on a weighted average basis.
iv) Net realisable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion to make the
sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/ or construction of
qualifying assets are capitalised as a part of the cost of such assets,
upto the date when such assets are ready for their intended use. Other
borrowing costs are charged to Statement of Profit and Loss.
l. Expenditure on New Projects and Substantial Expansion
Expenditure directly relating to expansion projects are capitalised.
Administration and other general overhead expenses incurred during the
year, which are specifically attributable to the expansion projects, are
capitalised as part of the indirect project cost. Other indirect
expenditure (including borrowing costs) incurred during the project
period which are not related to the project nor are incidental thereto,
are charged to Statement of Profit and Loss. Income earned during
project period, if any, is deducted from the total of the indirect
expenditure.
m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and
accordingly, is considered for valuation of finished goods stock lying
in the factories and branches as on the balance sheet date.
n. Retirement and Other Employee Benefits
i) Retirement Benefit in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to Statement of
Profit and Loss of the year when the employee renders the service. There
are no obligations other than the contribution payable to the
respective trusts.
ii) Gratuity and Post Retirement Medical Benefit liability are defined
benefit obligations and are provided for on the basis of actuarial
valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on actuarial
valuation made at the end of each financial year.
iv) Pension liability is split into a defined benefit portion and a
defined contribution portion as indicated in note no. 30. The
contributions towards defined contribution are charged to Statement of
Profit and Loss of the year when the employee renders the service. The
defined benefit portion is provided for on the basis of actuarial
valuation made at the end of each financial year.
v) Actuarial gains/losses are immediately taken to Statement of Profit
and Loss and are not deferred.
vi) The current and non current bifurcation is done as per the
Actuarial report.
o. Taxation
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
reflects the impact of current year timing differences between taxable
income and accounting income and reversal of timing differences of
earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available against
which such deferred tax assets can be realised. In situations where
the Company has unabsorbed depreciation or carry forward tax losses,
all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The Company writes down the carrying amount of the deferred
tax assets to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax assets can be
realised. Any such write-down is reversed to the extent that it
becomes reasonably certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
p. Earnings Per Share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognised when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions made in terms of Accounting
Standard-29, are not discounted to its present value and are determined
based on the management estimate required to settle the obligation at
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect the current management estimates.
Provision for product related warranty/guarantee costs is based on the
claims received up to the year end as well as the management estimates
of further liability to be incurred in this regard during the warranty
period, computed on the basis of past trend of such claims.
r. Segment Reporting
Based on the synergies, risks and returns associated with business
operations and in terms of Accounting StandardÂ17, the Company is
predominantly engaged in a single segment of storage batteries and
allied products during the year. The analysis of geographical segments
is based on the areas in which customers of the Company are located.
s. Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the Company or a present obligation that is not recognised
because it is not probable that an outflow of resources will be required
to settle the obligation. The Company does not recognise a contingent
liability but discloses its existence in the financial statements.
t. Cash and Cash Equivalents
Cash and cash equivalents for the purpose of cash fow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
(a) There are other tax disputes / litigations amounting to Rs. 4.26
crores (PY Rs. 3.32 crores) against which the Company has also
deposited money under protest and made provision there - against. Such
deposits and provisions have been netted of in the financials.
(b) There are also provisions against Income Tax claims amounting to
Rs. 7.11 crores (PY Rs. 8.38 crores) which is included in Note 14 i
(d), against which the Company has also created deferred tax assets as
disclosed in Note 4.
Mar 31, 2015
A. Basis of Preparation
The financial statements of the company have been prepared in
accordance with the generally accepted accounting principles in India
(Indian GAAP). The company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under section 133 of the Companies Act 2013, read together with
paragraph 7 of the Companies (Accounts) Rules 2014. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year, except for the change in accounting policy explained
below.
Change in accounting policy
Depreciation on fixed assets
Till the year ended March 31, 2014, Schedule XIV to the Companies Act,
1956, prescribed requirements concerning depreciation of fixed assets.
From the current year, Schedule XIV has been replaced by Schedule II to
the Companies Act, 2013. The applicability of Schedule II has resulted
in the following changes related to depreciation of fixed assets.
Unless stated otherwise, the impact mentioned for the current year is
likely to hold good for future years also.
(a) Useful lives/ depreciation rates
Till the year ended March 31, 2014, depreciation rates prescribed under
Schedule XIV were treated as minimum rates and the company was not
allowed to charge depreciation at lower rates even if such lower rates
were justified by the estimated useful life of the asset. Schedule II
to the Companies Act 2013 prescribes useful lives for fixed assets
which, in many cases, are different from lives prescribed under the
erstwhile Schedule XIV. However, Schedule II allows companies to use
higher/ lower useful lives and residual values if such useful lives and
residual values can be technically supported and justification for
difference is disclosed in the financial statements.
Considering the applicability of Schedule II, the management has
re-estimated useful lives and residual values of all its fixed assets.
The management believes that depreciation rates currently used fairly
reflect its estimate of the useful lives and residual values of fixed
assets, though these rates in certain cases are different from lives
prescribed under Schedule II.
Had the company continued its earlier policy of charging depreciation
based on earlier useful lives / lives determined by Schedule XIV of the
Companies Act, 1956 rates as the case may be, profits for the current
year would have been higher by Rs. 2.20 Crores.
(b) Accounting for additional depreciation on account of revaluation of
assets
The company had revalued all its land, buildings and plant & machinery
existing as on March 31, 1991 and March 31, 1999. Till year ended March
31, 2014, the Guidance Note on Treatment of Reserve Created on
Revaluation of Fixed Assets issued by the ICAI allowed companies to
transfer an amount equivalent to the additional depreciation arising
due to upward revaluation of fixed assets from revaluation reserve to
the statement of profit and loss. Accordingly, the company was
transferring an amount equivalent to additional depreciation arising
due to upward revaluation of building and plant & machinery from
revaluation reserve to the statement of profit and loss. In contrast,
Schedule II to the Companies Act, 2013 applicable from the current
year, states that depreciable amount of an asset is the cost of an
asset or other amount substituted for cost. Hence, in case of revalued
assets, depreciation computed on the revalued amount needs to be
charged to the statement of profit and loss, without any recoupment
from revaluation reserve. Consequently, to comply with the Schedule II
requirement, the company has discontinued the practice of recouping the
impact of additional depreciation from revaluation reserve. The
management has decided to apply the revised accounting policy
prospectively from accounting periods commencing on or after April 1,
2014.
Had the company continued its earlier policy of recouping the
additional depreciation arising due to upward revaluation of fixed
assets from revaluation of assets, profits for the current year would
have been higher by Rs. 0.86 Crores. However, the change in accounting
policy did not have any impact on reserves and surplus as at March 31,
2015.
(c) Depreciation on assets costing less than Rs. 5,000/-
Tiii year ended March 31, 2014, to comply with the requirements of
Schedule XIV to the Companies Act, 1956, the company was charging 100%
depreciation on assets costing less than Rs. 5,000/- in the year of
purchase. However, Schedule II to the Companies Act 2013, appiicabie
from the current year, does not recognize such practice. Hence, to
comply with the requirement of Schedule II to the Companies Act, 2013,
the company has changed its accounting policy for depreciations of
assets costing less than Rs. 5,000/-. As per the revised policy, the
company is depreciating such assets over their useful life as assessed
by the management. The management has decided to apply the revised
accounting policy prospectively from accounting periods commencing on
or after April 1, 2014.
The change in accounting for depreciation of assets costing less than
Rs. 5,000/- did not have any material impact on financial statements of
the company for the current year.
b. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Aithough these estimates are based upon management''s best
knowledge of current events and actions, actual results couid differ
from these estimates.
c. Revenue Recognition Sale of Goods
Revenue from sale of goods including manufactured products is
recognised upon passage of title to the customers, in accordance with
the Sale of Goods Act, 1930.
The Company collects Sales taxes and Value added Taxes (VAT) on behaif
of the Government and, therefore, these are not economic benefits
flowing to the Company. Hence they are excluded from Revenue.
Customs Duty benefits in the form of advance license entitlements are
recognised on export of goods, and are set off from materials cost.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders'' right to receive payment
is established by the balance sheet date.
d. Fixed Assets
Fixed Assets are stated at cost (or revalued amounts, as the case may
be) less accumulated depreciation and impairment losses, if any. Cost
comprises of Purchase price inclusive of duties (net of Cenvat), taxes,
incidental expenses, erection/commissioning expenses etc upto the date
the asset is ready for its intended use. In case of revaluation of
fixed assets, the original cost as written up by the valuer, is
considered in the accounts and the differential amount is transferred
to revaluation reserve.
T he carrying amounts of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on external
/ internal factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and their
''Value in use''. The estimated future cash flows are discounted to their
present value using pre tax discount rates and risks specific to the
asset.
e. Investments
Investments that are readily realizable and intended to be held for not
more than a year from the date on which such investments are made are
classified as current investments. All other investments are classified
as Long-Term investments. Current Investments are stated at lower of
cost or fair value on individual investment basis. Long Term
Investments are considered at cost, unless there is other than
temporary decline in value thereof, in which case adequate provision is
made for diminution in the value of Investments. Investments in foreign
companies are carried at exchange rates prevailing on the date of their
acquisition.
f. Depreciation and Amortisation
i) a) Depreciation on fixed assets is calculated on a straight-line
basis using the rates arrived at based on the useful lives estimated by
the management. The company has used the following rates to provide
depreciation on its fixed assets.
The management has estimated, based on the Company''s internal
evaluation, the useful lives of the following classes of assets:
Factory buildings, Other buildings and vehicles are depreciated over
the estimated useful lives of 28.5 years, 58.5 years and 6 years,
respectively, which are lower than those indicated in schedule II.
b) The Company has estimated the residual value of Plant & Machinery,
moulds and computers to be 2% of the cost as against 5% specified in
Schedule II of the Companies Act, 2013 based on past trends. For
Building, Office equipment, Furniture & Fittings and Vehicles, residual
value has been estimated at 5% of the cost.
ii) Depreciation includes amount amortised on a straight-line basis in
respect of leasehold properties over the respective lease period.
iii) Depreciation on fixed assets added/disposed off during the year is
provided on pro-rata basis with reference to the month of addition/
disposal.
iv) I n case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
g. Intangible Assets
i) Research costs are expensed as incurred. Development expenditure
incurred on an individual project is capitalised when its future
recoverability can reasonably be regarded as assured. Any expenditure
capitalised is amortised over the period of expected future sales from
the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment
annually when the asset is not yet in use, and otherwise when events or
changes in circumstances indicate that the carrying value may not be
recoverable.
ii) Acquired computer software and licenses are capitalised on the
basis of costs incurred to bring the specific intangibles to its
intended use. These cost are amortised on a straight- line pro rata
basis over their estimated useful life of five years.
iii) Acquired Goodwill / Trademark is amortised on a straight-line pro
rata basis over a period of five years. Goodwill is also tested for
impairment every year, if there are any indicators for impairment.
h. Operating leases
Assets acquired under Operating Leases represent assets where the
lessor effectively retains substantially all the risks and benefits of
their ownership. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
i. Foreign Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement/ conversion of monetary
items, are recognized as income or expenses in the year in which they
arise.
(iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or an expense for the
year.
j. Inventories
i) Raw materials, components, stores and spares are valued at Lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost is determined on a weighted
average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and
net realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty. Cost is
determined on a weighted average basis.
iii) Traded goods are valued at Lower of cost and net realizable value.
Cost includes cost of purchase and other costs incurred in bringing the
inventories to their present location and condition. Cost is determined
on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion to make the
sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/ or construction of
qualifying assets are capitalized as a part of the cost of such assets,
upto the date when such assets are ready for their intended use. Other
borrowing costs are charged to Statement of Profit and Loss.
l. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised.
Administration and other general overhead expenses which are
specifically attributable to the construction activity incurred during
the construction period are capitalised as part of the indirect
construction cost. Other indirect expenditure (including borrowing
costs) incurred during the construction period which are not related to
the construction activity nor are incidental thereto, are charged to
Statement of Profit and Loss. Income earned during construction
period, if any, is deducted from the total of the indirect expenditure.
AH direct capital expenditure on expansion are capitalised. As regards
indirect expenditure on expansion, only that portion is capitalised
which represents the marginal increase in such expenditure involved as
a result of capital expansion. Both direct and indirect expenditure are
capitalised only if they increase the value of the asset beyond its
original standard of performance.
m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and
accordingly, is considered for valuation of finished goods stock lying
in the factories and branches as on the balance sheet date.
n. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to Statement of
Profit and Loss of the year when the employee renders the service.
There are no obligations other than the contribution payable to the
respective trusts.
ii) Gratuity and Post Retirement Medical Benefit liability are defined
benefit obligations and are provided for on the basis of an actuarial
valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an
actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to
Statement of Profit and Loss.
v) Pension liability is split into a defined benefit portion and a
defined contribution portion as indicated in note no. 31. The
contributions towards defined contribution are charged to Statement of
Profit and Loss of the year when the employee renders the service. The
Defined benefit portion is provided for on the basis of an actuarial
valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to Statement of Profit
and Loss and are not deferred.
vii) The current and non current bifurcation is done as per Actuarial
report.
o. Taxation
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes down the carrying amount of the deferred
tax assets to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it
becomes reasonable certain or virtually certain, as the case may be,
that sufficient future taxable income will be available.
p. Earning per share
Earning per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions made in terms of Accounting
Standard-29, are not discounted to its present value and are determined
based on the management estimate required to settle the obligation at
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect the current management estimates.
Provision for product related warranty/ guarantee costs is based on the
claims received upto the year end as well as the management estimates
of further liability to be incurred in this regard during the warranty
period, computed on the basis of past trend of such claims.
r. Segment reporting
Based on the synergies, risks and returns associated with business
operations and in terms of Accounting Standard - 17, the Company is
predominantly engaged in a single segment of Storage Batteries and
allied products during the year. The analysis of geographical segments
is based on the areas in which customers of the Company are located.
s. Contingent Liabilities
A contingent liability is a possible obligation that arises from past
events whose existence will be confirmed by the occurrence or
non-occurrence of one or more uncertain future events beyond the
control of the company or a present obligation that is not recognized
because it is not probable that an outflow of resources will be
required to settle the obligation. The company does not recognize a
contingent liability but discloses its existence in the financial
statements.
t. Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
Mar 31, 2014
A. Basis of Preparation
The Company prepares its accounts under the Historical Cost Convention,
modified by revaluation of certain fixed assets. The financial
statements have been prepared to comply in all material respects with
the Accounting Standards notified under the Companies Act, 1956, read
with General Circular 8/2014 dated 4th April 2014, issued by the
Ministry of Corporate Affairs. For recognition of Income and expenses,
Mercantile System of Accounting is followed. The accounting policies
adopted in the preparation of financial statements are consistent with
those of previous year.
b. Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the
financial statements and the results of operations during the reporting
period. Although these estimates are based upon management''s best
knowledge of current events and actions, actual results could differ
from these estimates.
c. Revenue Recognition
Sale of Goods
Revenue from sale of goods including manufactured products is
recognised upon passage of title to the customers, in accordance with
the Sale of Goods Act, 1930.
The Company collects Sales taxes and Value Added Taxes (VAT) on behalf
of the Government and, therefore, these are not economic benefits
flowing to the Company. Hence they are excluded from Revenue.
Customs Duty benefits in the form of advance license entitlements are
recognised on export of goods, and are set off from materials cost.
Interest
Revenue is recognised on a time proportion basis taking into account
the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders'' right to receive payment
is established by the balance sheet date.
d. Fixed Assets
Fixed Assets are stated at cost ( or revalued amounts, as the case may
be ) less accumulated depreciation and impairment losses, if any. Cost
comprises of Purchase price inclusive of duties (net of Cenvat), taxes,
incidental expenses, erection/commissioning expenses etc. upto the date
the asset is ready for its intended use. In case of revaluation of
fixed assets, the original cost as written up by the valuer, is
considered in the accounts and the differential amount is transferred
to revaluation reserve.
The carrying amounts of assets are reviewed at each balance sheet date
to determine if there is any indication of impairment based on external
/ internal factors. An impairment loss is recognised wherever the
carrying amount of an asset exceeds its recoverable amount which
represents the greater of the net selling price of assets and their
''Value in use''. The estimated future cash flows are discounted to their
present value using pre tax discount rates and risks specific to the
asset.
e. Investments
Investments that are readily realizable and intended to be held for not
more than a year are classified as current investments. All other
investments are classified as Long-Term investments. Current
Investments are stated at lower of cost or fair value on individual
investment basis. Long Term Investments are considered at cost, unless
there is other than temporary decline in value thereof, in which case
adequate provision is made for diminution in the value of Investments.
Investments in foreign companies are carried at exchange rates
prevailing on the date of their acquisition.
f. Depreciation and Amortisation
i) The classification of plant & machinery into continuous and
non-continuous process is done as per technical certification and
depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates
and in the manner specified in Schedule XIV of the Companies Act, 1956,
except for the assets shown in (b) below. Further, in respect of
certain assets whose residual economic life, as determined by the
approved valuer, is less than the residual life as per the books,
depreciation is provided at the adjusted higher rates so that the value
thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on
the following assets is provided at a rate higher than those specified
in schedule- XIV of the Companies Act 1956:
Class of assets Useful economic Life Rate of Depreciation
Air conditioners, Refrigerators, Washing
Machines, Water Coolers, Televisions
(included in Furniture & Fittings) 6 15.83%
Motor Vehicles 6 15.83%
Computer Hardware 4 24.50%
Weighing Scales, & Transformers 15 6.53%
Pallet Trucks 10 9.80%
c) The Company has estimated the residual value of Plant & Machinery,
moulds and computers to be 2% of the cost as against 5% specified in
Section 205 (2](c ) of the Companies Act, 1956. Accordingly, 98% of the
value of fixed assets is being depreciated in the accounts.
iii) Depreciation includes amount amortised on a straight-line basis in
respect of leasehold properties over the respective lease period.
iv) Depreciation on fixed assets added/disposed off during the year is
provided on pro-rata basis with reference to the month of
addition/disposal.
v) In case of impairment, if any, depreciation is provided on the
revised carrying amount of the assets over its remaining useful life.
g. Intangible Assets
i) Research costs are expensed as incurred. Development expenditure
incurred on an individual project is capitalised when its future
recoverability can reasonably be regarded as assured. Any expenditure
capitalised is amortised over the period of expected future sales from
the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment
annually when the asset is not yet in use, and otherwise when events or
changes in circumstances indicate that the carrying value may not be
recoverable.
ii) Acquired computer software and licenses are capitalised on the
basis of costs incurred to bring the specific intangibles to its
intended use. These cost are amortised on a straight-line pro rata
basis over their estimated useful life of five years.
iii) Acquired Goodwill / Trademark is amortised on a straight-line pro
rata basis over a period of five years. Goodwill is also tested for
impairment every year, if there are any indicators for impairment.
h. Operating leases
Assets acquired under Operating Leases represent assets where the
lessor effectively retains substantially all the risks and benefits of
their ownership. Operating lease payments are recognized as an expense
in the Profit and Loss account on a straight-line basis over the lease
term.
i. Foreign Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency,
by applying to the foreign currency amount the exchange rate between
the reporting currency and the foreign currency at the date of the
transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate.
Non-monetary items which are carried in terms of historical cost
denominated in a foreign currency are reported using the exchange rate
at the date of the transaction; and non-monetary items which are
carried at fair value or other similar valuation denominated in a
foreign currency are reported using the exchange rates that existed
when the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary
items, are recognized as income or expenses in the year in which they
arise.
(iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange
contracts is amortised as expense or income over the life of the
contract. Exchange differences on such contracts are recognized in the
statement of profit and loss in the year in which the exchange rates
change. Any profit or loss arising on cancellation or renewal of
forward exchange contract is recognized as income or as expense for the
year.
j. Inventories
i) Raw materials, components, stores and spares are valued at Lower of
cost and net realizable value. However, materials and other items held
for use in the production of inventories are not written down below
cost if the finished products in which they will be incorporated are
expected to be sold at or above cost. Cost is determined on a weighted
average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and
net realizable value. Cost includes direct materials and labour and a
proportion of manufacturing overheads based on normal operating
capacity. Cost of finished goods includes excise duty. Cost is
determined on a weighted average basis.
iii) Traded goods are valued at Lower of cost and net realizable value.
Cost includes cost of purchase and other cost incurred in bringing the
inventories to their present location and condition. Cost is determined
on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary
course of business, less estimated costs of completion to make the
sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of
qualifying assets are capitalised as a part of the cost of such assets,
upto the date when such assets are ready for their intended use. Other
borrowing costs are charged to Statement of Profit and Loss.
I. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised.
Administration and other general overhead expenses which are
specifically attributable to the construction activity incurred during
the construction period are capitalised as part of the indirect
construction cost. Other indirect expenditure (including borrowing
costs) incurred during the construction period which are not related to
the construction activity nor are incidental thereto, are charged to
Statement of Profit and Loss. Income earned during construction period,
if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards
indirect expenditure on expansion, only that portion is capitalised
which represents the marginal increase in such expenditure involved as
a result of capital expansion. Both direct and indirect expenditure are
capitalised only if they increase the value of the asset beyond its
original standard of performance.
m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and
accordingly, is considered for valuation of finished goods stock lying
in the factories and branches as on the balance sheet date.
n. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined
contribution scheme and the contributions are charged to Statement of
Profit and Loss of the year when the employee renders the service.
There are no obligations other than the contribution payable to the
respective trusts.
ii) Gratuity and Post Retirement Medical Benefit liability are defined
benefit obligations and are provided for on the basis of an actuarial
valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an
actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to
Statement of Profit and Loss.
v) Pension liability is split into a defined benefit portion and a
defined contribution portion as indicated in Note No. 30. The
contributions towards defined contribution are charged to Statement of
Profit and Loss of the year when the employee renders the service. The
Defined benefit portion is provided for on the basis of an actuarial
valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to Statement of Profit
and Loss and are not deferred.
vii) The current and non current bifurcation is done as per Actuarial
report.
o. Taxation
Tax expense comprises of current and deferred tax. Current income tax
is measured at the amount expected to be paid to the tax authorities in
accordance with the Indian Income Tax Act. Deferred income taxes
reflects the impact of current year timing differences between taxable
income and accounting income for the year and reversal of timing
differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws
enacted or substantively enacted at the balance sheet date. Deferred
tax assets are recognised only to the extent that there is reasonable
certainty that sufficient future taxable income will be available
against which such deferred tax assets can be realised. In situations
where the company has unabsorbed depreciation or carry forward tax
losses, all deferred tax assets are recognised only if there is virtual
certainty supported by convincing evidence that they can be realised
against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance
sheet date. The company writes down the carrying amount of the deferred
tax assets to the extent that it is no longer reasonably certain or
virtually certain, as the case may be, that sufficient future taxable
income will be available against which deferred tax asset can be
realized. Any such write-down is reversed to the extent that it becomes
reasonably certain or virtually certain, as the case may be, that
sufficient future taxable income will be available.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for
the year attributable to equity shareholders by the weighted average
number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when the Company has a present obligation as
a result of past event and it is probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions made in terms of Accounting
Standard-29, are not discounted to its present value and are determined
based on the management estimate required to settle the obligation at
the balance sheet date. These are reviewed at each balance sheet date
and adjusted to reflect the current management estimates.
Provision for product related warranty/guarantee costs is based on the
claims received upto the year end as well as the management estimates
of further liability to be incurred in this regard during the warranty
period, computed on the basis of past trend of such claims.
r. Segment reporting
Based on the synergies, risks and returns associated with business
operations and in terms of Accounting Standard -17, the Company is
predominantly engaged in a single segment of Storage Batteries and
allied products during the year. The analysis of geographical segments
is based on the areas in which customers of the Company are located.
s. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature,
but if material, these are disclosed by way of notes.
t. Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement
comprise cash at bank and in hand and short-term investments with an
original maturity of three months or less.
i) The Company has a full-fledged Research and Development Center and
it has thereby been able to considerably further its efficiency. During
the year, a sum of Rs. 12.72 crs. (PY Rs. 11.10 crs), including
capital expenditure Rs. 3.05 crs. (PY Rs. 0.20 crs), was spent on
Research and Development work.
ii) Stores and Spares consumed is exclusive of Rs. 0.33 crs (PY Rs 0.69
crs) being the amounts allocated to other heads of expenses.
iii) Rent and Hire charges include Rs. 0.47 crs (PY Rs. 0.51 crs)
towards lease of residential apartments. These are cancellable leases,
renewable by mutual agreement. Generally, there is no escalation clause
and no other restrictions imposed by the lease arrangements. There are
no sub-leases.
Mar 31, 2013
A. Basis of Preparation
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of certain fixed assets. The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 ( as amended) and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.
b. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.
c. Revenue Recognition
Sale of Goods
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, in accordance with the Sale of Goods Act ,1930.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from materials cost.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders' right to receive payment is established by the balance sheet date.
d. Fixed Assets
Fixed Assets are stated at cost ( or revalued amounts, as the case may be ) less accumulated depreciation and impairment losses, if any. Cost comprises of Purchase price inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses etc upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external / internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their 'Value in use'. The estimated future cash flows are discounted to their present value using pre tax discount rates and risks specific to the asset.
e. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments.
Current Investments are stated at lower of cost or fair value on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of Investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
f. Depreciation and Amortisation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule- XIV of the Companies Act 1956:
c) The Company has estimated the residual value of Plant & Machinery, moulds and computers to be 2% of the cost as against 5% specified in Section 205 (2)(c ) of the Companies Act, 1956. Accordingly, 98% of the value of fixed assets is being depreciated in the accounts.
iii) Depreciation includes amount amortised on a straight-line basis in respect of leasehold properties over the respective lease period.
iv) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
v) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
g. Intangible Assets
i) Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised when its future recoverability can reasonably be regarded as assured. Any expenditure capitalised is amortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
ii) Acquired computer software and licenses are capitalised on the basis of costs incurred to bring the specific intangibles to its intended use. These cost are amortised on a straight-line pro rata basis over their estimated useful life of five years.
iii) Acquired Goodwill / Trademark is amortised on a straight-line pro rata basis over a period of five years. Goodwill is also tested for impairment every year, if there are any indicators for impairment.
h. Operating leases
Assets acquired under Operating Leases represent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognized as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term.
i. Foreign Currency Transactions
(i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items, are recognized as income or expenses in the year in which they arise.
(iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
j. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion to make the sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Statement of Profit and Loss.
l. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised. Administration and other general overhead expenses which are specifically attributable to the construction activity incurred during the construction period are capitalised as part of the indirect construction cost.
Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to Statement of Profit and Loss. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.
m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories and branches as on the balance sheet date.
n. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to Statement of Profit and Loss of the yearwhen the contributions to the respective funds are due. There are no obligations other than the contribution payable to the respective trusts.
ii) Gratuity and Post Retirement Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to Statement of Profit and Loss.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in Note 30. The contributions towards defined contribution are charged to Statement of Profit and Loss of the yearwhen the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to Statement of Profit and Loss and are not deferred.
vii) The current and non current bifurcation is done as perActuarial report. o. Taxation
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlieryears.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard- 29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
r. Segment reporting
Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard -17, the Company is predominantly engaged in a single segment of Storage Batteries and allied products during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
s. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
t. Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
Mar 31, 2012
A. Basis of Preparation
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of certain fixed assets. The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed.
The accounting policies adopted in the preparation of financial statements are consistent with those of previous year, except for the change in accounting policy explained below.
i) Presentation and disclosure of financial statements
During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company, for preparation and presentation of its financial statements. Except accounting for dividend on investments in subsidiary companies (see below), the adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.
ii) Dividend on Investment in subsidiary companies
Till the year ended 31st March 2011, the company, in accordance with the pre-revised Schedule VI requirement, was recognizing dividend declared by subsidiary companies after the reporting date in the current year's statement of profit and loss if such dividend pertained to the period ending on or before the reporting date. The revised schedule VI, applicable for financial years commencing on or after 1 April 2011, does not contain this requirement. Hence, to comply with AS 9 Revenue Recognition, the company has changed its accounting policy for recognition of dividend income from subsidiary companies. In accordance with the revised policy, the company recognizes dividend as income only when the right to receive the same is established by the reporting date.
b. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates.
c. Revenue Recognition
Sale of Goods
Revenue from sale of goods including manufactured products is recognized upon passage of title to the customers, in accordance with the Sale of Goods Act, 1930.
Customs Duty benefits in the form of advance license entitlements are recognized on export of goods, and are set off from material costs.
Interest
Revenue is recognized on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognized when the shareholders' right to receive payment is established by the balance sheet date.
d. Fixed Assets
Fixed Assets are stated at cost (or revalued amounts, as the case may be) less accumulated depreciation and impairment losses, if any. Cost comprises of Purchase price inclusive of duties (net of Cenvat), taxes,
incidental expenses, erection/commissioning expenses etc up to the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their 'Value in use'. The estimated future cash flows are discounted to their present value using pre tax discount rates and risks specific to the asset.
e. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Investments are stated at lower of cost or fair value on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
f. Depreciation and Amortization
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule
XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in Schedule - XIV of the Companies Act 1956:
c) The Company has estimated the residual value of Plant & Machinery, moulds and computers to be 2% of the cost as against 5% specified in Section 205 (2)(c) of the Companies Act, 1956. Accordingly, 98% of the value of fixed assets is being depreciated in the accounts.
iii) Depreciation includes amount a mortised on a straight-line basis in respect of leasehold properties over the respective lease period.
iv) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
v) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
g. Intangible Assets
i) Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalized when its future recoverability can reasonably be regarded as assured. Any expenditure capitalized is a mortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
ii) Acquired computer software and licenses are capitalized on the basis of costs incurred to bring the specific intangibles to its intended use. These cost are a mortised on a straight-line basis over their estimated useful life of five years.
iii) Acquired Goodwill is a mortised on a straight-line basis over a period of five years. Goodwill is also tested for impairment every year, if there are any indicators for impairment.
h. Leases:
i) Finance lease:
a ) Assets given under a finance lease are recognized as receivables at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognized immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
c) A leased asset is depreciated on a straight line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the company will obtain the ownership by the end of the lease term, the capitalized asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.
ii) Operating leases:
a) Assets acquired under Operating Leases represent assets where the less or effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
i. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement / conversion of monetary items, are recognized as income or expenses in the year in which they arise.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortized as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
j. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion to make the sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, up to the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
l. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalized. Expenditure which is not directly attributable to the construction activity incurred during the construction period are capitalized as part of the indirect construction cost. Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to the Profit and Loss Account. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalized. As regards indirect expenditure on expansion, only that portion is capitalized which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalized only if they increase the value of the asset beyond its original standard of performance.
m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
n. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contribution to the respective funds are due. There are no obligations other than the contribution payable to the respective trusts.
ii) Gratuity and Post Retirement Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. 31. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
vii) The current and non current bifurcation is done as per Actuarial report.
o. Taxation
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognized only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognized only if there is virtual certainty supported by convincing evidence that they can be realized against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
Provision for product related warranty/guarantee costs is based on the claims received up to the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend on such claims.
r. Segment reporting
Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of Storage Batteries and allied products during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
s. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
t. Cash and cash equivalents
Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.
Mar 31, 2011
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets. The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 (as amended) and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed. The accounting policies applied by the Company, are consistent with those used in the previous year. a. Use of estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon managements best knowledge of current events and actions, actual results could differ from these estimates.
c. Revenue Recognition Sale of Goods
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. However, Dividend from subsidiaries is recognised even if the same are declared after the balance sheet date but pertains to period on or before the date of balance sheet, as per the requirement of schedule VI of the Companies Act, 1956.
d. Fixed Assets
Fixed Assets are stated at cost (or revalued amounts, as the case may be) less accumulated depreciation and impairment losses, if any. Cost comprises of Purchase price inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses etc upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their `Value in use. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.
e. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
f. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
c) The Company has estimated the residual value of Plant & Machinery, moulds and computers to be 2% of the cost as against 5% specified in Section 205 (2)(c) of the Companies Act, 1956. Accordingly, 98% of the value of fixed assets is being depreciated in the accounts.
d) Acquired Goodwill and Softwares are amortised over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period. iv. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the
month of addition/disposal. v. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life. g. Intangible Assets
Research and Development Costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable. Acquired computer software and licenses are capitalised on the basis of costs incurred to bring the specific intangibles to its intented use. These cost are amortized on a straight-line basis over their estimated useful life of five years.
h. Leases:
i) Finance lease:
In order to comply with Accounting Standard - 19 Notified by the Companies Accounting Standard Rules, 2006 a ) Assets given under a finance lease are recognized as receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognized immediately in the Profit & Loss Account. b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Leased assets capitalised are depreciated over the shorter of the estimated useful life of the asset or the lease term. ii) Operating leases:
a) Assets acquired under Operating Leases represent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
i. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement / conversion of monetary items, are recognised as income or expenses in the year in which they arise.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
j.Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
k. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
l. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised. Indirect expenditure incurred during construction period are capitalised as part of the indirect construction cost to the extent to which the expenditure are indirectly related to construction or are incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to the Profit and Loss Account. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance. m. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date. n. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no obligations other than the contribution payable to the respective trusts.
ii) Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. `r. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year. vi) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred. o. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims. p. Taxation
Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
q. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
r. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
s. Segment reporting
Based on the synergies risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of Lead Acid Storage Batteries during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
t. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
VI. Figures in brackets relate to previous year and the same have been regrouped/rearranged where necessary.
Mar 31, 2010
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets. The financial statements have been prepared to comply in all material respects with the Accounting Standards notified by the Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed. The accounting policies applied by the Company, are consistent with those used in the previous year.
b. Revenue Recognition Sale of Goods
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. However, Dividend from subsidiaries is recognised even if the same are declared after the balance sheet date but pertains to period on or before the date of balance sheet, as per the requirement of schedule VI of the Companies Act, 1956.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses etc upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve. The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their Value in use. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in
(b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in Schedule - XIV of the Companies Act 1956:
c) The Company has estimated the residual value of Plant & Machinery, moulds and computers to be 2% of the cost as against 5% specified in Section 205 (2)(c) of the Companies Act, 1956. Accordingly, 98% of the value of fixed assets is being depreciated in the accounts.
d) Acquired Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
iv. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
v. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
f. Intangible Assets
Research and Development Costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
g. Leases:
i) Finance lease:
In order to comply with Accounting Standard -19 Notified by the Companies Accounting Standard Rules, 2006
a ) Assets given under a finance lease are recognized as receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognized immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Leased assets capitalised are depreciated over the shorter of the estimated useful life of the asset or the lease term.
ii) Operating leases:
a) Assets acquired under Operating Leases represent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. iii) Exchange Differences
Exchange differences arising on the settlement / conversion of monetary items, are recognised as income or expenses in the year in which they arise.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised. Indirect expenditure incurred during construction period are capitalised as part of the indirect construction cost to the extent to which the expenditure are indirectly related to construction or are incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to the Profit and Loss Account. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance. I. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no obligations other than the contribution payable to the respective trusts.
ii) Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. V. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
n. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims. o. Taxation
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax are measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write- down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available. p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of AccountingStandard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
r. Segment reporting
Based on the synergies risks and returns associated with business operations and in terms of Accounting Standard - 17, the Company is predominantly engaged in a single reportable segment of Lead Acid Storage Batteries during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located.
Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
VI. Figures in brackets relate to previous year and the same have been regrouped/rearranged where necessary.
Mar 31, 2009
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets. The financial statements have been prepared to comply in all material respects with the Notified Accounting Standards by Companies Accounting Standards Rules, 2006 and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed. The accounting policies have been consistently applied by the Company.
b. Revenue Recognition
Sale of Goods
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date.
Dividend from subsidiaries is recognised even if the same are declared after the balance sheet date but pertains to period on or before the date of balance sheet, as per the requirement of schedule VI of the Companies Act, 1956.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses. erection/commissioning expenses etc upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their Value in use. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
f. Intangible Assets
Research and Development Costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
g. Leases:
i) Finance lease:
In order to comply with Accounting Standard - 19 Notified by the Companies Accounting Standard Rules, 2006.
a ) Assets given under a finance lease are recognized as receivable at an amount equal to the net investments in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognized immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to a achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Leased assets capitalised are depreciated over the shorter of the estimated useful life of the asset or the lease term.
iii) Operating leases:
a) Assets acquired under Operating Leases represents assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement / conversion of monetary items, are recognised as income or expenses in the year in which they arise.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised. Indirect expenditure incurred during construction period are capitalised as part of the indirect construction cost to the extent to which the expenditure are indirectly related to construction or are incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to the Profit and Loss Account. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion, only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.
l. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement and other employee benefits
i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.
ii) Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Long term compensated absences are provided for based on an actuarial valuation made at the end of each financial year.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. r. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
n. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
o. Taxation
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
r. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2008
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets. The financial statements have been prepared to comply in all material respects with the Notified accounting standards by Companies Accounting Standards Rules, 2006 (amended) and the relevant provisions of the Companies Act, 1956. For recognition of Income and expenses, Mercantile System of Accounting is followed.
b. Revenue Recognition
Sale of Goods Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, which generally coincides with delivery. Customs Duty benefits in the form of advance license entitlements are recognised on export of goods. and are set off from material costs.
Interest
Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable.
Dividends
Revenue is recognised when the shareholders right to receive payment is established by the balance sheet date. Dividend from subsidiaries is recognised even if the same are declared after the balance sheet date but pertains to period on or before the date of balance sheet, as per the requirement of Schedule VI of the Companies Act, 1956.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses. erection/commissioning expenses etc upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their Value in use. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long-Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of Investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in Schedule- XIV of the Companies Act, 1956:
iii) Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
iv) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
v) In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
f Intangible Assets
Research and Development Costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
g. Leases:
i) Finance lease:
In order to comply with Accounting Standard -19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognized as receivables at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc. are recognized immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalized at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Leased assets capitalized are depreciated over the shorter of the estimated useful life of the asset or the lease term.
ii) Operating leases:
a) Assets acquired under Operating Leases represent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognized as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions (i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
(ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
(iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items, are recognized as income or expenses in the year in which they arise.
(iv)Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognized in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Expenditure on new projects and substantial expansion
Expenditure directly relating to construction activity are capitalised. Indirect expenditure incurred during construction period are capitalised as part of the indirect construction cost to the extent to which the expenditure are indirectly related to construction or are incidental thereto. Other indirect expenditure (including borrowing costs) incurred during the construction period which are not related to the construction activity nor are incidental thereto, are charged to the Profit and Loss Account. Income earned during construction period, if any, is deducted from the total of the indirect expenditure.
All direct capital expenditure on expansion are capitalised. As regards indirect expenditure on expansion. only that portion is capitalised which represents the marginal increase in such expenditure involved as a result of capital expansion. Both direct and indirect expenditure are capitalised only if they increase the value of the asset beyond its original standard of performance.
1. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement and other employee benefits
i) Retirement benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective funds.
ii) Gratuity liability and Post employment Medical Benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Short term compensated absences are provided for based on estimates.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss Account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no.r. The contributions towards defined contribution are charged to the Profit and Loss Account of the year when the contribution becomes due. The Defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
vi) Actuarial gains/losses are immediately taken to profit and loss account and are not deferred.
n. Product Related Warranty Guarantee Claims
Provision for product related warranty guarantee costs is based on the claims received upto the year - end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
o. Taxation
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient foture taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
The carrying amount of deferred tax assets are reviewed at each balance sheet date. The company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain as the case may be, that sufficient foture taxable income will be available against which deferred tax asset can be realized. Any such write-down is reversed to the extent that it becomes reasonable certain or virtually certain, as the case may be, that sufficient future taxable income will be available.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
r. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2007
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed.
b. Revenue Recognition
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their `Value in use'. The estimated future cash flows are discounted to their present value at the weighted average cost of capital,
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition,
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in Schedule - XIV of the Companies Act 1956:
Class of assets Useful economic Life Rate of Depreciation
Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions - (included in Furniture & Fittings) 6 15.83% Motor Vehicles 6 15.83% Computer Hardware 4 23.75% Weighing Scales & Transformers 15 6.33% Pallet Trucks 10 9.50%
c) Acquired Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period,
iv. Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets,
v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal,
vi. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life,
f. Intangible Assets
Research and Development Costs
Research costs are expensed as incurred. Development expenditure incurred on an individual project is carried forward when its future recoverability can reasonably be regarded as assured. Any expenditure carried forward is amortised over the period of expected future sales from the related project, not exceeding ten years.
The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use, and otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable.
g. Leases:
i) In respect of assets given/acquired on finance lease prior to 1st April, 2001:
a) In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued.
ii) In respect of assets given/acquired on finance lease on or after 1st April, 2001:
In order to comply with Accounting Standard -19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognized as receivables at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognised immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Leased assets capitalized are depreciated over the shorter of the estimated useful life of the asset or the lease term.
iii) Operating leases:
a) Assets acquired under Operating Leases represents assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items, are recognised as income or expenses in the year in which they arise except those relating to acquisition of fixed assets outside India, in which case such exchange differences are capitalised.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognisxed as income or as expense for the year.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Hedging
The Company has adopted a policy to minimize the risks associated with the fluctuations in the price of lead by hedging the mismatch in the futures market, only to the extent of its expected imports.
The above hedging contracts are accounted for on the date of their settlement and realised gain/loss thereof is recognised in the profit and loss account. The `open' contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts and charged to materials consumed, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.
l. Excise Duty
Excise Duty is accounted for at the point (if manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on (he balance sheet date.
m. Retirement and other employee benefits
i) Retirement Benefits in the form of Provident Fund is a defined contribution scheme and the contributions are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective trusts.
ii) Gratuity liability and Post employment Medical benefit liability are defined benefit obligations and are provided for on the basis of an actuarial valuation made at the end of each financial year.
iii) Short term compensated absences are provided for based on estimates.
iv) Payments made under the Voluntary Retirement Scheme are charged to the Profit and Loss account.
v) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. `r'. The contributions towards defined contribution are charged to the Profit and Loss account of the year when the contribution becomes due. The defined benefit portion is provided for on the basis of an actuarial valuation made at the end of each financial year.
n. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
o. Taxation
Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income for the year and reversal of timing differences of earlier years.
Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that mere is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.
At each balance sheet date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be that sufficient future taxable income will be available against which such deferred tax assets can be realised.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
r. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2006
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed.
b. Revenue Recognition
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs,
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which represents the greater of the net selling price of assets and their `Value in use'. The estimated future cash flows are discounted to their present value at the weighted average cost of capital,
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition,
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight-line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per die books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule - XIV of the Companies Act 1956:
Class of assets Useful Rate of economic Life Depreciation Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings) 8 11.87% Motor Vehicles 6 15.83% Computer Hardware 4 23.75% Weighing Scales & Transformers 15 6.33% Pallet Trucks 10 9.50%
c) Acquired Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period,
iv. Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets,
v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal,
vi. In case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
f. Research & Development Expenditure of revenue nature are charged to Profit & Loss Account, while capital expenditure are added to the cost of fixed assets in the year in which these are incurred.
g. Leases:
i) In respect of assets given/acquired on finance lease prior to 1st April, 2001:
a) In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued.
ii) In respect of assets given/acquired on finance lease on or after 1st April, 2001:
In order to comply with Accounting Standard -19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognized as receivables at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognised immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased items, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Leased assets capitalized are depreciated over the shorter of the estimated useful life of the asset or the lease term.
iii) Operating leases:
a) Assets acquired under Operating Leases represents assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items, are recognised as income or expenses in the year in which they arise except those relating to acquisition of fixed assets outside India, in which case such exchange differences are capitalised.
iv) Forward Exchange Contracts
The premium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Hedging
The Company has adopted a policy to minimize the risks associated with the fluctuations in the price of lead by hedging the mismatch in the futures market, only to the extent of its expected imports.
The above hedging contracts are accounted for on the date of their settlement and realised gain/loss thereof is recognised in the profit and loss account. The `open' contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts and charged to materials consumed, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.
l. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement Benefits
(a) Retirement Benefits in the form of Provident Fund are charged to the Profit & Loss Account of the year when the contribution to the fund is due.
(b) Retirement Benefit Schemes in the form of Gratuity and Pension are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
(c) Payments made under the Voluntary Retirement Scheme are charged to the Profit & Loss account.
n. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
o. Taxation
Provision for Taxation comprises of current tax, Fringe Benefit Tax and deferred tax charge or release. Current income-tax and Fringe Benefit Tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is 'virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets will be realized,
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Securities Premium Account in the year of redemption.
r. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
s. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2005
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed.
b. Revenue Recognition
Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external/internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds -its recoverable amount which represents the greater of the net selling price of assets and their `Value in use'. The estimated future cash flows are discounted to their present value at the weighted average cost of capital.
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Long Term Investments are considered at cost, unless there is other than permanent decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are carried at exchange rates prevailing on the date of their acquisition.
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule - XIV of the Companies Act 1956:
Class of assets Useful Rate of economic Life Depreciation Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings) 8 11.87% Motor Vehicles 6 15.83% Computer Hardware 4 23.75% Weighing Scales & Transformers 15 6.33% Pallet Trucks 10 9.50%
c) Acquired Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period,
iv. Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets,
v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal,
vi. In the case of impairment, if any, depreciation is provided on the revised carrying amount of the assets over its remaining useful life.
f. Research & Development Expenditure of revenue nature are charged to Profit & Loss Account, while capital expenditure are added to the cost of fixed assets in the year in which these are incurred.
g. Leases:
i) In respect of assets given/acquired on finance lease prior to 1st April, 2001:
a) In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued,
ii) In respect of assets given/acquired on finance lease on or after 1st April, 2001:
In order to comply with Accounting Standard - 19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest as per the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal charges, brokerage etc are recognised immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Leased assets capitalized are depreciated over the shorter of the estimated useful life of the asset or the lease term,
iii) Operating leases:
a) Assets acquired under Operating Leases represents assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets given under operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account, h. Foreign Currency Transactions
i) Initial Recognition
Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.
ii) Conversion
Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction; and non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined.
iii) Exchange Differences
Exchange differences arising on the settlement/conversion of monetary items, are recognised as income or expenses in the year in which they arise except those relating to acquisition of fixed assets outside India, in which case such exchange differences are capitalised.
i. Inventories
i) Raw materials, components, stores and spares are valued at Lower of cost and net realizable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost is determined on a weighted average basis.
ii) Work-in-progress and finished goods are valued at Lower of cost and net realizable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty.
Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and to make the sale.
j. Borrowing Costs
Borrowing costs attributable to the acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Hedging
The Company has adopted a policy to minimize the risks associated with the fluctuations in the price of lead by hedging the mismatch in the futures market. However, it conducts the hedging transactions only to the extent of its expected imports and does not conduct any speculative operations in the market.
The above hedging contracts are accounted for on the date of their settlement and realised gain/loss thereof is recognised in the profit and loss account. The 'open' contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.
l. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement Benefits
(a) Retirement Benefits in the form of Provident Fund are charged to the Profit & Loss Account of the year when the contribution to the fund is due.
(b) Retirement Benefit Schemes in the form of Gratuity and Pension are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
(c) Payments made under the Voluntary Retirement Scheme are charged to the Profit & Loss account.
n. Product Related Warranty/Guarantee Claims
Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims.
o. Taxation
Provision for Income-Tax comprises of current tax and deferred tax charge or release. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is 'reasonable certainty' that sufficient future taxable income will be available against which such deferred tax assets will be realized.
p. Earning per share
Earnings per share is calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Securities Premium Account in the year of redemption.
r. Provision
A provision is recognized when an enterprise has a present obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its present value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates.
s. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2004
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customers which generally coincides with delivery.
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d. Investments
Investments that are readily realizable and intended to be held for not more than a year are classified as current investments. All other investments are classified as Long-Term investments. Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for diminution in the value of investments. Investments in foreign companies are considered at exchange rates prevailing on the date of their acquisition.
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
ii) a) Depreciation is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified in schedule-XIV of the Companies Act 1956:
Class of assets Useful economic Rate of Life Depreciation Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings) 8 11.87%
Motor Vehicles 6 15.83% Computer Hardware 4 23.75%
c) Acquired Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
iv. Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets.
v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f. Research & Development Costs are expensed as and when they are incurred
g. Leases:
i) In respect of assets given/acquired on finance lease prior to 1st April, 2001:
a) In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued.
ii) In respect of assets given/acquired on finance lease on or after 1st April, 2001:
In order to comply with Accounting Standard - 19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognized as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognized as revenue. Initial direct costs such as legal costs, brokerage costs etc are recognised immediately in the Profit & Loss Account.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income. Lease Management fees, legal charges and initial other direct costs are capitalized.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
iii) Operating leases:
a) Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased assets, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets subject to operating leases are included in fixed assets. Lease income is recognized in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognized as an expense in the Profit and Loss Account.
h. Foreign Currency Transactions
i) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
ii) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit & Loss Account, as the case may be.
iii) In case of transactions covered by forward contracts, the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account, as the case may be, proportionately over the contract period.
i. Inventories
Inventories are valued at lower of cost, determined on moving average basis, or net realisable value.
j. Borrowing Costs
Borrowing costs attributable to acquisition and/or construction of qualifying assets are capitalized as a part of the cost of such assets, upto the date when such assets is ready for its intended use. Other borrowing costs are charged to Profit and Loss Account.
k. Hedging
The commodity hedging contracts are accounted for on the date of their settlement and realised gain/loss in respect of the settled contracts is recognised in the profit and loss account, along with the underlying transactions. The `open' contracts as on the Balance Sheet date are valued at the prevailing market rate and the net resultant loss, if any, is provided for in the accounts, whereas the net unrealized gains arising out of such reinstatement is not recognised as a matter of prudence.
l. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
m. Retirement Benefits
(a) Retirement Benefits in the form of Provident Fund are charged to the Profit & Loss Account of the year when the contribution to the fund is due.
(b) Retirement Benefit Schemes in the form of Gratuity and Pension are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
n. Warranty Claims
Provision for warranty claims is based on claims received upto the year end. However, in case of certain products where life-long free replacement are guaranteed, subject to fulfillment of certain conditions, the differential sales price is retained as unrealized income, to be credited to profit and loss account in ten equal annual installments.
o. Taxation
Provision for Income-Tax comprises of current tax and deferred tax charge or release. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is `virtual certainty' that sufficient future taxable income will be available against which such deferred tax assets will be realized.
p. Earning per share
Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends, if any and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares, if any are treated as a fraction of an equity share to the extent that they were entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events of bonus issue: bonus element in a rights issue to existing shareholders: share split: and reverse share split (consolidation of shares).
For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.
q. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Securities Premium Account in the year of redemption.
r. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 2003
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition Revenue from sale of goods including manufactured products are recognised upon passage of title to the customers which generally coincides with delivery Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d.Investments
Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for the diminution in the value of Investments. Investments in foreign companies are considered at the exchange rates prevailing on the date of their acquisition.
e. Depreciation
i) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly
ii) a) Depreciation is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956, except for the assets shown in (b) below. Further, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life detrmined by the valuer.
b) Based upon their respective useful economic life, depreciation on the following assets is provided at a rate higher than those specified n schedule - XIV of the Companies Act 1956:
Class of assets Useful economic Life Rate of Depreciation
Air conditioners, Refrigerators, Washing Machines, Water Coolers, Televisions (included in Furniture & Fittings) 10 9.50%
Motor Vehicles 8 11.87%
c) Goodwill is written off over a period of five years.
iii. Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
iv. Depreciation on the amount capitalised during the year on account of Foreign Echange fluctuation is provided prospectively over the residual life of the respective assets.
v. Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f. Leases:
i) In respect of assets given/acquired on finance lease prior to 1st April, 2001:
a) In respect of assets given on finance lease, depreciation in order to comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, is provided at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
b) In respect of assets acquired on finance lease, the lease rentals are charged to profit and loss account as and when accrued.
ii) In respect of assets given/acquired on finance lease on or after 1st April, 2001: In order to comply with Accounting Standard - 19 pronounced by the Institute of Chartered Accountants of India:
a) Assets given under a finance lease are recognised as a receivable at an amount equal to the net investment in the lease. Lease rentals are apportioned between principal and interest on the IRR method. The principal amount received reduces the net investment in the lease and interest is recognised as revenue.
b) Assets acquired under finance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the lower of the fair value and present value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged directly against income.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset or the lease term.
iii) Operating leases:
a) Leases where the lessor effectively retains substantially all the risks and benefits of ownership of the leased term, are classified as operating leases. Operating lease payments are recognised as an expense in the Profit and Loss Account on a straight-line basis over the lease term.
b) Assets subject to operating leases are included in fixed assets. Lease income is recognised in the Profit and Loss Account on a straight-line basis over the lease term. Costs, including depreciation are recognised as an expense in the Profit and Loss Account.
g. Foreign Currency Transactions
i) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
ii) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit & Loss Account, as the case may be.
iii) In case of transactions covered by forward contracts, the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account, as the case may be, proportionately over the contract period.
h. Inventories
Inventories are valued at lower of cost, determined on moving average basis, or net realisable value.
i. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
j. Retirement Benefits
Retirement Benefit Schemes are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
k. Warranty Claims
Provision for warranty claims is based on claims received upto the year end. However, in case of certain products where life-long free replacementis guaranteed, subject to fulfillment of certain conditions, the differential sales price is retained as unrealised income, to be credited to profit and loss account in ten equal annual installments.
l. Taxation
Provision for Income-Tax comprises of current tax and deferred tax charge or release. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is `virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized.
m. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Securities Premium Account in the year of redemption.
n. Contingent Liabilities
No provision is made for liabilities, which are contingent in nature, but if material, these are disclosed by way of notes.
VI. Figures in brackets relate to previous year and the same have been regrouped/rearranged where necessary.
Mar 31, 2002
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses, Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customers which generally coincides with delivery Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Modvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d. Investments
Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for the diminution in the value of Investments. Investments in foreign companies are considered at the exchange rates prevailing on the date of their acquisition.
e. Depreciation
a) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
b) i. Depreciation is provided on straight line method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. However, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
ii) Goodwill is written off over a period of five years.
c) Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
d) Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets.
e) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, taken prior to 1 April 2001, at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
a) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
b) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit & Loss Account, as the case may be.
c) In case of transactions covered by forward contracts, the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account, as the case may be, proportionately over the contract period.
g. Inventories
Inventories are valued at lower of cost, determined on moving average basis, or net realisable value.
h. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
i. Retirement Benefits
Retirement Benefit Schemes are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
j. Warranty Claims
Provision for warranty claims is based on claims received up to the year end.
k. Taxation
Provision for Income-Tax comprises of current tax and deferred tax charge or release. Deferred tax is recognized, subject to consideration of prudence, on timing differences, being difference between taxable and accounting income/expenditure that originate in one period and are capable of reversal in one or more subsequent period(s). Deferred tax assets are not recognized unless there is `virtual certainty that sufficient future taxable income will be available against which such deferred tax assets will be realized.
l. Deferred Revenue Expenditure
Payment under Voluntary Retirement Scheme and expenses incurred in relation to Enterprise Resource Planning, website development, etc., are considered as deferred revenue expenditure and amortised over a period of 2 to 5 years.
m. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Share Premium Account in the year of redemption.
n. Contingent Liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
o. Segment Reporting
Identification of segments:
The Company has identified that its operating segments are the primary segments. The Companys operating businesses are organized and managed separately according to the nature of products, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which the customers of the Company are located.
Allocation of common costs:
Common allocable costs are allocated to each segment on case to case basis applying the ratio, appropriate to each relevant case.
The accounting policies adopted for segment reporting are in line with those of the Company.
Mar 31, 2001
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of Income and expenses. Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customers which generally coincides with delivery
Customs Duty benefits in the form of advance license entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Modvat), taxes incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d. Investments
Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for the diminution in the value of Investments. Investments in foreign companies are considered at the exchange rates prevailing on the date of their acquisition.
e. Depreciation
a) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly
b) Depreciation is provided on straight line method as under :
i) On additions, at the rates specified in Schedule XTV of the Companies Act, 1956, However, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer.
ii) Goodwill is written off over a period of five years.
c) Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
d) Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets.
c) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
a) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
b) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit & Loss Account, as the case may be.
c) In case of transactions covered by forward contracts, the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account, as the case may be, proportionately over the contract period.
g. Inventories
Inventories are valued at lower of cost, determined on moving average basis, or net realisable value.
h. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
i. Retirement Benefits
Retirement Benefit Schemes are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit & Loss Account.
j. Warranty Claims
Provision for warranty claims is based on claims received up to the year end.
k. Deferred Revenue Expenditure
Payment under Voluntary Retirement Scheme and expenses incurred in relation to Enterprise Resource Planning, website development, etc., are considered as deferred revenue expenditure and amortised over a period of 2 to 5 years.
l. Premium on redemption of Debentures
Premium on redemption of debentures is adjusted against Share Premium Account in the year of redemption.
m. Contingent Liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed byway of notes.
Mar 31, 2000
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards in India. For recognition of income and expenses, Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customers which generally coincides with delivery.
Customs Duty benefits in the form of advance licence entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Modvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d. Investments
Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for the diminution in the value of Investments.
e. Depredation
a) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
b) Depreciation is provided on straight line method as under :
i) On additions, at the rates specified in Schedule XIV of the Companies Act, 1956. However, in respect of certain assets whose residual economic life, as determined by the approved valuer, is less than the residual life as per the books, depreciation is provided at the adjusted higher rates so that the value thereof is written off over the economic life determined by the valuer
ii) Goodwill is written off over a period of five years.
c) Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
d) Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation is provided prospectively over the residual life of the respective assets.
e) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by the Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
a) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
b) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit and Loss Account, as the case may be.
c) In case of transactions covered by forward contracts, the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit and Loss Account, as the case may be, proportionately over the contract period.
g. Inventories
Inventories are valued at lower of cost, determined on weighted average basis, or net realisable value.
h. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
i. Retirement Benefits
Retirement Benefit Schemes are administered through approved funds. Contributions to such funds, made in accordance with actuarial valuation/premiums demanded by Life Insurance Corporation of India, are charged to Profit and Loss Account.
j. Warranty Claims
Year end Provision for warranty claims is estimated, based on claims received upto the year end.
k. Deferred Revenue Expenditure
Payment under Voluntary Retirement Scheme and expenses incurred in relation to Enterprise Resource Planning etc., are considered as deferred revenue expenditure and amortised over a period of 3 to 5 years.
l. Contingent Liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 1999
A. Basis of Accounting
The Company prepares its accounts under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards. For recognition of Income and expenses, Mercantile System of Accounting is followed, except where stated otherwise.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customer which generally coincides with delivery.
Customs Duty benefits in the form of advance licence entitlement are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost of acquisition inclusive of duties (net of Modvat), taxes, incidental expenses, erection/commissioning expenses and interest etc. upto the date the asset is put to use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to capital reserve.
d. Investments
Current Quoted Investments are stated at lower of cost or market rate on individual investment basis. Unquoted and Long Term Investments are considered at cost, unless there is a permanent decline in value thereof, in which case adequate provision is made for the diminution in the value of Investments.
e. Depreciation
a) The classification of plant & machinery into continuous and non-continuous process is done as per technical certification and depreciation thereon is provided accordingly.
b) Depreciation is provided on straight line method as under
i) On assets acquired upto August 31, 1987, at the rates specified in the circular no. 1/86 dated May 21, 1986 issued by the Dept. of Company Affairs.
ii) On additions thereafter, at the rates specified in Schedule XIV of the Companies Act, 1956.
iii) Goodwill is written off over a period of five years.
c) Depreciation includes amount written off in respect of leasehold properties over the respective lease period.
d) Depreciation on the amount capitalised during the year on account of Foreign Exchange fluctuation, is provided retrospectively over the residual life of the respective assets.
e) Depreciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal.
f) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets account for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
a) Foreign currency transactions are recorded on the basis of exchange rates prevailing on the date of their occurrence.
b) Foreign currency assets and liabilities (other than those covered by forward contracts) as on the balance sheet date are revalued in the accounts on the basis of exchange rates prevailing at the close of the year and exchange difference arising therefrom, is adjusted to the cost of fixed assets or charged to Profit & Loss Account, as the case may be.
c) In case of transactions covered by the forward contracts the difference between the contract rate and exchange rate prevailing on the date of transaction, is adjusted to the cost of fixed assets or charged to the Profit & Loss Account, as the case may be, proportionately over the contract period.
g. Inventories
a) Inventories of raw materials, components, stores & spares, loose tools, work-in-progress and purchased components/accessories are valued at or under cost, on weighted average basis.
b) Finished goods stock (including trading goods) is valued at lower of cost or net realisable value.
c) Obsolete/damaged raw materials, components, stores and finished goods (including trading goods) etc. are valued at or under cost/estimated realisable value.
d) Re-processable scraps are valued at estimated realisable value.
h. Excise Duty
Excise Duty is accounted for at the point of manufacture of goods and, accordingly, is considered for valuation of finished goods stock lying in the factories as on the balance sheet date.
i. Retirement Benefits
Retirement Benefit Schemes are administered through approved hinds. Contribution to such hinds, made in accordance with actuarial valuation, are charged to Profit & Loss Account. j. Warranty Claims
Year end Provision for warranty claims is estimated, based on claims received upto the year end.
k. Deferred Revenue Expenditure
Payment under Voluntary Retirement Scheme and expenses incurred in relation to Enterprise Resource Planning and Y2K implementation are considered as deferred revenue expenditure and amortised over a period of 5 years.
l. Contingent Liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 1998
A. Basis of Accounting
The accounts of the Company are prepared under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenses, Mercantile System of Accounting is followed except where otherwise stated.
b. Revenue Recognition
Revenue from sale of goods including manufactured products are recognised upon passage of title to the customer which generally coincides with delivery.
Customs Duty benefits in the form of advance licence entitlements are recognised on export of goods, and are set off from material costs.
c. Fixed Assets
Fixed Assets are stated at cost or valuation less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for addition, improvements, and renewals are capitalised and expenditure for maintenance and repairs are charged to the Profit & Loss Account. When assets are sold or discarded, their costs and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the Profit & Loss Account: When fixed assets are revalued, any surplus on revaluation is credited to Revaluation Reserve.
d. Investments
Unquoted and Long Term Investments are valued at cost. Current quoted investments are valued at lower of cost or net realisable value.
e. Depreciation
Depreciation is provided on straight line method in terms of Section 205(2) (b) of the Companies Act, 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows
i) On assets acquired upto 31st August, 1987, at the rates on the basis of circular No.1/86 dated 21st May, 1986 issued by the Dept. of Company Affairs.
ii) On additions thereafter, at the rate specified in Schedule XIV to the Companies Act, as applicable, on their respective dates of addition, pro-rated for the period in use.
iii) Additional depreciation for the year on the revalued assets is appropriated from revaluation reserve.
iv) To comply with the requirements of true and fair disclosure under Section 211 of Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that full depreciation is provided over the period of lease. Adjustments as appropriate, are made in Income and Leased assets accounts for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
Transactions arising in foreign currencies during the year are converted at rates closely approximate to those ruling on the transaction dates. Liabilities payable in foreign currency are restated at year-end exchange rates. All exchange differences arising from conversion are included in the Profit & Loss Account except those in respect of Liabilities on purchase of fixed assets which are capitalised.
g. Inventories
Raw Materials, purchase items and stores and spare parts are valued at cost which is determined on "First in First Out" basis. Components, Work-in-progress and finished goods manufactured by the Company are valued at lower of cost consisting of direct material and labour costs together with related factory and administrative overheads; and their overall at estimated net realisable value, if lower. On finished goods lying outside the factories, freight etc. are considered for year-end valuation. Scraps are valued at estimated realisable value.
h. Excise Duty
Excise Duty is chargeable on production but is payable on clearance of goods. Accordingly, the Company accounts for excise duty on manufactured goods at the time of their clearance and not at the point of manufacture. However, the Company follows a practice of charging excise duty to the Profit & Loss Account to the extent recovered in sales and the balance amount paid on goods cleared is carried forward as advance. Non-accounting of excise duty on goods manufactured but not cleared does not have any effect on the operating results for the year.
i. Retirement Benefits
Retirement Benefit Schemes are administered through approved funds. Contribution to such funds, made in accordance with actuarial valuation, are charged to Profit & Loss Account.
Payments under Voluntary Retirement Scheme are treated as Deferred Revenue Expenditure and are amortised over a period not exceeding five years.
Warranty Claims
Year end Provision for warranty claims is estimated, based on claims received upto the year end.
k. Contingent Liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
l. Deferred Revenue Expenses
Share issue expenses are treated as deferred revenue expenditure and are amortised over a period of five years.
Mar 31, 1997
A. Basis of Accounting
The accounts of the Company are prepared under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenses, Mercantile System of Accounting is followed except where otherwise stated.
b. Revenue Recognition
Revenues from sale of goods including manufactured products are recognised upon passage of title to the customer which generally coincides with their delivery.
Customs duty benefit against Advance licence entitlements in respect of raw materials are recognised on export of goods.
c. Fixed Assets
Fixed Assets are stated at cost or valuation less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the Profit & Loss Account. When assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the Profit & Loss Account. When fixed assets are revalued, any surplus on revaluation is credited to Revaluation Reserve.
d. Investments
Long Term investments are valued at cost. Current quoted investments and current investments are valued at lower of cost or net realisable value.
e. Depreciation
Depreciation is provided on straight line method in terms of Section 205 (2) (b) of the Companies' Act 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows: (i) On assets acquired upto 31st August, 1987 - at the rates on the basis of circular No. 1/86 dated 21st May 1986 and issued by the Dept. of Company Affairs.
(ii) On additions thereafter at the rates specified in Schedule XIV to the Companies Act as applicable on their respective dates of addition, pro-rated for the period in use.
(iii) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956. real with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that the depreciation is provided over the primary period of lease.
Adjustments as appropriate, are made in Income and Leased assets accounts for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currency Transactions
Transactions arising in foreign currencies during the year are converted at rates closely approximate to those ruling on the transaction dates. Liabilities payable in foreign currency are restated at year-end exchange rates. All exchange differences arising from conversion are included in the Profit & Loss Account except those in respect of liabilities on purchase of fixed assets which are capitalised.
g. Inventories
Raw materials, purchased items and stores and spare parts are valued at cost which is determined on 'first in first out' basis. Components, Work in progress finished goods manufactured by the Company are valued at factory cost consisting of direct material and labour costs together with related factory and administrative overheads; in each case at estimated net realisable value, if lower. On finished goods lying outside the factories, freight etc., are considered for year-end valuation. Scraps are valued at estimated realisable values.
h. Excise Duty
Excise duty is chargeable on production but is payable on clearance of goods. Accordingly, the Company accounts for excise duty on manufactured goods at the time of their clearance and not at the point of manufacture. However, the Company follows a practice of charging excise duty to the Profit & Loss Account to the extent recovered in sales and the balance amount paid on goods cleared is carried forward as advance. Non-accounting of excise duty on goods manufactured but not cleared does not have any effect on the results for the year.
i.Retirement benefits
Retirement benefit schemes are administered through approved funds. Contribution to such funds made in accordance with actuarial valuation are charged to Profit & Loss Account.
Payments under Voluntary Retirement Scheme are treated as Deferred Revenue Expenditure ant are amortised over a period not exceeding five years.
j. Warranty Claims
Year end provision for warranty claims is estimated, based on claims received upto the year end.
k. Contingent liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
I.Deferred Revenue Expenses
Share issue expenses are treated as deferred revenue expenditure and are amortised over a period of five years.
Mar 31, 1996
A. Basis of Accounting
The accounts of the Company are prepared under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenses, Mercantile System of Accounting is followed except where otherwise stated.
b. Revenue Recognition
Revenues from sale of goods including manufactured products are recognised upon passage of title to the customer which generally coincides with their delivery.
Custom's duty benefit against Advance licence entitlements in respect of raw materials are recognised on export of goods.
c. Fixed Assets
Fixed Assets are stated at cost or valuation less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the Profit & Loss Account. When assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and any gain or loss resulting from their disposal is included in the Profit & Loss Account. When fixed assets are revalued, any surplus on revaluation is credited to Revaluation Reserve.
d. Investments
Long Term investments are valued at cost. Unquoted investments and current investments are valued at lower of cost or net realizable value.
e. Depreciation
Depreciation is provided on straight line method in terms of Section 205(2) (b) of the Companies Act 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows:
(i) On assets acquired upto 31st August, 1987 - at the rates on the basis of circular No. 1/86 dated 21 May 1986 issued by the Dept. of Company Affairs.
(ii) On additions thereafter at the rates specified in Schedule XIV to the Companies Act as applicable on their respective dates of addition, pro-rated for the period in use.
(iii) To comply with the requirements of true and fair disclosure under Section 211 of the Companies Act, 1956, read with Schedule VI thereof, the Company provides depreciation on assets given on lease, at rates which ensure that the depreciation is provided over the primary period of lease.
Adjustments as appropriate, are made in income and lease assets accounts for lease equalisation, in accordance with the Guidance Note on Accounting for Leases issued by The Institute of Chartered Accountants of India.
f. Foreign Currencies
Transactions arising in foreign currencies during the year are converted at rates closely approximate to those ruling on the transaction dates. Liabilities payable in foreign currency are restated at year-end exchange rates. All exchange differences arising from conversion are included in the Profit & Loss Account except those in respect of liabilities on purchase of fixed assets which are capitalised.
g. Inventories
Raw materials, purchased items and stores and spare parts are valued at cost which is determined on 'first in first out' basis. Components, Work in progress finished goods manufactured by the Company are 'valued at factory cost consisting of direct material and labour costs together with certain related factory and administrative overheads; in each case at estimated net realisable value, if lower. On finished goods lying outside the factories, items like freight, insurance, etc., are considered for year-end valuation.
h. Excise Duty
Excise duty is chargeable on production but is payable on clearance of goods. Accordingly, the Company accounts for excise duty on manufactured goods at the time of their clearance and not at the point of manufacture. However, the Company follows a practice of charging excise duty to the Profit & Loss Account to the extent recovered in sales and the balance amount paid on goods cleared is carried forward as advance. Non-accounting of excise duty on goods manufactured but not cleared does not have any effect on the results for the year.
i.Retirement benefits
Retirement benefit schemes are administered through approved funds. Contribution to such funds made in accordance with actuarial valuation are charged to Profit & Loss Account.
Payments under Voluntary Retirement Scheme are treated as Deferred Revenue Expenditure and are amortised over a period not exceeding five years.
j. Warranty Claims
Year end provision for warranty claims is estimated, based on claims received upto the year end.
k Contingent liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
l. Deferred Revenue Expenses
Share issue expenses are treated as deferred revenue expenditure and are amortised over a period of five years.
Mar 31, 1995
A. Basis of accounting
The accounts of the Company are prepared under the Historical Cost Convention modified by revaluation of fixed assets and in accordance with applicable accounting standards except where otherwise stated. For recognition of income and expenses, Mercantile System of Accounting is followed except where otherwise stated.
b. Revenue Recognition
Revenues from sale of goods including manufactured products are recognised upon passage of title to the customer which generally coincides with their delivery.
Customs duty benefit against Advance license entitlements in respect of raw materials are recognised on export of goods.
Leave salary and wages are accounted for, when the employees avail leave or at the time of encashment.
c. Fixed Assets
Fixed Assets are stated at cost or valuation less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to working condition for its intended use. Expenditure for additions, improvements and renewals are capitalised and expenditure for maintenance and repairs are charged to the Profit & Loss Account. When assets are sold or discarded their cost and accumulated depreciation are removed from the accounts and an gain or loss resulting from their disposal is included in the Profit & Loss Account. When fixed assets are revalued, any surplus on revaluation is credited to Revaluation Reserve.
d. Depreciation
Depreciation is provided on straight line method in terms of Section 205 (2) (b)of the Companies Act 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows:
(i) On assets acquired upto 31st August, 1987 - at the rates on the basis of circular No. 1/86 dated 21 May 1986 issued by the Dept. of Company Affairs.
(ii) On additions thereafter at the rates specified in Schedule XIV to the Companies Act as applicable on their respective dates of addition, pro-rated for the period in use.
In the case of assets which are revalued, depreciation is charged on the amount of revaluation and adjusted against Revaluation Reserve.
e) Foreign Currencies
Transactions arising in foreign currencies during the year are converted at rates closely approximate to those ruling on the transaction dates. Liabilities payable in foreign currency are restated at year-end exchange rates. All exchange differences arising from conversion are included in the Profit & Loss Account except those in respect of liabilities on purchase of fixed assets which are capitalised.
f) Inventories
Raw materials, components or purchased items and stores and spare parts are valued at cost which is determined on 'first in first out' basis. Work in progress and finished goods manufactured by the Company are valued at factory cost consisting of direct material and labour costs together with certain related factory and administrative Overheads; in each case at estimated net realisable value, if lower. On finished goods lying outside the factories, items like freight, insurance, etc., are considered for year-end valuation.
g) Excise Duty
Excise duty is chargeable on production but is payable on clearance of goods. Accordingly, the Company accounts for excise duty on manufactured goods at the time of their clearance and not at the point of manufacture. However, the Company follows a practice of charging excise duty to the Profit & Loss Account to the extent recovered in sales and the balance amount paid on goods cleared is carried forward as advance. Non-accounting of excise duty on goods manufactured but not cleared does not have any effect on the results for the year.
h) Retirement benefits
Retirement benefit schemes are administered through approved funds. Contribution to such funds made in accordance with acturial valuation are charged to Profit & Loss Account on accrual basis.
Payments under Voluntary Retirement Scheme are treated as Deferred Revenue Expenditure and are amortized over a period not exceeding five years.
i) Warranty Claims
Year end provision for warranty claims is estimated, based on claims received, upto the year end.
1) Contingent liabilities
No provision is made for liabilities which are contingent in nature, but if material, these are disclosed by way of notes.
Mar 31, 1994
Depreciation
Depreciation is provided on straight line method in terms of
Section 205(2)-(b) of the Companies At, 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows:
(i) On assets acquired upto 31 August, 1987 - to the rates on the basis of Circular No. 1/86 dated 21 May, 1986 issued by the Dept of Company Affairs.
(ii) On additions thereafter at the rates specified in Schedule XIV to the Companies Act as applicable on their respective date of addition, pro-ated for the period in use.
In the case of assets which are revalued, depreciation is charged on the amount of revaluation and adjusted against Revaluation Reserve.
Foreign Currencies Transactions arising in foreign currencies during the year are converted at rates closely approximate to those ruling on the transaction dates. Liabilities payable in foreign currency are restated at year-end exchange rates. All exchange differences arising from conversion are included in the Profit & Loss Account except those in respect of liabilities on purchase of fixed assets which are capitalised.
Mar 31, 1993
Revenue Recognition
Revenues from sale of goods including manufactured products are
recognised upon passage of title to the customer which generally
coincides with their delivery.
Depreciation Depreciation is provided on straight line method in terms of section 205(2)-(b) of the Companies Act 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows: i. On assets acquired upto 31st August, 1987-at the rates on the basis of circular No.1/86 dated 21 May 1986 May issued by the Dept. of Company Affairs.
ii. On additions thereafter-at the rates specified in Schedule XIV to the Companies Act 1956, pro-rated for the period in use.
In the case of assets which are revalued, depreciation is charged on the amount of revaluation and adjusted against Revaluation Reserve Amount.
Mar 31, 1992
Depreciation:
Depreciation is provided on straight line method in terms of section 205(2)-(b) of the Companies' Act 1956 and accordingly, 95% of the original value of the assets is being depreciated as follows:
(i) On assets acquired upto 31st August, 1987-at the rates on the basis of circular No. 1/86 dated 21 May 1986 issued by the Dept. of Company Affairs.
(ii) On additions thereafter-at the rates specified in Schedule XIV to the Companies Act 1956, pro-rated for the period in use. In the case of assets which are revalued, depreciation is charged on the amount of revaluation and adjusted against Revaluation Reserve Amount.
Mar 31, 1991
Depreciation for the year has been provided for on straight line method as follows :
i) On assets acquired upto 31st August, 1987 - at the rates on the basis of the circular No. 1/86 dated 21st Mar, 1986 issued by the Department of Company Affairs.
ii) On additions thereafter - at the rates specified in Schedule XIV to Companies Act pro-rated for the period in use.