Mar 31, 2023
Nature and purpose of reserves:(i) Securities Premium
Securities premium is used to record the premium on issue of shares. This premium is to be utilised in accordance with the provisions of the Act.
The General Reserve is a free reserve, retained from Company''s profits. The reserve can be utilised as per the provisions of the Act.
(iii) Equity Instruments through Other Comprehensive Income
The Company has elected to recognize changes in the Fair Value of certain Equity investments in Other Comprehensive Income. These changes are accumalated in the ''Equity Instruments through Other Comprehensive Income'' within Equity. The company transfers the amounts from this reserve to retained earnings when the relevant equity securities are de-recognised.
(iv) Share Based Payment Plan Account
The above reserve relates to share options granted by the Ultimate Holding Company to specific employees of its subsidiaries under its employee stock option plan. Further information about share-based payments to employees is set out in Note 46.
Revaluation Surplus was created under the erstwhile Indian GAAP to recognize the gain due to increase in value of certain Tangible assets as on June 30, 1988. The surplus can be utilised as per the provisions of the Act.
During the year, the Company has been sanctioned a Term Loan amounting to '' 25,00 lakhs from a Bank for purchase of capital assets. The said Term Loan is secured by lien on Fixed Deposit with bank (Refer Note 7). The loan is repayable in 60 equal monthly installments from the date of first disbursement and carries interest rate of 7% p.a. as at March 31,2023 (6.30% p.a. as at March 31, 2022).
II. Defined Benefit Plans:
Contribution to Gratuity Fund
The Company makes annual contributions to the Employees'' Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India and HDFC Group Term Plan Scheme of the HDFC Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/termination in terms of the provisions of the Payment of Gratuity Act or as per the Company''s policy, whichever is beneficial to the employees.
The carrying amounts of trade receivables, employee advances, cash and cash equivalents and other short term receivables, trade payables, unclaimed dividend, capital creditors, loan to a related party, borrowings and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The Companyâs activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
The Companyâs risk management is carried out by a central Treasury department under policies approved by the Board of Directors. The Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Companyâs operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and nonderivative financial instruments, and investment of excess liquidity.
Credit risk is the risk of incurring a loss that may arise from a borrower or debtor failing to make required payments. Credit risk arises mainly from outstanding receivables from free market dealers, cash and cash equivalents, employee advances, security deposits and investments. The Company manages and analyses the credit risk for each of its new clients before standard payment and delivery terms and conditions are offered.
Credit risk on cash and cash equivalents and investment is limited as company generally invests in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in debt mutual fund units.
(i) Credit risk management
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognised from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.
The Company believes that there are no customers or group of customers that would be subjected to any significant credit risks in the collection of the trade receivable.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The company ensures sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, the Treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below), cash and cash equivalents and investments on the basis of expected cash flows.
(ii) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(i) Foreign currency risk
Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency sales and purchases, primarily with respect to EUR and USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Companyâs functional currency (?) The risk is measured through a forecast of highly probable foreign currency cash flows.
The risk is measured through a forecast of foreign currency sales and purchases for the Companyâs operations. The Company uses foreign exchange forward contracts to manage its exposure in foreign currency risk. Entire foreign currency receivables and payables have been hedged.
March 31, 2023 |
March 31, 2022 |
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44 CONTINGENT LIABILITIES |
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(a) |
Excise, Service Tax & Custom Duty demands pending with the appropriate authorities and disputed by the Company |
4,35.72 |
5,27.74 |
(b) |
Sales Tax demands pending with the authorities and disputed by the Company |
36.44 |
38.33 |
(c) |
Claims against the Company under the Labour Laws disputed by the Company |
1,22.31 |
3,55.75 |
(d) |
Guarantees given by Banks, as counter guaranteed by the Company |
9,18.06 |
5,38.63 |
(e) |
Non-Agricultural Land Cess |
37.79 |
37.79 |
(f) |
Other Claims against the Company not acknowledged as debts |
1,21.81 |
1,21.81 |
(g) |
Demand raised by Southern Power Distribution Company of Andhra Pradesh Ltd(SPDCL) disputed by the company and subjudice in High court/Supreme court * |
13,40.77 |
46,50.53 |
(All amounts in '' lakhs, unless otherwise stated) |
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March 31, 2023 |
March 31, 2022 |
|
(i) Income tax liability on account of disputed disallowances |
20.34 |
88.32 |
(j) Good and Service Tax liability for Credit of duty paid on goods and services received prior to July 1,2017 |
16.18 |
8.09 |
*The invoice of SPDCL towards power charges reflect a demand of '' 91,65.00 lakhs as at March 31,2023 towards disputed matters which is not acknowledged as debt by the Company. The Company after considering the legal opinion, has determined the amount relating to ongoing disputes and disclosed the same in (g) above. |
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March 31, 2023 |
March 31, 2022 |
|
44 A COMMITMENTS |
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Capital commitments Capital expenditure contracted for at the end of the reporting period but not |
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recognised as liabilities is as follows: Property, Plant and Equipment |
59,50.70 |
13,62.10 |
45 The segment information is presented under the Notes forming part of the Consolidated Financial Statements as required under the Indian Accounting Standard - 108 on "Operating Segmentâ.
(a) Performance Share Plan
Certain employees of the Company in India are allotted Performance shares of the Ultimate Holding Company. These plans are subject to eligibility criteria based on the employeeâs period of service (service conditions) with the Group as well as performance criteria (performance conditions). The Ultimate Holding Company does not charge any cost for this benefit, the cost of this benefit has been arrived at using Black and Scholes method.
49 During the current year, the Company has acquired 100% equity shares of PRS Permacel Private Limited (PRS) at a consideration of '' 121,12 Lakhs. Consequently, PRS has become a wholly owned subsidiary of the Company effective May 27, 2022. Further, the Board of Directors of the Company at their meeting held on July 29, 2022, approved the Scheme of Amalgamation of PRS with the Company, the appointed date being May 27, 2022. The said Scheme has been filed with the National Company Law Tribunal on August 24, 2022, and is awaiting necessary approvals, as required.
51 (a) There are no subsequent events that would require adjustments or disclosure in the financial statements as on the balance sheet date.
(b) The other matters as required under paragraph âL - Additional Regulatary Informationâ under part I of Division II of Schedule III of the Companies Act,2013 and Paragraph 7(l) and 7 (n) of Part II of Division II and Schedule III to Companies Act 2013, are either not applicable or there are no reportable matters.
(c) Previous year''s figures have been audited by firm of Chartered Accountants other than Kalyaniwalla & Mistry LLP, Chartered Accountants.
Mar 31, 2022
Level 1: hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
There are no transfers between levels 1 and 2 during the year.
The Companyâs policy is to recognise transfers into and transfers out of fair value hierarchy levels as at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments or published NAV by fund house.
-the fair value of forward foreign exchange contracts is determined using forward exchange rate at the balance sheet date
- the fair value of employee stock option plans are determined using Black and Scholes valuation model.
- the fair value of certain financial instruments is determined using discounted cash flow analysis.
- the fair value of one equity instruments is based on net asset value method.
All of the resulting fair value estimates are included in level 1 or 2 except for unlisted equity securities where the fair values have been determined based on present values and the discount rates used were adjusted for counter party or own credit risk.
The Company has outsourced the valuation process of unquoted equity instruments for financial reporting purposes.
The main level 3 inputs for unlisted equity securities used by the Company are derived and evaluated as follows:
For valuation of Saint-Gobain India Pvt. Ltd. discounted cash flow method is used and discount rates are determined using Weighted Average Cost of Capital (WACC) to calculate a post-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.
Growth rate is estimated based on overall economic growth expected, our understanding of the industry and expected long-term inflation.
For valuation of Andhra Pradesh Gas Power Corporation Ltd. net asset value method is used.
Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the yearly valuation discussion between the Chief Financial Officer (CFO), Audit Committee (AC) and the valuation team. As part of this discussion the team presents a report that explains the reason for the fair value movements.
The carrying amounts of trade receivables, electricity deposit, employee advances, cash and cash equivalents and other short term receivables, trade payables, unclaimed dividend, capital creditors, borrowings and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
The fair values for loans and security deposits were calculated based on cash flows discounted using the current lending rate. They are classified as level 3 fair values in the fair value hierarchy since significant inputs required to fair value an instrument are not observable.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
The Company''s activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
The Company''s risk management is carried out by a central Treasury department under policies approved by the Board of Directors. The Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and nonderivative financial instruments, and investment of excess liquidity.
(A) Credit risk
Credit risk is the risk of incurring a loss that may arise from a borrower or debtor failing to make required payments. Credit risk arises mainly from outstanding receivables from free market dealers, cash and cash equivalents, employee
advances, security deposits and investments. The Company manages and analyses the credit risk for each of its new clients before standard payment and delivery terms and conditions are offered.
Credit risk on cash and cash equivalents and investment is limited as company generally invests in deposits with banks and financial institutions with high credit ratings assigned by international and domestic credit rating agencies. Investments primarily include investment in liquid mutual fund units.
(i) Credit risk management
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognised from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.
The Company do not believe there are any particular customer or group of customers that would subject us to any significant credit risks in the collection of our Trade receivable.
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The company ensures sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, the Treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below), cash and cash equivalents and investments on the basis of expected cash flows.
(i) Financing arrangements
The company had access to the following undrawn unsecured borrowing facilities at the end of the reporting period:
(ii) Maturities of financial liabilities
The tables below analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency sales and purchases, primarily with respect to EUR and USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Company''s functional currency (?) The risk is measured through a forecast of highly probable foreign currency cash flows.
The risk is measured through a forecast of foreign currency sales and purchases for the Company''s operations. The Company uses foreign exchange forward contracts to manage its exposure in foreign currency risk. Entire foreign currency receivables and payables have been hedged.
42 CAPITAL MANAGEMENT (a) Risk management
The Companyâs objectives when managing capital are to
⢠safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
⢠maintain an optimal capital structure to reduce the cost of capital.
Currently, there are limited borrowings and operations are being funded through internal accruals.
*The invoice of SPDCL towards power charges reflect a demand of '' 129,30.00 lakhs as at March 31,2022 towards disputed matters which is not acknowledged as debt by the Company. The Company after considering the legal opinion, has determined the amount relating to ongoing disputes and disclosed the same in (g) above.
45 The segment information is presented under the Notes forming part of the Consolidated Financial Statements as required under the Indian Accounting Standard - 108 on âOperating Segmentâ.
46 SHARE BASED PAYMENTS (a) Performance Share Plan
Certain employees of the Company in India are allotted Performance shares of the Ultimate Holding Company. These plans are subject to eligibility criteria based on the employee''s period of service (service conditions) with the Group as well as performance criteria (performance conditions). The Ultimate Holding Company does not charge any cost for this benefit, the cost of this benefit has been arrived at using Black and Scholes method.
* I ncludes estimated amount of gratuity considering amount funded with LIC and does not include provision for leave encashment as separate actuarial valuation is not available.
a It includes the remuneration of Mr. B. Santhanam, Managing Director, effective from April 1, 2020 and Mr. Krishna Prasad, Alternate Director Effective from May 20, 2020. upto January 01,2022, whole time Director w.e.f. February 03, 2022.
(ii) During the Previous year leave encashement of '' 4,54.60 lakhs and gratuity of '' 6,90.31 lakhs was paid to the managing director (who retired on April, 2020) out of the provision made in earlier years.
(f) Transactions with related parties
The following transactions were carried out with the related parties in the ordinary course of business alongwith year-end balances as follows :
(h) Rent paid to key management personnel '' 2.76 lakhs (March 31, 2021 - '' 2.76 lakhs).
(i) Terms and conditions
(i) Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
(ii) The terms and conditions of the loans to Key Managerial Personnel were as per the policy of the Company.
(iii) All other transactions were made on normal commercial terms and conditions and at market rates.
(iv) All outstanding balances are unsecured and are repayable in cash.
49 Previous period figures have been re-grouped / re-classified wherever necessary, to conform to current period''s classification in order to comply with the requirements of the amended Schedule III to the Companies Act,2013 effective April 1,2021.
50 The other matters as required under paragraph âL - Additional Regultary Informationâ under part I of Division II of Schedule III of the Companies Act,2013 and Paragraph 7(l) and 7(n) of Part II of Division II and Schedule III to Companies Act 2013 as relevant to Standalone financial statements are either not applicable or there are no reportable matters.
Mar 31, 2019
1.1 CORPORATE INFORMATION
Grindwell Norton Limited (âthe Companyâ) is a limited company incorporated on July 31, 1950 and domiciled in India. Its shares are publicly traded and has its registered office at 5th Level, Leela Business Park, Andheri Kurla Road, Marol, Andheri (East), Mumbai - 400059. The Company is one of the subsidiary of Compagnie de Saint - Gobain (âSaint Gobainâ), a transnational group with its headquarters in Paris. The Companyâs businesses are a part of the High Performance Solutions sector. In the Company, the businesses are divided into two major segments:
1. Abrasives; and
2. Ceramics and Plastics
The financial statements of the Company for the year ended March 31, 2019 were authorized for issue in accordance with a resolution of the Board of Directors on May 29, 2019.
1.2 BASIS OF PREPARATION
(i) Compliance with Ind AS
The financial statements comply in all material aspects, with Indian Accounting Standards (Ind AS) notified under Section 133 of the Companies Act, 2013 (the Act), as amended, and other relevant provisions of the Act as applicable.
(ii) Historical cost convention
The financial statements have been prepared on a historical cost basis, except for the following:
- Certain financial assets and liabilities (including derivative instruments) are measured at fair value;
- Defined benefit plans - plan assets measured at fair value; and
- Share based payments calculated using the Black and Scholes option pricing model for the shares of Ultimate Parent Company
(iii) New standard adopted by the Company
The Ministry of Corporate Affairs (MCA) has notified the Companies (Indian Accounting Standards) Amendment Rules, 2018 on March 28, 2018 which includes Indian Accounting Standard (Ind AS) 115 in respect of âRevenue from Contracts with Customersâ, and is mandatory for reporting periods beginning on or after April 1, 2018. Ind AS 115 has replaced existing Ind AS 18 - Revenue and Ind AS 11 - Construction Contracts. The Company has adopted IND AS 115 using modified retrospective approach and accordingly, the comparative information for previous year has not been restated. The adoption of Ind AS 115 did not have any material impact on the Companyâs financial statement.
(iv) Current versus non-current classification
All the assets and liabilities have been classified as current or non-current as per the Companyâs operating cycle and other criteria set out in the Schedule III to the Act. Based on the nature of the products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.
NOTE: 2 1.1 USE OF JUDGMENTS, ESTIMATES AND ASSUMPTIONS
While preparing financial statements in conformity with Ind AS, the management has made certain estimates and assumptions that require subjective and complex judgments. These judgments affect the application of accounting policies and the reported amount of assets, liabilities, income and expenses, disclosure of contingent liabilities at the statement of financial position date and the reported amount of income and expenses for the reporting period. Financial reporting results rely on the management estimate of the effect of certain matters that are inherently uncertain. Future events rarely develop exactly as forecasted and the best estimates require adjustments, as actual results may differ from these estimates under different assumptions or conditions. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.
Judgment, estimates and assumptions are required in particular for:
a) Determination of the estimated useful lives of tangible assets
Useful lives of tangible assets are based on technical advice, taking into account the nature of the asset, the estimated usage of the asset, the operating conditions of the asset, past history of replacement, anticipated technological changes, manufacturersâ warranties and maintenance support.
b) Recognition and measurement of defined benefit obligations
The obligation arising from defined benefit plan is determined on the basis of actuarial assumptions. Key actuarial assumptions include discount rate, trends in salary escalation, actuarial rates and life expectancy. The discount rate is determined by reference to market yields at the end of the reporting period on government bonds. The period to maturity of the underlying bonds correspond to the probable maturity of the post-employment benefit obligations. Due to complexities involved in the valuation and its long term nature, defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting period.
c) Recognition of deferred tax
Deferred tax assets and liabilities are recognised for the future tax consequences of temporary differences between the carrying values of assets and liabilities and their respective tax bases. Deferred tax assets are recognised to the extent that it is probable that future taxable income will be available against which the deductible temporary differences could be utilized.
d) Discounting of long-term financial assets / liabilities
All financial assets / liabilities are required to be measured at fair value on initial recognition. In case of financial assets / liabilities which are required to subsequently be measured at amortised cost, interest is accrued using the effective interest method.
e) Fair valuation of employee share options
The fair valuation of the employee share options of the Ultimate Holding Company is based on the Black-Scholes model used for valuation of options. Key assumptions made with respect to expected volatility includes share price, expected dividends and discount rate, under this option pricing model.
g) Measurement of Fair valuation of financial instruments
(i) Fair value of foreign currency forward contracts are determined using the fair value reports provided by respective bankers.
(ii) When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the Discounted Cash Flow (DCF) model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgments include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
f) Impairment of financial assets
The impairment provisions of financial assets are based on the assumptions about risk of default and expected loss rates. The Company uses judgment in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
h) Sales Incentives Schemes and Turnover discounts
The provision for sales incentive schemes and turnover discounts are calculated based on the relevant schemes and estimate of likely sales eligible for such discounts and schemes.
2.2 STANDARDS ISSUED BUT NOT YET EFFECTIVE:
The Company will apply the following standard for the first time for its annual reporting period commencing April 1, 2019:
The Ministry of Corporate Affairs (MCA) notified the Companies (Indian Accounting Standards) Amendment Rules, 2019 and Companies (Indian Accounting Standards) Second Amendment Rules, 2019 (the âRulesâ) on March 30, 2019. These rules are effective from April 1, 2019. Relevant disclosures required by Ind AS 8, Accounting Policies, Changes in Accounting Estimates and Errors for new Ind AS/amendments issued but not yet effective are as follows:
Ind AS 116 - Leases
Ind AS 116 will affect primarily the accounting by lessees and will result in the recognition of almost all leases on balance sheet. The standard removes the current distinction between operating and finance leases and requires recognition of an asset (the right-of-use the leased item) and a financial liability to pay rentals for virtually all lease contracts. An optional exemption exists for short-term and low-value leases. Under Ind AS 116, a contract is, or contains, a lease of the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
The statement of profit and loss will also be affected because the total expense is typically higher in the earlier years of a lease and lower in later years. Additionally, operating expense will be replaced with interest and depreciation, so key metrics like EBITDA will change.
Operating cash flows will be higher as repayments of the lease liability and related interest are classified within financing activities.
The accounting by lessors will not significantly change. Some differences may arise as a result of the new guidance on the definition of a lease.
The Company is in the process of assessing the detailed impact of Ind AS 116.
There are no other standards, changes in standards and interpretations that are not in force up to reporting period that the Company expects to have a material impact arising from its application in its financial statements.
(c) Rights and restrictions attached to the shares
Equity Shares: The Company has only one class of equity shares having a par value of Rs. 5/- each. Each shareholder is eligible for one vote per share held. The shareholders have rights in proportion to their shareholding for dividend as well as for assets, in case of liquidation.
(d) (i) Pursuant to the approval of the Shareholders, through postal ballot and e-voting on July 7, 2016, the Company on July 22, 2016, issued and allotted 5,53,60,000 Ordinary Equity Shares of Rs. 5/- each, as fully paid-up Bonus Shares in the proportion of 1 (One) Bonus Share of Rs. 5/- each for each Ordinary Equity Share of Rs. 5/- each held on the Record Date i.e. July 15, 2016. The Company has not allotted bonus shares other than noted above during five years immediately preceding the date of balance sheet.
(ii) The Company has not allotted any equity shares pursuant to contract without payment being received in cash nor bought back shares during five years immediately preceding the date of balance sheet.
Nature and purpose of reserves
(i) Securities Premium
Securities premium is used to record the premium on issue of shares. This is to be utilised in accordance with the provisions of the Act.
(ii) FVOCI - Equity Investment Reserve
The Company has elected to recognize changes in the Fair Value of certain Equity investments in Other Comprehensive Income. These changes are accumalated within the FV OCI - Equity Investments Reserve within Equity. The company transfers the amounts from this reserve to retained earnings when the relevant equity securities are de-recognised.
(iii) Stock Compensation Reserve
The stock compensation reserve is used to recognize the grant date fair value of options issued under Group (Compagnie de Saint-Gobain) share based payment arrangement to certain employees of the company under employee stock option plans.
(iv) Revaluation Reserve
Revaluation Reserve was created under the erstwhile Indian GAAP to recognize the gain due to increase in value of certain Tangible assets as on June 30, 1988.
3.1 Due to Micro and Small Enterprises:
Micro and small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) have been identified by the Company on the basis of the information available with the Company. The disclosures pursuant to MSMED Act based on the books of account are as under:
The Company has made provisions towards probable liabilities arising out of pending claims/disputes with various authorities. The timing of the outflow with regard to the said matters depends on the exhaustion of remedies available to the Company under the law and hence the Company is not able to reasonably ascertain the timing of the outflow resulting in they being disclosed at their potential undiscounted values.
3.2 Pursuant to the introduction of Goods and Services Tax Act, (GST) with effect from July 1, 2017, Central Excise, Value Added Tax etc. have been subsumed into GST. In accordance with Accounting requirements, unlike Excise Duty, GST is not part of revenue. Accordingly, the revenue figures for the year ended March 31, 2018 are not strictly relatable to those thereafter. The following additional information is being provided to facilitate such understanding:
II. Defined Benefit Plans:
Contribution to Gratuity Fund
The Company makes annual contributions to the Employeesâ Group Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of India and HDFC Group Term Plan Scheme of the HDFC Life Insurance Company Limited, a funded defined benefit plan for qualifying employees. Gratuity is payable to all eligible employees on death or on separation/termination in terms of the provisions of the Payment of Gratuity Act or as per the Companyâs policy, whichever is beneficial to the employees.
The following table sets out the funded status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at March 31, 2019:
Usefulness and Methodology adopted for Sensitivity analysis
Sensitivity analysis is an analysis which will give the movement in liability if the assumptions were not proved to be true on different count. This only signifies the change in the liability if the difference between assumed and the actual is not following the parameters of the sensitivity analysis.
viii) Maturity profile of defined benefit obligation
The weighted average duration of the defined benefit obligation is 10 years. The expected maturity analysis of gratuity on undiscounted basis is as follows:
Projected Benefits Payable in Future Years From the Date of Reporting
x) Risk exposure:
The Companyâs Defined Benefit Plan is Funded with Life Insurance Corporation of India and HDFC Life Insurance Company Limited. Companyâs Benefit Plan is exposed to risk such as investment risk, interest rate risk, salary escalation risk and demographic risk. Any change in these factors would impact the contribution to the fund.
4 .1 Corporate social responsibility expenditure
(a) Amount prescribed under the Act, to be spent during the year on CSR activities is Rs. 3,59.79 lakhs (March 31, 2018 -Rs. 3,14.14 lakhs)
(b) The contribution during the year to Saint Gobain India Foundation (Related Party as per Ind AS 24) is Rs. 1,13.65 lakhs (March 31, 2018 - Rs. 1,01.19 lakhs) which is spent on purposes other than Construction / acquisition of any assets.
(v) Valuation processes
The Company has outsourced the valuation process of unquoted equity instruments for financial reporting purposes.
The main level 3 inputs for unlisted equity securities used by the Company are derived and evaluated as follows:
For valuation of Saint-Gobain India Pvt. Ltd. discount rates are determined using Weighted Average Cost of Capital (WACC) to calculate a post-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.
Growth rate is estimated based on overall economic growth expected, our understanding of the industry and expected long-term inflation.
For valuation of Andhra Pradesh Gas Power Corporation Ltd., discount rate is determined considering prevailing yield of government bonds aligned with residual maturity, market risk premium and beta of similar companies. The Cash Flow projections are based on cost saving method.
Changes in level 2 and 3 fair values are analysed at the end of each reporting period during the yearly valuation discussion between the Chief Financial Officer (CFO), Audit Committee (AC) and the valuation team. As part of this discussion the team presents a report that explains the reason for the fair value movements.
The carrying amounts of trade receivables, electricity deposit, employee advances, cash and cash equivalents and other short term receivables, trade payables, unclaimed dividend, capital creditors and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
The fair values for loans and security deposits were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 fair values in the fair value hierarchy since significant inputs required to fair value an instrument are not observable.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
5 FINANCIAL RISK MANAGEMENT
The Companyâs activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk
The Companyâs risk management is carried out by a central Treasury department under policies approved by the Board of Directors. The Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Companyâs operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(A) Credit risk
Credit risk is the risk of incurring a loss that may arise from a borrower or debtor failing to make required payments. Credit risk arises mainly from outstanding receivables from free market delears, cash and cash equivalents, employee advances and security deposits. The Company manages and analyses the credit risk for each of its new clients before standard payment and delivery terms and conditions are offered.
(i) Credit risk management
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortised cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognised from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward looking information.
We do not believe there are any particular customer or group of customers that would subject us to any significant credit risks in the collection of our Trade receivable.
We have evaluated percentage of allowance for doubtful debts with our trade receivables over the years:
(B) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The company ensures sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, the Treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.
(i) Financing arrangements
The company had access to the following undrawn borrowing facilities at the end of the reporting period:
Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time.
(ii) Maturities of financial liabilities
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturties.
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
(i) Foreign currency risk
Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency sales and purchases, primarily with respect to EUR and USD. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Companyâs functional currency (â). The risk is measured through a forecast of highly probable foreign currency cash flows.
The risk is measured through a forecast of foreign currency sales and purchases for the Companyâs operations. The Company uses foreign exchange forward contracts to manage its exposure in foreign currency risk.
The Companyâs exposure to foreign currency risk at the end of the reporting period expressed in â are as follows:
6 CAPITAL MANAGEMENT
(a) Risk management
The Companyâs objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
Currently, there are no borrowings and operations are being funded through internal accruals.
(ii) Dividends not recognised at the end of the reporting period
In addition to the above dividends, since year end the directors have recommended the payment of a dividend of Rs. 6/- each per fully paid equity share (March 31, 2018 - Rs. 5/-). This proposed dividend is subject to the approval of shareholders at the ensuing annual general meeting.
(ii) The Company is in the process of evaluating the impact of the recent Supreme Court Judgment in case of âVivekananda Vidyamandir And Others Vs The Regional Provident Fund Commissioner (II) West Bengalâ and the related circular (Circular No. C-I/1(33)2019/Vivekananda Vidya Mandir/284) dated March 20, 2019 issued by the Employeesâ Provident Fund Organisation in relation to non-exclusion of certain allowances from the definition of âbasic wagesâ of the relevant employees for the purposes of determining contribution to provident fund under the Employeesâ Provident Funds & Miscellaneous Provisions Act, 1952. In the assessment of the management, the aforesaid matter is not likely to have a significant impact.
7 The segment information is presented under the Notes forming part of the Consolidated Financial Statements as required under the Indian Accounting Standard - 108 on âOperating Segmentâ.
8 SHARE BASED PAYMENTS (a) Performance Share Plan
Certain employees of the Company in India are allotted Performance shares of the Ultimate Holding Company. These plans are subject to eligibility criteria based on the employeeâs period of service (service conditions) with the Group as well as performance criteria (performance conditions). The Ultimate Holding Company does not charge any cost for this benefit, the cost of this benefit has been arrived at using Black and Scholes method.
9 RELATED PARTY TRANSACTIONS (AS PER IND AS 24 RELATED PARTY DISCLOSURES)
Relationships
(i) HOLDING COMPANY
Compagnie de Saint-Gobain, France
(ii) FELLOW SUBSIDIARIES
Certainteed Corporation, USA
Saint-Gobain Services Construction Products Gmbh, Germany
L.M.Van Moppes Diamond Tools India Pvt. Ltd., India Lapeyre, France
Pt. Saint-Gobain Abrasives Diamas,Indonesia Saint-Gobain Performance Plastics Corporation, USA Saint-Gobain Ceramics & Plastics, Inc, USA Saint-Gobain Abrasives (Suzhou) Co., Ltd,China
Saint-Gobain Abrasives BV, Netherlands
Saint-Gobain Abrasives Gmbh,Germany
Saint-Gobain Achats, France
Saint-Gobain Adfors, France
Saint-Gobain Building Distribution-UK
SG Ceramic Materials AS,Norway
Saint-Gobain Corporation, France
Saint-Gobain Dsi Groupe,France
Saint-Gobain Glass, France
Saint-Gobain India Private Limited, India
Saint-Gobain Innovative Materials Belgium, Belgium
Saint-Gobain Solar Gard, LLC,USA
Saint-Gobain Norpro,USA
Saint-Gobain (sea) Pte. Ltd., Philippines
Saint-Gobain Abrasifs,UAE Saint-Gobain Abrasifs S.A. (Maroc),Morocco
Saint Gobain America, S.A. De C.V.,Mexico
Saint-Gobain Building Distribution Deutschland Gmbh, Germany
Saint-Gobain Ceramic Materials (Zhengzhou) Co. Ltd, China
Saint-Gobain Colombia SAS,Colombia
Saint-Gobain Diamantwerkzeuge Gmbh,Germany
Saint-Gobain Distribution Batiment France S.A.S., France
Saint-Gobain Distribution Denmark, Denmark
Saint-Gobain Do Brasil Produtos Industriais E Para Construgao Ltda,Brazil
Saint-Gobain Glass Egypte S.A.E.,Egypt
Saint-Gobain HPM Polska sp.z o.o,Poland
Saint-Gobain Industrial Ceramics Pty Ltd,Australia
SG Industrial Ceramics Ltd, UK
Saint-Gobain Industriekeramik Rodental Gmbh, Germany Saint-Gobain K.K.,Japan Saint-Gobain Materiales Ceramicos,Venezuela Saint-Gobain Materiaux Ceramiques,France Saint-Gobain Nordic A/S,Denmark Saint-Gobain Pipes-France
Saint-Gobain Performance Plastics (Shanghai) Co Ltd,China
Saint-Gobain Sekurit India Ltd,India
Saint-Gobain Sekurit (Thailand) Co Lt,Thailand
Saint-Gobain Inovatif Malzemeler Ve Asindirici Sanayi Ticaret Anonim Sirketi, Turkey
Saint-Gobain Technical Fabrics, S.A. De,Mexico Saint-Gobain Vietnam Ltd.,Vietnam
Saint-Gobain Abrasifs, France,
Saint-Gobain Abrasives Limited,New Zealand
Saint-Gobain Abrasives (Pty.) Ltd.,South Africa
Saint-Gobain Abrasives (Thailand) Ltd.,Thailand
Saint-Gobain Abrasives Ltd, UK
Saint-Gobain Abrasives Limited,England
ST-Gobain Abrasives Pty. Ltd.,Australia
Saint-Gobain Abrasives S.A.,Luxembourg
Saint-Gobain Abrasives (Shanghai) Co Ltd, China
Saint-Gobain Abrasives, Inc.,USA
Saint-Gobain Abrasivi SPA,Italy
Saint-Gobain Abrasivos LDA. - (Portugal), Portugal
Saint-Gobain Abrasivos S.A.(ESPANA), Spain
Saint-Gobain Advanced Ceramics(Shanghai) Co Ltd, China
Saint-Gobain Gyproc Emirates Industries LLC, UAE
Saint-Gobain Adfors Cz S.R.O., Czech Republic
Saint-Gobain Solar Gard Australia Pty. Ltd.
Saint-Gobain Advanced Materials (Taiwan) Co Ltd
Saint-Gobain Rigips Alci Sanayi Ve Ticaret Anonim Sirketi, Turkey
Sanitas Troesch Ag, Switzerland
Saint-Gobain Performance Plastics Mg Silikon Gmbh, Germany
Savoie Refractaires, France
Societe Europeenne Des Produits Refractaires - S.E.P.R., France
Saint-Gobain Consulting Information and Organisation, France Saint-Gobain Distribuigao Brasil Ltda, Brazil Saint-Gobain Info Sys Gmbh, Germany Saint-Gobain Isover, France Saint-Gobain Materiaux Ceramiques, Belgium Saint-Gobain Performance Plastics Corby,UK Saint-Gobain Performance Plastics Korea Co Ltd,Korea Saint-Gobain Performance Plastics Pampus Gmbh, Germany Saint-Gobain Performance Plastics Ireland, Ireland Saint-Gobain Performance Plastics Rencol Limited, UK Saint-Gobain Technology Services, France Thai Gypsum Products PCI, Thailand
Saint-Gobain Centre De Recherche Et DâEtudes Europeen, France
Saint-Gobain Abrasivos Limitada, Chile Saint-Gobain Distribution The Netherlands BV, Netherlands Saint-Gobain Adfors America, Inc, USA Saint-Gobain Adfors Austria Gmbh, Austria
Toyoda Van Moppes Ltd
Saint-Gobain Performance Plastics L S Gmbh, Germany
(iii) OTHER RELATED PARTIES :
Grindwell Norton Employees Gratuity Trust Grindwell Norton Employees Superannuation Trust
(iv) SUBSIDIARY COMPANY
Saint-Gobain Ceramic Materials Bhutan Pvt. Ltd.
(v) KEY MANAGEMENT PERSONNEL
Mr. Anand Mahajan, Managing Director
Mr. Krishna Prasad, Alternate Director
Mr.Pradip Shah, Independent Director (upto March 31, 2019)
Mr. Shivanand Salgaocar, Independent Director
Mr. Keki M. Elavia, Independent Director
Mr. Mikhil Narang, Director
There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognised in respect of impaired receivables due from related parties.
(f) Terms and conditions
(i) All related party transactions entered during the year were in ordinary course of business and on arms length basis.
(ii) Transactions relating to dividends were on the same terms and conditions that applied to other shareholders.
(iii) The terms and conditions of the loans to Key Managerial Personnel are as per the policy of the Company.
(iv) All other transactions were made on normal commercial terms and conditions and at market rates. The average interest rate on the other loans during the year was 10% (March 31, 2018 - 10%).
(v) All outstanding balances are unsecured and are repayable in cash.
10 Previous yearâs figures have been regrouped wherever necessary to conform with current yearâs classification.
Mar 31, 2017
The following table sets out the funded status of the gratuity plan and the amounts recognized in the Company''s financial statements as at March 31, 2017:
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period. The mutual funds are valued using the closing NAV.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the-counter derivatives) is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities, contingent consideration and indemnification asset included in level 3.
There are no transfers between levels 1 and 2 during the year.
The Companyâs policy is to recognise transfers into and transfers out of fair value hierarchy levels at the end of the reporting period.
(ii) Valuation technique used to determine fair value
Specific valuation techniques used to value financial instruments include:
- the use of quoted market prices or dealer quotes for similar instruments
- the fair value of forward foreign exchange contracts is determined using forward exchange rate at the balance sheet date
- the fair value of employee stock option plans are determined using Black and Scholes valuation model
- the fair value of the remaining financial instruments is determined using discounted cash flow analysis
All of the resulting fair value estimates are included in level 1 or 2 except for unlisted equity securities where the fair values have been determined based on present values and the discount rates used were adjusted for counter party or own credit risk.
(iii) Fair value measurements using significant unobservable inputs (level 3)
The following table represents the changes in level 3 items for the period ended March 31, 2017 & March 31, 2016.
(v) Valuation processes
The Company has outsourced the valuation process of unquoted equity instruments for financial reporting purposes.
The main level 3 inputs for unlisted equity securities used by the Company are derived and evaluated as follows:
Discount rates are determined using a capital asset pricing model to calculate a pre-tax rate that reflects current market assessments of the time value of money and the risk specific to the asset.
Earnings growth factor for unlisted equity securities are estimated based on market information for similar types of companies.
Changes in level 2 and 3 fair values are analyzed at the end of each reporting period during the quarterly valuation discussion between the Chief Financial Officer (CFO), Audit Committee (AC) and the valuation team. As part of this discussion the team presents a report that explains the reason for the fair value movements.
The carrying amounts of trade receivables, electricity deposit, employee advances, cash and cash equivalents and other short term receivables, trade payables, unclaimed dividend, borrowings, capital creditors and other current financial liabilities are considered to be the same as their fair values, due to their short-term nature.
The fair values for loans, security deposits and investment in government securities were calculated based on cash flows discounted using a current lending rate. They are classified as level 3 in the fair value hierarchy since significant inputs required to fair value an instrument are observable.
For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to the fair values.
4 FINANCIAL RISK MANAGEMENT
The Company''s activities expose it to market risk, liquidity risk and credit risk.
This note explains the sources of risk which the entity is exposed to and how the entity manages the risk.
The Company''s risk management is carried out by a central Treasury department as per the policies of the Company. The Treasury department identifies, evaluates and hedges financial risks in close co-operation with the Company''s operating units. The Board provides written principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.
(A) Credit risk
Credit risk is the risk of incurring a loss that may arise from a borrower or debtor failing to make required payments. Credit risk arises mainly from outstanding receivables from free market dealers, cash and cash equivalents, employee advances and security deposits. The Company manages and analyses the credit risk for each of its new clients before standard payment and delivery terms and conditions are offered.
(i) Credit risk management
The Company assesses on a forward looking basis the expected credit losses associated with its assets carried at amortized cost. For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognized from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and relevant information that is available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Company''s historical experience and informed credit assessment and including forward looking information.
We have evaluated percentage of allowance for doubtful debts with the trade receivables over the years:
(B) Liquidity risk
Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses. The Company ensures sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Due to the dynamic nature of the underlying businesses, the Treasury maintains flexibility in funding by maintaining availability under committed credit lines. Management monitors rolling forecasts of the Company''s liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows.
(i) Financing arrangements
The Company had access to the following undrawn borrowing facilities at the end of the reporting period:
* The undrawn bank overdraft value is taken based on the actual overdraft value as per the Bank book i.e. Rs, 2,99.61 lakhs
- which includes cheques issued but not presented. The Overdraft as per bank statement is Rs, 1,60 lakhs.
Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time.
(ii) Maturities of financial liabilities
The tables herewith analyse the Company''s financial liabilities into relevant maturity groupings based on their contractual maturities for:
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
(i) Foreign currency risk
Currency risk refers to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company operates internationally and is exposed to foreign exchange risk arising from foreign currency sales and purchases, primarily with respect to EUR, USD, GBP, AUD and JPY Foreign exchange risk arises from future commercial transactions and recognized assets and liabilities denominated in a currency that is not the Company''s functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows.
The risk is measured through a forecast of foreign currency for the Company''s operations. The Company uses foreign exchange forward contracts to manage its exposure in foreign currency risk.
5 CAPITAL MANAGEMENT (a) Risk management
The Company''s objectives when managing capital are to
- safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefits for other stakeholders, and
- maintain an optimal capital structure to reduce the cost of capital.
Currently, there are negligible borrowings and operations are being funded through internal accruals.
6 The segment information is presented under the Notes forming part of the Consolidated Financial Statements as required under the Ind AS - 108 on âOperating Segmentâ.
7 SHARE BASED PAYMENTS (a) Performance Share Plan
Certain employees of the Company in India are allotted Performance shares of the Ultimate Holding Company. These plans are subject to eligibility criteria based on the employee''s period of service (service conditions) with the Group as well as performance criteria (performance conditions). The Ultimate Holding Company does not charge any cost for this benefit, the cost of this benefit has been arrived at using Black and Scholes method.
* For the purposes of this clause, the term ''Specified Bank Notes'' shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the November 8, 2016.
8 RELATED PARTY TRANSACTIONS
1. Relationships
(i) HOLDING COMPANY Compagnie de Saint-Gobain
(ii) FELLOW SUBSIDIARIES
Saint-Gobain Abrasives Inc; USA Societe Europeenne des Produits Refractaires, France
Societe de Participations Financieres et Industrielles Saint-Gobain Isover GHAG, Germany
ABC Superabrasives, USA Saint-Gobain ICASA S.A., Spain
Certainteed Corporation, USA Saint-Gobain Industrial Ceramics Pty Ltd.
L.M.Van Moppes Diamond Tools India Pvt. Ltd. Saint-Gobain Industrial Ceramics, UK
Norton Abrasives Pty. Ltd. Saint-Gobain IndustrieKeramik Dusseldorf GmbH, Germany
PT Saint-Gobain Norton Hamplas, Indonesia Saint-Gobain Materials Ceramicos Ltda., Brazil
PT Saint-Gobain Winter Diamas, Indonesia Saint-Gobain Materials Ceramicos, Venezuela
PT Saint-Gobain Abrasives Indonesia Saint-Gobain Materiaux Ceramics, Belgium
Placopatre SA, France Saint-Gobain PAM, France
Point.P Development, France Saint-Gobain Performance Plastics, USA
Saint-Gobain Ceramics & Plastics Inc., USA Saint-Gobain PPL Shanghai, China
Saint-Gobain Abrasives, Poland Saint-Gobain PPL Korean Co, Ltd, South Korea
Saint-Gobain Ceramiques Informatique Et Organisation, Saint-Gobain Produtos Industriais E Para Construcao Ltd. France
Saint-Gobain DSI Groupe Saint-Gobain Sekurit India Ltd
Saint-Gobain IndustrieKeramik Rodental GmbH, Germany Saint-Gobain Sekurit, Thailand
Saint-Gobain Abrasifs, Dubai Saint-Gobain Sekurit, France
Saint-Gobain Abrasifs, Morocco Saint-Gobain Tech Fab Hongfa (Changzhou) Ltd.
Saint-Gobain Abrasifs, France Saint-Gobain Technical Fabrics, S.A.
Saint-Gobain Abrasifs UAE Saint-Gobain Universal Superabrasives, Inc.
Saint-Gobain Abrasive International Trading (Shanghai) Saint-Gobain Vibros S.A.
Saint-Gobain Abrasives Pty. Ltd, Australia SG Isover, France
Saint-Gobain Abrasives (Pty) Ltd., South Africa Saint-Gobain Advanced Ceramics (Shanghai) Co Ltd
Saint-Gobain Abrasives (Sea) Pte. Ltd. Saint-Gobain Materiaux Ceramiques Benelux SA
Saint-Gobain Abrasives (Shanghai) Co Ltd., Shanghai Saint-Gobain Performance Plastics - Bristol
Saint-Gobain Abrasives (Suzhou) Co. Ltd. Saint-Gobain Performance Plastics Corby, UK
Saint-Gobain Abrasives BV., Netherlands Saint-Gobain Performance Plastics KK, Japan
Saint-Gobain Abrasives GmbH (CORA) Saint-Gobain Performance Plastics, Les Macon, France
Saint-Gobain Abrasives GmbH, Gerolzhofen., Germany Saint-Gobain Performance Plastics Pampus GmbH
Saint-Gobain Abrasives International Trading (HK) Ltd. Saint-Gobain Performance Plastics Verneret, France
Saint-Gobain Abrasives Inc, Worcester USA Saint-Gobain Performance Plastics, Chaineux, Belgium
Saint-Gobain Abrasives, Korea Saint-Gobain Performance Plastics, Ireland
Saint-Gobain Abrasives Ltd -Stafford-UK Saint-Gobain Performance Plastics, Kontich, Belgium
Saint-Gobain Abrasives Ltd., New Zealand Saint-Gobain Performance Plastics, Rencol., UK
Saint-Gobain Abrasives Ltda., Brazil Saint-Gobain Performance Plastics, Taiwan
Saint-Gobain Abrasives Ltda., Portugal Saint-Gobain Performance Plastics, Gembloux, Belgium
Saint-Gobain Abrasives Singapore (PTE) Ltd. Saint-Gobain Research India Ltd.
Saint-Gobain HPM Polska Sp.zo.o, Poland Saint-Gobain Technical Fabrics (Changzhou) Co. Ltd.
Saint-Gobain Abrasives; Thailand Saint-Gobain Weber Netservices
Saint-Gobain Abrasives, Indonesia Saint-Gobain Zipro
Saint-Gobain Abrasives Netherlands B.V. Universal Superabrasives, USA
Saint-Gobain Abrasivi S.P.A., Italy SAP Competence Center Verallia
Saint-Gobain Abrasivos SA, Argentina Saint-Gobain Centre De Recherches Et Detudes, European
Saint-Gobain Achats, France Saint-Gobain Construction Products, Belgium
Saint-Gobain Adfors, France SG Distribution Nordic AB, Sweden
Saint-Gobain Advanced Ceramics, Niagara Lapeyre, France
Saint-Gobain Advanced Materials (M) SDN BHD Saint-Gobain Ceramics Inc, USA
Saint-Gobain Advanced Materials (Taiwan) Co. Ltd. Saint-Gobain India Foundation
Saint-Gobain Building Distribution Deutschland GmbH, Saint-Gobain Vietnam Ltd.
Germany
Saint-Gobain Building Distribution, UK Saint-Gobain Corporation
Saint-Gobain Ceramic Materials (Zhengzhou) Co. Ltd., Saint-Gobain Tech Services-Central Europe China
Saint-Gobain Ceramic Materials,Inc, Canada Saint-Gobain Tech Services-France
Saint-Gobain Ceramic Materials A/S, Norway Saint-Gobain Technology SC
SG, Isover AB, Sweden Saint-Gobain Technology Services - UK
Saint-Gobain Construction Products, SA Saint-Gobain Technology-NA
Saint-Gobain Ceramics & Plastics,Brazil Saint-Gobain Glass France Saint-Gobain Diamantwerkzeuge GmbH & Co.,Germany Dahl Sverige AB
Saint-Gobain Distribution Denmark, Denmark Saint-Gobain Colombia S.A.S Saint-Gobain Do Brasil Produtos Ind. E Para Const Ltda Saint-Gobain Inovatif Malzemeler
Thai Gypsum Products Plc, Thailand Savoie Refractaires Saint-Gobain Gelva, BV Saint-Gobain Glass Egypt Saint-Gobain India Pvt Ltd
(iii) SUBSIDIARY COMPANY
Saint-Gobain Ceramic Materials Bhutan Pvt. Ltd.
(iv) KEY MANAGEMENT PERSONNEL
Anand Mahajan - Managing Director
There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been recognized in respect of impaired receivables due from related parties.
(f) Terms and conditions
(i) Transactions relating to dividends, subscriptions for new equity shares were on the same terms and conditions that applied to other shareholders.
(ii) The terms and conditions of the loans to Key Managerial Personnel are as per the policy of the Company.
(iii) All other transactions were made on normal commercial terms and conditions and at market rates. The average interest rate on the other loans during the year was 10% (March 31, 2016 - 10%).
(iv) All outstanding balances are unsecured and are repayable in cash.
9 DISCLOSURE AS REQUIRED BY IND AS 101 FIRST TIME ADOPTION OF INDIAN ACCOUNTING STANDARDS Transition to Ind AS
These are the Company''s first Standalone Financial Statements prepared in accordance with Ind AS.
The accounting standards notified u/s 133 of the Companies Act, 2013 and the Accounting policies set out in note 1.2 have been applied in preparing the financial statements for the year ended March 31, 2017, the comparative information presented in these financial statements for the year ended March 31, 2016 and in the preparation of an opening Ind AS balance sheet at April 1, 2015 (The Company''s date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Company''s financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied by the Company in the transition from previous GAAP to Ind AS.
10 Ind AS optional exemptions
11 Deemed cost
Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment (PPE) as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Company has elected to measure all of its PPE and intangible assets at their previous GAAP carrying value, except for the effect of Government Grants as per Ind AS 20, the value of PPE have been increased over deemed cost to that extent.
12 Designation of previously recognized financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at Fair Value through Other Comprehensive Income (FVOCI) on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.
13 Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.
14 Investments in subsidiary
If a first time adopter measures investments in subsidiary, joint venture or associate at cost in accordance with Ind AS 27, Ind AS 101 allows the entity to measure such investments at one of the following amounts in its separate opening Ind AS Balance Sheet
(a) Cost determined in accordance with Ind AS 27; or (b) Deemed cost.
The deemed cost of such an investment shall be its:
(i) fair value at the entity''s date of transition to Ind ASs in its separate financial statements; or
(ii) previous GAAP carrying amount at that date.
The above options can be selected each investment wise. Accordingly the Company has elected to measure investment in its subsidiary at their previous GAAP carrying value.
15 Ind AS Mandatory Exceptions A.2.1 Estimates
An entity''s estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2015 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP:
- Investment in equity instruments carried at FVOCI;
- Investment in mutual funds carried at Fair Value through Profit and Loss (FVPL); and
- Impairment of financial assets based on expected credit loss model.
16 De-recognition of financial assets and liabilities
Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the de-recognition requirements in Ind AS 109 retrospectively from a date of the entity''s choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions.
The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
17 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
18 Impairment of financial assets
Ind AS 101 provides that if at the date of transition the determination of increase in credit risk since initial recognition is difficult, loss allowance to be provided at an amount equal to lifetime expected credit losses at each reporting date until de-recognition.
C: Notes to First time adoption
19 Fair valuation of investments
Under the previous GAAP, investments in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and reliability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes of these investments (other than equity instruments designated as at FVOCI) have been recognized in retained earnings as at the date of transition and subsequently in the profit and loss for the year ended March 31, 2016. This increased the retained earnings by Rs, 3,24.27 Lakhs as at March 31, 2016 (April 1, 2015 - Rs, 2,33.50 Lakhs).
Fair value changes with respect to investments in equity instruments designated as at FVOCI have been recognized in FVOCI - Equity investments reserve as at the date of transition and subsequently in the Other Comprehensive Income for the year ended March 31, 2016. This increased other reserves by Rs, 94,79.54 Lakhs as at March 31, 2016 (April 1, 2015 - Rs, 47,91.54 Lakhs).
Consequent to the above, the total equity as at March 31, 2016 increased by Rs, 98,04.10 Lakhs (April 1, 2015 - Rs, 50,25.02 Lakhs) and Profit and Other Comprehensive Income for the year ended March 31, 2016 increased by Rs, 90.79 Lakhs and Rs, 46,88.30 Lakhs, respectively.
20 Bank overdrafts
Under Ind AS, bank overdrafts repayable on demand and which form an integral part of the cash management process are included in cash and cash equivalents for the purpose of presentation of statement of cash flows. Under previous GAAP, bank overdrafts were considered as part of borrowings and movements in bank overdrafts were shown as part of financing activities. Consequently, cash and cash equivalents have reduced by Rs, 2,99.61 Lakhs as at March 31, 2016 (April 1, 2015
- '' Nil) and cash flows from financing activities for the year ended March 31, 2016 have also increased by '' 2,99.61 Lakhs to the effect of the movements in bank overdrafts.
21 Proposed dividend
Under the previous GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting. Accordingly, the liability for proposed dividend of '' NIL as at March 31, 2016 (April 1, 2015 -'' 43,31.03 Lakhs) included under provisions has been reversed with corresponding adjustment to retained earnings. Consequently, the total equity increased by an equivalent amount.
22 Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in Other Comprehensive Income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year. As a result of this change, the profit for the year ended March 31, 2016 increased by '' 5,01.40 Lakhs. There is no impact on the total equity as at March 31, 2016. Also, the Interest cost on actuarial, amounting to '' 5.00 Lakhs has been regrouped from Employee benefit expenses to Finance cost.
23 Revenue Recognition
The Company was recognizing revenue in accordance with the companyâs accounting policies, when the goods were dispatched. The Company has evaluated the principles under Ind AS 18 and made necessary changes.
24 Excise Duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the Statement of Profit and Loss as part of expenses. This change has resulted in an increase in total revenue and total expenses for the year ended March 31, 2016 by Rs, 90,08.18 Lakhs. There is no impact on the total equity and profit.
25 Cash Discount
Under the previous GAAP, Cash Discount and Discounts related to Sales of Rs, 33,90.90 Lakhs was recognized as part of Other Expenses which have been adjusted against Revenue from operations, under Ind AS.As a result of this change, the Revenue for the year ended March 31, 2016 decreased by Rs, 33,90.90 Lakhs.
26 Employee stock option expense
Under the previous GAAP, the cost of equity-settled employee share-based plan were recognized using the intrinsic value method. Under Ind AS, the cost of equity settled share-based plan is recognized based on the fair value of the options as at the grant date. Consequently, the amount recognized in share compensation reserve increased by Rs, 1,65.88 Lakhs as at March 31, 2016 (April 1, 2015- Rs, 86.23 Lakhs). The profit for the year ended March 31, 2016 decreased by Rs, 79.65 Lakhs. There is no impact on total equity.
27 Security deposits
Under the previous GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognized as Deferred rent. Consequent to this change, the amount of security deposits decreased by Rs, 73.72 Lakhs as at March 31, 2016 (April 1, 2015 - Rs, 1,16.52 Lakhs). The deferred rent increased by Rs, 73.72 Lakhs as at March 31, 2016 (April 1, 2015 - Rs, 1,16.52 Lakhs). Further, the Deferred rent asset is bifurcated between Current and Non-current amounting to Rs, 55.64 Lakhs and Rs, 18.08 Lakhs respectively (April 1, 2015 - Rs, 99.44 and Rs, 17.08 Lakhs respectively), based on Management''s intention. The profit for the year and total equity as at March 31, 2016 decreased by Rs, 3.92 Lakhs due to amortization of the deferred rent of Rs, 18.10 Lakhs which is partially off-set by the notional interest income of Rs, 14.17 Lakhs recognized on security deposits.
28 Fair valuation of loans to employee and Director
Under the previous GAAP, loans to employees at concessional rate (that are recoverable in cash as per the loan terms) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognized at fair value. Accordingly, the Company has fair valued these loans to employees and Director under Ind AS. Difference between the fair value and transaction value of the loans has been recognized as expenses in the Statement of Profit and Loss for the year. Consequent to this change, the amount of loans decreased by Rs, 25.57 Lakhs as at March 31, 2016 (April 1, 2015 -Rs, 31.27 Lakhs). The profit for the year and total equity as at March 31, 2016 increased by Rs, 12.77 Lakhs due to notional interest income recognized on loan to employees and director.
29 Fair valuation of forward contracts
Under the previous GAAP, the Company applied the requirements of Accounting Standard 11-The effects of changes in foreign exchange rates to account for forward exchange contract for hedging foreign exchange risk related to recognized trade payables and trade receivables. At the inception of the contract, the forward premium was separated and amortized as expense over the tenure of the contract. The underlying trade payables, trade receivables and the forward contract were restated at the closing spot exchange rate.
Under Ind AS, derivatives which are not designated as hedging instruments are fair valued with resulting changes being recognized in Statement of Profit and Loss. The change transaction resulted in a net loss of Rs, 3,07.90 Lakhs as at March 31, 2016 (Net gain as on April 1, 2015 - Rs, 2,90.82 Lakhs). Consequently, other financial liabilities as at March 31, 2016 has increased by Rs, 17.21 Lakhs (financial assets as at April 1, 2015 increased by Rs, 2,90.82 Lakhs).
30 Government Grant
Under the previous GAAP, the grant received from the Government can be deducted from the carrying amount of fixed asset. Under Ind AS 20, the Company shall recognize the asset related government grants outstanding on the transition date as deferred income with the corresponding adjustment made to the carrying amount of property, plant and equipment (net of cumulative depreciation impact). The Company has imported capital goods under Export Promotion Capital Goods (EPCG) Scheme and has recognized the duty save on the same as deferred income with the corresponding impact in property, plant and equipment at the transition date amounting to Rs,3,13.25 Lakhs. During the year 2015-16, the Company has additionally imported capital goods under EPCG scheme and the duty saved recognized on it is Rs, 15.73 lakhs. This deferred income has been bifurcated into Current and Non-current Asset amounting to Rs, 2,15.28 Lakhs and Rs, 56.83 Lakhs respectively (April 1, 2015 Rs, 2,56.90 Lakhs and Rs, 56.35 Lakhs respectively). The Company has charged the depreciation and amortization of deferred income amounting to Rs,56.87 Lakhs based on useful life of the asset imported under EPCG scheme. There is no impact on the total equity as at March 31, 2016.
31 Adjustment related to Property, Plant & Equipment
The Company has elected to measure all of its PPE at their previous GAAP carrying value, hence, the revaluation reserve adjusted in retained earnings as on March 31, 2016 has been capitalized to PPE. Consequent to this change, the PPE has increased by '' 2,73.79 Lakhs. The profit for the year has decreased by Rs, 61.71 lakhs, being reversal of the depreciation previously charged to Revaluation reserve.
Under the previous GAAP, Goodwill and Trademark were amortized over the useful life. However, as per Ind AS, the same will be tested for impairment annually or more frequently if the events or changes in circumstances indicate that it might be impaired. Consequent to this change, there is an increase in the Goodwill and Trademark by Rs, 32.46 Lakhs and Rs, 20.44 Lakhs respectively, with a subsequent increase in the profit for the year.
32 Deferred tax
Deferred tax have been recognized on the adjustments made on transition to Ind AS.
33 Retained Earnings
Retained earnings as at April 1, 2015 has been adjusted consequent to the above Ind AS adjustments.
34 Other Comprehensive Income
Under Ind AS, all items of income and expense recognized in a period should be included in Statement of Profit and Loss for the period, unless a standard requires or permits otherwise. Items of income and expenes that are not recognized in Statement of Profit and Loss but are shown in the Statement of Profit and Loss as âOther Comprehensive Incomeâ, includes remeasurement of Employee Benefit obligation and fair valuation of Equity Instruments through OCI and Income tax relating to these items. The concept did not exist under the previous GAAP
35 Previous Year''s figures have been recast and rearranged wherever necessary.
Mar 31, 2016
Note : 1.
There is no movement in the number of shares outstanding during the
year ended 31st March 2015 & year ended 31st March 2016.
Note : 2.
Rights and restrictions attached to the shares
Equity Shares: The Company has only one class of equity shares having a
par value ofRs.5 per share. Each shareholder is eligible for one vote
per share held. The shareholders have rights in proportion to their
shareholding for dividend as well as for assets, in case of
liquidation.
Note : 3.
The company has decided to follow the Accounting for Fixed asset at
historical cost as per the amended Accounting Standard - 10.
Accordingly, Revaluation Reserve of Rs.3,18.60 lacs is adjusted against
the carrying amount of the fixed asset as on 31st March, 2016.
Note : 4.
The Company has revised the depreciation rate on certain fixed assets as
per useful life specified in the Companies Act,2013. Depreciation of
Rs.1,80.60 lacs (net of deferred taxRs.92.99 lacs) on account of assets
whose useful life is already exhausted as on 1st April, 2014 have been
adjusted to General Reserve.
Note : 5.
Excise duty deducted from turnover represents amount of excise duty
collected by the Company on sale of goods manufactured by the Company.
Excise duty of ?2,37.08 Lacs (Previous Year-?2,19.43 Lacs), being the
difference between the opening and closing stock of finished goods is
debited to Miscellaneous Expenses.
Note : 6.
(a) Amount prescribed under the Companies Act, 2013 to be spent during
the year on CSR activities is Rs.2,70.10 Lacs.
(b) The amount spent on purposes other than construction / acquisition
of any assets during the year is Rs.70.86 Lacs.
(c) The contribution to Saint-Gobain India Foundation ( Related Party
as per AS -18 ) is Rs.70.86 Lacs.
Note : 7.
Exchange difference arising on foreign currency transactions amounting
to net gain -Rs.5,94.77 Lacs (Previous Year-Rs.5,37.76 Lacs) has been
accounted under respective heads.
Note : 8.
The segment information is presented under the Notes forming part of
the Consolidated Financial Statements Accounts as required under the
Accounting Standard  17 on "Segment Reporting".
Note : 9.
Previous year''s figures have been recast and rearranged wherever
necessary.
Mar 31, 2013
Note : 1.1
Rights and restrictions attached to the shares
Equity Shares: The Company has only one class of equity shares having a
par value of Rs. 5 per share. Each shareholder is eligible for one vote
per share held. The shareholders have rights in proportion to their
shareholding for dividend as well as for assets, in case of
liquidation.
Note : 2.1
Excise duty deducted from turnover represents amount of excise duty
collected by the Company on sale of goods manufactured by the Company.
Excise duty of Rs. 2,15.99 Lacs (Previous Year  Rs. 3,14.22 Lacs), being
the difference between the opening and closing stock of fnished goods
is debited to Miscellaneous Expenses.
Note : 3
Exchange difference arising on foreign currency transactions amounting
to Rs. 62.79 Lacs (Net Loss) (Previous Year  Rs. 21.06 Lacs) has been
accounted under respective heads.
Note : 4
The segment information is presented under the Notes forming part of
the Consolidated Accounts as required under the Accounting Standard Â
17 on "Segment Reporting".
Note : 5
RELATED PARTY DISCLOSURE :
1. Relationships :
(i) HOLDING COMPANY : Compagnie de Saint-Gobain
(ii) FELLOW SUBSIDIARIES :
Saint-Gobain Abrasives Inc., USA
Societe de Participations Financieres et Industrielles
Saint-Gobain Glass India Ltd.
ABC Superabrasives, USA
Certainteed Corporation, USA
L.M.Van Moppes Diamond Tools India Pvt. Ltd.
Norton Abrasives PTY Ltd.
PT Saint-Gobain Norton Hamplas, Indonesia
PT Saint-Gobain Winter Diamas, Indonesia
PT Saint-Gobain Abrasives Indonesia
Placopatre
Point.P Development
Saint-Gobain Ceramics & Plastics Inc.
Saint-Gobain Abrasives, France
Saint-Gobain Abrasives, Poland
Saint-Gobain Ceramiques Informatique Et Organisation
Saint-Gobain DSI Groupe
Saint-Gobain Industriekeramik Rodental GMBH
Saint-Gobain Abrasifs Dubai
Saint-Gobain Abrasifs Maroc, Morocco
Saint-Gobain Abrasifs, France
Saint-Gobain Abrasifs UAE
Saint-Gobain Abrasives International Trading (Shanghai)
Saint-Gobain Abrasives (Australia) PTY Ltd.
Saint-Gobain Abrasives (PTY) Ltd., South Africa
Saint-Gobain Abrasives (Sea) Pte. Ltd.
Saint-Gobain Abrasives (Shanghai) Co Ltd., Shanghai
Saint-Gobain Abrasives (Suzhou) Co. Ltd.
Saint-Gobain Abrasives BV., Netherlands
Saint-Gobain Abrasives GMBH (CORA)
Saint-Gobain Abrasives GMBH, Gerolzhofen., Germany
Saint-Gobain Abrasives International Trading (HK) Ltd.
Saint-Gobain Abrasives Inc, Worcester USA
Saint-Gobain Diamantwerkzeuge GMBH & Co
Saint-Gobain Distribution Denmark
Saint-Gobain Do Brasil Produtos Ind. E Para Const Ltda
Saint-Gobain Formula Thai Gypsum Product
Saint-Gobain Gelva, BV
Saint-Gobain Glass Egypt
Saint-Gobain Gyproc India Ltd.
Saint-Gobain High Performance Materials, France
Saint-Gobain HPM Polska Sp. z o.o
Saint-Gobain Isover G H AG
Saint-Gobain ICASA S.A.
Saint-Gobain Industrial Ceramics Pty Ltd.
Saint-Gobain Industrial Ceramics, UK
Saint-Gobain Industrie Keramik Dusseldorf GMBH
Saint-Gobain Materials Ceramicos Ltda. Brazil
Saint-Gobain Materials Ceramicos, Venezuela
Saint-Gobain Materiaux Ceramics, Belgium
Saint-Gobain PAM, France
Saint-Gobain Performance Plastics Portage
Saint-Gobain Performance Plastics, New Jersey, USA
Saint-Gobain Performance Plastics, Worcester, USA
Saint-Gobain Performance Plastics, Taunton, USA
Saint-Gobain PPL Corporation Mexico
Saint-Gobain PPL Shanghai
Saint-Gobain Performance Plastics, Korea
Saint-Gobain Produtos Industriais E Para Construcao Ltda
Saint-Gobain Sekurit India Ltd
Saint-Gobain Sekurit (Thailand) Co., Ltd
Saint-Gobain Seva Engineering India Limited
Saint-Gobain Seva, France
Saint-Gobain Tech Fab Hongfa (Changzhou) Ltd.
Saint-Gobain Technical Fabrics, S.A
Saint-Gobain Universal Superabrasives, Inc
Saint-Gobain Abrasives Korea
Saint-Gobain Abrasives Ltd. Â Stafford-UK
Saint-Gobain Abrasives Ltd., New Zealand
Saint-Gobain Abrasives Ltda., Brazil
Saint-Gobain Abrasives Ltda., Portugal
Saint-Gobain Abrasives Singapore (PTE) Ltd.
Saint-Gobain Abrasives SP. Z.O.O
Saint-Gobain Abrasives SP.Z
Saint-Gobain Abrasives Thailand
Saint-Gobain Abrasives Indonesia
Saint-Gobain Abrasives Netherlands B.V.
Saint-Gobain Abrasivi S.P.A.(Micromold)
Saint-Gobain Abrasivi S.P.A.(Ral-Sud)
Saint-Gobain Abrasivi S.P.A., Italy
Saint-Gobain Abrasivos SA, Argentina
Saint-Gobain Achats
Saint-Gobain Advanced Ceramics, Niagara
Saint-Gobain Advanced Materials (M) SDN BHD
Saint-Gobain Advanced Materials (Taiwan) Co. Ltd.
Saint-Gobain Building Distribution
Saint-Gobain Ceramic Materials (Liyanguang) Co. Ltd., China
Saint-Gobain Ceramic Materials (Mudanjiang) Co. Ltd., China
Saint-Gobain Ceramic Materials (Zhengzhou) Co. Ltd., China
Saint-Gobain Ceramic Materials, Australia
Saint-Gobain Ceramic Materials AS., Norway
Saint-Gobain Ceramic Materials Weilerswist GMBH
Saint-Gobain Ceramic Materials, USA
Saint-Gobain Ceramicas Industrialces S.A, Spain
Saint-Gobain Ceramicas Industriales S.A.
Saint-Gobain Ceramics & Plastics,Brazil
Saint-Gobain Ceramics Inc, USA
Saint-Gobain Construction Products Vietnam Ltd.
Saint-Gobain Crystals & Detectors India Ltd.
Saint-Gobain Vibros S.A. Savoi Refractories SEPR Refractories India
Ltd. SEPR, France
Saint-Gobain Advanced Ceramics (Shanghai) Co Ltd Saint-Gobain Materiaux
Ceramiques Benelux SA Saint-Gobain Performance Plastics  Bristol
Saint-Gobain Performance Plastics (Shanghai) Co. Ltd. Saint-Gobain
Performance Plastics Corby, UK Saint-Gobain Performance Plastics KK,
JAPAN Saint-Gobain Performance Plastics, Les Macon, France Saint-Gobain
Performance Plastics Pampus GMBH Saint-Gobain Performance Plastics
Verneret, France Saint-Gobain Performance Plastics, Akron, USA
Saint-Gobain Performance Plastics, Beaverton, USA Saint-Gobain
Performance Plastics, Chaineux, Belgium Saint-Gobain Performance
Plastics, Florida, USA Saint-Gobain Performance Plastics, Garden
Groove, USA Saint-Gobain Performance Plastics, Granville, USA
Saint-Gobain Performance Plastics, Ireland Saint-Gobain Performance
Plastics, Kontich, Belgium Saint-Gobain Performance Plastics,
Mickleton, USA Saint-Gobain Performance Plastics, New York, USA
Saint-Gobain Performance Plastics, Pittsburg, USA Saint-Gobain
Performance Plastics, Poestenkill, USA Saint-Gobain Performance
Plastics, Rencol., UK Saint-Gobain Performance Plastics, Taiwan
Saint-Gobain Performance Plastics, Gembloux, Belgium Saint-Gobain
Research India Ltd. Saint-Gobain Technical Fabrics (Changzhou) Co.
Ltd. Weber Netservices Universal Superabrasives., USA
(iii) SUBSIDIARY COMPANY :
Saint-Gobain Ceramic Materials Bhutan Pvt. Ltd.
(iv) KEY MANAGEMENT PERSONNEL : A. Y. Mahajan - Managing Director
J.A.J. Pereira - Executive Director - Human Resources & Corporate
Services
Note : 6
Previous year''s fgures have been recast and rearranged wherever
necessary.
Mar 31, 2012
Note : 1.2
There is no movement in the number of shares outstanding during the
year ended 31st March 2011 & year ended 31st March 2012.
Note : 1.2
Rights and restrictions attached to the shares
Equity Shares: The Company has only one class of equity shares having a
par value of Rs 5 per share. Each shareholder is eligible for one vote
per share held. The shareholders have rights in proportion to their
shareholding for dividend as well as for assets, in case of
liquidation.
Note : 2.1
The Company has not provided any loans and advances in the nature of
loans to its subsidiary during the year (Previous Year - Rs Nil) and
hence disclosure under clause 32 of the listing agreement is not made.
I. Defined Benefit Plan
Contribution to Gratuity Fund
The Company makes annual contributions to the Employees' Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of
India, a funded defined benefit plan for qualifying employees. Gratuity
is payable to all eligible employees on superannuation, death or on
separation/termination in terms of the provisions of the Payment of
Gratuity Act or as per the Company's policy whichever is beneficial to
the employees. .
Note :3.1
Excise duty deducted from turnover represents amount of excise duty
collected by the Company on sale of goods manufactured by the Company.
Excise duty of Rs 3,14.22 Lacs (Previous Year - Rs 2,22.42 Lacs), being
the difference between the opening and closing stock of finished goods
is debited to Miscellaneous Expenses.
As at As at
31st March,2012 31st March, 2011
(Rs Lacs) (Rs Lacs)
Note : 4 CONTINGENT LIABILITIES
NOT PROVIDED FOR IN RESPECT OF :
(a) Excise & Custom Duty demands/show
cause notices pending with the
appropriate authorities and disputed
by the Company 8,35.62 7,33.18
(b) Sales Tax demands pending with
the Commissioner ate/High Court and
disputed by the Company 2,49.42 2,90.78
(c) Claims against the Company under
the Labour Laws for disputed cases
1,00.73 90.00
(d) Guarantees given by Banks,
of which Rs 4,28.44 Lacs (Previous Year -
Rs 2,86.37 Lacs) are counter guaranteed
by the Company 4,28.44 2,86.37
(e) Guarantees given on behalf of
Subsidiary Company 8,39.08 8,39.08
(f) Letters of credit issued by banks
on behalf of the Company 1.89 1,18.14
(g) Non-Agricultural Land Cess 37.79 35.97
(h) Other Claims against the Company
not acknowledged as debts 1,12.04 2,94.39
(i) Demand raised by A.P Transco on
increase in power cost, disputed by
the Company & subjudice in Honourable
Supreme Court 26,27.55 24,40.22
(j)Demand raised by A.P Transco on
surplus units allocated, disputed by
the Company & subjudice in High
Court (Net) 6,95.48 6,01.01
(k) Demand raised by A.P Transco for
fuel surcharge adjustment for FY 2008-09,
disputed by the Company & subjudice in
Honourable Supreme Court 1,64.00 -
(I) Income Tax liability on account of
disputed disallowances 91.25 20.17
Note : 5
Exchange difference arising on foreign currency transactions amounting
to Rs 21.06 Lacs (Net Loss) (Previous Year - Rs 1,69.78 Lacs Net Gain)
has been accounted under respective heads.
Note : 6
Consequent to the notification of Revised Schedule VI under the
Companies Act, 1956, the financial statements for the year ended 31st
March, 2012 are prepared as per Revised Schedule VI. Accordingly, the
figures of financial statements for the year ended 31st March, 2011
have been reclassified as per Revised Schedule VI, to conform to
current year's classification.
NOTES : 1. The Company has undrawn borrowing facilities amounting to Rs
26,00 Lacs (Previous Year - Rs 26,00 Lacs).
2. Previous Year's figures have been regrouped to conform with the
current year's presentation.
Mar 31, 2011
1. The Company has changed its accounting year from January à December
to April à March with effect from the previous period. Accordingly, the
current years financial statements relate to 12 months ended 31st
March, 2011 and the previous periods fgures are for fifteen months from
1st January, 2009 to 31st March, 2010. Hence the current years fgures
are not strictly comparable to the previous period.
2. Contingent liabilities not provided for in respect of :
As at As at
31st March, 31st March,
2011 2010
(Rs. Lacs) (Rs. Lacs)
a. Excise & Custom Duty demands/show
cause notices pending with the appropriate
authorities and disputed by the Company 7,33.18 3,20.60
b. Sales Tax demands pending with the
Commissionerate/High Court and disputed by
the Company 2,90.78 2,41.04
c. Claims against the Company under the
Labour Laws for disputed cases 90.00 26.44
d. Demand raised by A.P. Transco on
surplus units allocated, disputed by the
Company & subjudice in High Court (Net) 6,01.01 4,84.72
e. Guarantees given by Banks, of which
Rs. 286.37 Lacs (Previous Period Ã
Rs. 223.13 Lacs) are counter guaranteed by
the Company 2,86.37 2,23.13
f. Guarantees given on behalf of
Subsidiary Company 8,39.08 8,39.08
g. Letters of credit issued by banks on
behalf of the Company 1,18.14 19.83
h. Non-Agricultural Land Cess 35.97 35.97
i. Other Claims against the Company not
acknowledged as debts 2,94.39 48.24
j. Demand raised by A.P. Transco on
increase in power cost, disputed by the
Company & subjudice in Honourable
Supreme Court 24,40.22 21,44.32
3. The Company has Cash Credit facilities from bankers secured by first
charge by way of hypothecation of inventories and book debts, both
present and future, wherever situated and subservient mortgage on
immovable properties situated at Mora, Bangalore and Nagpur.
4. The Company has been in possession of land at Tirupati, on which
its Silicon Carbide Plant was erected, since 1978. The transfer
formalities for the said land were not completed because of a dispute
relating to the lease rent payable. The Company had paid lease rental
(inclusive of penalty upto 1997) of Rs. 30.00 Lacs for the period 1978 to
2004. The Company has also provided for lease rent in respect of 90
acres of land for the period 2004 to date at the rates prevailing for
2004, pending the fnalisation of the lease agreement.
5. Estimated amount of capital commitments (net of advances à Rs.
1,92.00 Lacs) not provided for Rs. 7,61.63 Lacs (Previous Period à Rs.
4,95.11 Lacs net of advances of Rs. 91.74 Lacs).
6. Exchange difference arising on foreign currency transactions
amounting to Rs. 1,69.78 Lacs (Net Gain) (Previous Period à Rs. 1,82.98
Lacs Net Gain) has been accounted under respective heads.
7. Excise duty deducted from turnover represents amount of excise duty
collected by the Company on sale of goods manufactured by the Company.
Excise duty of Rs. 2,22.42 Lacs (Previous Period à Rs. 1,72.46 Lacs), being
the difference between the opening and closing stock of fnished goods
is debited to Miscellaneous Expenses under Schedule 9.
Mar 31, 2010
1. The Company has changed its accounting year from january à December
to April à March with effect from the current year. Accordingly, the
current periodÃs fnancial statements are for ffteen months from 1st
January, 2009 to 31st March, 2010. The previous yearÃs fgures relate
to 12 months ended 31st December 2008 and hence current periodÃs fgures
are not strictly comparable to previous year.
2. Contingent liabilities not provided for in respect of :
As at As at
31st March, 31st December,
2010 2008
(Rs. Lacs) (Rs. Lacs)
a. Excise Duty demands/show cause
notices pending with the appropriate
authorities and disputed by the Company 3,20.60 3,09.35
b. Sales Tax/VAT demands pending with
the Commissionerate/high Court and
disputed by the Company 2,41.04 3,56.15
c. Custom Duty demands pending with
Appellate Tribunal and disputed by the
Company - 10.43
d. Claims against the Company under
the Labour Laws for disputed cases 26.44 5.12
e. Demand raised by A.P. Transco on
surplus units allocated, disputed by the
Company & subjudice in high Court (Net) 4,84.72 2,95.70
f. Guarantees given by Banks, of which
Rs. 2,23.13 Lacs (Previous Year
Rs. 3,39.67 Lacs) is counter guaranteed
by the Company 2,23.13 18,39.67
g. Guarantees given on behalf of
Subsidiary Company 8,39.08 6,29.34
h. Letters of credit issued by banks
on behalf of the Company 19.83 -
i. Non-Agricultural Land Cess 35.97 35.97
j. other Claims against the Company not
acknowledged as debts 48.24 48.24
3. The Company has Cash Credit facilities from bankers secured by frst
charge by way of hypothecation of inventories and book debts, both
present and future, wherever situated and subservient mortgage on
immovable properties situated at Mora, Bangalore and Nagpur.
Court and the matter is still subjudice. Based on the legal advice, the
Company discontinued making further provision from january 2005. After
internal review of the matter and based on the legal advice, the
Company is now of the view that the earlier provision of Rs. 7,72.11
lacs is no longer required and hence the same has been reversed and
disclosed under the head ÃExceptional ItemÃ.
4. The Company has been in possession of land at Tirupati, on which
its Silicon Carbide Plant was erected, since 1978. The transfer
formalities for the said land were not completed because of a dispute
relating to the lease rent payable. The Company had paid lease rental
(inclusive of penalty upto 1997) of Rs. 30 lacs for the period 1978 to
2004. The Company has also provided for lease rent in respect of 90
acres of land for the period 2004 to date at the rates prevailing for
2004, pending the fnalisation of the lease agreement.
5. Estimated amount of capital commitments (net of advances of Rs.
91.74 Lacs) not provided for Rs. 4,95.11 Lacs [Previous Year à Rs.
10,14.26 Lacs (net of advances of Rs. 5,47.31 Lacs)].
6. Exchange difference arising on foreign currency transactions
amounting to Rs. 1,82.98 Lacs (Net Gain) (Previous Year à Rs. 56.16
Lacs à Net Loss) has been accounted under respective heads.
9. During the period, the Company has amended the terms and conditions
of the Group Gratuity Scheme. Consequent to this, the impact of Rs.
2,76.15 Lacs has been charged under the head ÃSalaries, Wages, Bonus
and GratuityÃ.
7. Excise duty deducted from turnover represents amount of excise
duty collected by the Company on sale of goods manufactured by the
Company. Excise duty of Rs. 1,72.46 Lacs (Previous Year à Rs. 2,88.09
Lacs), being the difference between the opening and closing stock of
finished goods is debited to Miscellaneous Expenses under Schedule 9.
8. The Company has not provided any loans and advances in the nature
of loan to its subsidiary during the period (Previous Year Rs. Nil) and
hence disclosure under clause 32 of the listing agreement is not made.
9. The Company uses forward contracts to hedge its risk associated
with foreign currency fuctuations relating to frm commitments and
forecasted transactions. The Company does not enter into forward
exchange contracts which are intended for speculative purposes.
Previous YearÃs fgures are in brackets.
The Indian Rupee equivalent is arrived at by converting the forward
contracts at the spot rate as at 31st March, 2010. Foreign currency
exposure (net) not hedged by forward contracts as on 31st March, 2010
is Rs. 2,91.97 Lacs (Previous Year à Rs. 3,05.91 Lacs).
II. Defned Beneft Plan :
Contribution to Gratuity Fund :
The Company makes annual contributions to the Employeesà Group
Gratuity-cum-Life Assurance Scheme of the Life Insurance Corporation of
India, a funded defned beneft plan for qualifying employees. Gratuity
is payable to all eligible employees on superannuation, death or on
separation/termination in terms of the provisions of the Payment of
Gratuity Act or as per the CompanyÃs policy whichever is benefcial to
the employees.
10. Previous Years fgures have been recast and rearranged wherever
necessary.