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Notes to Accounts of High Energy Batteries (India) Ltd.

Mar 31, 2015

1 Contingent Liabilities and Commitments

Counter Guarantees and Commitments on Letters of Credit 971.03 894.53

Claims against the company not acknowledged as Debts 28.00 28.00

Estimated amount of contracts remaining to be executed on capital accounts not provided for 2.40 -

Tamil Nadu VAT under dispute 84.65 84.65

Claims from Customers under dispute 0.38 0.38

2. Transfer to Deferred Tax is mainly on account of difference in charging depreciation prescribed under the Companies Act 1956, and allowable under the Income Tax Act, 1961 and on account of unabsorbed depreciation / business loss under Income Tax Act.

Based on firm orders on hand and expected improvements in the performance of the company as a whole, in the view of the Management, the company will have adequate taxable income in future and there exists virtual certainty of the Deferred Tax Asset (DTA) getting realized.

3. Expenditure on Scientific Research includes salaries and allowances Rs 61.12 Lakhs (Previous year Rs 60.33 Lakhs) and materials Rs.1.02 Lakhs (Previous year Rs 19.85 Lakhs)

4. In terms of development contract with a customer, assets and development expenditure of the value of Rs 191 Lakhs has been incurred and equivalent amount received from the customer is netted against the same. The company is holding these assets as a bailee in terms of the development contract.

5. Movement in estimated liability towards Warranty as per Accounting Standard 29 (AS 29)

6. Hitherto, depreciation was provided as per rates/methods specified in Schedule XIV of the Companies Act, 1956.

The company has changed the method of providing depreciation from 1st April 2014 as required by the Companies Act, 2013. Accordingly the depreciation for the current year has been provided in accordance with useful life specified in Schedule II thereof in respect of all assets (other than Plant & Machinery relating to Lead Acid Battery Division). In respect of Plant & Machinery relating to Lead Acid Battery Division, depreciation is provided based on 20 years of useful life as assessed by a Chartered Engineer.

Due to the above change in the method, depreciation for the current year is higher by Rs.11.28 Lakhs.

Further, in respect of assets whose useful life at the beginning of the year is NIL, their carrying value (Rs.16.57 Lakhs) net of deferred tax (Rs 8.53 Lakhs) as on 1st April 2014, after retaining the residual value, has been adjusted against retained earnings.

7. Profit on sale of land amounting to Rs 639.69 Lakhs has been recognized pursuant to execution of sale agreement, possession handed over and receipt of significant portion of sale consideration. The execution and registration of sale deed has since been completed.

8. Related Party disclosures, as required by Accounting Standard 18 (AS 18)

(i) Name of the transacting Related Party:

- Seshasayee Paper and Boards Limited (SPB)

- Esvi International (Engineers & Exporters) Limitied

- Dr. G. A. Pathanjali, Managing Director

- Mr. T. R. Sivaraman, Director (Finance)

(ii) A description of the relationship between the parties:

Presumption of Significant influence

(iii) A description of the nature of the transactions and volume of the transaction, either as an amount or as an appropriate proportion:

9. The disclosures as required under Accounting Standard 17 (AS 17) "Segment Reporting"

a. The company has considered business segment as the primary segments for disclosure. The business segments are Aerospace, Naval and Power System Batteries and Lead Acid Batteries. The above reportable segments have been identified based on the organisation structure as well as differing risks and returns associated with the segments.

b. Segmental expenses and revenue wherever could not be identified to a particular segment has been treated as unallocated expenses and revenue.

c. Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and other liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "unallocable".

10. Employee Benefits

i) Defined Contribution Plans

Contribution of Rs 39.23 Lakhs to defined contribution plans is recognized as expense and included in Employee Benefits (Note No. 25) in the profit and loss account. (Previous year Rs 33.09 Lakhs)


Mar 31, 2013

1. Transfer to Deferred Tax is mainly on account of difference in charging depreciation prescribed under the Companies Act 1956, and allowable under the Income Tax Act, 1961 and on account of unabsorbed depreciation / business loss under Income Tax Act.

Based on firm orders on hand and expected improvements in the performance of the company as a whole, in the opinion of the Management, the company will have adequate taxable income in the future and there exists virtual certainty of the Deferred Tax Asset (DTA) getting realized.

2. Expenditure on Scientific Research includes salaries and allowances Rs. 68.85 lakhs (Previous year Rs. 44.35 lakhs) and materials Rs. 3.59 lakhs (Previous year Rs. 11.58 lakhs)

3. In terms of development contract with a customer, assets and development expenditure of the value of Rs. 191 lakhs has been incurred and equivalent amount received from the customer is netted against the same. The company is holding these assets as a bailee in terms of the development contract.

4. Related Party disclosures, as required by Accounting Standard 18 (AS 18)

(i) Name of the transacting Related Party:

- Seshasayee Paper and Boards Limited (SPB)

- Esvi International (Engineers & Exporters) Limitied

- Sri. S. Sridharan, Managing Director

- Dr. G A Pathanjali, Executive Director (Effective from 30.05.2012)

(ii) A description of the relationship between the parties:

Presumption of Significant influence.

(iii) A description of the nature of the transactions and volume of the transaction, either as an amount or as an appropriate proportion:

5. The disclosures as required under Accounting Standard 17 (AS 17) ”Segment Reporting” issued by the Institute of Chartered Accountants of India is as under :- a. The company has considered business segment as the primary segments for disclosure. The business segments are Aerospace, Naval and Power System Batteries and Lead Acid Batteries. The above reportable segments have been identified based on the organisation structure as well as differing risks and returns associated with the segments.

b. Segmental expenses and revenue wherever could not be identified to a particular segment has been treated as Unallocated expenses and revenue.

c. Segment assets and segment liabilities represent assets and liabilities in respective segments. investments, tax related assets and other assets and other liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "unallocable”.

6. Employee Benefits

i) Defined Contribution Plans

Contribution of Rs. 31.38 lakhs to defined contribution plans is recognized as expense and included in Employee Benefits (Note No. 25) in the profit and loss account. (Previous year Rs. 26.26 lakhs)


Mar 31, 2012

Rupee Term Loan is repayable as per details below :

UCO Bank - 5 Annual installments ; Indian Bank and Canara Bank - 15 Quarterly installments

The Car loan is secured by the hypothecation of the car. The loan is repayable in 60 exuviated monthly installments commencing from September 2011.

Working Capital Loans from Banks are secured by First Charge on inventories, book debts and other moveable assets of the Company and First Charge on all moveable and immovable fixed assets of the company other than those pertaining to Lead Acid Battery Facility. The Working Capital Loan is further secured by way of lien on Fixed Deposits aggregating to Rs 50 lakhs.

1 Contingent Liabilities and Commitments

Counter Guarantees and Commitments on Letters of Credit 1987.85 1250.41

Claims against the company not acknowledged as Debts 28.00 28.00 Estimated amount of contracts remaining to be executed on

capital account not provided for 5.09 4.61

Outstanding Silver Futures Contract 474.46 285.45

Outstanding Forward Contracts on Forex Exposure 12.01 --

2. The Financial Statements for the year ended March 31, 2012 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. The Financial Statements for the year ended March 31, 2012 are prepared as per Revised Schedule VI. Accordingly the previous year figures have also been reclassified to conform to this year's classification.

3. Transfer to Deferred Tax is mainly on account of difference in charging depreciation prescribed under the Companies Act 1956, and allowable under the Income Tax Act, 1961 and on account of unabsorbed depreciation / business loss under Income Tax Act. Based on firm orders on hand and improvements effected in the performance of both the divisions including Lead Acid Battery Division, in the opinion of the Management, the company will have adequate taxable income in the future and there exists virtual certainty of the Deferred Tax Asset (DTA) getting realized.

4. Expenditure on Scientific Research includes salaries and allowances Rs 44.35 lakhs (Previous year Rs 46.50 lakhs) and materials Rs 11.58 lakhs (Previous year Rs 3.07 lakhs)

5. In terms of development contract with a customer, assets and development expenditure of the value of Rs 191 lakhs has been incurred and equivalent amount received from the customer is netted against the same. The company is holding these assets as a bailee in terms of the development contract.

6. The disclosures as required under Accounting Standard 17 (AS 17) Segment Reporting issued by the Institute of Chartered Accountants of India is as under

a. The company has considered business segment as the primary segments for disclosure. The business segments are Aerospace, Naval and Power System Batteries and Lead Acid Batteries. The above reportable segments have been identified based on the organization structure as well as differing risks and returns associated with the segments.

b. Segmental expenses and revenue wherever could not be identified to a particular segment has been treated as Unallocated expenses and revenue.

c. Segment assets and segment liabilities represent assets and liabilities in respective segments, investments , tax related assets and other assets and other liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "unallowable".

7. Employee Benefits

i) Defined Contribution Plans

Contribution of Rs 26.26 lakhs to defined contribution plans is recognized as expense and included in Employee Benefits (Note No. 25) in the profit and loss account. (Previous yearRs 19.81 lakhs)


Mar 31, 2010

1. Figures have been rounded off to the nearest Rupee and the figures for the previous year have been regrouped and reclassified wherever necessary.

2. The New facility to manufacture Lead Acid Batteries (LAB) has started commercial production on July 09, 2009. Pre-operative and Trial Production expenses incurred till commencement of commercial production aggregating to Rs 355.63 lakhs have been allocated to Fixed Assets.

3. Contingent Liabilities not provided for :

a. Counter guarantees and commitments on Letters of Credit Rs. 1077.02 lakhs. (Previous year Rs. 566.38 lakhs)

b. Claims against the Company not acknowledged as debts Rs.28 lakhs (Previous year Rs. 28 lakhs).

c. Bills discounted with Banks : Rs 331.06 lakhs (Previous year Nil)

d. Bond Executed in favour of Commissioner of Customs towards Project Imports Rs. 695.29 lakhs (Previous year Rs. 605.29 lakhs)

4. Estimated amount of contracts remaining to be executed on Capital accounts: Rs 0.83 lakhs. (Previous year - Rs 141.47 lakhs)

5. Selling expenses include Rs. 29.22 lakhs towards commission on sales (Previous year Rs. 8.79 lakhs)

6. Expenditure on Scientific Research includes salaries and allowances Rs. 50.08 lakhs (Previous year Rs. 58.71 lakhs) and materials Rs. 8.98 Lakhs (Previous year Rs. 8.74 lakhs)

7. In terms of development contract with a customer, assets and development expenditure of the value of Rs.191 lakhs has been incurred and equivalent amount received from the customer is netted against the same. The company is holding these assets as a bailee in terms of the development contract.

8. Related Party disclosures, as required by Accounting Standard 18 (AS 18)

(i) Name of the transacting Related Party:

- Sri S Sridharan, Managing Director

- Seshasayee Paper and Boards Limited (SPB)

- Ponni Sugars (Erode) Limited (PEL)

- SPB Projects and Consultancy Limited (SPB-PC)

(ii) A description of the relationship between the parties:

Presumption of Significant influence.

(iii) A description of the nature of the transactions and volume of the transaction, either as an amount or as an appropriate proportion:

S Sridharan

- Sri S Sridharan is the Managing Director and was in receipt of remuneration as disclosed in Note No. 15 (a).

9. The disclosures as required under Accounting Standard AS-17 "Segment Reporting" issued by the Institute of Chartered Accountants of India is as under:

a. The company has considered business segment as the primary segments for disclosure. The business segments are Aerospace, Naval and Power System Batteries and Lead Acid Batteries. The above reportable segments have been identified based on the organisation structure as well as differing risks and returns associated with the segments.

b. Segmental expenses and revenue wherever could not be identified to a particular segment has been treated as Unallocated expenses and revenue.

c. Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments , tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "unallocable"

10. Employee Benefits

i) Defined Contribution Plans

Contribution of Rs. 19.88 lakhs (including transitional liablility of Rs 3.61 lakhs) to defined contribution plans is recognized as expense and included in Employee cost (Schedule 13) in the profit and loss account.

ii) Defined Benefit Plans

Disclosure for defined plans based on actuarial valuation as on 31.03.2010

 
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