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Notes to Accounts of India Nippon Electricals Ltd.

Mar 31, 2015

1. The Company has only one class of share capital, i.e. equity shares of par value Rs. 10 per share. Each holder of equity shares is entitled to one vote per share.

2. Disclosure required Under Accounting Standard 15 "Employee Benefits"

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified under Section 133 of the Companies Act 2013, read with Rule 7 of the Companies (Accounts) Rules, 2014 are given below:

(a) Defined Contribution Plan

I. Provident fund :

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee's Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employee's salary.

II. Superannuation fund :

Eligible employees receive benefits form the superannuation fund, which is a defined contribution plan. Aggregate contributions alongwith interest theron are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation fund are determined by the Life Insurance Corporation of India as the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Superannuation Fund.

The Company recognised Rs. 159.61 lacs for Provident Fund and superannuation fund contribution in the statement of profit and loss.

(b) Defined benefit plan

Gratuity :

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Gratuity Fund Trust (the "Trust"). Trustees administer contrbutions by means of a group gratuity policy with Life Insurance Corporation of India

(c) Leave encashment

The Employees of the Company are entitled to compensated absence. Employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 30 days. The Company records an obligation for compensated absences in the period in which employees render services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date. The liability has been actuarially evaluated and accounted in the books.

3. The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs , in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

4. Related Party Disclosures :

Related Parties and their relationship

Joint Venturers of the Company : Kokusan Denki Co Ltd (KDCL) Lucas Indian Service Ltd (LIS)

Subsidiary of the Company : P T Automotive Systems Indonesia (PT ASI)

Associate Company : Synergy Shakthi Renewable Energy Ltd (SSREL

Key Managerial Personnel (KMP) : Mr Subhasis Dey - Manager (*)

Mr Arvind Balaji - Managing Director

Mr S Sampath - Chief Financial Officer & Company Secretary

Enterprise over which KMP has significant influence : Lucas TVS Limited (LTVS)

Firm in which Director is a : Subbarya Aiyar Padmanabhan & Ramamani partner Associates (SAPRA)

( * ) Mr Subhasis Dey held the position of Manager of the Company until 27th August 2014

5. Sales excludes sales tax. Sales tax collected and paid Rs. 1147.37 lacs (Previous year Rs. 945.22 lacs)

6. Investments :

The Company is considering various options for activating the Indonesian subsidiary. In the opinion of the Directors, the value of the land is not less than the investment made by the Company. Hence, no losses are expected on this investment.

7. Contingent liabilities & Commitments

(i) Contingent liabilities

a Claims against the company not acknowledged - - as debt

b Letter of Credit 64.63 69.72

c Letter of Guarantee - -

d Sales tax demand in appeal 0.41 0.41

e Excise Duty/Service Tax 23.99 26.89

f Other money for which the company 2.00 2.00 is contingently liable

(ii) Commitments

a Estimated amount of contracts remaining to be executed on capital account 416.71 509.47 and not provided for

b Uncalled liability on shares and other investments partly paid 0.01 0.01

c other commitments - -

8. The agreement with the Union of Workmen at Hosur plant of the company is under negotiation with the Management for the period commencing from 1st October 2013. Pending the finalisation of the same, an estimated amount has been provided for the year ended 31st March 2015. Pending finalization of the amount, the Plant Performance Incentive Payment also is provided on estimated basis for the year ended 31st March 2015

9. Previous year figures have been regrouped/reclassified wherever necessary.




Mar 31, 2014

1. Disclosure required Under Accounting Standard 15 "Employee Benefits" :

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified in the Companies (Accounting Standards) Rules 2006 are given below:

(a) Defined Contribution Plan

I. Provident fund :

Eligible employees receive benefits from a provident fund, which is a defined contribution plan Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee''s Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employee''s salary.

II. Superannuation fund :

Eligible employees receive benefits from the superannuation fund, which is a defined contribution plan. Aggregate contributions alongwith interest thereon are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation fund are determined by the Life Insurance Corporation of India as at the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India''s Employees Superannuation Fund. The Company recognised Rs. 131.65 lacs for Provident Fund and superannuation fund contribution in the statement of profit and loss.

(b) Defined benefit plan Gratuity :

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India''s Employees Gratuity Fund Trust (the "Trust"). Trustees administer contrbutions by means of a group gratuity policy with Life Insurance Corporation of India.

Note : The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(c) Leave encashment

The Employees of the Company are entitled to compensated absence. Employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 30 days. The Company records an obligation for compensated absences in the period in which employees render services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date. The liability has been actuarially evaluated and accounted in the books.

2. The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs , in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

3. Related Party Disclosures :

Related Parties and their relationship

Joint Venturers of the Company : Kokusan Denki Co Ltd (KDCL)

Lucas Indian Service Ltd (LIS)

Subsidiary of the Company : PT Automotive Systems Indonesia (PT ASI)

Associate Company : Synergy Shakthi Renewable Energy Ltd (SSREL)

Key Managerial Personnel (KMP) : Mr Subhasis Dey - Manager

Mr Arvind Balaji - Whole Time Director

Enterprise over which KMP has

significant influence : Lucas TVS Limited (LTVS)

4. Investments :

The Company is considering various options for activating the Indonesian subsidiary. In the opinion of the Directors, the value of the land is not less than the investment made by the Company. Hence, no losses are expected on this investment.

2013-2014 2012-2013

lacs lacs

5. Contingent liabilities & Commitments

(i) Contingent liabilities

a Claims against the company not acknowledged as debt - -

b Letter of Credit 69.72 72.14

c Letter of Guarantee - -

d Sales tax demand in appeal 0.41 0.41

e Excise Duty/Service Tax 26.89 26.89

f Other money for which the company is contingently liable 2.00 2.00

(ii) Commitments

a Estimated amount of contracts remaining to be executed on capital account and not provided for 509.47 159.85

b Uncalled liability on shares and other investments partly

0.01 0.01 paid

c other commitments - -

6. The agreement with the Union of Workmen at Hosur plant of the company is under negotiation with the Management for the period commencing from 1st October 2013. Pending the finalisation of the same, an estimated amount has been provided for the year ended 31st March 2014. Pending finalization of the amount, the Plant Performance Incentive Payment also is provided on estimated basis for the year ended 31st March 2014.

7. Previous year figures have been regrouped/reclassified wherever necessary.


Mar 31, 2013

1. Disclosure required Under Accounting Standard 15 "Employee Benefits" :

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified in the Companies (Accounting Standards) Rules 2006 are given below:

(a) Defined Contribution Plan

I. Provident fund :

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee''s Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employee''s salary.

II. Superannuation fund :

Eligible employees receive benefits from the superannuation fund, which is a defined contribution plan. Aggregate contributions alongwith interest theron are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation fund are determined by the Life Insurance Corporation of India as at the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India''s Employees Superannuation Fund.

The Company recognised Rs. 12047571 for Provident Fund and superannuation fund contribution in the statement of profit and loss.

(b) Defined benefit plan

Gratuity :

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee''s salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India''s Employees Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

(c) Leave encashment

The Employees of the Company are entitled to compensated absence. Employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods

or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 30 days. The Company records an obligation for compensated absences in the period in which employees render services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date. The liability has been actuarially evaluated and accounted in the books.

2.The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs , in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

3. Sales excludes sales tax. Sales tax collected and paid Rs. 890.74 lacs (Previous year Rs. 814.44 lacs)

4. Investments :

The Company is considering various options for activating the Indonesian subsidiary. In the opinion of the Directors, the value of the land is not less than the investment made by the Company. Hence, no losses are expected on this investment.

2012-2013 2011-2012 Rs. lacs Rs. lacs

5. (i) Contingent liabilities

a Claims against the company not acknowledged as debt b Letter of Credit 72.14 34.39

c Letter of Guarantee 1.65

d Sales tax demand in appeal 0.41 0.41

e Excise Duty/Service Tax 26.89 43.50

f Other money for which the company is 2.00 2.00 contingently liable (ii) Commitments

a Estimated amount of contracts remaining to be 159.85 520.04 executed on capital account and not provided for b Uncalled liability on shares and other investments 0.01 0.01 partly paid c other commitments (specify)

6. Previous year figures have been regrouped/reclassified wherever necessary.


Mar 31, 2012

1. Disclosure required Under Accounting Standard 15 "Employee Benefits":

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified in the Companies (Accounting Standards) Rules 2006 are given below:

(a) Defined Contribution Plan

I. Provident fund ;

Eligible employees receive benefits from a provident fund, which is a defined contribution plan.

Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee's Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employee's salary.

II. Superannuation fund :

Eligible employees receive benefits from the superannuation fund, which is a defined contribution plan. Aggregate contributions alongwith interest theron are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation fund are determined by the Life Insurance Corporation of India as at the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Superannuation Fund,

The Company recognised Rs 13620298 for Provident Fund and superannuation fund contribution in the statement of profit and loss.

(b) Defined benefit plan

Gratuity:

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Gratuity Fund Trust (the "Trust"). Trustees administer contributions by means of a group gratuity policy with Life Insurance Corporation of India.

(c) Leave encashment

The Employees of the Company are entitled to compensated absence, Employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 30 days. The Company records an obligation for compensated absences in the period in which employees render services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the balance sheet date.

2. The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs, in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

3. Investments :

The Company is considering various options for activating the Indonesian subsidiary. In the opinion of the Directors, the value of the land is not less than the investment made by the Company. Hence, no losses are expected on this investment.

Considering that the investment of India Nippon Electricas Limited in Synergy Shakthi Renewable Energy Limited is a long term investment and that the investment is a strategic investment no provision is considered necessary to recognise the loss of Synergy Shakthi Renewable Energy Limited.

2011-2012 2010-2011

Rs lacs Rs lacs

4. (i) Contingent liabilities

a Claims against the company not acknowledged - - as debt

b Letter of Credit 34.39 43.89

c Letter of Guarantee 1.65 7.14

d Sales tax demand in appeal 0.41 0.41

e Excise Duty/Service Tax 43.50 134.36

2011-2012 2010-2011

Rs lacs Rs lacs

f Other money for which the company is 2.00 2.00 contingently liable

(ii) Commitments

a Estimated amount of contracts remaining 520.04 155.72 to be executed on capital account and not provided for

b Uncalled liability on shares and other 0.01 0.01 investments partly paid c other commitments (specify) - -

5. Consequent upon the notification of Revised Schedule VI under the Companies Act, 1956, the financial statements for the year ended March 31, 2012 have been prepared as per Revised Schedule VI. Accordingly, the previous year figures which had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956 for the purposes of the financial statements for the year ended March 31,2011 have also been reclassifies to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles.


Mar 31, 2011

1. Contingent Liabilities :

Description 2010-2011 2009-2010 Rs. lacs Rs. lacs

a) Letter of Credit 43.89 51.39

b) Letter of Guarantee 7.14 1.30

c) Sales Tax Demand in appeal 0.41 1.39

d) Uncalled liability on 0.01 0.01 shares partly paid up

e) Excise Duty/Service Tax 134.36 48.44

f) Others 2.00 2.00

2.The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs, in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

3. As mentioned in item 11 (I) of Accounting Policy statement, the company is accounting for taxes in accordance with the Accounting Standard 22 "Accounting for Taxes on Income" notified under Company (Accounting Standards) Rules 2006. Accordingly, an amount of Rs.2.28 lacs

4. a) Sales excludes sales tax. Sales tax collected and paid Rs.639.61 lacs (Previous year Rs.436.50 lacs)

b) lncrease/(decrease) in excise duty on finished goods has been shown under the head "Materials consumed" in schedule No, 14

5. The sum of Rs.22.00 lacs towards commission to Non-Whole Time Directors is outstanding as at 31st March 2011 and is included in sundry creditors (Previous year Rs. 14.00 lacs)

6. Disclosure required Under Accounting Standard 15 "Employee Benefits":

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified in the Companies (Accounting Standards) Rules 2006 are given below:

(a) Defined Contribution Plan

I. Provident fund :

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment. Both the employee and the Company make monthly contributions to the Employee's Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employee's salary.

The Company recognised Rs.80,23,953 for provident fund contribution in the profit and loss account.

II. Superannuation fund:

Eligible employees receive benefits form the superannuation fund, which is a defined contribution plan. Aggregate contributions alongwith interest theron are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation fund are determined by the Life Insurance Corporation of India as at the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Superannuation Fund.

The Company recognised Rs. 13,06,372 for superannuation fund contribution in the profit and loss account.

(p) Defined benefit plan

Gratuity:

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement death, incapacitation or termination of employment, of an amount based on the respective employee's salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as at the balance sheet date, based upon which, the company contributes all the ascertained liabilities to the Life Insurance Corporation of India's Employees Gratuity Fund Trust (the "Trust"). Trustees administer contrbutions by means of a group gratuity policy with Life Insurance Corporation of India.

(c) Leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods

7. Investments:

The Company is considering various options for activating the Indonesian subsidiary. In the opinion of the Directors, the value of the land is not less than the investment made by the Company. Hence, no losses are expected on this investment.

Considering that the investment of India Nippon Electricas Limited in Synergy Shakthi Renewable Energy Limited is a long term investment and that the investment is a strategic investment, no provision is considered necessary to recognise the loss of Synergy Shakthi Renewable Energy Limited.

8. Capital commitments not provided for Rs.155.72 lacs (Previous year lacs)

9. Figures for the previous year have been reclassified wherever necessary.


Mar 31, 2010

2009-2010 2008-2009

Rs. lacs Rs. lacs

1. Contingent Liabilities :

a) Letter of Credit 51.39 228.31

b) Letter of Guarantee 1.30 1.29

c) Income Tax Demands in appeal - 16.30

d) Sales Tax Demand in appeal 1.39 1.39

e) Uncalled liability on shares partly paid up 0.01 0.01

f) Excise Duty/Service Tax 48.44 49.27

g) Others 2.00 2.00

2. The Company has sent circular to suppliers/vendors for getting information as required under "Micro, Small and Medium Enterprises Development Act 2006". No vendor has given registration details. However, they have indicated their status of undertaking as defined under the Act. With the available information, the amount outstanding as on 31st March 2010 Rs.141.70 lacs (Previous year Rs.231.17 lacs). Further no interest has been paid or payable in the opinion of the Management to such parties as per the said Act.

3. The fixed assets were revalued in the year 1992-93 by which the value of the assets were written up by Rs.230.71 lacs after technical assessment with the corresponding credit being given to Revaluation Reserve. These assets were fully written off in the books of account as on 31st March 1997. In the year 1997-98, the fixed assets comprising of plant & machinery and electrical installations were revalued again after a technical assessment by which the values of these assets were written up by Rs.233.30 lacs with the corresponding credit being given to Revaluation Reserve. As mentioned in Note No.11(h)(iii) of notes on accounts, depreciation is computed on the revalued amounts and is charged off to the Profit and Loss Account in full without withdrawing any amount from the revaluation reserve. The additional amount charged as depreciation for the year is Rs.2.00 lacs (previous year Rs.2.94 lacs).

4. The company is in the business of manufacturing electronic ignition systems and therefore there is only one business segment. While the company sells its products in the domestic and export markets and to OEMs, in view of the fact that there is no significant variation in the risks and returns profile of these markets, it is considered that there are no different geographical segments.

5. a) Sales excludes sales tax. Sales tax collected and paid Rs.436.50 lacs (Previous year Rs.364.30 lacs)

b) Increase/(decrease) in excise duty on finished goods has been shown under the head "Materials consumed" in schedule No.14

6. The sum of Rs.14.00 lacs towards commission to Non-Whole Time Directors is outstanding as at 31st March 2010 and is included in sundry creditors (Previous year Rs.11.00 lacs)

7. Disclosure required Under Accounting Standard 15 "Employee Benefits" :

The company has provided long term employee benefits on the basis of actuarial valuation carried out as per Projected Unit Credit Method.

The disclosure required under Accounting Standard 15 "Employees Benefits" notified in the Companies (Accounting Standards) Rules 2006 are given below:

(a) Defined Contribution Plan

I. Provident fund :

Eligible employees receive benefits from a provident fund, which is a defined contribution plan. Aggregate contributions along with interest thereon are paid at retirement, death, incapacitation or termination of employment.

Both the employee and the Company make monthly contributions to the Employees Provident Fund scheme administered by Government of India equal to a specified percentage of the covered employees salary.

The Company recognised Rs.62,45,606 for provident fund contribution in the Profit and Loss Account.

II. Superannuation fund :

Eligible employees receive benefits from the Superannuation Fund, which is a defined contribution plan. Aggregate contributions alongwith interest theron are paid at retirement, death, incapacitation or termination of employment. The Company makes yearly contributions to the Superannuation Fund Scheme administered by Life Insurance Corporation of India. Liabilities with regard to the Superannuation Fund are determined by the Life Insurance Corporation of India as at the Balance Sheet date, based upon which, the company contributes all the ascertained liabilities to the India Nippon Electricals Limited Executives Superannuation Scheme.

The Company recognised Rs.10,40,925 for Superannuation Fund contribution in the Profit and Loss Account.

(b) Defined benefit plan

Gratuity :

The Company provides a gratuity, a defined benefit retirement plan (the "Gratuity Plan") covering eligible employees. The Gratuity Plan provides a lump sum payment to vested employees at retirement, death, incapacitation or termination of employment, of an amount based on the respective employees salary and the tenure of employment. Vesting occurs upon completion of five years of service. Liabilities with regard to the Gratuity Plan are determined by actuarial valuation as of the Balance Sheet date, based upon which, the company contributes all the ascertained liabilities to the India Nippon Electricals Limited Employees Group Gratuity Scheme (the "Trust"). Trustees administer contrbutions by means of a group gratuity policy with Life Insurance Corporation of India.

The following table set out the status of the gratuity plan as required under AS 15:

Note: The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

(c) Leave encashment

The employees of the Company are entitled to compensated absence. The employees can carry forward a portion of the unutilized accrued compensated absence and utilize it in future periods or receive cash compensation at retirement or termination of employment for the unutilized accrued compensated absence for a maximum of 30 days. The Company records an obligation for compensated absences in the period in which the employee renders the services that increase this entitlement. The Company measures the expected cost of compensated absence as the additional amount that the Company expects to pay as a result of the unused entitlement that has accumulated at the Balance Sheet date.

8. Capital commitments not provided for Rs.30.20 lacs (Previous year Rs.377.48 lacs)

9. Figures for the previous year have been reclassified wherever necessary.

 
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