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Notes to Accounts of Swelect Energy Systems Ltd.

Mar 31, 2015

1. Increase in capital expenditure include payments for items in capital work-in-progress and purchase of fixed assets. Adjustments for increase / decrease in current liabilities relating to acquisition of fixed assets have been made to the extent identified.

2. Fixed deposits with banks with maturity period of more than three months amounting to Rs.1,272,169,271 (Previous year Rs. 1,293,066,836) are not included under Cash and Cash equivalents. These fixed deposits include deposits amounting to Rs.486,529,343 (Previous year Rs. 480,055,421) retained in Escrow account pursuant to the transfer of uninterruptible power supply systems business.

3. The accompanying notes are an integral part of the financial statement.

SWELECT ENERGY SYSTEMS LIMITED

Notes to financial statements for the year ended 31 March 2015

(All amounts are in Indian Rupees, unless otherwise stated)

1. Nature of operations

SWELECT ENERGY SYSTEMS LIMITED ('the Company') was incorporated as a Public Limited Company on September 12, 1994 and was formerly known as NUMERIC POWER SYSTEMS LIMITED. The Company is engaged in the business of manufacturing and trading of, Solar power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of Solar Photovoltaic inverters and energy efficient lighting systems.

b. Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2015, the amount of per share dividend recognised as distributions to equity shareholders for interim dividend was Rs. Nil (31 March 2014 Rs.Nil/-) and proposed dividend was Rs.2.50 31 March 2014: Rs. 9/-).

In the event of the liquidation of the Company, the holder of equity share will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be proportionate to the number of equity shares held by the As per records of the Company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares.

The overdraft facility from the Bank is secured against the Fixed Deposits of the Company and it is repayable on demand.

Term loans from Bank I amounting to Rs. 598,000,000 (Previous year Rs. 578,500,000) are repayable in 16 installments of Rs. 29,406,250 (Previous year Rs. 29,406,250 of 16 installments each) each per quarter starting from June 2015 onwards and ends on March 2019, 16 installments of Rs. 4,343,750 (Previous year Nil) each per quarter starting from June 2016 and ends on March 2020 and 8 installments of Rs. 6,750,000 each per quarter (Previous year - 16 installments of Rs. 6,750,000 each per quarter) starting from May 2015 till May 2017 and 1 installment of Rs.4,000,000 (Previous year - Nil) payable on May 2017. These loans are secured by a pledge on the investments in mutual funds of the Company.

Term loans from Bank II amounting to Rs. 437,754,810 (Previous year Rs. 173,583,000) are for a period of three years with bullet repayment terms. These loans are secured by investments in mutual funds of the Company.

Note:

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under "The Micro Small and Medium Enterprises Development Act, 2006". Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the year.

* Deposits to the extent of Rs.734,251,097 (Previous year Rs 50,000,000) have been given as collateral to the banks to facilitate the availment of working capital, packing credit, letter of credit and term loans for the Company and Subsidiaries.

Note :

Current bank balance include deposits amounting to Rs. 486,529,343 (net) (Previous Year: Rs.480,055,420), disclosed under Note 15.2 Other Assets) retained in the Escrow account pursuant to the transfer of uninterruptible power supply systems business, which would mature on May 29, 2015.

Note:

'Investments marked have been pledged as collateral securities with banks for availment of term loans. (Refer Note 6).

2 Employee benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy.

The following table summarises the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

The fund is administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the year over which the obligations is to be settled.

The estimates of future salary increases and rate of attrition considered in actuarial valuation take into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

A. Primary segment information (By Business segments)

The Company's operations represents revenue from Solar power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of solar PV inverters and energy efficient lighting systems. Accordingly, revenues based on class of products comprise the primary basis of segmental information set out in the financial statements.

Business (Primary) segments of the Company are:

a) Contract manufacturing - UPS Systems

b) Solar Energy Systems / Services

c) Others

The following table shows the geographical distribution of the Company's segment revenues and additions to tangible and intangible assets for the year ended 31 March 2015 and year ended 31 March 2014. All tangible and intangible assets are located only in India except trade receivable and investment.

3 Information in respect of Joint Venture in terms of Accounting Standard 27 -

Financial Reporting of Interests in Joint Ventures

Name of the Joint Venture: Swelect Infrastructure Services Private Limited

Nature of business : Providing infrastructure services.

Proportion of ownership : NIL (Previous year - 50%) interest

Date of incorporation : 02 April 2004

Country of incorporation : India

Summary of assets and liabilities:

(Details given below represent proportionate amount of the Company's share in Joint Venture)

The Joint Venture has been wound up during the current year and hence the entire amount of investment has been written off

4 Derivative instruments and foreign currency exposures

The year end foreign currency exposures that have not been hedged by a derivative instrument or otherwise are given below:

5 Capital and other commitments

a) The estimated amount of contracts remaining to be executed on capital account and not provided for is Rs.413,059,895 (31 March 2014: Rs.48,662,043).

b) Commitments relating to lease arrangements, please refer to note 28.

6 Exceptional Item

Exceptional item represents cost of land written off amounting to Rs.20,311,785 (net of recovery) on account of defective title and for which the company is persuing a legal claim against certain individuals.

7 The Company acquired 51% of the equity share capital of HHV Solar Technologies Limited on August 01, 2014, hence HHV Solar Technologies Limited has become 100% subsidiary of the Company, with effect from August 01,2014.

8 Previous year figures have been regrouped / reclassified, whereever necessary, to conform to the current year's classification.


Mar 31, 2014

1. Nature of operations

SWELECT ENERGY SYSTEMS LIMITED (''the Company'') was incorporated as a Public Limited Company on 12 September 1994 and was formerly known as NUMERIC POWER SYSTEMS LIMITED. The Company is engaged in the business of manufacturing and trading of Solar power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of Solar Photovoltaic inverters and energy efficient lighting systems.

On 29 May 2012, the Company had consummated the sale of its Uninterruptible Power Supply Systems (UPS) Business to Novateur Electrical & Digital Systems Private Limited, a group company of Legrand S.A, pursuant to the Business Transfer Agreement dated 9 February 2012 (refer to note 27 for further details).

2 Discontinued operations - Sale of Uninterruptible power supply systems (UPS)

On 29 May 2012 the Company had consummated sale of its UPS Business to Novateur Electrical & Digital Systems Private Limited, a group company of Legrand S.A, pursuant to the Business Transfer Agreement dated 9 February 2012. The UPS business undertaking comprising of operations in India, Singapore and its investment in Srilanka was transferred as a going concern on a slump sale basis for an aggregate consideration of Rs. 811.13 Crores (including, an amount of Rs. 19.46 Crores for the Singapore operations). The net assets transferred pursuant to the slump sale of its UPS Business, being operations in India and investment in Srilanka is Rs. 176.56 Crores and the profit recognised pursuant to the slump sale is Rs. 615.12 Crores and disclosed as an exceptional item in the statement of profit & loss.

The Company''s continuing operations represent revenues from Solar power project, solar and wind power generation, contract manufacturing services, installation and maintenance services and sale of energy efficient lighting systems.

Discontinuance of UPS division falls within the meaning of Accounting Standard 24 - Discontinuing Operations. The following table summarises the revenues, expenses, loss and cash flows from ordinary activities attributable to the discontinued operations and assets/liabilities transferred pursuant to the slump sale of UPS Business comprising the Company''s operations in India and investment in Srilanka.

3 Employee benefit plans

The Company has a Defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy.

The following table summarises the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

4 Segment information

A. Primary segment information (By Business segments)

The Company''s continuing operations represents revenue from Solar power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of solar PV inverters and energy efficient lighting systems. During the previous year, the Company had discontinued its operations relating to Uninterruptible power supply systems (UPS) (Also refer note 27).

Business (Primary) segments of the Company are:

Continuing operations

a) Contract manufacturing - UPS System

b) Solar Energy Systems / Services

c) Others

Discontinued operations

a) Uninterruptible power supply systems

5 Information in respect of Joint Venture in terms of Accounting Standard 27 -

Financial Reporting of Interests in Joint Ventures''

Name of the Joint Venture:

Swelect Infrastructure Services Private Limited

(Formerly known as Numeric Infrastructure Services Private Limited'')

Nature of business Providing infrastructure services.

Proportion of ownership interest: 50 % (Previous year - 50%)

Date of incorporation: 2 April 2004

Country of incorporation: India

Summary of assets and liabilities:

(Details given below represent proportionate amount of the Company''s share in joint venture)

6 Contingent liabilities

31 March 2014 31 March 2013

Claims against the Company not acknowledged as debts

a) Excise / cenvat related matters 2,630,000 2,630,000

b) Sales tax related matters 17,382,361 17,382,361

c) Income tax related matters 14,575,600 -

34,587,961 20,012,361

7 Capital and other commitments

a) At 31 March 2014, the estimated amount of contracts remaining to be executed on captial account and not provided for is Rs. 48,662,043 (31 March 2013: Rs. Nil)

b) Commitments relating to lease arrangements, please refer to note 29.

8 Previous year fgures have been regrouped/reclassified, wherever necessary, to conform to the current year''s classifcation.


Mar 31, 2013

1. Nature of operations

SWELECT ENERGY SYSTEMS LIMITED (''the Company'') was incorporated as a public limited Company on September 12, 1994 and was formerly known as NUMERIC POWER SYSTEMS LIMITED. The Company is engaged in the manufacturing and trading of Uninterruptible Power Supply Systems (UPS), Solar roof top power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of Solar PV inverters and energy efficient lighting systems.

On May 29, 2012 the Company had consummated the sale of its UPS Business to Novateur Electrical & Digital Systems Private Limited, a group company of Legrand S.A, pursuant to the Business Transfer Agreement dated February 9, 2012 (refer to note 27 for further details).

2 Discontinued operations - Sale of Uninterruptible power supply systems (UPS)

On May 29, 2012 the Company had consummated sale of its UPS Business to Novateur Electrical & Digital Systems Private Limited, a group company of Legrand S.A, pursuant to the Business Transfer Agreement dated February 9, 2012. The UPS business undertaking comprising of operations in India, Singapore and its investment in Srilanka was transferred as a going concern on a slump sale basis for an aggregate consideration of Rs. 811.13 Crores (including, an amount of Rs. 19.46 Crores for the Singapore operations). The net assets transferred pursuant to the slump sale of its UPS Business, being operations in India and investment in Srilanka is Rs. 176.56 Crores and the profit recognised pursuant to the slump sale is Rs. 615.12 Crores and disclosed as an exceptional item in the statement of profit & loss.

The Company''s continuing operations represent revenues from Solar and wind power generation, contract manufacturing services, installation and maintenance services and sale of energy efficient lighting systems.

Discontinuance of UPS division falls within the meaning of Accounting Standard 24 - Discontinuing Operations. The following table summarises the revenues, expenses, profits and cash flows from ordinary activities attributable to the discontinued operations and assets/liabilities transferred pursuant to the slump sale of UPS Business comprising the Company''s operations in India and investment in Srilanka.

3 Employee benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an Insurance Company in the form of a qualifying insurance policy.

The following tables summaries the components of net benefit expense recognised in the Statement of profit and loss and the funded status and amounts recognised in the balance sheet for the gratuity plan.

4 Segment information

A. Primary segment information (By Business segments)

The Company''s continuing operations represents revenue from Solar roof top power projects, solar and wind power generation, contract manufacturing services, installation and maintenance services, sale of solar PV inverters and energy efficient lighting systems. During the year the Company has discontinued its operations relating to Uninterruptible power supply systems (UPS) (Also refer note 27).

Business (Primary) segments of the Company are:

Continuing operations

a) Contract manufacturing - UPS Systems

b) Solar Energy Systems / Services

c) Others

5. Contingent liabilities

31 March 2013 31 March 2012

Claims against the Company not acknowledged as debts

a) Excise / cenvat related matters 2,630,000 2,630,000

b) Sales tax related matters 11,344,380 11,936,446

13,974,380 14,566,446

Contingent liabilities are not probable and hence not provided for.

6. Capital and other commitments

a) At 31 March, 2013, the estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. Nil (31 March 2012: Rs 19,453,447).

b) Commitments relating to lease arrangements, please refer to note 29.

7. Previous year figures have been regrouped/reclassified, where necessary, to conform to the current year''s classification.


Mar 31, 2012

1. Nature of Operations

SWELECT ENERGY SYSTEMS LIMITED ('the Company') was incorporated as a public limited company on September 12, 1994 and was formerly known as NUMERIC POWER SYSTEMS LIMITED. The Company is engaged in the manufacture, sale and trading of Uninterrupted Power Supply ('UPS') systems and accessories and has its manufacturing facilities in Pondicherry, Chennai, Salem and Himachal Pradesh. The Company provides maintenance and other after sale services in respect of UPS systems through a network of branches situated across the country. The Company's operating activities/investments also include Solar and Wind Power generation, installation and maintenance services, energy efficient lighting services, and manufacture of iron and aluminium alloy foundry castings.

Pursuant to the consummation of transfer of the UPS business on May 29, 2012, as more fully discussed in Note 26 of financial statements, the name of the Company has been changed to SWELECT ENERGY SYSTEMS LIMITED.

a. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 3 (31 March 2011: Rs.3).

In the event of the liquidation of the Company, the holder of equity share will be entitled to receive remaining assets of the Company, after distribution of all preference amounts. The distribution will be proportionate to the number of equity shares held by the shareholders.

Note

There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under The Micro Small and Medium enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the year.

2. Discontinuing operation

During the year, the Company had entered into a Business Transfer Agreement dated February 9, 2012 to sell its UPS business undertaking. The UPS business undertaking comprising of the operations in India, Singapore and its investment in Srilanka is being transferred as a going concern on a slump sale basis for an aggregate consideration of Rs. 837.08 Crores including, an amount of USD 4.5 Million for the Singapore operations. The shareholders of the Company approved the transaction by way of postal ballot on March 16, 2012 and the Company has, upon fulfillment of the various conditions precedent, transferred the UPS business undertaking subsequent to the year end, on May 29, 2012.

As this transaction would qualify as an initial disclosure event, within the meaning of Accounting Standard 24 Discontinuing operations, the profit attributable to the discontinuing operation net of related income tax expense has been disclosed seperately in the statement of profit and loss. The following table summarizes the revenues, profits, assets, liabilities and cash flows attributable to the discontinuing operations

3. Employee benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Long term compensated absences are provided for based on actuarial valuation as per projected unit credit method made at the end of each financial year.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

4. Segment information

A. Primary segment information (By Business segments)

The Company's operations predominantly relates to the manufacture and trading in UPS systems and accordingly this is the only primary reportable segment.

5. Contingent Liabilities not provided for _

31 March 2012 31 March 2011

Claims against the Company not acknowledged as debts

a) Excise / CENVAT related matters 26,30,000 26,30,000

b) Sales tax related matters 1,19,36,446 10,00,000

1,45,66,446 36,30,000

6. Derivative instruments and Foreign currency exposures

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations on payable balance.

7. Capital and other commitments

a) At 31st March, 2012, the estimated amount of contracts remaining to be executed on capital account and not provided for is Rs. 1,94,53,447 (31st March 2011: Rs 47,44,827)

b) Commitments relating to lease arrangements, please refer to note 28

8. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, became applicable to the Company, for preparation and presentation of its financial statements. The Company has presented its financial statements in accordance with the requirements of revised Schedule VI and has hence reclassified and regrouped the previous year figures to conform to current year's classification.


Mar 31, 2011

1. There is no overdue amount payable to Micro, Small and Medium Enterprises as defined under The Micro Small and Medium enterprises Development Act, 2006. Further, the Company has not paid any interest to any Micro, Small and Medium Enterprises during the year.

2. Investments:

4A. Investment in Amex alloys private limited:

- The Company had entered into a Share Purchase Agreement on December 05, 2010, with the majority shareholders of M/s. Amex Alloys Private Limited ('AAPL') for acquisition of Equity Shares up to 92% and takeover of the Management Control and the acquisition has been completed on 31st January 2011.

- The Company has made investments aggregating to Rs.3,75,00,000/- in 10% Cumulative redeemable preference shares of Amex Alloys Private Limited.

4B. Investment in Numeric Power Systems Proprietary Limited, South Africa ('NPSPL'):

During the year the management of the Company had applied for deregistration of NPSPL on March 29, 2011. Consequent to the above the NPSPL discontinued its operations and the loss incurred on account of such disposition of the investment aggregating to Rs.5,50,547 has been included and disclosed separately in Schedule 16 - Manufacturing and Other Expenses.

The lease term ranges between 1 and 6 years. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases.

Note:- As the liabilities for gratuity and leave encashment are provided on an actuarial basis for the Company as a whole, the amounts pertaining to the directors are not included above.

3 Employee benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

Long term compensated absences are provided for based on actuarial valuation as per projected unit credit method made at the end of each financial year.

The following tables summarise the components of net benefit expense recognised in the profit and loss account and the funded status and amounts recognised in the balance sheet for the gratuity plan.

The fund is administered by Life Insurance Corporation of India ("LIC"). The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the year over which the obligation is to be settled.

The estimates of future salary increases and rate of attrition considered in actuarial valuation take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

4 Segment information

A. Primary segment information (By Business segments)

The Company's operations predominantly relates to the manufacture and trading in UPS systems and accordingly this is the only primary reportable segment.

B. Secondary segment information (By Geographical segments)

The following table shows the geographical distribution of the Company's segment revenues and additions to tangible and intangible assets for the year ended March 31, 2011 and year ended March 31, 2010.

- Installed capacity is subject to changes in product mix utilization of manufacturing facilities.

- It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total.

- It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total.

- It is not practicable to furnish quantitative information in view of the large number of items which differ in size and nature, each being less than 10% in value of the total.

Note: The figures shown are balancing figures, ascertained on the basis of opening stock, purchases and closing stock and, therefore, include adjustments of excesses and shortages ascertained on physical count.

5 Derivative instruments and Foreign currency exposures

The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations on payable balance.

The following are the outstanding Forward Exchange Contracts entered into by the Company as at March 31, 2011.

6 Previous year figures have been reclassified/regrouped wherever necessary to conform to current years' presentation.

Notes:

1. Increase in capital expenditure include payments for items in capital work in progress and purchase of fixed assets. Adjustments for increase / decrease in current liabilities relating to acquisition of fixed assets have been made to the extent identified.

2. The accompanying notes are an integral part of this statement.

3. Fixed deposits with banks with maturity period of more than three months including interest accrued thereon amounting to Rs.4,74,36,599/- (previous year Rs.1,15,91,740/-) are not included under Cash and Cash equivalents.

4. Unpaid dividend aggregating to Rs.8,37,015/- (previous year Rs.9,29,685/-) are not included under Cash and Cash equivalents


Mar 31, 2010

1 Contingent Liabilities not provided for

Claims against the Company not acknowledged as debts

a) Excise / CENVAT related matters 26,30,000 2,00,000

b) Sales tax related matters 10,00,000 10,00,000

2 Segment information

A. Primary segment information (By Business segments)

The Companys operations predominantly relates to the manufacture and trading in UPS systems and accordingly this is the only primary reportable segment.

3 Information in respect of Joint Venture in terms of Accounting Standard 27 - Financial Reporting of Interests in Joint Venture

Name of the Joint Venture: Numeric infrastructure services private Lmt Nature of business Providing infrastruture services Proportion of Ownership Interest: 50% Date of incorporation: April 2, 2004 Country of Incorporation: India

 
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