Mar 31, 2018
1 SIGNIFICANT ACCOUNTING POLICIES
Company overview
HARITA SEATING SYSTEMS LIMITED (âthe Companyâ) is a Public Limited Company incorporated in India. The companyâs equity shares are listed on NSE. The registered office is located at âJayalakshmi Estatesâ, 29, Haddows Road, Nungambakkam, Chennai - 600006, Tamil Nadu, India.
1.1 Statement of compliance
The financial statements have been prepared as a going concern in accordance with Indian Accounting Standards (Ind AS) notified under the Section 133 of the Companies Act, 2013 (âthe Actâ) read with the Companies (Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
Upto the year ended 31st March, 2017, the Company prepared financial statements in accordance with the requirements of previous GAAP, which includes standards notified under the Companies (Accounting Standards) Rules, 2006 and other relevant provisions of the Act.
These are Companyâs first Ind AS based financial statements. The date of transition to Ind AS is 1st April, 2016. Company has opted certain exemptions while first-time adoption of Ind As based Financial statement (refer note 39 of Financial Statement)
1.2 Basis of preparation and presentation
The financial statements have been prepared on the historical cost convention on accrual basis except for certain financial instruments which are measured at fair value at the end of each reporting period, as explained in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange of goods or services.
The principal accounting policies are set out below:
All assets and liabilities have been classified as current or noncurrent according to the Companyâs operating cycle and other criteria set out in the Act. Based on the nature of products and the time between acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as twelve months for the purpose of current and non-current classification of assets and liabilities.
1.3 Going concern
The board of directors have considered the financial position of the Company at 31st March 2018 and projected cash flows and financial performance of the Company for at least twelve months from the date of approval of these financial statements as well as planned cost and cash improvement actions, and believe that the plan for sustained profitability remains on course.
The board of directors have taken actions to ensure that appropriate long-term cash resources are in place at the date of signing the accounts to fund the Companyâs operations.
1.4 Use of estimates and judgments
The preparation of financial statements in conformity with Ind AS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amount of assets, liabilities, income, expenses and disclosures of contingent assets and liabilities at the date of these financial statements and the reported amount of revenues and expenses for the years presented. Actual results may differ from the estimates.
Estimates and underlying assumptions are reviewed at each balance sheet date. Revisions to accounting estimates are recognised in the period in which the estimates are revised and future periods affected.
1.5 Revenue recognition
The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and specific criteria in relation to significant risk.
1.5.1. Sale of goods
Revenue from sale of products is recognised when the products are delivered to the dealer / customer or when delivered to the carrier, when risks and rewards of ownership pass to the dealer / customer, as per terms of contract.
Revenue is measured at the fair value of the consideration received or receivable and net of returns, trade allowances and rebates. It includes excise duty but excludes Value Added Tax and Sales Tax.
1.5.2. Income from service
Income from services is accounted over the period of rendering of services.
1.6 Foreign currencies
1.6.1. Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment in which the company operates (âthe functional currencyâ). The financial statements are presented in Indian rupee, which is the companyâs functional and presentation currency.
1.6.2. Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
1.7 Employee Benefits
1.7.1. Short term obligations
Liabilities for wages and salaries, including non-monetary benefits that are expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognized in respect of employeesâ services upto the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liabilities are presented as current employee benefit obligations in the balance sheet.
1.7.2. Other long term employee benefit
The liabilities for earned leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore measured as the present value of the expected future payments to be made in respect of services provided by employee upto the end of reporting period using the projected unit credit method. The benefits are discounted using the market yields at the end of the reporting period that have terms approximating to the terms of the related obligation. Measurements as a result of experience adjustments and changes in actuarial assumptions are recognized in profit or loss.
The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.
Accumulated leave, which is expected to be utilized within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.
The Company treats accumulated leave expected to be carried forward beyond 12 months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the period-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred. The Company presents the leave as a current liability in the balance sheet; to the extent it does not have an unconditional right to defer its settlement for 12 months after the reporting date. Where Company has the unconditional legal and contractual right to defer the settlement for a period beyond 12 months, the same is presented as non-current liability.
1.7.3. Post-employment obligation
The Company operates the following post-employment schemes:
a) Defined benefit plans such as gratuity for its eligible employees, and
b) Defined contribution plans such as provident fund.
Defined contribution plan:
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognizes contribution payable to the provident fund scheme and pension scheme as expenditure, when an employee renders the related service. If the contribution payable to the scheme for service received before the balance sheet date exceeds the contribution already paid, the deficit payable to the scheme is recognized as a liability after deducting the contribution already paid. If the contribution already paid exceeds the contribution due for services received before the balance sheet date, then excess is recognized as an asset to the extent that the pre-payment will lead to, for example, a reduction in future payment or a cash refund.
Defined benefit plan:
The Company has a gratuity defined benefit plans for its employees. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Re-measurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognised in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and the balance sheet. The Company has funded this with Life Insurance Corporation of India (âLICâ). The contributions made to the LIC are treated as plan assets. The defined benefit obligation recognised in the balance sheet represents the present value of the defined benefit obligation as reduced by the fair value of plan assets.
1.7.4. Bonus plans
The Company recognizes a liability and an expense for bonus. The Company recognizes a provision where contractually obliged or where there is a past practice that has created a constructive obligation
1.8 Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
1.8.1. Current tax
The income tax expenses or credit is based on taxable profit for the year. Taxable profit differs from âprofit before taxâ as reported in the statement of profit and loss because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Companyâs current tax is calculated using tax rates that have been enacted.
1.8.2. Deferred tax
Deferred tax is provided in full, using the balance sheet approach, on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences and incurred tax losses to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.
1.8.3. Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case, the income taxes are also recognised in other comprehensive income or directly in equity respectively.
1.8.4. MAT Credit
Outstanding MAT Credit as at 31st March 2018 has been considered in this financial year as the certainty for utilisation has been ascertained and partially utilised in the current financial year
1.9 Property, plant and equipment
Property, plant and equipment are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
Such assets are classified to the appropriate categories of property, plant and equipment when completed and ready for intended use.
Subsequent costs are included in the assetâs carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. The other repairs and maintenance of revenue nature are charged to profit or loss during the reporting period in which they are incurred.
Transition to Ind AS
On transition to Ind AS, the Company has elected to continue with the carrying value of its property, plant and equipment recognised as at 1st April 2015, measured as per the previous GAAP and use that carrying value as the deemed cost of the property, plant and equipment.
Depreciation methods, estimated useful lives and residual value
Depreciation is calculated using the straight-line method on a prorata basis from the month in which each asset is put to use to allocate their cost, net of their residual values, over their estimated useful lives.
Estimated useful life of assets are as follows which is based on technical evaluation of the useful lives of the assets:
The assetsâ residual values, estimated useful lives and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.
Gains and losses on disposal are determined by comparing proceeds with carrying amount and are credited / debited to profit or loss.
2.0 Intangible assets
Intangible assets are stated at cost of acquisition or construction less accumulated depreciation less accumulated impairment, if any.
2.0.1. Deemed cost on transition to Ind AS
For transition to Ind AS, the Company has elected to continue with the carrying value of all of its intangible assets recognised as of 1st April, 2015 (transition date) measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
2.1. Impairment of tangible and intangible assets
At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
2.2. Inventories
Inventories are valued at the lower of cost and net realizable value.
The cost of finished goods and work in progress comprises raw materials, direct labor, other direct costs and appropriate proportion of variable and fixed overhead expenditure. Overhead expenditures are being allocated on the basis of normal operating capacity. Raw materials are valued at weighted average cost. Cost of inventories also include all other costs incurred in bringing the inventories to their present location and condition. Costs of purchased inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
Non- production inventory (other than those supplied along with main plant and machinery, which are capitalised and depreciated accordingly) are charged to profit or loss on consumption.
2.3 Provisions and contingencies
Provisions: Provisions are recognised when there is a present obligation or constructive obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and there is a reliable estimate of the amount of the obligation. Provisions are determined by discounting the expected future cash flows at a pre tax rate that reflects current market assessment of the time value of money and the risks specific to the liability
Contingent Liabilities: Contingent liabilities are disclosed when there is a possible obligation arising from past events, the existence of which will be confirmed only by the occurrence or non occurrence of one or more uncertain future events not wholly within the control of the company or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required to settle or a reliable estimate of the amount cannot be made.
2.4 Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial instruments (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss. Subsequently, financial instruments are measured according to the category in which they are classified.
2.5 Financial assets
All purchases or sales of financial assets are recognized and de-recognized on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
2.5.1. Classification of financial assets
Classification of financial assets depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
The Company classifies its financial assets in the following measurement categories:
- those to be measured subsequently at fair value (either through other comprehensive income, or through profit or loss), and
- those measured at amortised cost
The classification depends on the Companyâs business model for managing the financial assets and the contractual terms of the cash flows.
A financial asset that meets the following two conditions is measured at amortised cost unless the asset is designated at fair value through profit or loss under the fair value option:
- Business model test : the objective of the Companyâs business model is to hold the financial asset to collect the contractual cash flows.
- Cash flow characteristic test : the contractual term of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
A financial asset that meets the following two conditions is measured at fair value through other comprehensive income unless the asset is designated at fair value through profit or loss under the fair value option:
- business model test : the financial asset is held within a business model whose objective is achieved by both collecting cash flows and selling financial assets.
- cash flow characteristic test : the contractual term of the financial asset gives rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All other financial assets are measured at fair value through profit or loss.
2.5.2. Financial assets at fair value through profit or loss (FVTPL)
Investment in equity instrument are classified at fair value through profit or loss, unless the Company irrevocably elects on initial recognition to present subsequent changes in fair value in other comprehensive income for investments in equity instruments which are not held for trading.
Financial assets that do not meet the amortised cost criteria or fair value through other comprehensive income criteria are measured at fair value through profit or loss. A financial asset that meets the amortised cost criteria or fair value through other comprehensive income criteria may be designated as at fair value through profit or loss upon initial recognition if such designation eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets and liabilities or recognising the gains or losses on them on different bases.
Investments in debt based mutual funds are measured at fair value through profit and loss.
Financial assets which are fair valued through profit or loss are measured at fair value at the end of each reporting period, with any gains or losses arising on re measurement recognized in profit or loss.
2.5.3. Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for impairment.
2.5.4. Cash and cash equivalents
In the cash flow statement, cash and cash equivalents includes cash in hand, cheques and drafts in hand, balances with bank and deposits held at call with financial institutions, short-term highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet and forms part of financing activities in the cash flow statement. Book overdraft are shown within other financial liabilities in the balance sheet and forms part of operating activities in the cash flow statement.
2.5.5. Impairment of financial assets
The Company assesses impairment based on expected credit losses (ECL) model to the following:
- financial assets measured at amortised cost
- financial assets measured at fair value through other comprehensive income Expected credit loss are measured through a loss allowance at an amount equal to :
- the twelve month expected credit losses (expected credit losses that result from those default events on the financial instruments that are possible within twelve months after the reporting date); or
- full life time expected credit losses (expected credit losses that result from all possible default events over the life of the financial instrument).
For trade receivables or any contractual right to receive cash or another financial asset that result from transactions that are within the scope of Ind AS 18, the Company always measures the loss allowance at an amount equal to lifetime expected credit losses.
2.5.6. Income recognition
Interest Income: Interest income from debt instruments is recognised using the effective interest rate method.
2.6 Financial liabilities
All financial liabilities are subsequently measured at amortised cost using the effective interest rate method or at fair value through profit or loss.
2.6.1. Trade and other payables
Trade and other payables represent liabilities for goods or services provided to the Company prior to the end of financial year which are unpaid.
2.6.2. Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings using the effective interest rate method.
Borrowings are removed from the balance sheet when the obligation specified in the contract is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that has been extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
2.6.3. Foreign exchange gains or losses
For financial liabilities that are denominated in a foreign currency and are measured at amortised cost at the end of each reporting period, the foreign exchange gains and losses are determined based on the amortised cost of the instruments and are recognised in profit or loss.
The fair value of financial liabilities denominated in a foreign currency is determined in that foreign currency and translated at the exchange rate at the end of the reporting period. For financial liabilities that are measured as at fair value through profit or loss, the foreign exchange component forms part of the fair value gains or losses and is recognised in profit or loss.
2.7. Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.
2.8. Leases
Leases of property, plant and equipment where the Company, as a lessee has substantially all the risks and rewards of ownership, are classified as finance leases. Finance leases are capitalised at the leaseâs inception at the fair value of the leased property or, if lower, the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings or other financial liabilities as appropriate. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Leases in which a significant portion of the risks and rewards of ownership are not transferred to the Company as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit or loss on a straight-line basis over the period of the lease unless the payments are structured to increase in line with expected general inflation to compensate for the lessorâs expected inflationary cost increases.
2.9. Borrowing costs
General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
3.0. Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions.
Government grants relating to income are deferred and recognised in the profit or loss over the period necessary to match them with the costs that they are intended to compensate and presented within other income.
Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis over the expected lives of the related assets and presented within other income.
3.1. Earnings Per Share
Basic earnings per share have been computed by dividing the net income by the weighted average number of shares outstanding during the year. Diluted earnings per share has been computed using the weighted average number of shares and diluted potential shares, except where the result would be anti-dilutive
3.2. Dividends
Final dividends on shares are recorded on the date of approval by the shareholders of the Company.
Terms and rights attached to equity shares
The company has one class of equity shares having a par value of Rs.10 each. Each shareholder is eligible for one vote per share held. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
Mar 31, 2016
c) Rights Attached to Equity Shares : Share holders are entitled to such rights as to attend meetings of the share holders, to receive dividend distributable and also have a right in residual interest in the assets of the Company. Every shareholder is also entitled to right of inspection of documents as provided in the Companies Act, 2013.
d) Details of issue of Bonus shares in the last five years preceding the date on which Balance sheet is prepared - Nil.
1. Last year''s figures have been regrouped and re-arranged wherever necessary to conform to this year''s classification.
2. The retrospective amendment to the payment of Bonus Act, 1965 (effective from 01-04-2014) enhancing the limit to Rs.7000 /- per month per employee or aggregate minimum wages per month whichever is higher, is contested by the Company through a writ before the honorable High Court of Judicature at Madras. Hence bonus provision with retrospective effect approximately Rs. 33 lakhs is not provided in the accounts. This prospective amendment effective from 01-04-2015 is provided for.
3. Related Party Disclosures as per Accounting Standard - 18
A) List of Related Parties as per Clause 3(a) of the Standard where control exists.
Reporting Entity : Harita Seating Systems Limited, Chennai
Holding Companies : Nil
Subsidiary Company : Harita Fehrer Limited, Chennai (01.04.2015 to 31.03.2016)
Notes: 4) The above statement has been prepared in indirect method except in case of interest, direct tax, purchase and sale of investments, which have been considered on the basis of actual movement of cash.
5) Cash and Cash equivalent represents cash and bank balances
Mar 31, 2014
1) Rights Attached to Equity Shares : Shareholders are entitled to such
rights as to attend meetings of the share holders, to receive dividend
distributable and also have a right in residual interest in the assets
of the Company. Further, share holders are entitled to right of
inspection of the documents as provided in Companies Act, 1956.
2) Details of issue of Bonus shares in the last five years preceding
the date on which Balance Sheet is prepared. Nil
ACCOUNTING STANDARD (3) - Cash flow statement
The cash flow statement is prepared under "indirect method" and the
same is annexed.
ACCOUNTING STANDARD (4) -Contingencies and events occurring after the
Balance Sheet date
Details regarding contested liabilities are furnished in Note No.3 and
also disclosed under Accounting Standard - 29.
ACCOUNTING STANDARD (6) - Depreciation accounting
Depreciation has been provided under straight line method in respect of
all assets other than those stated below at the rates prescribed under
schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets
acquired/sold during the year. Depreciation in respect of the
following assets have been provided higher than the rates prescribed
under Schedule XIV of the Companies Act 1956. Computers 30%, Moulds
20%, Vehicles 18% & Tools & fixtures 25%.
Depreciation in respect of assets acquired during the year whose actual
cost does not exceed Rs.5,000/- has been provided at 100%.
ACCOUNTING STANDARD (8) - R & D
This standard is withdrawn from 1st April, 2003
ACCOUNTING STANDARD (9) - Revenue recognition
The income of the company is derived from manufacture and sale of
seating systems for automotive and non automotive applications and
other parts and accessories for automotive and non automotive
applications.
Indigenous sales are recognised based on raising of invoices and
delivery of goods thereof to the carrier.
Export sales are recognised on the basis of date of let export
certificate.
The revenue and expenditure are accounted on a going concern basis.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Income from services is recognised on rendering of services and as per
terms of agreement.
Dividend Income is recognised when right to receive dividend is
established.
ACCOUNTING STANDARD (10) - Accounting for fixed assets
Fixed assets are stated at cost including expenditure incurred in
bringing them to usable condition less depreciation.
ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates
Purchase of imported raw materials, components, spares and capital
goods are accounted based on retirement memos from banks. In respect of
liabilities on import of raw materials, components, spare parts and
capital goods which are in transit and where invoices/bills are yet to
be received, the liability is accounted based on the advance copies of
documents at the market exchange rate prevailing on the date of the
Balance Sheet.
External commercial borrowings for acquisition of an asset
The amendment to Accounting Standard-11 introduced by Government of
India permitting fluctuation in exchange rates in relation to
acquisition of capital assets to be added to or deducted from the
carrying cost of such assets is not applicable as the company did not
have any external commercial borrowings for acquisition of any asset.
The company has not entered into any transactions in derivative
instruments and hence reporting on currency swapping/interest rate
structure does not arise.
ACCOUNTING STANDARD (12) - Accounting for Government grants
During the year, the Company has not received any grant from
Government.
ACCOUNTING STANDARD (13) - Accounting for Investments
Investments are valued at cost. Provision for diminution in the
carrying cost of investments is made if such diminution is other than
temporary in nature in the opinion of the management. (Refer Notes XIII
of the Balance Sheet)
ACCOUNTING STANDARD (15) - Employee benefits
A Defined contribution plan
a) Contributions to provident fund is in the nature of defined
contribution plan and are made to provident fund maintained by
Government.
B Defined benefit plan
a) The Company extends defined benefit plans in the form of leave
salary to employees. In addition, the Company also extends pension to
senior managers. Provision for leave salary and pension is made on
actuarial valuation basis.
b) The Company also extends defined benefit plan in the form of
gratuity to employees. Contribution to gratuity is made to Life
Insurance Corporation of India in accordance with the scheme framed by
the corporation.
ACCOUNTING STANDARD (16) - Borrowing costs
During the year the Company has not incurred any borrowing cost within
the meaning of this Accounting Standard.
ACCOUNTING STANDARD (17) - Segment reporting
The operations of the entity relate to manufacture of seating system
for automotive & non automotive applications, and other parts and
accessories for automotive and non automotive applications. The income
from sale of other parts and accessories being individually less than
ten percent of total revenue, no separate disclosure is made.
ACCOUNTING STANDARD (19) - Accounting for leases
The Company has taken the following assets under operating lease. The
lease term is 5 years.
Plant & Equipment, Electrical Equipments.
ACCOUNTING STANDARD (21) - Consolidated financial statements
Consolidated financial statements of the Company and its subsidiary is
enclosed.
ACCOUNTING STANDARD (22) - Accounting for taxes on income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax liability and asset are
recognised based on timing difference.
ACCOUNTING STANDARD (24) - Discontinuing operations
During the year the Company has not discontinued any of its operations.
ACCOUNTING STANDARD (25) - Interim financial reporting
The Company has elected to publish quarterly financial results which
were subject to limited review by the statutory auditors.
ACCOUNTING STANDARD (27) - Financial reporting of interest in joint
venture
Company and the Company''s joint venture partner viz. M/s. F.S Fehrer
Automotive GmbH, Germany (Fehrer) holds equity shares in the subsidiary
Company viz. Harita Fehrer Limited, Chennai (HFRL) in the ratio of
51:49
ACCOUNTING STANDARD (28) - Impairment of assets
As on the balance sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
those assets other than Rs.43.87 lakhs debited to statement of profit
and loss (Refer note no.XXVI).
Mar 31, 2013
ACCOUNTING STANDARD (1) - Disclosure of accounting policies
The accounts are maintained on accrual basis as a going concern.
ACCOUNTING STANDARD (2) - Valuation of inventories
Inventories are valued in accordance with the method of valuation
prescribed by The Institute of Chartered Accountants of India at
weighted average cost or net realisable value, whichever is less.
ACCOUNTING STANDARD (3) - Cash flow statement
The cash flow statement is prepared under "indirect method" and the
same is annexed.
ACCOUNTING STANDARD (4) -Contingencies and events occurring after the
Balance Sheet date
Details regarding contested liabilities are furnished in Note No.3 and
also disclosed under Accounting Standard - 29.
ACCOUNTING STANDARD (5) Net profit or loss for the period, prior period
items and changes in accounting policies
Prior period Items
- Rates & Taxes
- Rent
Warranty Provision:
Provision made in this regard is retained for one year till 31st March
2012. Effective this year provision is retained for two years. Due to
this change, profit for the year is down by Rs. 43.43 lakhs.
ACCOUNTING STANDARD (6) - Depreciation accounting
Depreciation has been provided under straight line method in respect of
all assets other than those stated below at the rates prescribed under
schedule XIV of the Companies Act, 1956 and on pro-rata basis on assets
acquired/sold during the year. Depreciation in respect of the
following assets have been provided higher than the rates prescribed
under Schedule XIV of the Companies Act 1956. Computers 30%, Moulds
20%, Vehicles 18% & Tools & fixtures 25%.
Depreciation in respect of assets acquired during the year whose actual
cost does not exceed Rs.5,000/- has been provided at 100%.
ACCOUNTING STANDARD (7) - Construction contracts
ACCOUNTING STANDARD (8) - R & D
This standard is deleted from 1st April, 2003
ACCOUNTING STANDARD (9) - Revenue recognition
The income of the company is derived from manufacture and sale of
seating systems for automotive and non automotive applications and
other parts and accessories for automotive and non automotive
applications.
Indigenous sales are recognised based on raising of invoices and
delivery of goods thereof to the carrier.
Export sales are recognised on the basis of date of let export
certificate.
The revenue and expenditure are accounted on a going concern basis.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Income from services is recognised on rendering of services and as per
terms of agreement.
Dividend Income is recognised when right to receive dividend is
established.
ACCOUNTING STANDARD (10) - Accounting for fixed assets
Fixed assets are stated at cost including expenditure incurred in
bringing them to usable condition less depreciation.
ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates
Purchase of imported raw materials, components, spares and capital
goods are accounted based on retirement memos from banks. In respect of
liabilities on import of raw materials, components, spare parts and
capital goods which are in transit and where invoices/bills are yet to
be received, the liability is accounted based on the advance copies of
documents at the market exchange rate prevailing on the date of the
Balance Sheet.
Net foreign exchange gain credited to Profit and loss account included
in other income.
External commercial borrowings for acquisition of an asset
The amendment to Accounting Standard-11 introduced by Government of
India permitting fluctuation in exchange rates in relation to
acquisition of capital assets to be added to or deducted from the
carrying cost of such assets is not applicable as the company did not
have any external commercial borrowings for acquisition of any asset.
The company has not entered into any transactions in derivative
instruments and hence reporting on currency swapping/interest rate
structure does not arise.
ACCOUNTING STANDARD (12) - Accounting for Government grants
During the year, the Company has not received any grant from
Government.
ACCOUNTING STANDARD (13) - Accounting for Investments
Investments are valued at cost. Provision for diminution in the
carrying cost of investments is made if such diminution is other than
temporary in nature in the opinion of the management. (Refer Notes XIII
of the Balance Sheet)
ACCOUNTING STANDARD (14) - Accounting for amalgamation
ACCOUNTING STANDARD (15) - Employee benefits
A Defined contribution plan
a) Contributions to provident fund is in the nature of defined
contribution plan and are made to provident fund maintained by
Government.
B Defined benefit plan
a) the company extends defined benefit plans in the form of leave
salary to employees. In addition, the company also extends pension to
senior managers. Provision for leave salary and pension is made on
actuarial valuation basis.
b) The company also extends defined benefit plan in the form of
gratuity to employees. Contribution to gratuity is made to Life
Insurance Corporation of India in accordance with the scheme framed by
the corporation.
ACCOUNTING STANDARD (16) - Borrowing costs
During the year the Company has not incurred any borrowing cost within
the meaning of this Accounting Standard.
ACCOUNTING STANDARD (17) - Segment reporting
The operations of the entity relate to manufacture of seating system
for automotive & non automotive applications, and other parts and
accessories for automotive and non automotive applications. The income
from sale of other parts and accessories being individually less than
ten percent of total revenue, no separate disclosure is made.
ACCOUNTING STANDARD (18) - Related party disclosures
A) List of related parties as per Clause 3(a) of the Standard where
control exists. Reporting Entity : Harita Seating Systems Limited,
Chennai Holding Companies : Nil
Subsidiary Company : Harita Fehrer Limited, Chennai
(01.04.2012 to 31.03.2013)
B) List of related parties as per Clause 3(c) of the Standard
Key Management Personnel : Mr.A.G.Giridharan
Manager under the provisions of the Companies Act, 1956.
ACCOUNTING STANDARD (20) - Earnings per share
Earnings per share is calculated by dividing the profit attributable to
the shareholders by the number of equity shares outstanding as at the
close of the year
ACCOUNTING STANDARD (21) - Consolidated financial statements
Consolidated financial statements of the Company and its subsidiary is
enclosed.
ACCOUNTING STANDARD (22) - Accounting for taxes on income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax liability and asset are
recognised based on timing difference.
ACCOUNTING STANDARD (24) - Discontinuing operations
During the year the Company has not discontinued any of its operations.
ACCOUNTING STANDARD (25) - Interim financial reporting
The Company has elected to publish quarterly financial results which
were subject to limited review by the statutory auditors.
ACCOUNTING STANDARD (26) - Intangible assets
Amortisation for intangibles has been provided as under: (i) Software
is amortised over a period of two years.
- Estimated useful life of the asset
- Amortisation rates used
ACCOUNTING STANDARD (27) - Financial reporting of interest in joint
venture
Company and the Company''s joint venture partner viz. M/s. F. S Fehrer
Automotive GmbH, Germany (Fehrer) holds equity shares in the subsidiary
Company viz. Harita Fehrer limited, Chennai (HFRL) in the ratio of
51:49
ACCOUNTING STANDARD (28) - Impairment of assets
As on the balance sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
those assets. Hence there is no impairment loss on the assets of the
company for the year.
ACCOUNTING STANDARD (29) - Provisions, contingent liabilities and
contingent assets
Mar 31, 2012
ACCOUNTING STANDARD (1) - Disclosure of accounting policies
The accounts are maintained on accrual basis as a going concern.
ACCOUNTING STANDARD (2) - Valuation of inventories
Inventories are valued in accordance with the method of valuation
prescribed by The Institute of Chartered Accountants of India at
weighted average cost or net realizable value, whichever is less.
b) Changes in accounting policies
During the year, the Company has changed the accounting policy on
provision of depreciation on moulds from number of shots basis to
straight line method. This change has no material impact on
profitability.
ACCOUNTING STANDARD (3) - Depreciation accounting
Depreciation has been provided under straight line method in respect of
all assets at the rates prescribed under Schedule XIV of the Companies
Act, 1956 and on pro-rata basis on assets acquired/sold during the
year. Depreciation in respect of computers and vehicles has been
provided at 30% and 18% respectively which is higher than the rate
prescribed in Schedule XIV of the Companies Act, 1956.
Until the year ended 31st March 2002, moulds were depreciated by
applying rates fixed under Schedule XIV of the Companies Act, 1956.This
method is continued for moulds acquired before 31st March, 2002 and put
to use. In respect of moulds acquired on and after 1st April, 2002 and
put to use, depreciation is charged based on quantity of seat cushions
manufactured.
Mar 31, 2011
ACCOUNTING STANDARD (1) - Disclosure of accounting policies
The accounts are maintained on accrual basis as a going concern.
ACCOUNTING STANDARD (2) - Valuation of inventories
Inventories are valued in accordance with the method of valuation
prescribed by the Institute of Chartered Accountants of India at
weighted average rates and in applicable cases at lower of cost or net
realisable value.
ACCOUNTING STANDARD (3) - Cash flow statement
The cash flow statement is prepared under "indirect method" and the
same is annexed.
ACCOUNTING STANDARD (4) -Contingencies and events occurring after the
balance sheet date
Details regarding contested liabilities are furnished in Note No.3 and
also disclosed under Accounting Standard - 29.
ACCOUNTING STANDARD (5) Net profit or loss for the period, prior period
items and changes in accounting policies
b) Changes in accounting policies
Work trolleys till March 31, 2010 were capitalised on acquisition and
depreciation was claimed. From this year onwards cost of acquisition of
work trolleys are charged off. This change has no material impact on
profit.
ACCOUNTING STANDARD (6) - Depreciation accounting
Depreciation has been provided under straight line method in respect of
all assets at the rates prescribed under schedule XIV of the Companies
Act, 1956 and on pro-rata basis on assets acquired / sold during the
year. Depreciation in respect of computers and vehicles has been
provided at 30% and 18% respectively which is higher than the rate
prescribed in schedule XIV of the Companies Act, 1956.
Until the year ended 31st March, 2002, moulds were depreciated by
applying rates fixed under schedule XIV of the Companies Act, 1956.This
method is continued for moulds acquired before 31st March, 2002 and put
to use. In respect of moulds acquired on and after 1st April, 2002 and
put to use, depreciation is charged based on quantity of seat cushions
manufactured.
Until the year ended 31st March, 2002, tools and fixtures were
depreciated by applying rates fixed under schedule XIV of the Companies
Act,1956. This method is continued for tools and fixtures acquired
before 31st March, 2002 and put to use. In respect of tools and
fixtures acquired on and after 1st April, 2002 and put to use,
depreciation is charged at 25%.
Depreciation in respect of assets acquired during the year whose actual
cost does not exceed Rs.5,000/- has been provided at 100%.
During the year accelerated depreciation provided on moulds used for
slow moving items.
ACCOUNTING STANDARD (7) - Construction contracts Not applicable Not
applicable
ACCOUNTING STANDARD (8) - R & D
This standard is deleted from 1st April, 2003
ACCOUNTING STANDARD (9) - Revenue recognition
The income of the Company is derived from manufacture and sale of
seating systems for automotive and non automotive application and other
parts and accessories for automotive and non automotive application.
Indigenous sales are recognised based on raising of invoices and
delivery of goods thereof to the carrier.
Export sales are recognised on the basis of date of let export
certificate and includes realised exchange fluctuations on exports
(Gain - Rs.22.18 lakhs).
The revenue and expenditure are accounted on a going concern basis.
Interest income is recognised on a time proportion basis taking into
account the amount outstanding and the rate applicable.
Income from services is recognised on rendering of services and as per
terms of agreement.
ACCOUNTING STANDARD (10) - Accounting for fixed assets
Fixed assets are stated at cost including expenditure incurred in
bringing them to usable condition less depreciation.
ACCOUNTING STANDARD (11) - Effects of changes in foreign exchange rates
Purchase of imported raw materials, components, spares and capital
goods are accounted based on retirement memos from banks. In respect of
liabilities on import of raw materials, components, spare parts and
capital goods which are in transit and where invoices / bills are yet
to be received, the liability is accounted based on the advance copies
of documents at the market exchange rate prevailing on the date of the
Balance Sheet.
External commercial borrowings for acquisition of an asset
The amendment to Accounting Standard -11 introduced by Government of
India permitting fluctuation in exchange rates in relation to
acquisition of capital assets to be added to or deducted from the
carrying cost of such assets is not applicable as the Company did not
have any external commercial borrowings for acquisition of any asset.
The Company has not entered into any transaction in derivative
instruments and hence reporting on currency swapping / interest rate
structure does not arise.
ACCOUNTING STANDARD (12) - Accounting for Government grants
No grant has been received during the year.
ACCOUNTING STANDARD (13) - Accounting for Investments
Investments are valued at cost. Provision for diminution in the
carrying cost of investments is made, if such diminution is other than
temporary in nature in the opinion of the management. (Refer Schedule
VII of the Balance Sheet)
ACCOUNTING STANDARD (14) - Accounting for
amalgamation Not applicable Not applicable
ACCOUNTING STANDARD (15) - Employee benefits
A Defined contribution plan
a) Contributions to provident fund is in the nature of defined
contribution plan and are made to provident fund maintained by
Government.
B Defined benefit plan
a) The Company extends defined benefit plans in the form of leave
salary to employees. In addition, the Company also extends pension to
senior managers. Provision for leave salary and pension is made on
actuarial valuation basis.
b) The Company also extends defined benefit plan in the form of
gratuity to employees. Contribution to gratuity is made to Life
Insurance Corporation of India in accordance with the scheme framed by
the corporation.
ACCOUNTING STANDARD (16) - Borrowing costs
During the year the Company has not incurred any borrowing costs within
the meaning of Accounting Standards issued by The Institute of
Chartered Accountants of India.
ACCOUNTING STANDARD (17) - Segment reporting
The operations of the entity relate to manufacture of seating system
for automotive & non automotive applications, and other parts and
accessories for automotive and non automotive applications. The income
from sale of other parts and accessories being individually less than
ten percent of total revenue, no separate disclosure is made.
ACCOUNTING STANDARD (18) - Related party disclosures
A) List of related parties as per clause 3(a) of the Standard where
control exists.
Reporting Entity : Harita Seating Systems Limited, Chennai
Subsidiary Company : Harita Fehrer Limited, Chennai
01.04.2010 to 31.03.2011
B) List of related parties as per clause 3(c) of the Standard
Key Management Personnel : Mr.A.G.Giridharan
Manager under the provisions of
the Companies Act, 1956.
ACCOUNTING STANDARD (19) - Accounting for leases Not applicable Not
applicable
ACCOUNTING STANDARD (20) - Earnings per share
Disclosure is made in the Profit & Loss Account as per the requirement
of the standard.
ACCOUNTING STANDARD (21) - Consolidated financial statement
Consolidated financial statements of the Company and its subsidiary is
enclosed.
ACCOUNTING STANDARD (22) - Accounting for taxes on income
Current tax is determined as the amount of tax payable in respect of
taxable income for the period. Deferred tax liability and asset are
recognised based on timing difference.
ACCOUNTING STANDARD (23) - Accounting for
investments in associates in consolidated
financial statements Not applicable Not applicable
ACCOUNTING STANDARD (24) - Discontinuing operations
During the year the Company discontinued the operations at Bengaluru.
The closure does not affect the earning generating capacity.
ACCOUNTING STANDARD (25) - Interim financial reporting
The Company has elected to publish quarterly financial results which
were subject to limited review by the statutory auditors.
ACCOUNTING STANDARD (26) - Intangible assets
During the year the Company acquired the following assets falling under
the definition of intangible assets as per the Accounting Standard and
the following disclosure is made in respect of those assets.
ACCOUNTING STANDARD (27) - Financial reporting of interest in joint
venture
Harita Fehrer Limited, Chennai (HFRL) the subsidiary company made the
final allotment of 30,14,676 equity shares of face value of Rs.10/-
each for cash at a price of Rs.51.78 per share (including a premium of
Rs.41.78 per share) aggregating to Rs.15.61 crores on 14th February
2011, to the Joint Venture Partner, viz., M/s. F.S. Fehrer Automotive
GmbH, Germany (Fehrer), by virtue of the memorandum of understanding
dated 28.05.2009. Subsequent to the allotment, the shareholding pattern
between the Company and Fehrer is in the ratio of 51:49
ACCOUNTING STANDARD (28) - Impairment of assets
As on the balance sheet date the carrying amounts of the assets net of
accumulated depreciation is not less than the recoverable amount of
those assets. Hence there is no impairment loss on the assets of the
Company for the year. (Previous year : Rs.54.88 lakhs)
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