SIGNIFICANT ACCOUNTING POLICIES a. Basis of Preparation The financial statements of the Company have been brpared in accordance with the generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply in all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014. The financial statements have been brpared on an accrual basis and under the historical cost convention except for Land, Building, Plant and Machinery acquired on and before March 31, 1999, which are carried at revalued amounts. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. Starting from April 01, 2016, IND-AS Accounting Standards as brscribed by Ministry of Corporate Affairs have become applicable to the Company and the Accounting Policies would undergo necessary changes. b. Use of estimates The brparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements and the results of operations during the reporting period. Although these estimates are based upon management's best knowledge of current events and actions, actual results could differ from these estimates. c. Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Sale of Goods Revenue from sale of goods including manufactured products is recognised upon passage of title to the customers, in accordance with the Sale of Goods Act, 1930. The Company collects Sales taxes and Value added Taxes (VAT) on behalf of the Government and therefore, these are not economic benefits flowing to the Company. Hence they are excluded from Revenue. Customs Duty benefits in the form of advance license entitlements are recognised on export of goods and are set off from materials cost. Interest Revenue is recognised on a time proportion basis taking into account the amount outstanding and the rate applicable. Dividends Revenue is recognised when the shareholder's right to receive payment is established by the balance sheet date. d. Fixed Assets Fixed Assets are stated at cost (or revalued amounts, as the case may be) less accumulated debrciation and impairment losses, if any. Cost comprises of purchase price inclusive of duties (net of Cenvat), taxes, incidental expenses, erection/commissioning expenses, etc. upto the date the asset is ready for its intended use. In case of revaluation of fixed assets, the original cost as written up by the valuer, is considered in the accounts and the differential amount is transferred to revaluation reserve. The Company identifies and determines cost of each component of the asset separately, if the component has a cost which is significant to the total cost of the asset and has useful life that is materially different from that of the remaining asset. These components are debrciated separately over their useful lives; the remaining components are debrciated over the life of the principal asset. The carrying amounts of assets are reviewed at each balance sheet date to determine if there is any indication of impairment based on external / internal factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount which rebrsents the greater of the net selling price of assets and their 'Value in use' The estimated future cash flows are discounted to their brsent value using br tax discount rates and risks specific to the asset. e. Investments Investments that are readily realisable and intended to be held for not more than a year, from the date on which such investments are made, are classified as current investments. All other investments are classified as Long-Term investments. Current Investments are stated at lower of cost or fair value on individual investment basis. Long Term Investments are considered at cost, unless there is other than temporary decline in value thereof, in which case adequate provision is made for diminution in the value of Investments. Investments in foreign companies are carried at exchange rates brvailing on the date of their acquisition. f. Debrciation and Amortisation i) a) Debrciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management. The Company has used the following useful lives to provide debrciation on its fixed assets.by the management, are lower than those indicated in Schedule II to the Companies Act, 2013. b) The Company has estimated the residual value of Plant & Machinery, Moulds and Computers to be 2% of the cost as against 5% specified in Schedule II of the Companies Act, 2013, based on past trends. For Buildings, Office equipments, Furniture & Fittings and Vehicles, residual value has been estimated at 5% of the cost. ii) Debrciation includes amount amortised on a straight-line basis in respect of leasehold properties over the respective lease period. iii) Debrciation on fixed assets added/disposed off during the year is provided on pro-rata basis with reference to the month of addition/disposal. iv) i n case of impairment, if any, debrciation is provided on the revised carrying amount of the assets over its remaining useful life. g. Intangible Assets i) Research costs are expensed as incurred. Development expenditure incurred on an individual project is capitalised when its future recoverability can reasonably be regarded as assured. Any expenditure capitalised is amortised over the period of expected future sales from the related project, not exceeding ten years. The carrying value of development costs is reviewed for impairment annually when the asset is not yet in use or otherwise when events or changes in circumstances indicate that the carrying value may not be recoverable. ii) Acquired computer softwares and licenses are capitalised on the basis of costs incurred to bring the specific intangibles to their intended use. These costs are amortised on a straight-line pro rata basis over their estimated useful life of five years. iii) Acquired Goodwill / Trademark is amortised on a straight-line pro rata basis over a period of five years. Goodwill is also tested for impairment every year, if there are any indicators for impairment. h. Operating leases Assets acquired under Operating Leases rebrsent assets where the lessor effectively retains substantially all the risks and benefits of their ownership. Operating lease payments are recognised as an expense in the Statement of Profit and Loss on a straight-line basis over the lease term. i. Foreign Currency Transactions (i) Initial Recognition Foreign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount, the exchange rate between the reporting currency and the foreign currency at the date of the transaction. (ii) Conversion Foreign currency monetary items are reported using the closing rate. Non-monetary items which are carried in terms of historical cost denominated in a foreign currency are reported using the exchange rate at the date of the transaction. Non-monetary items which are carried at fair value or other similar valuation denominated in a foreign currency are reported using the exchange rates that existed when the values were determined. (iii) Exchange Differences Exchange differences arising on the settlement/ conversion of monetary items, are recognised as income or expenses in the year in which they arise. (iv) Forward Exchange Contracts The brmium or discount arising at the inception of forward exchange contracts is amortised as expense or income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the year, in which the exchange rates change. Any profit or loss arising on cancellation or renewal of forward exchange contract is recognized as income or as expense for the year. j. Inventories i) Raw materials, components, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost, if the finished products, in which they will be incorporated, are expected to be sold at or above cost. Cost is determined on a weighted average basis. ii) Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials, labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on a weighted average basis. iii) Traded goods are valued at lower of cost and net realisable value. Cost includes cost of purchase and other costs incurred in bringing the inventories to their brsent location and condition. Cost is determined on a weighted average basis. iv) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion to make the sale. k. Borrowing Costs Borrowing costs attributable to the acquisition and/ or construction of qualifying assets are capitalised as a part of the cost of such assets, upto the date when such assets are ready for their intended use. Other borrowing costs are charged to Statement of Profit and Loss. l. Expenditure on New Projects and Substantial Expansion Expenditure directly relating to expansion projects are capitalised. Administration and other generaloverhead expenses incurred during the year, which are specifically attributable to the expansion projects, are capitalised as part of the indirect project cost. Other indirect expenditure (including borrowing costs) incurred during the project period which are not related to the project nor are incidental thereto, are charged to Statement of Profit and Loss. Income o. earned during project period, if any, is deducted from the total of the indirect expenditure. m. Excise Duty Excise Duty is accounted for at the point of manufacture of goods and accordingly, is considered for valuation of finished goods stock lying in the factories and branches as on the balance sheet date. n. Retirement and Other Employee Benefits i) Retirement Benefit in the form of Provident Fund is a defined contribution scheme and the contributions are charged to Statement of Profit and Loss of the year when the employee renders the service. There are no obligations other than the contribution payable to the respective trusts. ii) Gratuity and Post Retirement Medical Benefit liability are defined benefit obligations and are provided for on the basis of actuarial valuation made at the end of each financial year. iii) Long term compensated absences are provided for based on actuarial valuation made at the end of each financial year. iv) Pension liability is split into a defined benefit portion and a defined contribution portion as indicated in note no. 30. The contributions towards defined contribution are charged to Statement of Profit and Loss of the year when the employee renders the service. The defined benefit portion is provided for on the basis of actuarial valuation made at the end of each financial year. v) Actuarial gains/losses are immediately taken to Statement of Profit and Loss and are not deferred. vi) The current and non current bifurcation is done as per the Actuarial report. Taxation Tax expense comprises of current and deferred tax. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Indian Income Tax Act. Deferred income taxes reflects the impact of current year timing differences between taxable income and accounting income and reversal of timing differences of earlier years. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. Deferred tax assets are recognised only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed debrciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. The carrying amount of deferred tax assets are reviewed at each balance sheet date. The Company writes down the carrying amount of the deferred tax assets to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax assets can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available. Earnings Per Share Earnings per share is calculated by dividing the net profit or loss for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares. q. Provision A provision is recognised when the Company has a brsent obligation as a result of past event and it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions made in terms of Accounting Standard-29, are not discounted to its brsent value and are determined based on the management estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current management estimates. Provision for product related warranty/guarantee costs is based on the claims received upto the year end as well as the management estimates of further liability to be incurred in this regard during the warranty period, computed on the basis of past trend of such claims. r. Segment Reporting Based on the synergies, risks and returns associated with business operations and in terms of Accounting Standard-17, the Company is brdominantly engaged in a single segment of storage batteries and allied products during the year. The analysis of geographical segments is based on the areas in which customers of the Company are located. s. Contingent Liabilities A contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a brsent obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. The Company does not recognise a contingent liability but discloses its existence in the financial statements. t. Cash and Cash Equivalents Cash and cash equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 2. GRATUITY AND OTHER POST EMPLOYMENT BENEFIT PLANS The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service is entitled to Gratuity on terms not less favourable than the provisions of The Payment of Gratuity Act, 1972. The scheme is funded with an insurance company. The Company provides certain post-retirement medical benefits (PRMB) to the employees qualifying for such benefits under the scheme upto 31 March, 2006, and accordingly the number of beneficiaries is frozen on that date. This benefit is unfunded. The Company has a Pension plan, a part of the liability whereof upto 31 March, 2003, for employees as on that date, is in the nature of a defined benefit plan. From 1 April, 2003 onwards, pension remains as a defined contribution liability which is funded annually with an insurance company. The Company also extends benefit of compensated absences to the employees, whereby they are eligible to carry forward their entitlement of earned leave for encashment upon retirement/separation. This is an unfunded plan. The following tables summarise 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 Post - retirement benefit plans. The above information exclude particulars in respect of certain non-resident shareholders for whom dividend warrants were sent to the shareholders' banks in India, with prior approval of the Reserve Bank of India. On March 30, 2016, the Ministry of Corporate Affairs notified the Companies (Accounting Standards) Amendment Rules, 2016, resulting in amendment in certain Accounting Standards. The Company is of the view that the said amendments shall come into effect from accounting periods commencing on or after the publication of the notification i.e. from the period starting April 01, 2016 onwards and hence no impact of the same has been given in these financial statements. 3.Previous year figures have been regrouped / rearranged where necessary. As per our report of even date. S.R.Batliboi & Co. LLP Registration Number: 301003E Chartered Accountants per Kamal Agarwal Partner Membership No. 58652 As Approved For and on behalf of the Board of Directors P. K. Kataky Directors J. Kumar Secretary A. K. Mukherjee Directors Place : Mumbai, date ; April 27, 2016 |