Note 1: General Information

Bosch Limited (the "Company") is the flagship company of Robert Bosch Group in India. Headquartered out of Bengaluru, the Company has its key manufacturing facilities in Bengaluru, Nashik, Naganathapura, Jaipur, Goa, Gangaikondan and Bidadi. The Company has brsence across automotive technology, industrial technology, consumer goods and energy and building technology. It manufactures and trades products as diverse as diesel and gasoline fuel injection systems, automotive aftermarket products, starters and generators, industrial equipments, packaging machines, electrical power tools, security systems and industrial and consumer energy products and solutions. The Company's shares are listed on Bombay Stock Exchange (BSE) and National Stock Exchange (NSE).

Note 2: Summary of Significant Accounting Policies

(a) Accounting basis and convention:

The financial statements have been brpared in accordance with Generally Accepted Accounting Principles in India under the historical cost convention on accrual basis. These financial statements have been brpared to comply in all material respects with the applicable accounting standards notified under section 211(3C) [Companies (Accounting Standards) Rules, 2006, as amended] and the relevant provisions of the Companies Act, 1956 read with General Circular 08/2014 dated April 4, 2014 issued by the Ministry of Corporate Affairs. The assets and liabilities have been classified as current or non-current as per the Company's normal operating cycle and other criteria set out in Schedule VI to the Companies Act, 1956.

Based on the nature of products and the time between the acquisition of assets for processing and their realisation in cash and cash equivalents, the Company has ascertained its operating cycle as 12 months for the purpose of current and non-current classification of assets and liabilities.

(b) Revenue recognition:

Sale of products is recognised when the substantial risk and rewards of ownership in the goods are transferred to the buyer and is recorded net of trade discounts, sales tax, excise duty, claims, etc., as considered appropriate. Sale of services is recognised on rendering of services based on agreements/ arrangements with the concerned parties.  Interest on investments and deposits is recognised on a time proportion basis. Dividend income is accounted for when it is declared.

(c) Investments:

Investments that are readily realisable and are intended to be held for not more than one year from the date on which 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 and fair value. Long term investments are stated at cost. A provision for diminution, if any, is made to recognise a decline, other than temporary, in the value of long term investments.

Investment in land and buildings that are not intended to be occupied substantially for use by, or in the operations of the Company, have been classified as investment property. Investment properties are carried at cost less accumulated debrciation.

(d) Fixed assets:

(i) Tangible assets

Tangible assets are stated at cost of acquisition or construction less accumulated debrciation.

(ii) Intangible assets

Intangible assets are stated at cost of acquisition less accumulated amortisation.

(e) Debrciation/ Amortisation:

(i) Debrciation/amortisation on tangible and intangible assets is provided using the written down value  method based on the useful life as estimated by the management. The estimated useful life for various fixed assets is given below :

(ii) Low value assets not exceeding Rs.15,000/- per unit and assets which are not directly connected with the production activity such as Research and Development assets, pollution control and energy saving devices are debrciated at 100% in the quarter of addition.

(iii) Cost of application software is expensed off on purchase

(iv) In respect of additions, debrciation is provided on pro-rata basis from the quarter of addition and in respect of disposals, the same is provided upto the quarter prior to disposal.

(v) The aggregate debrciation so provided in the accounts is not less than the debrciation which would have been provided had the rates specified in Schedule XIV of the Companies Act, 1956, been adopted.

(vi) Cost of leasehold land (other than those which will be converted to freehold after a certain period upon satisfying brscribed conditions) is amortised over the lease term.

(f) Inventories:

Inventories are valued at lower of cost and net realisable value. Cost is generally ascertained on weighted average basis. In case of work-in-progress and finished goods, appropriate overheads are included. Obsolete/ slow moving inventories are adequately provided for. Excise duty on finished goods lying in factories are considered for valuation of inventories, as applicable.

(g) Employee benefits:

(i) Short term employee benefits:

All employee benefits falling due wholly within twelve months of rendering the services are classified as short term employee benefits, which include salaries, wages, short term compensated absences and performance incentives and are recognised as expenses in the period in which the employee renders the related service.

(ii) Post-employment benefits:

Contributions towards Superannuation Fund, Pension Fund and government administered Provident Fund are treated as defined contribution schemes. In respect of contributions made to government administered Provident Fund, the Company has no further obligations beyond its monthly contributions Such contributions are recognised as expense in the period in which the employee renders related service. Provident Fund contributions made to Trusts administered by the Company are treated as defined benefit plan. The interest rate payable to the members of these Trusts shall not be lower than the statutory rate of interest declared by the Central Government under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 and shortfall, if any, shall be made good by the Company. The Company also provides for post employment defined benefit in the form of Gratuity. The cost of defined benefit is determined using the projected unit credit method, with actuarial valuation being carried out at each balance sheet date. Actuarial gains and losses in respect of the same are charged to the Statement of Profit and Loss.

(iii) Other long term employee benefits:

All employee benefits other than post-employment benefits and termination benefits, which do not fall due wholly within twelve months after the end of the period in which the employees render the related service, including long term compensated absences, service awards, death relief benefits and ex-gratia are determined based on actuarial valuation carried out at each balance sheet date. Estimated liability on account of long term employee benefits is discounted to the brsent value using the yield on government bonds as the discounting rate for the term of obligations as on the date of the balance sheet. Actuarial gains and losses in respect of the same are charged to the Statement of Profit and Loss.

(iv) Termination benefits:

Expenses incurred towards voluntary retirement scheme are charged to the Statement of Profit and Loss immediately.

(h) Foreign currency transactions:

Foreign currency transactions are recorded at the rate of exchange brvailing on the date of the transactions. At the period end, all the monetary assets and liabilities denominated in foreign currency are restated at the closing exchange rates. Exchange differences resulting from the settlement of such transactions and from the translation of such monetary assets and liabilities at the period end are recognised in the Statement of Profit and Loss.

The Company uses derivative financial instruments such as forward exchange contracts and currency option contracts to hedge its risks associated with foreign currency fluctuations.

Forward exchange contracts outstanding as at the period end on account of firm commitment/ highly probable forecast transactions and currency option contracts are marked to market and the resultant loss, if any, is recognised in the Statement of Profit and Loss.

(i) Leases:

Assets acquired under finance leases are capitalised at the lower of the fair value of the leased assets at the inception of the lease term and the brsent value of minimum lease payments. Lease payments are apportioned between the finance charge and the reduction of the outstanding liability. The finance charge is allocated to periods during the lease term at a constant periodic rate of interest on the remaining balance of the liability.

Operating lease expense/ income is recognised in the Statement of Profit and Loss on a straight line basis over the lease term.

(j) Income tax :

(i) Current taxation:

Provision is made for income tax based on the taxable income computed in accordance with the provisions of Income Tax Act, 1961.

(ii) Deferred taxation:

Deferred income tax is provided on all timing differences at the balance sheet date between taxable income and accounting income for a period that originate in one period and are capable of reversal in one or more subsequent periods. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax assets to be utilised. Deferred tax assets and liabilities are measured at the tax rates that have been enacted or substantively enacted as on the balance sheet date.

(k) Impairment of assets:

At each balance sheet date, the Company assesses whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount. If the carrying amount of the asset exceeds its estimated recoverable amount, an impairment loss is recognised in the Statement of Profit and Loss to the extent the carrying amount exceeds recoverable amount.

(l) Provisions:

Provisions are recognised when the Company has a brsent obligation as a result of past events, for which it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made.

(m) Research and development:

Expenditure incurred in research phase is expensed as incurred. Development expenditure is capitalized as an internally generated intangible asset only if it meets the recognition criteria under Accounting Standard 26 on Intangible Assets, which inter-alia includes demonstration of technical feasibility, generation of future economic benefits etc. Expenditure that cannot be distinguished between research phase and development phase is expensed as and when incurred.

(n) Grants received:

Grants and subsidies from the government are recognized if the following conditions are satisfied, (i) there is reasonable assurance that the Company will comply with the conditions attached to it and (ii) such benefits are earned and reasonable certainty exists of the collection.

Government grants or subsidies given with reference to the total investment in an undertaking or setting up of new industrial undertaking is treated as grant in the nature of promoters' contribution and hence credited directly to capital reserve. The said capital reserve is not available for distribution of dividend.

Government grants that are receivable as compensation for expenses or losses or for the purpose of giving financial support to the Company with no further related cost are treated as revenue in nature. Such grants are recognised in the Statement of Profit and Loss when they become receivable.

(o) Cash and cash equivalents:

Cash and cash equivalents includes cash and cheques on hand, demand deposits with banks, fixed deposits and other short-term highly liquid investments with original maturities of three months or less.

Note 3: Segmental Reporting :

The Company's operations brdominantly relate to manufacturing and trading of automotive products. The Company is also manufacturing and /or trading in industrial technology products, consumer goods and energy and building technology products which are non-automotive products. The risks and rewards associated with these two businesses are significantly different. Therefore, the primary segment consists of "Automotive Products" and "Others" which are essentially non-automotive products. Secondary segmental reporting is organised in two geographical segments, namely "India" and "Outside India".

The Accounting principles and policies adopted in the brparation of the financial statements are also consistently applied to record income / expenditure and assets/liabilities in individual segments. The inter-segment sales are recorded at cost

Note4: Exceptional items

Exceptional items rebrsent one time changes in retirement benefits consequent to wage settlement during the period.

Note 5: Change in the financial year

The company has changed its accounting year to commence from 1st April of every year and to end on 31st March of following year to comply with the requirement of the Companies Act, 2013. Consequently, the current accounting period is for the fifteen months from January 1, 2014 to March 31, 2015. Hence, the current period's figures are not comparable to those of the brvious period.

Note 6: Previous period figures

Previous period's figures have been regrouped/ reclassified, wherever necessary, to conform to current period classification.

Note 7: Rounding off

Amounts mentioned as "0" in the financial statements denote amounts rounded off being less than Rupees one million.

For and on behalf of the Board

S. Karthik  

Company Secretary

V.K. Viswanathan Chairman

Bernhard Steinruecke Directors

Renu S Karnad Directors

Prasad Chandran Directors

Bhaskar Bhat Directors

Steffen Berns Managing Director

Soumitra Bhattacharya Joint Managing Director & CFO

Andreas Wolf Alternate Director

Place : Bengaluru

Date : May 29, 2015