CORPORATE INFORMATION Havells India Limited (‘the Company’) is a public limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is listed on BSE Limited and National Stock Exchange of India Limited. The Company is electrical and power distribution equipment manufacturer with products ranging from Industrial and Domestic Circuit Protection Switchgears, Cables, Motors, Pumps, Fans, Power Capacitors, CFL Lamps and Luminaries for Domestic, Commercial and Industrial applications, Modular Switches, Water Heaters and Domestic Appliances covering the entire range of household, commercial and industrial electrical needs. The Company’s manufacturing facilities are located at Faridabad in Haryana, Alwar and Neemrana in Rajasthan, Haridwar in Uttarakhand, Sahibabad and Noida in Uttar Pradesh and Baddi in Himachal Pradesh. The research and development facilities are located at Head office, Noida (Uttar Pradesh) and at some of the units which have been approved by Department of Scientific & Industrial Research, Ministry of Science & Technology, Government of India, New Delhi. During the year, the Company has divested its stake in worlwide business brands like Sylvania, Concord, Luminance and Linotile effective from January 1, 2016. 1 SIGNIFICANT ACCOUNTING POLICIES 1.01 Basis of Preparation a) Basis of Accounting The financial statements of the Company have been brpared and brsented in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has brpared these financial statements to comply with all material respects with the accounting standards notified under section 133 of the Companies Act, 2013, read together with Rule 7 of the Companies (Accounts) Rules, 2014. The financial statements have been brpared on an accrual basis and under the historical cost convention. The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. b) Current/Non Current classification All 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 III of the Companies Act, 2013. 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 12 months for the purpose of current/ non-current classification of assets and liabilities. c) Use of Estimates The brparation of financial statements are in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amount of Assets, Liabilities and Disclosure of Contingent Liabilities on the date of the Financial Statements and the reported amount of revenue and expenses during the reported period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets, liabilities, revenue and expenses in future periods. Changes in estimates are reflected in the financial statements in the period in which changes are made and if material, their effects are disclosed in notes to accounts. 1.02 Tangible Assets a) Tangible assets are stated at cost, net of accumulated debrciation and accumulated impairment losses, if any. The cost comprises of purchase price, taxes, duties, freight and other incidental expenses directly attributable and related to acquisition and installation of the concerned assets and are further adjusted by the amount of CENVAT credit, VAT credit availed and subsidy directly attributable to the cost of fixed asset, wherever applicable. Interest and other borrowing costs during construction period to finance qualifying fixed assets is capitalised, if capitalisation criteria are met. b) The Company identifies and determines cost of each component/ part of the asset separately, if the component/ part 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. Similarly, when significant parts of plant and equipment are required to be replaced at intervals or when a major inspection/overhauling is required to be performed, such cost of replacement or inspection is capitalised (if the recognition criteria is satisfied) in the carrying amount of plant and equipement as a replacement cost or cost of major inspection/overhauling, as the case may be and debrciated seperately based on thier specific useful life. c) Subsequent expenditure related to fixed assets is capitalised only if such expenditure results in an increase in the future benefits from the existing assets beyond its brviously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts are charged to the statement of profit and loss for the period during which such expenses are incurred. d) Capital work in progress comprises cost of fixed assets that are not yet ready for their intended use at the balance sheet date and are carried at cost comprising direct cost, related incidental expenses, other directly attributable costs and borrowing costs. The allocation of broperative expenditure is done on the basis of prime cost of fixed assets in the year of commencement of commercial production. e) Assets retired from active use and held for disposal are stated at the lower of their net book value or net realisable value, and are shown separately. Any expected loss is recognised immediately in the statement of profit and loss. f) Gains or losses arising from disposal of tangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the assets and are recognised in the statement of profit and loss when the assets are disposed off. 1.03 Intangible Assets a) Acquired intangible assets Intangible assets including software licenses of enduring nature and contractual rights acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any. Cost comprises the purchase price and any attributable cost of bringing the asset to its working condition for its intended use. b) Research and development cost Research costs are expensed as incurred. Development expenditure incurred on an individual project is recognised as an intangible asset when the Company can demonstrate all the following: i) The technical feasibility of completing the intangible asset so that it will be available for use or sale; ii) Its intention to complete the asset; iii) Its ability to use or sale the asset; iv) How the asset will generate future economic benefits; v) The availability of adequate resources to complete the development and to use or sale the asset; and vi) The ability to measure reliably the expenditure attributable to the intangible asset during development. Following the initial recognition of the development expenditure as an asset, the cost model is applied requiring the asset to be carried at cost less any accumulated amortization and accumulated impairment losses. Amortization of the asset begins when development is complete and the asset is available for use. It is amortized on straight line basis over the estimated useful life. c) Gains or losses arising from disposal of the intangible assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the assets are derecognised. 1.04 Debrciation and Amortisation a) Debrciation of tangible Assets : i) Debrciation on Fixed Assets is provided on prorata basis on straight line method using the useful lives of assets estimated by the management and in the manner brscribed in Schedule II of The Companies Act, 2013. ii) Dies and tools and mobile phones are debrciated over the estimated useful lives of 6 years and 3 years, respectively, which are lower than those indicated in Schedule II. On the basis of technical assessement, management believes that the useful lives as given above best rebrsent the period over which the assets are expected to be used. iii) Lease hold improvements are debrciated on straight line basis over their initial agreement period. iv) Leasehold land is amortised on a straight line basis over the unexpired period of their respective lease ranging from 90-99 years. b) Amortisation of intangible Assets : Intangible assets are amortised on a straight line basis over their estimated useful life of six years. 1.05 Investments Investments are classified into current and long-term investments. Investments that are readily realizable and intended to be held for not more than one year from the date of acquisition are classified as current investments. All other investments are long-term investments and classified as Non Current Investments. However, that part of long term investments which are expected to be realized within twelve months from Balance Sheet date is also brsented under “Current Investments” under “Current portion of long term investments” in consonance with the current / non-current classification of Schedule III of the Act. “Current investments are stated at the lower of cost and fair value. The comparison of cost and fair value is done separately in respect of each category of investments. Long-term investments are stated at cost. A provision for diminution in the value of long-term investments is made only if such a decline is other than temporary in the opinion of the management. Reversal of such provision for diminution is made when there is a rise in the value of long term investments, or if the reasons for the decline no longer exist.” On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss. 1.06 Inventories a) Basis of valuation: i) Inventories other than scrap materials are carried at lower of cost and net realisable value after providing cost of obsolescence, if any. 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. The comparison of cost and net realisable value is made on an item-by-item basis. ii) Inventory of scrap materials have been carried at net realisable value. b) Method of Valuation: i) Cost of Inventories has been determined by using moving weighted average cost method and comprises all costs of purchase, duties, taxes (other than those subsequently recoverable from tax authorities) and all other costs incurred in bringing the inventories to their brsent location and condition. ii) Cost of finished goods and work in progress further includes direct labour and an appropriate share of fixed and variable production overheads and excise duty as applicable. Fixed production overheads are allocated on the basis of normal capacity of production facilities. iii) Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale. 1.07 Foreign Currency Transactions a) Initial recognition Foreign currency transactions are recorded in the reporting currency, by applying the exchange rate brvailing at the date of transaction. b) Measurement of Foreign Currency items at the Balance Sheet date- Foreign currency monetary items are retranslated using the exchange rate brvailing at the reporting date. Nonmonetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of transaction. c) Exchange differences Exchange differences arising on conversion/ settlement of foreign currency monetary items are recognised as income or expense in the year in which they arise. d) Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability The brmium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/ income over the life of the contract. Exchange differences on such contracts are recognised in the statement of profit and loss in the period in which the exchange rates changes. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or expense for the period. 1.08 Government Grants and Subsidies Grants and subsidies from the government are recognised when there is reasonable assurance that (a) the Company will comply with all the necessary conditions attached to them; and (b) the grant/subsidy will be received. When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of profit and loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to a specific Fixed Asset, the same is shown as a deduction from the gross value of the asset concerned in arriving at its book value and accordingly the debrciation is provided on the reduced book value. 1.09 Employee Benefits a) Gratuity The Employee's Gratuity Fund Scheme, which is defined benefit plan, is managed by Trust maintained with Life Insurance Corporation of India (LIC) and Bajaj Allianz Life Insurance Company Limited. The liabilities with respect to Gratuity Plan are determined by actuarial valuation on projected unit credit method on the balance sheet date, based upon which the Company contributes to the Group Gratuity Scheme. The difference, if any, between the actuarial valuation of the gratuity of employees at the year end and the balance of funds with Life Insurance Corporation of India and Bajaj Allianz Life Insurance Company Limited is provided for as assets/ (liability) in the books. Actuarial gains/ (losses) for defined benefit plans are recognised in full and are immediately taken to the statement of profit and loss and are not deferred. b) Provident fund Retirement benefit in the form of provident fund is a defined contribution scheme. The contributions to provident fund are made in accordance with the relevant scheme and are charged to the statement of profit and loss for the year when contribution are due. The Company has no obligation, other than the contribution payable to the provident fund. The Company recognises contribution payable to the provident fund scheme as an expenditure, when an employee renders the related services. c) Compensated Absences Accumulated leaves which is expected to be utilised whithin next 12 months is treated as short term employee benefit. The Company measures the expected cost of such absences as the additional amuont that it expects to pay as a result of the unused entitlement and discharge at the year end. 1.10 Employee Stock Option Schemes Employees (including senior executives) of the Company receive remuneration in the form of share based payment transactions, whereby employees render services as consideration for equity instruments (equity-settled transactions). In accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, the cost of equity-settled transactions is measured using the intrinsic value method. The cumulative expense recognized for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit recognized in the Statement of Profit and Loss for a period rebrsents the movement in cumulative expense recognized as at the beginning and end of that period and is recognized in employee benefit expenses. Where the terms of an equity-settled transaction award are modified, the minimum expense recognized is the expense as if the terms had not been modified, if the original terms of the award are met. An additional expense is recognized for any modification that increases the total intrinsic value of the share-based payment transaction, or is otherwise beneficial to the employee as measured at the date of modification. The Employee stock option scheme is administered through Havells Employee Welfare Trust. 1.11 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: a) Sale of goods Revenue from sale of goods is recognised when all the significant risks and rewards of ownership of the goods have been passed to the buyer and no significant uncertainty exists regarding the amount of consideration that will be derived from the sale of goods. Sales are recorded net of returns and trade discount. The Company collects sales tax and value added tax (VAT) on behalf of the Government and, therefore, these are not economic benefits flowing to the Company and hence are excluded from revenue. Excise duty is deducted from revenue (gross) to arrive at revenue from operations (net). Sales do not include inter-divisional transfers. b) Services Revenue from service related activities is recognised using the proportionate completion method. c) Export incentives Export incentives under various schemes notified by the Government have been recognised on the basis of their entitlement rates in accordance with the Foreign Trade Policy 2015-20 (FTP 2015-20). Benefits in respect of advance licences are recognised when there is reasonable assurance that the Company will comply with the conditions attached to them and incentive will be received. d) Interest Interest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rates. e) Claims Claims are recognised when there exists reasonable certainty with regard to the amounts to be realised and the ultimate collection thereof. 1.12 Segment Reporting Identification of segments The Company’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment rebrsenting a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operates. Allocation of common costs Common allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs. Unallocated items Unallocated items include general corporate income and expense items which are not allocated to any business segment. Segment accounting policies The Company brpares its segment information in conformity with the accounting policies adopted for brparing and brsenting the financial statements of the Company as a whole. 1.13 Earnings Per Share Basic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders by the weighted average number of equity shares outstanding during the period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources. 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 effect of all potentially dilutive equity shares. 1.14 Taxes on Income Tax expense for the year comprises of current tax and deferred tax. a) Current Tax i) Current income tax is measured at the amount expected to be paid to taxation authorities in accordance with the Income Tax Act, 1961 and the Income Computation and Disclosure Standards (ICDS) enacted in India by using tax rates and the tax laws that are enacted at the reporting date. The Company is eligible for deduction under section 80-IC of Income Tax Act, 1961 in respect of income of units located in Special Category of States. ii) Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e. the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset in accordance with the 'Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961', the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement” under loans and advances. The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period. b) Deferred Tax Deferred income tax reflect the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences for the earlier years. Deferred tax is measured using the tax rates and the tax laws those are enacted or substantively enacted at the reporting date. Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised and carried forward 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 losses under tax laws, all deferred tax assets are recognised only to the extent that there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits. Deferred tax assets and deferred tax liabilities are off-set , if a legally enforceable right exists to set-off current tax assets against current tax liabilities, and the deferred tax assets and deferred tax liabilities relate to taxes on income levied by the same governing taxation laws. In the situations, where the Company is entitled to a tax holiday under the Income-tax Act, 1961, no deferred tax asset/ (liability) is recognised in respect of timing differences which are reversible during the tax holiday period, to the extent the Company’s gross total income is subject to the deduction during the tax holiday period as per taxation laws. Deferred tax, in respect of timing differences which are reversible after the tax holiday period, is recognised in the year in which the timing differences originate. However, the Company restricts recognition of deferred tax assets to the extent that it has become reasonably certain or virtually certain supported by convincing evidence, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised. For recognition of deferred taxes, the timing differences which originate first are considered to reverse first. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of deferred tax asset to the extent that it is no longer virtually certain that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes virtually certain that sufficient future taxable income will be available. 1.15 Impairment of Assets The Company assesses at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their brsent value using a br-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. Impairment losses of continuing operations, including impairment on inventories, are recognised in the statement of profit and loss. After impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. 1.16 Leases Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight line basis over the lease term. 1.17 Borrowing Costs Borrowing cost includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost. Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are recognised as expense in the period in which they occur. 1.18 Provisions and Contingent Liabilities Provisions A provision is recognised when the Company has a brsent obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their brsent value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates. Provisions for warranty Product warranty costs are accrued in the year of sale of products, based on past experience. The Company periodically reviews the adequacy of product warranties and adjust warranty percentage and warranty provisions for actual experience, if necessary. The timing of outflow is expected to be with in one to two years. 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. A contingent liability also arises in extremely rare cases, where there is a liabilty that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements. 1.19 Cash and Cash Equivalents Cash and cash equivalents for the purposes of cash flow statement comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. 1.20 Exceptional Items Exceptional items are transactions which due to their size or incidence are seperately disclosed to enable a full understanding of the Company's financial performance. Items which may be considered exceptional are significant restructuring charges, gains or losses on disposal of investments of subsidiaries, write down of inventories and significant disposal of fixed assets. Notes to financial statement 1 OTHER NOTES ON ACCOUNTS 1 a) The Board of Directors of the Company in their meeting held on December 10, 2015 has approved divestment plan upto 100% in its subsidiaries/ step down subsidiaries, which is approved by the shareholders of the Company through postal ballot on January 18, 2016, consequently following events happened: i). During the year, Havells Holdings Limited, Isle of Man, a wholly owned subsidiary of the company, had entered into a Share Purchase Agreement dated December 10, 2015 with INESA UK Limited a subsidiary of Shanghai Feilo Acoustics Co. Ltd. (FEILO), a Company listed on Shanghai Stock Exchange for sale of 80% stake in its wholly owned subsidiary Havells Malta Limited, Malta for a purchase consideration of Euro 138.40 million (equivalent to Rs. 1,011.05 crores). Under the same agreement Havells Holdings Limited will continue to hold 100% stake in subsidiaries based in USA, Brazil, Chile and Thailand. Accordingly, Havells Malta Limited has become an associate company and ceased to be a subsidiary company of Havells Holdings limited (wholly owned subsidiary of the Company). (ii). The Company has entered into a Share Purchase Agreement dated December 10, 2015 with Shanghai Feilo Investment Limited (A subsidiary of Shanghai Feilo Acoustics Co. Ltd.) for the sale of 80% stake in its wholly owned subsidiary Havells Exim Limited, Hong Kong for a purchase consideration of Rs. 75.89 crores (Euro 10.40 million). Pursuant to aforesaid sale of Shares, the Company has received a sum of Rs. 75.89 crores (Euro 10.40 million) against sale on 800 Equity shares of Havells Exim limited. The profit on sale of Long term Investment as aforesaid, amounting to Rs. 75.81 crores being the difference between consideration received(net of expenses) and historical cost of investments has been disclosed as an Exceptional item in accordance with the requirements of Accounting Standard -5 – “Net Profit or Loss for the period, Prior Period items and Change in Accounting Policies” (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014). Subsequent to the above transaction, the Company holds 20% stake in Havells Exim Limited and therefore Havells Exim Limited ceases to be the subsidiary of the Company and has become an Associate Company. Further, pursuant to Share Purchase agreement with Shanghai Feilo Investment Limited (A subsidiary of Shanghai Feilo Acoustics Co. Ltd), the Company is committed for the remaining 20% stake sale in Havells Exim Limited i.e. 200 Equity Shares of HKD 1 each as the end of nine months from the date of transfer of the 80% stake for a consideration of Euro 2.60 million subject to fulfillment of certain terms and conditions mentioned in the Share Purchase Agreement. The Investment in Havells Exim Limited has been treated as Current Investments, held for sale and disclosed accordingly. b) Havells Holdings Limited, the wholly owned subsidiary of the Company, has in its meeting of Board of Directors held on January 15, 2016 and March 26, 2016, approved redemption of 90,293,332 ordinary shares of GBP 1 each and 2,772,167 ordinary shares of GBP 1 each respectively at a price of EURO 1.2626 per equity share based on the fair value of the Company. Pursuant to the aforesaid redemption, the Company has received a sum of Rs. 858.37 crores (Euro 117.50 million) against redemption of 9,30,65,499 shares of Havells Holdings Limited. The profit on redemption of long term Investments amounting to Rs. 126.58 crores has been disclosed as an Exceptional item in accordance with the requirement of Accounting Standard -5 – “Net Profit or Loss for the period, Prior Period items and Change in Accounting Policies” (specified under section 133 of the Companies Act, 2013, read with Rule 7 of Companies (Accounts) Rules, 2014). 2 (a) The Company has availed working capital limits from banks under consortium of Canara Bank, IDBI Bank Limited, State Bank of India, Standard Chartered Bank, ICICI Bank Limited, Yes Bank Limited and The Hongkong and Shanghai Banking Corporation Limited. (b) Working capital limits from consortium banks are secured by way of: i) pari-passu first charge by way of hypothecation on stocks of raw materials, semi-finished goods, finished goods, stores and spares, bill receivables, book debts and all movable and other current assets of the Company. ii) pari-passu first charge by way of equitable mortgage of land and building at 14/3, Mathura Road, Faridabad. iii) pari-passu second charge by way of hypothecation of plant and machinery, generators, furniture and fixtures, electric fans and installations. (c) The Company has a debit balance in cash credit accounts as on the date of Balance Sheet (refer note no. 18). 3 Corporate Social Responsibility As per provisions of section 135 of the Companies Act, 2013, the Company has to incur at least 2% of average net profits of the brceding three financial years towards Corporate Social Responsibility (“CSR”). Accordingly, a CSR committee has been formed for carrying out CSR activities as per the Schedule VII of the Companies Act, 2013. The Company has contributed a sum of Rs. 11.48 crores (brvious year Rs. 9.79 crores) towards this cause and debited the same to the Statement of Profit And Loss . The funds are primary allocated to QRG foundation, a society registered under section 12A of the Income Tax Act, 1961 for undertaking Mid-Day meal scheme, Ashoka University, sponsored by International Foundation for Research and Education (IFRE) which is a “Not for Profit” Company incorporated under the provisions of section 25 of the erstwhile Companies Act, 1956 for the promotion of education and to Vivekanand Ashram for providing free education to underprivileged students. 4 The Company's manufacturing units at village Gullarwala, Baddi Dist- Solan (Unit II) (H.P.) and two units of Haridwar (Uttarakhand) are exempted from excise duty vide notification no. 49 and 50/2013 issued by Government of India, Ministry of Finance, Department of Revenue, CBEC, New Delhi and profits are eligible for the deduction as per the provisions under Section 80-IC of the Income Tax Act 1961. 5 MAT credit entitlement of Rs. 22.61 crores includes MAT credit amounting to Rs. 21.37 crores pertaining to brvious years as while filing return of income for the brvious year, the Company has claimed the allowance to that extent. Accordingly, the same has been adjusted in the books of accounts for current year. 6 Subsequent events With respect to the earlier communication sent to the Stock Exchanges on January 4, 2013, QRG Enterprises Limited, one of the promoter companies, has vide an Assignment Agreement dated May 9, 2016, completed the assignment of the brand “HAVELLS” for electrical products, to the Company effective April 1, 2016. 7 The figures have been rounded off to the nearest crore of rupees upto two decimal places. The figure 0.00 wherever stated rebrsents value less than Rs. 50,000/-. 8 Previous year figures has been regrouped/reclassified wherever necessary to make them comparable with the current year figures. 9 Note No.1 to 31 form integral part of the balance sheet and statement of profit and loss. The accompanying notes are an integral part of the financial statements. As per our report of even date For S.R. Batliboi & Co. LLP Chartered Accountants ICAI Registration No. 301003E /E3000005 Per Manoj Kumar Gupta Partner Membership No. 83906 For V.R. Bansal & Associates Chartered Accountants ICAI Registration No. 016534N Per V.P. Bansal Partner Membership No. 8843 For and on behalf of Board of Directors Anil Rai Gupta Chairman and Managing Director DIN: 00011892 Rajesh Kumar Gupta Director (Finance) and Group CFO DIN: 00002842 Surjit Kumar Gupta Director DIN: 00002810 Sanjay Gupta Secretary Company Sanjay Johri Vice President (Finance) Noida, May 11, 2016 |