Notes to the financial statement for the year ended March 31,2015 (All amounts are in lacs of Indian Rupees except share data and unless otherwise stated) 1. Corporate Information Genus Power Infrastructures Limited (referred to as "Genus" or the "Company") is a public company domiciled in India. The Company is primarily engaged in the business of manufacturing / providing 'Metering and Metering Solutions, Power Backup including Solar Backup and Solar On-Grid Solutions', and also undertaking 'Engineering, Construction and Contracts'on turnkey basis. The equity shares of the Company are listed on National Stock Exchange of India Limited and BSE Limited. 2. Basis of brparation 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.The accounting policies adopted in the brparation of financial statements are consistent with those of brvious year. 2.1 Statement of significant accounting policies a. Use of estimates The brparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting 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 or liabilities in future periods. b. 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 recognized: Sale of goods Revenue from sale of goods is recognized when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. 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. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year. Income from services Revenues from service contracts are recognized as and when services are rendered. The Company collects service tax on behalf of the government and, therefore, it is not an economic benefit flowing to the Company. Hence, it is excluded from revenue. Revenue from erection contracts Revenue from erection contracts is recognized on the percentage of completion method as mentioned in Accounting Standard (AS 7) "Construction Contracts" as per the Companies Accounting Standards Rules, 2006 (as amended) which are deemed to be applicable as per section 133 of Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014. The percentage of completion is determined by the proportion that contract costs incurred for work performed up to the reporting date bear to the estimated total contract costs. However, profit is not recognized unless there is reasonable progress on the contract. If total cost of a contract, based on technical and other estimates, is estimated to exceed the total contract revenue, the foreseeable loss is provided for. The effect of any adjustment arising from revision to estimates is included in the income statement of the year in which revisions are made. Contract revenue earned in excess of billing has been reflected under "Other current assets" and billing in excess of contract revenue has been reflected under "Other current liabilities" in the balance sheet. Revenue recognized is net of taxes. Price Escalation and other claims or variations in the contract works are included in contract revenue only when: i. Negotiations have reached to an advanced stage such that it is probable that customer will accept the claim; and ii. The amount that is probable will be accepted by the customer and can be measured reliably. Interest income Interest income is recognized on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head "Other income" in the statement of profit and loss. Dividend income Dividend income is recognized when the Company's right to receive dividend is established by the reporting date. c. Tangible fixed assets and debrciation Fixed assets are stated at cost less accumulated debrciation, impairment losses and specific grant/subsidies, if any. The cost comprises of purchase price, freight, non refundable taxes and duties and any attributable cost of bringing the asset to its working condition for its intended use. Borrowing costs relating to acquisition of fixed assets which take substantial period of time to get ready for use are included to the extent they relate to the period till such assets are ready for intended use. All other borrowing costs are expensed in the period they occur. Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset 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. The Company adjusts exchange differences arising on translation/ settlement of long-term foreign currency monetary items pertaining to the acquisition of a debrciable asset to the cost of the asset and debrciates the same over the remaining life of the asset In accordance with MCA circular dated August 09, 2012, exchange differences adjusted to the cost of fixed assets are total differences, arising on long-term foreign currency monetary items pertaining to the acquisition of a debrciable asset, for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. Expenditure directly relating to construction activity is capitalised. Indirect expenditure is capitalised to the extent those relate to the construction activity or is incidental thereto. Income earned during construction period is deducted from the total expenditure relating to construction activity. Assets under finance leases, where there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term are capitalised and are debrciated over the lease term or estimated useful life of the asset or useful life envisaged in schedule II of the Companies Act, 2013 whichever is shorter. Premium paid on leasehold land is amortised over the lease term which is from 90 to 99 years. 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, which are equal to the life brscribed under the Schedule II to the Companies Act, 2013. The lives of the assets are as follows: | | | | | | Assets | Life of the assets (in years) | | | | | March 31,2015 | March 31,2014 | | | Buildings | 30-60 | 30-61 | | | Plant and equipment | 6-15 | 6-21 | | | Furniture and fixture | 10 | 16 | | | Vehicles | 8 | 9-1 0 | | | Office equipments | 5 | 21 | | | Computers | 3-6 | 6 | | | Wind mill | 22 | 19 | | | | | | |
d. Intangible assets Costs relating to computer software, which are acquired, are capitalised and amortised on a straight-line basis over their useful life of three years. Research costs are expensed as incurred. Development expenditure incurred in respect of internally generated intangible assets such as product development is carried forward when the future recoverability can reasonably be regarded as assured. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in the statement of profit and loss when the asset is derecognized. e. Impairment of tangible and intangible assets The carrying amounts of assets are reviewed at each reporting date if there is any indication of impairment based on internal/external factors. An impairment loss is recognised wherever the carrying amount of an asset exceeds its recoverable amount. The recoverable amount is the greater of the asset's net selling price and its value in use. In assessing value in use, the estimated future cash flows are discounted to their brsent value using weighted average cost of capital. Post impairment, debrciation is provided on the revised carrying amount of the asset over its remaining useful life. f. Government grant and subsidies Grants and subsidies from the government are recognized when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received. When the grant or subsidy relates to revenue, it is recognized 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 an asset, it's value is deducted in arriving the carrying amount of the related asset Government grants of the nature of promoters' contribution are credited to capital reserve and treated as a part of the shareholders' funds. g. Investments Investments, which are readily realizable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments. On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges. Current investments are carried in the financial statements at lower of cost and fair value determined on an individual investment basis. Long-term investments are carried at cost However, provision for diminution in value is made to recognize a decline other than temporary in the value of the investments. 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. h. Inventories Raw materials and components, are valued at lower of cost and net realizable 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 of raw materials and components is determined on weighted average basis. Finished goods and work-in-progress are valued at lower of cost and net realisable value. Cost includes materials, labour and a proportion of appropriate overheads based on normal operating capacity. Cost of finished goods includes excise duty. Cost is determined on weighted average basis. 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 weighted average basis. Net realisable value is the estimated selling price in the ordinary course of business, reduced by the estimated costs of completion and costs to effect the sale. i. Retirement and other benefits Employee benefit in the form of provident fund is a defined contribution scheme and the contributions are charged to the statement of profit and loss in the year of which the contributions to the respective funds are due. There are no other obligations other than the contribution payable to the respective authorities. Gratuity is a defined benefit obligation and is provided for on the basis of an actuarial valuation on projected unit credit method made at the end of each financialyear. Short term compensated absences are provided for based on estimates. Long term compensated absences are provided for based on actuarial valuation. The actuarial valuation is done as per projected unit credit method at the end of each financial yearActuarial gains/losses are immediately taken to statement of profit and loss and are not deferred. The Company brsents the entire leave as a current liability in the balance sheet, since it does not have an unconditional right to defer its settlement for 12 months after the reporting date. ]. Income taxes 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, 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year 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 reporting 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 the situations where the Company is entitled to tax holiday under Income Tax Act 1961, no deferred tax is recognised in respect of timing differences which reverse during the tax holiday period, to the extent Company's gross total income is subject to the deduction during the tax holiday period. Deferred tax in respect of timing differences which reverse after the tax holiday period is recognised in the year in which timing difference originates. Unrecognised deferred tax assets of earlier years are re-assessed and recognised to the extent that it has become reasonably certain or virtually certain, as the case may be that future taxable income will be available against which such deferred tax assets can be realised. The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of a deferred tax asset 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 asset 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. Minimum Alternate Tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognizes 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 recognizes 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." 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. k. 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 retranslated using the exchange rate brvailing at the reporting date. Non-monetary items, which are measured 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 measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined. iii) Exchange difference 1. Exchange differences arising on long-term foreign currency monetary items related to acquisition of a fixed asset are capitalized and debrciated over the remaining useful life of the asset. 2. Exchange differences arising on other long-term foreign currency monetary items are accumulated in the "Foreign Currency Monetary Item Translation Difference Account" and amortized over the remaining life of the concerned monetary item. 3. All other exchange differences are recognized as income or as expenses in the period in which they arise. For the purpose of 1 and 2 above, the Company treats a foreign monetary item as "long-term foreign currency monetary item", if it has a term of 12 months or more at the date of its origination. In accordance with MCA circular dated August 09, 2012, exchange differences for this purpose, are total differences arising on long-term foreign currency monetary items for the period. In other words, the Company does not differentiate between exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost and other exchange difference. iv) 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 amortized and recognized as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognized in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognized as income or as expense for the period. Any gain/ loss arising on forward contracts which are long-term foreign currency monetary items is recognized in accordance with paragraph (iii)(1) and (iii)(2). I. Leases Where the Company is lessee Finance leases, where the substantial risks and benefits incidental to ownership of the leased items are transferred to the Company, are capitalised at the lower of the fair value and brsent value of the minimum lease payments at the inception of the lease term and disclosed as leased assets. Lease payments are apportioned between the finance charges and reduction of the lease liability based on the implicit rate of return. Finance charges are charged directly against income. Lease management fees, legal charges and other initial direct costs are capitalised. 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. m. Earning per share Basic earning per share is calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares outstanding during the year. For the purpose of calculating diluted earnings per share, the net profit for the year attributable to equity shareholders and the weighted average number of equity shares outstanding during the year are adjusted for the effects of all dilutive potential equity shares. n. Provisions A provision is recognized 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. Warranty provisions Provisions for warranty-related costs are recognized when the product is sold or service provided. Provision is based on historical experience. The estimate of such warranty-related costs is revised annually. o. Cash and cash equivalents Cash and cash equivalents in the cash flow statements comprise cash at bank and in hand and short-term investments with an original maturity of three months or less. p. Employee stock option plan Measurement and disclosure of the employee share-based payment plans is done in accordance with SEBI (Share Based Employee Benefits) Regulations, 2014 and the Guidance Note on Accounting for Employee Share-based Payments, issued by the ICAI. The Company measures compensation cost relating to employee stock options using the intrinsic value method. Compensation expense, if any, is amortized over the vesting period of the option on a straight line basis. q. Contingent liabilities A contingent liability is 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 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 liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise the contingent liability but discloses its existence in the financial statements. r. Borrowing costs Borrowing cost includes interest, amortization 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 or construction of an asset that necessarily takes a substantial period of time to get ready for its intended use are capitalized as part of the cost of the respective asset. All other borrowing costs are expensed in the year they occur. s. Segment reporting The Company's operations brdominately relate only to power segment and accordingly this is the only primary segment Further the geographical segment is based on the areas in which major operating divisions of the company operates. t Corporate Social Responsibility (CSR) Expenditure The Company has opted to charge its CSR expenditure incurred during theyear to the statement of profit and loss. 3. In respect of the amounts mentioned under section 125 of the Companies Act, 2013 there are no dues that are to be credited to the investor education and protection fund as at March 31, 2015 Rs. Nil (March 31, 2014: Rs. Nil). 4. Leases - operating leases Operating leases are mainly in the nature of lease of office brmises with no restrictions and are renewable/ cancellable at the option of either of the parties. There are no sub-leases. There are no restrictions imposed by lease arrangements. The aggregateamount of operating lease expenses recognised in the statement of profit and loss is Rs. 179.58 (March 31, 2014: Rs. 190.65). 51. In accordance with the provisions of Schedule II of the Companies Act, 2013, the Company has revised the estimated useful lives of fixed assets with effect from April 01, 2014. Accordingly, the net-book value of the fixed assets as on April 01, 2014, is debrciated on a prospective basis over the remaining useful life, wherever applicable. This change in accounting estimate has resulted in increase in debrciation and amortization expenses for the year ended March 31, 2015 by Rs. 93.17 with a corresponding decrease in the net book value of the fixed assets and reserves and surplus of the Company. In addition, as per the provision of Schedule II read with notification dated August 29, 2014 issued by the Ministry of Corporate Affairs, the Company has opted to charge off to statement of profit and loss the carrying amount of certain fixed assets, amounting to Rs. 84.46, where remaining useful life was "Nil" as on April 01, 2014. 56. The Company has spent Rs. 94.21 against total requirement of Rs. 91.47 as per section 135 of the Companies Act, 2013. The amount contributed towards CSR activities are for various items mentioned in Schedule VII of the Companies Act, 2013 and is as approved by the CSR Committee. 58. Previous year figures have been audited by one of the existing joint auditors other than S.R. Batliboi & Associates LLP. Previous year figures have been regrouped / reclassified, wherever necessary to conform to those of current period's classification. As per our report of even date For S.R. BATLIBOI & ASSOCIATES LLP ICAI firm registration number:101049W Chartered Accountants per Vikas Kumar Pansari Partner Membership No.093649 Place: Hyderabad • Date: May 27,2015 As per our report of even date For D. KHANNA & ASSOCIATES Registration number 012917N Chartered Accountants per Deepak Khanna Partner Membership No.92140 Place: Jaipur • Date: May 27,2015 Ishwar Chand Agarwal Chairman DIN: 000111152 Rajendra Kumar Agarwal Managing Director & CEO DIN: 000111127 Rakesh Kumar Agarwal Chief Financial Officer Anklt Jhanjhari Company Secretary Place: Jaipur Date: May 27, 2015 |