Notes to Financial Statements as at and for the Year Ended 31st March, 2015 Company Overview : 1 Advance Metering Technology Limited ("AMTL" or "the Company") was incorporated on 7th February,2011 under the provisions of the Companies Act,1956. The Company operates in the Energy Sector and within the business segment Energy Generation, Energy Measurement and Energy Management. The Company is engaged in manufacturing and selling of Energy Meters, provides technical services relating to Energy Sector and in the business of Wind Power Generation through Wind Mills/ other renewable energy sources.Its shares are listed on the National Stock Exchange of India Limited and Bombay Stock Exchamge Limited. The AMTL was incorporated as a Special Purpose Vehicle (SPV) to take over the Metering Division and proposed power generation business/undertakings of Eon Electric Limited ( formerly Indo Asian Fusegear Limited) as a going concern. The Hon'ble High Court for the States of Punjab & Haryana at Chandigarh vide its order dated 27th March 2012, has approved the Scheme of Arrangement ( 'Seheme' ) u/s 391 to 394 of the Companies Act,1956 between the Company and Eon electronic Limited ( Eon ) and their respective shareholders and creditors for demerger of the Metering Division and Power Generation Business ( "De-merged Undertaking") of Eon and transfer/ vesting of the said undertaking in favour of AMTL with effect from Ist April 2011 ( Apponited Date) on going concern basis. The scheme become effective on 8th April 2012 ( Effective Date) on filling of the Certified True Copy of the said Order of the Hon'ble High Court with the Registrar of Companies, NCT of Delhi & Haryana. 2 Significant Accounting Policies : 1. Basis of brparation of Financial Statements:- The financial statements are brpared under the historical cost convention on the accrual basis of accounting, in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 2013 as adopted consistently by the Company. 2. Definition of Borrowings:- The borrowings (long term and short term ) have been classified as secured for which the charge has been filed and registered with Registrar of Companies, Delhi & Haryana against any asset of the company. All other borrowings have been clasified as unsecured. 3. Fixed Assets :- (a) Tangible Assets Fixed Assets are accounted at cost of acquisition (net of cenvat availed) inclusive of inward freight,duties, taxes and incidentals related to acquisition and installation including br-operative expenses / interest on loan taken for projects are also capitalised, wherever appropriate. Assets under installation or under construction as at the Balance Sheet date are shown as Capital Work-in-Progress. The revalued amounts of Fixed Assets are brsented in the Balance Sheet by restating the net book value by adding thereon the net increase on account of revaluation. (b) Intangible Assets Intangible Assets are stated at cost of acquisition. Costs relating to development of Computer Software are capitalized. Software expenses, other than development costs, are expensed off in the year they are incurred. 4. Debrciation / Amortisation :- W.e.f April 1,2014 Company adopted the useful life of Fixed Assets as per Schedule-II of the Companies Act 2013 and also applied the transitional provision stated therein.The debrciation on items whose useful life has expired as on Ist April 2014, has to be adjusted from opening free reserve. Debrciation is provided on pro-rata basis on written down value method except Leasehold Improvements which are amortized over the period of Lease and Computer Software is amortized over a period of five years. Premium on leasehold land is amortized over the period of lease, On Power Generation assets, the debrciation is charged on pro-rata basis on straight line method as per the rates brscribed by Schedule II of the Companies Act, 2013. 100% debrciation is provided in respect of assets upto Rs. 5,000. Debrciation on the revalued portion of Fixed assets is charged to the Merger Adjustment Account as they were revalued prior to demerger of erstwhile division of 'Eon Electric Ltd' into the Company. 5. Investments :- Non-current Investments (Long Term Investments) are stated at cost after deducting provision, if any, made for decline, other than temporary, in the values. Current Investments are stated at lower of cost and market /fair value. 7. Cash Flow Statement:- Cash Flow is reported using the indirect method as specified in Accounting Standard (AS-3)'Cash Flow Statement' as issued by the Companies (Accounting Standards) Rules,2006. 8. Revenue Recognition Sales : Sale of goods is recognised at the point of despatch of finished goods to customer in accordance with accounting standard (AS)-9, Revenue Recognition. Sales are exclusive of sales tax. Revenue from Windmills Power Generation : Revenue from Wind Power Generation is recognized on the basis of actual power sold (net of reactive energy consumed) as per the terms of the power purchase agreements entered into with the respective purchasers. Generation Based Incentive Recognised after registration with concerned authorities. Revenue from Technical Consultancy - Energy Audits: Revenue from Technical Consultancy - Energy Audits is recognised on the basis of completion of the audit assignment and submission of audit report to the client. Investing and other Activities : Income on account of interest and other activities is recognized on an accrual basis. Dividends are accounted for when the right to receive the payment is established. 9. Transactions in Foreign Currency :- Transactions denominated in foreign currencies are recorded at the exchange rate brvailing on the date of transaction. Foreign currency monetary items (including forward contracts) are translated at year end rates. Exchange differences arising on settlement of transactions and translation of monetary items (including forward contracts) are recognized as income or expense in the year in which they arise . The brmium or discount arising at the inception of a forward contract, which are not intended for trading purpose, is amortised as expense or income over the life of the contract. Company has not exercised the option under paragraph 46 / 46A of Accounting Standard (AS) 11, The Effects of Changes in Foreign Exchange Rates. 10. Employee Benefits (a) Short Term Employee Benefits Short-term employee benefits are recognized as an expense at the undiscounted amount in the Statement of Profit and Loss of the year in which the related service is rendered. (b) Long Term Employee Benefits (i) Defined Contribution plan Provident Fund and Employees' State Insurance schemes All employees of the Company are entitled to receive benefits under the Provident Fund, which is a defined contribution plan. Both the employees and the employer make monthly contributions to the plan at a brdetermined rate (brsently 12.0%) of the employees' basic salary and dearness allowance. These contributions are made to the fund administered and managed by the Government of India. In addition, some employees of the Company are covered under the Employees' State Insurance schemes, which are also defined contribution schemes recognized and administered by the Government of India. The Company's contributions to both these schemes are expensed in the Statement of Profit and Loss. The Company has no further obligations under these plans beyond its monthly contributions. (ii) Defined Benefit plan Leave Encashment — Liability on account of unavailed earned leave at the year end is provided as per the actuarial valuation according to Projected Unit Credit Method. Gratuity — Liability on account of Gratuity at the year end is provided as per the actuarial valuation according to the Projected Unit Credit Method. Actuarial gains or losses arising from such transactions are charged to statement of Profit & Loss in the year in which they arise. 11. Borrowing Costs:- Borrowing Costs attributable to acquisition and construction of qualifying assets are capitalised as a part of the cost of such asset upto the date when such assets are ready for intended use. Other Borrowing Costs are charged as an expense in the year in which these are incurred. 12. Taxation :- Tax expense comprises both current and deferred tax. Current Tax is measured at the amount expected to be paid to the tax authorities, using the applicable tax rates and tax laws. Deferred tax assets and liabilities are recognized for future tax consequences attributable to the timing difference between taxable income and accounting income that are capable of reversal in one or more subsequent period(s) and are measured using tax rates enacted or substantively enacted as at the Balance Sheet date. Deferred Tax assets are not recognized unless, in the management judgment, there is virtual certainty that sufficient future taxable income will be available against which such deferred tax assets can be realized. The carrying amount of deferred tax is reviewed at each balance sheet date. 13. Earnings Per Share :- Basic Earnings per equity share is computed by dividing net profit or loss for the period attributable to equity share holders by the weighted average number of equity shares outstanding during the period. The Diluted Earnings per share is calculated on the same basis as Basic Earnings per share, after adjusting for the effects of potential dilutive equity shares. 14. Segment Reporting:- Revenue and Expenses are identified to Segments on the basis of their relationship to the operating activities of the segment. Revenue and Expenses, which relate to the entrprise as a whole and are not allocable to segments on a reasonable basis, are included under "un-allocated corporate expenses." 15. Leases :-Operating Lease — As Lessee Lease Rentals in respect of assets taken on 'Operating Lease' are charged to the Statement of Profit and Loss on a staright line basis over the lease term in accordance with Accounting Standard (AS)-19, Leases. 16. Pre-operative Expenditure The Expenditure incurred by the Company from the date of setting up of a new unit, up to the date of commencement of commercial production of the unit is treated as Preoperative expenditure to be capitalised as a part of the indirect cost of construction. The amount of such expenditure is apportioned over the individual assets in an equitable manner in the year of commencement of Commercial Production of the unit. The amounts not directly attributable to fixed assets are charged to the Statement of Profit and Loss in the year in which such expenditure is incurred. 17. Impairment of Assets Assets that are subject to amortisation/debrciation are reviewed for impairment whenever events of changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the assets' carrying amount exceeds its recoverable amount. The recoverable amount is the higher of the assets' fair value less costs to sell and value in use. For the purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). 18. Provisions , Contingent Liabilities and Contingent Assets:- Provisions are recognized when the Company has a brsent obligation as a result of past events; it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Contingent Liabilities are not recognized but are disclosed in the notes. Contingent Assets are neither recognized nor disclosed in the financial statements. 1 The Company is engaged in the business of manufacturing of energy meters. However, maintenance of cost records and cost audit is not applicable on the Company in view of Section 148 of the Companies Act, 2013 read with Companies (cost records and audit) Rules, 2014. 2 Financial Reporting of Interests in Joint Venture Company had a joint venture share of interest of 20% in Saudi National Lamps and Electricals Company Limited, Saudi Arabia that has been terminated during the brvious year ended on 31st March 2014. As at the date of termination, the Company had following in the said joint venture - Investment in share capital - Rs 25,732,351 - Receivables - Rs.42,754,347 In the opinion of the management of the Company, the aforesaid investment stands impaired and needs to be written off subject to regulatory approvals. Therefore, the Company has made the provision of 99% of value thereof as under- for investment in share capital of Rs. Nil, brvious year (Rs 25,475,027 ). - for receivables of Rs. Nil brvious year ( Rs. 42,326,804 ) As the joint venture stands terminated, no additional disclosures as per Accounting Standard (AS) 27- 'Financial Reporting of Interest in Joint Venture' are made. 3 The expense incurred by R & D Dept. for the current year 2014-15 & brvious year 2013-14 is debited to Employee Cost & respective expense account as under- Employee Benefits Expense 5,702,446 5,736,264 Other Expenses: Manufacturing 142,437 67,707 Administrative 438,307 423,424 The material consumption by R&D is reflected in group manufacturing expenses under a\c head 'Research and Development Expenses. 3 There is no other material item that needs to be disclosed in accordance with Listing Agreement/ Companies Act, 2013. As per our report of even date annexed For S.S. Kothari Mehta & Co. For and on behalf of the Board of Directors Chartered Accountants Firm Registration No : 000756N K K Tulshan Pranav Kumar Ranade Vikram Ranade Prashant Ranade Partner Chairman-cum- Executive Director Executive Director Membership No : 085033 Managing Director DIN-00006021 DIN-00006024 DIN-00005359 Ravinder Singh Chief Financial Officer Rakesh Dhody AVP-Corporate Affairs & Company Secretary Place : Noida Dated : 05th May, 2015 |