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The Company has only one class of equity shares having a par value of
Rs, 2/- per share. Each holder of equity shares is entitled to one vote
per share. The Company declares and pays dividends in Indian Rupees.
The dividend proposed by the Board of Directors is subject to the
approval of the shareholders in the ensuing Annual General Meeting.
During the year ended December 31, 2015, the amount of per share
dividend recommended and provided for distributions to equity
shareholders is Rs, 3.70/-. (December 31, 2014 : Rs, 3.70/-)
In the event of liquidation of the Company, the holders of equity
shares will be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
As per records of the Company and other declarations received from
shareholders, the above shareholding represents both legal and
beneficial ownerships of shares.
b) There is no movement in the share capital during the current and
1. Segment reporting
A) Primary segment reporting (by business segments)
i) Composition of business segments
The Company's business segments are organized around products and
system solutions provided to its customers, which include utilities,
industries, channel partners and original equipment manufacturers.
Power Systems segment (PS) offers turnkey systems and services for
transmission and distributions for power grid and power plants. The
segment offers the instrumentation, control and the entire balance of
power plants, which improve performance and energy efficiency through
flexible alternating current transmission systems, high voltage direct
current systems, network management systems and utility communications.
Power Products segment (PP) manufactures, engineers, supplies key
components to transmit and distribute electricity, improving power
supply and energy efficiency. The segment produces transformers, high
and medium voltage switchgears, circuit breakers, capacitors,
distribution relays, insulation paper and paper board components etc.
Process Automation segment (PA) provides customers with integrated
solutions for control, plant optimization and industry specific
application knowledge. The industries served include oil and gas,
power, chemicals and pharmaceuticals, pulps and paper, metals and
minerals, marine and turbo charging.
Discrete Automation and Motion segment (DM) provides products, with
related services, that are used as components in machinery and
automation systems. The segment covers a wide range of products and
services including power electronics systems, motors and generators,
drives, robots etc.
Low Voltage Products segment (LP) manufactures products and systems
that provide protection, control and measurement for electrical
installations, enclosures, switchboards, electronics and
electromechanical devices for industrial machines, plants and related
ii) The accounting policies used in the preparation of the financial
statements of the Company are also applied for segment reporting.
iii) Segment revenues, expenses, assets and liabilities are those,
which are directly attributable to the segment or are allocated on an
appropriate basis. Corporate and other revenues, expenses, assets and
liabilities to the extent not allocable to segments are disclosed in
the reconciliation of reportable segments with the financial
iv) Inter segment transfer pricing
Inter segment prices are normally negotiated amongst the segments with
reference to the costs, market prices and business risks, within an
overall optimization objective for the Company.
v) Figures in brackets are in respect of the previous year.
2. The Company has taken several premises and vehicles under
cancelable and non-cancelable operating leases. These lease agreements
are normally for one to ten years and have option of renewal on expiry
of lease period based on mutual agreement. Rental expenses towards
cancelable and non-cancelable operating lease charged to the statement
of profit and loss amounts to Rs, 52.93 crores (Previous Year Rs, 44.80
Some of the lease agreements have escalation clause ranging from 5% to
15%. There are no exceptional / restrictive covenants in the lease
agreement. There are no assets given on operating lease.
3. Excise duty on sales amounting to Rs, 530.43 crores (Previous year
Rs, 423.64 crores) has been reduced from sales in the statement of
profit and loss. Excise duty reversal on decrease in inventory of
finished goods amounting to Rs, 0.90 crores (December 31, 2014: Rs,
3.10 crores) has been accounted in the statement of profit and loss
under the head "(Increase) / decrease in inventories of finished goods,
work-in-progress and traded goods".
4. Long term borrowings represent 600, unsecured, rated, listed,
redeemable, non-convertible debentures of face value of Rs, 1.0 crore
each aggregating to Rs, 600.00 crores on private placement basis. The
debentures are repayable after 3 years from the date of allotment being
September 4, 2015. The debentures carry interest rate of MIBOR plus 80
basis points. The proceeds have been utilized towards working capital
and other corporate purposes including refinancing the Company's debt.
5. Short term borrowings represent unsecured short term loan and
overdraft facility from banks. The same is repayable on demand and
carries interest @ 9% to 11% p.a.
The Company is contesting the demands and the management believes that
its position will likely be upheld in the various appellate authorities
/ courts. The management believes that the ultimate outcome of this
proceeding will not have a material adverse effect on the Company's
In respect of the above contingent liabilities, the future cash
outflows are determinable only on receipt of judgment pending at
various forums / authorities.
6. Related party disclosures
a) List of related parties
Party where control exists:
ABB Limited, Zurich, Switzerland (Ultimate Holding Company)
ABB Asea Brown Boveri Limited, Zurich, Switzerland (Holding Company)
Other Related parties with whom transactions have taken place during
ABB (Asea Brown Boveri), S.A.,Paco de Arcos, Portugal ABB Inc.,
Saint-Laurent Quebec, Canada.
ABB (China) Ltd.,Beijing,China ABB Inc.,Cary, NC,United States
ABB (Hong Kong) Ltd.,Hong Kong, Hong Kong ABB Industries
(L.L.C.).,Dubai,United Arab Emirates
ABB (Private) Ltd. ,Harare ,Zimbabwe., ABB Industries FZ.,Dubai,United
ABB (Pty) Ltd.,Gaborone,Botswana ABB Information Systems
ABB (Pvt) Ltd.,Lahore,Pakistan ABB International Marketing Ltd.,
ABB A/S.,Skovlunde,Denmark ABB Intra AG, Zurich, Switzerland
ABB AB.,V„ster†s,Sweden ABB Investments (Pty) Ltd,Modderfontein,South
ABB AG.,Mannheim,Germany ABB Jiangjin Turbo Systems Company
ABB AG.,Vienna,Austria ABB Jiangsu Jingke Instrument Transformer Co.,
ABB AS.,Billingstad,Norway ABB K.K.,Tokyo,Japan
ABB AS.,Jri,Estonia ABB Limited.,Auckland,New Zealand
ABB Australia Pty Limited.,Sydney,Australia ABB
ABB Automation Co. Ltd.,Riyadh,Saudi Arabia ABB Limited.,Dar Es
Salaam,United Republic of Tanzania
ABB Automation GmbH, Mannheim, Germany. ABB Limited.,Dhaka,Bangladesh
ABB Automation L.L.C.,Abu Dhabi,United Arab Emirates ABB
ABB Automation Products GmbH.,Ladenburg,Germany ABB
ABB Bailey Beijing Engineering Co. Ltd.,Beijing,China ABB
ABB Bailey Japan Limited.,Shizuoka-Ken,Japan ABB LLC.,Muscat,Oman
ABB Beijing Drive Systems Co. Ltd.,Beijing,China ABB
ABB Beteiligungs-Management GmbH, Germany ABB Logistics Center Europe
ABB Bulgaria EOOD.,Sofa,Bulgaria ABB Ltd. ,Hanoi ,Vietnam.
ABB B V, Rotterdam, Netherlands ABB Ltd., Zagreb, Croatia.
ABB Capital, B.V.,Amsterdam,Netherlands ABB Ltd.,Dublin,Ireland
ABB Chongqing Transformer Company Ltd.,Chongqing,China ABB
ABB CL Logistic S.A., Montevideo, Uruguay ABB Ltd.,Kyiv,Ukraine
ABB Contracting Company Ltd.,Riyadh,Saudi Arabia ABB Ltd.,Lusaka,Zambia
ABB D.o.o., Ljubljana, Slovenia ABB Ltd.,Lusaka,Zambia
ABB d.o.o.,Belgrade,Serbia ABB Ltd.,Moscow,Russian Federation
ABB Ecuador S.A.,Quito,Ecuador ABB Ltd.,Seoul,Korea, Republic of
ABB Electrical Industries Ltd.,Riyadh,Saudi Arabia ABB
Ltd.,Taipei,Taiwan, Province of China
ABB Electrical Machines Ltd.,Shanghai,China ABB Ltd.,Zagreb,Croatia
ABB Elektrik Sanayi A.S.,Istanbul,Turkey ABB Ltda.,Osasco,Brazil
ABB Engg. Technologies Co. (KSCC).,Safat,Kuwait ABB LV Installation
Materials Co. Ltd.,Beijing,China
ABB Engineering (Shanghai) Ltd.,Shanghai,China ABB Malaysia Sdn
ABB Engineering Trading and Service Ltd.,Budapest,Hungary ABB
Management Services Ltd.,Zurich,Switzerland
ABB Equity Limited.,St. Peter's Port,Guernsey ABB Manufacturing Sdn.
ABB ESAP Limited.,St. Peter's Port,Guernsey ABB Mexico S.A. de C.V.,San
Luis Potosi SLP,Mexico
ABB Finance B.V.,Amsterdam,Netherlands ABB N.V.,Zaventem,Belgium
ABB for Electrical Industries (ABB ARAB) S.A.E.,Cairo,Egypt ABB Near
East Trading Ltd.,Amman,Jordan
ABB France.,Les Ulis,France ABB Norden Holding AB, V„ster†s, Sweden
ABB FZ-LLC.,Dubai,United Arab Emirates ABB Oryx Motors and Generator
Service LLC, Doha, Qatar
ABB Generators Ltd, Nanchang, China. ABB Oy.,Helsinki,Finland
ABB Genway Xiamen Electrical Equipment Co. Ltd.,Xiamen,China ABB Power
Equipment (Xiamen) Co., Ltd.,Xiamen,China
ABB Global Industries and Services Private Limited.,Bengaluru,India ABB
ABB Global Marketing FZ LLC.,Dubai,United Arab Emirates ABB Qatar LLC.,
ABB Group Accounting Services B.V.,Rotterdam,Netherlands ABB Research
ABB Hefei Transformer Co. Ltd.,Hefei,China ABB S.A., Les Ulis, France
ABB High Voltage Switchgear (Xiamen) Company Ltd.,Xiamen,China ABB
ABB High Voltage Switchgear Co. Ltd.,Beijing,China ABB
ABB Holdings Sdn. Bhd.,Subang Jaya,Malaysia ABB S.A.,Lima,Peru
ABB Import & Export Services Ltd., Oranjestad/Aruba (NA), Aruba (Nl)
ABB S.A.,Santiago,Chile Asea Brown Boveri Lanka (Private) Limited
ABB S.p.A.,Milan,Italy Asea Brown Boveri Ltd.,Port Louis,Mauritius
ABB s.p.r.l.,Kinshasa Gombe,The Democratic Republic of Congo Asea Brown
Boveri Ltda.,Bogot ,Colombia
ABB s.r.o.,Prague,Czech Republic Asea Brown Boveri Ltda.,La Paz,
Plurinational State of Bolivia
ABB Schweiz AG.,Baden,Switzerland Asea Brown Boveri S.A., Caracas,
ABB S‚cheron S.A.,Satigny,Switzerland Asea Brown Boveri
ABB Service Co. Ltd.,Al Khobar,Saudi Arabia Asea Brown Boveri
ABB Shanghai Motors Co. Ltd.,Shanghai,China Asea Brown Boveri
S.A.,Metamorphossis Attica ,Greece
ABB Shanghai Transformer Co. Ltd.,Shanghai,China Asea Brown Boveri
S.A.E., Cairo, Egypt
ABB SIA.,Riga,Latvia Baldor Electric (Asia) PTE
ABB South Africa (Pty) Ltd.,Longmeadow,South Africa Baldor Electric
(Shanghai) Company Ltd.,Shanghai,China
ABB Sp. z o.o.,Warsaw,Poland Baldor Electric Company.,Fort Smith,
ABB Stotz-Kontakt GmbH.,Heidelberg,Germany Baldor UK Ltd.,Bristol,
ABB Technologies Ltd., Tirat Carmel, Israel Busch-Jaeger Elektro
ABB Technologies S.A., Dakar, Senegal Electrical Materials
ABB Technologies W.L.L.,Bahrain,Bahrain K-Tek Level Engineering Pvt.
Ltd., Navi Mumbai, India
ABB Technology Ltd.,Zurich,Switzerland Maska Power Transmission
ABB Technology Oy, Helsinki, Finland Newave Energy
ABB Technology SA.,Abidjan,Cote d'Ivoire Newave
ABB Transformers S.A.E.,El-Nozha El-Gedida,Egypt Power-One Italy
ABB Transmission & Distribution Ltd.,Abu Dhabi,United Arab Emirates
Power-One Renewable Energy (China) Co. Ltd.,Shenzhen, China.
ABB Turbo Systems (Hong Kong) Limited.,Hong Kong,Hong Kong Power-One
Renewable Energy Solutions India Private Ltd.,Mumbai,India
ABB Turbo Systems AG.,Baden,Switzerland Power-One Renewable Energy
Solutions LLC.,Delaware,United States
ABB Turbo Systems Holding Ltd, Baden,Switzerland. PT ABB Sakti
ABB Turbochargers S.A.E.,Suez,Egypt Pucaro Elektro-Isolierstoffe
ABB UAB, Vilnius, Lithuania Shantou Winride Switchgear Co., Ltd.,Longhu
ABB Verwaltungs AG.,Zurich,Switzerland Spirit IT B.V, Eindhoven,
ABB Xiamen Electrical Controlgear Co. Ltd.,Xiamen,China Striebel & John
GmbH & Co. KG.,Mannheim,Germany
ABB Xiamen Low Voltage Equipment Co. Ltd.,Xiamen,China Sucursal Panama
de ABB SA.,Panama,Panama
ABB Xiamen Switchgear Co. Ltd.,Xiamen,China Thomas & Betts Asia
(Singapore) Pte. Ltd, Singapore
ABB Xi'an High Power Rectifer Company Limited.,Xi'an,China Thomas &
Betts Corporation.,Knoxville, TN,United States
ABB Xi'an Power Capacitor Company Limited.,Xi'an,China Thomas & Betts
India Private Ltd.,Andhra Pradesh,India
ABB Xinhui Low Voltage Switchgear Co. Ltd.,Xinhui ,China Thomas & Betts
Limited ,Saint-Jean-sur-Richelieu, Quebec,Canada.,
ABB Zhongshan Transformer Company Ltd.,Zhongshan,China Thomas & Betts
Power Solutions LLC.,Delaware,United States
ABB, Inc.,Paranaque, Metro Manila,Philippines Trasfor
ABB, s.r.o.,Bratislava,Slovakia Tropos Networks, Inc.,Wilmington,
ABBNG Limited.,Lagos,Nigeria Turbo Systems United Co. Ltd.,Tokyo,Japan
Asea Brown Boveri (Pty) Ltd., Windhoek, Namibia Ventyx (UK)
Asea Brown Boveri Electrica SGPS (Angola) Limitada.,Luanda,Angola
Ventyx Inc.,Atlanta,United States
Key managerial personnel:
Managing director: Mr. Bazmi R. Husain (upto December 31, 2015)
Company secretary Mr. B. Gururaj
Chief fnancial offcer: Mr. T. K. Sridhar (Effective July 24, 2015)
Mr. Amlan Datta Majumdar (upto March 10, 2015)
b) Nature of provisions:
i) Warranties: The Company provides warranties for its products,
systems and services, undertaking to repair or replace the items that
fail to perform satisfactorily during the warranty period. Provision
made as at December 31, 2015 represents the amount of the expected cost
based on technical evaluation and past experience of meeting such
obligations. It is expected that this expenditure will be incurred over
the contractual warranty period.
ii) Loss orders: A provision for expected loss on construction
contracts is recognized when it is probable that the contract costs
will exceed total contract revenue. For all other contracts loss order
provisions are made when the unavoidable costs of meeting the
obligation under the contract exceed the currently estimated economic
iii) Provision for litigation represents claims against the Company not
acknowledged as debts that are expected to materialize in respect of
matters in litigation. The outflow would depend on the cessation of the
iv) Provision for sales tax represents mainly the differential sales
tax liability on account of non - collection of declaration forms. The
outflow would depend on the cessation of the respective events.
7. The employees of the Company are entitled to purchase shares of
ABB Limited., Zurich (the ultimate holding company) on the settlement
date, at a price fxed based on the fair market price on the grant date
under ABB employee share acquisition plan. During the year, the Company
has been cross charged Rs, Nil (Previous Year Rs,.0.08 crores) towards
the above including administrative charges and this has been charged in
the statement of proft and loss under the head salaries, wages and
The Institute of Chartered Accountants of India has issued a guidance
note on accounting for 'employee share-based payments', which is
applicable to employee share based payment plans. The scheme detailed
above is managed and administered, compensation benefits in respect of
the scheme is assessed and accounted by the ultimate holding company,
except for the obligation towards expenses cross charged as above.
Accordingly, the Company is of the opinion that there is no further
accounting treatment/ disclosure required under the said guidance note.
8. Derivative Instruments
i) Forward cover for foreign currency trade receivables outstanding as
of balance sheet date is Rs, 271.45 crores (Previous Year Rs, 349.05
ii) Forward cover for expected future sales or highly probable forecast
transaction as of balance sheet date is Rs, 433.12 crores (Previous
Year Rs, 384.91 crores).
iii) Forward cover for foreign currency trade payables outstanding as
of balance sheet date is Rs, 716.56 crores (Previous Year Rs, 577.89
iv) Forward cover for expected future purchases or highly probable
forecast transaction as of balance sheet date is Rs, 440.94 crores
(Previous Year Rs, 116.55 crores).
v) Foreign currency exposure (net) that are not hedged by derivative
instruments or otherwise is payable Rs, 187.33 crores (Previous year
payable was Rs, 267.31 crores).
9. Commodity Contracts
The Company uses commodity future contracts to hedge risk against
fuctuation in commodity prices. The following are outstanding future
contracts entered into by the Company as on December 31, 2015.
a) Gratuity Plan
Gratuity is payable to all eligible employees of the Company as per the
provisions of the Payment of Gratuity Act, 1972 or as per the Company's
scheme, whichever is higher.
b) Provident Fund Plan
The Company manages provident fund plan through a provident fund trust
for its employees which is permitted under the Provident Fund and
Miscellaneous Provisions Act, 1952. The Contribution by employee and
employer together with interest are payable at the time of separation
from service or retirement whichever is earlier.
c) Assumptions relating to future salary increases, attrition, interest
rate for discount and overall expected rate of return on assets have
been considered based on relevant economic factors such as inflation,
market growth and other factors applicable to the period over which the
obligation is expected to be settled.
d) The Company expects to contribute Rs, 13.00 crores (Previous Year
Rs, 20.00 crores) to gratuity fund and Rs, 18.00 crores (Previous Year
Rs, 20.00 crores) to provident fund in 2016.
e) The attrition rate for gratuity varies from 1% to 8% for various age
10. In accordance with the provisions of Companies Act, 2013, the
Company is required to contribute Rs, 5.60 crores towards CSR
expenditure for the year against which actual capital expenditure is
Rs, 1.24 crores and revenue expenditure is Rs, 0.46 crores. The said
provision is frst time applicable for the company from January 1, 2015.
11. The previous year figures have been regrouped/ reclassified, where
necessary, to conform with the current year's classifications.
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