Notes to accounts
1. CORPORATE INFORMATION
WABCO INDIA LIMITED (“Company”) was incorporated originally as Auto (India) Engineering Limited on November 18, 2004. The name of the Company was changed to WABCO INDIA LIMITED on August 2, 2011. The Company is a public limited company domiciled in India and has its primary listings on BSE Limited and National Stock Exchange of India Limited in India. The registered office of the Company is located at Plant 1, Plot No.3, (SP), III Main Road, Ambattur Industrial Estate, Chennai - 600 058, India. The Company is primarily engaged in the manufacture of air brake actuation systems for commercial vehicles. The Company also provides software development and other services to its group companies.
On June 3, 2009, WABCO Holdings Inc., executed its step acquisition in WABCO through Clayton Dewandre Holdings Limited and increased its percentage ownership to 75% by acquiring the shares from the other joint venture partner, TVS Group. Post-acquisition, the Company has become a subsidiary of WABCO Holdings Inc.
On June 28, 2013, M/s. Clayton Dewandre Holdings Limited, Rotterdam holding 75% of the equity shares of the Company transferred the entire holding to M/s. WABCO Asia Private Limited, Singapore, a subsidiary of M/s. Clayton Dewandre Holdings Limited, Rotterdam.
The financial statements were authorized for issue in accordance with a resolution of the directors on May 30, 2017.
2.1 Basis of Preparation
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015. For all periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended March 31, 2017 are the first the Company has prepared in accordance with Ind AS.
Refer to note 40 for information on how the Company adopted Ind AS.
The financial statements have been prepared on a historical cost basis, except for certain financial assets and liabilities measured at fair value (refer accounting policy regarding financial instruments).
The financial statements are presented in INR and all values are rounded to the nearest lakhs (INR 00,000), except when otherwise indicated.
3. Property plant and equipments
Capital work in progress
Capital work in progress as at March 31, 2017 comprises expenditure for the plant in various stages of installation. Total amount of Capital work in progress is INR 6,166.20 lakhs (March 31, 2016: INR 3,745.11 lakhs, April 1, 2015: INR 1,763.28 lakhs).
Opening balance of assets
The Company has elected to regard the WDV of assets as of March 31, 2015 as deemed cost, accordingly the gross block as of April 1, 2015 presented above, is net of accumulated depreciation of INR 21,406.75 lakhs (Tangible assets INR 20,537.47 lakhs and Intangible assets INR 869.28 lakhs).
The Company has classified the land at Jamshedpur with a gross book value of INR 76.10 lakhs as at April, 1 2015 under the previous GAAP taken on 30 years lease from Adityapur Industrial Area Development Authority, Adityapur, Jamshedpur as operating lease and hence, the amount paid for the leasehold land has been reclassified from PPE to Other current asset. Refer note 44 for further details.
* Represents land at Chennai taken on 99 years lease from Mahindra Industrial Park Limited and land at Panthnagar taken on 90 years lease from State Infrastructure & Industrial Development Corporation Uttarakhand Limited
Terms / rights attached to equity shares
The Company has only one class of equity share having a par value of Rs.5 per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed as distributions to equity shareholders is subject to approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the assets of the Company, in proportion to the number of equity shares held by the shareholders.
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year plus the weighted average number of Equity shares that would be issued on conversion of all the dilutive potential Equity shares into Equity shares.
4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the Company’s Financial Statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In the process of applying the Company’s accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognised in the Financial Statements:
Fair value measurement of financial instruments
When the fair values of financial assets and financial liabilities recorded in the Balance Sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgement is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments. See Note 37 for further disclosures.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the Financial Statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Company. Such changes are reflected in the assumptions when they occur.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets or observable market prices less incremental costs for disposing of the asset. The value in use calculation is based on a DCF model. The cash flows are derived from the budget for the next five years and do not include restructuring activities that the Compant is not yet committed to or significant future investments that will enhance the asset’s performance of the CGU being tested. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised by the Company.
Deffered income taxes
The Company’s tax expense for the year is the sum of the total current and deferred tax charges. The calculation of the total tax expense necessarily involves a degree of estimation and judgement in respect of certain items. A deferred tax asset is recognised when it has become probable that future taxable profit will allow the deferred tax asset to be recovered. Recognition, therefore. involves judgeinent regarding the prudent forecasting of future taxable gains and profits of the business.
Defined benefit plans
The cost of the defined benefit plan and other post-employment benefits and the present value of the obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date. Further details about defined benefit obligations are given in Note 32.
5. EMPLOYEE BENEFITS OBLIGATION
Defined Benefit Plan
The gratuity plan is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to specific benefit. The level of benefits provided depends on the member’s length of service and salary at retirement age.
b. Provident Fund
In respect of employees covered under Company’s Employees Provident Fund Trust contribuions to the Company’s Employee Provident Fund Trust are made in accordance with the fund rules. The interest rate payable to the beneficiaries every year is being notified by the Government.
In the case of contribution to the Trust, the Company has an obligation to make good the shortfall, if any, between the return from the investments of the Trust and the notified interest rate and recognizes such obligation, determined based on an actuarial valuation, as an expense.
5.1 Share based payments
Under a global compensation plan announced and adminstered by Wabco Holdings Inc., USA, the ultimate holding company, some of the employees are eligible for compensation in form of stock units viz., Performance Stock Units (“PSU”) and Restricted Stock Units (“RSU”). PSUs vesting of which would occur at levels ranging from none to 200% of the number of granted PSUs depending upon the achievement of three year cumulative earnings per share goals approved by the Compensation, Nominating and Governance Committee of the Board of Directors of the ultimate holding company. The ultimate holding company assesses expected achievement levels at the end of each reporting period. As of March 31, 2017, the Company believes it is probable that the performance conditions will be met and has accrued for the compensation expense accordingly which is in line with the estimates made by the ultimate holding company.
RSU’s vests to the employees on a proportionate basis over the period of 3 years proivded the employees continues in employment.
The Company records a stock based compensation based on the estimated fair value of the award at the grant date and is recognised as an expense in the statement of profit or loss over the requisite period.
The expected term of the RSU / PSU is determined based on the vesting term and contractual term of the RSU / PSU, as well as expected exercise behaviour of the employee who recieves the RSU / PSU.
Expected volatality during the expected term of the RSU / PSU is based on historical volatality of the observed market prices of Wabco Holding Inc., USA publicly traded equity shares during a period equivalent to the expected term of the RSU / PSU.
6. LEASE COMMITMENTS Operating leases:
The Company had leased one of its office premises under operating lease for a non-cancellable period of 5 years. The lease rentals incurred during the current year have been charged as an expense in the statement of profit and loss. The future lease rental payables as follows:
7. COMMITMENT AND CONTINGENCIES
A) Contingent Liabilities
i) Matters wherein management has concluded the Company’s liability to be probable and has accordingly provided for in the books. Refer Note 17.
ii) In respect of all the matters mentioned below, based on the legal advice obtained, the management is of the view that the claims are not tenable and the same can be successfully contested. Hence, no provision has been considered neccessary in the financial statments.
During the current year, the Company has received a demand order for a sum of INR. 19,552.39 lakhs, as well as penalty of INR. 28,076 lakhs from the Commercial Tax Department for VAT on various matters including differential amounts between financial statements and returns filed during the period April 1, 2010 to December 2015. The Company is contesting the order on the grounds that the Order was made based on factually incorrect information and has also obtained a stay from the Hon’ble High Court of Madras. Based on advice by its tax consultants and an internal evaluation, the Company has not accrued any amount towards these demands pending final outcome of this matter and these amounts have been disclosed as contingent liability.
8.1. LIST OF RELATED PARTIES AND NATURE OF RELATIONSHIP
1) Where control exists
a) Holding company WABCO Asia Private Limited, Singapore
b) Ultimate holding company WABCO Holdings Inc., USA
Related parties under Ind AS 24 with whom transactions have taken place during the year
2) Fellow Subsidiary companies
1 WABCO Vertriebs, GmbH & Co., Germany
(formerly WABCO Fahrzeugsysteme, GmbH,Germany)
2 WABCO China Co Ltd, China
3 WABCO France SAS, France
4 Meritor WABCO Vehicle Control Systems, USA
5 Shandong WABCO Automotive Products Co. Ltd, China
6 WABCO (Shanghai) Management Co Limited, China
7 WABCO Automotive South Africa
8 WABCO Automotive UK Ltd, United Kingdom
9 WABCO Compressor Manufacturing Co. USA
10 WABCO Hong Kong Limited, Hong Kong
11 WABCO Japan Inc, Japan
12 WABCO Korea Ltd, Korea
13 WABCO Polska Sp. z o.o. Poland
14 WABCO Polska Sprzedaz Sp. z o.o. Poland
15 WABCO Development Gmbh, Germany
16 WABCO Logistik GmbH, Germany
17 WABCO Australia Pty Limited, Australia
18 WABCO Europe BVBA, Belgium
19 WABCO Austria GesmbH, Austria
20 WABCO Belgium BVBA, Belgium
21 WABCO Financial Services SPRL; Belgium
22 Tavares BVBA, Belgium
23 Transics BVBA, Belgium
24 FLC NV
25 Transics Belux BVBA, Belgium
26 Transics Deutschland GmbH, Germany
27 Transics Italia S.R.L
28 Delta Industrie Service SARL, France
29 Transics France SARL, France
30 Transics Ireland Limited, Ireland
31 Carrierweb B.V, Netherlands
32 Transics Netherland B.V
33 Transics Telematica Espana
34 WABCO do Brasil Industria e Comercio de Freios Ltda, Brazil
35 WABCO Brzdy K Vozidlum spol S.R.O, Czech Republic
36 WABCO Gmbh, Germany
37 WABCO Radbremsen Gmbh, Germany
38 WABCO Automotive Italia SRL, Italy
39 WABCO BV, Netherlands
40 WABCO Europe Holdings BV, Netherlands
41 WABCO Espana SLU, Spain
42 WABCO Automotive AB, Sweden
43 WABCO (Schweiz) Gmbh, Switzerland
44 WABCO Automotive B.V, Netherlands
45 WABCO ARAC Kontrols Sistemleri Destek VE Pazarlama Limited Sirketi, Turkey
46 WABCO Middle East and Africa FZCO, Dubai
47 WABCO IP Holdings LLC, USA
48 WABCO Automotive Products Ltd, Cayman
49 WABCO Air Compressor Holdings Inc.,USA
50 WABCO Automotive Control Systems Inc.,USA
51 WABCO Group Inc.,USA
52 WABCO Group International Inc.,USA
53 WABCO Logistics (Quingdao) Co. Ltd, China
54 WABCO North America LLC, USA
55 WABCO Expats Inc.
56 WABCO (Thailand) Limited
57 Guang Dong WABCO Fuwa Vehicle Brakes Co Limited
58 Ephicas BV, Netherlands
59 WABCO Foundation Brakes Private Limited, Chennai
60 WABCO International LLC, USA
61 WABCO Europe Holdings LLC, USA
62 Ephicas Patents BVBA;
63 WABCO France S.A.S.
64 WABCO Services S.A.S, France
65 WABCOWURTH Workshop Services GmbH
66 WABCO Testbahn GmbH, Germany
67 WABCO Holding GmbH, Germany
68 WABCO Systeme GmbH, Germany
69 WABCO Holdings B.V., Netherlands
70 WABCO Sandown B.V., Netherlands
71 WABCO CV, Netherlands
72 WABCO RUS LLC.
73 WABCO Vostok LLC, Russia
74 WABCO Centro de Distribuicao de pecas Automotives Ltda, Brazil
75 Clayton Dewandre Holdings Limited, Rotterdam, The Netherlands
76 WABCO Automotive Pensions Trustees Limited, UK
77 WABCO Automotive U.K. Limited, UK
78 WABCO Reman Solutions
79 WABCO Vehicle Control systems, Poland
80 WABCO Vehicle Control Systems, USA
3) Others Key management personnel
1 WABCO India Limited Employees’ Provident Fund Trust
Mr. P Kaniappan - Managing Director
Mr. RS Raja Gopal Sastry - Chief Financial Officer (w.e.f 31-08-2015)
Mr. M C Gokul- Company Secretary (w.e.f 30-01-2016)
Mr. T.S. Rajagopalan - Chief Financial Officer (resigned w.e.f 31-08-2015)
Mr. Sivalai Senthilnathan- Company Secretary (resigned w.e.f 30-01-2016)
Mr. Sean Deason - Non-executive Director
Ms. Lisa J Brown - Non-executive Director
Mr. Jorge Solis - Non-executive Director
Mr. Shivaram Narayanaswami - Non-executive Director
Mr. M Lakshminarayan - Chairman and independendent Director
Dr. Lakshmi Venu- Independent Director (w.e.f. 19-05-2016)
Mr. Narayan K Seshadri- Independent Director
Mr. D E Udwadia - Independent Director (resigned w.e.f 01-04-2016)
The Company primarily operates in the automotive segment. The automotive segment includes all activities related to development, design and manufacture of products. The board of directors of the Company, which has been identified as being the chief operating decision maker (CODM), evaluates the Company’s performance, allocate resources based on the analysis of the various performance indicator of the Company as a single unit. Therefore, there is no reportable segment for the Company as per the requirement of IND AS 108 “Operating Segments”.
* Non-current assets for this purpose consists of property, plant and equipment, intangible assets, capital work in progress and other non current assets.
Information about major customer
Revenue from three customers contributing more than 10% of sale of products amounted to INR 115,221 lakhs (March 31, 2016 : INR 96,778 lakhs), arising from sales of products and rendering of services.
9. FAIR VALUE
The carrying value of all other financial assets & liabilities approximate fair value.
The following table provides the fair value measurement hierarchy of the Company’s assets and liabilities:
Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2017:
The Company’s principal financial liabilities, include trade and other payables. The Company has various financial assets such as trade receivables and cash and short-term deposits, which arise directly from its operations. The Company also holds FVTPL investments.
The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks. The Company’s senior management ensures that the company’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Company’s policies and risk objectives. It is the Company’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors reviews and agrees policies for managing each of these risks, which are summarised below.
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk. Financial instruments affected by market risk include loans, deposits and FVTPL investments.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates.
The Company has no borrowings and hence not exposed to interest rate risk.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company’s exposure to the risk of changes in foreign exchange rates relates primarily to the Company’s operating activities (when revenue or expense is denominated in a foreign currency).
The majority of the Company’s revenue and expenses are in Indian Rupees, with the remainder denominated in US Dollars. The Company has exports revenue and import purchases in foreign currency which act as a natural hedge and the management believes the currency risk is mitigated on account of such natural hedge and does not further hedge its currency risk.
As variations in foreign currency exchange rates are mitigated and the remaining risk, if any, is not expected to have a significant impact on the results of operations, a sensitivity analysis is not presented.
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions, foreign exchange transactions and other financial instruments.
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure funds are available for use as per requirements.
The Company’s prime source of liquidity is cash and cash equivalents and the cash generated from operations. The Company has no outstanding bank borrowings. The Company invests its surplus funds in bank, fixed deposit and mutual funds, which carry minimal mark to market risks.
The table below summarises the maturity profile of the Company’s financial liabilities based on contractual undiscounted payments.
10. CAPITAL MANAGEMENT
For the purpose of the Company’s capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity shareholders. The primary objective of the Company’s capital management is to maximise the shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares.
In order to achieve this overall objective, the Company’s capital management, amongst other things, aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowings that define capital structure requirements. Breaches in meeting the financial covenants would permit the bank to immediately call loans and borrowings. There have been no breaches in the financial covenants of any interest-bearing loans and borrowing in the current period.
No changes were made in the objectives, policies or processes for managing capital during the years ended March 31, 2017 and March 31, 2016.
These financial statements, for the year ended March 31, 2017, are the first the Company has prepared in accordance with Ind AS. For periods up to and including the year ended March 31, 2016, the Company prepared its financial statements in accordance with accounting standards notified under section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2015 (Indian GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ended on March 31, 2017, together with the comparative period data as at and for the year ended March 31, 2016, as described in the summary of significant accounting policies. In preparing these financial statements, the Company’s opening balance sheet was prepared as at April 1, 2015, the Company’s date of transition to Ind AS. This note explains the principal adjustments made by the Company in restating its Indian GAAP financial statements, including the balance sheet as at April 1, 2015 and the financial statements as at and for the year ended March 31, 2016.
Ind AS 101 allows first-time adopters certain exemptions from the retrospective application of certain requirements under Ind AS. The Company has applied the following exemptions:
Deemed cost for property, plant and equipment and intangible assets
Since there is no change in the functional currency, the Company has elected to continue with the carrying value as at April 1, 2015 for all of its investment property, intangibles and property plant & equipment as recognised in its Previous GAAP financial as deemed cost at the transition date.
Ind-AS 102 Share-based Payment has not been applied to equity instruments in employee stock options that were exercised before April 1, 2015 and which are vested but not exercised as on April 1, 2015.
Mandatory exceptions Estimates
The estimates at April 1, 2015 and at March 31, 2016 are consistent with those made for the same dates in accordance with Indian GAAP (after adjustments to reflect any differences in accounting policies) apart from Impairment of financial assets based on expected credit loss model where application of Indian GAAP did not require estimation.
The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at April 1, 2015 (i.e. the date of transition to Ind-AS) and as of March 31, 2016.
Effect of the Transition to Ind AS
Reconciliations of the Company’s balance sheets prepared under Indian GAAP and Ind AS as of April 1, 2015 and March 31, 2016 are also presented in Note 40 & 41. Reconciliations of the Company’s income statements for the year ended March 31, 2016 prepared in accordance with Indian GAAP and Ind AS in Note 42.
A. Property, plant and equipments
Under Indian GAAP, leasehold land were not required to be evaluated as operating or finance lease and accordingly, the Company had classified the land taken on lease from Adityapur Industrial Area Development Authority, Adityapur, Jamshedpur as part of Property, Plan and Equipment (PPE). However, under Ind AS, leasehold land has been classified as operating lease. Accordingly, the Company has reclassified the amount paid for the leasehold land from PPE to Other current assets and Other non-current assets. Also, the Company has reclassified the amortization on leasehold land from Depreciation and amortization expense to Rent under Other expenses.
B. Security Deposits
Under Indian GAAP, interest free lease security deposits (that are refundable in cash on completion of the lease term) are recorded at their transaction value. Under Ind AS, all financial assets are required to be recognised at fair value. Accordingly, the Company has fair valued these security deposits under Ind AS. Difference between the fair value and transaction value of the security deposit has been recognised as prepaid rent. The prepaid rent is amortised over the period of the deposit.
C. Investments Carried at fair value through P & L
Under Indian GAAP, the Company accounted for investments in quoted mutual funds as investment measured at the lower of cost or market value. Under Ind AS, the Company has measured such investments at fair value. The difference between fair value and Indian GAAP carrying amonut has been recognized in retained earnings.
D. Government Grant
Under Indian GAAP, the Company recognised the capital investment subsidy as in the nature of promoter’s contribution and treated it as capital reserve. Under Ind AS, the grant set up as deferred income is recognised in profit or loss on a systematic basis over the useful life of the asset.
E. Deferred tax
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requires entities to account for deferred taxes using the balance sheet approach, which focuses on temporary differences between the carrying amount of an asset or liability in the balance sheet and its tax base. The application of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP In addition, the various transitional adjustments lead to temporary differences. According to the accounting policies, the Company has to account for such differences. Deferred tax adjustments are recognised in correlation to the underlying transaction either in retained earnings or a separate component of equity. On the date of transition, the net impact on deferred tax liabilities is of INR 9.83 lakhs (March, 31 2016: INR 2.23 lakhs).
F. Proposed Dividend
In the case of the Company, the declaration of dividend occurs after period end. Therefore, the liability of INR 421.70 lakhs for the year ended on March 31, 2015 recorded for dividend has been derecognised against retained earnings on April 1, 2015 and recognised in the year of payment i.e. 2015-2016.
G. Sale of goods
Under Indian GAAP, sale of goods was presented as net of excise duty. However, under Ind AS, sale of goods includes excise duty. Excise duty on sale of goods is separately presented on the face of statement of profit and loss. Thus sale of goods under Ind AS has increased by INR 16,708.01 lakhs with a corresponding increase in other expense.
H. Other Comprehensive Income
Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses, and the return on plan assets excluding amounts included in net interest on the net defined benefit liability] are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI. Thus the employee benefit cost is reduced by INR 95.12 lakhs for the year 2015-16 and Remeasurements gains/ losses on defined benefit plans has been recognized in the OCI net of tax.
I. Share based Payment cost
Under Indian GAAP, there was no requirement to account for employee stock options scheme operated by the parent companies. The scheme of the ultimate holding Company, Wabco Holdings Inc., USA, 18,292 options (net of cancelled / lapsed) of the ultimate holding Company have been granted to some of the employees of the Company as at March 31, 2017. Based on valuation obtained by the Wabco Holdings Inc., USA, being the administrator of the Scheme, an amount of INR 239.63 Lakhs (March 31, 2016 INR 205.33 Lakhs) has been recorded as costs to the Company with respect to the scheme. Since there is no final payout by the Company, for the exercised options / units, an equivalent credit has been transferred to the reserves.
Statement of cash flows
The transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
11. DETAILS OF SPECIFIED BANK NOTES HELD AND TRANSACTED DURING THE PERIOD NOVEMBER 8, 2016 TO DECEMBER 30, 2016
During the year, the Company had specified bank notes or other denomination note as defined in the MCA notification G.S.R. 308(E) dated March 31, 2017 on the details of Specified Bank Notes (SBN) held and transacted during the period from November 8, 2016 to December 30 2016, the SBNs and other notes as per the notification is given below:
* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning provided in the notification of the Government of India, in the Ministry of Finance, Department of Economic Affairs number S.O. 3407(E), dated the 8th November, 2016.
12. PREVIOUS YEAR FIGURES
Previous year’s figures have been regrouped and reclassified where necessary to conform to this year’s classification.