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received few queries after declaration of quarterly results.
These queries are summarized as under and explanation is provided
for investors.
Increase in staff cost
Warranty
Segmented Profits
Income from Operations
Other Income
Interest Cost
Tax Provision
Export Sales
Sale of Shares of GG Dandekar
Other Expenditure
Staff Cost:
Company executed wage agreement towards end of last fiscal
year ending March 31, 2004. The wage agreement provides for
increased wages, and also improved productivity goals. As
new wage agreement is effective from April 01, 2004 for three
years, the effect of wage increase is increased staff cost
in quarter results. There is no significant change in the
number of employees since end of last fiscal on March 31,
2004.
Warranty :
Warranty expenses for the sale in the quarter have been provided
for in accordance with Accounting Standards 29 on Provisions,
Contingent liabilities and Contingent assets as mandatory
from April 01, 2004. This provision is in addition to the
warranty expenses incurred and booked as expense in the quarter
on sales in previous accounting periods. Thus, in current
fiscal the practice of booking actual expenses as incurred,
and also providing for warranty against sales in the accounting
period for which results are reported will continue. From
next fiscal, we will be booking expenses against the provisions
that are made in year ending March 31, 2004 while continuing
the provisioning as explained.
Segmented Profits:
The segmental profits are reported by deducting provisions
made as mentioned above in case of Warranty.
Income from Operations:
The break-up of this income will be provided in the Annual
Report for the year ending March 31, 2005. In this quarter,
the items of income are the same as those reported in Annual
Report for the last year ending March 31, 2004, and these
are lease rentals, export incentives, service and installation
charges, sales tax refunds and other miscellaneous receipts.
Other Income:
Other Income is mainly dividend received by the Company.
Interest Cost:
The interest cost is only on working capital loans, as Company
has no term loans.
Tax Provision:
Tax provision is lower due to higher dividend income received
in this quarter. Export income does not impact tax liability
as export income is now taxable.
Export Sales:
Export sales in the quarter are Rs. 249 million as compared
to Rs. 88 million in same quarter in previous year.
Sale of shares:
Company has not sold any shares of G. G. Dandekar, or any
other shares held as part of Company's Treasury Function.
Other Expenditure:
In the first quarter of last year, the sales income includes
Rs. 239 million on account of trade of Coke as compared no
sale of Coke in this quarter. Thus, Other Expenditure as percentage
of Sales Income after adjusting for trade in Coke is slightly
lower in this quarter as compared to same quarter in previous
year.
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