Annual Report-FY 2012-13 - Timex Group India

Additional disclosures relating to certain provisions (as per Accounting Standard 29)Unearned margin Warranty Sales return Litigations31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March2013 2012 2013 2012 2013 2012 2013 2012At the commencement - - 69 96 216 182 43 32of the yearProvision created 183 - 109 157 - 34 - 11during the yearProvision utilised - - (137) (184) (27) - - -during the yearAt the end of the year 183 - 41 69 189 216 43 43Provision for warrantiesA provision is estimated for expected warranty claims in respect of products sold during the year on the basis of a technicalevaluation and past experience regarding failure trends of products and costs of rectification or replacement. It isexpected that most of this cost will be incurred over the next one year as per warranty terms.Provision for sales returnsProvision for sales returns has been created for estimated loss of margin on expected sales returns in future period againstproducts sold during the year. The provision has been created based on management’s estimates and past trends.Provision for unearned marginProvision for unearned margin relates to certain sales where property in the goods has passed but a significant risk ofownership has not passed to the counterparty by the date of the balance sheet.Provision for litigationsThis represents provisions made for probable liabilities/ claims arising out of pending disputes/litigations with variousregulatory authorities (in respect of excise duty, sales tax and similar matters). Above provisions are affected by numerousuncertainties and management has taken all efforts to make a best estimate. Timing of outflow of resources willdepend upon timing of decision of cases.31 March 2013 31 March 20126. Short-term borrowingsLoan repayable on demand- Cash credit from bank (unsecured)* 27 865Working capital loan from bank (unsecured) ** 1,000 -1,027 865* Cash credit facilities from bank carry interest ranging between 10%-13% p.a., computed on a monthly basis onactual amount utilised, and are repayable on demand.Timex Group Luxury Watches BV, the holding company, has provided a standby letter of credit amounting to Rs.3,380 lakhs (previous year Rs. 1,780 lakhs) to the bankers of the Company as a guarantee for use of cash credit andoverdraft facilities.** Working capital loan carries interest @ 10% p.a. The loan is repayable on 3 April 2013.31 March 2013 31 March 20127. Trade payablesTrade payables 6,520 5,9906,520 5,990For dues to micro and small suppliers, refer note 3838