NOTE 1 - SHARE CAPITAL
b) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 1/- per share. Each holder of equity shares is entitled to one vote
per share. The dividend proposed by the board of directors is subject
to the approval of the shareholders in the ensuing annual general
NOTE 2 - LONG TERM BORROWINGS
1. Indian rupee loans from banks include:
(a) Rupee term loans of Rs. 14938.47 lacs (previous year Rs. 16414.35
lacs) are secured by first pari-passu charge over the entire movable
and immovable fixed assets of the Company, both present and future,
except the assets exclusively charged to Standard Chartered Bank for
Rs. nil (previous year Rs. 388.89 lacs). Loans to the extent of Rs.
2325.00 lacs (previous year Rs. 1995.00 lacs) are further secured by
way of second charge on current assets, on pari passu basis. The rate
of interest on aforesaid loans are linked to the specific banks'' Prime
Lending Rate (PLR).
(b) Rupees term loan of Rs. 1750.00 lacs (previous year Rs. 3000.00
lacs) from State Bank of India is secured by way of first pari-passu
charge on current assets and second parri-passu charge on movable and
immovable fixed assets of the Company. The loan is further secured by
way of exclusive mortgage on land situated at Plot No. 19, Dharuhera
Industrial Area, Phase II, District Rewari (Haryana). The rate of
interest on aforesaid loan is linked to bank''s Prime Lending Rate
(c) Rupee term Loan of Rs. 114.93 lacs (previous year Rs. 63.30 lacs)
from Allahabad Bank, secured by way of exclusive charge on the
vechicles financed out of the said term loan. The rate of interest on
aforesaid loan is linked to bank''s Prime Lending Rate (PLR).
2. Indian rupee loan from NBFC include :
Term loan of Rs. 680.52 lacs (previous year Rs. 874.95 lacs) is secured
by way of second charge on entire assets of the Company situated at
Sanand, Gujarat to be purchased or constructed out of said term loan.
The rate of interest on aforesaid loan is linked to NBFC''s Prime
Lending Rate (PLR).
3. Foreign currency loans from banks include :
Foreign currency loan of USD 4 million equivalent to Rs. 2046.00 lacs
(previous year Rs. nil) from Standard Chartered Bank is secured by
first charge on movable and immovable fixed assets except assets
exclusively charged to other banks. The loan carries interest @ LIBOR
Foreign currency loan of USD 5 million equivalent to Rs. 2512.50 lacs
(previous year Rs. nil) from Standard Chartered Bank on fully hedged
basis is secured by first charge on movable and immovable fixed assets
except assets exclusively charged to other banks. The loan carries
interest @ 10.28% p.a.
The estimates of future salary increases, considered in actuarial
valuation, takes into account inflation, seniority, promotions and
other relevant factors including supply and demand in the employment
market. The above information is certified by the actuarial valuer.
The discount rate is based on the prevailing market yield of Govt.
bonds as at the date of valuation.
Expected return on asset - The expected return on assets over the
accounting period is based on an assumed rate of return.
iv) Investment details of plan assets :
The gratuity trust has taken up a group policy with Life Insurance
Corporation of India.
NOTE 3 - LEASES
(a) Operating lease: Company as lessee
The Company has taken various residential, office premises and vehicles
under operating lease on lease and license agreements. These are
cancellable; have a term of 11 months and five years. The agreements
for premises cannot be terminated by either party before the expiry of
one year. Agreements for leasing of vehicles can generally be
terminated early by payment of nominal fees. The lease arrangements are
generally renewable on the expiry of lease period subject to mutual
agreement. Lease payments are recognised in the statement of profit and
loss in the year incurred.
NOTE 4 - SEGMENT REPORTING
The Company is primarily engaged in the business of auto components of
four wheelers, which are governed by the same set of risk and returns,
and hence there is only one primary segment. The Company operates
mainly to the needs of domestic market and export turnover is less than
ten percent of the total turnover and hence there are no reportable
secondary geographical segments.
NOTE 5 - CONTINGENT LIABILITIES
Current year Previous year
(Rs. / Lacs) (Rs. / Lacs)
I) Claims against the
Company not acknowledged
as debt on account of :
a) Excise duty 1981.78 1322.54
b) Service tax 267.06 341.88
c) Local Area Development
Tax 435.72 209.16
d) Income tax - matters
in appeal 30.53 56.81
e) Warranties/customers - 67.25
II) Customer bills discounted 1406.00 910.00
III) Letter of credit opened
by banks for purchase of
inventory /capital goods 1243.31 867.00
IV) The Company has filed a writ petition with the Hon''ble High Court
of Calcutta for injunction restraining the Govt. of West Bengal for
acting in terms of the Singur Land Rehabilitation And Development Act,
2011, which is being heard by a Divisional Bench alongwith the appeals
of Tata Motors Ltd. and their other vendors. Pending finalization of
the case, the Company has not made any provision for the impairment of
value of land.
V) During the year under audit, search and seizure operation were
carried out by Revenue Authorities on 29th November, 2011. However
neither any unexplained money, bullion or valuables were found nor
there was any seizure. Additional tax liability, if any, shall be
accounted for on creation of demand against the Company.
NOTE 6 - DEFERRAL / CAPITALIZATION OF EXCHANGE DIFFERENCES
The Ministry of Corporate Affairs (MCA) has issued the amendment dated
29th December, 2011 to AS 11. The effects of changes in foreign
exchange rates, to allow companies deferral / capitalization of
exchange differences arising on long- term foreign currency monetary
In accordance with the amendment to AS 11, the Company has capitalized
the exchange loss to depreciable fixed assets arising on long-term
foreign currency loan, amounting to Rs.192.74 lacs (previous year nil)
for the year ended 31st March, 2012. The Company does not have any
other long-term foreign currency monetary items. Hence, the amount of
exchange loss deferred in the Foreign currency monetary item
translation difference account is nil.
NOTE 7 - The amount of excise duty disclosed as deduction from
turnover is the total excise duty for the year except excise duty
related to difference between the closing stock and opening stock and
excise duty paid but not recovered, which has been disclosed as excise
duty expense in Changes in inventories of finished goods,
work-in-progress and stock- in-trade-excise duty on increase/(decrease)
in finishedgoods under note 20 annexed and forming part of statement
of profit and loss.
NOTE 8 - Raw material and components consumed are net of Rs. 2559.19
lacs (previous year Rs. 3036.74 lacs) being the value of dispatches
made to vendors for job work.
NOTE 9 - A provision is recognized for expected warranty claims on
products sold during the last two to three years, based on past
experience of the level of returns. It is expected that significant
portion of these cost will be incurred in the next financial year and
all will have been incurred within three years after reporting date.
Assumptions used to calculate the provision for warranties were based
on current sales level and current information available about returns
based on the three year warranty period for products sold. The table
below gives information about movement in warranty provisions.
NOTE 10 - PREVIOUS YEAR FIGURES : The Company was using pre-revised
Schedule VI to the Companies Act, 1956, till the year ended 31st March,
2011, for preparation and presentation of its financial statements.
During the year ended 31st March, 2012, the revised Schedule VI
notified under the Companies Act, 1956, has become applicable to the
Company. The Company has re-classified previous year figures to conform
to this year''s classification. The adoption of revised Schedule VI does
not impact recognition and measurement principles followed for
preparation of financial statements. However, it significantly impacts
presentation and disclosures made in the financial statements,
particularly presentation of balance sheet.