Sona Koyo Steering Systems

Current Year       Previous Year
                                      Rs./Lacs            Rs./Lacs
 
 1.  Capital Commitment :
 Estimated amount of contracts remaining  1875.78          3392.26
 to be executed on capital account not 
 provided for
 
 2.  Contingent Liabilities :
 
 I.  Claims against the Company not acknowledged as debt on account of
 
 a) Excise Duty                         683.72              582.17
 b) Service Tax                          76.21               82.83
 c) Income Tax - Matters in Appeal      102.16              163.09
 
 II.  Customer Bills Discounted        1925.00             3919.41
 
 III.  Letter of credit opened by 
      banks for purchase of
      inventory/capital goods           184.92                0.00
 
 3.  Miscellaneous Expenditure :
 
 Miscellaneous expenditure consists of payments made in earlier years
 towards technical know how, new product development expenses and new
 project expenses which are amortised on a straight line over a period
 not exceeding 6 years. Accordingly, Rs. 302.15 Lacs (Previous Year
 Rs.149.10 Lacs) for the current year has been recognised in Profit &
 Loss Account.
 
 4.  Purchases are net of Rs. 2093.10 Lacs (Previous Year Rs. 2530.19
 Lacs) being the value of dispatches made to vendors for job work.
 
 5.  The amount of Excise Duty and other Taxes recovered on sales is
 reduced from income and comprise Sales Tax of Rs. 2671.43 Lacs
 (Previous Year Rs. 2902.72 Lacs) and Excise Duty of Rs. 9016.83 Lacs
 (Previous Year Rs. 11469.55 Lacs).
 
 6. In terms of the resolution passed by the Company on 22nd November
 2006, 70,40,216 Warrants were alloted to the Promoter/Promoter Group(s)
 on 7th December 2006. Out of these convertible warrants, 46,16,535
 Warrants were eligible for conversion at the option of the Warrant
 holders, into Equity Shares of the Company at a price of Rs. 67.10 per
 Warrant within a period from 1st April, 2007 to 30th April 2007 and
 24,23,681 Warrants at same terms and conditions from 1st April, 2008 to
 30th April 2008. One Optionally Convertible Warrant was to be converted
 into one Equity Share of Rs. 2/- each at a premium of Rs 65.10 per
 Equity Share. During the period the option has been exercised by
 promoters and 24,23,681 Warrants have been converted into Equity Shares
 as per the terms and conditions laid down.
 
 7. 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.
 
 8.  Operating Lease
 
 The Company has taken various residential, vehicle and office premises
 under operating lease or leave and licence 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 Profit & Loss Account
 in the year incurred.
 
 The Company has taken cars for its employees under operating lease
 agreement. An amount of Rs 32.44 Lacs (Previous Year Rs. 33.50 Lacs) is
 recognised as lease expenses in the Profit & Loss Account for the year
 ended March 31, 2009. The future lease payment under leases are:
 
 (i) upto 1 year Rs. 43.74 Lacs (Previous Year Rs. 43.98 Lacs)
 
 (ii) between 1 to 5 years Rs. 58.19 Lacs (Previous Year Rs. 81.29 Lacs)
 
 21.  The Company was in the process of construction of a Plant at
 Singur in the state of West Bengal for supply of auto parts to Tata
 Motors Limited primarily for use in the manufacture of its new small
 car ‘Nano’. In view of continued instability at Singur, Tata Motors
 Limited has suspended the work at the location. As a result of this,
 the Management of the Company has also taken a decision to suspend the
 construction for the time being.
 
 The Company continues to hold the title to land and lease rent is being
 paid on time to the Government. A decision regarding the potential use
 of land and other infrastructure already created at the site is under
 consideration of the Management. Pending a detailed evaluation of
 options relating to the facility, the land and capital work in progress
 continues to be stated at the carrying cost.
 
 9.  Raw Material and Components Consumed includes purchase of traded
 goods of Rs 215.20 Lacs (Previous Year Rs. 273.63 Lacs).
 
 10.  Previous year figures have been regrouped/recast, wherever
 necessary.