V-Guard Industries

1.  Particulars of Security provided for the loans are as under: -
 
 a) Term loan of Rs.370 lakhs from Dhanalakshmi Bank Ltd. is secured by
 hypothecation by way of first charge on the plant and machinery, tools
 and accessories in respect of specific assets financed by the bank,
 namely (a) 2 x 230 KW Wind Mills situated at Dharapuram Taluk, Erode,
 Tamil Nadu, (b) Machinery and equipment in respect of Solar Water
 Heater Unit at K.G Chavadi, Coimbatore and (c) Office cum godown
 building at Mansoorabad Village, Renga Reddy District, Andhra Pradesh
 and Equitable Mortgage of 4 acres of land relating to the Wind Mills,
 at Erode, Tamil Nadu and 2091.5 sq. meters of land at Mansoorabad
 Village in Andhra Pradesh. The loans are further secured by personal
 guarantees of Shri Kochouseph Chittilappilly, Managing Director and
 Smt. Sheela Kochouseph.
 
 b) Term loan of Rs.100 lakhs from Dhanalakshmi Bank Ltd. is secured by
 equitable mortgage of 106.424 cents of land at Edappally South Village,
 Kanayannur Taluk, Vennala Desom, together with godown with an area of
 1578.40 sq meters. The loan is further secured by personal guarantees
 of Sri. Kochouseph Chittilappilly, Managing Director and Smt. Sheela
 Kochouseph.
 
 c) Term loan of Rs. 1,000 lakhs from State Bank of India is secured by
 (a) charge over the registered Trade Mark V-GUARD and (b) exclusive
 charge over the fixed assets, land and buildings, namely (i) Plant and
 Machinery in the trading division having establishments at Ernakulam,
 Bangalore, Coimbatore and Hyderabad, (ii) Factory building and plant
 and machinery at Solar Water Heater Division, (iii) 47.737 cents of
 land at Sastha Temple Road, Kaloor, 113.293 cents of land at High
 School Road, Vennala, 1306 cents of land at K.G Chavadi, Coimbatore,
 12.52 cents of land at Mettupalayam Road, Coimbatore. The loan is
 further secured by personal guarantees of Sri. Kochouseph
 Chittilappilly, Managing Director and Smt. Sheela Kochouseph.
 
 d) Term Loan of Rs.800 lakhs from State Bank of India is secured by (a)
 charge over the assets acquired / constructed out of bank finance,
 namely corporate office building at Vennala, (b) extension of equitable
 mortgage over 47.737 cents of land at Sastha Temple Road, Kaloor,
 113.293 cents of land at High School Road, Vennala, 1306 cents of land
 at K.G Chavadi, Coimbatore, 12.52 cents of land at Mettupalayam Road,
 Coimbatore, and (c) extension of charge over Plant and Machinery in
 trading Division and Solar Division and factory building of Solar Water
 Heater Division. The loan is further secured by personal guarantees of
 Sri. Kochouseph Chittilappilly, Managing Director and Smt. Sheela
 Kochouseph.
 
 e) Medium term loans from Sundaram Finance Ltd., Dhanalakshmi Bank Ltd.
 and HDFC Bank Ltd. are secured by hypothecation of vehicles financed by
 the lender.
 
 f)
 
 i. Working Capital Loan from State Bank of India and Standard Chartered
 Bank are secured by hypothecation by way of first charge on all current
 assets of the company, both present and future, including stock of
 goods, book debts and all other movable assets including document of
 title to goods on pari-passu basis and 3rd pari-passu charge on all
 fixed assets of the company including immovable properties. The loan is
 further secured by personal guarantees of Shri. Kochouseph
 Chittilappilly, Managing Director and Smt. Sheela Kochouseph.
 
 ii. Working Capital Loan from Dhanalakshmi Bank Ltd, is secured by way
 of first charge on all current assets of the company, both present and
 future, including stock of goods, book debts and all other movable
 assets including document of title to goods on pari-passu basis and 3rd
 pari-passu charge on all fixed assets of the company including
 immovable properties.
 
 iii. Working Capital Loan from HDFC Bank Ltd., is secured by way of
 first charge on all current assets of the company, both present and
 future, including stock of goods, book debts and all other movable
 assets including document of title to goods on pari-passu basis. The
 loan is further secured by personal guarantees of Shri. Kochouseph
 Chittilappilly, Managing Director and Smt. Sheela Kochouseph.
 
 2. Company has availed supplier bill-discounting facilities of Rs.500
 lakhs from Small Industries Development Bank of India (SIDBI), Rs.750
 lakhs from State Bank of India and Rs.400 lakhs from Standard Chartered
 Bank and Rs. 500 Lakhs from Dhanalakshmi Bank Ltd. The security details
 of these facilities are as follows:
 
 a) The limit with SIDBI is secured by a second charge by way of
 hypothecation of all the movable assets including movable plant,
 machinery, spares, tools, accessories, equipments, computers etc., both
 present and future and also by personal guarantee of Shri. Kochouseph
 Chittilappilly, Managing Director of the Company.
 
 b) The limit with State bank of India, Standard Chartered Bank and
 Dhanalakshmi Bank Ltd are secured by way of extension of securities
 provided for working capital loans.
 
 3.  Contingent liabilities:
 
                                       2008-09             2007-08
 Particulars                                      
                                    (Rs. in lakhs)      (Rs. in lakhs)
 
 a) Sales tax matters under dispute     97.49              103.40
 
 b) Open letters of credit for import 
 purchase                               65.22              174.39
 
 4. Estimated amount of contracts remaining to be executed on capital
 amount and not provided for (net of advances) Rs.576.10 lakhs.
 (Previous year: Rs.4,841.66 lakhs).
 
 5. Notes on Cash Flow Statement:
 
 a) The Cash Flow Statement has been prepared using the indirect
 method specified in Accounting Standard - 3 Cash Flow Statements
 notified in Companies (Accounting Standards) Rules, 2006.
 
 b) Cash and Cash Equivalents include fixed deposits of Rs.59.45 lakhs
 (Previous Year: Rs. 54.47 lakhs), given as security against guarantees
 and Letter of credit issued by
 State Bank of India and Dhanalakshmi Bank Ltd., and unclaimed dividend
 account of Rs.5.36 lakhs, not available for use by the Company.
 
 6. Interest amounting to Rs.36.97 lakhs (Previous year - Rs.37.29
 lakhs) on funds borrowed for construction of corporate office building
 was capitalized during the year and is included in Capital
 Work-in-Progress.
 
 7.  Employee Benefits:
 
 The Company has provided the following benefits to its employees during
 the year:
 
 I. Defined Contribution Plan - Provident Fund:
 
 During the year, the Company has recognised the employers contribution
 to Employees Provident Fund Organisation amounting to Rs.7,752,984/-
 (Previous year Rs.6,485,585/-) as part of Employee Costs in Schedule 16
 of the financial statements.
 
 8. Segment disclosures:
 
 a) Business segments have been identified as per Accounting Standard 17
 on Segment Reporting taking into account the product portfolio,
 internal reports, organisation structure etc.
 
 b) The Company has considered business segment as the primary segment
 for the purpose of disclosure.
 
 d) The Segment revenues, results, assets and liabilities include the
 respective amounts identifiable to each of the segment and amounts
 allocated on a reasonable basis.
 
 9. The amount of unclaimed dividends lying in separate bank accounts
 as at the Balance Sheet date is Rs. 5.36 lakhs (Previous year Rs.
 nil.). There is no amount due and outstanding as at the Balance Sheet
 date to be credited to the Investor Education and Protection Fund.
 
 10.  Previous years figures have been re-grouped/re-classified
 wherever necessary to conform to classification for the year.