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Notes to Accounts of Alfa Transformers Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES & COMMITMENTS (Rs. in Lakhs)

SR Particulars 2014-15 2013-14 No

A. Contigent Liabilities

i. Un expired Letters of Credit 245.58 319.57

ii. Counter Guarantees given by Company for Bank Guarantees issued 519.46 377.33

iii. Claims against the Company not acknowledged as Debt

a) Income Tax 17.68 17.62

b) Sales Tax (*) 26.45 30.54

c) Entry Tax (#) 89.85 91.01

d) Excise - 1.06

TOTAL 899.02 837.13

* Amount paid under protest against the demands amounting to Rs. 19.46 lakhs (Previous Year- Rs.20.66 lakhs) is shown under"Long-term Loans and Advances" under Note No. 12

# Amount paid under protest against the demands amounting to Rs. 4.90 lakhs (Previous year- Rs. 4.20 lakhs )is shown under "Long Term Loans and Advances" under Note no.12

2. Disclosure relating to Gratuity, as certified by Life Insurance Corporation of India, (Pension and Group Scheme Department) for the year ended 31st March, 2015 have been made as below:

i) In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees.

ii) The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under the plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the Company.

iii) Annual premium payable to LIC amounting to Rs. 0.10 lakhs (Previous Year- Rs. 1.00lakhs) have been shown under "Employee Benefit Expenses" in Schedule-22.

3. Trade Receivables, deposits and advance to parties include some old balances pending reconciliation/ adjustment/ confirmation.

4. Advances received for supply of Transformers for Rs. 33.35 lakhs has been written back in view of absence of response by the customer since 2011. As and when the Customer intend to take the transformer, the Company will supply after receipt of differential price at prevailing market rate and overall cost will be debited to Statement of Profit & Loss as an event of that year.

4. In terms of Accounting Policy Note No. 25 (12), the Company assessed the Cash Generating Unit for Impairment Test using a discount rate of 8% and did not find any asset that requires a provision for impairment.

5. Operating Cycle is considered to be twelve months period.

6. Previous Year's Figures have been regrouped and re arranged wherever necessary.


Mar 31, 2014

The Term Loan availed from Axis Bank Limited is secured by :

i. Exclusive charge by way of hypothecation of entire movable fixed assets of the Company at its Vadodara Unit (both present and future).

ii. Equitable mortgage over lease hold right of the industrial land and factory building constructed/ to be constructed located at Plot No. 1046 to 1048. GIDC Estate, Waghodia, Vadodara, Gujarat. iii. Personal Guarantees given by three Directors including Managing Director.

2. DEFERRED TAX LIABILITY (Net)

The Company has been recognising in the financial statements the deferred tax assets/ liabilities, in accordance with Accounting Standard 22 " Accounting of Taxes on Income" issued by the Institute of Chartered Accountants of India. During the year, the Company has charged/(credited) to the Statement of Profit and Loss with Deferred Tax Asset (Net) of Rs NIL [ Previous year- Nil ] by restricting Deferred Tax Assets to Deferred Tax Liability figure making Deferred Tax element recognition at NIL during the year.

3. RELATED PARTY DISCLOSURES

Name

a) Related Companies

Industrial Designs & Services Ltd

Oricon Industries Limited

Galaxy Medicare Limited

Galaxy Medicare Limited

Phoneix Surgicare (P) Ltd

(wholly owned subsidary Company)

Alfa Electricals & Co

D.K.Das & Sons (HUF)

4. CONTINGENT LIABILITIES & COMMITMENTS ( Rs. in Lakhs )

SR No Particulars 2013 - 14 2012 - 13

A. Contigent Liabilities

i. Un expired Letters of Credit 319.57 223.66

ii. Counter Guarantees for Bank Guarantees issued 377.33 261.39

iii. Claims against the Company not acknowledged as Debt

a) Income Tax 17.62 17.62

b) Sales Ta x (*) 30.54 30.54

c) Entry Tax (#) 91.01 91.01

d) Excise 1.06 1.06

837.13 625.29

B. Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for. — —

TOTAL 837.13 625.29

* Amount paid under protest against the demands amounting to Rs. 20.66 lakhs is shown under "Long-term Loans and Advances" under Note No.12

# Amount paid under protest against the demands amounting to Rs.4.20 lakhs which is shown under "Long Term Loans and Advances" under Note no.12

5. SEGMENT REPORTING :

The Company is mainly engaged in only one product i.e Transformer, which is considered the Primary reportable business segment as per Accounting standard (AS-17) "Segment reporting" issued by the Institute of Chartered Accountants of India. Business outside India and within India are considered to be Secondary Segment based on geographical segmentation. Details of expenses, assets and liabities of the respective segments have not been ascertained.

6. Disclosure relating to Gratuity, as certified by Life Insurance Corporation of India, (Pension and Group Scheme Department) for the year ended 31st March, 2014 have been made as below :

i) In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees.

ii) The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under the plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the Company.

iii) Annual premium payable to LIC amounting to Rs. 1.00 lakhs (Previous Year- Rs. 1.91 lakhs) have been shown under "Employee Benefit Expenses" in Schedule-22.

7. Capital Work in Progress of Rs.6.00 lakhs (Previous Year- Rs. 8.04 lakhs ) disclosed under Note No. -10 includes Rs.Nil (Previous Year - Nil ) being the borrowing cost/ Up-front Charges on Bank Borrowings for the Qualifying Assets in line with Accounting Standard 16 issued by The Institute of Chartered Accountants of India.

8. Trade Receivables, deposits and advance to parties include some old balances pending reconciliation/ adjustment/ confirmation. Efforts are being made for recovery/ reconciliation of such balances and resultant effect will be accounted for in the year of such adjustments.

9 Trade Receivables, includes deduction made towards liquidated damages/penalty amounting to Rs.59.59 lakhs, for which no provision is created in line with Accounting Policy No. 10.

10 In terms of Accounting Policy Note No. 25 (12), the Company assessed the Cash Generating Unit for Impairment Test using a discount rate of 8% and did not find any asset that requires a provision for impairment.

11 Operating Cycle is considered to be twelve months period.

12 Previous Year''s Figures have been regrouped and re arranged wherever necessary.


Mar 31, 2013

1. SEGMENT REPORTING :

The Company is mainly engaged in only one product i.e Transformer, which is considered the Primary reportable business segment as per Accounting standard (AS-17) "Segment reporting" issued by the Institute of Chartered Accountants of India. Business outside India and within India are considered to be Secondary Segment based on geographical segmentation. Details of expenses, assets and liabities of the respective segments have not been ascertained.

2. Disclosure relating to Gratuity, as certified by Life Insurance Corporation of India, (Pension and Group Scheme Department) for the year ended 31st March, 2013 have been made as below :

i) In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees.

ii) The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under the plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the Company.

iii) Annual premium payable to LIC amounting to Rs. 1.91 lakhs (Previous Year- Rs. 0.08 lakhs) have been shown under "Employee Benefit Expenses" in Schedule-22.

iv) Disclosures as required by AS-15 (Revised) are made as per the details submitted by LIC which are given below :

3. Capital Work in Progress of Rs.8.04 lakhs (Previous Year- Rs. 21.73 lakhs ) disclosed under Note No. -10 includes Rs.Nil (Previous Year- Nil ) being the borrowing cost/ Up-front Charges on Bank Borrowings for the Qualifying Assets in line with Accounting Standard 16 issued by The Institute of Chartered Accountants of India.

4. Trade Receivables, deposits and advance to parties include some old balances pending reconciliation/ adjustment/ confirmation. Efforts are being made for recovery/ reconciliation of such balances and resultant effect will be accounted for in the year of such adjustments.

5 Trade Receivables, includes deduction made towards liquidated damages/penalty amounting to Rs.130.93 lakhs, for which no provision is created in line with Accounting Policy No. 10.

6 In terms of Accounting Policy Note No. 25 (12), the Company assessed the Cash Generating Unit for Impairment Test using a discount rate of 8% and did not find any asset that requires a provision for impairment.

7 Operating Cycle is considered to be twelve months period.

8 Previous Year''s Figures have been regrouped and re arranged wherever necessary.


Mar 31, 2012

1. All figures in brackets are outflow.

2. Cash flow statement has been prepared under the indirect method as set out in Accounting Standard-3 issued by the Institute of Chartered Accountants of India.

3. Previous year figures regrouped/recast where ever necessary.

NOTES:

The Term Loan availed from State Bank of India is secured by :

i. Equitable mortgage of factory land measuring 0.826 acre at revenue Plot no. 4768 (P), IDCO Plot No. 2(P) at Mancheswar Industrial Estate,Bhubaneswar with all building, sheds and structures and immovable assets constructed/ situated thereon.

ii. Hypothecation of the Plant and Machinery and other fixed assets purchased out of the Term Loan.

iii.Second Charge on Raw Materials,Stock-in-Progress, Finished goods, Consumables, Book Debts and other Liquid Assets of Unit-1 and Unit-2 situated at Bhubaneswar.

iv.Personal Guarantees are given by three Directors including Managing Director.

The Term Loan availed from Axis Bank Limited is secured by :

i. Exclusive charge by way of hypothecation of entire movable fixed assets of the Company at its Vadodara Unit (both present and future).

ii. Equitable mortgage over lease hold right of the industrial land and factory building constructed/ to be constructed located at Plot No. 1046 to 1048. GIDC Estate, Waghodia, Vadodara, Gujarat.

iii.Personal Guarantees are given by three Directors including Managing Director.

The Company has been recognising in the financial statements the deferred tax assets/ liabilities, in accordance with Accounting Standard 22 " Accounting of Taxes on Income" issued by the Institute of Chartered Accountants of India. During the year, the Company has charged/(credited) to the Profit andLoss Account with Deferred Tax Asset (Net) of Rs.19.10 lakhs [ Previous year (Rs.19.10 lakhs)] by restricting Deferred Tax Assets to Deferred Tax Liability figure making Deferred Tax element recognition at NIL.

a) The Working Capital Loan availed from State Bank of India is secured by:

i. Equitable Mortgage over factory land and building at Plot No. 3337, Mancheswar Industrial Estate, Bhubaneswar.

ii. First Charge on fixed assets of the Company at Bhubaneswar Unit-2.

iii. Equitable Mortgage of Company's Properties Flat No. A/7, Lord Gunjan Palace, Bhubaneswar.

iv. Personal Guarantees are given by three Directors including Managing Director.

b) The Working Capital Loan availed from Axis Bank Limited is secured by:

i. Exclusive charge by way of hypothecation on entire current assets (both present & future) of Vadodara Unit of the Company.

ii.Personal Guarantees are given by three Directors including Managing Director.

1. CONTINGENT LIABILITIES (Rs in Lakhs)

SR No Particulars 2011-12 2010-11

A. Contigent Liabilities - -

i. Un expired Letters of Credit 91.04 357.14

ii. Counter Guarantees for Bank Guarantees issued 282.46 394.13

iii. Claims against the Company not acknowledged as Debt

a) Income Tax 11.85 11.85

b) Sales Tax (*) 31.84 31.84

c) Entry Tax (#) 25.21 25.21

d) Excise 1.06 1.06

443.46 821.22

B. Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for. -- 1.42

TOTAL 443.46 822.64

* Advance against the demands amounting to Rs. 21.14 lakhs which has been paid under protest is shown under Short-term Loans and Advances under Note No.17.

# Advance against the demands amounting to Rs.4.60 lakhs which has been paid under protest which is shown under "Short Term Loans and Advances under Note no.17.

2. SEGMENT REPORTING :

The Company is mainly engaged in only one product i.e Transformer, which is considered the Primary reportable business segment as per Accounting standard (AS-17) "Segment reporting" issued by the Institute of Chartered Accountants of India. Business outside India and within India are considered to be Secondary Segment based on geographical segmentation. Details of expenses, assets and liabities of the respective segments have not been ascertained.

3. Disclosure relating to Gratuity, as certified by Life Insurance Corporation of India, (Pension and Group Scheme Department) for the year ended 31st March, 2012 have been made as below :

i) In accordance with applicable Indian laws, the Company provides for gratuity, a defined benefit retirement plan (Gratuity Plan) covering certain categories of employees.

ii) The Company provides the gratuity benefit through annual contributions to a fund managed by the Life Insurance Corporation of India (LIC). Under the plan, the settlement obligation remains with the Company, although the Life Insurance Corporation of India administers the plan and determines the contribution premium required to be paid by the Company.

iii) Annual premium payable to LIC amounting to Rs. 0.08 lakhs (Previous Year- Rs. 3.02 lakhs) have been shown under "Employees Cost" in Schedule-11.

iv) Disclosures as required by AS-15 (Revised) are made as per the details submitted by LIC which are given below :

4. Capital Work in Progress of Rs.21.73 lakhs (Previous Year- Rs. 120.76 lakhs ) disclosed under Note No. -10 includes Rs.Nil (Previous Year- Rs.1.78 lakhs) being the borrowing cost/ Up-front Charges on Bank Borrowings for the Qualifying Assets in line with Accounting Standard 16 issued by The Institute of Chartered Accountants of India.

5. Sundry Debtors, deposits and advance to parties include some old balances pending reconciliation/ adjustment/ confirmation. Efforts are being made for recovery/ reconciliation of such balances and resultant effect will be accounted for in the year of such adjustments.

6. In terms of Accounting Policy Note No. 25 (12), the Company assessed the Cash Generating Unit for Impairment Test using a discount rate of 7% and did not find any asset that requires a provision for impairment.

7. Operating Cycle is considered to be twelve months period.

8. Previous Year's Figures have been regrouped and re arranged wherever necessary.


Mar 31, 2010

Contingent Liabilities not provided for: Rs.In Lakhs

PARTICULARS As at As at 31.03.2010 31.03.2009

Un expired Letters of Credit 295.91 158.96

Counter Guarantees for Bank Guarantees issued 235.10 116.99

Claims against the Company not acknowledged as Debt,

(i)Income Tax 43.58 20.40

(ii)Sales Tax (*) 31.84 32.25

(iii)Entry Tax (#) 4.49 4.49

(iv)Excise 1.06 1.06

(v)ESI 0.21 0.21

Total 612.19 334.36

(*)Advance against the demands of Rs.21 .13 lakhs has been paid under protest which is shown under (Loans and Advances).

(#)Advance against the demands of Rs.2.30 lakhs has been paid under protest which is shown under (Loans and Advances).

a)Estimated amount of contracts remaining to be executed on capital account and not provided for Rs 8,12,036/- (net of advances)[ Previous year-Rs 87,50,786/-)

b)Capital Work in Progress of Rs.59.60,195/-(Previous Year-Rs.18,75, 933/-)disclosed under Schedule -5. includes Rs.1,11,0597-(Previous Year-Rs.1,21,226/-)being the borrowing cost /Up-front Charges on Bank Borrowings for the Qualifying Assets in line with Accounting Standard 16 issued by The Institute of Chartered Accountants of India.

c)The Company had revalued its Land -Leasehold and freehold Buildings, Plant &Machinery,Testing Equipments,Material handling equipments, Electrical Installations,Computers,Office equipment,Vehicle,Furniture &Fixtures as on 31.10.1999.The increase on revaluation has been transferred to FixedAssets Revaluation Reserve.The decrease in revaluation has been charged off to profit and loss account.

d)The Company has transferred Rs.3,68,43,045/-to Revaluation Reserve (Shown under Reserves &Surplus) on revaluation of Fixed Assets and transferred the additional charge of depreciation on revalued assets amounting to Rs.11,98,048/-(Previous Year -Rs.12,12,0897-)from Revaluation Reserve to Profit and Loss Account [Read with Accounting Policy 1 (c)(vi)].

e)Sundry Debtors,deposits and advance to parties include some old balances pending reconciliation/adjustment/confirmation.Efforts are being made for recovery/reconciliation of such balances and resultant effect will be accounted for in the year of such adjustments.

f)Under the Micro,Small and Medium Enterprises Development Act,2006, which came into force on October 2, 2006,certain disclosures are required to be made relating to Micro,Small and Medium Enterprisers. The Company is in the process of compiling relevant information from its supplies about their coverage under the Act.which have been relied upon by the Auditors.

g)In view of taxable income being less than the Book Profit as calculated under section 115JB of Income Tax Act, 1961,the Company is liable to pay Minimum Alternate Tax (on Book Profit)amounting to Rs.13,93,0697-which has been provided for.The Company has not recognized the same as Credit (in line with Guidance Note of Institute of Chartered Accountants of India in this regards)for equivalent amount during the year as set off is available U/s 115 JAA of Income Tax Act,1961 in the year when normal taxation arises on the taxable Income.

h)The Company has been recognizing in the financial statements the deferred tax assets /liabilities,in accordance with According Standard 22 "Accounting for Taxes on Income"issued by the Institute of Chartered Accountants of India.During the year,the Company has charged the Profit and Loss Account with Deferred Tax Liability (Net) of Rs.26.81 laks (Previous Year Rs.23.55 lakhs)



 
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