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Notes to Accounts of Austin Engineering Company Ltd.

Mar 31, 2015

Notes forming part of the financial statements of the Accounts for the year ended 31st March, 2015.

1. Corporate Information :

AUSTIN ENGINEERING COMPANY LIMITED is a public Limited Company domiciled in India and incorporate under the provisions of the Companies Act,1956, Its shares are listed in one stock exchange in India. (BSE ) The company is engaged in manufacturing and selling all type of Bearings and its components under trademark "aec". The company is also engaged in generating of Power from wind energy. The Manufacturing unit of the company is situated at village Patla, Taluka Bhesan, Dist. Junagadh-362 030. The Company is having one fully owned subsidiary Company at U.S.A.. The company caters to both domestic and international markets.

2. Basis of Preparation :

The financial statement of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP) including accounting standards notified under the relevant provisions of the Companies Act, 2013. The Financial statements have been prepared on an accrual basis and under the historical cost convention except where specifically stated.

3. Use of Estimates :

The preparation of the financial statements in conformity with Indian GAAP requires the Management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as of the date of the financial statements and the reported amount of revenues and expenses during the reporting year. The Management believes that the estimates used in preparation of the financial statements are prudent and reasonable. Future results could differ due to these estimates and the differences between the actual results and the estimates are recognized in the periods in which the results are known / materialise.

4. Contingent liabilities not provided for in respect of :

[i] The claim of the agent of M/s. Accurate Engineering Company for the commission on the sales affected by the Company is not accepted. The matter is under dispute in the court and the amount is not ascertainable.

[ii] Bank guarantees outstanding as at 31st March,2015 for which the Company has given counter guarantees amounting to Rs. 59,74,654/- (Previous year Rs. 72,09,763/-).

[iii] Income Tax demand of Rs.6,32,440/- ( Previous year Rs. 17,77,970/- )raised by the Income Tax department at the time of Assessment. The said demand is disputed by the company. The company has paid Rs. 3,16,440/- (Previous year Rs. 11,45,530/-) against the said demand.

[iv] Central Excise demand of Rs. 3,99,937/- (Previous year Rs. NIL) raised by the Central Excise department. The said demand is disputed by the company. The company has paid Rs.22,496/- (Previous year Rs. NIL) against the said demand.

5. In the opinion of the Board of Directors, current assets and loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

6. Confirmations of debit/credit balances have not been received and hence these balance are subject to adjustment if any

7. BUY BACK OF SHARES :

Up to March 31, 2010, the Company had bought back and extinguished total 53,200 equity shares of Rs. 10 each at an average price of Rs. 54.99 per share, utilizing a sum of Rs. 29,35,463/- (inclusive of brokerage and applicable taxes total amount Rs.9,869/-. The amount of Rs.23,93,594/- paid towards buy back of shares, in excess of the face value, had been charged to General Reserve Account. The Company had also transferred Rs 5,32,000/-from free reserves to Capital Redemption Reserve Account, which represents the nominal value of shares bought back during the previous year.

8. Amortisation of Intangible Assets :

In accordance with the accounting standard 26 "Intangible assets" issued by the Institute of Chartered Accountants of India, intangible assets are amortised as follows:

(a) Considering the legal rights are renewable, renewal is virtually certain and economic benefits to be derived, the useful life of 50 years of Trademark is estimated by the Management and hence the Cost of Trademark is amortised over 50 years. For the year Rs. 8,17,220./- (Previous year Rs. 8,17,220/-) is charged to profit & loss account.

9. Derivatives and Foreign Currency exposures :

The Company uses forward contract to mitigate its risks associated with foreign currency fluctuations having underlying transaction in relation to Sale of goods. The company does not enter into any forward contract which is intended for trading or speculative purposes.

10. IMPAIRMENT OF ASSETS :

The Company has adopted the provisions of Accounting Standard - 28 on "Impairment of Assets" as recommended by the Institute of Chartered Accountants of India. On the assessment made by the Management and the Valuation Report of the approved Valuer, there is no impairment of assets and therefore no provisions for impairment of loss is required.

11. RELATED PARTY INFORMATION :

Disclosures in respect of related parties (as defined in Accounting Standard 18), with whom transactions have taken place during the year are given below :

(1) Relationship

(a) Enterprises where control of Key Management Personnel and/or their relatives exists.

(i) Max Precision Bearings P. Ltd. (iv) Austin Traders

(ii) Accumax Engineering Company (v) Optimum Services Inc.

(iii) Accord Precision Products

(b) Key Management Personnel

(i) Shri S. M. Thanki (ii) Shri N. C. Vadgama

(iii) Shri R. R. Bambhania (iv) Shri J. R. Bhogayta

(v) Shri S. A. Kotal (vi) Ms. Z. M. Talreja

(c) Relative of Key Management Personnel

(i) Shri S. M. Thanki HUF (v) Shri Jignesh S. Thanki

(ii) Shri R. N. Bambhania HUF (vi) Shri Hiren N. Vadgama

(iii) Shri N. C. Vadgama HUF (vii) Shri Chandulal N. Bambhania

(iv) Shri J. R. Bhogayata HUF

(d) Subsidiary Company

(i) Acurate Engineering Inc. - U.S.A.

Note : Related party relationship is as identified by the company and relied upon by the auditors.

12. Depreciation :

Pursuant to the notification of schedule II of the Companies Act, 2013 ( "the Act") by the Ministry of Corporate affairs effective 01/04/2014. The Management has internally reassessed based on technical evaluation and changed, wherever necessary, the useful lives to compute depreciation, to confirm to the requirements of the Act. Accordingly, the carrying amount as at 01/04/2014 is being depreciated over the revised remaining useful life of the asset. The carrying value of Rs. 25,31,399/- in case of assets with nil revised remaining useful life as at 01/04/2014 is reduced after tax adjustment from the retained earnings as at such date.

Further had the company continued with the Straight Line Method at the rates prescribed in Schedule XIV of the Companies Act, 1956, charge for depreciation for the year ended 31/03/2015 would have been higher by Rs. 93,06,146/- and the profit before tax would have been lower by such amount.

13. Lease commitments :

Obligation towards operating leases (As lessee)

The Company has entered into operating lease arrangements for vehicles and office premises. Rent expenses of Rs. 4,58,274/-( Previous Year Rs. 1,90,700/-) in respect of obligation under non cancellable operating leases have been recognised in the Statement of Profit and Loss.

14. Previous year figures

The company has regrouped / rearranged previous year figures in veiw of easy comparision with current year figures.

15. Figures rounded off to nearest rupee. All the figures includig previous year figures have been rounded off to nearest rupee.


Mar 31, 2014

1. Corporate Information :

AUSTIN ENGINEERING COMPANY LIMITED is a public limited company domiciled in India and incorporate under the provisions of the Companies Act, 1956, Its shares are listed in one stock exchange in India. (BSE ) The company is engaged in manufacturing and selling all type of Bearings and its components under trademark "aec". The company is also engaged in manufacturing of Power from wind energy. The Manufacturing unit of the company is situated at village Patla, Taluka Bheshan, Dist. Junagadh - 362 030. The company is having one fully owned subsidiary company at U.S.A.. The company caters to both domestic and international markets.

2. Basis of Preparation :

The financial statement of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956 and the provisions of the Companies Act, 2013 (to the extent notified) and guidelines issued by the Institute of Chartered Accountants of India (ICAI) and other regulatory authority. The Financial statements have been prepared on an accrual basis and under the historical cost convention except where specifically stated.

3. NOTE: ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

1 Contingent liabilities not provided for in respect of :

[i] The claim of the agent of M/s. Accurate Engineering Company for the commission on the sales effected by the Company is not accepted. The matter is under dispute in the court and the amount is not ascertainable.

[ii] Bank guarantees outstanding as at 31st March,2014 for which the Company has given counter guarantees amounting to Rs. 72,09,763/- (Previous year Rs. 1,62,12,061/-).

[iii] Income Tax demand of Rs. 17,77,970/- ( Previous year Rs. 11,45,530/- ) raised by the Income Tax department at the time of Assessment. The said demand is disputed by the company. The company has paid Rs. 11,45,530/- (Previous year Rs. 11,45,530/-) against the said demand.

2 In the opinion of the Board of Directors, current assets and loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

3 Confirmations of debit/credit balances have not been received and hence these balance are subject to adjustment if any.

4 BUY BACK OF SHARES :

Up to March 31, 2010, the Company had bought back and extinguished total 53,200 equity shares of Rs. 10 each at an average price of Rs. 54.99 per share, utilizing a sum of Rs. 29,35,463/- (inclusive of brokerage and applicable taxes total amount Rs.9,869/- The amount of Rs.23,93,594/- paid towards buy back of shares, in excess of the face value, had been charged to General Reserve Account. The Company had also transferred Rs 5,32,000/-from free reserves to Capital Redemption Reserve Account, which represents the nominal value of shares bought back during the previous year.

4. Amortisation of Intangible Assets :

In accordance with the accounting standard 26 "Intangible assets" issued by the Institute of Chartered Accountants of India, intangible assets are amortised as follows:

(a) Considering the legal rights are renewable, renewal is virtually certain and economic benefits to be derived, the useful life of 50 years of Trademark is estimated by the Management and hence the Cost of Trademark is amortised over 50 years. For the year Rs. 8,17,220./- (Previous year Rs. 8,17,220/-) is charged to profit & loss account.

5. Derivatives and Foreign Currency exposures :

The Company uses forward contract to mitigate its risks associated with foreign currency fluctuations having underlying transaction in relation to Sale of goods. The company does not enter into any forward contract which is intended for trading or speculative purposes.

6. IMPAIRMENT OF ASSETS :

The Company has adopted the provisions of Accounting Standard - 28 on "Impairment of Assets" as recommended by the Institute of Chartered Accountants of India.

On the assessment made by the Management and the Valuation Report of the approved Valuer, there is no impairment of assets and therefore no provisions for impairment of loss is required.

7. RELATED PARTY INFORMATION :

Disclosures in respect of related parties (as defined in Accounting Standard 18), with whom transactions have taken place during the year are given below :

(1) Relationship

(a) Enterprises where control of Key Management Personnel and/or their relatives exists.

(i) Max Precision Bearings P. Ltd. (iv) Austin Traders

(ii) SNR Enterprises (v) Optimum Services Inc.

(iii) Accord Precision Products

(b) Key Management Personnel

(i) Shri S M Thanki (iii) Shri N C Vadgama

(ii) Shri R R Bambhania (iv) Shri J R Bhogayta

(c) Relative of Key Management Personnel

(i) Shri S. M. Thanki HUF (v) Shri Jignesh S. Thanki

(ii) Shri R. N. Bambhania HUF (vi) Shri Hiren N. Vadgama

(iii) Shri N. C. Vadgama HUF (vii) Shri Chandulal N. Bambhania

(iv) Shri J. R. Bhogayata HUF

(d) Subsidiary Company

(i) Acurate Engineering Inc. - U.S.A.

Note : Related party relationship is as identified by the company and relied upon by the auditors.

8. Previous year figures

The company has regrouped / rearranged previous year figures in veiw of easy comparision with current year figures.

9. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 & 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 212 of the companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiary has been included in the Consolidated Financial statements.

10. Figures rounded off to nearest rupee. All the figures includig previous year figures have been rounded off to nearest rupee.


Mar 31, 2013

1. Corporate Information :

AUSTIN ENGINEERING COMPANY LIMITED is a public limited Company domiciled in India and incorporate under the provisions of the Companies Act, 1956, Its shares are listed in one stock exchange in India. (BSE ) The company is engaged in manufacturing and selling all type of Bearings and its components under trademark "aec". The company is also engaged in manufacturing of Power from wind energy. The Manufacturing unit of the company is situated at village Patla, Taluka Bhesan, Dist. Junagadh - 362 030. The Company is having one fully owned Subsidiary Company at U.S.A. The Company caters to both domestic and international markets.

2. Basis of Preparation :

The financial statement of the company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial statements have been prepared on an accrual basis and under the historical cost convention. except where specifically stated.

NOTE 3 ADDITIONAL INFORMATION TO THE FINANCIAL STATEMENTS

1. Contingent liabilities not provided for in respect of :

[i] The claim of the agent of M/s. Accurate Engineering Company for the commission on the sales effected by the Company is not accepted. The matter is under dispute in the court and the amount is not ascertainable.

[ii] Bank guarantees outstanding as at 31st March,2013 for which the Company has given counter guarantees amounting to Rs. 1,62,12,061/- (Previous year Rs. 1,15,41,801/-).

[iii] Income Tax demand of Rs. 11,45,530/- (Previous year Rs. 72,34,520/- ) raised by the Income Tax department at the time of Assessment. The said demand is disputed by the company. The company has paid Rs. 11,45,530/- (Previous year Rs. 21,70,400/- ) against the said demand.

2. In the opinion of the Board of Directors, current assets and loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

3. Confirmations of debit/credit balances have not been received and hence these balance are subject to adjustment if any.

4. BUY BACK OF SHARES

Up to March 31, 2010, the Company had bought back and extinguished total 53,200 equity shares of Rs. 10 each at an average price of Rs. 54.99 per share, utilizing a sum of Rs. 29,35,463/- (inclusive of brokerage and applicable taxes total amount Rs.9,869/- The amount of Rs.23,93,594/- paid towards buy back of shares, in excess of the face value, had been charged to General Reserve Account. The Company had also transferred Rs 5,32,000/-from free reserves to Capital Redemption Reserve Account, which represents the nominal value of shares bought back during the previous year.

4. IMPAIRMENT OF ASSETS :

The Company has adopted the provisions of Accounting Standard - 28 on "Impairment of Assets" as recommended by the Institute of Chartered Accountants of India.

On the assessment made by the Management and the Valuation Report of the approved Valuer, there is no impairment of assets and therefore no provisions for impairment of loss is required.

5. RELATED PARTY INFORMATION :

Disclosures in respect of related parties (as defined in Accounting Standard 18), with whom transactions have taken place during the year are given below:

(1) Relationship

(a) Enterprises where control of Key Management Personnel and/or their relatives exists.

(i) Max Precision Bearings P. Ltd.

(ii) SNR Enterprises

(iii) Accord Precision Products

(iv) Austin Traders

(v) Optimum Services Inc.

(b) Key Management Personnel

(i) Shri S M Thanki

(ii) Shri R R Bambhania

(iii) Shri N C Vadgama (iv) Shri J R Bhogayta

(c) Relative of Key Management Personnel

(i) Shri S. M. Thanki HUF (ii) Shri R. N. Bambhania HUF (iii) Shri N. C. Vadgama HUF (iv) Shri J. R. Bhogayata HUF

(v) Shri Jignesh S. Thanki (vi) Shri Hiren N. Vadgama (vii) Shri Chandulal N. Bambhania

(d) Subsidiary Company

(i) Acurate Engineering Inc. - U.S.A. Note : Related party relationship is as identified by the company and relied upon by the auditors.

6. Previous year figures

The company has regrouped / rearranged previous year figures in veiw of easy comparision with current year figures.

7. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 & 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 212 of the companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiary has been included in the Consolidated Financial statements.

8. Figures rounded off to nearest rupee. All the figures includig previous year figures have been rounded off to nearest rupee.


Mar 31, 2012

1. Corporate Information :

AUSTIN ENGINEERING COMPANY LIMITED is a public limited Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed in one stock exchange in India. (BSE) The company is engaged in manufacturing and selling of all type of Bearings and its components under the trademark "aec". The company is also engaged in manufacturing of Power from wind energy. The Manufacturing unit of the company is situated at village Patla, Taluka Bheshan, Dist. Junagadh - 362 030 (Gujarat). The Company is having one fully owned subsidiary Company in U.S.A.. The Company caters to both domestic and international markets.

2. Basis of Preparation.

The financial statement of the Company have been prepared in accordance with the generally accepted accounting principles in India (Indian GAAP). The company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The Financial statements have been prepared on an accrual basis and under the historical cost convention except where specifically stated.

3. Contingent liabilities not provided for in respect of:

(i) The claim of the agent of M/s. Accurate Engineering Company for the commission on the sales effected by the Company is not accepted. The matter is under dispute in the court and the amount is not ascertainable.

(ii) Bank guarantees outstanding as at 31st March, 2012 for which the Company has given counter guarantees amounting to Rs. 115 lacs (Previous year Rs. 106 lacs).

(iii) Income Tax demand of Rs. 72 lacs (Previous year Rs. NIL) raised by the Income Tax department at the time of Assessment. The said demand is disputed by the company. The company has paid Rs.22 lacs (Previous year Rs. NIL) against the said demand.

Based on the facts, the company has been legally advised that the demand is likely to either deleted or substantially reduced and accordingly no provision has been made.

4. In the opinion of the Board of Directors, current assets and loans and advances have a value on realization in ordinary course of business at least equal to the amount at which they are stated.

5. Confirmations of debit/credit balances have not been received and hence these balance are subject to adjustment if any.

6. BUY BACK OF SHARES:

Up to March 31, 2010, the Company had bought back and extinguished total 53,200 equity shares of Rs. 10 each at an average price of Rs. 54.99 per share, utilizing a sum of Rs. 29 lacs (inclusive of brokerage and applicable taxes total amount Rs.9,869/- The amount of Rs.24 lacs paid towards buy back of shares, in excess of the face value, had been charged to General Reserve Account. The Company had also transferred Rs 5 lacs from free reserves to Capital Redemption Reserve Account, which represents the nominal value of shares bought back during the previous year.

7. Amortisation of Intangible Assets :

In accordance with the accounting standard 26 "Intangible assets" issued by the Institute of Chartered Accountants of India, intangible assets are amortised as follows:

(a) Considering the legal rights are renewable, renewal is virtually certain and economic benefits to be derived, the useful life of 50 years of Trademark is estimated by the Management and hence the Cost of Trademark is amortised over 50 years. For the year Rs. 8 lacs (Previous year Rs. 8 lacs ) is charged to profit & loss account.

8. Derivatives and Foreign Cuurency exposures :

The Company uses forward contract to mitigate its risks associated with foreign currency fluctuations having underlying transaction in relation to Sale of goods. The company does not enter into any forward contract which is intended for trading or speculative purposes.

9. IMPAIRMENT OF ASSETS:

The Company has adopted the provisions of Accounting Standard - 28 on "Impairment of Assets" as recommended by the Institute of Chartered Accountants of India. On the assessment made by the Management and the Valuation Report of the approved Valuer, there is no impairment of assets and therefore no provisions for impairment of loss is required

10. RELATED PARTY INFORMATION:

Disclosures in respect of related parties (as defined in Accounting Standard 18), with whom transactions have taken place during the year are given below:

(1) Relationship

(a) Enterprises where control of Key Management Personnel and/or their relatives exists.

(i) Max Precision Bearings P. Ltd. (iv) Austin Traders

(ii) SNR Enterprises (v) Optimum Services Inc.

(iii) Accord Precision Products

(b) Key Management Personnel

(i) Shri S M Thanki (iii) Shri N C Vadgama

(ii) Shri R R Bambhania (iv) Shri J R Bhogayta

(c) Relative of Key Management Personnel

(i) Shri S. M. Thanki HUF (v) Shri Jignesh S. Thanki

(ii) Shri R. N. Bambhania HUF (vi) Shri Hiren N. Vadgama

(iii) Shri N. C. Vadgama HUF (vii) Shri Chandulal N. Bambhania

(iv) Shri J. R. Bhogayata HUF

(d) Subsidiary Company

(i) Acurate Engineering Inc. - U.S.A.

Note: Related party relationship is as identified by the company and relied upon by the auditors.

11. Previous year figures

Till the year ended 31st March, 2011, the company was using pre-revised Schedule VI to the Companies act, 1956, 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 reclassified previous year figures to conform to this year's classification. The adoption of revised Schedule VI dose not impacts recognition and measurament principles followed preparation of Financial statements. However, it significantly impacts presentation and disclosures made in the financial statements particularly presentation of balance sheet.

12. The Ministry of Corporate Affairs, Government of India, vide General Circular No. 2 and 3 dated 8th February 2011 and 21st February 2011 respectively has granted a general exemption from compliance with Section 212 of the companies Act, 1956, subject to fulfillment of conditions stipulated in the circular. The company has satisfied the conditions stipulated in the circular and hence is entitled to the exemption. Necessary information relating to the subsidiary has been included in the Consolidated Financial statements.

13. Figures rounded off to nearest lacs. All the figures including previous year figures have been rounded off to nearest lacs. Where the rounding off has become zero, actual figures have been shown in brackets.

 
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