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Notes to Accounts of G G Dandekar Machine Works Ltd.

Mar 31, 2015

1. SHARE CAPITAL:

1.1 Reconciliation of shares :

The Company has neither issued nor bought back any shares in the capital of the company during the year.

1.2 Rights, preferences and restrictions attached to equity shares :

The equity shares have rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 2013.

2. Out of the Term Loans From Banks :

a) Company has paid off entire outstanding term loan before balance sheet date (Previous Year Rs. 42,468,676/-) which was secured by hypothecation of Plant & Machinery as well as factory building at Nagpur and collaterally secured by mortgage of land and building of the company at Bhiwandi. Procedure for removal of the charge of Bank is under process.

b) Term loan amounting to Rs. 2,33,704/- (Current as well as Non-Current Liability) (Previous Year Rs. 3,98,477/-) is secured by vehicle purchased out of the said term loan.

3. Cash Credit amounting to Rs.1,98,39,476/- (Previous Year Rs. 1,92,93,826/-) is secured by hypothecation of inventory and book debts and collaterally secured by mortgage of land and building of the company at Nagpur.

NOTES FORMING PART OF ACCOUNTS: (PART C)

1. Contingent Liabilities not provided for:

(Amount of Rs.)

Sr. Particuiars As at As at No 31-03-2015 31-03-2014

A. Disputed Liabilities in respect of 10,59,33,120 43,408,683/- Income Tax

B. Disputed Liabilities in respect of 3,85,19,845 292,633/- Sales Tax

C. Disputed Liabilities in respect of 1,102,612 Nil Wealth Tax

D. Liabilities on account of Pending 2,68,76,887 2,11,98,896 receipt of "C" Forms under Sales Tax

E. Liability in respect of sale of land 1,06,87,634 1,09,87,634 in previous years**

** Apart from this certain parties have either filed cases against the company or the Company has been made a party in respect of certain transactions relating to sale of land. The Company has been legally advised that it is in a position to defend its stand and does not expect any material financial liability.

2. The Company has single product, namely "Food Processing Machinery". Consequently, there are no Reportable Segments of the Company as per the Accounting Standard (AS) 17- "Segment Reporting" as prescribed by Companies' (Accounting Standards) Amendment Rules, 2007.

3. Related parties, as defined under clause 3 of Accounting Standard (AS 18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India.

a) Key Managerial Personnel :

i. Pranav V. Deshpande- Executive Director Relatives of Key Management Personnel: Wife : Vaidehi P Deshpande Daughter: Ovee P Deshpande

ii. Pankaj A. Parkhi - Chief Finance Officer Relatives of Key Management Personnel: Wife: Manik P Parkhi

iii. Saurabh S. Somani - Company Secretary Relatives of Key Management Personnel: Wife: Bhagyashree S. Somani

b) Enterprise in which Directors are interested: Vasudha IT Solutions Private Limited

c) Subsidiary Company: N.A.

4. As required by 'Accounting Standard 22 Accounting for Taxes on income' issued by The Institute of Chartered Accountants of India, which is mandatory in nature, the company has recognized deferred tax liability of Rs.18,924/-, which results from timing differences between book profits and tax profits for the year.

5. The Company is in communication with its suppliers to ascertain the applicability of the provisions of "The Micro, Small and medium Enterprises Development Act, 2006". As on the date of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding filling of necessary memorandum with the appointed authority. In view of this, information as required u/s 22 of the said Act is not given.

6. For synergy of operations and from point of view of administrative convenience, the Company has decided vide resolution passed at its Board of Directors meeting on 02nd May, 2014 to shift the factory operations which were carried out at Bhiwandi lock, stock and barrel to Nagpur with effect from 02nd May, 2014.

During the course of shifting of operations, few of the contract workers protested and interrupted the process & with the help of Labour Union, approached to the Industrial Court.

The Industrial Court heard both the parties and passed the orders that the company will not remove any machinery from Bhiwandi premises and no office bearers or members of the labour union will prevent the free movement of men, vehicles and material ingress and outgress of the company till next date of hearing i.e. 06th Aug.2014. The said order was valid up to 22nd Sept.2014.The labour union has again approached to the Industrial Court and applied for extension of the same order. The application is rejected by the Industrial Court on 7th Oct. 2014.

The shifting process was completed in the quarter ended on 31st December 2014. This has temporarily affected the production capacity of the company and which in turn has affected the topline for the year ended on 31st March 2015. Hence sales figures for the corresponding period are not comparable.

7. As per section 205C (2) of the Companies Act, 1956 unpaid dividend for 7 years is required to be transferred to Investor Education and Protection Fund (IEPF). The Company could not transfer such dividend to IEPF since a dispute was going on with the banker relating to the balance in the unpaid dividend account maintained with them. During the year the company and the banker have reconciled the balances and an amount of Rs. 5,43,867/- was transferred to IEPF on 9th March, 2015 for the financial year 2004-05 and 2005-06.

8. In cases where letters of confirmation have been received from parties, book balance have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account.

9. Previous year's figures have been regrouped and /or rearranged wherever necessary.


Mar 31, 2014

1. Contingent Liabilities not provided for : (Amount in Rs.)

Sr. Particulars As at As at No. 31.03.2014 31.03.2013

A. Disputed Liabilities in respect of Income Tax 43,408,683/- 39,434,222/-

B. Disputed Liabilities in respect of Sales Tax 292,633/- 178,345/-

C. The company had sold a part of its land in the financial year 2006 - 07. A dispute has arisen regarding some portion of the land sold. The matter is in litigation pending before the Civil Judge Sr. Division, Thane. If the outcome of the decision is not favorable to the company, the sale stands cancelled and the company needs to indemnify the purchaser for the cost and other consequential damages. The amount thereof is not ascertainable. The company has been legally advised that the ultimate decision of the dispute is likely to be favorable.

2. The Company has single product, namely "Food Processing Machinery". Consequently, there are no Reportable Segments of the Company as per the Accounting Standard (AS) 17- "Segment Reporting" as prescribed by Companies'' (Accounting Standards) Amendment Rules, 2007.

3. Related parties, as defined under clause 3 of Accounting Standard (AS 18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India:

1. Key Management Personnel : Pranav V Deshpande - Executive Director Relatives of Key Management Personnel: Wife: Vaidehi P. Deshpande Daughter: Ovee P. Deshpande

2. Enterprise in which Directors are interested: N.A.

3. Subsidiary Company: N.A.

4. Earnings Per Share (EPS) :

Earnings Per Share (EPS) calculated in accordance with Accounting Standards 20 issued by the Institute of Chartered Accountants of India.

5. The Company is in communication with its suppliers to ascertain the applicability of the provisions of "The Micro, Small and medium Enterprises Development Act, 2006". As on the date of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding filling of necessary memorandum with the appointed authority. In view of this, information as required u/s 22 of the said Act is not given.

6. During the year the Company has paid Rs. 18,40,000/- as compounding charges for contraventions of provisions of the Foreign Exchange Management Act, 1999 (FEMA) relating to non-reporting of Investment/acquisitions made abroad, non- obtention of ''Unique Identification Number (UIN)'' and delay in filing of Annual Performance Reports (APR).

7. Inventory write off of exceptional nature - Rs. Nil (Previous Year - Rs 2,75,38,921/-).

8. During the financial year 2011-12, the company had announced Voluntary Retirement Scheme (VRS) for its employees. In the same year the company had settled all the liabilities, including gratuity, of those who opted for the VRS. Later on, some of the workers objected to the amount of gratuity paid by the company and contended that there was a shortfall in the payment. They also approached the Assistant Labour Commissioner. After discussing the matter with the workers and the Assistant labour commissioner, the company agreed for the settlement of these liabilities. Accordingly, in April 2014 the company has entered in to a ''Memorandum of Settlement'' with the concerned persons and agreed to pay an aggregate amount of Rs.18,65,871/- as final settlement of the liability. This amount is provided in the books and disclosed as exceptional item.

9. For synergy of operations and from point of view of administrative convenience, the Board of Directors in its meeting held on 02nd May, 2014 decided to shift the factory operations at Bhiwandi lock, stock and barrel to Nagpur with effect from 02nd May, 2014. However, the company faced protests from workers. The workers have approached the Industrial Court, Thane seeking restraining orders for the movement of machinery, material etc. The court has issued orders directing the company, not to move any machinery till further orders. The company has been legally advised that the ultimate outcome of the dispute is likely to be in its favour.

10. As per section 205C (2) of the Companies Act, 1956, dividend remaining unpaid for a period of seven years is required to be transferred to Investor Education and Protection Fund (IEPF). Such unpaid dividend amounting to Rs.58,795/- and Rs.2,61,813/- for the financial years 2004-05 and 2005-06 respectively, is yet to be so transferred due to a dispute with the bank, with which the company has maintained Dividend Accounts for the relevant financial year, regarding the balance in those accounts. Recently the bank has confirmed the balance in these accounts. The company will transfer the amounts to the IEPF as soon as the bank releases these amounts.

11. In cases where letters of confirmation have been received from parties, book balances have been generally reconciled and adjusted, wherever necessary. In other cases, balances in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account and are subject to reconciliation.

12. Previous year''s figures have been regrouped and /or rearranged wherever necessary.


Mar 31, 2013

1. Note regarding sale of Subsidiary company:

On 26th March, 2013 the Company sold its entire stake in G.G. Dandekar Investments Pte Ltd (GGDIPL). GGDIPL therefore ceased to be a subsidiary of the company. The stake was sold to Casper Trading Ltd. for Euro 1,027,000 equivalent to Rs. 71,277,476/.. The amount was receivable as on 31st March 2013 and has been shown under Other Current Assets''. The amount was received and credited in the company''s bank account immediately after the balance sheet date. The exchange loss of Rs. 4,670,107/. arising on the sale of shares has been shown as exceptional item. It may also be noted that the company has agreed to waive an amount of Rs.1,511,440/.receivable from GGDIPL and is in the process of obtaining the requisite approval. Pending approval, a provision has been made for this amount and disclosed as an exceptional item.

2. Contingent Liabilities not provided for:

(Amount in Rs.)

As at As at Sr. No. Particulars 31.03.2013 31.03.2012

A. Disputed Income Tax Liability 39,434,222/- 39,434,222/-

(A.Y.2005.2006)

Disputed Sales Tax Liability

B. 178,345/- 178,345/- ( F.Y. 2007.2008)

The Company had sold some of its Land in 2006 – 07. Out of the said property, there is dispute regarding Plot No. 62.

The decision is pending from the Special Suit before the Civil Judge Sr. Division, Thane. If the outcome of the decision is C. against the Vendor, the sale stands cancelled and company stands to indemnify the vendor for the cost, loss and damages, except taxes, if any. The amount in respect thereof is not ascertainable.

3. The Company is in communication with its suppliers to ascertain the applicability of the provisions of The Micro, Small and medium Enterprises Development Act, 2006 . As on the date of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding filling of necessary memorandum with the appointed authority. In view of this, information as required u/s 22 of the said Act is not given.

4. The Company has single product, namely Food Processing Machinery . Consequently, there are no Reportable Segments of the Company as per the Accounting Standard (AS) 17. Segment Reporting as prescribed by Companies'' (Accounting Standards) Amend. ment Rules, 2007.

5. In cases where letters of confirmation have been received from parties, book balance have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account.

6. During the financial year 2012.13, the company has entered into an agreement to sale'' for a portion of its land at Bhiwandi. As per the terms of the agreement the company is to sell 1.56 acres of its land for a consideration of Rs. 50,000,000/.. The company has received an advance of Rs. 30,100,000/. during the financial year and the transaction is likely to be completed by the end of July 2013.

7. As required by Accounting Standard (AS 22) "Taxes on income issued by The Institute of Chartered Accountants of India, which is mandatory in nature, the company has recognized deferred taxes, which result from timing differences between book profits and tax profits for the year aggregating Rs. 18,861,187/. has been charged in the Profit and Loss Account, the details of which are as under:

8. Related parties, as defined under clause 3 of Accounting Standard (AS 18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India.

1) Key Management Personnel:

A. Jeetendra M Shende . Executive Director (Till 08.01.2013)

Relatives of Key Management Personnel: Wife. Nilima J. Shende Son. Shantanu J. Shende

B. Pranav V Deshpande . Executive Director (From 08.01.2013 till date)

Relatives of Key Management Personnel: Wife. Vaidehi P. Deshpande Daughter. Ovee P. Deshpande

2) Enterprise in which Directors are interested: N.A.

3) Subsidiary Company. G. G. Dandekar Investments Pte. Ltd. (till 26th March, 2013)

9. Writing off inventory:

The company has certain inventory of imported raw materials (components) and machines. Machines have been held for the purpose of trading. It was observed that performance of the machines was not satisfactory and the company experienced rejection from the customers. Performance of raw material items was also not satisfactory. In view of this, the company carried out a detailed technical analysis of these items in the last quarter of the year. The technical analysis revealed that due to technological obsolescence, perform. ance of the machines was significantly affected and hence they were not in a usable condition. Due to technological obsolescence, lack of salability and continuous negative feedback from customers, it was decided to discontinue sale of the machines/ components. Conse. quently, the machines/components have been brought to their realizable value by writing off an amount of Rs 27,538,921/. (Rs.24,233,433/. for machines and Rs.3,305,288/. for components). The amount has been shown as an exceptional item.

10. Borrowing Cost:

The total amount of borrowing cost capitalized during the year is Rs.16,588,390/..

11. Previous year''s figures have been regrouped and /or rearranged wherever necessary.


Mar 31, 2012

A-1 SHARE CAPITAL

A-1.1 Reconciliation of shares :

The Company has neither issued nor bought back any shares in the capital of the company during the year.

A-1.2 Rights, preferences and restrictions attached to equity shares:

The equity shares have rights, preferences and restrictions which are in accordance with the provisions of law, in particular the Companies Act, 1956.

A-2.1 Out of the Term Loans From Banks:

a) Term loan amounting to Rs. 64,211,025/- (Previous Year Rs. 69,015,061/-) is secured by hypothecation of Plant & Machinery as well as factory building at Nagpur and collaterally secured by mortgage of land and building of the Company at Bhiwandi.

b) Term loans amounting to Rs. 677,475/- (Previous Year Rs. 818,346/-) is secured by vehicles purchased out of the said term loan.

A-3 SHORT TERM BORROWINGS

A-3.1 Cash Credit amounting to Rs. 11,584,042/- (Previous Year Rs. 21,130,248/-) is secured by hypothecation of inventory and book debts and collaterally secured by mortgage of land and building of the Company at Bhiwandi.

B-1 Details of Subsidiary company

G. G. Dandekar Investments Pte Ltd (GGDIPL) is the wholly owned subsidiary of the company. GGDIPL is an investment company. It has invested its funds in a Swedish company named Rund Stahl Bau Holdings AB, Sweden. Swedish company has further invested the funds in Rund Stahl Bau, GmbH, Austria (Austrian company). So, the value of investments held by Swedish company has ultimate bearing on the valuation of investments of the company in GGDIPL. Due to the general recessionary trends prevailing world over and especially in Europe, the management of the company decided to review its investments in GGDIPL and ultimately decided to take steps to dispose off the invest- ments. This fact was clearly disclosed in the publication of the unaudited results of the quarter ended 31st March, 2012. The accounts of GGDIPL are consolidated with the company. The audited accounts of GGDIPL for the year ended 31st March, 2012 have been received, in which the auditors of GGDIPL have disclaimed an opinion i.e. they have expressed inability to express an opinion since they could not verify the documents relating to the ownership of GGDIPL investments in the Swedish Company at the time of issue of the Audit Report dated 05 June 2012. Subsequently, the document was received and handed over to them. On receipt of the document, the auditors considered and agreed to the request to reissue the audit report. At present they are in the process of reissue of the Audit Report.

In the meantime, the management has taken steps to dispose off its investments in GGDIPL and is negotiating with a prospective buyer.

Considering this fact, management is of the view that no provision for the diminution in the value of investments is necessary.

B-2. Contingent Liabilities not provided for:

Sl. Particulars (Amount in Rs.) No. FY 2011-12 FY 2010-11

a. Disputed Income Tax Liability 39,434,222/- 39,434,222/- (A.Y.2005-2006)

b. Disputes Sales Tax Liability 178,345/- 178,345/- (F.Y. 2007-2008)

The Company has sold its partial land in FY 2006-2007. Out of this sold land dispute has arisen about the ownership of certain piece of land viz. plot No. 62. The decision is pending with the appropriate authorities. If the decision goes against

c. the Company, this sale would stand cancelled and Company would require to pay to the purchaser agreed value of the land plus damages if any except for the taxes. The Company has not provided against this contingent liability and will meet the liability, as and when it arises.

B-3. The Company is in communication with its suppliers to ascertain the applicability of the provisions of "The Micro, Small & Medium Enterprises Development Act, 2006". As on the date of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding filing of necessary memorandum with the appropriate authority. In view of this, information as required u/s 22 of the said Act is not given.

B-4. The Company has single product, namely "Food Processing Machinery". Consequently, there are no Reportable Segments of the Company as per the Accounting Standard (AS) 17- "Segment Reporting" as prescribed by Companies" (Accounting Standards) Amendment Rules, 2007.

B-5. In cases where letters of confirmation have been received from parties, book balance have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of account.

B-6. Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for Rs. 11,464,000/- (Previous Year- Rs. 115,452,000/-).

B-7. At the request of the workers, the Company declared Voluntary Retirement Scheme (VRS) for them. All the workers opted for the VRS with effect from 30th April, 2011. As per the scheme, the Company has agreed and paid aggregate compensation of Rs. 68,881,404/- to the workers.

B-8. The Company has entered into an 'agreement to sale' a portion of its land at Bhiwandi. As per the terms of the agreement the Company would sell 2.32 acres of its land for a consideration of Rs. 100,000,000/-. As per the terms of the agreement, the Company has received an advance of Rs. 70,000,000/- during the Financial Year (Previous Year - NIL) and the transaction would be completed by the end of September 2012.

B-9. Related parties, as defined under clause 3 of Accounting Standard (AS) 18 "Related Party Disclosure" issued by the Institute of Chartered Accountants of India.

1. Key Management Personnel:

Jeetendra M. Shende - Executive Director

Relatives of Key Management Personnel:

Wife - Nilima J. Shende

Son - Shaantanu J. Shende

2. Enterprise in which Directors are interested: Kirloskar Consultants Limited (till 30th September, 2011)

3. Subsidiary Company: G.G. Dandekar Investments Pte. Ltd.


Mar 31, 2010

1. Contingent Liabilities not provided for: (Amount in Rs ) Sr. No. Particulars Current Year Previous Year

A Disputed Income Tax Liability (Assessment Year 2005-2006) 39,434,222 39,434,222

B. Disputed Sales Tax Liability (Financial Year 2007-2008) 178,345 Nil

C. The Company had sold some of its Land in 2006 - 07. Out of the said property, there is dispute regarding Plot No. 62. The decision is pending from the Special Suit before the Civil Judge Sr. Division, Thane. If the outcome of the decision is against the Vendor, the sale stands cancelled and Company stands to indemnify the vendor for the cost, loss and damages, except taxes, if any. The Company has not provided against this contingent liability and will meet the liability, as and when it arises.

2. Out of the secured loans:

a) Loans and Advances on Cash Credit Account of Rs.1.32 Crores (Previous year Nil) from banks are secured by hypothecation of inventory and book debts.

b) Term Loan from Bank amounting to Rs. 4.09 Lacs (Previous year Nil) is secured by hypothecation of vehicles purchased out of the said term loan.

c) Out of the total Secured Term Loans, an amount payable within next twelve months is Rs. 1,71,360/- ( Previous year Nil)

3. During the Current year, Company has entered into a Memorandum of Understanding (MOU) for sale of land (Plot No. 125). Total consideration for the said contract is Rs.2 Crores.The Company has already received from parties Rs.5.51 Lacsas Advance for Sale of Land. As per the terms, the Company has recognized Rs. 10 Lacs as income for the Current year, as the purchaser have not executed the sale deed for the said plot within stipulated period as mentioned in MOU.

4. The Company is in communication with its suppliers to ascertain the applicability of the provisions of "The Micro, Small and medium Enterprises Development Act, 2006". As on the date of this Balance Sheet, the Company has not received any communication from any of its suppliers regarding filling of necessary memorandum with the appointed authority. In view of this, information as required under Section 22 of the said Act is not given.

5. The Company has single product, namely "Food Processing Machinery". Consequently, there are no Reportable Segments of the Company as per the Accounting Standard (AS) 17- "Segment Reporting" as prescribed by Companies (Accounting Standards) Amendment Rules, 2007.

6. In cases where letters of confirmation have been received from parties, book balance have been generally reconciled and adjusted, if required. In other cases, balance in accounts of sundry debtors, sundry creditors and advances or deposits have been taken as per books of accounts.

7. Estimated amount of contracts remaining to be executed on Capital Accounts and not provided for (net of advances Rs.0.90 Crores) - Rs.4.74 Crores. (Previous year Nil).

8. Related parties, as defined under clause 3 of Accounting Standard (AS 18) "Related Party Disclosure" issued by the Institute of Chartered Accountants of India.

1) Key Management Personnel: Jeetendra M Shende- Executive Director Relatives of Key Management Personnel : Wife - Nilima J. Shende Son - Shantanu J. Shende

2) Enterprise in which Directors are interested: Kirioskar Consultants Limited

3) Subsidiary Company : G.G. Dandekar Investments Pte. Ltd.

9. Previous years figures have been regrouped and /or rearranged wherever necessary.

 
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