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Notes to Accounts of G S Auto International Ltd.

Mar 31, 2013

1. Corporate Information;

"G.S.Auto International Limited" ("GS" or "the Company") 15 a public company domiciled jn India and incorporated as "Gurmukh Singh & Sons Auto Parts Private Limited" on 29th June, 1973 under the provisions of the Companies Act 195G & later on changed Its name to "G.S.Auto International Limited'', having its registered office at G.S.Estate, G.T Road, Dhandarl Kalan, Ludhlana-141010. Its shares are listed on iwo stock exchanges in India.

The Company is engaged in the manufacturing of wide range of auto components such as Ferrous & Non Ferrous Casting Components, Machined Components, Forged parts and Assembly of heavy duty trailer axles for Commercial vehicles.

The Company is operating in all the three verticals of auto components industry by supplying its components to Original Equipment Manufacturers, After Sales Market (Replacement Market! & Export Market

2 (a) Balance with Bank-Current accounts & fixed deposits [more than 3 months & less than 12 months maturity) includes Rs.99.77 lacs & Rs.279.17 lacs (previous year Rs.1207,14 lacs & Rs.250 lacs } respectively, pending for utilization at Jamshedpur project.

3 {c) In furnishing information under Note 25 (b}, the view has been taken that particulars are required only in respect of items that are incorporated in the Finished Goods produced and not for such material used for maintenance of Piant & Machinery.

4. The Company has filed an appeal agai ist the demand and the management including its tax/legal advisors, believes that its position will likely be upheld in the appellate process No tax expense has been accrued in the financial statements for the tax demand raised The management believes that the ultimate outcome of this proceeding will not have a material adverse effect on the company''s financial position and results of operations.

5. Commitments:

Estimated value of contracts remaining lo be executed on Capital Accounts (net of advances) not provided for Rs.462.52 Lacs (Previou: year Rs.G14.83 Lacs).

6. Domestic Sales includes Rs.33.28 Lacs (Previous Year Rs.61.30 Lacs) on account of Job Work receipts.

7. All the Inventories are valued and certified by the Management.

8. Purchase of finished goods Rs.13.87 lars (previous year Rs.14.67 lacs) consists of trading of wheel rrms,

9. Other Borrowing cost Note No.28 under the heading "Finance Cost" includes Bank Charges/Commission, Interest to others & hire charges.

10. The Company is primarily engaged in the business of "Auto Components" for commercial vehicles, which are governed by same set of risks and returns and hence there is only one segment as required by Accounting Standard (AS-17) on Segment Reporting Issued by Companies (Accounting Standards] Rules, 2006.

11. In cases where letters of confirmation have been received from parties, book balances 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.

12. No amount is considered as doubtful, from the total debtors.

13. No amount is due, as on balance sheet date, from other officers or from directors or any of them either severally or jointly, with any other persons nor any debts due by firms or private companies, in which any of the directors is a partner or a director or a member except at Note No.66.

14. Fixed Deposits includes Rs, Nil (previous year Rs.01.29 lacs) are held as margin money for the issuance of bank guarantee as on balance sheet date.

15. Figures in bracket indicate deductions except otherwise stated.

16. Unclaimed Dividend:

Unclaimed dividends include amounts which will be credited to investor Education and Protection Fund under Section 205 C of the Companies Act, 1956 (on Expiry of the specified period, if the amount remains unclaimed at that time).

17. Defi ned Benef it PI a ns f o r Em pi oyees (AS-15);

Liability for employee benefit (post retirement funded gratuity plan and leaves which is unfunded) has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard-15 (revised), the details of which are as under;

18, Capital work in progress includes amount of Rs,1747.99 Lacs (Previous year Rs. 948.30 Lacs, on account of machinery under installation, Rs.398.19 Lacs (Previous year Rs.194.89 Lacs) on account of Building under construction, on account of electric fitting Rs,82,30 Lacs (Previous year Rs.37.22 Lacs) and other assets Rs.17,04 Lacs [Previous year Rs.6.4S Lacs}, preoperative expenses, related to Jamshedpur unit & for Ludhiana unit of the Company Rs.310.72 lacs (previous year Rs.222.35 lacs).

19. Preoperative expenses, for the Jamshedpur project of the company (pending capitalization) (net of income, earned during construction period, from the temporary surplus funds, invested from time to time, pending for utilization for the setting up new manufacturing unit at Jamshedpur) have been included under the head capital work in progress.

20. Intangible Assets comprises of Acquisition of computer Software & Video Advertisement have been amortized @ 25% on Straight fine basis, as the useful life thereof has been estimated to be not more tha n fou r years.

21. D isd osu re: as req u i re d by AS-28 {I m pa i rme nt of Ass ett):

In terms of Accounting Standard 28 (AS-2S) there was no impairment loss on assets during the year under report.

22. Balance with Central Excise & Revenue Authorities under Note 21, under the heading "Short term Loans & Advances", includes Rs.848.95 Lacs (Previous year Rs.738.07 Lacs) on account of pending Value Added Tax (VAT) refunds, from the Sales Tax Authorities, Government of Punjab.

23. The Company is developing certain machineries (Special purpose Machines), as per its various in house production process requirements, along with for the requirements of its group Companies, as & when required, under its Research & Development Centre. The following expenditure has been incurred during th year, included under the relevant heads in the profit and loss account.

24. Def er ra l/Ca pita I i iati o n of exc h a nge d iff er e nces;

The Ministry of Corporate Affairs (MCA) hds issued the amendment dated December 29, 2011 to AS 11 "The Effects of Changes in Foreign Exchange Rates", to allow companies deferral/capitalization of exchange differences arising on long-term foreign currency monetary items. In accordance with the amendment/earlier amendment to AS 11, the Company wil! capitalized exchange loss, arising on lon^-term foreign currency loan to the cost of plant and equipments & other assets, for the long term funds raised in foreign currency for the setting up of new manufacturing unit at Jamshedpur, once the said plant will commence its commercial production.

As at 31il March, 2013, the Company has unhedged foreign currency exposure to the extent of US$ 42.24 Lacs [equivalent to Rs.2200.00 Lacs) (Previous year US$ 23.52 Lacs (equivalent to Rs.1200.00 Lacs) in the shape of foreign currency term loan, from financial institution, for the setting up of new manufacturing unit at Jamshedpur, for the purchase of certain capital equipments.

25. Ca pitalizat ion of Ex pen se.s:

Bank Interest & Bank Charges capitalized in respect of Plant St Machinery & other Tangible Fixed Assets Rs.1-46 Lacs (Previous year Rs.17.19 Lacs).

26. Miscellaneous Receipts include, Rs,1.05 Lacs (Previous year Rs.4.59 Lacs}, on account of Insurance Claim received.

27. The amount written off against leasehold land at Note No.13 {for Jamshedpur unit) will commence, when the Jamshedpur unit of the Company will commence its commercial production.

28. Advances recoverable In cash or in kind or for value to be received under Note No.21 under the neaoing "5ho;t-term Loans and Aovantes" includes Rs.12.56 Lacs (previous year fis.1433 Lacs) due from various employees of the Company. Maximum balance outstanding during the year was Rs.21,10 Lacs (previous year Rs.16.05 Lacs),

29. The company has leased facility under cancellable and non-cancellable operating leases arrangements with a lease term ranging from one to thirty years, which are subject to renewal at mutual consent thereafter. The cancellable arrangements can be terminated by either party after giving due notice. The lease rent expenses recognized during the year under preoperative expenses amounts to Rs. 00.36 Lacs. The future minimum lease payments in respect of the non-cancellable operating leases as at 3l51 March 2013 are as under:

30. Provision for diminution in the value of Current Investment Rs,0.61 lacs, (previous year Rs.1.73 Lacs} related to the Jamshedpur unit (jnder Construction), have been included under pre- operative expenses account.

31. D isd osu re r e q uir ed by CI a us e-32 of th e I ist i n g Agre em ent:

The Company has not made, during the year, any Loans & Advances in the nature of Loans to its Associates/ Firms/Companies, in which directors are interested.

32. Proposed Dividend:

During the year & during the previous year, the Company has not proposed any dividend on its equity shares;

33. Related Party Disclosure:

Related party disclosures as required under Accounting Standard-18 issued by The Institute of Chartered Accountants of India are given below:

a. The Key Management personnel & ind!viduals having control or significant Influence over the Company by reason of voting power, and their relatives:

Mr, Jasbir Singh Ryait - Chairman

Mr, Surinder Singh Ryait - Managing Director

Mrs, Dalvinder Kaur Ryait ¦ Director

Mrs, AmarjeetKaur Ryait - director

b. Enterprises, over which control is exercised by individuals listed in "a" above:

G.S, Automotives Private Limited G.S.Autocomp Private Limited G,S. Consumer Products Private Limited GJ.Holdings Private Limited*

No transaction has taken place during the year.

c. Relative of key management personnel:

Mr.Harkirat Singh Ryait

The foil owing trans actions were carried out during the year with related parties in the ordinary course of business:

34. Rental income includes Rs.3.4S lacs (previous year Rs.3.96 law) from group companies as per Note No.67 above & Rs.0.06 lacs (previous year Rs.0.06 lacs) from others.

35. (i) Rupee short term loan from others, outstanding balance as at 31st March, 2013 amounted to Rs. Nil [previous year Rs.23.7l lacs) was payable in equated monthly installment of Rs 2 81 lacs each, (including interest) up to December, 2012. sss (ii) Referred payment liability-Vehicle loan from HDFC Bank Limited, outstanding balance at 31 March, 2013 amounted to Rs.43.9B ''acs (previous year Rs.1.09 lacs) is payable fn equated monthly installment of Rs.4.39 lacs, [previous year Rs, 0.13 lacs) each, (including interest) up to January, 2014 (previousyear December, ;>012).

(Hi) Other unsecured short term loan from others, outstanding balance at 31st March 2013 amounted to Rs.14S.69 lacs (previous year Rs.251,18 lacs) is payable in equated monthly mstaHment (including interest) of Rs.lJ.4t) lacs up to September, 2013, Rs.7.56 lacs up to October, 2013 & Rs.3,72 lacs up to February, 2014.

36. Previous year''s figures have been regroup >d or reclassified wherever necessary to confirm to the current year''s classification.


Mar 31, 2012

1. Background:

"G.S.Auto International Limited" ("GS" or "the Company") was incorporated as "Gurmukh Singh & Sons Auto Parts Private Limited" on 29th June, 1973 & later on changed its name to "G.S.Auto International Limited", having its registered office at G.S.Estate, G.T. Road, Dhandari Kalan, Ludhiana-141010.

The Company is engaged in the manufac- turing of wide range of auto components such as Ferrous & Non Ferrous Casting Components, Machined Components, Forged parts and Assembly of heavy duty trailer axles for Commercial vehicles.

The Company is operating in all the three verticals of auto components industry by supplying its components to Original Equipment Manufacturers, After Sales Market (Replacement Market) & Export Market.

2. (a) Rights, preferences and restrictions attached to shares: The Company has only one class of issued equity shares having a par value of Rs. 5/- per share. Each holder of equity shares is entitled to one vote per share. The dividend (if any) proposed by the Board of Directors and approved by the shareholders in the Annual General Meeting, except in case of Interim Dividend, is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. (b) Other Information:

(i) The Company had reissued 24,300 forfeited Equity Shares, of the face value of Rs. 10/- each, at a premium of Rs. 80.25 per equity share, on dated 23rd May, 2008, on preferential basis, for raising long term funds to part finance the setting up of new manufacturing unit, for the manu- facture of auto component at Jamshedpur. The funds raised have been utilized towards the object of the issue. The profit arising on re-issue of forfeited Equity Shares had transferred to securities premium account.

The Company had issued 46,00,000 (forty Six lacs) Equity Shares, of the face value of Rs. 5/- (Rs. five) each, at a premium of Rs. 5/-(Rs. Five) per equity share, on dated 01st July,2009, consequent to the conversion of 23,00,000 (Twenty three lacs) warrants into Equity shares, warrant earlier issued/allotted on dated 07th January,2008 of the face value of Rs. 20/- (Twenty) per warrant, (to be converted into equivalent number of Equity Shares of the face value of Rs. 10/- (Ten) each, at a premium of Rs. 10/- (Ten) per Equity Share) to the Promoters & others, on preferential basis, pursuant to the provisions of section 81{ 1 A) and other applicable provisions of the

Companies Act, 1956, for raising long term funds for the setting up of new manufacturing unit, for the manufacture of auto component at Jamshedpur. The funds raised have been utilized towards the object of the issue.

(ii) During the year, the Company has issued 40,00,000 (forty lacs) Equity Shares of Rs. 51- (Rs. five) each at a premium of Rs. 22.41 per equity shares, on dated 02nd August 2011, pursuant to the conversion of 40,00,000 (forty lacs) warrant allotted ® Rs. 27.41 per warrant, to the Promoters and others, on preferential basis, pursuant to the provisions of section 81(1 A) and other applicable provisions of the Companies Act, 1956, for raising long term funds for the setting up of new manufacturing unit, for the manufacture of auto component at Jamshedpur. The funds raised have been utilized towards the object of the issue.

(iii) The Company had sub-divided its Equity Share from the face value of Rs. 10/- each, to the face value of Rs. SI- each, w.e.f. 27th August, 2008.

3. (a) Securities Premium Account: See Note 3(d) (i) and 3(d) (ii) regarding other information.

4. Money Received Against Share Warrants: Pursuant to the approval from the Members of the Company at the Extra Ordinary General Meeting held on 26th December,2009, the Company had allotted 40,00,000 (Forty lacs) warrant Rs. 27.41 per warrant, to the Promoters and others on dated 09th February,2010, on preferential basis, pursuant to the Provisions of section 81(1A) and other applicable provisions of the Companies Act, 1956 (to be optionally convertible, within a period of Eighteen months from the date of allotment, into equivalent number of Equity Shares of

the face value of Rs. 51- (Rs. Five) each, at a premium of Rs. 22.41 (Rs. Twenty Two and paise Forty One) per Equity Share, for the setting up of a new manufacturing unit at Jamshedpur. During the year, the Company had received the entire balance amount, from all the warrants holders and consequently allotted the required equivalent number of equity shares on dated 02nd August, 2011, hence no amount was further due from the warrant holders as at 31st March, 2012 (Previous year Rs. 488.31 lacs).

5. (a) Rupee Term Loan:

i) From Punjab National Bank:

Balance Outstanding Rs. Nil (Previous year Rs. 25.17 lacs)

For Ludhiana unit of the Company Secured by (i) first pari-passu charge by way of Hypothecation on entire block assets of the Company by way of hypothecation of machinery and equipments, other fixed assets, machin- ery spares, tools and accessories and other movables, both present & future, whether installed or to be installed, stored or to be stored in or about.all the factories, godowns and premises situated at G.S.Estate, G T Road, Dhandari Kalan, Ludhiana (Punjab) & at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand) and

(ii) first pari-passu Equitable Mortgage by way of deposit of title deeds of immoveable properties ofthe Company admeasuring 75110 sq.yards sit- uated at G.S. Estate, G.T.Road, Dhandari Kalan, Ludhiana (Punjab) & first pari-passu Equitable Mortgage of the leasehold rights ofthe Company's 3 (three) acre Land situated at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand), together with all buildings and structures thereon and all Plant & Machineries attached to the earth or permanently fastened to anything attached to the earth

(iii) first pari-passu charge on the Company's entire Current Assets (both present & future) (both Jamshedpur & Ludhiana unit of the Company),

such as Hypothecation of Raw Material, Stock in Process, Finished Goods, Consumable Stores/Spares required for manufacturing and lying in the unit(s) or elsewhere & Hypothecation of Book Debts arising out of genu- ine sales transaction of business not older than ninety days and further guaranteed by all the Promoters Directors of the Company.

ii) From Axis Bank Limited:

Balance Outstanding Rs. 476.39 lacs (Previous year Rs. Nil)

For Jamshedpur unit of the Company Secured by (i) first pari-passu charge by way of Hypothecation on entire block assets of the Company by way of hypothecation of machinery and equipments, other fixed assets, machinery spares, tools and accessories and other movables, both present & future, whether installed or to be installed, stored or to be stored in or about all the factories, godowns and premises situated at G.S.Estate, G T Road, Dhandari Kalan, Ludhiana (Punjab) & at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand) and

(ii) first pari-passu Equitable Mortgage by way of deposit of title deeds of immoveable properties ofthe Company admeasuring 75110 sq.yards sit- uated at G.S. Estate, G.T.Road, Dhandari Kalan, Ludhiana (Punjab) & first pari-passu Equitable Mortgage of the leasehold rights ofthe Company's 3 (three) acre Land situated at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand), together with

all buildings and structures thereon and all Plant & Machineries attached to the earth or permanently fastened to anything attached to the earth

(iii) first pari-passu charge on the Company's entire Current Assets (both present & future) (both Jamshedpur & Ludhiana unit of the Company), such as Hypothecation of Raw Material, Stock in Process, Finished Goods, Consumable Stores/Spares required for manufacturing and lying in the unit(s) or elsewhere & Hypothecation of Book Debts arising out of genu- ine sales transaction of business not older than ninety days and further guaranteed by all the Promoters Directors of the Company.

Repayable in 23 quarterly installments, first installment to commence from 19 months after first disbursement but not later than September, 2013. Interest to be serviced as and when due @ base rate 3% p.a.

(b) Foreign Currency Term Loan: From Export Import Bank of India, Mumbai:

Balance Outstanding US$ 23.52 lacs (equivalent to Rs. 1200.00 lacs) (Previous year Rs. Nil)

For Jamshedpur unit of th e Company: Secured by (i) first pari-passu charge by way of Hypothecation on entire block assets of the Company by way of hypothecation of machinery and equipments, other fixed assets, machinery spares, tools and accessories and other movables, both present & future, whether installed or to be installed, stored or to be stored in or about all the factories, godowns and premises situated at G.S.Estate, G T Road, Dhandari Kalan, Ludhiana (Punjab) & at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand) and

(ii) first pari-passu Equitable Mortgage by way of deposit of title deeds of immoveable properties of the Company admeasuring 75110 sq.yards sit- uated at G.S. Estate, G.T.Road, Dhandari Kalan, Ludhiana (Punjab) & first pari-passu Equitable Mortgage of the leasehold rights of the Company's 3 (three) acre Land situated at M-09, Large Sector, Tata Kundra Main Road, Industrial Area, Adityapur, Jamshedpur (Jharkhand), together with all buildings and structures thereon and all Plant & Machineries attached to the earth or permanently fastened to anything attached to the earth

(iii) first pari-passu charge on the Company's entire Current Assets (both present & future) (both Jamshedpur & Ludhiana unit of the Company), such as Hypothecation of Raw Material, Stock in Process, Finished Goods, Consumable Stores/Spares required for manufacturing and lying in the unit(s) or elsewhere & Hypothecation of Book Debts arising out of genu- ine sales transaction of business not older than ninety days and further guaranteed by all the Promoters Directors of the Company.

Repayment linked to commencement of commercial production, ten- tatively, to be repaid in 20 equally quarterly installments, commencing September, 2013. Interest to be serviced as and when due @ LIBOR (6 months) 600 bps p.a.

(c) Deferred Payment Liabilities:

i) From Axis Bank Limited:

Balance Outstanding Rs. Nil (Previous year Rs. 14.24 lacs)

Vehicle loan was secured by way of charge on the respec- tive vehicle(s) financed. Repayable in equated monthly install- ment of Rs. Nil (previous year Rs. 0.93 lacs) along with Interest of 6.25% p.a.

ii) From HDFC Bank Limited:

Balance Outstanding Rs. 31.15 lacs (Previous year Rs. 49.98 lacs)

Vehicle loan(s) secured by way of charge on the respective vehicle(s) financed. Repayable in equated monthly installment of Rs. 1.43 lacs, (previous year Rs. 1.88 lacs) along with Interest, ranges from 10.25% to 11.00% p.a.

iii) From HDFC Bank Limited:

Balance Outstanding Rs. 56.58 lacs (Previous year Rs. Nil)

Used car refinance loan(s) secured by way of charge on the respective vehicle(s) financed. Repayable in equated monthly installment, of Rs. 2.96 lacs (previous year Rs. Nil) along with Interest @ 9.50% p.a.

(d) Term Loan from Others:

Rupee Term Loan from MFL Balance Outstanding Rs. 68.64 lacs (Previous year Rs. Nil)

Repayable in equated monthly installment of Rs. 3.72 lacs (previous year Rs. Nil) along with Interest of @ 17.40% p.a.

Maximum Amount outstanding on all the above said Secured & Unsecured loans, at any time during the year Rs. 1884.39 lacs (Previous year Rs. 134.29 lacs).

Notes:

a) At Cost, except leasehold land

b) Includes 11264 sq.yards land given on lease.

c) Land taken on leasehold basis at Jamshedpur, amounted to Rs. 31,04,206/-, Note No.64 related to capital expednidure at jamshedpur.

d) Building is on ownership basis.

e) Depreciation Rs. 3.23 lacs represents, amount amortised up to 31st March, 2012 on Intangible Assets,See Note No.51.

f) Capitalisation of Interest- See Note No.57 & Work in progress see Note No.64.

g) See Note 2-clause (e) for accounting policy on Fixed Assets and Depreciation.

6. (a) Balances with Bank-Current accounts & fixed deposits (more than 3 months & less than 12 Months maturity) includes Rs. 1207.14 lacs & Rs. 250 lacs (previous year Rs. 1.85 lacs & Rs. Nil) respectively, pending for utalisation at Jamshedpur project.

7. (c) In furnishing information under Note 26 (b), the view has been taken that particulars are required only in respect of items that are incor- porated in the Finished Goods produced and not for such material used for maintenance of Plant & Machinery.

8. Contingent Liabilities not provided for in respect of:

As At As At Particulars 31st March, 2012 31st March, 2011

(Rs. in lacs) (Rs. in lacs)

(i) Guarantee given by the Company to the bank, on behalf of other Group Companies (i.e.G.S. Automotives Private Limited, G.S.Autocomp Private Limited & G.S. Consumer Products Private Limited & to PSIDC (for & on behalf of G.S. Radiators Ltd.)

Balance Outstanding 1498.74 1270.35 (Maximum Amount) (2169.26) (1914.26)

(ii) Sales Bills Discounted with banks 146.01 00.00

(iii)Service Tax Demand-matter under appeal (Note No.34) 03.35 03.35



9. The Customs Excise and Service Tax Appellate Tribunal (CESTAT) New Delhi had dismissed the department appeal and accordingly the Assistant Commissioner of Central Excise & Customs, Ludhiana, has passed the req- uisite necessary final order along with the refund of Rs. 3.35 lacs in favour of the Company vide its order dated 26th July, 2012.

10.Commitments:

Estimated value of contracts remaining to be executed on Capital Accounts (net of advances), not provided for Rs. 614.83 lacs (Previous year Rs. 440.81 lacs).

11. Domestic Sales includes Rs. 61.30 lacs (Previous Year Rs. 114.40 lacs) on account of Job Work receipts.

12. All the Inventories are valued and certified by the Management.

13. Purchase of finished goods Rs. 14.67 lacs (previous year Rs. 12.85 lacs) consists of trading of wheel rims.

14. Other Borrowing cost Note No.29 under the heading "Finance Cost" includes Bank Charges/Commission, Interest to others & hire charges.

15. The Company is primarily engaged in the business of "Auto Components" for commercial vehicles, which are governed by same set of risks and returns and hence there is only one segment as required by Accounting Standard (AS-17) on Segment Reporting issued by Companies (Accounting Standards) Rules, 2006.

16. In cases where letters of confirmation have been received from parties, book balances 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.

17. Book Debts include a customer amounting to Rs. Nil (Previous year Rs. 2.81 lacs), for which a legal case for recovery was filled by the com- pany against the customer & the judicial authority has passed an order in favour of the Company for the Collection of the fullest amount from the concerned customer. During the year, the Company has received the entire amount from the above said customer. No other amount is consid- ered as doubtful, from the total debtors.

18. No amount is due, as on balance sheet date, from other Officers or from Directors or any of them either severally or jointly, with any other persons nor any debts due by firms or private companies, in which any of the Directors is a partner or a director or a member except at Note No.67.

19. Fixed Deposits includes Rs. 01.29 lacs (previous year Rs. 14.54 lacs) are held as margin money for the issuance of bank guarantee (Previous year Bank Guarantee & Letter of Credit) as on balance sheet date.

20. Figures in bracket indicate deductions except otherwise stated.

21. Unclaimed Dividend: Unclaimed dividends include amounts which will be credited to Investor Education and Protection Fund under Section 205 C of the Companies Act, 1956 (on Expiry of the specified period, if the amount remains unclaimed at that time).

22. Capital work in progress includes amount of Rs. 948.30 lacs (Previous year Rs. 633.87 lacs, (Rs. 27.27 lacs included in Note No. 54)) on account of machinery under installation, Rs. 194.89 lacs (Previous year Rs. 68.98 lacs) on account of Building under construction, on account of electric fitting Rs. 37.22 lacs (Previous year Rs. 0.60 lacs) and other assets Rs. 6.48 lacs (Previous year Rs. 5.60 lacs), preoperative expenses, related to Jamshedpur unit of the Company Rs. 222.35 lacs (previous year Rs. 28.33 lacs).

23. Preoperative expenses, for the Jamshedpur project of the company (pending capitalization) (net of income, earned during construction period, from the temporary surplus funds, invested from time to time, pending for utalisation for the setting up new manufacturing unit at Jamshedpur) have been included under the head capital work in progress.

24. Intangible Assets comprises of Acquisition of computer Software & Video Advertisement have been amortized @ 25% on Straight line basis, as the useful life thereof has been estimated to be not more than four years.

25. Disclosure: as required by AS-28 (Impairment of Assets): In terms of Accounting Standard 28 (AS-28) there was no impairment loss on assets during the year under report.

26. Balance with Central Excise & Revenue Authorities under Note 22, under the heading "Short term Loans & Advances", includes Rs. 738.07 lacs (Previous year Rs. 599.46 lacs) on account of pending Value Added Tax (VAT) refunds, from the Sales Tax Authorities, Government of Punjab.

27. The Company is developing certain machineries (Special purpose Machines), as per its various in house production process requirements, along with for the requirements of its group Companies, as & when required, under its Research & Development Centre. The following expenditure has been incurred during the year, included under the relevant heads in the Statement of Profit & Loss. '

28. The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting standard) Rules, 2006 was amended on 31st March, 2009,vide notification dated 31st March, 2009, by the Ministry of Corporate Affairs. The said amendment offered an option to companies to recognize Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and lia- bilities acquired up to 31st March, 2009 retrospectively from accounting periods commencing after 07th December, 2006 up to March, 2011, as Capital Cost of acquisition of the particular assets where they relate to the acquisition of assets or to a Translation Reserve i.e 'Foreign Currency Monetary Item Translation Difference Account "in other cases. The amount so recognized as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognized in the "Foreign Currency Monetary Item Translation Difference Account" is to be amortized over the balance term of the monetary assets or liability, but not beyond 31st March, 2011.

The Company had chosen to exercise this option in preparation of its financial statements from the year ended 31st March, 2009, accord- ingly the foreign exchange differences adjusted against the cost of par- ticular assets. As at 31st March, 2012, the Company has un-hedged for- eign currency exposure to the extent of US$ 23.52 lacs (equivalent to Rs. 1200.00 lacs) (Previous year Rs. Nil) in the shape of Foreign Currency Term Loan, disbursed on dated 30th March, 2012, from Others, for the setting up of new manufacturing unit at Jamshedpur, for the purchase of certain capital equipments.

29. Capitalization of Expenses: Bank Interest & Bank Charges cap- italized in respect of Plant & Machinery & other Tangible Fixed Assets Rs. 17.19 lacs (Previous year Rs. 10.19 lacs).

30. Miscellaneous Receipts include, Rs. 4.59 lacs (Previous year Rs. 3.33 lacs), on account of Insurance Claim received.

31. The amount written off against leasehold land at Note No.14 (for Jamshedpur unit) will commence, when the Jamshedpur unit of the Company will commence its commercial production.

32. Advances recoverable in cash or in kind or for value to be received under Note No.22 under the heading "Short-term Loans and Advances" includes Rs. 14.33 lacs (previous year Rs. 8.98 lacs) due from various employees of the Company. Maximum balance outstanding during the year was Rs. 16.05 lacs (previous year Rs. 11.17 lacs).

33. The company has leased facility under cancellable and non-cancel- lable operating leases arrangements with a lease term ranging from one to thirty years, which are subject to renewal at mutual consent thereafter. The cancellable arrangements can be terminated by either party after giv- ing due notice. The lease rent expenses recognized during the year under preoperative expenses amounts to Rs. 00.36 lacs. The future minimum lease payments in respect ofthe non-cancellable operating leases as at 31st March, 2012 are as under:

34. Provision for diminution in the value of Current Investment Rs. 1.73 lacs, for the year ended 31st March, 2012 related to the Jamshedpur unit (under Construction), have been included under pre-operative expenses account. _

35. Disclosure required by Clause-32 of the Listing Agreement: The Company has not made, during the year, any Loans & Advances in the nature of Loans to its Associates/Firms/Companies, in which Directors are interested. '

The Company has taken the above said leasehold land at (i) at Jamshedpur, for Jamshedpur plant, on leasehold basis from Adityapur Industrial Development Authority (AIDA), Jamshedpur. As the commercial production of the Jamshedpur plant, has not commenced during the year, all the lease rent paid for the said leasehold land during the year, has been transferred to the pre-operative / expenses pending capitalization account.

In furnishing information under Note 66 (a), the view has been taken that particular are required only in respect of items that are incorporated in the Finished Goods produced and not for such material used for maintenance of Plant & Machinery.

36. Related Party Disclosure: Related party disclosures as required under Accounting Standard -18 issued by The Institute of Chartered Accountants of India are given below: ,

(a) The Key Management personnel & individuals having control or sig- nificant influence over the Company by reason of voting power, and their relatives:

Mr. Jasbir Singh Ryait - Chairman

Mr. Surinder Singh Ryait - Managing Director

Mrs. Dalvinder Kaur Ryait - Director

Mrs. Amarjeet Kaur Ryait - Director

(b) Enterprises, over which control is exercised by individuals listed in "a" above:

G.S.Automotives Private Limited G.S.Autocomp Private Limited G.S.Consumer Products Private Limited

G.J.Holdings Private Limited.*

* No transaction has taken place during the year.

(c) Relative of key management personnel:

Mr. Harkirat Singh Ryait

37. Rental income includes Rs. 3.96 lacs (previous year Rs. 3.84 lacs) from group companies as per Note No.67 above & Rs. 0.06 lacs (previ- ous year Rs. 0.06 lacs) from others.

38. (i) Rupee short term loan from Others, Rs. 23.71 lacs (previous year Rs. Nil) is payable in equated monthly installment of Rs. 2.81 lacs each, (including interest) (previous year Rs. Nil) up to December, 2012.

(ii) Deferred payment liability: Vehicle loan from HDFC Bank Limited, outstanding balance at 31st March, 2012 amounted to Rs. 1.09 lacs (previous year Rs,. 2.18 lacs) is payable in equated monthly installment of Rs. 0.13 lacs, (previous year Rs. 0.38 lacs) each, (including interest) up to December, 2012.

(iii) Other unsecured short term loan from Others, outstanding balance at 31st March, 2012 amounted to Rs. 251.18 lacs (previous year Rs. Nil) is payable in equated monthly installment (including interest) as per detail herein below:

(a) Rs. 45.54 lacs (previous year Rs. Nil) each, from April, 2012 to July, 2012.

(b) Rs. 18.32 lacs (previous year Rs. Nil) each from August, 2012 to November, 2012.

(c) Rs. 15.14 lacs (previous year Rs. Nil) in the month of December, 2012.

39. The financial statements for the year ended 31st March, 2011 had been prepared as per the then applicable pre-revised Schedule VI to the Companies Act, 1956, Consequent to the notification of Revised sched- ule VI under the Companies Act, 1956, the financial statements for the year ended 31st March, 2012 are prepared as per Revised Schedule VI.Accordingly, the previous year's figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements.


Mar 31, 2010

(Rs. in Lacs)

1. Contingent Liabilities As at 31.03.2010 As at 31.03.2009

a) Guarantee given to PSIDC (for & on behalf of G.S Radiators Ltd), and bank to G.S.Automotive (P) Ltd & G.SAutocomp(P)Ltd.

Balance Outstanding 875.44 803.99

(MaximumAmount) 1766.00 1355.00

b) Others - 3.20

c) Claims against the Company not acknowledged as debt on account of

(i) Excise Duty - 23.07

(ii) Service Tax 03.35 03.35

(iii) Income Tax (Matters in Appeal) - 31.68

2. The Company has contested the additional demand raised in respect of service tax etc amounting to Rs.3.35 lacs (Previous year Rs.3.35 Lacs).Against this, a sum of Rs.3.35 lacs (Previous year Nil) has been deposited under protest along with penalty & interest of Rs.2.10 lacs (Previous year Nil) and the total amount Rs.5.45 lacs (Previous year Nil) stands included under the head "Advances recoverable in cash or kind". The Company has filed an appeal with the Appellate Authority and is advised that the demand is not in accordance with Law. No provision therefore, has been made in accounts in respect thereof.

3. The Company is primarily engaged in the business of auto components for commercial vehicles, which are governed by same set of risks and returns and hence there is only one segment as required by Accounting Standard (AS-17) on Segment Reporting issued by Companies (Accounting Standards) Rules, 2006.

4. In cases where letters of confirmation have been received from parties, book balances 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.

5. Book Debts include Customer amounting to Rs.2.81 Lacs (Previous year Rs.8.91 Lacs), which are considered as doubtful for recovery, and legal suit against these customers has already been filed. No provision is made by the Company, for the same, in the books of the accounts, for the financial year 2009-2010.

6. Previous financial years figures have been regrouped, rearranged and reclassified wherever necessary to make them comparable with those of the current year.

7. Figures in bracket indicate deductions.

8. Micro & Small Enterprises:-

Micro & Small enterprises as defined under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) have been identified to the extent of information available with the Company. This has been relied upon by the auditors.

9. Share Capital

Issued, Subscribed & Paid up Equity Share Capital, includes 46,00,000 (Forty Six Lacs) Equity Shares, of the face value of Rs.5/- (Rs.Five) each, at a premium of Rs.5/-(Rs.Five) per equity share, allotted on dated 01st July,2009, consequent to the conversion of 23,00,000 (Twenty three lacs) warrant into Equity shares, warrant earlier issued/allotted on dated 07th January,2008 of the face value of Rs.20/-(Twenty) per warrant, (to be converted into equivalent number of Equity Shares of the face value of Rs.10/- (Ten)) each, at a premium of Rs.10/-(Ten) per Equity Share to the promoters & others, on preferential basis, pursuant to the provisions of section 81(1A) and other applicable provisions of the Companies Act, 1956, for raising long term funds for the setting up of new manufacturing unit, for the manufacture of auto component at Jamshedpur.

10. Pursuant to the approval from the Members of the Company at the Extra Ordinary General Meeting held on 26th December,2009, the Company had allotted 40,00,000(Forty lacs) warrant @ Rs.27.41 per warrant, to the promoter and others on dated 06th February,2010, on preferential basis, pursuant to the Provisions of section 81(1 A) and other applicable provisions of the Companies Act, 1956 (to be optionally convertible, within a period of Eighteen months from the date of allotment, into equivalent number of Equity Shares of the face value of Rs.5/- (Rs.Five) each, at a premium of Rs.22.41 (Rs.Twenty Two and paise Forty One) per Equity Share, keeping in mind the expansion of the project at Jamshedpur along with modernization & capacity expansions for various auto components, presently being manufactured, at its existing manufacturing unit at Ludhiana. As at 31st July, 2010 the Company has received Rs.488.31 lacs, being a part of the total amount, due from the above said warrant holders.

11. Computation of Net profit in accordance with Section 198 read with section 349 of the Companies Act, 1956, for the purpose of remuneration payable to the Chairman and Managing director.

12. Capital work in progress includes amount of Rs.59.21 Lacs (Previous year Rs. 39.99 Lacs) on account of machinery under installation, Rs.14.30 Lacs (Previous year Rs.NILLacs) on account of Building under construction.

13. Computation of Earning Per Share (EPS):

Earning per Share (EPS) calculated in accordance with Accounting Standard 20 issued by The Institute of Chartered Accountants of India.

14. Information required in terms of part IV of Schedule VI of the Companies Act, 1956, is attached.

15. Intangible Assets which comprises of Acquisition of computer Software & Video Advertisement have been Amortized @ 25% on Straight line basis, as the useful life thereof has been estimated to be not more than four years.

16. In accordance with the Accounting Standard (AS-28) on Impairment of Assets, the Company has assessed as on the Balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the Assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly, no impairment loss has been recognized in the books of account.

17. There are no amounts due & outstanding to be credited to Investor Education Protection Fund.

18. The Company has already filed an application to the Department of Scientific and Industrial Research, Ministry of Science & Technology, Government of India, for granting the approval to its in-house Research & Development centre. The Company at present, developing machineries (Special purpose Machines), for its specific purposes, according to its production process requirements, for its in house requirements along with for the requirements of its group Companies. Further, the Company is in the process to strengthen its Research & Development cell.

19. The Accounting Standard (AS-11) "The effects of changes in Foreign Exchange Rates" prescribed by Companies (Accounting standard) Rules, 2006 was amended on 31st March,2009,vide notification dated 31st March,2009,by the Ministry of Corporate Affairs. The said amendment offered an option to companies to recognize Foreign Exchange Gains and Losses arising on translation of all long term monetary assets and liabilities acquired up to 31st March, 2009 retrospectively from accounting periods commencing after 07th December, 2006 up to March, 2011, as Capital Cost of acquisition of the particular assets where they relate to the acquisition of assets or to a Translation Reserve i.e Foreign Currency Monetary Item Translation Difference Account". The amount so recognized as capital cost of acquisition of assets is to be depreciated over the balance life of the relevant assets and in case of the amount recognized in the "Foreign Currency Monetary Item Translation Difference Account" is to be amortized over the balance term of the monetary assets or liability, but not beyond 31 st March, 2011.

The Company has chosen to exercise this option in preparation of its financial statements from the year ended 31 st March,2009, accordingly the foreign exchange differences adjusted against the cost of particular assets. Further during the year, the Company has no foreign currency exposure against long term assets or liabilities.

20. The Exchange difference Gain/ (Loss) on account of fluctuations in foreign currency rates:

21. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for Rs.77.87 Lacs (Previous year Rs.2.22 Lacs).

22. Capitalization of Expenses;

Bank Interest & Labour Charges, in respect of Plant & Machinery & other Tangible Fixed Assets Rs.9.22 Lacs (Previous year Rs. 1.49 Lacs)

23. Miscellaneous Receipts consists of Insurance Claim received of Rs.4.76 Lacs (Previous year Rs.3.52 Lacs).

24. Advances recoverable in cash or in kind or for value to be received, under the heading Loan and Advances includes Rs.4.83 lacs (Previous year Rs.7.69 lacs) due from various employees of the Company. Maximum balance outstanding during the year Rs.9.16 Lacs (Previous year Rs.12.75 Lcs)

25. Disclosure required by Clause-32 of the Listing Agreement:

The Company has not made, during the year, any Loans & Advances in the nature of Loans to its Associates/ Firms/Companies, in which directors are interested.

26. Expenditure incurred on Projects during Construction period at Jamshedpur (Including amounts grouped under Capital work in progress):

27. Related Party Disclosure;

A) Disclosures of related Parties and relationship between the parties as required under Accounting Standard-18 issued by The Institute of Chartered Accountants of India are given below:-. 1. The Key Management personnel exercise control over the Company.

i) Mr. Jasbir Singh Ryait - Chairman

ii) Mr. Surinder Singh Ryait - Managing Director

iii) Mrs.DalvinderKaurRyait - Director

iv) Mrs. AmarjeetKaur Ryait - Director

2. Enterprises over which key management personnel (a) G.S.Automotives Private Limited. and relatives of such personnel is able to exercise (b) G.S.Autocomp Private Limited.

Significantcontrol & Influence. (c) G.J.Holdings Private Limited.*

(d) G.S.Consumer Products Private Limited.

(e) Ryait Exports*

(f) G.S.Sales Corporation

* No transaction has taken place during the year.

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