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Notes to Accounts of Gajra Bevel Gears Ltd.

Mar 31, 2015

Notes to financial statements for the pe riod ended 31st March 2015 Company Background

Gajra Bevel Gears Limited is a Public Limited Company incorporated under the Indian Companies Act, 1956. The Company is engaged in business of manufacturing vast range of gears, Differential and transmission gears and other products to keep automotive progress on the move.

1) Claims against which the company 31.03.2015 30.06.2014 not acknowledged as debt in respect of :

Assessed demand of Commercial Tax Rs.565.61 Rs.565.61 for which the Lacs Lacs Company has preferred for revision before the competent Authority.

Assessment Yr. Demand Rs. in Lacs.

1990-2000 16.64

2001- 2002 27.72

2002- 2003 48.09

2005- 2006 267.81

2006- 2007 205.35

In respect of amount of Interest Amount Amount liability /penalty on delayed/ unascertainabl unascertainabl nonpayment/ non and late deduction e e of statutory dues

2) (i) Contingent liabilities that may arise due to delayed/ non-compliance of certain fiscal statues and claims lodged by the ex-employees- amounts are unascertainable.

In view of no manufacturing / business activity in the company through out the years ended on 30.09.2009 to 30.09.2012, the management of the company is of the opinion "NO WORK NO PAY" and accordingly no provision has been made in the accounts in respect of Salaries, Wages, Allowances and benefits to the employees of the Company, which otherwise works out to as follows:


Mar 31, 2014

(Rs.in lacs)

a) Claims against the company not acknowledged 31.03.2014 30.06.2013 as debt in respect of : Assessed demand of Commercial Tax for which the Rs.565.61 Rs.621.88 Company has preferred for revision before the competent Authority.

Assessment Yr. Demand Rs. in Lacs.

1990-2000 16.64 2001-2002 27.72 2002-2003 48.09 2005-2006 267.81 2006-2007 205.35

In respect of amount of Interest liability/ Amount Amount penalty on delayed/ nonpayment/ non and late unascertaina unascert deduction of statutory dues ble ainable

b) (i) Contingent liabilities that may arise due to delayed/ noncompliance of certain fiscal statues and claims lodged by the ex-employees- amounts are unascertainable.

(ii) The financial liabilities on the account of legal cases pending against the company amounts are unascertainable.

(iii) Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments (if any) with an original maturity of three months or less.

(iv) Income Tax:

a) Deferred Taxes: The Company has carry forward losses and unabsorbed depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the yearend including related credit / charges for the year have not been recognized in these accounts on prudent basis.

b) Current Taxes: In view of carry forward losses and unabsorbed deprecation, the Company does not expect any current tax liability for the Financial Years 2007-08 to 2013-14 (Assessment Years 2008-09 to 2014-15) and hence no provision has been made for current taxes for these years.

(v) Related Parties:

Associate of the Company and concern in which Key Management Personnel have significant influence are as follows:

a) M/s. Garha Gears Ltd. b) M/s. Garha Utilbrocce Tools Ltd. c) M/s. S&H Gears Pvt. Ltd. d) M/s. Garha Auto Distributors e) M/s. Kshipra Gears f) M/s. Abhimanyu Agro Pvt. Ltd. g) M/s. Rani Agro Pvt. Ltd.

Key management personnel

a) Shri Surendra Singh: Managing Director b) Shri Atul Ragnekar: CFO c) Ms.Shivank Khandelwal: CS

Amount due to related parties (Associate Concerns) on balance sheet date is Rs.27,46,94,255/-

(xiv) The Company does not possess information as to which of its suppliers are ancillary industrial undertakings/ small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability, if any, of interest which would be payable under The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1992 cannot be ascertained. However, the Company has not received any claims in respect of interest.

The Company does not possess information as to which of suppliers are Small Scale Industrial Undertakings. Accordingly, the information regarding total outstanding dues to Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs.1.00 lakh and outstanding for more than 30 days has not been compiled and hence not disclosed by the Company.

(vi) The net worth of the Company has been eroded on account of the losses of year ended on 30.09.08. Based on the ABS as on 30.09.08 the company has filed the reference U/s 15(1) of SIC (SP) Act, 1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009. The BIFR vide its order of hearing held on 06.01.2010 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as the Operating Agency (OA).The Operating Agency is in process to formulate a rehabilitation scheme for revival of the Company. Meantime, the promoters of the Company are putting best of their efforts for One Time Settlement (OTS) of loans from the Secured Lenders and have succeeded in OTS with SBI, IDBI, IFCI and MPSIDC.

(xvi) Being the company under BIFR, interest on the loans from financial institutions has not been provided for in the accounts for the years ended 30.09.2007 to 31.03.2014 which otherwise works out to as follows:

Accounting Year ended upto Accounting year ended on 31.03.2014 30.06.2013

Rs. 8794920 Rs. 70359360

(vii) The unsecured loans are received from the companies of the promoters group to start the operation of the company. The interest rate on the said loans are not decided yet and hence no provisions for any interest payable, if any, is made in the accounts.

(viii) In view of no manufacturing / business activity in the company through out the years ended on 30.09.2009 to 30.09.2012, the management of the company is of the opinion "NO WORK NO PAY" and accordingly no provision has been made in the accounts in respect of Salaries, Wages, Allowances and benefits to the employees of the Company, which otherwise works out to as follows:

(ix) Measurement of EBITDA:

As permitted by the guidance note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of the profit and loss. The company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expenses, finance costs and tax expense.

(x) Previous year figures have been regrouped and rearranged wherever necessary.

(xi) Change in Accounting Year which are yet to be finally paid / settled

During the year under review, the Company has changed its accounting year from 12 months to 9 months resulting the present accounting is for 9 months only commencing from 1st July'' 13 to 31st March''14 and therefore figure of previous year are not comparable.


Jun 30, 2013

A) Debentures are secured by way of hypothecation of the company''s all movable properties both present and future. These debentures are also secured by way of first charge on the present and future immovable properties of the company by a joint equitable mortgaged by deposit of title deeds. In view of the OTS with IDBI, there is a possibility of waiver of interest on IDBI Loans and therefore, no interest has been provided for the period under consideration on debenture issued to IDBI.

b) IDBI-EFTL/WCTL/FITL and IFCI-TL/FITL above are secured by a joint equitable mortgaged by deposit of title deeds of immovable properties of the company and also by way of hypothecation of all movable asset of company(save and except book debts) both present and future, further, item 3(c) above is also secured by exclusive hypothecation of whole plant and machinery acquired by this loan.

c) IDBI has given consent for OTS of their loans at an amount of Rs. 345 Lacs vide letter dated 05.02.2013 giving the waiver of interest subject to full and final payment of OTS amount as per the terms of OTS. Full and final payment of OTS amount is still pending and therefore, no entry has been passed for the waiver of interest received under the OTS.

d) Interest free sales tax loan from-MPAVN Ltd is secured by way of second charged on movable and immovable properties of the company.

e) MPFC-WCTL/FITL and MPSIDC(ICD) are secured by way of hypothecation of dll movable assets of the company(save and except book debt) both present and future.

f) Secured loans shown in above as IDBI-EFTL/WCTL/FITL,IFCI-TL/FITL, Interest free sales tax loan from- MPAVN Ltd, MPFC-WCTL/FITL, MPSIDC(ICD) and Debentures have been personally guaranteed by the promoter directors of the company.

g) Term loans are shown inclusive of interest accrued thereon up to the year ended on 30-09-2006.

h) Loans from MPAKVN and MPSIDC have also been settled in Lok Adalat held on 19.11.2011 at Bhopal in total at Rs. 198 Lacs against which the Company has already paid the agreed amount but due to some deviation in the decision of MPSIDC dispute regarding payment of Rs.15.80 Lacs Is still pending and therefore no entry has been passed for the waiver received under the OTS.


Sep 30, 2012

(i) Contingent liabilities that may arise due to delayed/ noncompliance of certain fiscal statues and claims lodged by the ex-employees- amounts are unascertainable.

(ii) The financial liabilities on the account of legal cases pending against the company amounts are unascertainable.

c) Estimated amount of the contract remaining to be executed on capital account and not provided for Rs. 4593589/-

(iii) Cash and Cash Equivalents:

Cash and Cash Equivalents for the purpose of cash flow statement comprise cash at bank and in hand and short term investments (if any) with an original maturity of three months or less.

(iv) Income Tax:

a) Deferred Taxes: The Company has carry forward losses and unabsorbed depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the yearend including related credit / charges for the year have not been recognized in these accounts on prudent basis.

b) Current Taxes: In view of carry forward losses and unabsorbed deprecation, the Company does not expect any current tax liability for the Financial Years 2007-08 to 2011-12 (Assessment Years 2008-09 to 2012-13) and hence no provision has been made for current taxes for these years.

(v) Trade Receivables:

a) Trade Receivables includes Rs. 22848088 due from a concern of which a Director was the proprietor till 06.11.1999. Maximum amount due at any time during the period from the said concerns is Rs.22848088.

b) Trade Receivables include Rs.4824150 due from some of the ex-distributors/customers of the company. The company is of the opinion that the amount is fully recoverable on completion of final settlement which is in progress. The company is confident of recovering the amounts.

(vi) Related Parties:

Associate of the Company and concern in which Key Management Personnel have significant influence are as follows:

a) M/s. Garha Gears Ltd.

b) M/s. Garha Utilbrocce Tools Ltd.

c) M/s. S&H Gears Pvt. Ltd.

d) M/s. Garha Auto Distributors

e) M/s. Gajra Marketing

f) M/s. Kshipra Gears

g) M/s. Garha Tours & Travels

h) M/s. Abhimanyu Agro Pvt. Ltd.

i) M/s. Rani Agro Pvt. Ltd.

Key management personnel

a) Shri Surendra Singh: Managing Director

b) Shri Ranveer Singh: Director

Amount due to related parties (Associate Concerns) on balance sheet date is Rs.224240435.

(vii) The Company does not possess information as to which of its suppliers are ancillary industrial undertakings/ small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability, if any, of interest which would be payable under The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1992 cannot be ascertained. However, the Company has not received any claims in respect of interest.

The Company does not possess information as to which of suppliers are Small Scale Industrial Undertakings. Accordingly, the information regarding total outstanding dues to Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs.1.00 lakh and.outstanding for more than 30 days has not been compiled and hence not disclosed by the Company.

(viii) The writ petition filed by the Company and admitted by the Honorable High Court, Mumbai for the payment of minimum remuneration of Rs.1,27,307/- to the Late Managing Director for the period 01.04.1979 to 30.09.1981 (being the date of expiry of the terms of appointment of the Managing Director) has not come up for hearing. The Company has applied for the approval of the Department of Company Affairs, Ministry of Law, Justice and Company Affairs, for the re- appointment of the Managing Director for the period from 01.10.1981 to 30.09.1986, on the terms and conditions approved by the shareholders in the General Meeting of the Company. The total remuneration of Rs.6,05,207 for the period from 01.04.1979 to 30.09.1986 has not been paid.

(ix) Loans and Advance includes amounts due from private limited company in which some of the Directors are members Rs.41252. Maximum amount due at any time during the year from the said company is Rs.41252.

(x)The net worth of the Company has been eroded on account of the losses of year ended on 30.09.08. Based on the ABS as on 30.09.08 the company has filed the reference U/s 15(1) of SIC (SP) Act, 1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009. The BIFR vide its order of hearing held on 06.01.2011 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as the Operating Agency (OA).The Operating Agency is in process to formulate a rehabilitation scheme for revival of the Company. Meantime, the promoters of the Company are putting best of their efforts for One Time Settlement (OTS) of loans from the Secured Lenders.

(xi) In view of no manufacturing / business activity in the company through out the years ended on 30.09.2009 to 30.09.2012, the management of the company is of the opinion "NO WORK NO PAY" and accordingly no provision has been made in the accounts in respect of Salaries, Wages, Allowances and benefits to the employees of the Company, which otherwise works out to as follows :

(xii) Measurement of EBITDA:

As permitted by the guidance note on the Revised Schedule VI to the Companies Act, 1956, the company has elected to present earnings before interest, tax, depreciation and amortization (EBITDA) as a separate line item on the face of the statement of the profit and loss. The company measures EBITDA on the basis of profit/(loss) from continuing operations. In its measurement, the company does not include depreciation and amortization expenses, finance costs and tax expense.

(xiii)Previous year figures have been regrouped and rearranged wherever necessary.


Sep 30, 2011

1. Contingent Liabilities:

(a) Claims against the Company not acknowledged 30.09.2011 30.09.2010 As debts In respect of: Rupees In Lacs Rupees In Lacs

(i) Sales/Entry Tax matters pending under appeal/Revision 314.71 314.71

(ii) Excise Duty 48.51 48.51

(iii) Assessed Demand Commercial Tax of Asstt Yr. 03-04 & 04-05 148.72

(iv) Other 4.01 4.01

(v) In respect of amount of interest liability/ Amount un- Amount un- Penalty on delayed / non-payment/ non & ascertainable ascertainable late deduction of statutory dues

(b) Income Tax Matters pending under appeal 56.32 56.32

(B.) (i) Contingent liabilities that may arise due to delayed / non-compliance of certain fiscal statutes and claims lodged by the ex-employees- amounts are unascertainable (30.09.2010- amount unascertainable).

(ii) The financial liabilities on the account of legal cases pending against the company amounts are on unascertainable (30.09.2010-amount unascertainable).

C. Estimated amount of the contract remaining to be executed on Capital Account and not provided for Rs.4593589/- (30.09.09 - Rs.4593589/-).

2. (a) The Company does not possess information as to which of its suppliers are ancillary industrial undertakings/small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability, if any, of ' interest which would be payable under 'The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act-1992 cannot be ascertained. However, the Company has not received any claims in respect of interest.

(b) As stated in note 3(a) above, the Company does not possess information as to which of suppliers are Small Scale Industrial Undertakings. Accordingly, the information regarding total outstanding dues to Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs.1.00 lakh and outstanding for more than 30 days has not been compiled and hence not disclosed by the Company.

NIL NIL

NOTE: -

(1) The writ petition filed by the Company and admitted by the Honourable High Court, Mumbai for the payment of minimum remuneration of Rs.1,27,307/-to the Late Managing Director for the period 01.04.1979 to 30.09.1981 (being the date of expiry of the terms of appointment of the Managing Director) has not come up for hearing. The Company has applied for the approval of the Department of Company Affairs, Ministry of Law, Justice and Company Affairs, for the re-appointment of the Managing Director for the period from 01.10.1981 to 30.09.1986, on the terms and conditions approved by the shareholders in the General Meeting of the Company. The total remuneration of Rs.6,05,207/- for the period from 01.04.1979 to 30.09.1986 has not been paid.

(2) In view of financial sickness of the Company, the provision for the Managerial Remuneration to Managing Director has not been made in the accounts for the years ended 30.09.2007,30.09.2008, 30.09.2009 and 30.09.2011 which otherwise works out to as follows :

3. The quantities of sales, stock, raw materials consumed and production ( in notes 6 & 7 above) have been converted from units/pairs to metric tones on the basis of standard conversion factors which have been certified by the management.

4. Research & Development expenditure as certified by the Company (net of recoveries) charged to the profit and loss account (including amortized portion of the deferred expenditure Rs.1716078/- (30.09.10 - Rs.1716078/-) and depreciation on machines used for R & D Rs. NIL (30.09.10 Rs. NIL)

5. (a) Sundry Debtors includes Rs. 22848088/- (30.09.10- Rs.22848088/-) due from a concern of which a Director was the proprietor till 06.11.1999. Maximum amount due at any time during the period from the said concerns is Rs.22848088/- (30.09.10 Rs.22848088/-)

(b) Loans and Advance includes amounts due from private limited company in which some of the Directors are members Rs.41252/- (30.09.10- Rs.41252/-). Maximum amount due at anytime during the year from the said company is Rs.41252/- (30.09.10-Rs.41252/-)

6. CURRENT ASSETS, LOAN & ADVANCES

a) In the opinion of the management and to the best of their knowledge and belief the aggregate value of current assets and loans and advances on realization in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

b) Balances under the head sundry debtors, loans and advances, creditors and others are subject to confirmation/ re-conciliation. Adjustments, if any, will be accounted for as and when confirmed / reconciled.

7. Sundry Debtors include Rs.4824150/- (30.09.10- Rs.4824150/-) due from some of the ex- distributors/customers of the company. The company is of the opinion that the amount is fully recoverable on completion of final settlement which is in progress. The company is confident of recovering the amounts.

8. The entire net worth of the Company had been eroded on account of the losses of year ended on 30.09.08. Based on the Balance Sheet of the Company as on 30.09.08 the company has filed the reference U/s.15(1) of SIC (SP) Act.'1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009. The BIFR vide its order of hearing held on 06.01.2011 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 3(1) (o) of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as the Operating Agency (OA).The Operating Agency is in process to formulate a rehabilitation scheme for revival of the Company. Meantime, the promoters of the Company are putting best of their efforts for One Time Settlement (OTS)of loans from the Secured Lenders.

9. Owing to the financial sickness, there is no production / business activity in the company after 31st 0ct.2006.

10. Being the company under BIFR, interest on the loans from financial institutions has not been provided for in the accounts for the year ended on 30.09.2008, year ended 30.09.2009,30.09.2010 and 30.09.2011 which otherwise works out to as follows:

11 No provision of TDS has been made on the provisions made on tentative basis in respect of professional fees.

12. All the loan / deposit accounts with State Bank of India remained seized through out the years ended on 30.09.2008,30.09.2009,30.09.2010 and 30.09.2011 therefore, no provision has been made in accounts for the interest earned on margin money deposits with the bank which was in the year ended on 30.09.2007 was at Rs. 198198/- 23. Borrowing Costs:

None of the borrowing costs incurred during the year are attributable to the acquisition of fixed assets, hence reporting under Accounting Standard -16 "Borrowing Cost" does not arise.

13. Segment Reporting:

The company is engaged in the business of manufacturing and marketing of automobile components falling within the single segment business of automobiles components. The company is managed as one entity and is governed by similar set of risks and returns.

As the company operates in a single segment, the reporting requirement prescribed in Accounting Standard -17 are not applicable to the Company and have not been provided in this financial statement.

14. Related Parties:

Disclosure in respect of related party transactions for the year ended 30.09.2009 are given below:- (A)

(i) Holding Company Nil

(ii) Subsidiary Company Nil

(iii) Associate of the Company and concern in which Key Management Personnel have significant influence. Transaction during the year ended 30.09.2009 Rs. NIL.

1. M/s. Garha Gears Ltd

2. M/s. Garha Utilbrocce Tools Ltd.

3. M/s. S&H Gears Pvt. Ltd.

4. M/s. Garha Auto Distributors.

5. M/s. Kshipra Gears

6. M/s. Garha Tours & Travles

15. The Company does not have any subsidiary / Holding Company. Hence, reporting under "Accounting Standard - 21 does not arise.

16. Taxes on Income

A. Deferred Taxes: The Company has unabsorbed carry forward losses/ depreciation available for set- off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the year end including related credit / charges for the year have not been recognised in these accounts on prudent basis.

B. Current Taxes : In view of the carry forward unabsorbed losses / deprecation, the Company does not expect any current tax liability for the Financial Years 2008-09, 2009-10 and 2010-11 (Assessment Years 2009-10, 2010-11 and 2011-12) and hence no provision has been made for the current Income Tax

17. Previous year figures have been re-grouped and re-arranged wherever necessary.


Sep 30, 2010

1. Contingent Liabilities :

(a) Claims against the Company not acknowledged 30.09.2010 30,09.2009 As debts in respect of: Rupees Rupees In Lacs In Lacs

(i) Sales/Entry Tax matters pending under appeal / 314.71 588,89 Revision

(ii) Excise Duty 48.51 48.51

(iii) Other 4.01 4.01

(iv) In respect of amount of interest liability/ Amount un- Amount un- Penalty on delayed / non-payment/ non & ascertainable ascertainable Idle deduction of statutory dues

(b) Income Tax Matters pending under appeal 56.32 56.32

B. (i) Contingent liabilities that may arise due to delayed /non-compliance of certain fiscal statutes and claims lodged by the ex-employees- amounts are ascertainable (30,09.2009- amount unascertainable),

(ii) The financial liabilities on the account of legal cases pending against the company amounts are on unascertainable (30,09,2009-amount unascertainable).

C. Estimated amount of the contract remaining to be executed on Capital Account and not provided for Rs,4593589/- (30.09.09; - Rs,4593589/-}.

2, (a) The Company docs not possess information as to which of its suppliers arc ancillary industrial undertakings/ small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability if any, of interest which would be payable under The interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act-1992 cannot be ascertained. However, the Company has not received any claims in respect of interest.

(b) As stulcd in note 3(a) above, the Company does not possess information as to which of suppliers are Small Scale industrial Undertakings. Accordingly, the information regarding total outstanding dues in Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs.1.00 lakh and outstanding for more than .10 days has not been completed and hence not disolved by the Company.

3 The quantities of sales, stock, raw materials consumed and production ( in notes 6 & 7 above) have been converted from unite/pairs to metric tones on the basis of standard conversion factors which have been certified by the management.

4 Research & Development expenditure as certified by the Company (net of recoveries) charged to the profit and loss account (including amortized portion of the deferred expenditure Rs.l 716078/- (30.09.00 - Rs.l716078/-} and depreciation on machines used for R&D Rs. Nil (30.09.09 Rs. NIL)

5 a Sundry Debtors includes Rs. 22848088/- (30.09.09-Rs.22848088/-) due from a concern of which a Director was the proprietor till 06.11.1999. Maximum amount clue at any time during the period from the said concerns is Rs.22848088/- (30.09.09 RS.22848088/-) (b) Loans and Advance includes amounts due from private limited company in which some of the Directors are members Rs.41252/- (30.09,09- Rs.41252/-). Maximum amount due at am time during the year from the said company is Rs.41252/- (30.09.09-Rs.41252"/-)

6. CURRENT ASSETS, LOAN & ADVANCES

a} In the opinion of the management and to the best of their knowledge and belief the aggregate value of Current assets and loans and advances on realization in the ordinary course of business will not be less than the amount at which they are Stated in the Balance Sheet. in Balances under the head sundry debtors, loans and advances, creditors and others are subject to confirmation/ reconciliation. Adjustments, if any, will be accounted for as and when confirmed / reconciled.

7. Sundry Debtors include RS.4824150/- (30.09.09- Rs.4824150/-) due from some of the ex-disiributors/customers of the company. The company is of the opinion that the amount is fully recoverable on completion of final settlement which is in progress. The company is confident of recovering the amounts.

8. The entire net worth of the Company had been eroded on account of the tosses of year ended on 30.09.08. Based on the Balance Sheet of the Company as on 30.09.08 the company has filed the reference U/s. 15(1) of SIC (SP) Act1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009. The BIFR vide its order of bearing held on 06.01.2010 declared the Company a SICK INDUSTRIAL COMPANY in terms of section 8(l) (o) of Sick Industrial Companies (Special Provisions) Act 1985 and appointed IDBI as the Operating Agency (OA).The Operating Agency is in process to formulate a rehabilitation scheme for revival of the Company. Meantime, the promoters of the Company are putting best of their efforts for One Time Settlement (OTS ) of loans from the Secured Lenders.

9. Owing to the financial sickness, there is no production / business activity in the company after 31st Oct.2006.

10 No provision of IDS has been made on the provisions made on tentative basis in respect of professional fees.

11 All the loan /deposit accounts with State Bank of lndia remained seized through out the years ended on 30.09.2008,30.09.2009 and 30,09.2010 therefore. no provision has been made in accounts for the interest earned on margin money deposits with the bank which was in the year ended on 30.09.2007 was at Rs. 198198/-

12. Borrowing Costs :

None of the borrowing costs incurred during the year are attributable to the acquisition of fixed assets, hence reporting under Accounting Standard - 16 "Borrowing Cost" does not arise.

13 Segment Reporting:

The company is engaged in the business of manufacturing and marketing of automobile components falling within the single segment business of automobiles components. The company is managed as one entity and is governed by similar set of risks and returns.

As the company operates in a single segment, the reporting requirement prescribed in Accounting Standard - 17 are not applicable to the Company and have not been provided in this financial statement.

14. Related Parties:

Disclosure in respect of related part} transactions for the year ended 30,09.2009 are given below-

(A)

(i) Holding Company

Nil

(ii) Subsidiary Company

Nil

(iii) Associate of the Company and concern in which Key Management Personnel have significant influence. Transaction during the year ended 30.09.2009 Rs. NIL.

1. M/s. Garha Gears Ltd

2. M/s. Garha Ulibrocee Tools Ltd.

3. M./S&H Gears Pvt. Ltd,

4. M/s. Garha Auto Distributors.

5. M/s. Kshipra Gears

6. M/s. Garha Tours & Travles

(iv) Concerns in which the reporting company has substantial interest (Voting power of 20% or more). Nil

(v) Key management personnel

1, Shri Surendra Singh - Managing Director

2 Shri Ranveer Singh - Director

(B) Transactions with related parties during the year and outstanding balances as on 30.09.2010.

15. The Company does not have any subsidiary / Holding Company. Hence, reporting under Accounting Standard-21 " does not arise,

16. Taxes on Income

A. Deferred Taxes: The Company has unabsorbed carry forward losses/ depreciation available for set-off under the Income Tax Act, 1961. However, in view of present uncertainly regarding generation of sufficient future income, net deferred tax assets at the year end including related credit / charges for the year have not been recognised in these accounts on prudent basis.

17. Current Taxes: In view of the carry forward unabsorbed losses / deprecation, the Company does not expect any current tax liability for the Financial Years 2008-09 and 2009-10 (Assessment Years 2009-10 and 2010-11) and hence no provision has been made for the current Income Tax .

18. Previous year figures have been re-grouped and re-arranged wherever necessary.


Sep 30, 2009

1. Contingent Liabilities:

A. (a) Claims against the Company not acknowledged 30.09.2009 30.09.2008 As debts in respect of: Rupees In Lacs Rupees In Lacs

(i) Sales/Entry Tax matters pending under appeal /Revision 588.59 431.42

(ii) Excise Duty 48.51 48.51

(iii) Other 4.01 4.01

(iv) In respect of amount of interest liability/ Amount un- Amount un-

Penalty on delayed / non-payment/ non & ascertainable ascertainable

late deduction of statutory dues

(b) Income Tax Matters pending under appeal 56.32 84.25

B. (i) Contingent liabilities that may arise due to delayed / non-compliance of certain fiscal statutes and claims lodged by the ex-employees- amounts are unascertainable (30.09.2008-amountunascertainable).

(ii) The financial liabilities on the account of legal cases pending against the company amounts are on unascertainable (30.09.2008-amount unascertainable).

C. Estimated amount of the contract remaining to be executed on Capital Account and not provided for Rs.4593589/- (30.09.08 - Rs.4593589/-).

2. (a) The Company does not possess information as to which of its suppliers are ancillary industrial undertakings/ small scale industrial undertakings holding permanent registration certificate issued by the Directorate of Industries of a State or Union territory. Consequently, the liability, if any, of interest which would be payable under The Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act-1992.cannot be ascertained. However, the Company has not received any claims in respect of interest.

(b) As stated in note 3(a) above, the Company does not possess information as to which of suppliers are Small Scale Industrial Undertakings. Accordingly, the information regarding total outstanding dues to Small Scale Industrial Undertakings as at the year end and that regarding the names of Small Scale Industrial undertakings to whom the Company owes more than Rs.1.00 lakh and outstanding for more than 30 days has not been compiled and hence not disclosed by the Company.

NOTE: -

(1) The writ petition filed by the Company and admitted by the Honourable High Court, Mumbai for the payment of minimum remuneration of Rs. 1,27,307/-to the Late Managing Director for the period 01.04.1979 to 30.09.1981 (being the date of expiry of the terms of appointment of the Managing Director) has not come up for hearing. The Company has applied for the approval of the Department of Company Affairs, Ministry of Law, Justice and Company Affairs, for the re-appointment of the Managing Director for the period from 01.10.1981 to 30.09.1986, on the terms and conditions approved by the shareholders in the General Meeting of the Company. The total remuneration of Rs.6,05,207/- for the period from 01.04.1979 to 30.09.1986 has not been paid.

Notes :-

i. Licensed capacity represents capacity registered with the Directorate General of Technical development/ Secretariat for Industrial Approvals.

ii. Installed capacity is as certified by the management but not verified by the Auditors being a technical matter.

iii. Quantities of production exclude items manufactured for third parties. iv. Sales quantities include warranty replacements, free samples, claims, etc. v. Figures in the brackets relate to 30.09.2008.

3. (a) Sundry Debtors includes Rs. 22848088/- (30.09.08- Rs.22848088/-) due from a concern of which a Director was the proprietor till 06.11.1999. Maximum amount due at any time during the period from the said concerns is Rs.22848088/- (30.09.08 Rs.22848088/-)

(b) Loans and Advance includes amounts due from private limited company in which some of the Directors are members Rs.41252/- (30.09.08- Rs.41252/-). Maximum amount due at any time during the year from the said company is Rs.41252/- (30.09.08-RS.41252/-)

4. CURRENT ASSETS, LOAN & ADVANCES

a) In the opinion of the management and to the best of their knowledge and belief the aggregate value of current assets and loans and advances on realization in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

b) Balances under the head sundry debtors, loans and advances, creditors and others are subject to confirmation/ re-conciliation. Adjustments, if any, will be accounted for as and when confirmed / reconciled.

5. Sundry Debtors include Rs.4824150/-(30.09.08-Rs.4824150/-) due from some of the ex-distributors/customers of the company. The company is of the opinion that the amount is fully recoverable on completion of final settlement which is in progress. The company is confident of recovering the amounts.

6. The entire net worth of the Company had been eroded on account of the losses of year ended on 30.09.08. Based on the Balance Sheet of the Company as on 30.09.08 the company has filed the reference U/s.15(1) of SIC (SP)Act.1985 before BIFR, and the same has been registered as case No. 27/2009 on 13.07.2009.

7. Owing to the financial sickness, there is no production / business activity in the company after 31st Oct.2006.

8 No provision of TDS has been made on the provisions made on tentative basis in respect of professional fees.

9 All the loan / deposit accounts with State Bank of India remained seized through out the years ended on 30.09.2008 and 30.09.2009 therefore, no provision has been made in accounts for the interest earned on margin money deposits with the bank which was in the year ended on 30.09.2007 was at Rs. 198198/-

10. Borrowing Costs :

None of the borrowing costs incurred during the year are attributable to the acquisition of fixed assets, hence reporting under Accounting Standard -16 "Borrowing Cost" does not arise.

11. Segment Reporting:

The company is engaged in the business of manufacturing and marketing of automobile components falling within the single segment business of automobiles components. The company is managed as one entity and is governed by similar set of risks and returns.

As the company operates in a single segment, the reporting requirement prescribed in Accounting Standard-17 are not applicable to the Company and have not been provided in this financial statement.

12. Related Parties:

Disclosure in respect of related party transactions for the year ended 30.09.2009 are given below:-

(A)

(i) Holding Company

Nil

(ii) Subsidiary Company

Nil

(iii) Associate of the Company and concern in which Key Management Personnel have significant influence. Transaction during the year ended 30.09.2009 Rs. NIL.

1. M/s. Garha Gears Ltd

2. M/s. Garha Utilbrocce Tools Ltd.

3. M/s. S&H Gears Pvt. Ltd.

4. M/s. Garha Auto Distributors.

5. M/s. Kshipra Gears

6. M/s. Garha Tours & Travles

(iv) Concerns in which the reporting company has substantial interest (Voting power of 20% or more). Nil

(v) Key management personnel

1. Shri Surendra Singh - Managing Director

2. Shri Ranveer Singh - Director

3. Shri H.C. Poddar - H.O.D., Personnel & HRD.

13. During the year company has not entered into any Lease transactions. Hence reporting under "Accounting Standard - 19" does not arise.

14. The Company does not have any subsidiary / Holding Company. Hence, reporting under "Accounting Standard - 21 " does not arise.

15. Taxes on Income :-

A. Deferred Taxes: The Company has unabsorbed carry forward losses/ depreciation available for set- off under the Income Tax Act, 1961. However, in view of present uncertainty regarding generation of sufficient future income, net deferred tax assets at the year end including related credit / charges for the year have not been recognised in these accounts on prudent basis.

B. Current Taxes: In view of the carry forward unabsorbed losses / deprecation, the Company does not expect any current tax liability for the Financial Year 2007-08 and 2008-09 (Assessment Year 2008- 09 and 2009-10); and hence no provision have been made for the current Income Tax.

16. Previous year figures have been re-grouped and re-arranged wherever necessary.

 
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