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Notes to Accounts of GKB Ophthalmics Ltd.

Mar 31, 2015

1. Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

2. Nature of security :

The above short term borrowings from banks are secured by hypothecation of the inventories, book debts receivable and other current assets, and personal guarantees of three directors and corporate guarantee of GKB Vision Limited, an associate company.

3. Contingent Liabilities Rs. Rs.

a) Sales tax liability that may arise in respect of matters in appeal 11,170,738 11,170,738

b) Excise duty liability that may arise in respect of matters in dispute 51,747,843 3,361,887

c) Other claims against the Company not acknowledged as debts - 7,525,000

d) Guarantees given on behalf of associate companies. 363,008,000 312,108,000

e) Bills discounted 9,615,392 9,881,502

f) Letters of credit outstanding 21,619,309 7,714,789

g) Bank guarantees 5,229,403 5,229,403

4. It is not practical to estimate the timing of outflows in respect of 'a', 'b' and 'c' above pending resolution of legal proceedings.

Commitments Rs. Rs.

a) Estimated amount of contracts remaining to be executed on capital account and not - - provided for (net of advances)

b) Other commitments

The Company is a 100% EOU registered under the SEEPZ Special Economic Zone. As per the amendment to Letter of Permission dated November 20, 2008, the Company was required to achieve export turnover of USD 35.82 million and Net Foreign Exchange Earning (NFE) of USD 3.26 million during the period April 1, 2008 to March 31, 2013. Although the Company achieved Net Foreign Exchange Earnings (NFE) as required, export turnover obligation remained unfullfilled to the extent of USD 8.03 million. By letter dated May 27, 2013, the EOU status of the Company has been further extended by period of 5 years. However, the letter granting the extension does not make any mention of export turnover obligation. The Company is of the view that the condition of achieving export turnover no longer applies and the only requirement is that the Company should be NFE positive.

5. Disclosures as required by Accounting Standard (AS) 15 "Employee Benefits": a) Defined Contribution Plans :

Contribution to Defined Contribution Plans, recognised as an expense and included under "Employee Benefits Expenses"

6. to the Statement of Profit and Loss are as under :

* Employer's contribution to Provident Fund and EDLI Rs.1,434,650 (Previous year Rs.1,296,171)

* Employer's contribution to Family Pension Scheme Rs.1,326,089 (Previous year Rs.1,103,600 )

* Employer's contribution to Employees State Insurance Scheme Rs.1,555,731 (Previous year Rs. 1,285,686 )

* Employer's contribution to Superannuation Fund Rs.437,495 (Previous year Rs.310,903)

* Employer's contribution to Labour Welfare Fund Rs.58,380 (Previous year Rs.47,805)

7. eneral description of the defined benefit plans :

1) The Company operates a gratuity scheme, which is a funded scheme for qualifying employees, except in the case of directors where the scheme is unfunded. The scheme provides for lump sum payment to employees on retirement, death, while in employment or termination of employment or an amount equivalent to 15 days salary for every completed year of service or part thereof in six months, provided the employee has completed 5 years of service.

2) The Company operates a leave encashment scheme, which is a unfunded scheme. The present value of obligation under this scheme is based on an actuarial valuation using the Projected Unit Credit method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

8. During the year the Company has not capitalised any borrowing costs as per Accounting Standard (AS) 16 - "Borrowing costs".

9. Disclosures as required by Accounting Standard (AS) 17 - Segment Reporting : a) Primary Segment :

The Company operates in one primary segment i.e. ophthalmic lenses, and that is the only primary reportable segment.

10. Disclosures as required by Accounting Standard (AS) 18 - Related Party Disclosures :

(a) Relationships:

List of related parties with whom transactions were carried out during the year or previous year:

(i) Subsidiary companies

1 GKB Ophthalmics Products FZE

2 GKB Ophthalmics GmbH

(ii) Associates/ Enterprises in which directors exercise significant influence

1 Prime Lenses Pvt Ltd

2 GKB Vision Limited

3 Lensco-The Lens Company

4 GKB Opticals Limited

5 GKB Optic Technologies Pvt.Ltd.

(iii) Key Management Personnel

1 Mr. K.G Gupta - Chairman and Managing Director

(iv) Relatives of key management personnel

1 Mrs. Veena Gupta

2 Mr. Gaurav Gupta

3 Mr. Vikram Gupta

4 Mr. K. M. Gupta

11. There were no Loans and Advances in the nature of loans given to subsidiaries and associates. Hence disclosure requirements of clause 32 of the Listing Agreement are not applicable.

12. Unclaimed dividend: There is no amount due to be credited to the Investors Education & Protection Fund as at 31st March, 2015.

13. As per Accounting Standard (AS) 28 "Impairment of Assets", the Company has reviewed potential generation of economic benefits from fixed assets. Accordingly, no impairment loss has been provided for the year ended March 31, 2015 (previous year - Nil) in the books.

14. The products manufactured by the company do not have a warranty period, hence provision for warranty as specified in Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets" is not required to be made.

15. The Company's international and domestic transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to March 31, 2014, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with 'associated enterprises' as defined in section 92A of the Income Tax Act, 1961. The Management believes that the international transactions and specified domestic transactions entered into with 'associated enterprises' during the financial year are at arm's length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions.

16. No Provision for current tax expense has been made in the current year due to tax losses incurred by the Company.

17. Previous year's figures have been regrouped/reclassified, to correspond to current year's classification/disclosure.


Mar 31, 2014

1 Contingent Liabilities and Commitments : 31.03.2014 31.03.2013

Contingent Liabilities Rs. Rs.

a) Sales tax liability that may arise 11,170,738 11,170,738 in respect of matters in appeal

b) Excise duty liability that may arise 3,361,887 3,361,887 in respect of matters in appeal

c) Other claims against the Company not 7,525,000 7,525,000 acknowledged as debts

d) Guarantees given on behalf of associate 312,108,000 306,108,000 companies.

e) Bills discounted 9,881,502 14,898,384

f) Letters of credit outstanding 7,714,789 15,710,536

g) Bank guarantees 5,229,403 5,379,403

Note :

It is not practical to estimate the timing of outflows in respect of ''a'', ''b'' and ''c'' above pending resolution of legal proceedings.

Commitments Rs. Rs.

a) Estimated amount of contracts remaining to be executed on capital account and not - - provided for (net of advances)

b) Other commitments

The Company is a 100% EOU registered under the SEEPZ Special Economic Zone. As per the amendment to Letter of Permission dated November 20, 2008, the Company was required to achieve export turnover of USD 35.82 million and Net Foreign Exchange Earning (NFE) of USD 3.26 million during the period April 1, 2008 to March 31,2013. Although the Company achieved Net Foreign Exchange Earnings (NFE) as required, it did not meet the export turnover obligation.

By letter dated May 27, 2013, the period for achievement of export targets has been extended upto March 31,2018. As at March 31, 2014, the export turnover ob ligatio n re maining to be achieved is USD 8.03 mil -lion .

2 Trade receivable, loans and advances and trade payable balances are subject to confirmation, reconciliation and consequent adjustments, i f any.

3 Disclosures as required by Accounting Standard (AS) 15 "Employee Benefits": a) Defined Contribution Plans :

Contribution to Defined Contribution Plans, recognised as an expense and included under "Employee Benefits Expenses"

Note 4 to the Statement of Profit and Loss are as under :

- Employer''s contribution to Provident Fund and EDLI Rs.1,296,171 (Previous year Rs.1,278,195)

- Employer''s contribution to Family Pension Scheme Rs.1,103,600 (Previous year Rs.1,056,240 )

- Employer''s contribution to Employees State Insurance Scheme Rs.1,285,686 (Previous year Rs.1,178,245 )

- Employer''s contribution to Superannuation Fund Rs.310,903 (Previous year Rs.322,225)

- Employer''s contribution to Labour Welfare Fund Rs.47,805 (Previous year Rs.43,010)

5 During the year the Company has not capitalised any borrowing costs as per Accounting Standard (AS) 16 - "Borrowing costs".

6 Disclosures as required by Accounting Standard (AS) 17 - Segment Reporting : a) Primary Segment :

The Company operates in one primary segment i.e. ophthalmic lenses, and that is the only primary reportable segment.

7 Disclosures as required by Accounting Standard (AS) 18 - Related Party Disclosures :

(a) Relationships:

List of related parties with whom transactions were carried out during the year or previous year:

(i) Subsidiary companies

1 GKB Ophthalmics Products FZE

2 GKB Ophthalmics GmbH

(ii) Associates/ Enterprises in which directors exercise significant influence

1 Prime Lenses Pvt Ltd

2 GKB Vision Limited

3 Lensco-The Lens Company

4 GKB Opticals Limited

5 GKB Optic Technologies Pvt.Ltd.

6 GKB Rx Lens Pvt Ltd

7 Indo Prime Visual Technologies Pvt Ltd

(iii) Key Management Personnel

1 Mr. K.G Gupta - Chairman and Managing Director

(iv) Relatives of key management personnel

1 Mrs. Veena Gupta

2 Mr. Gaurav Gupta

3 Mr. Vikram Gupta

4 Mr. K. M. Gupta

8 There were no Loans and Advances in the nature of loans given to subsidiaries and associates. Hence disclosure requirements of clause 32 of the Listing Agreement are not applicable.

9 Unclaimed dividend: There is no amount due to be credited to the Investors Education & Protection Fund as at 31st March, 2014

10 As per Accounting Standard (AS) 28 "Impairment of Assets", the Company has reviewed potential generation of economic benefits from fixed assets. Accordingly, no impairment loss has been provided for the year ended March 31, 2014 (previous year - Nil) in the books.

11 During the previous year, the Company terminated the Joint Venture agreement and applied to the Ministry of Corporate Affairs (MCA) under the Easy Exit Scheme for the de-registration and dissolution of the Joint Venture entity, M/s Indo Prime Visual Technologies Private Limited. Accordingly, the value of investment in the Joint Venture entity was written off during the previous year after considering the realisation proceeds of Rs. 185,656/-.

12 The products manufactured by the company do not have a warranty period, hence provision for warranty as specified in Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets" is not required to be made.

13 The Company''s international and domestic transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to March 31, 2013, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with ''associated enterprises'' as defined in section 92A of the Income Tax Act, 1961. The Management believes that the international transactions and specified domestic transactions entered into with ''associated enterprises'' during the financial year are at arm''s length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions.

14 Previous year''s figures have been regrouped/reclassified, to correspond to current year''s classification/disclosure.


Mar 31, 2013

31.03.2013 31.03.2012

1 Contingent Liabilities and Commitments : Contingent Liabilities Rs. Rs.

a) Sales tax liability that may arise in respect of matters in appeal 11,170,738 11,170,738

b) Excise duty liability that may arise in respect of matters in appeal 3,361,887 3,361,887

c) Other claims against the Company not acknowledged as debts 7,525,000 7,140,000

d) Guarantees given on behalf of associate companies. 306,108,000 306,108,000

e) Bills discounted 14,898,384 22,500,515

f) Letters of credit outstanding 15,710,536 19,841,978

g) Bank guarantees 5,379,403 5,252,568

2 Trade receivable, loans and advances and trade payable balances are subject to confirmation, reconciliation and consequent adjustments, if any.

3 Disclosures as required by Accounting Standard (AS) 15 "Employee Benefits":

a) Defined Contribution Plans :

Contribution to Defined Contribution Plans, recognised as an expense and included under "Employee Benefit Expenses" Note 21 to the Statement of Profit and Loss are as under :

- Employer''s contribution to Provident Fund and EDLI Rs.1,278,195 (Previous year Rs. 1,139,840)

- Employer''s contribution to Family Pension Scheme Rs. 1,056,240 (Previous year Rs. 1,025,332)

- Employer''s contribution to Employees State Insurance Scheme Rs. 1,178,245 (Previous year Rs. 1,151,033)

- Employer''s contribution to Superannuation Fund Rs. 322,225 (Previous year Rs. 318,344)

b) Defined Benefit Plans :

The Company''s gratuity and leave encashment plans are defined benefit plans :

4 During the year the Company has not capitalised any borrowing costs as per Accounting Standard (AS) 16 - "Borrowing costs".

5 Disclosures as required by Accounting Standard (AS) 17 - Segment Reporting :

a) Primary Segment :

The Company operates in one primary segment i.e. ophthalmic lenses, and that is the only primary reportable segment.

b) Secondary Segment (Geographical Segment) :

6 Disclosures as required by Accounting Standard (AS) 18 - Related Party Disclosures :

(a) Relationships:

List of related parties with whom transactions were carried out during the year or previous year:

(i) Subsidiary companies

1 GKB Ophthalmics Products FZE

2 GKB Ophthalmics GmbH

(ii) Associates/Joint venture/Enterprises in which directors exercise significant influence

1 Prime Lenses Pvt Ltd

2 GKB Vision Limited

3 GKB Rx Lens Pvt Ltd

4 Indo Prime Visual Technologies Pvt Ltd

5 Lensco-The Lens Company

6 GKB Opticals Limited

(iii) Key Management Personnel

1 Mr. K.G Gupta - Chairman and Managing Director

(iv) Relatives of key management personnel

1 Mrs. Veena Gupta

2 Mr. Gaurav Gupta

3 Mr. Vikram Gupta

4 Mr. K. M. Gupta

7 There were no Loans and Advances in the nature of loans given to subsidiaries and associates. Hence disclosure requirements of clause 32 of the Listing Agreement are not applicable.

8 Unclaimed dividend: There is no amount due to be credited to the Investors Education & Protection Fund as at 31st March, 2013

9 As per Accounting Standard (AS) 28 "Impairment of Assets", the Company has reviewed potential generation of economic benefits from fixed assets. Accordingly, no impairment loss has been provided for the year ended March 31, 2013 (previous year - Nil) in the books.

10 Disclosure as required by Accounting Standard (AS) 27 - " Financial Reporting of Interests in Joint Ventures"

a) Details of Investment in Joint Venture *

Name of the Joint Venture Entity : Indo Prime Visual Technologies Private Limited Description of Interest : Incorporated Joint Venture

(Sale of Indo equipment in India) Proportion of Interest : 48.50% Country of incorporation : India

* During the year, the Company terminated the joint venture agreement and an application has been made to the Ministry of Corporate Affairs (MCA) under the Easy Exit Scheme for the de-registration and dissolution of the Joint Venture entity. Accordingly, the value of investment in the Joint Venture entity has been written off during the year after considering the realisation proceeds of Rs. 185,656/-.

11 The products manufactured by the company do not have a warranty period, hence provision for warranty as specified in Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets" is not required to be made.

12 The Company''s international and domestic transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to March 31, 2012, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered into with ''associated enterprises'' as defined in section 92A of the Income Tax Act, 1961. The Management believes that the international transactions and specified domestic transactions entered into with ''associated enterprises'' during the financial year are at arm''s length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions.

13 Previous year''s figures have been regrouped/reclassified, to correspond to current year''s classification/disclosure.


Mar 31, 2012

Rights, preferences and restrictions attached to shares

The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company in proportion to their shareholding.

Nature of security :

The above short term borrowings from banks are secured by hypothecation of the inventories, book debts receivable and other current assets and personal guarantees of three directors and corporate guarantee of GKB Vision Limited, an associate company.

* Purchases include prior period items of Rs. Nil (previous year reversal of Rs. 1,737,159)

* Interest expenses on borrowings include prior period items of Rs. Nil (previous year Rs. 2,524)

** Interest expenses on account of Income Tax includes interest related to earlier years Rs. 6,229,000 (previous year Rs. 3,219,096)

Note:

* Rates and taxes include prior period items of Rs. Nil (previous year Rs. 70,897)

# Freight and forwarding expenses include prior period items of Rs. Nil (previous year Rs. 15,776)

1 Contingent Liabilities and Commitments :

31.03.2012 31.03.2011

Contingent Liabilities Rs. Rs.

a) Sales tax liability that may arise in respect of matters in appeal 11,170,738 -

b) Excise duty liability that may arise in respect of matters in appeal 3,361,887 3,361,887

c) Guarantees given on behalf of associate companies 306,108,000 52,198,000

d) Bills discounted 22,500,515 -

e) Letters of credit outstanding 19,841,978 76,415,440

f) Bank guarantees 5,252,568 5,102,568

Note :

ii) It is not practical to estimate the timing of outflows in respect of 'a' and 'b' above pending resolution of legal proceedings.

2 Trade receivable, loans and advances and trade payable balances are subject to confirmation, reconciliation and consequent adjustments, if any.

3 Disclosures as required by Accounting Standard (AS) 15 "Employee Benefts":

a) Defned Contribution Plan:

Contribution to Defined Contribution Plan, recognised as an expense and included under "Employee Benefits

Expenses"

Note 21 to the Statement of Profit and Loss are as under :

- Employer's contribution to Provident Fund and EDLI Rs.1,139,840 (Previous year Rs. 1,077,766)

- Employer's contribution to Family Pension Scheme Rs. 1,025,332 (Previous year Rs. 991,589)

- Employer's contribution to Employees State Insurance Scheme Rs. 1,151,033 (Previous year Rs. 1,141,526)

- Employer's contribution to Superannuation Fund Rs. 318,344 (Previous year Rs. 475,671)

General description of the defned beneft plan ;

1) The Company operates a gratuity scheme, which is a funded scheme for qualifying employees, except in the case of directors where the scheme is unfunded. The scheme provides for lump sum payment to employees on retirement, death, while in employment or termination of employment or an amount equivalent to 15 days salary for every completed year of service or part thereof in six months, provided the employee has completed 5 years of service.

2) The Company operates a leave encashment scheme, which is a unfunded scheme. The present value of obligation under this scheme is based on an actuarial valuation using the Projected Unit Credit method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

4 During the year the Company has not capitalised any borrowing costs as per Accounting Standard (AS) 16 - "Borrowing costs".

5 Disclosures as required by Accounting Standard (AS) 17 - Segment Reporting :

a) Primary Segment :

The Company operates in one primary segment i.e. ophthalmic lenses, and that is the only primary reportable segment.

* Revenue within India includes deemed export sales of Rs. 36,423,476 (Previous Year Rs. 34,285,394) made to other EOU units in India.

Figures in brackets pertain to the previous year.

6 Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act) as at 31st March, 2012, as per information available with the Company.

The above information and that given in Note 7 - "Trade Payables" pertaining to micro and small enterprises has been determined to the extent such parties have been identified on the basis of the information available with the Company. This has been relied upon by the auditors.

7 Disclosures as required by Accounting Standard (AS) 18 - Related Party Disclosures:

(a) Relationships:

List of related parties with whom transactions were carried out during the year:

(i) Subsidiary companies

1 GKB Ophthalmics Products FZE

2 GKB Ophthalmics GmbH

(ii) Associates/Joint venture

1 Prime Lenses Pvt. Ltd.

2 GKB Vision Limited

3 GKB Rx Lens Pvt. Ltd.

4 Indo Prime Visual Technologies Pvt. Ltd.

5 Lensco-The Lens Company

6 GKB Opticals Limited

(iii) Key Management Personnel

1 Mr. K.G. Gupta - Chairman and Managing Director

(iv) Relatives of key management personnel

1 Mrs. Veena Gupta

2 Mr. Gaurav Gupta

3 Mr. Vikram Gupta

4 Mr. K. M. Gupta

Note: Amounts paid/received includes amounts charged/credited to the statement of profit and loss.

8 There were no Loans and Advances in the nature of loans given to subsidiaries and associates. Hence disclosure requirements of Clause 32 of the Listing Agreement is not applicable.

9 Unclaimed dividend: There is no amount due to be credited to the Investors Education & Protection Fund as at 31st March, 2012.

10 As per Accounting Standard (AS) 28 "Impairment of Assets", the Company has reviewed potential generation of economic benefits from fixed assets. Accordingly, no impairment loss has been provided for the year ended March 31, 2012 (previous year - Nil) in the books.

11 The products manufactured by the company do not have a warranty period, hence provision for warranty as specified in Accounting Standard (AS) 29 on "Provisions, Contingent Liabilities and Contingent Assets" is not required to be made.

12 The Company's transfer pricing certification is carried out by an independent firm of Chartered Accountants. The Company has established a system of maintenance of documents and information as required by the transfer pricing legislation u/s. 92-92F of the Income Tax Act, 1961. Up to March 31, 2011, the last date for which the transfer pricing certification was carried out, there were no adjustments made to the transactions entered with 'associated enterprises' as defined in Section 92A of the Income Tax Act, 1961. The Management believes that the international transactions entered into with 'associated enterprises' during the financial year are at arm's length price and that there will be no impact on the amount of tax expense or the provision of tax on the application of the transfer pricing legislation to such transactions.

13 Consequent to the notification of Revised Schedule VI under the Companies Act, 1956, the Company has prepared the financial statements for the year ended 31st March, 2012 as per the requirements of the Revised Schedule VI issued by the Ministry of Corporate Affairs. Accordingly, the figures for the previous year have been regrouped / reclassified to conform to the current year's classification. Further, the adoption of the Revised Schedule VI for the previous year's figures does not impact recognition and measurement principles followed for preparation of the financial statements.


Mar 31, 2010

1. The Company in its accounts of the earlier year had disclosed under the head " Investments" 28,76,000 shares of Rsl 0/- each in Prime Ophthalmic Products Pvt. Ltd. Subsequent to the closure of the accounts of the earlier year the Bombay High court has approved the merger of Prime Ophthalmic Products Pvt. Ltd in another company namely Prime Lenses Pvt. Ltd with effect from 01.07.2009. As a consequence of this merger the Company is entitled to receive 5,32,592 shares of Rs 1 0/- each in Prime Lenses Pvt. Ltd. as against 28,76,000 shares of Rs. 1 0/- each held earlier in Prime Ophthalmic Products Pvt. Ltd. Considering the aforesaid change in the share holding, the Company has disclosed in the accounts of current year 5,32,592 shares of Rs. 1 0/-each in Prime Lenses Pvt. Ltd. and Nil Shares in Prime Ophthalmic Products Pvt. Ltd.

2 a) The Company had during the earlier years invested a sum of Euros 127,822.92 (Rs. 53,99,488/-) in GKB Ophthalmics GmbH, in Germany. During the financial year 2004-05, GmbH had refunded Euros 60,000/- at cost in partial disinvestment of capital reserves i.e. export of lenses converted into equity. During the financial year 2006-07, GmbH has further refunded 24,258/- Euros at cost in partial disinvestment of Capital reserve. As on the year end, the Company holds a n investment of Euros 25,624.92 (Rs. 10,81,488/-) in GmbH.

b) The GmbH has informed the Company that although it holds the entire capital of the GmbH there is no "Subsidiary - Holding Company" relationshipbetweenthetwoCompaniesaspertheGermanLaw.Thelatestfinancial statement received from the GmbH is for the year ended 31.12.2009 and GmbH has incurred a loss in Euro 902,37 compared to the Loss of Euros 691,20 in the previous year endedon31.12.2008. Thefinancial statement of the company and GKB Ophthalmics GmbH, a company incorporated in Germany has therefore not been consolidated due to absence of subsidiary holding relationship.

c) The GmbH has also intimated to the Company that it holds in the GmbH only one share for the entire investment. No share Certificate has however been issued to the company, since as per the German Law no such certificate is required to be issued to the shareholder.

3 The Company had during the earlier year invested a sum of DHS 150,000/-( Rs. 1,830,150/-) in GKB Ophthalmic Products FZE in SAIF Zone, Sharjah, U.A.E. The GKB Ophthalmic Products FZE ("the FZF) was incorporated on 29.02.2004 in the Sharjah Airport International Free Zone, Sharjah as a Free Zone Establishment with limited Liability.

FZE has informed the Company that although it holds the entire capital of the FZE there is no "Subsidiary - Holding Company"relationshipbetweenthetwoCompaniesaspertheU.A.ELawThe enterprise is licensed to import, export and Distribution of Optical Products. The latest financial statement received from the FZE is for the year ended 31.12.2009 and the FZE has earned a profit of DHS 7,86,847/- as compared to the profits of DHS 821,369/- previous period ended 31.12.2008. The financial statement of the Company and GKB Ophthalmics Products FZE, an establishment incorporated in U.A.E have therefore not been consolidated due to absence of subsidiary holding relationship.

c) The FZE has also intimated to the Company that it holds in the Establishment only one share of DHS. 1 50,000/- for the entire investment.

Note: There were no Loans & Advances where interest is not charged or charged below bank rate.

4 After the end of the year, the Company has sent Balance Confirmation letters to the parties showing debit/credit outstanding balances as on 31 st March, 2010. Some of the parties have confirmed their balances. Necessary adjustments, if any shall be made in the accounts on the settlements of the outstanding balances of the other remaining parties.

The Company has been advised that the computation of net profit for the purpose of Directors remuneration under section 349 of Companies Act, 1956 need not be enumerated since no commission by way of percentage of profits is payable for the year to any of the directors of the Company.

5. Payment of Cess

The Company has not made any provision for the Cess under provision of section 441A of the Companys Act, 1956 in the absence of notification regarding rate and manner of remittance.

6. Micro, Small and Medium Enterprises Development Act,2006

Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the company) :

7. Disclosure of related parties/related party transactions :

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made. Also no amounts have been written off or written back during the year in respect of debts dues from related parties.

i) List of Related parties :

Associate Companies/firms/parties

1. Prime Lenses Pvt. Ltd

2. GKB Vision Limited.

3. GKB Opticals Limited.

4. Gopal Krishna & Brothers.

5. GKB Rx Lens Pvt. Ltd.

6. Mega motion infotech Pvt. Ltd.

7. GKB Ophthalmics Products FZE

8. GKB Ophthalmics GmbH

9. Prime Ophthalmic Products Pvt. Ltd.

10. Indo Prime Visual Technologies Pvt. Ltd.

11. Crysta lenses Pvt. Ltd.

Key Management Personnel

1. Mr. K. G. Gupta - Chairman & Managing Director

Relatives of Key Management Personnel.

1. Mrs. Veena Gupta

2. Mr. Gaurav Gupta

3. Mrs. Shefali Chawla

4. Mr. Vipul Chawla

5. Mr. R. K. Gupta

6. Mr. B. K. Gupta

7. Mrs. Uma Gupta

8. Mr. K. M. Gupta

9. Mrs. Usha Gupta

10. Mrs. Sushma Gupta

11. Mr. N. K. Gupta

12. Dr. G. N. Agrawal

13.Vikram Gupta

NOTE : Related party relationship is as identified by the Company and relied upon by the Auditors.

8. Segment Information:

i) Primary Segments: Business Segment The Company is primarily engaged in a single segment business of a manufacture and sale of Ophthalmic lenses and that is the only primary reportable segment. The Companys operations are solely situated in India.

ii) Secondary Segments: Geographical Segment Both the units of the Company are 100% Export Oriented Units. The secondary segmental reporting is based on the geographical location of customers. The geographical segments have been disclosed based on revenues within India (sales to customers in India) and revenues outside India (sales to customers located outside India)

9. Earnings per share

Basic and diluted earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares. The Company does not have any outstanding dilutive potential equity shares. Consequently the basic and diluted earnings per share remain the same.

10. Excise duty

The company is a 100% EOU and as per prevailing laws& guidelines it is exempted from customs & excise duties & levies. The company is however required to pay custom duty which is in the nature of excise duty payable at concessional rates on domestic sales.During the year, the company has made domesic sales of Rs 4,50,47,521/- (excluding duty) on which excise duty of Rs.21,64,211/- has been paid to excise Department.

11. The product manufactured by the company do not have warranty period, hence provision for warranty as specified in AS-29 on provision, contingent liabilities and contingent assets is not required to be made.

12. Previous years figures have been regrouped and/or rearranged wherever considered necessary to make their classification comparable with that of the current year.


Mar 31, 2009

1 Contingent liabilities not provided for: As at 31.3.2009 As at 31.3.2008

(a) Letter of credit outstanding 47,198,856 34,278,739

(b) Bank Guarantees 4,371,393 31,72,500

(c) Corporate Guarantees 52,198,000 58,198,000

(d) Bills discounted 37,327,246 35,381,173

(e) Disputed Demand in respect of:

- Income Tax 3,396,154 4,414,507

- Central Excise 3,361,887 3,361,887

2 a) The Company bod during the earlier years invested a sum of Euros 127822.92 (Rs. 53,99,488/-) in GKB Ophthalmics GmbH, in Germany. During the financial year 2004-05, GmbH had refunded Euros 60,000/- at cost in partial disinvestment of capital reserves i.e. export of lenses converted into equity. During the financial year 2006-07, GmbH has further refunded 24,258/- Euros at cost in partial disinvestment of Capital reserve. As on the year end, the Company holds an investment of Euros 25,624.92 (Rs. 10,81,488/-) in GmbH.

b) The GmbH has informed the Company that although it holds the entire capital of the GmbH there is no Subsidiary - Holding Company" relationship between the two Companies as per the German Law, The latest financial statement received from the GmbH is for the year ended 31,12.2008 and GmbH has incurred a loss in Euro 691,20compared to the Loss of Euros 526,23 in the previous year ended on 31.12.2007 The financial statement of the company and GKB Ophthalmia GmbH, a company incorporated in Germany has therefore not been consolidated due to absence of subsidiary holding relationship.

c) The GmbH has also intimated to the Company that it holds in the GmbH only one share for the entire investment. No share Certificate has however been i.ssued to the company, since as per the German Law no such certificate is required to be issued to the shareholder.

3 a) The Company had during the earlier year invested a sum of DHS 150,000/- (Rs. 1,830,150/-) in GKB Ophthalmic Products FZE in SAIF Zone, Sharjah,U.A.E.The GKB Ophthalmic Products FZE ("the FZE") in the Sharjah Airport International Free Zone, Sharjah as a Free Zone Establishment with limited Liability.

b) The FZE has informed the Company that although it holds the entire capital of the FZE there is no "Subsidiary - Holding Company relationship between the two Companies as per the U.A.E. law The enetrprise is licensed to import, export and Distribution of Optical Products. The latest financial statement received from the FZE is for the year ended 31.12.2008 and the FZE has earned a profit of DHS 2,894,222/- as compared to the profits of DHS 2,072,853/- previous period ended 31.12.2007. The financial statement of the Company and GKB Ophthalmics Products FZE, an establishment incorporated in U.A.E have therefore not been consolidated due to absence of subsidiary holding relationship.

c) The FZE has also intimated to the Company that it holds in the Establishment only one share of DHS. 150,000/- for the entire investment, 3 After the end of the year, the Company has sent Balance Confirmation letters to the parties showing debit/credit outstanding balances as on 31 st March, 2009. Some of the parties have confirmed their balances. Necessary adjustments, if any shall be made in the accounts on the settlements of the outstanding balances of the other remaining parties, Unclaimed Dividend: There is no amount due to be credited to investors Education & Protection fund

4. Payment of Cess

The Company has not made any provision for the Cess under provision of section 441A of the Companys Act, 1956 in the absence of notification regarding rate and manner of remittance.

5 Disclosure of related parties/related party transactions :

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made. Also no amounts have been written off or written back during the year in respect of debts due from related parties.

i) List of Related parties: Associate Companies/firms/parties

1. Prime Lenses Pvt. Ltd 5. GKB Rx Lens Pvt. ltd. 9. Prime Ophthalmic Products Pvt. Ltd.

2. GKB Vision Limited. 6. Mega motion infotech Pvt. Ltd. 10. Indo Prime Visual Technologies Pvt. Ltd.

3. GKB Opticals Limited. 7. GKB Ophthalmics Products FZE 11. Crysta lenses Pvt. Ltd.

4. Gopo) Krishna & Brothers. 8. GKB Ophthalmics GmbH

Key Management Personnel

1. Mr, K. G. Gupta - Chairman & Managing Director

2. Mr. Vilcram Gupta - Wholetime Director (upto 31st March, 2008) Relatives of

1. Mrs. Veena Gupta 5. Mr. R. K. Gupta 9. Mrs. Usha Gupta

Key Management 2. Mr. Gaurav Gupta 6. Mr, B. K. Gupta 10. Mrs, Sushma Gupta

Personnel. 3. Mrs, Shefali Chawla 7. Mrs. Uma Gupta 11. Mr, N. K. Gupta

4, Mr. Vipul Chawla 8, Mr. K, M, Gupta 12, Dr. G. N, Agrawal

NOTE : Related party relationship is as identified by the Company and relied upon by the Auditors,

6. Segment Information:

i) Primary Segments: Business Segment

The Company is primarily engaged in a single segment business of a manufacture and sale of Ophthalmic lenses and that is the only primary reportable segment. The Companys operations are solely situated in India.

7 Earnings per share

Basic and diluted earnings per share are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number of equity shares. The Company does not have any outstanding dilutive potential equity shares. Consequently the basic and diluted earnings per share remain the same.

8 Excise duty

The company is a 100% EOU and as per prevailing laws & guidelines it is exempted from customs & excise duties & levies. The company is however required to pay custom doty which is in the nature of excise duty payable at concessional rates on domestic sales.During the year, the company has made domesic sales of Rs 7,47,00,136/- {excluding duty) on which excise duty of Rs.39,31,343/- has been paid to excise Department.

9 The product manufactured by the company do not have warranty period, hence provision for warranty as specified in AS-29 on provision, contingent liabilities and contingent assets is not required to be made.

10 Previous years figures have been regrouped and/or rearranged wherever considered necessary to mate their classification comparable with that of the current year.

 
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