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Notes to Accounts of Hind Rectifiers Ltd.

Mar 31, 2014

(* (**)) Secured by first charge against all movable and immovable assets both present and future situated at Bhandup, Mumbai and also by hypothecation of stocks and book debts of the Company ranking pari-passu in favour of ICICI Bank Ltd. and Union Bank of India.

(*) Includes

i) Loan for vehicles Rs. 17.78 lacs (Previous year Rs. 30.51 lacs)

ii) Fixed Deposits Rs. 21.14 lacs (Previous year NIL)

(**) Includes statutory dues and outstanding expenses

* Balance with banks in current account includes Unclaimed Dividend of Rs. 24.19 lacs (Previous year Rs. 23.19 lacs) ** Balance in Margin money towards security for Letter of Credit and Letter of Guarantee

1) Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for Rs. 130.07 lacs (Previous Year Rs. 152.95 lacs).

2) Contingent Liabilities in respect of the following:

(Rs. in lacs)

Particulars As at As at March 31, 2014 March 31, 2013

Letters of credit opened by - 90.74 the bankers of the Company in favour of the third parties

Guarantee given by the banks to 734.67 817.77 the third parties on behalf of the Company

Letter of Credit discounted with 101.07 - bank

Claims of Excise disputed by the 90.29 99.39 Company

Claims of Sales Tax disputed by the 43.90 13.75 Company

Claims of Income Tax disputed by the - 18.48 Company

Non-performance of Export obligation - 4.96

3) Employee Benefits:

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made.

4) Trade Receivables over six months comprises of Rs. 614.35 lacs (Previous year Rs. 599.49 lacs) due from Government concerns and Rs. 215.90 lacs (Previous year Rs. 165.12 lacs) due from commercial parties.

5) In the opinion of the Management, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and all provisions for laibilities are adequate and not in excess of the amount considered necessary.

6) In the opinion of the Management, no provision is required against contingent liabilities referred hereinabove.

7) Balance of Trade Receivables and Trade Payables are subject to confirmation.

8) The recurring expenditure of Rs. 49.11 lacs (Previous year Rs. 39.38 lacs) and Capital Expenditure of Rs. 0.65 lacs (Previous Year Nil) spent in respect of Research and Development during the year have been debited to respective account.

9) Segment Information :

The Company has identified its Business Segments as its Primary Segments comprising of Electronic Components and Equipments.

* Raw materials consumed:

i) Includes material used for service activities.

ii) Excludes sale and stock of scrap.

iii) Includes Conversion and Processing charges Rs. 344.26 lacs (Previous Year Rs. 343.11 lacs)

10) Due to absence of profits during the year, the management personnel have been paid the remuneration as approved by shareholders and remuneration committee as minimum remuneration.

11) Previous year''s figures has been re-classified and re-grouped wherever necessary.


Mar 31, 2013

I) Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for Rs. 152.95 lacs (Previous Year Rs. 150.03 lacs).

ii) Contingent Liabilities in respect of the following:

(Rs.in lacs)

Particulars As at As at March 31, 2013 March 31, 2012

Letters of credit opened by the bankers of the Company 90.74 91.69 in favour of the third parties

Guarantee given by the banks to the third parties on 817.77 702.44 behalf of the Company

Letter of Credit discounted with bank 68.27

Claims of Excise disputed by the Company 99.39 45.45

Claims of Sales Tax disputed by the Company 13.75

Claims of Income Tax disputed by the Company 18.48 27.61

Non-performance of Export obligation 4.96 4.96

iii) Employee Benefits:

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made.

iv) Trade Receivables over six months comprises of Rs. 599.49 lacs (Previous year Rs. 624.89 lacs) due from Government concerns and Rs. 165.12 lacs (Previous year Rs. 89.04 lacs) due from commercial parties.

v) In the opinion of the Management, the current assets, loans and advances are approximately of the values

stated if realised in the ordinary course of business and all provisions for laibilities are adequate and not in excess of the amount considered necessary.

vi) In view of the deductions available under section 80 IC of the Income Tax Act, 1961 to the Company, provision

for Income Tax of Rs. 222.50 lacs has been computed on the basis of Minimum Alternative Tax (MAT) in accordance with section 115JB of the Income Tax Act, 1961. Considering the future profitability and taxable position in the subsequent years, the Company has recognised MAT Credit Entitlement of Rs. 125.00 lacs as an asset by crediting the Statement of Profit & Loss Account for an equal amount and disclosed the same under the head Other Non-Current Assets in accordance with the Guidance Note on "Accounting for Credit available in respect of Minimum Alternative Tax under the Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India.

vii) In the opinion of the Management, no provision is required against contingent liabilities referred hereinabove.

viii) Balance of Trade Receivables and Trade Payables are subject to confirmation.

ix) The recurring expenditure of Rs. 39.38 lacs (Previous year Rs. 28.06 lacs) spent in respect of Research and

Development during the year have been debited to respective expense account.

x) At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. However, in the opinion of the management, there is no impairment of assets as on the balance sheet date.

xi) Segment Information :

The Company has identified its Business Segments as its Primary Segments comprising of Electronic Components and Equipments.

xii) Previous year''s figures has been re-classified and re-grouped to confirm to this year.


Mar 31, 2012

I) Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for Rs 150.03 lacs (Previous Year Rs 151.18 lacs).

ii) Contingent Liabilities in respect of the following:

(Rs.in lacs)

Particulars As at As at March 31, 2012 March 31, 2011

Letters of credit opened by the bankers of the Company 91.69 98.15 in favour of the third parties

Guarantee given by the banks to the third parties on 702.44 533.57 behalf of the Company

Letter of Credit discounted with bank 68.27 -

Claims of Excise disputed by the Company 45.45 14.78

Claims of ESIC disputed by the Company - 14.73

Claims of Income Tax disputed by the Company 27.61 10.87

Non-performance of Export obligation 4.96 4.96

iii) Trade Receivables over six months comprises of Rs 624.89 lacs (Previous year Rs 434.44 lacs) due from Government concerns and Rs 89.04 lacs (Previous year Rs 74.98 lacs) due from commercial parties.

iv) In the opinion of the Management, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and all provisions for laibilities are adequate and not in excess of the amount considered necessary.

v) In view of the deductions available under section 80 IC of the Income Tax Act, 1961 to the Company, provision for Income Tax of Rs 244.00 lacs has been computed on the basis of Minimum Alternative Tax (MAT) in accordance with section 115JB of the Income Tax Act, 1961. Considering the future profitability and taxable position in the subsequent years, the Company has recognised MAT Credit Entitlement of Rs 88.00 lacs as an asset by crediting the Profit & Loss Account for an equal amount and disclosed the same under the head Other Non-Current Assets in accordance with the Guidance Note on "Accounting for Credit available in respect of Minimum Alternative Tax under the Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India.

vi) In the opinion of the Management, no provision is required against contingent liabilities referred hereinabove.

vii) Balance of Trade Receivables and Trade Payables are subject to confirmation.

viii) The recurring expenditure of Rs 28.06 lacs (Previous year Rs 19.97 lacs) spent in respect of Research and Development during the year have been debited to respective expense account.

ix) At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. However, in the opinion of the management, there is no impairment of assets as on the balance sheet date.

x) During the year a fraud amounting to Rs 24.00 lacs approximately committed by an employee Mr. A. R. Biswas of Kolkata branch was noticed. Services of the said employee since, has been terminated and legal action has been initiated against him. The necessary accounting treatment for recovery/loss will be given in the year of settlement.

Includes purchases for manufacturing:

* Rs 0.63 lacs (Previous year Rs 0.90 lacs) ** Rs 7.65 lacs (Previous year Rs 5.83 lacs) *** Rs 5.38 lacs (Previous year Rs 36.18 lacs)

* Raw materials consumed:

i) Includes material used for service activities.

ii) Excludes sale and stock of scrap.

iii) Others include Conversion and Processing charges Rs 302.51 lacs (Previous Year Rs 239.87 lacs)

xi) Till the year ended 31st March, 2011, the Company was using the pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its Financial Statements. During the year ended 31st March, 2012 the Revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company. Accordingly previous year's figures has been re-classified and re-grouped to confirm to this year.


Mar 31, 2011

1. Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for Rs. 1,51,17,600/- (Previous Year Rs. 1,46,78,400/-) and on account of Capital Expenditure Rs. 2,00,000/- (Previous Year Rs. 2,00,000/-)

2. Contigent Liabilities in respect of the following:

31.03.2011 31.03.2010

Rs. Rs.

i) Letters of credit opened by the bankers of the Company in favour of third parties 98,15,255 81,80,222

ii) Guarantee given by the banks to the third parties on behalf of the Company 5,33,56,691 6,38,81,068

iii) Claims of Excise disputed by the Company 14,77,875 14,77,875

iv) Claims of ESIC disputed by the Company 14,72,936 14,72,936

v) Claims of Income Tax disputed by the Company 10,86,630 -

vi) Non-performance of Export obligation 4,95,712 4,95,712

3. Employee Benefits:

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made.

4. Sundry debtors over six months comprise Rs. 508.03 lacs (Previous year Rs. 276.86 lacs) due from Government concerns and Rs. 86.54 lacs (Previous year Rs. 52.68 lacs) due from commercial parties.

5. In the opinion of the Management, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and all provisions for laibilities are adequate and not in excess of the amount considered necessary.

6. In view of the deductions available under section 80 IC of the Income Tax Act, 1961 to the Company, provision for Income Tax of Rs. 2,34,00,000/- has been computed on the basis of Minimum Alternative Tax (MAT) in accordance with section 115JB of the Income Tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the Company has recognised MAT Credit Entitlement of Rs.54,00,000/- as an asset by crediting the Profit & Loss Account for an equal amount and disclosed the same under the head Loans and Advances in accordance with the Guidance Note on "Accounting for Credit available in respect of Minimum Alternative Tax under the Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India.

7. In the opinion of the Management, no provision is required against contingent liabilities referred in Note No. 4 of this schedule.

8. Balances of debtors and creditors are subject to confirmation.

9. Sundry Creditors of Rs. 15,46,05,179/- (Previous Year Rs. 9,42,99,458/-), includes Rs. 58,08,297/- (Previous Year Rs. 15,34,709/-) payable to Micro, Small and Medium Enterprises.

Based on the information available with the Company there are no overdue amount payable to suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006.

10. The recurring expenditure of Rs. 19.97 lacs ( Previous year Rs. 39.45 lacs) spent in respect of Research and Development during the year have been debited to respective expense account.

11. At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. However, in the opinion of the management, there is no impairment of assets as on the balance sheet date.

12. Segment Information :

The Company has identified its Business Segments as its Primary Segments comprising of Electronic Components and Equipments.

13. Related Party Disclosure Under Accounting Standard - 18 :

The disclosure of transactions with the related parties as defined in the accounting standard are given below : I) List of related parties with whom transactions have taken place and relationship :

Sr. No. Name of the Related Party Relationship

i. Shri. S.K.Nevatia Key Management Personnel

ii. Smt. Uma Nevatia Key Management Personnel

iii. Shri. Saurabh Nevatia Relative of Key Management Personnel

iv. Smt. Surabhi Golyan Relative of Key Management Personnel

v. Shri. Bharat Swaroop Relative of Key Management Personnel

14. Previous years figures have been reclassified and regrouped wherever necessary.


Mar 31, 2010

1. Estimated amount of contract remaining to be executed on account of Technical Know-How not provided for Rs.1,46,78,400/- (Previous Year P.s.1,59,88,800/-) and on account of Capital Expenditure Rs. 2,00,000/- (Previous Year Rs.76,61,972/-)

2. Contigent Liabilities in respect of the following :

31.03.2010 31.03.2009 Rs. Rs.

i) Letters of credit opened by the bankers of the Company in favour of third 81,80,222 69,28,850 parties

ii) Guarantee given by the banks to the third parties on behalf of the 6,38,81,068 4,63,59,896 Company

iii) Claims of Excise disputed by the Company 14,77,875 14,77,875

iv) Claims of ESIC disputed by the Company 14,72,936 14,72,936

v) Debts not acknowledged by the Company - 72,034

vi) Non-performance of Export obligation 4,95,712 4,95,712

3. Employee Benefits:

Consequent upon adoption of Accounting Standard on "Employee Benefits" (AS 15) (Revised 2005) issued by the Institute of Chartered Accountants of India, as required by the Standard, the following disclosures are made.

4. Sundry debtors over six months comprise Rs. 276.86 lacs ( Previous year Rs. 156.59 lacs) due from Government concerns and Rs. 52.68 lacs (Previous year Rs. 65.78 lacs) due from commercial parties.

5. In the opinion of the Management, the current assets, loans and advances are approximately of the values stated if realised in the ordinary course of business and all provisions for liabilities are adequate and not in excess of the amount considered necessary.

6. In the opinion of the Management, no provision is required against contingent liabilities referred in Note No. 4 of this schedule.

7. Balances of debtors and creditors are subject to confirmation.

8. Based on the information available with the Company there are no overdue amount payable to suppliers covered under the Micro, Small and Medium Enterprises Development Act, 2006.

9. The recurring expenditure of Rs. 39.45 lacs ( Previous year Rs. 48.58 lacs ) spent in respect of Research and Development during the year have been debited to respective expense account.

10. At each balance sheet date, the management reviews the carrying amounts of its assets included in each cash generating unit to determine whether there is any indication that those assets were impaired. However, in the opinion of the management, there is no impairment of assets as on the balance sheet date.

11. Related Party Disclosure Under Accounting Standard -18 :

The disclosure of transactions with the related parties as defined in the accounting standard are given below :

I) List of related parties with whom transactions have taken place and relationship :

Sr. No. Name of the Related Party Relationship

i. Mr. S. K. Nevatia Key Management Personnel

ii. Mrs. Uma Nevatia Key Management Personnel

iii. Mr. Saurabh Nevatia Relative of Key Management Personnel

iv. Mrs. Surabhi Golyan Relative of Key Management Personnel

v. Mr. Bharat Swaroop Relative of Key Management Personnel

12. Previous years figures have been reclassified and regrouped wherever necessary.

 
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