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Notes to Accounts of Indag Rubber Ltd.

Mar 31, 2015

1. [i] Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information Geographical Segments

The Company has organized its manufacturing operations into two major geographical segments : Domestic (in India) and Overseas (Outside India).

The analysis of geographical segments is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

The following table shows the distribution of the Company's consolidated sales and trade receivables by geographical market, regardless of where the goods were produced:

The Company has common fixed assets in India for producing goods/providing services to domestic as well as overseas market. Hence, separate figures for fixed assets/ addition to fixed assets have not been furnished.

2. [ii] Related party disclosures

The Company has the following related parties in accordance with Accounting Standard- 18 "Related Party Disclosures" notified under the Companies (Accounting Standards) Rules, 2006 (as amended).

Names of related parties and their relationships

(a) Key management personnel

- Mr. Nand Khemka (Chairman cum Managing Director)

- Mr. K.K. Kapur (Whole Time Director)

(b) Relatives of key management personnel

- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka

- Mrs. Jeet Khemka, wife of Mr. Nand Khemka

- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka

- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka

- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka

- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka

(c) Enterprises owned or significantly influenced by key management personnel or their relatives (ei- ther individually or with others)

- Unipatch Rubber Limited

- Khemka Aviation Private Limited

- Nand and Jeet Khemka Foundation

- Khemka & Co. Pvt. Ltd.

- Pankaj Dilip Pvt. Ltd.

- Sun Securities Ltd.

- Sun London Limited

- Khemka Technical Services Pvt. Ltd.

- Khemka Instruments Pvt. Ltd.

- Youth Reach

No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

3. [i] Contingent liabilities (not provided for) in respect of:

31 March 2015 31 March 2014 (Rs. in lacs) (Rs. in lacs)

a) The Company is under litigation with the revenue authorities 159.15 159.15 regarding an expenditure claimed by the Company arising out of an arbitration award. As per the Company, the expenditure should be allowed to them in the year the arbitrator has passed the award. The department is of the view that the liability is not accrued till the award becomes a rule of court and has therefore disallowed the expenditure in the AY 98-99 (the year in which the Company claimed the expenditure). During the financial year 2006-2007, the Company has received a demand notice from Income tax authorities pursuant to the order by Income Tax Appellate Tribunal, Delhi. The Company is presently in appeal before the Hon'ble High Court. The Company has deposited Rs. 20.00 lacs against the above demand which is included in the 'Advance Tax' under note no. 10 of complete set of financial statements.

b) Pending Labour cases 5.31 5.31

c) Demand raised by the Excise Authorities, being disputed 6.90 6.90 by the Company.

d) Claims against the Company not acknowledged as debts. The 4.78 4.63 Company has deposited Rs. 4.23 lacs against the above claim which is included in the 'Deposits' under note no. 10 of complete set of financial statements.

e) Demand raised by the Sales Tax Authorities, being disputed by 1.66 - the Company.

f) Entry tax demand being disputed by the Company ( excluding 793.85 510.41 the amount of interest and penalty, if any, which can't be determined at this stage)

Total 971.65 686.4

The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax @ 2% on all goods entering the state with effect from 24th January, 2011. The same has been reduced to 1% w.e.f. July 13, 2011 and again increased to 2% w.e.f. March 01, 2014. The Hon'ble High Court while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as ''deposit'' with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. Since the cash payment as per court order is in the nature of deposits, no amount has been charged to the accounts as entry tax. However, the cash deposited so far is Rs. 238.08 lacs (previous year Rs. 164.12 lacs) and bank guarantee furnished is for an amount of Rs. 476.16 lacs (previous year Rs. 328.24 lacs).

* Based on the discussions with the solicitor/ expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.

4 [11] Book value and Market value of Quoted investments Non-current investments

As of 31 March 2015 and 31 March 2014, the book value of quoted investments is Rs. 438.74 lacs and Nil respectively.

As of 31 March 2015 and 31 March 2014, the market value of quoted investments is Rs. 461.49 lacs and Nil respectively.

* These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities.

5. Pending enactment of the income tax rates proposed in Finance Bill, 2015, the Company has recognized deferred tax credit and made provision towards tax on proposed final dividend for the current year at the rates prevailing as at 31 March 2015.

6. Amounts disclosed under abridged financial statements are same as that shown in the corresponding aggregated heads in the financial statement prepared in accordance with Revised Schedule VI or as near thereto as possible.

7. Previous year's figures have been regrouped wherever necessary to conform to this year's classification.


Mar 31, 2014

1 Corporate information

Indag Rubber Limited (hereinafter referred to as ''the Company'') is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. The Company is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.

2 Basis of preparation

The financial statements have been prepared to comply in all material respects with the Accounting Standards notified under the Companies Act, 1956 (the ''Act'') read with General Circular 15/2013 dated September 13, 2013, issued by the Ministry of Corporate Affairs, in respect of Section 133 of the Companies Act, 2013. The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies have been consistently applied by the Company and are consistent with those used in the previous year.

3. Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information

Geographical Segments

The Company has organized its manufacturing operations into two major geographical segments: Domestic (in India) and Overseas (Outside India).

The analysis of geographical segments is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows: Sales within India include sales to customers located within India. Sales outside India include sales to customers located outside India.

4. Related party disclosures

Names of related parties and their relationships

(a) Key management personnel

- Mr. Nand Khemka (Chairman cum Managing Director)

- Mr. K. K. Kapur (Whole Time Director)

(b) Relatives of key management personnel

- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka

- Mrs. Jeet Khemka, wife of Mr. Nand Khemka

- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka

- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka

- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka

- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka

(c) Enterprises owned or significantly influenced by key management personnel or their relatives (either individually or with others)

- Unipatch Rubber Limited

- Khemka Aviation Private Limited

- Nand and Jeet Khemka Foundation

- Khemka & Co. Pvt. Ltd.

- Pankaj Dilip Pvt. Ltd.

- Sun Securities Ltd.

- Sun London Limited

- Khemka Technical Services Pvt. Ltd.

- Khemka Instruments Pvt. Ltd.

No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

5. Income tax

The Company has till date recognized Rs. 162.44 lacs (previous year Rs. 265.21 lacs) as Minimum Alternate Tax (MAT) credit entitlement which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income Tax Act, 1961. The management based on the future profitability projections and also profit earned during the current year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

6. Contingent liabilities (not provided for) in respect of :

31 March 2014 31 March 2013 (Rs. in lacs) (Rs. in lacs)

a) The Company is under litigation with the revenue authorities 159.15* 159.15* regarding an expenditure claimed by the Company arising out of an arbitration award. As per the Company, the expenditure should be allowed to them in the year the arbitrator has passed the award. The department is of the view that the liability is not accrued till the award becomes a rule of court and has therefore disallowed the expenditure in the AY 98-99 (the year in which the Company claimed the expenditure). During the financial year 2006-2007, the Company has received a demand notice from Income tax authorities pursuant to the order by Income Tax Appellate Tribunal, Delhi. The Company is presently in appeal before the Hon''ble High Court. The Company has deposited Rs. 20 lacs against the above demand which is included in the Advance Tax shown under note no. 10.

b) Pending Labour cases 5.31* 5.31*

c) Demands raised by the Sales Tax Authorities, being disputed - 21.00* by the Company.

d) Claims against the Company not acknowledged as debts. The 4.63* 41.77* Company has deposited Rs. 4.23 lacs against the above claim which is included in the Deposits shown under note no. 10.

e) Demand raised by the Excise Authorities, being disputed by the 6.90* - Company.

f) Entry tax demand being disputed by the Company (excluding 501.41* 350.17* the amount of interest and penalty, if any, which can''t be determined at this stage) #

Total 686.40 577.40

# The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax @ 2% on all goods entering the state with effect from 24th January, 2011. The same has been reduced to 1% w.e.f. July 13, 2011. The Hon''ble High Court while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as ''''deposit'''' with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. Since the cash payment as per court order is in the nature of deposits, no amount has been charged to the accounts as entry tax. However, the cash deposited so far is Rs. 164.12 lacs (previous year Rs. 107.92 lacs) and bank guarantee furnished is for an amount of Rs. 328.24 lacs (previous year Rs. 215.84).

* Based on the discussions with the solicitor / expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.

7. Leases

Operating Lease

The Company has taken office, residence and warehouse premises under operating lease agreements. There are no purchase options in the lease agreements. There is an escalation clause in some of the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The agreements are generally cancelable at the mutual consent of both the lessor and the lessee.

8. Gratuity and other post employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

The Company expects to contribute Rs. 23.14 lacs (previous year Rs. 55.01 lacs) to gratuity fund during the next year.

Provident Fund

The provident fund of few employees is being administered by a provident fund trust. The provident fund being administered by this Trust is a defined benefit scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to conform to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The Actuarial Society of India has issued the final guidance for measurement of interest shortfall on provident fund liabilities. The actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31 March 2014.

9. Previous year comparatives

Previous year''s figures have been regrouped wherever necessary to conform to this year''s classification.

10. All figures in values are rupees in lacs.


Mar 31, 2013

1 Corporate information

Indag Rubber Limited (hereinafter referred to as ''the Company'') is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. The Company is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.

2 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

3. Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information

Geographical Segments

The Company has organized its manufacturing operations into two major geographical segments :

Domestic (in India) and Export (Outside India)

The analysis of geographical segments is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

4. Related party disclosures

Name of related parties and their relationships

(a) Key management personnel

- Mr. Nand Khemka (Chairman cum Managing Director)

- Mr. K.K.Kapur (Whole Time Director)

(b) Relatives of key management personnel

- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka

- Mrs. Jeet Khemka, wife of Mr. Nand Khemka

- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka

- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka

- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka

- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka

(c) Enterprises owned or significantly influenced by key management personnel or their relatives (either individually or with others)

- Unipatch Rubber Limited

- Khemka Aviation Private Limited

- Nand and Jeet Khemka Foundation

- Khemka & Co. Pvt. Ltd.

- Pankaj Dilip Pvt. Ltd.

- Sun Securities Ltd.

- Sun London Limited

- Khemka Technical Services Pvt. Ltd.

- Khemka Instruments Pvt. Ltd.

No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from / to above related parties.

5. Income tax

The Company has till date recognised Rs. 265.21 lacs (previous year Rs. 356.01 lacs) as Minimum Alternate Tax (MAT) credit entitlement which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income Tax Act, 1961. The management is confident, based on the future profitability projections and profit earned during the current year that there would be sufficient taxable profit in future which will enable the Company to utilise the above MAT credit entitlement.

6. Leases

Operating Lease

The Company has taken office and warehouse premises under operating lease agreements. There are no purchase options in the lease agreements. There is no escalation clause in the lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The agreements are generally cancellable at the mutual consent of both the lessor and the lessee.

7. The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax @ 2% on all goods entering the state w.e.f. 24 January 2011. The same has been reduced to 1% w.e.f. 13 July 2011. The Hon''ble High Court while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as ''''deposit'''' with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. Since the cash payment as per Court order is in the nature of deposits, no amount has been charged to the accounts as entry tax. The estimated amount of entry tax upto 31 March 2013 is Rs. 350.17 lacs (excluding the amount of interest and penalty, if any, which can''t be determined at this stage). However, the cash deposited so far is Rs. 107.92 lacs and bank guarantee furnished is for an amount of Rs. 215.84 lacs.

8. As per the requirement of Clause 40A of the Listing Agreement, the minimum public shareholding in a public listed Company should at least be 25% or above of the total paid up capital. Pursuant to Securities Contracts (Regulation) (Second Amendment) Rules, 2010- Amendment in rules 2, 19 and 19A (Notification no. G.S.R. 662(E) dated August 09, 2010, any listed Company which has public shareholding below 25% shall increase its public shareholding to atleast 25% latest by June 2013. The public shareholding of the Company as at 31 March 2013 was 22.95%. The promoters of the Company are in the process of off loading the shares to ensure that the Company complies with the aforesaid clause.

9. Gratuity and other post employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expenses recognised in the statement of profit and loss and the funded status and amount recognised in the balance sheet for the gratuity plan.

10. Previous year comparitives

Previous year figures have been regrouped wherever necessary to conform to this year''s classification.

11. All figures in values are rupees in lacs.


Mar 31, 2012

1 Corporate information

Indag Rubber Limited (hereinafter referred to as 'the Company') is a public company domiciled in India and incorporated under the provisions of the Companies Act,1956. The Company is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.

2 Basis of preparation

The financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAp). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention. The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

(a) Terms/ rights attached to equity shares

The Company has only one class of equity shares having par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31 March 2012, the amount of per share dividend recognized as distributions to equity shareholders was Rs. 6.00, previous year Rs. 4.00.

3. Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information

Geographical Segments

The Company has organized its manufacturing operations into two major geographical segments :

Domestic (in India) and Export (Outside India)

The analysis of geographical segments is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

The following table shows the distribution of the Company's consolidated sales and debtors by geographical market, regardless of where the goods were produced:

4. Related party disclosures

Names of related parties and related party relationship

(a) Key management personnel and their relatives

- Mr. Nand Khemka (Chairman cum Managing Director)

- Mr. K. K. Kapur (Whole Time Director)

(b) Relatives of key management personnel

- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka

- Mrs. Jeet Khemka, wife of Mr. Nand Khemka

- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka

- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka

- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka

- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka

(c) Enterprises owned or significantly influenced by key management personnel or their relatives (either individually or with others)

- Unipatch Rubber Limited

- Khemka Aviation Private Limited

- Nand and Jeet Khemka Foundation

- Khemka & Co. Pvt. Ltd.

- Pankaj Dilip Pvt. Ltd.

- Sun Securities Ltd.

- Sun London Limited

- Khemka Technical Services Pvt. Ltd.

- Khemka Instruments Pvt. Ltd.

No amount has been provided as doubtful debt or advance written off or written back in the period in respect of debts due from/ to above related parties.

5. Income tax

The Company has till date recognized Rs. 356.01 lacs (previous year Rs. 388.82 lacs) as Minimum Alternate Tax (MAT) credit entitlement which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income Tax Act, 1961. The management based on the future profitability projections and also profit earned during the period is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

6. Contingent liabilities (not provided for) in respect of :

31 March 2012 31 March 2011 (Rs. in lacs) (Rs. in lacs)

a) The Company is under litigation with the revenue authorities regarding 159.15* 159.15* an expenditure claimed by the Company arising out of an arbitration award. As per the Company, the expenditure should be allowed to them in the year the arbitrator has passed the award. The department is of the view that the liability is not accrued till the award becomes a rule of court and has therefore disallowed the expenditure in the AY 98-99 (the year in which the Company claimed the expenditure). During the financial year 2006-2007, the Company has received a demand notice from Income tax authorities pursuant to the order by Income Tax Appellate Tribunal, Delhi. The Company is presently in appeal before the Hon'ble High Court.

The Company has deposited Rs. 20 lacs against the demand which is appearing in the note of Loans and advances

b) Demands raised by the Service Tax Authorities but disputed by the 1.93* 1.93* Company and the appeal is pending before the CESTAT.

c) Pending Labour cases 9.75* 12.50*

d) Demands raised by the Sales Tax Authorities, being disputed by the 22.27* 11.11* Company.

e) Differential amount of custom duty payable by the Company in case of 22.67 22.67 non-fulfillment of export obligation including interest thereon against the import of capital goods made at concessional rate of duty. Based on future sales plans, management is quite hopeful to meet out the export obligation by executing the required volume of exports in the future.

f) Claims against the Company not acknowledged as debts 28.95* 18.29* Total 244.72 225.65

* Based on the discussions with the solicitor/expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.

7. The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax @ 2% on all goods entering the state with effect from 24th January, 2011. The same has been reduced to 1% w.e.f. July 13, 2011. The Hon'ble High Court while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as "deposit" with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. Since the cash payment as per court order is in the nature of deposits, no amount has been charged to the accounts as entry tax. The estimated amount of entry tax upto 31 March 2012 is Rs. 193.15 lacs (excluding the amount of interest and penalty, if any, which can't be determined at this stage). However, the cash deposited so far is Rs. 50.13 lacs and bank guarantee furnished is for an amount of Rs. 100.25 lacs.

8. As per the requirement of Clause 40A of the Listing Agreement, the minimum public shareholding in a public listed company should at least be 25% or above of the total paid up capital. Pursuant to Securities Contracts (Regulation) (Second Amendment) Rules, 2010- Amendment in rules 2, 19 and 19A (Notification no. G.S.R. 662(E) dated August 09, 2010, any listed company which has public shareholding below 25% shall increase its public shareholding to atleast 25% within a period of 3 years i.e. latest by August 08, 2013. The public shareholding of the Company as at March 31, 2012 was 22.95%. The promoters of the Company are in the process of off loading the shares to ensure that the Company complies with the aforesaid clause.

9. Gratuity and other post employment benefit plans

The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part thereof in excess of six months. The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognized in the statement of profit and loss and the funded status and amounts recognized in the balance sheet for the gratuity plan.

Provident Fund

The provident fund being administered by a Trust is a defined benefit scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. The Actuarial Society of India has issued the final guidance for measurement of provident fund liabilities. The actuary has accordingly provided a valuation and based on the below provided assumptions, there is no shortfall as at 31 March 2012.

10. Previous year figures

Till the year ended 31 March 2011, the Company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31 March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has re-classified previous year figures to conform to this year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.

11. All figures in values are rupees in lacs.


Mar 31, 2011

1. Nature of Operations

Indag Rubber Limited (here in after referred to as 'the Company') is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.

2. Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion.Gum and Rubber Cement, which are used for fixing on old used tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information

The Company has organized its manufacturing operations into two major geographical segments : Domestic (in India) and Export (Outside India)

The analysis of geographical segments is based on the geographical location of the customers.

The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

3. Income tax

The Company has till date recognized Rs. 38,882 (previous year Rs. 42.830) as Minimum Alternate Tax (MAT) credit entitlement, which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income Tax Act, 1961 .The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

4. Contingent Liabilities (not provided for) in respect of: (Rs. '000)

31st 31st March March 2011 2010

a) The Company is under litigation with the 15,915* 15,915* revenue authorities regarding icais* expenditure claimed by the Company arising out of an arbitr -ation award. As perthe Company, the expenditure should be allowed to them in the year the arbitr -ator has passed the award.The department is of the view that the liability is not accrued till the award becomes a rule of court and has there -fore disallowed the expenditure in the AY 98-99 (the year in which the Company claimed the expen -diture). During the financial year 2006-2007, the Company has received a demand notice from Income tax authorities pursuant to the order by Income tax Appellate Tribunal, Delhi. The Company is presently in appeal before the Hon'ble High Court. The Company has deposited Rs. 2,000 against the demand and which is appearing in the schedule of Loans and Advances.

b) Demands raised by the Service Tax Authorities 193* 193* but disputed by the Company and the appeal is pending before the CESTAT.

c} Pending Labour cases 1,250* 1,120*

d) Demands raised by the Sales Tax Authorities, 1,111* 1,158* being disputed by the Company.

e) Excise duty liability for DG Set case pending - 917* before CESTAT

f) Differential amount of custom duty payable by 2,267 2 267 the Company in case of non-fulfiilment of export obligation including interest there against the import of capital goods made at concessional rate of duty. Based on future sales plans, management is quite hopeful to meet out the export obligation by executing the required volume of exports in the future

g) Claims against the Company not acknowledged 1,829* - as debts Based on the discussions with the solicitor expert opinions taken/status of the case, the management believes that the Company has strong chances ot success in above mentioned cases and hence no provision there against is considered necessary at this point in time. 22,565 21,570 5. Leases

Operating Lease

The Company has taken office and warehouse premises under operating lease agreements. There is no purchase option in the lease agreements. There is no escalation clause in the lease agreement. There are no restrictions imposed by lease arrangements. There are no subleases. The agreements are generally cancelable at the mutual consent of both the lessor and the lessee.

6. As per the requirement of Clause 40A of the Listing Agreement, the minimum public shareholding in a public limited company should atleast be 25% or above of the total paid up capital. The public shareholding of the Company at March 31. 2011 was 22.95%. The promoters of the Company are in the process of off loading the share ensure that the Company complies with the aforesaid clause.

7. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service or part there of in excess of six months.The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Provident Fund being administered by a Trust is a defined benefit scheme where by the Company deposit an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests us commencement of employment. The interest credited to the accounts of the employees is adjusted on annual basis to confirm to the interest rate declared by the Government for the Employees Provident Fund, guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from Actuarial Society of India, the Company's actuary has expressed his inability to reliably measure the provident fund liability.There is no deficit in the fund.

8. There were fraudulant electronic transfers of Rs.700 thousand from the Company's bank account to the bank accounts of three individuals, out of which Rs.400 thousand were recovered before withdrawal from these bank accounts of individuals and the balance amount of Rs. 300 thousand has not been recovered.The Company has taken up the matter with the bank for the recovery of the balance amount and considered the amount as fully recoverable.

9. Previous Year Comparatives

Previous year's figures have been regrouped where necessary to conform to this year's classification.

10. All figures In values are rupees In thousands.


Mar 31, 2010

1. Nature of Operations

Indag Rubber Limited (hereinafter referred to as the Company) is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.

2. Segment Information

The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for fixing on old used tyres. These products do not have any different risk and returns and thus the Company has only one business segment.

Segment Information Geographic Segments

The Company organized its manufacturing operations into two major geographical segments : Domestic (in India) and Export (Outside India)

The analysis of geographical segments is based on the geographical location of the customers. The geographical segments considered for disclosure are as follows:

- Sales within India include sales to customers located within India.

- Sales outside India include sales to customers located outside India.

The following table shows the distribution of the Companys consolidated sales and debtors by geographical market, regardless of where the goods were produced:

Names of Related Parties

Key Management Personnel

Mr. Nand Khemka (Chairman)

Mr. K. K. Kapur (Whole Time Director)

Relatives of key management personnel

Mr. Shyam Lai Khemka Mrs. Jeet Khemka Mr. Shiv Vikram Khemka Mr. Uday Harsh Khemka Mrs Nitya Mohan Khemka Mrs Urvashi khemka

Enterprises owned or significantly influenced by key management personnel or their relatives. (either individually or with others)

Unipatch Rubber Limited

Khemka Aviation Private Limited

Nand and Jeet Khemka Foundation

Khemka & Go. Pvt. Ltd

Pankaj Dilip Pvt. Ltd.

Sun Securities Ltd.

Sun London Limited

Khemka Technical Services Pvt. Ltd

Khemka Instruments Pvt. Ltd

No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.

3. Income tax

The Company has till date recognized Rs. 42,830 (previous year Rs. 23,342) as Minimum Alternate Tax (MAT) credit entitlement (including Rs. 19,914 (previous year Rs. 8,591) recognized during the current year), which represents that portion of the MAT Liability, the credit of which would be available based on the provision of Section 115 JAA of the Income Tax Act, 1961. The Management based on the future profitability projections and also profit earned during the year is confident that there would be sufficient taxable profit in future which will enable the Company to utilize the above MAT credit entitlement.

(Rs. 000) 31st 31st March, March, 2010 2009

8. Contingent Liabilities (not provided for) in respect of:

a) The Company is under litigation with the revenue authorities 15,915* 15,915* regarding expenditure claimed by the Company arising out of an arbitration award. As per the Company, the expenditure should be allowed to them in the year the arbitrator has passed the award.

The department is of the view that the liability is not accrued till the award becomes a rule of court and has therefore disallowed the expenditure in the AY 98-99 (the year in which the Company claimed the expenditure). During the financial year 2006-2007, the Company has received a demand notice from Income tax authorities pursuant to the order by Income tax Appellate Tribunal, Delhi. The Company is presently in appeal before the Honble High Court. The Company has deposited Rs. 2,000 against the demand and which is appearingin the schedule of Loans and Advances.

b) Demands raised by the Service Tax Authorities but disputed by the 193* 193* Company and the appeal is pending before the CESTAT.

c) Pending Labour cases 1,120* 1,450*

d) Demands raised by the Sales Tax Authorities, being disputed by 1,158* -- the Company. The Company has deposited Rs. 241 against the demands and which is appearing in the schedule of Loans and Advances.

e) Excise duty liability for DG Set case pending before CESTAT. The 917* 917* Company has deposited Rs. 464 against the demand and which is appearing in the schedule of Loans and Advances.

* Based on the discussions with the solicitor/ expert opinions taken/ status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.

f) Guarantees given by the Company. 13,513 12,696

g) Differential amount of custom duty payable by the Company in case 2,267 2,267 of non-fulfillment of export obligation including interest thereon against the import of capital goods made at concessional rate of duty. Based on future sales plans, management is quite hopeful to meet out the export obligation by executing the required volume of exports in the future. 35,083 33,438

10. As per the requirement of Clause 40A of the Listing Agreement, the minimum public shareholding in a public listed company should at least be 25% or above of the total paid up capital. The public shareholding of the Company as at March 31, 2010 was 20.13%.

During the previous year, the Company had applied to Bombay Stock Exchange seeking the extension of time for compliance of Clause 40A and received the approval letter dated April 2, 2009 from the exchange giving the extension time upto April 30, 2009. The Company had again requested Bombay Stock Exchange for grant of further extension of time for compliance of clause 40A of the listing agreement. The Company during the current year has received show cause notice from Bombay Stock Exchange to increase the minimum public shareholding from promoters. The promoters of the Company are in the process of off loaded the shares to ensure that Company complies the said clause.

4. The Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service.

The scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Provident Fund being administered by a Trust is a defined benefit scheme whereby the Company deposits an amount determined as a fixed percentage of basic pay to the fund every month. The benefit vests upon commencement of employment. The interest credited to the accounts of the employees is adjusted on an annual basis to confirm to the interest rate declared by the Government for the Employees Provident Fund. The Guidance Note on implementing AS-15, Employee Benefits (Revised 2005) issued by the Accounting Standard Board (ASB) states that provident funds set up by employers, which requires interest shortfall to be met by the employer, needs to be treated as defined benefit plan. Pending the issuance of the Guidance Note from the Actuarial Society of India, the Companys actuary has expressed his inability to reliably measure the provident fund liability. There is no deficit in the fund.

The following tables summarize the components of net benefit expense recognized in the Profit and Loss Account and the funded status and amounts recognized in the Balance Sheet for the gratuity.

5. Previous Year Comparatives

Previous years figures have been regrouped where necessary to conform to this years classification.

6. All figures in values are rupees in thousands.

 
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