Home  »  Company  »  KDDL Ltd.  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of KDDL Ltd.

Mar 31, 2015

1. Background and nature of operations

KDDL Limited (the "Company") incorporated in January 1981 is engaged in the business of manufacturing dials, watch hands and precision components. Currently, the Company has manufacturing facilities, at Parwanoo (Himachal Pradesh) and Derabassi (Punjab) - dial manufacturing, Bangalore (Karnataka) - hands and precision components manufacturing.

2.Contingent liability not provided for exists in respect of:

a) Bank guarantees outstanding 47,767,670 39,513,050

b) Bonds in favour of central excise and customs authorities 1.425,000 1,425,000

c) Guarantee given to scheduled banks and non-banking financial company (NBFC) in relation to cash-credit and non-fund based facilities of Rs.516,000,000 (previous year Rs.386,000,000) and term loans of Rs.145,100,000 (previous year Rs.145,100,000) provided by banks and NBFC to subsidiary companies. Overdraft outstanding as of 31 March 2015 is Rs.405,866,925 (previous year Rs.323,951,146) and term loan Rs. 78,972,751 (previous year Rs.101,346,634) respectively against the facilities availed by subsidiary companies. The Company has also created charge over its various fixed assets with respect to such loans availed by its subsidiary.

d) Demand raised for Service Tax against which appeals have been filed 219,309 219,309

e) Demand raised by Punjab State Electricity Board for payment of penalty for usage of additional power against sanctioned load. Amount paid under protest Rs.372,818 (previous year Rs.372,818) 372,818 372,818

f) Demand raised for Income tax (assessment year 2004-05 to assessment year 2011-12) 77,753,538 77,753,538

g) Demand made by central excise authority. 8,164,882 8,164,882

h) Surety bonds in favour of sales tax department. 100,000 100,000

i) Custom duty saved against EPCG Licences, pending redemption 12,370,089 19,123,038

j) Claims against the company filed by employees not acknowledged as debt 2,033,525 1,155,420 (to the extent ascertainable)

3.Related party disclosures A. Relationships

I. Subsidiary companies Pylania S.A. Kamla International Holdings SA Ethos Ltd

Mahen Distribution Limited

II. Associates : Kamla Tesio Dials Limited

III. Joint venture : Satva Jewellery and Design Limited

IV. Entities over which significant influence is exercised by the company /key management personnel (either individually or with others) :

Jan Seva Trust Y Saboo (HUF) Smt. Kamla Devi Saboo Charitable Trust Vardhan Properties & Investments Limited Saboo Coatings Limited

VBL Innovations Private Limited Vardhan International Limited Shri M.K. Saboo Charitable Trust Tara Chand Mahendra Kumar (HUF)

Saveeka Family Trust; and Dream Digital Technology Limited

V. Key management personnel (KMP) : Relatives

a. Mr. R.K. Saboo (Chairman) Ms. U. Saboo (spouse), Mr. Y. Saboo (son), Ms. Asha Devi Saboo (brother's spouse)

b. Mr. Y. Saboo Mr. R.K. Saboo (father), (Chief Executive Officer ) Ms. A. Saboo (spouse), Ms. Malvika Singh (son's spouse)

c. Dinesh Agrawal Ms Shashi Agrawal (spouse) (Chief Operating Officer)

*With respect to the key management personnel, disclosure has been given for those relatives with whom the Company has made transactions during the year.

* The loans and gaurantees given by the Company during the year have been utilised by the subsidiaries for meeting their working capital requirements. B. The following transactions were carried out with related parties in the ordinary course of business of the year ended 31 March, 2014

4. The information required by paragraph 5 of general instructions for preparation of the statement of profit and loss as per revised schedule III of Companies Act, 2013

5. Leases

Operating leases

The Company has leased some of its premises and some of its fixed assets to a third party under a lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2015 and 31 March 2014 aggregate to Rs. 4,229,884 and Rs. 744,000 respectively.

The Company is a lessee under various cancellable and non-cancellable operating leases. Rental expense for operating leases for the years ended 31 March 2015 and 31 March 2014 was Rs. 19,193,021 and Rs. 17,832,377 respectively. The Company has executed non-cancelable operating leases. Expected future minimum lease payments in respect of such leases are as follows:

6. In accordance with the provisions of section 135 of the Companies Act 2013, the Board of Directors of the Company had constituted a Corporate Social Responsibility (CSR) Committee.

(a) In terms with the provisions of the said Act, the Company had to spend a sum of Rs 1,519,217 towards CSR activities during the year ended 31 March 2015.

(b) The details of amount actually spent by the Company are:

7 KDDL Employee Stock Option Plan- 2011 ('ESOP 2011')

(a) The Company has established an Employee Stock Option Plan ('ESOP') in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999 ('Guidelines') which has been approved by the Board of Directors and the shareholders. A compensation committee comprising promoter executive and independent non-executive members of the Board of Directors administer the ESOP. All options under the ESOP are exercisable for equity shares. The Company planed to grant upto 110,000 options to eligible employees and directors of the Company and subsidiaries of the Company. The outstanding options as on 31 March 2015 are 39,750.

(b) Fifty percent of the options which have been granted under ESOP 2011 have been vested on 1 April 2014 ('first tranche').These options were exercised by the employees and accordingly 39,750 shares were issued during the year to the eligible employees. The balance options shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 1,500,000,000 ('second tranche'). The exercise period for the options is within six months from the date of vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant.

(d) Proforma Accounting for Stock option Grants

The company applies the intrinsic value based method of accounting for determining compensation cost for its stock based compensation plans. Had the compensation cost been determined using fair value approach, the company's net income and basic/diluted earnings per share as reported would have reduced to the performa amounts as indicated :

The volatility of the options is based on historical volatility of share prices since the company's share are publicly traded, which may be shorter than the terms of the options.

(f) Details of the weighted average exercise price and fair value of the stock options granted at price below market price :

8. Segment information, as required under AS-17 "Segment Reporting", has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

9. As per the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm's length prices of transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of appointing independent consultants for conducting a Transfer Pricing Study (the 'Study') to confirm that the transaction with associate enterprises undertaken during the financial year are on "arms length basis". Management is of the opinion that the company's transactions are at arm's length and that the results of the proposed study will not have any impact on the financial statements and that they do not expect any transfer pricing adjustments.

10. Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2014

1. Background and nature of operations

KDDL Limited (the "Company") incorporated in January 1981, under the Companies Act 1956, is engaged in the business of manufacturing dials, watch hands and precision components. Currently, the Company has manufacturing facilities, at Pawanoo (Himachal Pradesh) and Derabassi (Punjab) - dial manufacturing, Bangalore (Karnataka) - hands and precision components manufacturing.

As at As at 31 March 2014 31 March 2013

2. Contingent liability not provided for exists in respect of:

a) Bank guarantees outstanding 39,513,050 2,164,700

b) Bonds in favour of central excise and customs authorities 1,425,000 1,425,000

c) Guarantee given to scheduled banks and non banking financial company (NBFC) in relation to cash-credit and non-fund based facilities of Rs.386,000,000 (previous year Rs.423,500,000) and term loans of Rs.145,100,000 (previous year Rs.95,000,000) provided by banks and NBFC to subsidiary companies. Overdraft outstanding as of 31 March 2014 is Rs.323,951,146 (previous year Rs.299,118,186) and term loan Rs.101,346,634 (previous year Rs.101,160,314) respectively against the facilities availed by subsidiary companies. The Company has also created charge over its various fixed assets with respect to such loans availed by its subsidiary.

d) Demand raised for Service Tax against which appeals have been filed 219,309 1,204,891

e) Demand raised by Punjab State Electricity Board for payment of penalty for usage of additional power against sanctioned load. Amount paid under protest Rs.372,818 372,818 372,818 (previous year Rs.372,818)

f) Income tax (AY 2005-06 to AY 2011-12) 73,707,430 35,746,450 Case for AY 2005-06, for which a demand of Rs.13,203,431 (previous year Rs.13,203,431) was raised by the income tax department, was decided by the Commissioner of Income Tax (Appeals) in favour of the Company. However, the income tax department has preferred an appeal with Income Tax Appellate Tribunal. Demands raised by Income Tax Authorities in respect of disallowancs for AY 2006-07 to 2011-12 (except for AY 2010-11for which loss claimed by the Company has been decreased by the assessing authority) are identical to AY 2005-06, which have been challenged by the Company before Income Tax Authorities (Income Tax Appellate Tribunal for AY 2006-07 and Commissioner of Income Tax (Appeals) for AY 2007-08 to AY 2011-12) and the Company had deposited Rs.29,533,221 (previous year Rs.18,919,847) under protest.

g) Demands raised by the income tax authority for AY 2004-05 against which appeals have been 4,046,108 4,046,108 filed. Amount paid under protest Rs.4,046,108 (previous year Rs.4,046,108)

h) Demand made by central excise authority 8,164,882 8,256,222

i) Surety bonds in favour of sales tax department 100,000 100,000

j) Custom duty saved against EPCG Licences, pending redemption. 19,123,038 30,569,347

36. Related party disclosures

A. Relationships

I. Subsidiary companies

Pylania S.A.

Kamla International Holding AG

Ethos Limited

Mahen Distribution Limited

II. Associates

Kamla Tesio Dials Limited

III. Joint venture Satva Jewellery and Design Limited

IV. Entities over which significant influence is exercised by the company /key management personnel (either individually or with others)

Saboo Coatings Limited., Dream Digital Technology Limited

VBL Innovations Private Limited, Vardhan Properties &

Investments Limited, Vardhan International Ltd, Smt. Kamla Devi Saboo

Charitable Trust, Shri M.K. Saboo Charitable Trust,

Tara Chand Mahendra Kumar (HUF), Y Saboo (HUF),

Saveeka Family Trust, Jan Seva Trust

V. Key management personnel Relatives **

a. Mr. R.K. Saboo (Chairman) Ms. U. Saboo (wife),

Mr. Y. Saboo (son), Ms. Asha Devi Saboo (brother''s wife)

b. Mr. Y. Saboo Mr. R.K. Saboo (father), Ms. A. Saboo (Wife) (Chief Executive Officer) Ms. Malvika Singh (son''s wife)

c. Dinesh Agrawal (Chief Operating Officer) Ms. Shashi Agrawal (Wife) ** Only those relatives of key management personnel with whom the Company had transactions during the year, have been given.

3. The information required by paragraph 5 of general instructions for preparation of the statement of profit and loss as per revised schedule VI of the Companies Act, 1956.

4. Leases

Operating leases

The Company has leased some of its premises and some of its fixed assets to a third party under a lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2014 and 31 March 2013 aggregate to Rs. 744,000 and Rs. 612,000 respectively.

5. KDDL Employee Stock Option Plan-2011 (''ESOP 2011'')

a. The Company has established an Employee Stock Option Plan (''ESOP'') in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, which has been approved by the Board of Directors and the shareholders. A compensation committee comprising promoter executive and independent non-executive members of the Board of Directors administer the ESOP. All options under the ESOP are exercisable for equity shares. The Company plans to grant upto 110,000 options to eligible employees and directors of the Company and subsidiaries of the Company.

b. Fifty percent of the options which have been granted under ESOP 2011 shall vest with the guarantee on 1 April 2014 (''first tranche'') and the balance options shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 1,500,000,000 (''second tranche''). The exercise period for the options is within six months from the date of vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant. The Company has granted 100,500 options upto 31 March 2014.

d. Pro forma accounting for stock option grants

The Company applies the intrinsic value-based method of accounting for determining compensation cost for its stock-based compensation plan. Had the compensation cost been determined using fair value approach, the Company''s net income and basic/diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

6. Merger of Himachal Fine Blanks Limited and KDDL Limited

A wholly owned subsidiary of KDDL Limited (''Transferee Company''), namely, Himachal Fine Blank Limited (''HFBL'' or ''Transferor Company'') has merged with the transferee company vide order dated 27 December 2012 of the Hon''ble High Court of Himachal Pradesh, with appointed date 1 April 2011. Such order was filed with the Registrar of Companies on 8 January 2013. The effect of merger had been given during the year ended 31 March 2013 as per the scheme of merger approved by the Hon''ble High Court.

The aforementioned merger has been accounted for in the financial statements using "pooling of interest method" as prescribed under Accounting Standard-14 "Accounting for Amalgamations" issued pursuant to the Companies (Accounting Standard) Rules, 2006, by taking all the assets and liabilities of the transferor company with those of the transferee company at the book values.

7. Segment information, as required under AS-17 "Segment Reporting", has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

8. As per the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of appointing independent consultants for conducting a Transfer Pricing Study (the ''Study'') to confirm that the transaction with associate enterprises undertaken during the financial year are on "arms length basis". Management is of the opinion that the company''s transactions are at arm''s length and that the results of the proposed study will not have any impact on the financial statments and that they do not expect any transfer pricing adjustments.

9. Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2013

1. Related party disclosures A. Relationships

I. Subsidiary companies

Pylania S.A.

Kamla International Holding AG

Ethos Limited

Mahen Distribution Limited

II. Associates Kamla Tesio Dials Limited

III. Joint venture Satva Jewellery and Design Limited

IV. Entities over which significant Saboo Coatings Limited., Dream Digital Technology Ltd influence is exercised by the VBL Innovations Private Limited, Vardhan Properties & company /key management Investments Limited., Vardhan International Ltd, Smt. Kamla Devi Saboo personnel (either individually or Charitable Trust, Shri M.K. Saboo Charitable Trust with others) Tara Chand Mahendra Kumar (HUF), Y Saboo (HUF) Saveeka Family Trust

V. Key management personnel Relatives **

a. Mr. R.K. Saboo (Chairman) Ms. U. Saboo (wife),

Mr. Y. Saboo (son), Ms. Asha Devi Saboo (brother''s wife)

b. Mr. Y. Saboo Mr. R.K. Saboo (father), Ms. A. Saboo (Wife) (Chief Executive Officer and Vice Chairman)

c. Dinesh Agrawal (Chief Operating Officer) Ms Shashi Agrawal (Wife)

** Only those relatives of key management personnel with whom the Company had transactions during the year, have been given.

2. Leases

Operating leases

The Company has leased some of its premises and some of its fixed assets to a third party under a lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2013 and 31 March 2012 aggregate to Rs. 612,000 and Rs. 612,000 respectively.

The Company is a lessee under various operating leases. Rental expense for operating leases for the years ended 31 March 2013 and 31 March 2012 was Rs. 14,211,609 and Rs. 10,279,567 respectively. The Company has not executed any non- cancelable operating leases. Expected future minimum lease payments in respect of leases are as follows:

3. KDDL Employee Stock Option Plan-2011 (''ESOP2011'')

a. The Company has established an Employee Stock Option Plan (''ESOP'') in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, which has been approved by the Board of Directors and the shareholders. Acompensation committee comprising promoter executive and independent non-executive members of the Board of Directors administer the ESOP. All options under the ESOP are exercisable for equity shares. The Company plans to grant upto 110,000 options to eligible employees and directors of the Company and subsidiaries of the Company.

b. Fifty percent of the options which have been granted under ESOP 2011 shall vest with the guarantee on 1 April 2014 (''first tranche'') and the balance options shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 1,500,000,000 (''second tranche''). The exercise period for the options is within six months from the date of vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant. The Company has granted 100,500 options upto 31 March 2013.

c. The movement in the scheme is set out as under:

d. Pro forma accounting for stock option grants

The Company applies the intrinsic value-based method of accounting for determining compensation cost for its stock-based compensation plan. Had the compensation cost been determined using fair value approach, the Company''s net income and basic/diluted earnings per share as reported would have reduced to the pro forma amounts as indicated:

4. Merger of Himachal Fine Blanks Limited and KDDL Limited

A wholly owned subsidiary of KDDL Limited (Transferee Company''), namely, Himachal Fine Blank Limited (''HFBL'' or Transferor Company'') has merged with the transferee company vide order dated 27 December 2012 of the Hon''ble High Court of Himachal Pradesh, with appointed date 1 April 2011. Such order was filed with the Registrar of Companies on 8 January 2013. The effect of merger has been given during the year ended 31 March 2013 as per the scheme of merger approved by the Hon''ble High Court. Accordingly, the financial statements of the Company for the year ended 31 March 2013 are not strictly comparable with those of the previous year ended 31 March 2012.

The aforementioned merger has been accounted for in the financial statements using "pooling of interest method" as prescribed under Accounting Standard-14 "Accounting for Amalgamations" issued pursuant to the Companies (Accounting Standard) Rules, 2006, by taking all the assets and liabilities of the transferor company and combining them with those of the transferee company at the book values, aftertaking effect of the inter-company eliminations.

5. Segment information, as required under AS-17 "Segment Reporting", has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

6. As per the transfer pricing legislation under sections 92-92F of the Income Tax Act, 1961, the Company is required to use certain specific methods in computing arm''s length prices of transactions with associated enterprises and maintain adequate documentation in this respect. Since law requires existence of such information and documentation to be contemporaneous in nature, the Company is in the process of appointing independent consultants for conducting a Transfer Pricing Study (the ''Study'') to confirm that the transactions with associate enterprises undertaken during the financial year are on an "arms length basis". Management is of the opinion that the Company''s transactions are at arm''s length and that the results of the proposed study will not have any impact on the financial statements and that they do not expect any transfer pricing adjustments.

7. Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2012

1. As at As at 31 March 2012 31 March 2011

Estimated amount of contracts remaining to be executed on 2,672,359 2,578,164 capital account and not provided for (net of advances)

2. Contingent liability not provided for exists in respect of:

a) Bank guarantees outstanding 1,262,500 1,216,500

b) Bonds in favour of central excise and customs authorities 5,000,000 5,000,000

c) Guarantee given to a scheduled bank in relation to cash-credit and non-fund based facility of Rs. 290,000,000 (previous year Rs. 329,000,000) and term loanofRs. 95,000,000 (previous year Rs. 90,000,000) provided by the bank to subsidiary companies. Amount of over draft out standing as on 31 March 2012 isRs. 323,718,175 (previous year Rs. 283,277,266) and term loan Rs. 102,255,677 (previous year Rs.50,266,850) respectively

The Company has also created charge over its various fixed assets with respect to such loans availed by its subsidiary.

d) Demand raised for Service Tax against which appeals have been filed 1,204,891 1,204,891

e) Demand raised by Punjab State Electricity Board for payment of penalty for usage of additional power 504,443 504,443 against sanctioned load. Amount paid under protest Rs. 296,000 (previous year Rs. 296,000)

f) Case for AY 2005-06, for which a demand of Rs.13,203,431 (previous year Rs.13,203,431) was raised by the 35,746,450 24,063,220 income tax department and the Company had deposited Rs. Nil (previous year Rs.10,916,620) under protest, was decided by the Commissioner of Income Tax (Appeals) in favour of the Company and the amount deposited has been adjusted against dues for subsequent assessment years. However, the income tax department has preferred an appeal with Income Tax Appellate Tribunal. Demands raised by Income Tax Authorities in respect of disallowances for AY 2006-07, 2007-08 and 2008-09 are identical to AY 2005-06, which have been challenged by the Company before Income Tax Authorities (Income Tax Appellate Tribunal for AY 2006-07 and Commissioner of Income Tax (Appeals) for AY 2007-08 and 2008-09) and the Company had deposited Rs.17,419,847 (previous year Rs. Nil) under protest.

g) Demands raised by the income tax authority for AY 2004-05 against which appeals have been filed. 4,046,108 4,046,108 Amount paid under protest Rs.4,046,108 (previous year Rs. 1,577,440)

h) Demand made by central excise authority 8,256,222 8,256,222

i) Surety bonds in favour of sales tax department 100,000 -

3. KDDL Employee Stock Option Plan-2011 ('ESOP2011')

a. The Company has established an Employee Stock Option Plan ('ESOP') in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, which has been approved by the Board of Directors and the shareholders. A compensation committee comprising promoter executive and independent non-executive members of the Board of Directors administer the ESOPs. All options under the ESOPs are exercisable for equity shares. The Company plans to grant upto 110,000 options to eligible employees and directors of the Company and subsidiaries of the Company.

b. Fifty percent of the options which have been granted under ESOP 2011 shall vest with the guarantee on 1April 2014 ('first tranche') and the balance options shall vest on the date when the turnover (excluding excise duty thereon) of the Company would exceed Rs. 1,500,000,000 ('second tranche'). The exercise period for the options is within six months from the date of vesting of the options. Each option is exercisable for one equity share of Rs. 10 each fully paid up on payment of exercise price of share determined with respect to the date of grant. The Company has granted 100,500 optionsupto31March 2012.

4. The Board of Directors in its meeting heldon30September 2010 approved the Scheme of amalgamation (the 'scheme') under section 391-394 of the Companies Act, 1956, of Himachal Fine Blank Limited and KDDL Limited, with the Company, effective from 1 April 2011. The approval for the scheme of amalgamation is pending at Honorable High Court of Himachal Pradesh. Since the scheme is pending approval, no effect of the amalgamation has been given in these financial statements in accordance with Accounting Standard - 14, 'Accounting for Amalgamation'.

5. Segment information, as required under AS-17 "Segment Reporting", has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

6. Till the year ended March 31, 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 March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company. The Company has reclassified 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.


Mar 31, 2011

(Amount in Rupees)

As at As at 31 March 2011 31 March 2010

1. Contingent liability not provided for exists in respect of:

a) Bank guarantees outstanding. 1,216,500 144,400

b) Bonds in favour of central excise and customs authorities 5,000,000 5,000,000

c) Guarantee given to a scheduled bank in relation to overdraft facility of Rs 329,000,000 (previous year Rs.305,000,000) and term loan of Rs.90,000,000 (previous year Rs.34,000,000) provided by the bank to subsidiary companies. Amount of overdraft outstanding as on 31 March 2011 is Rs.283,277,266 (Previous year Rs.240,494,686) and term loan Rs.50,266,850 (previous year Rs. 15,663,761) respectively. The Company has created charge over its various fixed assets with respect to such loans availed by its subsidiary.

d) Demand raised for service tax against which appeals have been filed. 1,204,891 1,661,899

e) Demand raised by Punjab State Electricity Board for payment of penalty for 372,818 372,818 usage of additional power against sanctioned load. (Amount paid under protest Rs. 372,818 (previous year Rs. 372,818)

f) Case for AY 2005-06, for which a demand of Rs.13,203,431 (previous year Rs.Nil) 24,063,220 - was raised by the income tax department and the Company had deposited Rs.10,916,620 (previous year Rs.Nil) under protest, was decided by the Commissioner of Income Tax (Appeals) in favour of the Company. However, the income tax department has preferred an appeal with Income Tax Appellate Tribunal. Demands raised by Income tax Authorities in respect of disallowances for AY 2006-07 and 2007-08, are identical to AY 2005-06 have been challanged by the company before Income Tax Appellate Tribunal.

g) Demands raised by the income tax authority for AY 2004-05 against which 4,046,108 4,046,108 appeals have been filed. Amount paid under protest Rs. 1,577,440 (previous year Rs. 400,000)

h) Demand made by central excise authority 8,256,222 4,187,217

i) Demand of house tax made by Municipal Commissioner - Derabassi - 5,551,447

2. During the year, the Company issued 1,687,600 equity share warrants on preferential basis upon payment of a consideration of Rs. 10.25 per warrant. Each share warrant is convertible into one equity share of Rs. 10 each at a premium of Rs. 31 per share on payment of remaining consideration. Holders of such warrants have the option to convert these warrants into equity shares upon payment of aforesaid consideration on or before eighteen months from the date of allotment of warrants, viz., 02 November 2010. During the year, holders of 421,950 equity share warrants excercised the option of conversion of warrants into equity shares. Amount outstanding as at the year end and disclosed as equity share warrants money constitutes Rs. 10.25 per warrant received from the holders of remaining 1,265,650 share warrants.

3. During the year, Mahen Boutiques Limited (MBL) was merged with Kamla Retail Limited (KRL) in terms with the scheme of arrangement under section 391 to 394 of the Companies Act, 1956, which was approved by the Hon'ble High Court of Himachal Pradesh on 3 March 2011 and became effective on 13 May 2011 on filing of certified copy of the order of the Hon'ble High Court in the office of the Registrar of Companies by KRL. The appointed date of the scheme was 01 April 2009. Accordingly, KRL shall issue equity shares to KDDL Limited (the shareholders of MBL) in the following proportions:

-1 fully paid up equity share of the face value of Rs. 10 each of KRL at par for 1 fully paid up equity share of the face value of Rs. 10 held in MBL. -2 fully paid up equity share of the face value of Rs. 10 each of KRL at par for 3 partly paid up equity share (paid up value Rs. 6.75 per share) of the face value of Rs. 10 held in MBL.

Based on above, KDDL Limited was allotted 1,383,333 equity shares of Rs.10 each in KRL subsequent to the year end. As at 31 March 2011, these shares were considered as held in share suspense account by KRL.

4. Related Party disclosures

A. Relationships

I. Subsidiary Companies Himachal Fine Blank Ltd.

Pylania S.A.

Kamla Retail Limited

Mahen Boutiques Limited

Mahen Distribution Limited

II. Associates Kamla Tesio Dials Limited

Taratec SA

III. Joint Venture Satva Jewellery and Design Limited

IV. Entities over which significant influence is exercised by the company /key management personnel (either individually or with others)

Saboo Coatings Ltd., Krypton Outsourcing Limited,

VBL Innovations Pvt. Limited, Vardhan Properties &

Investments Ltd., Vardhman International Ltd., Smt. Kamla Devi Saboo

Charitable Trust, Shri M.K. Saboo Charitable Trust,

Tara Chand Mahendra Kumar (HUF)

V Key Management Personnel Relatives **

a. Mr. R.K. Saboo (Chairman) Ms. U. Saboo (wife),

Mr. Y Saboo (son), Mr. J. Saboo (son), Ms. R Saboo (daughter in law), Ms. Asha Devi Saboo (brother's wife)

b. Mr. Y Saboo (Chief Executive Officer) Mr. R.K. Saboo (father), Ms. A. Saboo (wife)

Mr. RS. Saboo (son), Ms. S.Suri (daughter)

c. Mr. Dinesh Agrawal Ms. Shashi Agrawal (wife) (Chief Operating Officer)

* Refer note 7 of schedule 18.

"Relatives of key management personnel with whom the Company had transactions during the year.

5. Leases

Operating leases

The company is a lessee under various operating leases. Rental expense for operating leases for the years ended 31 March 2011 and 31 March 2010 was Rs.8,202,648 and Rs.7,624,518 respectively. The company has not executed any non-cancelable operating leases. The company has leased some of its premises and some of its fixed assets to a third party under a lease agreement that qualifies as an operating lease. Rental income for operating leases for the years ended 31 March 2011 and 31 March 2010 aggregate to Rs.600,000 and Rs.600,000 respectively.

6. During the year, the shareholders of Pylania S.A. approved the scheme of capital reduction, pursuant to which, the Company has written off investments aggregating to Rs. 12,345,435 which were earlier provided for as other than temporary diminution in its value.

7. Segment information, as required under AS-17 "Segment Reporting", has been provided in the consolidated financial statements of the Company and therefore no separate disclosure on segment information is given in these standalone financial statements.

8. Previous year figures have been regrouped /recasted, wherever considered necessary to make them comparable with those of the current year.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on 2,230,500 232,007 capital account and not provided for (net of advances).

2. Contingent liability not provided for exists in respect of:

a) Bank guarantees outstanding. 144,400 1,035,400

b) Bonds in favour of central excise and customs authorities 5,000,000 10,125,000

c) Guarantee given to a scheduled bank in relation to overdraft facility of Rs. 305,000,000 (previous year Rs. 255,000,000) and termloan of Rs.34,000,000 (previous year 34,000,000) provided by the bank to subsidiary companies. Amount of overdraft outstanding as on 31 March 2010 is Rs. 240,494,686 (previous year Rs. 215,587,159) and term loan Rs. 15,663,761 (previous year Rs. 24,164,166) respectively.

d) Demand raised for service tax against which appeals have been filed. 1,661,899 2,302,693

e) Demand raised by Punjab State Electricity Board for payment of penalty for 372,828 372,828 usage of additional power against sanctioned load. (Amount paid under protest Rs. 372,828 (previous year Rs. 372,828)

f) Demands made by the income tax authorities against which 4,046,108 17,399,539 appeals have been filed. Amount paid under protest Rs. 400,000 (previous year Rs. 2,900,000)

g) Demand made by central excise authority 4,187,217 4,187,217 h)Demand of House tax made by Municipal Commissioner - Derabassi 5,551,447 5,551,447

3. a) Amount due to a subsidiary companies 14,172,472 6,276,883

b) Amount due to entities covered under Micro, Small and Medium

Enterprises as defined in the Micro, Small, Medium Enterprises Development Act, 2006, have been identified on the basis of information available with the Company. There was no amount due to any such entities which needs to be disclosed. This has been relied upon by the auditors.

4. A. Related Party disclosures Relationships

I. Subsidiary Company

Himachal Fine Blank Ltd.

Pylania S.A.

Kamla Retail Limited

Mahen Boutiques Limited

Mahen Distribution Limited (incorporated on 28 May 2009)

II. Associates

Kamla Tesio Dials Limited

Taratec SA

III. Joint Venture

Satva Jewellery and Design Limited

IV. Entities over which significant influence is Saboo Coatings Ltd., Krypton Outsourcing Limited, exercised by the company /key management VBL Innovations Pvt. Limited, Vardhan Properties & personnel (either individually or with others) Investments Ltd., Smt. Kamla Devi Saboo Charitable Trust, Shri M.K. Saboo Charitable Trust, Tara Chand Mahendra Kumar (HUF)

V Key Management Personnel Relatives **

a. Mr. R.K. Saboo (Chairman) Ms. U. Saboo (wife),

Mr. Y. Saboo (son) , Mr. J. Saboo (son), Ms. R Saboo (daughter in law), Ms. Asha Devi Saboo (brothers wife)

b. Mr. Y. Saboo (Chief Executive Officer) Mr. R.K. Saboo (father), Ms. A. Saboo (wife)

Mr. RS. Saboo (son), Ms. S. Saboo (daughter)

c. Mr. Dinesh Agrawal Ms. Shashi Agrawal (wife) (Chief Operating Officer (North))

**Relatives of key management personnel with whom the Company had transactions during the year.

The Company made annual contributions to the LIC of India of an amount advised by the LIC.The Company was not informed by LIC of the investment made by the LIC or the break-down of plan assets by investment type.

Toe Company makes annual contribution to the LIC of India for gratuity benefits as amount advised by the LIC. An amount of Rs. 276,946 (excluding taxes, etc. of Rs. 96,645) paid by the Company on 30 March 2010 had not been considered by LIC as contributions received as at 31 March 2010, though, the same has been considered as contributions made above.

5. During the year, the Company has recognised provision for other than temporary diminution in value of investment in Pylania SA of Rs. 12,345,435 pursuant to the capital reduction approved by the shareholders of Pylania SA subsequent to the year end. The management has ascertained that there is no impairment of assets as on the balance date.

6. Previous year figures have been regrouped/recasted, wherever considered necessary to make them comparable with those of the current year.

 
Subscribe now to get personal finance updates in your inbox!