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Notes to Accounts of MIC Electronics Ltd.

Mar 31, 2015

NOTE - 1.

Disclosure in respect of operating lease:

i) A general description of leasing arrangements : Leasing arrangement for LED Display Systems

ii) Lease payment recognized in the statement of Profit & Loss Account for the year: Rs.Nil (Previous year- Rs.Nil)

iii) lease amounts not recognised during the year : First Leasing Company of India Ltd transferred the lease rentals receivables from MIC Electronics Ltd to Reliance Capital Ltd. As per the agreement, lease rentals are payable in 59 monthly instalments to Reliance Capital Ltd and the last instalment is due in Dec'14. MIC Electronics Ltd received a notice from Reliance Capital Ltd on 20.01.2012 about the loan agreement termination for delay in payment of lease rentals. Subsequently First Leasing Company stopped billing lease rentals w.e.f 01.04.2012. Hence MIC Electronics Ltd stopped recognizing lease rentals in the books from 01.04.2012. The unrecognized lease rentals from Apr'14 to Mar'15 amount to Rs 47,196,000/-.(Total unrecognised lease rentals upto 31.03.15 is Rs.17.31 crores)

NOTE - 2.

In accordance with the AS-22 'Accounting for taxes on Income issued by the Institute of Chartered Accountants of India , during the current year the company has accounted for the effect of deferred Tax against the income pertaining to current year and has accordingly provided for deferred tax asset of Rs.16,793,867/- (Previous Year Rs.118,622,330/- deferred tax asset) on account of current year's deferred tax.

NOTE -3.

(i) The company has incurred one time expenditure of Rs.16,361,609/- during the Year 2009-10 towards leased assets which is being amortised over a period of 5 years ending with March 2015. During the year an amount of Rs.2,726,942/- (Previous year Rs.2,454,240/-) has been amortised.

(ii) The company has incurred one time expenditure of Rs.9,331,130/- during the Year 2010-11 towards DMRC project finance which is being amortised over a period of 5 years . During the period an amount of Rs.1,866,224/- (Previous year Rs.1,399,668/-) has been amortised.

NOTE - 4.

Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. As per the records with the company, none of the enterprises have been identified as Micro, Small and Medium Enterprises.

NOTE - 5.

Figures have been rounded off to nearest rupee. Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure. Also previous year figures are not comparable since they represent only 9 months where as current year represent 12 months.


Mar 31, 2014

1. Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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 accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those followed in the previous years.

NOTE- 2

(i) In the opinion of the management the Trade Receivables, Current Assets, Loans and Advances are expected to realise the amount at which they are stated and provision for all known liabilities have been adequately made in the accounts.

(ii) The balances of trade receivables, trade payables, long term loans & advances, short term loans & advances, other current assets & other current liabilities are subject to confirmation from respective parties

NOTE- 3

Contingent Liabilities : The following contingent liabilities are not provided for

(Amount in Rs.) Sl Particulars As at 31st As at 30th No. March 2014 June, 2013

1 Counter guarantees given by the 41,076,799 60,857,283 company to banks towards issue of B.Gs.

2 Counter guarantees given by the 7,096,982 7,096,982 company to banks towards issue of B.Gs to Customs & Central Excise Dept.

3 Bonds executed to Customs & 82,300,000 82,300,000 Central Excise Dept. (net of BGs)

4 Letter of credits issued by - 32,346,929 bankers

5 Corporate Guarantees given 70,000,000 70,000,000 by the company to banks on behalf of subsidiaries & associates

6 Claims against the company , 1,014,767,760 1,014,924,475 not acknowledged:

TAX Matters in Appeals

1 Excise Duty 3,896,982 3,896,982

2 Customs Duty 1,801,111 1,801,111

3 Sales Tax 5,302,831 5,302,831

NOTE - 4

Segment Information : The company is operating only in one segment i.e, LED based products and hence no segmental reporting is made.

NOTE - 5

Disclosure in respect of operating lease:

i) A general description of leasing arrangements : Leasing arrangement for LED Display Systems

ii) Lease payment recognized in the statement of Profit & Loss Account for the year: Rs.Nil (Previous year-Rs.Nil)

iii) lease amounts not recognised during the year : First Leasing Company of India Ltd transferred the lease rentals receivables from MIC Electronics Ltd to Reliance Capital Ltd MIC Electronics Ltd received a notice from Reliance Capital Ltd on 20.01.2012 about the loan agreement termination for delay in payment of lease rentals. Subsequently First Leasing Company stopped billing lease rentals w.e.f 01.04.2012. Hence MIC Electronics Ltd stopped recognizing lease rentals in the books from 01.04.2012. The unrecognized lease rentals from Jul''13 to Mar''14 amount to Rs 47,196,000/-.(previous year - Rs.47,196,000/-)

NOTE - 6

In accordance with the AS-22 ''Accounting for taxes on Income issued by the Institute of Chartered Accountants of India , during the current year the company has accounted for the effect of deferred Tax against the income pertaining to current year and has accordingly provided for deferred tax asset of Rs.118,622,330/-(Previous Year Rs.73,878,792/ - deferred tax liability) on account of current year''s deferred tax.

NOTE - 7

(i) The company has incurred one time expenditure of Rs.16,361,609/- during the Year 2009-10 towards leased assets which is being amortised over a period of 5 years. During the year an amount of Rs.2,454,240/ - (Previous year Rs.2,454,240/-) has been amortised

(ii) The company has incurred one time expenditure of Rs.9,331,130/- during the Year 2010-11 towards DMRC project finance which is being amortised over a period of 5 years . During the period an amount of Rs.1,399,668/- (Previous year Rs.1,399,668/-) has been amortised

NOTE - 8

Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. As per the records with the company, none of the enterprises have been identified as Micro, Small and Medium Enterprises.

NOTE - 9

Figures have been rounded off to nearest rupee. Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Jun 30, 2013

1 Basis of accounting and preparation of financial statements

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply 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 accrual basis under the historical cost convention. The accounting policies adopted in the preparation of the financial statements are consistent with those fol lowed in the previous years.

NOTE-2.1

Segment Information: The company is operating only in one segment i.e, LED based products and hence no segmental reporting is made.

NOTE-2.2

Related party disclosures:

In Accordance with the Accounting standard AS-18" Related Party disclosures" Issued by the ICAI, the transactions with related parties are given below:

NOTE- 2.3

Disclosure in respect of operating lease:

i) Ageneral description of leasing arrangements : Leasing arrangement for LED Display Systems

ii) Lease payment recognized in the statement of Profit & Loss Account for the year: Rs.Nil (Previous year-Rs.55,258,646/-)

iii) lease amounts not recognised during the year : First Leasing Company of India Ltd transferred the lease rentals receivables from MIC Electronics Ltd to Reliance Capital Ltd. MIC Electronics Ltd received a notice from Reliance Capital Ltd on 20.01.2012 about the loan agreement termination for delay in payment of lease rentals. Subsequently First Leasing Company stopped billing lease rentals w.e.f 01.04.2012. Hence MIC Electronics Ltd stopped recognizing lease rentals in the books from 01.04.2012. The unrecognized lease rentals from Oct''12 to Jun''13 amount to Rs 47,196,000/-.(previous year - Rs.31,464,000/-)

NOTE-2.4

In accordance with the AS-22 ''Accounting for taxes on Income issued by the Institute of Chartered Accountants of India, during the current year the company has accounted for the effect of deferred Tax against the income pertaining to current year and has accordingly provided for deferred tax liability of Rs.73,878,792/-on account of current year''s deferred tax.

NOTE-2.5

(I) The company has incurred one time expenditure of Rs.16,361,609/- during the Year 2009-10 towards leased assets which is being amortised over a period of 5 years. During the year an amount of Rs.2,454,240/- (Previous year Rs.4,090,400/-) has been amortised.

(ii) The company has incurred one time expenditure of Rs.9,331,130/- during the Year 2010-11 towards DMRC project finance which is being amortised over a period of 5 years. During the period an amount of Rs.1,399,668/-(Previous year Rs.2,799,339/-) has been amortised.

NOTE-2.6

Disclosure of Sundry Creditors under Trade Payables is based on the information available with the Company regarding the status of the suppliers as defined under the "Micro, Small and Medium Enterprises Development Act, 2006" and relied upon by the Auditors. As per the records with the company, none of the enterprises have been identified as Micro, Small and Medium Enterprises.

NOTE-2.7

Figures have been rounded off to nearest rupee. Previous year''s figures have been regrouped/reclassified wherever necessary to correspond with the current year''s classification/disclosure.


Jun 30, 2009

1. Contingent liabilities not provided for on account of :

(Amount in Rs.)

S No Particulars As at 30.06.09 As at 30.06.08

A Counter guarantees given by the company to banks towards issue of B.Gs. 100,522,738 132,703,165 B Counter guarantees given by the company to banks towards issue of B.Gs to Customs Dept. against advance licenses 1,098,855 1,098,855 C Bonds executed to Customs Deptt. (net of BGs) against advance licenses 2,759,930 2,759,930 D Letter of credits issued by bankers 33,926,707 29,798,618 E Corporate Guarantees given by the company to banks 131,000,000 37,900,000 TAX Matters in Appeals A Excise Duty 21,223,061 -- B Customs Duty 1,801,111 -- C Sales Tax 3,195,527 -- 2. Loans:

Working Capital Loans from SBI & DCB:

a) State Bank of India and Development Credit Bank Limited are secured by pari passu charge on fixed assets and all chargeable current assets of the Company except assets pertaining to Technology Development Board, National Research Development Corporation, IDBI and UCO Bank. State Bank of India and Development Credit Bank Limited are secured by second charge on the assets financed by IDBI and UCO Bank.

b) SBI is further secured by personal guarantees of three of the following Directors of the company.

1. Dr M V Ramana Rao

2. Mr L N Malleswara Rao

3. Mr N. Srinivasa Rao

c) Development Credit Bank Limited is further secured by personal guarantee of Dr. M.V.Ramana Rao, Managing Director of the company. Term Loans:

a) Technology Development Board is secured by all assets pertaining to the development and commercialization of the LED TV / Electronic Display system project along with personal guarantee of Dr. M.V. Ramana Rao, Managing Director.

b) National Research Development Corporation is secured by all the machinery and equipments acquired for the development of "Fraud Management and Control Centre (FMCC)".

c) Term Loan taken from IDBI is secured as follows:

Primary:(i)a first mortgage and charge on Industrial Plot No.192/B in Survey No.274 admeasuring 5341 Sq. Yards situated at Phase II, IDA, Cherlapally village, Kapra Municipality, Ghatkesar Mandal, RR District valued at Rs. 2.50 Crores and proposed building thereon admeasuring 100000 Sq.Ft valued at Rs.12.52 Crores (Approx). (ii)A first hypothecation charge on plant and machinery valued Rs.6.89 Crores.

Collateral: NIL

Personal Guarantee: An irrevocable and unconditional guarantee from Dr. M.V.Ramana Rao in favour of IDBI

d) Term Loan taken from UCO Bank is secured as follows:

Primary: (i) 1st hypothecation charge over the plant and machinery, LED Display Boards, software and other fixed assets of the project of the company at DMRC. (ii) 1st Charge on receivables arising out of the DMRC Project.

Collateral Security: Second charge on the fixed assets of the company other than what has been taken as first charge. The first charge will be with SBI and DCB. UCO Bank is further secured by personal guarantee of Dr. M.V.Ramana Rao, Managing Director.

e) Loans taken against purchase of vehicles are secured by hypothecation of the respective vehicles.

2. The company has identified Micro and Small enterprises as per Micro, Small and Medium Enterprises Development Act 2006. The outstanding for more than 30 days as at 30th June 2009 for the enterprises is Rs. 28,593,977/-

3. Previousyears figures are regrouped wherever necessary to conform to the Current Years Presentation/Classification.

4. Figures have been rounded off to the nearest Rupee.

 
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