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Notes to Accounts of Nirlon Ltd.

Mar 31, 2016

Notes :

1. Previous year''s figures are given in brackets.

2. The above assets do not include the assets, the value of which are recoverable from the licencees as Common Area Maintenance charges.

3. Of the above, a certain portion of the assets have been given on Leave & License. The details of major assets are as under :

4. Buildings include building constructed on Leasehold Land at Worli, Mumbai having a written down value of Rs, 56.62 lakh (Previous year Rs, 67.39 lakh), being the share of the Company in the property which is jointly owned with Nirlon Foundation Trust.

5. Based on valuation reports submitted by M / s. I.H. Shah & Asociates, Approved Valuers, the following Assets of Goregaon had been revalued on 1st April, 1984, 30th June, 2006 and 31st March, 2012 on the basis of assessment of their market value. The company had restated the buildings so revalued to their original cost with effect from 1st April 2014. The amounts by which they were written up and reversed are as indicated below :

a) Excise duty of Rs, 110.53 lakh and interest thereon of Rs, 236.59 lakh based on the Supreme Court order received during the year in relation to manufacture of Nylon Tyrecord Yarn and Fabrics for the period April 1999 to June 2000.

b) Liquidated damages of Rs, 13.45 lakh and interest thereon of Rs, 5.35 lakh on delayed payment of Provident Fund dues for the period January 2000 to February 2007.

c) Property tax write back is for earlier years on account of assessment as per the Capital Value system.

d) Sale of receivables is with respect to sale of receivables of future license fees from licensees of the Nirlon House premises owned by the Company of Rs, 444.60 lakh, less expenses thereon of Rs, 15.81 lakh

* of the above, professional fees capitalized Rs, 32.52 lakh (previous year Rs, 85.82 lakh), and Buyers credit interest capitalised Rs, Nil lakh (previous year Rs, 5.13 lakh).

6. COMMITMENTS (As certified by the Management)

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs, 2,301.00 lakh (previous year Rs, 538.56 lakh).

7. The company has not received any intimation from “suppliers” regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard could not be provided.

8. Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

9. SEGMENT REPORTING :

There are no other reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year.

10. DISCLOSURE IN RESPECT OF LEAVE & LICENSE (As per AS19)

1) Assets given on leave & license

a) General description of leave & license arrangement

i) Licensed assets : Licensing of commercial premises

ii) Future License fees are determined on the basis of agreed terms.

b) Future minimum license fee payments receivable under non-cancellable Leave & License agreements:

2) Assets taken on leave & license

The total amount (net of recovery) recognized in the Statement of Profit and Loss is Rs, 1.58 lakh (previous year Rs, 1.43 lakh.

b) Contribution to Provident Fund and Other Funds charged to Statement of Profit & Loss stated under the Defined Contribution Plans is Rs, 190.26 lakh (previous year Rs, 194.17 lakh).

11.DISCLOSURE OF RELATED PARTIES / RELATED PARTY TRANSACTIONS : The list of related parties are as stated below :

Name Nature of relation

Mr. Rahul V. Sagar, Key Managerial Personnel

Executive Director

Mr. Kunal V. Sagar, Director Key Managerial Personnel up to 25.9.2015 & brother of Mr. Rahul Sagar Mrs. Mallika V. Advani Sister of Mr. Kunal Sagar & Mr. Rahul Sagar

Mrs. Maneesha R. Bhat Sister of Mr. Kunal Sagar & Mr. Rahul Sagar

12. Property Management expenses include expenses which are recoverable as Common Area Maintenance from licensees.

13. Derivative instruments and unhedged foreign currency exposure :

(a) Derivative instruments :

The Company uses foreign exchange, forward contracts to hedge its exposure to movements in the foreign exchange rates.

Derivative instruments have been acquired to hedge buyers credit facilities.

14. Borrowing cost capitalised during the year - Rs, 300.81 lakh (previous year Rs, 936.80 lakh).

15. Miscellaneous expenses under Note No 2.22 includes Foreign Exchange loss amounting to Rs, 28.16 lakh (previous year gain of Rs, 49.01 lakh included in the miscellaneous income.)

16. Previous year''s figures have been re-arranged and re-grouped wherever necessary to conform to the classification adopted for the current year.


Mar 31, 2015

1 Basis for preparation of the Financial Statements :

The Financial Statements are prepared in accordance with Generally Accepted Accounting Principles ('GAAP') in India under the historical cost convention on accrual basis except if specifically stated otherwise.These Financial Statements have been prepared to comply in all material respects with the Accounting Standards specified under Section 133 of the Companies Act, 2013 read with Rule 7 of Companies (Accounts) Rules, 2014.

2 Rights, Preferences and Restrictions attached to the Shares.

Equity Shares:

i) The Company has only one class of equity shares having a par value of Rs. 10.

Each holder of equity shares is entitled to one vote per share. The Shareholders have the right to receive interim dividends declared by the Board of Directors and final dividends proposed by the Board of Directors and approved by the Shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.

The Shareholders have all other rights as available to equity Shareholders as per the provisions of the Companies Act, 2013, read together with the Memorandum of Association & Articles of Association of the Company, as applicable.

3 Shares Issued to the Nirlon Employees Stock Option Trust

In accordance with the Nirlon ESOP 2012, during the financial year 2013-14 the Company had issued 7,17,656 shares of Rs. 10 each at a premium of Rs. 31.30 per share to the Nirlon Employees Stock Option Trust. The Company had provided a loan of Rs.296.39 lac to the Trust for subscribing such shares. As on 31st March, 2015, 6,80,000 (previous year nil) options have been excercised equal to 6,80,000 number of shares. In accordance with the provision of the Guidance Note on Accounting for Employee Share-based payments, the outstanding loan amount given to the Trust is disclosed as recoverable under the head Share Capital & Securities Premium Reserves.

Pursuant to the Resolution passed by the Shareholders of the Company by way of postal ballot on May 23, 2012, the Company granted 7,15,000 stock options to its employees at an issue price of Rs. 41.30 per share on May 30, 2012 in accordance with the Nirlon ESOP 2012. Each option entitles the holder to purchase one Equity Share of the Company at the issue price.

The weighted average contractual life for the stock options was 5 years and they vested at the rate of 15%, 20%, 25%, 40% at the end of 15 months, 30 months, 42 months, 54 months respectively from the date of grant. During the year, the Nomination and Remuneration Committee has vide its Resolution dated February 9, 2015, accelerated the vesting period for all the unvested options to February 15, 2015 and accelerated the exercise period for all the options upto September 30, 2016. According all the options granted have been already vested.

4 The Board of Directors, in their meeting held on May 7, 2015 proposed a dividend of 7.50 % i.e. Rs. 0.75 paise per equity share on the face value of Rs. 10 (previous year Rs. 0.75 paise per equity share of Rs. 10 each) . The proposal is subject to the approval of shareholders at the ensuing Annual General Meeting. Dividend amounting to Rs. 675.88 lac (previous year Rs. 560.55 lac) and dividend distribution tax thereon amounting to Rs. 137.62 lac (previous year Rs. 95.27 lac) is appropriated during the year.

5 At the AGM held on September 23, 2014, the shareholders approved the dividend for the year 2013-14 on a prorata basis on the equity shares issued during the year 2013-14. However, subsequently, the Bombay Stock Exchange informed the Company that the dividend should not be on a prorata basis as equity shares issued during the year 2013-14 rank pari passu in all respects with the then existing equity shares of the Company. Accordingly, the differential dividend of Rs. 115.33 lac and tax thereon of Rs. 19.61 lac aggregating to Rs. 134.94 lac has also been appropriated during the year by debiting the same to surplus.

6 Buildings include building constructed on Leasehold Land at Worli, Mumbai having a written down value of Rs. 67.39 lac (previous year Rs. 2.38 lac), being the share of the Company in the property which is jointly owned with Nirlon Foundation Trust.

7 CONTINGENT LIABILITIES

i) Claims against the Company not acknowledged as debts Rs. 12.81 lac (previous year Rs.12.81 lac) - as certified by the Management.

ii) Contingent liabilities not provided for :

(Rs. In Lac)

As at As At 31-Mar-15 31-Mar-14

Excise Duty 963.61 1,167.79

Service Tax 2,012.19 2,012.19

Income Tax 55.33 55.33

Value Added Tax 35.40 35.45

8 The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard could not be provided.

9 Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

10 SEGMENT REPORTING

There are no other reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year.

11 DISCLOSURE IN RESPECT OF LEAVE & LICENSE (AS PER AS19)

1 ) Assets given on leave & license:

a) General description of leave & license arrangement

i) Licensed assets : Licensing of commercial premises

ii) Future License fees are determined on the basis of agreed terms.

12 Disclosure of Related parties/related party transactions :

The list of related parties are as stated below : Related parties :

Key Management Personnel :

Shri Kunal V. Sagar, Executive Vice Chairman Shri Rahul V. Sagar, Executive Director Smt. Mallika V. Advani (Sister of Shri Kunal Sagar & Shri Rahul Sagar) Smt Maneesha R. Bhat (Sister of Shri Kunal Sagar & Shri Rahul Sagar)

13 Borrowing cost capitalised during the year - Rs. 936.80 lac (previous year Rs. 1811.44 lac).

14 Miscellaneous receipts under Note No 2.19 includes Foreign Exchange gains amounting to Rs. 49.01 lac (previous year Rs. 56.17 lac.)

15 Property Management expenses include expenses which are recoverable as Common Area Maintenance from licensees.

16 Derivative instruments and unhedged foreign currency exposure :

(a) Derivative instruments :

The Company uses foreign exchange, forward contracts to hedge its exposure to movements in the foreign exchange rates.

Derivative instruments have been acquired to hedge buyers credit.

17 Consequent to the applicability of the Companies Act, 2013, with effect from April 01, 2014, depreciation for the year ended March 31, 2015 has been calculated based on the useful life as specified in Schedule II of the said Act. Depreciation in respect of fixed assets whose useful life is already exhausted as on April 01, 2014 is charged in the Statement of Profit and Loss amounting to Rs. 53.69 Lac after retaining the salvage value in accordance with the requirements of Schedule II of the said Act. Accordingly, depreciation for the current year is not comparable with that of the previous year.

18 As per the disclosure made on May 5, 2015 (for April 30, 2015) under Regulation 13 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992, filed by M/s. Reco Berry Pvt. Ltd. with Bombay Stock Exchange, M/s. Reco Berry Pvt. Ltd. has acquired 5,57,59,872 equity shares of the Company aggregating to 61.87 % of the total share capital of the Company. Further, M/s. Reco Berry Pvt. Ltd. is classified as a Promoter of the Company.

19 Previous year's figures have been re-arranged and re-grouped wherever necessary to confirm to the classification adopted for the current year.


Mar 31, 2014

1.a. Rights, Preferences and Restrictions attached to the Shares Equity Shares :

i) The Company has only one class of equity shares having a par value of Rs. 10/-. Each holder of equity shares is entitled to one vote per share. The Shareholders have the right to receive interim dividends declared by the Board of Directors and final dividend proposed by the Board of Directors and approved by the Shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the Shareholders.

The Shareholders have all other rights as available to equity Shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association & Articles of Association of the Company, as applicable.

ii) During the year the Company allotted 1,76,34,798 Equity Shares of Rs. 10/- each @ premium of Rs. 33.76 per share to Promoters and Others on a Preferential basis in compliance with SEBI (ICDR) Regulations, 2009.

Preference Shares:

The Company has only one class of Authorised Preference Shares having a par value of Rs. 100/-.

Rate of dividend on Preference Shares (subject to the rate not exceeding 11 % per annum) and the terms of redemption will be determined at the time of issue subject to provisions of such Acts as may be applicable.

b. Shares Issued to the Nirlon Employees Stock Option Trust

In accordance with the Nirlon ESOP 2012, during the year the Company has issued 7,17,656 shares of Rs. 10/- each at a premium of Rs. 31.30 per share to the Nirlon Employees Stock Option Trust. The Company has provided a Loan of Rs. 296.39 lac to the Trust for subscribing such shares. As on 31st March, 2014 none of the employees have excerised the options. In accordance with the provision of the Guidance Note on Accounting for Employee Share-based Payments, the Loan amount given to Trust is disclosed as Recoverable under the head Share Capital & Securities Premium Reserves.

Nirlon ESOP Plan 2012

Pursuant to the Resolution passed by the Shareholders of the Company by way of a postal ballot on May 23, 2012, the Company granted 7,15,000 stock options to its employees at an issue price of Rs. 41.30 per share on May 30, 2012 in accordance with Nirlon ESOP 2012. Each option entitles the holder to purchase one Equity Share of the Company at the issue price.

The weighted average contractual life for the stock options is 5 years and vests at the rate of 15%, 20%, 25%, 40% at the end of 15 months, 30 months, 42 months, 54 months respectively from the date of grant and becomes fully exercisable.

c. The Board of Directors, in their meeting held on 27th May, 2014 proposed a dividend of Rs. 0.75 paise (7.5%) per equity share on a face value of Rs. 10/-. The proposal is subject to the approval of Shareholders at the ensuing Annual General Meeting. The proposed dividend amounting to Rs. 560.55 lac and dividend distribution tax thereon amounting to Rs. 95.27 lac is appropriated during the year.

The loan from HDFC Ltd. is secured by a charge in the nature of an equitable mortgage by deposit of title deeds of land situated at Goregaon, Mumbai together with buildings and structures standing thereon, both present and future, and right, title and interest in the license fees receivables.

# The amount of each installment is subject to change based on changes in Interest rates & other factors.

* The terms of repayment for Loan 2 will be finalised once the same is securitised, as done for Loan 1.

The Buyers Credit facility provided by HDFC Bank is repayable on demand. The amount is secured by way of earmarking, facilities to this extent, (vide a letter of undertaking from HDFC Ltd. to HDFC Bank) out of the total facility granted by HDFC Ltd to the Company. Refer Note 2.3 for security provided to HDFC Ltd.

2. Buildings include the building constructed on Leasehold Land at Worli, Mumbai having a written down value of Rs. 2.38 lac (Previous year Rs. 2.50 lac), being the share of the Company in the property which is jointly owned with Nirlon Foundation Trust.

3. CONTINGENT LIABILITIES

i) Claims against the Company not acknowledged as debts Rs. 12.81 lac (Previous Year Rs. 12.81 lac) as certified by the Management.

ii) Contingent liabilities not provided for :

(Rs. in lac) As at As at 31-Mar-14 31-Mar-13

Excise Duty 1,167.79 1,144.74

Service Tax 2,012.19 1,078.40

Income Tax 55.33 -

Value Added Tax 35.45 -

4. The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard could not be provided.

5. Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

* of the above, professional fees capitalized Rs. 124.51 lac (Previous Year Rs. 77.96 lac), and Buyers Credit interest capitalised Rs. 13.89 lac (Previous Year Rs. 1.48 lac).

6. SEGMENT REPORTING

There are no reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year.

7. DISCLOSURE IN RESPECT OF LEAVE & LICENSE (As per AS19)

1. Assets given on leave & license

a) General description of leave & license arrangement

i) Licensed assets : Licensing of commercial premises

ii) Future License fees are determined on the basis of agreed terms.

b) Contribution to Provident Fund and Other Funds charged to Statement of Profit & Loss stated under Defined Contribution Plans is Rs. 198.81 lac (Previous Year Rs. 210.60 lac).

8. Disclosure of Related parties/related party transactions :

The list of related parties are as stated below :

Related parties :

Key Management Personnel Executive Directors :

Shri Kunal V. Sagar, Executive Vice Chairman Shri Rahul V. Sagar, Executive Director

Note : The Board of Directors and the Shareholders of the Company have approved Issue of Equity shares on a preferential basis to various persons including Shri Kunal V. Sagar - Executive Vice Chairman and Shri Rahul V. Sagar - Executive Director at their meeting held on December 26, 2013 and January 27, 2014 respectively. Accordingly, the Committee of Directors has allotted Equity shares to Shri Kunal V. Sagar - Executive Vice Chairman and Shri Rahul V. Sagar - Executive Director on a Preferential basis at their meeting held on February 6, 2014.

9. Borrowing cost capitalised during the year Rs. 1,811.44 lac (Previous Year Rs. 1,631.87 lac).

10. Miscellaneous receipts under Note No 2.19 includes Foreign Exchange gain amounting to Rs. 56.17 lac (Previous Year Rs. 3.96 lac)

11. The Exceptional itemf for the financial years 2013-14 & 2012-13 is on account of write back of Property Tax liability of the earlier years due to retrospective amendment in respect of the property tax levied by the appropriate authorities.

12. Property Management expenses include expenses which are recoverable as Common Area Maintenance from licensees.

13. Derivative instruments and unhedged foreign currency exposure :

(a) Derivative instruments :

The Company uses foreign exchange forward contracts to hedge its exposure to movements in foreign exchange rates.

Derivative instruments have been acquired to hedge buyers credit.

14. Previous year''s figures have been re-arranged and re-grouped wherever necessary to confirm to the classification adopted for the current year.


Mar 31, 2013

1.1 Contingent Liabilities

i) Claims against the Company not acknowledged as debts Rs. 12.81 lacs (previous year Rs. 12.81 lacs) as certified by the Management.

ii) Contingent liabilities not provided for :

(Rs.In lacs)

As at As at 31-Mar-13 31-Mar-12

Excise Duty 1,14,4.74 985.28

Service Tax 1,078.40 1,078.40

1.2 The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard could not be provided.

1.3 Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

1.4 Segment Reporting

There are no other reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year.

1.5 Disclosure in Respect of Leave & License (As per AS19)

1. Assets given on leave & license

a) General description of leave & license arrangement

i) Licensed assets : Licensing of commercial premises

ii) Future License fees are determined on the basis of agreed terms.

1.6 Borrowing cost capitalised during the year Rs. 1,631.87 lacs (previous year Rs. 346.33 lacs).

1.7 Current Tax pertains to Minimum Alternate Tax (MAT) Rs. 490.00 lacs (previous year Rs. 75.52 lacs, provision for Income Ta x of the earlier years and Rs. 0.53 lacs Provision for Fringe Benefit Ta x of earlier years).

1.8 Miscellaneous receipts under Note No 2.19 includes Foreign Exchange gain amounting to Rs. 3.96 lacs (previous year Rs. 3.48 lacs Foreign Exchange loss considered under Miscellanoues expenses under Note No.2.22)

1.9 The Exceptional item for the Financial Year 2012-13 is on account of the write back of the Property Ta x liability of the earlier years due to the retrospective amendment in respect of the Property Tax levied by the appropriate authorities.

1.10 Property Management expenses include expenses which are recoverable as Common Area Maintenance from licensees.

1.11 Previous year''s figures have been re-arranged and re-grouped wherever necessary to confirm to the classification adopted for the current year.


Mar 31, 2012

A. Rights, Preferences and Restictions attached to Shares Equity Shares :

The Company has only one class of Equity Shares having a par value of Rs. 10/-.

Each holder of Equity Shares is entitled to one vote per share. The shareholders have the right to receive interim dividends declared by the Board of Directors and final dividend proposed by the Board of Directors and approved by the Shareholders.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the Company after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

The shareholders have all other rights as available to equity shareholders as per the provisions of the Companies Act, 1956, read together with the Memorandum of Association & Articles of Association of the Company, as applicable.

During the year, the Company has issued 1,35,49,000 equity shares on a preferential basis which have a lock in period of one year from the date of allottment as per Securities & Exchange Board of India (SEBI) Regulations.

Preference Shares :

The Company has only one class of Authorised Preference shares having a par value of Rs. 100/-.

Rate of dividend on Preference Shares (subject to rate not fexceeding 11 % per annum) and the terms of redemption will be determined at the time of issue subject to the provisions of such Acts as may be applicable.

1. Buildings include building constructed on Leasehold Land at Worli, Mumbai having written down value of Rs. 2.63 lacs (Previous year Rs. 2.77 lacs), being the share of the Company in the property which is jointly owned with Nirlon Foundation Trust.

2.1 Commitments (As certified by the Management)

a) Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 8,716.33 lacs (previous year Rs. 6,543.16 lacs).

b) Other Commitments : Rs. Nil (Previous year Rs. Nil)

Excludes Commitment given to ex-employees.

2.2 Contingent liabilities

i) Claims against the Company not acknowledged as debts Rs. 12.81 lacs (previous year Rs. 12.81 lacs) as certified by the Management.

2.3 The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard could not be provided.

2.4 Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

2.5 Segment reporting

There are no other reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year.

2.6 Borrowing cost capitalised during the year Rs. 346.33 lacs (previous year Rs. 1,368.58 lacs).

2.7 Current Tax pertains to Provision for Income Tax of previous years Rs. 75.52 Lacs (previous year Rs. Nil) and Provision for Fringe Benefit Tax of previous years Rs. 0.53 lacs (previous year Rs. Nil)

2.8 Miscellaneous expenses under note 2.22 includes foreign exchange loss amounting to Rs. 3.48 lacs (Prevoius year Rs. Nil).

2.9 Property Management expenses include expenses which are recoverable as Common Area Maintenance from licensees.

2.10 The Company has discontinued its operations at Tarapur, Dist. Thane.

2.11 Previous year's figures have been re-arranged and re-grouped wherever necessary to confirm to the classification adopted for the current year.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs.6543.16 (previous year Rs.3536.67 lacs).

2. i) Contingent liabilities not provided for :

(Rs. In lacs)

As at As at

31-03-2011 31-03-2010

Excise Duty 1,123.34 1,112.89

Property Tax 67.98 187.39

Income Tax - 40.54

ii) Claims against the Company not acknowledged as debts Rs. 12.81 lacs (previous year Rs. 92.94 lacs).

3. The company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

4. Balances of sundry debtors, creditors, loans and advances and deposits are subject to confirmation.

5. Segment reporting :

There are no other reportable segments as per AS 17 (Segment Reporting), except licencing of immovable property for the year. Hence previous years figures have not been disclosed.

6. Disclosure in respect of Leave & License (As per AS19)

Assets given on Leave & License

a) General description of Leave & License arrangement

i) Licensed assets : Licensing of commercial premises

ii) Future License fees are determined on the basis of agreed terms.

b) Future minimum License fee payments receivable under non-cancellable Leave & License agreements:

Assets taken on Leave & License :

The premises taken on Leave & License by the Company is cancellable. The total amount recognised in the Profit and Loss Account for the same is Rs.2.48 lacs (previous years Rs.2.24 lacs).

7. Deferred Tax

Deferred Tax Adjustments for the year amounting to Rs.4.01 lacs (previous year Rs. 28.30 lacs) have been recognised in the Profit and Loss Account.

Deferred Tax Asset on account of unabsorbed depreciation and brought forward business losses has been recognised, as the Company is of the opinion that there is virtual certainty of realisation of the same in view of the expected profits of the Company.

8. Borrowing cost capitalised during the year Rs. 1,368.58 lacs (previous year Rs.3,361.99 lacs).

9. The Company is in the process of discontinuing its operations at Tarapur, Dist Thane.

10. Previous year's figures have been re-arranged and re-grouped wherever necessary to confirm to the classification adopted for the current year.


Mar 31, 2010

1. The estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs.3,536.67 lacs (previous year Rs.10,077.48 lacs).

2. (i) Contingent liabilities not provided for (excluding interest):

a) Excise duty amounting to Rs.1,112.89 lacs (previous year Rs.1,112.89 lacs), pending de- cision of the Appellate Tribunal/Supreme Court.

1) Supreme court - Rs.813.73 lacs

2) CESTAT - Rs.233.49 Lacs.

3) Commissioner (appeals) - Rs.65.66 Lacs.

b) Demand of Property tax by Municipal Corpora- tion of Greater Mumbai disputed by the Com- pany Rs.187.39 lacs (previous year Rs.634.62 lacs)

c) Income tax demands amounting to Rs. 40.54 lacs (previous year Rs.Nil) disputed by the Company.

Commissioner of Income Tax (appeals) - Rs.40.54 Lacs

ii) Claims against the Company not acknowledged as debts Rs. 92.94 lacs (previous year Rs.12.81 lacs).

3. The Company has not received any intimation from "suppliers" regarding their status under the Micro, Small and Medium Enterprise Development Act, 2006 and hence disclosure requirements in this regard as per Schedule VI of the Companies Act, 1956 could not be provided.

4. Balances of sundry debtors, creditors, loans and ad- vances and deposits are subject to confirmation.

5. Segment reporting :

Segments have been identified in line with the Accounting Standard on Segment Reporting (AS-17), taking into account the Companys organisational structure as well as the differential risks and returns of these segments.

Segment Revenues, Results, and Assets and Liabili- ties figures include the respective amounts identifi- able to each of the segments. Interest and other finan- cial charges/income are reported at a corporate level. Also those assets and liabilities, which are not identi- fiable to the individual segments are reported at a cor- porate level.

6. Pursuant to the Resolution passed by the Board of Directors at the meeting held on 29th January, 2010, the company has entered into an MOU (subject to approval of share holders) for sale of land situated at Tarapur, District Thane. The Company has received advance of Rs.1,125 lacs from the buyer during the period.

7. The Company is in the process of obtaining a legal opinion on the applicability of the payment of pension to ex- employees whose age was less than 50 years as on 30th November, 1999. The Company has decided to pay the pension amounts to these ex-employees, pending the legal opinion. Accordingly, no liability for the pension payable in future is created in the accounts. Hence, the impact on the Profit and Loss Account cannot be ascertained.

8. a) The Company has discontinued manufacturing of V-

Belts with effect from 1st October, 2008. In view of this, the figures for the year ended 31st March, 2010 are not comparable with the corresponding figures of the previous year.

b) Previous years figures have been re-arranged and re- grouped wherever necessary to confirm to the classification adopted for the current year.

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