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Notes to Accounts of OK Play India Ltd.

Mar 31, 2016

1. Secured Term Loans are secured as below:

From Banks : Secured against hypothecation of assets created from Term Loan.

Against Vehicles : Secured against hypothecation of respective vehicles.

2. Term Loans from banks are collaterally secured by:

a)Equitable Mortgage on the Company''s property at 124, New Manglapuri, Mehrauli, New Delhi.

b)Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the Directors of the company.

f) Pledge of 47.94 lacs Equity Shares of the company by one of the Directors.

g) Second charge on entire fixed assets of the subsidiary company, OK Play Auto Private Limited.

h) Residual value of prime security of the subsidiary company, OK Play Auto Private Limited.

i) Reinvestment Deposit Plan of the value of Rs.0.84 crores.

j) Corporate Guarantee of the Subsidiary Company, OK Play Auto Private Limited, restricted to Rs.91.21 crores

3. Term Loans, Unsecured from other parties have been secured by third party property.

4. Term Loans are repayable as follows:

From Bank: Payable in monthly installments upto year 2019-20 Against Vehicles: Payable in monthly installments extending to year 2019-20 External Commercial Borrowing: Payable in half-yearly installments up to year 2018-19 Unsecured From Other Parties: Payable in monthly installments extending to year 2022-23

5. Working Capital Loan from Bank is secured by:

Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts.

6. Working Capital Loan from bank is collaterally secured by:

a)Equitable Mortgage on the Company''s property at 124, New Manglapuri, Mehrauli, New Delhi.

b)Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the directors of the company.

f) Pledge of 47.94 lacs Equity Shares of the company by one of the Directors.

g) Second charge on entire fixed assets of the subsidiary company, OK Play Auto Private Limited.

h) Residual value of prime security of the subsidiary company, OK Play Auto Private Limited.

i) Reinvestment Deposit Plan of the value of Rs.0.84 crores.

7. The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds (''FCCB'') aggregating to USD 10 million, at par.

During the financial year 2010-11, the ''FCCB'' of the face value of USD 9,760,000 had been bought back by the company at a discount of 24% to the face value of the ''FCCB'' and subsequently a notice was given to the Clearing Houses, through the Trustees, requesting communication with the bondholders of the balance 24 bonds of the face value of USD 240,000. However, no response has been received and no claimant has come forth on the redemption date of 24th July, 2012 and till date. The premium payable on the redemption of the FCCB has been provided for.

8. Contingent Liabilities and Commitments, not provided for :

(I) Contingent Liabilities

a) Claims against the company not acknowledged as debt:

(i) Claims against the Company, where legal cases are under way, but not acknowledged as debts amount to Rs.70,68,518.12 (Previous Year Rs.59,74,812.12)

(ii) Demand of penalty of Rs.29,37,276/- (Previous Year Rs.29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

b) Guarantees:

(i) Guarantees given to banks as counter guarantees for performance of contracts Rs.1,06,60,000 /- (Previous Year Rs.7,06,60,000/-).

(ii) Letter of credit issued by banks-Nil (Previous year Rs. Nil)

(iii) Corporate Guarantee, restricted to Rs.26.00 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

c) Other money for which the company is contingently liable:

(i) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

(II) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

9. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realization in the ordinary course of business at least equal to the amount stated therein. The provision for all known liabilities have been made and are adequate.

10 . There was a fire at the plant on the intervening night between 9th & 10th January, 2015 in which the company lost its stocks and part of the Building and Plant & Machinery. The company had incurred a loss of Rs 22.25 crores due to the fire which had been reflected in Other Expenses in the previous year. The company had filed a claim with the insurance company for the loss incurred which had been reflected in the Other Income and Other Current Assets in the previous year. During the year, the insurance company has paid the claim to the company as per its final loss assessment report. The final loss on account of fire, incurred by the company, has been reflected as Exceptional Item in the Statement of Profit and Loss for the year.

11. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

12. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, ‘Segment Reporting’(AS17)), issued by the Institute of Chartered Accountants of India.


Mar 31, 2015

1. Secured Term Loans are secured as below:

From Banks : Secured against hypothecation of assets created from Term Loan.

Against Vehicles : Secured against hypothecation of respective vehicles.

2. Term Loans from banks are collaterally secured by:

a) Equitable Mortgage on the Company's property at 124, New Manglapuri, Mehrauli, New Delhi.

b) Equitable mortgage of land and building at plot no. 17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the directors of the company.

f) Pledge of 47.94 lacs Equity Shares of the company by one of the Directors.

g) Second charge on entire fixed assets of the subsidiary company, OK Play Auto Private Limited.

h) Residual value of prime security of the subsidiary company, OK Rlay Auto Private Limited.

i) Reinvestment Deposit Plan of the value of Rs. 0.45 crores.

3. Term Loans, Unsecured from other parties have been secured by third party property.

4. Term Loans are repayable as follows:

From Bank: Payable in monthly instalments upto year 2019-20

Against Vehicles: Payable in monthly instalments extending to year 2020-21 External Commercial Borrowing: Payable in half-yearly instalments upto year 2018-19 Unsecured From Other Parties: Payable in monthly instalments extending to year 2022-23

5. Working Capital Loan from Bank is secured by:

Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts.

6. Working Capital Loan from bank is collaterally secured by:

a) Equitable Mortgage on the Company's property at 124, New Manglapuri, Mehrauli, New Delhi.

b) Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the directors of the company.

f) Pledge of 47.94 lacs Equity Shares of the company by one of the Directors.

g) Second charge on entire fixed assets of the subsidiary company, OK Play Auto Private Limited.

h) Residual value of prime security of the subsidiary company, OK Play Auto Private Limited.

i) Reinvestment Deposit Plan of the value of Rs.0.45 crores.

7. The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds ('FCCB') aggregating to USD 10 million, at par. During the financial year 2010-11, the 'FCCB' of the face value of USD 9,760,000 had been bought back by the company at a discount of 24% to the face value of the 'FCCB' and subsequently a notice was given to the Clearing Houses, through the Trustees, requesting communication with the bondholders of the balance 24 bonds of the face value of USD 240,000. However, no response has been received and no claimant has come forth on the redemption date of 24th July, 2012 and till date. The premium payable on the redemption of the FCCB has been provided for.

8. Contingent Liabilities and Commitments, not provided for:

(I) Contingent Liabilities *

a) Claims against the company not acknowledged as debt:

(i) Claims against the Company, where legal cases are under way, but not acknowledged as debts amount to Rs 59,74,812.12.

(ii) Demand of penalty of Rs. 29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

b) Guarantees:

(I) Guarantees given to banks as counter guarantees for performance of contracts Rs.706,60,000 /- (Previous Year Rs. 706,60,000/-).

(ii) Letter of credit issued by banks-Nil (Previous year Rs. Nil)

(iii) Corporate Guarantee, restricted to Rs. 19.48 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

c) Other money for which the company is contingently liable:

(i) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

9. Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

10. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate.

11. There was a fire at the plant on the intervening night between 9th & 10th January, 2015 in which the company lost its stocks and part of the Building and Plant & Machinery. The company has incurred a loss of Rs 22.25 crores due to the fire which have been reflected in Other Expenses. The company has filed a claim with the insurance company for the loss incurred which has been reflected in the Other Income and Other Current Assets. The insurance company has yet to give a copy of the final loss assessment report.

12. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

13. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, 'Segment Reporting'(AS17)), issued by the Institute of Chartered Accountants of India.

14. Related Party Disclosures:

(I) Relationships

(a) Key Management Personnel

Justice T.R. Handa (Retd.) Mr. Rajan Handa Mrs. Mamta Handa Dr. Rajan Wadhera Relatives Mrs. Usha Handa

(b) Subsidiary Company

OK Play Auto Private Limited

(c) Significant influence of key management personnel of the company Rave India (A Printing unit of Rave Scans Pvt Ltd)

A&A Labels Anupam Art Printer

Note: Related party relationship is as identified by the company and relied upon by the Auditors.


Mar 31, 2014

1. Secured Term Loans are secured as below:

From Banks : Secured against hypothecation of assets created from Term Loan.

Against Vehicles : Secured against hypothecation of respective vehicles.

2. Term Loans from banks are collaterally secured by:

a) Equitable Mortgage on the Company''s property at 124, New Manglapuri, Mehrauli, New Delhi.

b) Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the directors of the company.

f) Pledge of Equity Shares of the company of the value of Rs. 10 crores by one of the directors.

g) Residual value of prime security of the subsidiary company, OK Play Auto Private Limited.

h) Equitable Mortgage of third party property.

3. Term Loans, Unsecured from other parties have been secured by third party property.

4. Term Loans are repayable as follows:

From Bank: Payable in monthly instalments upto year 2016-17 Against Vehicles: Payable in monthly instalments extending to year 2020-21 External Commercial Borrowing: Payable in half-yearly instalments upto year 2018-19 Unsecured From Other Parties: Payable in monthly instalments extending to year 2022-23

5. Working Capital Loan from Bank is secured by:

Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts.

6. Working Capital Loan from bank is collaterally secured by:

a) Equitable Mortgage on the Company''s property at 124, New Manglapuri, Mehrauli, New Delhi.

b) Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Personal guarantees of two of the directors of the company.

f) Pledge of Equity Shares of the company of the value of Rs. 10 crores by one of the directors.

g) Residual value of prime security of the subsidiary company, OK Play Auto Private Limited.

h) Equitable Mortgage of third party property.

7. The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds (''FCCB'') aggregating to USD 10 million, at par. During the financial year 2010-11, the ''FCCB'' of the face value of USD 9,760,000 had been bought back by the company at a discount of 24% to the face value of the ''FCCB'' and subsequently a notice was given to the Clearing Houses, through the Trustees, requesting communication with the bondholders of the balance 24 bonds of the face value of USD 240,000. However, no response has been received and no claimant has come forth on the redemption date of 24th July, 2012 and till date. The premium payable on the redemption of the FCCB has been provided for.

8. Contingent Liabilities and Commitments, not provided for :

(I) Contingent Liabilities

a) Claims against the company not acknowledged as debt:

(i) Demand of penalty of Rs. 29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

b) Guarantees:

(i) Guarantees given to banks as counter guarantees for performance of contracts Rs.706,60,000/- (Previous Year Rs. 106,60,000/-).

(ii) Letter of credit issued by banks-Nil (Previous year Rs. 272,86,102/-)

(iii) Corporate Guarantee, restricted to Rs. 19.48 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

c) Other money for which the company is contingently liable:

(i) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

(II) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

9. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate. However, the balances of parties are subject to confirmation.

10. Advertisement expenses of Rs 392,13,964/- standing as deferred revenue expenditure in the previous year have been written off during the year as the benefit of the same has been received.

11. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

12. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard

17, ''Segment Reporting''(AS17)), issued by the Institute of Chartered Accountants of India.

13. Related Party Disclosures:

(I) Relationships

(a) Key Management Personnel Justice T.R. Handa (Retd.)

Mr. Rajan Handa

Mrs. Mamta Handa Dr. Rajan Wadhera Relatives Mrs. Usha Handa

(b) Subsidiary Company

OK Play Auto Private Limited

(c) Significant influence of key management personnel of the company Sacred Exim Limited

14. Note: Related party relationship is as identified by the company and relied upon by the Auditors.


Mar 31, 2013

1. Contingent Liabilities and Commitments, not provided for :

(I) Contingent Liabilities

a) Claims against the company not acknowledged as debt:

(i) Demand of penalty of Rs. 29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

b) Guarantees:

(i) Guarantees given to banks as counter guarantees for performance of contracts Rs.106,60,000 /- (Previous Year Rs. 163,63,000/-). (ii) Letter of credit issued by banks Rs.272,86,102 /- (Previous year Rs. 199,60,878/-) (iii) Corporate Guarantee, restricted to Rs. 19.48 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

c) Other money for which the company is contingently liable:

(i) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

(II) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

2. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate. However, the balances of parties are subject to confirmation.

3. Advertisement expenses in the nature of deferred revenue expenditure would be written off over the years when the benefit would be received.

4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

5. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, ''Segment Reporting''(AS17)), issued by the Institute of Chartered Accountants of India.

6. Related Party Disclosures: (I) Relationships

(a) Key Management Personnel Justice T.R. Handa (Retd.) Mr. Rajan Handa Mrs. Mamta Handa Dr. Rajan Wadhera

Relatives

Mrs. Usha Handa

(b) Subsidiary Company

OK Play Auto Private Limited

(c) Significant influence of key management personnel of the company Sacred Exim Limited

Note: Related party relationship is as identified by the company and relied upon by the Auditors.


Mar 31, 2012

1.1 Secured Term Loans are secured as below:

From Banks : Secured against hypothecation of assets created from Term Loan.

Against Vehicles : Secured against hypothecation of respective vehicles.

1.2 Term Loans from banks are collaterally secured by:

a)Equitable Mortgage on the Company's property at 124, New Manglapuri, Mehrauli, New Delhi.

b)Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Negative lien on the property of land at Bawal Industrial Estate, Phase II, Haryana

f) Personal guarantees of two of the directors of the company.

g) Pledge of Equity Shares of the company of the value of Rs. 10 crores by one of the directors.

1.3 Term Loans, Unsecured from other parties have been secured by third party property and by pledge of equity shares by a director.

1.4 Term Loans are repayable as follows:

From Bank: Payable in monthly instalments upto year 2016-17 Against Vehicles: Payable in monthly instalments extending to year 2014-15 External Commercial Borrowing: Payable in half-yearly instalments upto year 2018-19 Unsecured From Other Parties: Payable in monthly instalments extending to year 2022-23

2.1 Working Capital Loan from Bank is secured by:

Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts.

2.2 Working Capital Loan from bank is collaterally secured by:

a)Equitable Mortgage on the Company's property at 124, New Manglapuri, Mehrauli, New Delhi.

b)Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Negative lien on the property of land at Bawal Industrial Estate, Phase II, Haryana

f) Personal guarantees of two of the directors of the company.

g) Pledge of Equity Shares of the company of the value of Rs. 10 crores by one of the directors.

3.1 The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds (‘FCCB') aggregating to US $ 10 million, at par.

The bondholders have an option to convert these bonds into equity shares at an initial conversion price of Rs. 140/- per share at a fixed exchange rate ( Rs. 40.34 = US $ 1). The conversion price may be reset on the first, second and third anniversaries of the Bonds. The reset conversion price cannot be lower than Rs. 98.15 or the applicable reset floor price as prescribed by SEBI from time to time. The conversion price will be subject to certain adjustments as detailed in the offering circular such as dilution, bonus, dividends, right issue etc. Unless previously redeemed, repurchased or converted, the company will redeem these bonds at 146.25 percent of the principal amount on 24th July, 2012. As at 31st March, 2012 none of the ‘FCCB' have been converted into equity shares but ‘FCCB' of the face value of USD 9,760,000 had been bought back by the company at a discount of 24% to the face value of the ‘FCCB' and the balance of ‘FCCB' outstanding as on 31st March, 2012 have been included in Other Current Liabilities.

The company expects that the bond holders would opt for conversion rather than redemption and hence, in that case no premium would be payable and on that basis the same is not provided for.

Maximum premium amount payable at current exchange rates is Rs.57,80,913/-.

4.1 Potential equity shares on conversion of the Foreign Currency Convertible Bonds into equity shares, at the option of the bond holders, are having an anti-dilutive effect and are therefore ignored in calculating diluted earnings per share.

Note : 1 Notes on Financial Statements

1. Contingent Liabilities and Commitments, not provided for:

(I) Contingent Liabilities

a) Claims against the company not acknowledged as debt:

(i) Demand of penalty of Rs. 29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

b) Guarantees:

(i) Guarantees given to banks as counter guarantees for performance of contracts Rs.163,63,000 /- (Previous Year Rs. 146,23,000/-).

(ii) Letter of credit issued by banks Rs. 199,60,878 /- (Previous year Rs. 201,70,159/-)

(iii) Corporate Guarantee, restricted to Rs. 19.48 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

c) Other money for which the company is contingently liable:

(i) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

(II) Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

1. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate. However, the balances of parties are subject to confirmation.

2. Advertisement expenses in the nature of deferred revenue expenditure would be written off over the years when the benefit would be received.

3. Expenses on issue of Foreign Currency Convertible Bonds are being written off over five financial years.

4. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

5. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, ‘Segment Reporting'(AS17)), issued by the Institute of Chartered Accountants of India.

6. Related Party Disclosures:

(I) Relationships

Key Management Personnel

Justice T.R. Handa (Retd.)

Mr. Rajan Handa

Mrs. Mamta Handa

Dr. Rajan Wadhera

Relatives

Mrs. Usha Handa

Note: Related party relationship is as identified by the company and relied upon by the Auditors.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. Nil).

2. Contingent Liabilities not provided for :

(i) Demand of penalty of Rs. 29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

(ii) Guarantees given to banks as counter guarantees for performance of contracts Rs. 146,23,000/- (Previous Year Rs. 113,50,000/-).

(iii) Letter of credit issued by banks Rs. 201,70,159/- (Previous year Rs.112,99,036/-)

(iv) Corporate Guarantee, restricted to Rs. 19.48 crores, given as security for the credit limits sanctioned by a bank to the subsidiary company, OK Play Auto Private Limited.

(v) Security, in the form of charge on the properties and Residual value of Block assets, present and future, after netting the prime security for term loans, provided to a bank for the credit limits sanctioned by it to the subsidiary company, OK Play Auto Private Limited.

3. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate. However, the balances of parties are subject to confirmation.

4. Amounts shown under the head 'Secured Loans' have been secured as below:-

(i) Term Loans

From Banks : Secured against hypothecation of assets created from Term Loan. Against Vehicles : Secured against hypothecation of respective vehicles.

(ii) Working Capital Loans:

From Banks : Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts.

Term Loans and Working Capital Loans from banks are collaterally secured by:

a) Equitable Mortgage on the Company's property at 124, New Manglapuri, Mehrauli, New Delhi.

b) Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

c) Hypothecation of all the Current Assets of the company.

d) First charge on other net block assets of the company.

e) Negative lien on the property of land at Bawal Industrial Estate, Phase II, Haryana

f) Personal guarantees of two of the directors of the company.

g) Pledge of Equity Shares of the company of the value of Rs. 10 crores by one of the directors.

5. 'Term Loan from others' shown under Unsecured Loans in Schedule 'C' – Loan Funds has been secured by third party property and by pledge of equity shares by a director.

6. In respect of the Domestic Factoring Facility availed by the company, the discounting charges have been provided as per the terms of the sanction letter. However, the factoring company has charged excess discounting charges of Rs. 1,69,365.52 during the year, to which the company disagrees and hence has not provided the same. Accordingly the profits of the company would have been lower by the said amount had the company accepted the excess charges of the factoring company.

7. Advertisement expenses in the nature of deferred revenue expenditure would be written off over the years when the benefit would be received.

8. The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds ('FCCB') aggregating to US $ 10 million, at par. The bondholders have an option to convert these bonds into equity shares at an initial conversion price of Rs. 140/- per share at a fixed exchange rate ( Rs. 40.34 = US $ 1). The conversion price may be reset on the first, second and third anniversaries of the Bonds. The reset conversion price cannot be lower than Rs. 98.15 or the applicable reset floor price as prescribed by SEBI from time to time. The conversion price will be subject to certain adjustments as detailed in the offering circular such as dilution, bonus, dividends, right issue etc. Unless previously redeemed, repurchased or converted, the company will redeem these bonds at 146.25 percent of the principal amount on 24th July, 2012. As at 31st March, 2011 none of the 'FCCB' have been converted into equity shares. However, during the year, 'FCCB' of the face value of USD 9,760,000 have been bought back by the company at a discount of 24% to the face value of the 'FCCB' and the balance of 'FCCB' outstanding as on 31st March, 2011 have been included and disclosed in Schedule 'C'- Loan Funds under the sub-heading 'Unsecured'.

The company expects that the bond holders would opt for conversion rather than redemption and hence, in that case no premium would be payable and on that basis the same is not provided for. Maximum premium amount payable at current exchange rates is Rs.50,39,156/-.

9. Expenses on issue of Foreign Currency Convertible Bonds are being written off over five financial years.

10. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

11. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, 'Segment Reporting'(AS17)), issued by the Institute of Chartered Accountants of India.

12. Related Party Disclosures:

(I) Relationships

Key Management Personnel

Justice T.R. Handa (Retd.)

Mr. Rajan Handa

Mrs. Mamta Handa

Dr. Rajan Wadhera

Relatives

Mrs. Usha Handa

Note: Related party relationship is as identified by the company and relied upon by the Auditors.

13. Previous year's figures have been regrouped wherever necessary to make them comparable with the current year.


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for amount to Rs. Nil (Previous Year Rs. 4,40,00,000/-).

2. Contingent Liabilities not provided for :

(i) Demand of penalty of Rs.29,37,276/- (Previous Year Rs. 29,37,276/-) under the Central Excise Act is in dispute and pending before the Central Excise & Service Tax Appellate Tribunal.

(ii) Guarantees given to banks as counter guarantees for performance of contracts Rs.113,50,000/- (Previous Year Rs. 91,95,733/-).

(iii) Letter of credit issued by banks Rs.112,99,036/- (Previous year Rs. Nil).

3. In the opinion of the Management, the Current Assets, Loans and Advances shown in the Balance Sheet have a value on realisation in the ordinary course of business atleast equal to the amount stated therein. The provision for all known liabilities have been made and are adequate. However, the balances of parties are subject to confirmation.

4. Amounts shown under the head ‘Secured Loans have been secured as below:-

(i) Term Loans

From Banks : Secured against hypothecation of assets created from Term Loan.

Against Vehicles : Secured against hypothecation of respective vehicles.

(ii) Working Capital Loans:

From Banks : Secured against hypothecation of stocks of Raw Material, Work-in-process, Finished Goods & Other Stocks and book debts, except Harita Seating Systems Ltd.

From others: Secured against hypothecation of book debts of Harita Seating Systems Ltd. and additionally secured by the personal guarantee of a director of the company.

Term Loans and Working Capital Loans from banks are collaterally secured by:

a) Equitable mortgage of land and building at plot no.17-18, Rojka Meo Industrial Estate, Tehsil Nuh, District Mewat, Haryana.

b) Hypothecation of all the Current Assets of the company.

c) First charge on all the other net block assets of the company.

d) First charge on the Companys property at 124, New Manglapuri, Mehrauli, New Delhi.

e) Negative lien on the property of land at Bawal Industrial Estate, Phase II, Haryana

f) Personal guarantees of two of the directors of the company.

5. Term Loan from others shown under Unsecured Loans in Schedule C - Loan Funds has been secured by third party property and by pledge of equity shares by a director.

6. In respect of the Domestic Factoring Facility availed by the company, the discounting charges have been provided as per the terms of the sanction letter. However, the factoring company has charged excess discounting charges of Rs. 46,51,209.60 to which the company disagrees and hence has not provided the same. Accordingly the profits of the company would have been lower by the said amount had the company accepted the excess charges of the factoring company.

7. Advertisement expenses in the nature of deferred revenue expenditure would be written off over the years when the benefit would be received.

8. A vehicle had been imported in an earlier year from Volkswagen AG through the managing director as per agreement between him and the company. As the vehicle is hypothecated to a bank, it will be registered in the name of the company after satisfaction of the loan.

9. The Board of Directors of the Company at its meeting held on 23rd July, 2007 issued zero coupon unsecured Foreign Currency Convertible Bonds (‘FCCB) aggregating to US $ 10 million, at par. The bondholders have an option to convert these bonds into equity shares at an initial conversion price of Rs. 140/- per share at a fixed exchange rate (Rs. 40.34 = US $ 1). The conversion price may be reset on the first, second and third anniversaries of the Bonds. The reset conversion price cannot be lower than Rs. 98.15 or the applicable reset floor price as prescribed by SEBI from time to time. The conversion price will be subject to certain adjustments as detailed in the offering circular such as dilution, bonus, dividends, right issue etc. Unless previously redeemed, repurchased or converted, the company will redeem these bonds at 146.25 percent of the principal amount on 24th July, 2012. As at 31st March, 2010 none of the FCCB have been converted into equity shares and the balance of FCCB outstanding as on 31st March, 2010 have been included and disclosed in Schedule C - Loan Funds under the sub-heading Unsecured.

The company expects that the bond holders would opt for conversion rather than redemption and hence, in that case no premium would be payable and on that basis the same is not provided for. Maximum premium amount payable at current exchange rates is Rs.20,80,13,538/-.

10. Expenses on issue of Foreign Currency Convertible Bonds are being written off over five financial years.

11. The Company has not received any intimation from suppliers regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid / payable as required under the said Act have not been furnished.

12. All the operations of the company are considered as a single business segment for the purpose of Accounting Standard 17, Segment Reporting (AS17), issued by the Institute of Chartered Accountants of India.

13. Related Party Disclosures:

(I) Relationships

Key Management Personnel

Justice T.R. Handa (Retd.)

Mr. Rajan Handa

Mrs. Mamta Handa

Dr. Rajan Wadhera

Relatives

Mrs. Usha Handa

Note: Related party relationship is as identified by the company and relied upon by the Auditors.

14. Previous years figures have been regrouped wherever necessary to make them comparable with the current year.

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