Mar 31, 2018
1. Corporate Information
PPAP AUTOMOTIVE LIMITED (âPPAPâ or âthe Companyâ) is a limited Company domiciled in India and was incorporated on 18th October, 1995. The registered office of the Company is located at 54, Okhla Industrial Estate, Phase-III New Delhi-110020, India.
PPAP is a leading manufacturer of automotive sealing systems, interior and exterior automotive parts in India. The Companyâs state of the art manufacturing facilities are located in Noida (U.P.), Greater Noida (U.P.), Vallam Vadagal (Tamil Nadu), Pathredi (Rajasthan) and Viramgam (Gujarat). The Company was listed on the Indian Stock Exchange (BSE / NSE) in 2008. The financial statements of the Company for the year ended 31st March, 2018 were authorized for issue in accordance with a resolution of the Directors on 21st May, 2018.
I n 2012, the Company has ventured into EPDM Rubber based automotive sealing systems by establishing a Joint Venture with its Technology Partner Tokai Kogyo Co. Limited-Japan.
2. Significant Accounting Policies
2.1 Basis of preparation
The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Indian Accounting Standards) (Amendment) Rules, 2016.
For all periods up to and including the year ended 31st March, 2017, the Company has prepared its financial statements in accordance with Indian GAAP including accounting standards notified under Section 133 of the Companies Act, 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Indian GAAP). These financial statements for the year ended 31st March, 2018 are the first being prepared in accordance with Ind AS.
The financial statements have been prepared on a historical cost basis, except for the certain assets and liabilities which have been measured at different basis and such basis has been disclosed in relevant accounting policy.
The financial statements are presented in INR and all values are rounded to the nearest lacs (INR 00,000), except as when otherwise indicated.
2.2 Significant accounting judgements, estimates and assumptions
The preparation of the Companyâs financial statements requires management to make judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the accompanying disclosures and the disclosure of contingent liabilities at the date of the financial statements. Estimates and assumptions are continuously evaluated and are based on managementâs experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods.
In particular, the Company has identified the following areas where significant judgements, estimates and assumptions are required. Further information on each of these areas and how they impact the various accounting policies are described below and also in the relevant notes to the financial statements. Changes in estimates are accounted for prospectively.
Judgements
In the process of applying the Companyâs accounting policies, management has made the following judgements, which have the most significant effect on the amounts recognized in the financial statements.
Contingencies
Contingent liabilities may arise from the ordinary course of business in relation to claims against the Company, including legal, contractor, land access and other claims. By their nature, contingencies will be resolved only when one or more uncertain future events occur or fail to occur. The assessment of the existence and potential quantum, of contingencies inherently involves the exercise of significant judgments and the use of estimates regarding the outcome of future events.
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below. The Company based its assumptions and estimates on parameters available when the consolidated financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market change or circumstances arising beyond the control of the Company. Such changes are reflected in the assumptions when they occur
(a) Impairment of Non-Financial Assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the assetâs recoverable amount. An assetâs recoverable amount is the higher of an assetâs or CGUâs fair value less costs of disposal and its value in use. It is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
I n assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.
(b) Defined Benefit Plans
The cost of the defined benefit plan and other post-employment benefits and the present value of such obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases, mortality rates and future pension increases. Due to the complexities involved in the valuation and its long-term nature, a defined benefit obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(c) Fair Value Measurement of Financial Instruments
When the fair values of financial assets and financial liabilities recorded in the balance sheet cannot be measured based on quoted prices in active markets, their fair value is measured using valuation techniques including the DCF model. The inputs to these models are taken from observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility. Changes in assumptions about these factors could affect the reported fair value of financial instruments.
(d) Impairment of Financial Assets
The impairment provisions for financial assets are based on assumptions about risk of default and expected loss rates. The Company uses judgments in making these assumptions and selecting the inputs to the impairment calculation, based on Companyâs past history, existing market conditions as well as forward looking estimates at the end of each reporting period.
Derivative instruments at fair value through profit or loss
Derivative instruments at fair value through profit or loss reflect the positive change in fair value of those foreign exchange forward contracts that are not designated in hedge relationships, but are, nevertheless, intended to reduce the level of foreign currency risk for expected sales and purchases.
Bank deposits (having maturity more than 12 months)
Bank deposits are held as security against letter of credit and bank guarantees.
B. Terms / Rights attached to equity shares
The Company has only one class of equity share having face value of Rs. 10/- per share. The holder of the equity shares is entitled to receive dividend as declared from time to time. The dividend proposed by the Board of Directors is subject to the approval of shareholders in ensuing annual general meeting. The holder of share is entitled to voting rights proportionate to their shareholding.
In the event of liquidation of the Company, the holders of equity shares will be entitled to receive assets of the Company remaining after settlement of all liabilities. The distribution will be in proportion to the number of equity shares held by the shareholders.
Note I:
Term loans are secured by 1st charge on all movable assets (present and future) of the Company. Term loans are further secured by way of equitable mortgage on factory land and building of the Company situated at Kasna, Greater Noida. The charges are ranked pari-passu with the charges shared with other bankers.
Note II:
Loan from State Owned Corporation viz. The Pradeshiya Industrial & Investment Corporation of U.P. Limited is secured by bank guarantee equivalent to 100% of loan amount.
Note III:
Secured by hypothecation of inventories, book debts, other current assets, factory land and building at B-206A, Sector-81, Phase-II, Noida.
3. Earnings Per Share (EPS)
Basic and Diluted EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of equity shares outstanding during the year. Diluted EPS are calculated by dividing the profit for the year attributable to the equity holders of the Company by weighted average number of equity shares outstanding during the year plus the weighted average number of equity shares that would be issued on conversion of all the dilutive potential equity shares into equity shares.
The following reflects the income and share data used in the basic and diluted EPS computations:
4. Employee Benefit Plans
Defined contribution plans - general description
Retirement benefits in the form of provident fund, superannuation fund and national pension scheme are defined contribution schemes. The Company has no obligation, other than the contribution payable to the provident fund. The Companyâs contribution to the povident fund is Rs. 195.22 lacs (31st March, 2017: Rs. 170.90 lacs)
Defined benefit plans - general description Gratuity
The Company has a defined benefit gratuity plan. Gratuity is computed as 15 days salary, for every completed year of service or part thereof in excess of 6 months and is payable on retirement / termination / resignation. The benefit vests on the employee completing 5 years of service. The Company makes provision of such gratuity asset / liability in the books of accounts on the basis of actuarial valuation as per the projected unit credit method.
The following tables summarise the components of net benefit expense recognised in the statement of profit & loss and the funded status and amounts recognised in the balance sheet for the gratuity plan:
Changes in the present value of the defined benefit obligation are as follows:
The sensitivity analyses above have been determined based on a method that extrapolates the impact on defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. Sensitivities due to mortality and withdrawals are insignificant and hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payments, rate of increase of pensions before retirement & life expectancy are not applicable being a lump sum benefit on retirement.
Companyâs best estimate of expense for the next annual reporting period is Rs. 140.33 lacs.
The weighted average duration of the defined benefit plan obligation at the end of the reporting period is 17.23 years (31st March, 2017: Rs. 16.83 years)
5. Leases
Operating leases taken
The Company has taken certain building on operating lease arrangements. The lease expense recognized in the statement of profit and loss is Rs. 196.97 lacs (31st March, 2017: Rs. 184.28 lacs). The future minimum lease payments under non-cancellable operating leases are as follows:
Operating leases given
The Company has given certain properties on operating lease arrangements. The lease income recognized in the statement of profit and loss is Rs. 88.17 lacs (31st March, 2017: Rs. 82.41 lacs). The future minimum lease payments under non-cancellable operating leases are as follows:
6. Commitments
(i) Retention charges and capital commitments (net of advances) are Rs. 302.67 lacs (31st March, 2017: Rs. 791.59 lacs; 1st April, 2016: Rs. 541.02 lacs)
Notes :-
(i) A demand of Rs. 29.40 lacs has been raised for the assessment year 2010-11. The Honâble CIT(A) has partly allowed the appeal in our favour. However department has filed the appeal with ITAT(Delhi) against the order of the allowability of the royalty amount. Balance liability of Rs. 10.63 lacs has been accepted and paid by the Company. ITAT has referred back the case to assessing officer for recomputation of income.
(ii) A demand of Rs. 2.43 lacs has been raised for the assessment year 2011-12. The Honâble CIT(A) has decided the case in our favour. However department has filed the appeal with ITAT(Delhi) against the order of the allowability of the royalty amount. The case has been decided in our favour and ITAT has deleted the demand.
(iii) A demand of Rs. 3.00 lacs has been raised for the assessment year 2012-13. The Honâble CIT(A) has decided the case in our favour. The department has filed an appeal with ITAT (Delhi).
(iv) Central sales tax assessment for the assessment year 2004-05 was completed and a balance demand of Rs. 0.45 lacs was raised by the department. Appeal against the same is pending before the Joint Commissioner of sales tax (Appeals) and stay granted vide order no F/PA/Jt. Comm. (KDU) /02/Stay/ 410-411 dated 18.08.06.
(v) Joint commissioner has demanded entry tax of Rs. 5.24 lacs on stock transfer of iron and steel for job work for the assessment year 2011-12. We have filed an appeal before the Additional Commissioner (Appeals) against the said demand. Additional Commissioner (Appeals) granted stay of 50% of demand. We have filed an appeal against the order of Additional Commissioner (Appeals) before Commercial Tax Tribunal (Noida, U.P.).
(vi) Joint Commissioner has demanded Rs. 31.16 lacs towards shortfall of Form C and Rs. 4.43 lacs towards central sales tax on stock transfer of iron and steel for job work for the assessment year 2012-13. We filed an appeal before the Additional Commissioner (Appeals) against the said demand. Additional Commissioner (Appeals) granted stay of 50% of total demand. We have filed an appeal against the order of Additional Commissioner (Appeals) before Commercial Tax Tribunal (Noida, U.P.).
(vii) Joint Commissioner has demanded Rs. 2.69 lacs towards reversal of input tax credit on consumable goods for the assessment year 2013-14. We have filed an appeal before the Additional Commissioner (Appeals) against the said demand. Additional Commissioner (Appeals) has granted stay of 50% of total demand.
(viii) A demand of Rs. 84.55 lacs had been raised by BSES Rajdhani Limited for making payments of arrears for the misuse of electricity. The Company had filed a suit against BSES with District Court and won the case in its favour. However, BSES had filed an appeal with Honâble High Court. The case has been decided in our favour and the Honâble High Court set aside the said demand.
(ix) Demand of excise duty of Rs. 1.06 lacs along with penalty of Rs. 1.06 lacs was imposed on the Company by Additional Commissioner, Central Excise, Delhi, for cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944. The Company had filed an appeal against the aforesaid order with Commissioner of Central Excise, Okhla. The Commissioner of central excise has rejected the appeal. Thereafter, the Company has filed the appeal with the Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(x) Demand of excise duty of Rs. 42.11 lacs along with penalty of Rs. 42.11 lacs was imposed on the Company by Additional Commissioner, Central Commissionerate, Noida, for cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944. The Company filed before the Commissioner (Appeals), Central Excise, Noida. The Commissioner (Appeals) rejected the appeal. The Company has filed the appeal with the Central Excise & Service Tax Appellate Tribunal (CESTAT) which has been decided in favor of the Company. The department approached the Allahabad High Court against the order of CESTAT. The High Court remanded the case back to Allahabad CESTAT for hearing it again.
(xi) Demand of excise duty of Rs. 35.36 lacs along with penalty of Rs. 35.36 lacs was imposed on the Company by Additional Commissioner, Central Excise, Delhi, for cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944 and was outstanding as on 31.03.2016. The Company had filed the appeal with the Central Excise & Service Tax Appellate Tribunal (CESTAT) and CESTAT has decided the case in favour of Company and set aside the demand. The Company approached the Delhi High Court against the order of CESTAT and the High Court has remanded the case back to CESTAT for hearing it again.
(xii) RIICO has raised a demand of Rs. 103.57 lacs towards additional cost of land due to delay in commencement of production activities at its plant at Pathredi.
7. Segment information
According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. Based on the consideration of dominant sources and nature of risk & returns, the Company is considered as an automotive components manufacturer. Most of the activities are revolving around this business and accordingly has only one reportable segment. The geographical location of its main operations and the internal organization / reporting and management structure supports such treatment.
8. Dues to Micro and Small Enterprises
The dues to Micro and Small Enterprises as required under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) to the extent information available with the Company is given below:
(ii) Fair value hierarchy
All financial instruments for which fair value is recognized or disclosed are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurements as a whole.
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: valuation techniques for which the lowest level inputs that has a significant effect on the fair value measurement are observable, either directly or indirectly.
Level 3: valuation techniques for which the lowest level input which has a significant effect on fair value measurement is not based on observable market data.
The following table provides the fair value measurement hierarchy of the Companyâs assets and liabilities, other than those whose fair values are close approximations of their carrying values.
Financial assets and liabilities measured at fair value-recurring fair value measurements for which fair values are disclosed at 31st March, 2018:
There have been no transfers between Level 1 and Level 2 during the period.
Valuation technique used to determine fair value:
(i) For cash and cash equivalents, trade receivables, loans other financial assets, short term borrowings, trade payables and other current financial liabilities the management assessed that they approximate their carrying amounts largely due to the short-term maturities of these instruments.
(ii) The fair values of the Companyâs investments in mutual funds has been determined by multiplying the number of units held at the year end to the closing NAV
(iii) The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.
(iv) The fair value of security deposits is determined using discounted cash flow analysis.
9. Financial risk management objectives and policies
The Companyâs principal financial liabilities, comprise borrowings, trade payables, and creditors for expenses. The Companyâs principal financial assets include investments, long term deposits, trade receivables, cash and short-term deposits / loan that derive directly from its operations. The Company also holds FVTPL investments in quoted mutual funds.
The Company is exposed to market risk, credit risk and liquidity risk. The Companyâs senior management oversees the management of these risks. The Companyâs senior management is supported by the Board of Directors that advises on financial risks and the appropriate financial risk governance framework for the Company. The Board provides assurance to the Companyâs management that the Companyâs financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Companyâs policies and risk objectives. The management reviews and agrees policies for managing each of these risks, which are summarized below.
I. Market risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such as equity price risk and commodity risk. Financial instruments affected by market risk include, deposits and FVTPL investments.
The sensitivity analyses of the above mentioned risk in the following sections relate to the position as at 31st March, 2018 and 31st March, 2017.
The analyses exclude the impact of movements in market variables on: the carrying values of gratuity and other post-retirement obligations; provisions; and the non-financial assets and liabilities.
The following assumptions have been made in calculating the sensitivity analyses:
- The sensitivity of the relevant profit or loss item is the effect of the assumed changes in respective market risks. This is based on the financial assets and financial liabilities held at 31st March, 2018 and 31st March, 2017.
A. Interest rate risk
I nterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Companyâs exposure to the risk of changes in market interest rates relates primarily to the Companyâs debt obligations with floating interest rates.
B. Foreign currency sensitivity
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Companyâs exposure to the risk of changes in foreign exchange rates relates primarily to the Companyâs operating activities (when revenue or expense is denominated in a foreign currency). Foreign currency risk sensitivity is the impact on the Companyâs profit before tax is due to changes in the fair value of monetary assets and liabilities. The following tables demonstrate the sensitivity to a reasonably possible change in USD, JPY and EURO exchange rates, with all other variables held constant. The Companyâs exposure to foreign currency changes for all other currencies is not material.
The movement in the pre-tax effect on profit and loss is a result of a change in the fair value of monetary assets and liabilities denominated in foreign currency.
II. Credit risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its financing activities, including deposits with banks and financial institutions.
Credit risk from investments with banks and other financial institutions is managed by the treasury functions in accordance with the management policies. Investments of surplus funds are only made with approved counterparties who meet the appropriate rating and / or other criteria and are only made within approved limits. The management continually re-assess the Companyâs policy and update as required. The limits are set to minimize the concentration of risks and therefore mitigate financial loss through counterparty failure.
Customer credit risk is managed by each business unit subject to the Companyâs established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on an extensive credit review and individual credit limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
At the year end the Company does not have any significant concentrations of bad debt risk other than disclosed in note 11.
The maximum credit risk exposure relating to financial assets is represented by the carrying value as at the Balance Sheet date.
III. Liquidity risk
The Companyâs objective is to maintain a balance between continuity of funding and flexibility through the use of bank overdrafts.
The table below summarizes the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments.
IV. Excessive risk concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographical region, or have economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Companyâs performance to developments affecting a particular industry. The Company is in automotive components manufacturing business and the management have assessed risk concentration as low.
10 . Capital Management
The objective of the Companyâs capital management structure is to ensure that there remains sufficient liquidity within the Company to carry out committed work programme requirements. The Company monitors the long term cash flow requirements of the business in order to assess the requirement for changes to the capital structure to meet that objective and to maintain flexibility.
The Company manages its capital structure and makes adjustments to it, in light of changes to economic conditions. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital, issue new shares for cash, repay debt, put in place new debt facilities or undertake other such restructuring activities as appropriate. No changes were made in the objectives, policies or processes during the year ended 31st March, 2018.
11. Balance confirmation
Debit and credit balance of trade payables and trade receivables to the extent not confirmed are subject to confirmation and reconciliation with parties.
12. In the opinion of the Board of Directors and to the best of their knowledge and belief, the aggregate value of current assets on realization in the ordinary course of business will not be less than the amount at which these are stated in the Balance Sheet.
13. Disclosure of movement in provisions during the year as per Ind AS- 37, âProvisions, Contingent Liabilities and Contingent Assets:
14. Disclosure under Ind AS 7 âStatement of Cash Flowsâ
Effective 1st April, 2017, the Company adopted the amendment to Ind AS 7, which require the entities to provide disclosures that enable users of financial statements to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation between the opening and closing balances in the Balance Sheet for liabilities arising from financing activities.
15 First time adoption of Ind AS
The financial statements, for the year ended 31st March, 2018, are the Companyâs first financial statements prepared in accordance with Ind AS. For periods up to and including the year ended 31st March, 2017, the Company has prepared its financial statements in accordance with accounting standards notified under Section 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (Previous GAAP). Accordingly, the Company has prepared financial statements which comply with Ind AS applicable for periods ending on 31st March, 2018, together with the comparative period data as at and for the year ended 31st March, 2017, as described in the summary of significant accounting policies. In preparing these financial statements, the Companyâs opening balance sheet was prepared as at 1st April, 2016, the Companyâs date of transition to Ind AS. This note explains exemptions availed by the Company in restating its previous GAAP financial statements, including the balance sheet as at 1st April, 2016 and the financial statements as at and for the year ended 31st March, 2017.
Exemptions applied:
1. Mandatory exceptions;
a) Estimates
The estimates at 1st April, 2016 and at 31st March, 2017 are consistent with those made for the same dates in accordance with previous GAAP (after adjustments to reflect any differences in accounting policies) apart from impairment of financial assets based on expected credit loss model where application of previous GAAP did not require estimation.
The estimates used by the Company to present these amounts in accordance with Ind AS reflect conditions at 1st April, 2016, the date of transition to Ind AS and as of 31st March, 2017
b) De-recognition of financial assets
The Company has applied the de-recognition requirements in Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS.
c) Classification and measurement of financial assets Financial Instruments
Financial assets like security deposits received and security deposits paid, has been classified and measured at amortized cost on the basis of the facts and circumstances that exist at the date of transition to Ind AS. Since, it is impracticable for the Company to apply retrospectively the effective interest method in Ind AS 109, the fair value of the financial asset or the financial liability at the date of transition to Ind AS by applying amortized cost method, has been considered as the new gross carrying amount of that financial asset or the financial liability at the date of transition to Ind AS.
d) Impairment of financial assets: (Trade receivables and other financial assets)
At the date of transition to Ind AS, the Company has determined that estimation of significant increase in credit risk since the initial recognition of a financial instrument would require undue cost or effort, the Company has recognized a loss allowance at an amount equal to lifetime expected credit losses at each reporting date until that financial instrument is derecognized (unless that financial instrument is low credit risk at a reporting date).
2. Optional exemptions
a. Deemed cost Previous GAAP carrying amount: (PPE and Intangible)
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets and investment property covered by Ind AS 40 Investment Properties.
Accordingly, the Company has elected to measure all of its property, plant and equipment, capital work-in-progress and intangible assets at their previous GAAP carrying value.
b. Lease
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The company has elected to apply this exemption for such contracts / arrangements.
c. Investment in subsidiaries, jointly controlled entities and associates in standalone financial statements At transition date, entity may choose to account for its investment at:
- Cost as per Ind AS 27 determined at transition date.
- Fair value as per Ind AS 113 (only on transition date).
- Previous GAAP carrying amount.
- Fair value as per Ind AS 109 (recurring fair valuation without recycling).
The Company has elected to apply previous GAAP carrying amount exemption.
Reconciliations between previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile total equity and total comprehensive income for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
Note-1
De-recognition of proposed dividend
Under the Indian GAAP, dividends proposed by the board of directors after the balance sheet date but before the approval of the financial statements were considered as adjusting events. Accordingly, provision for proposed dividend was recognized as a liability. Under Ind AS, such dividends are recognized when the same is approved by the shareholders in the general meeting.
Note-2
Reversal of amortization of leasehold land classified as finance lease
Under Indian GAAP, the leasehold land was recognized as property, plant and equipment and the same was amortized during the tenure of the lease. Under Ind AS, the leasehold land has been classified as finance lease and hence the amortization is reversed as land is considered to have infinite useful life.
Note-3
Fair valuation of current investments
Under Indian GAAP, the mutual funds classified as current investments were valued at lower of cost and fair value. Under Ind AS the same are classified as financial assets and are valued at FVTPL.
Note-4 Measurement of certain financial assets at amortized cost
Under previous GAAP, the security deposits paid for lease rent are shown at the transaction value whereas under Ind AS, the same are initially discounted and subsequently recorded at amortized cost at the end of every financial reporting period. Accordingly, the difference between the transaction and discounted value of the security deposits paid towards lease rent is recognized as deferred lease expense and is amortized over the period of the lease term. Further, interest is accreted on the present value of the security deposits paid for lease rent.
Note-5
Measurement of certain financial liabilities at amortized cost Interest free loan-Government grant
Under the previous GAAP, interest free loan from the government has been presented in the Balance Sheet by showing it as a part of borrowings. Under Ind AS the benefit of a government loan at a below-market rate of interest is treated as a government grant. The benefit of the below-market rate of interest shall be measured as the difference between the initial carrying value of the loan determined by discounted cash flow analysis and the proceeds received.
Other long term borrowings:
Under the previous GAAP, the transaction costs relating to long term borrowings were charged to profit or loss as and when incurred. However, under Ind transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognized in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.
Note-6
Provision for expected credit loss on trade receivables
Under Indian GAAP, the Company created provision for impairment of receivables consists only in respect of specific amount for incurred losses. Under Ind AS, impairment allowance has been determined based on Expected Loss model (ECL).
Note-7
Remeasurement of defined benefit obligations reclassified to other comprehensive income (OCI)
Both under Indian GAAP and Ind AS, the Company recognized costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, including actuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements [comprising of actuarial gains and losses] are recognized immediately in the balance sheet with a corresponding debit or credit to other equity through OCI.
Note-8
Excise duty
Under the previous GAAP, revenue from sale of products was presented exclusive of excise duty. Under Ind AS, revenue from sale of goods is presented inclusive of excise duty. The excise duty paid is presented on the face of the statement of profit and loss as part of expenses. There is no impact on the total equity and profit.
Note-9
Other comprehensive income
Under Ind AS, all items of income and expense recognized in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognized in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans. The concept of other comprehensive income did not exist under previous GAAP,
Re-classification
The previous GAAP figures have been reclassified to conform to Ind AS presentation requirements for the purposes of this note.
Mar 31, 2016
1.1 During the year the company has not issued or bought back any share. Following is the reconciliation of number of shares outstanding as at the beginning and end of he year.
2 Equity shares carry voting rights at the general meeting of the company and are entitled to dividend.
3 There is no holding or subsidiary company of the Company.
4 The details of shareholders holding more than 5% equity shares in the Company.
5 The Company has not issued bonus shares or shares for a consideration other than cash in past five years.
Nature of security and terms of repayment for long term secured borrowings
Long term borrowings represent term loans and vehicle loans from ICICI bank limited and HDFC bank limited. Term loans are secured by 1st charge on all movable assets (present and future) of the Company. Term loans are further secured by way of equitable mortgage on factory land and building of the Company situated at Kasna, Greater Noida. The charges are ranked pari-passu with the charges shared with other multiple banker.
Vehicle loans are secured against respective assets financed from ICICI bank limited and HDFC bank limited. Vehicle loans are repaid in monthly installments.
Loan of '' 80,938,027 from State Owned Corporation viz. The Pradeshiya Industrial & Investment Corporation of U.P. Limited. is secured by bank guarantee equivalent to 100% loan amount. The loan is free of interest and shall be repaid in one installment after seven years from the date of disbursement i.e. 29.10.2015.
There is no default in repayment of interest and principal on above loans.
6 Liability for employee benefits has been determined by an actuary, appointed for the purpose, in conformity with the principles set out in the Accounting Standard 15 (Revised), the details of which are as hereunder : Actuarial Method
a) Projected unit credit (PUC) actuarial method has been used to assess the planâs liabilities of exit employees for retirement, death-in-service and withdrawals (Resignations / Terminations).
b) Under the PUC method a projected accrued benefit is calculated at the beginning of the period and again at the end of the period for each benefit that will accrue for all active members of the plan. The projected accrued benefit is based on the plan accrual formula and upon service as of the beginning or end of period, but using memberâs final compensation, projected to the age at which the employee is assumed to leave active service. The plan liability is the actuarial present value of the projected accrued benefits as on the date of valuation.
7 Actuarial assumptions Economic assumptions
The principal assumptions are the discount rate & salary growth rate. The discount rate is generally based upon the market yields available on Government bonds at the accounting date with a term that matches that of the liabilities & the salary growth rate takes account of inflation, seniority, promotion and other relevant factors on long term basis. Valuation assumptions are as follows which have been agreed by the Company:_
* Total amount of ''1,112,767 (previous year '' 1,201,005) was required to be incurred towards CSR activities as per Section 135 of the Companies Act, 2013. The Company has incurred '' 989,123 (previous year '' 1,111,957) during the financial year in the field of education and health.
8 Related Party Disclosures
9A Related Party Transactions, as required by Accounting Standard - 18," Related Party Disclosures"
Related Parties in the group where common control exists :
Kalindi Farms Private Limited
Key Management Personnel of the Company :
Mr. Ajay Kumar Jain - Chairman & Managing Director Mr. Abhishek Jain - Whole Time Director
Joint Ventures:
PPAP Tokai India Rubber Private Limited
Associate Companies:
PPAP Automotive Chennai Private Limited PPAP Automotive Technology Private Limited PPAP Automotive Systems Private Limited
Relatives of the Key Management Personnel:
Mrs. Vinay Kumari Jain
*Other Services include management support fee, reimbursement of expenses, job work charges and rental income from PPAP Tokai India Rubber Private Limited.
10. Segment Reporting
Manufacturing of automotive components is the Companyâs only business segment and domestic operations is the only significant geographical segment and hence disclosure of segment wise information is not applicable under Accounting Standard 17 - âSegment Reportingâ.
Notes
(i) A demand of Rs, 55,655/- has been raised for the assessment year 2003-04. However an appeal is pending before the Honâble CIT Appeal.
(ii) A demand of Rs, 2,939,730/- has been raised for the assessment year 2010-11.The Hon''ble CIT(A) has partly allowed the appeal in our favour. However department has filed the Appeal with ITAT (Delhi) against the order of the allow ability of the royalty amount. Balance liability of '' 1,062,836 has been accepted and paid by the Company.
(iii) A demand of Rs, 243,430/- has been raised for the assessment year 2011-12. The Hon''ble CIT(A) has decided the case in our favour. However department has filed the Appeal with ITAT(Delhi) against the order of the allow ability of the royalty amount.
(iv) A demand of Rs, 300,190/- has been raised for the assessment year 2012-13. The Hon''ble CIT(A) has decided the case in our favour. The department has filed an appeal with ITAT (Delhi).
(v) Central sales tax assessment for the assessment year 2004-05 was completed under Section 9 of Central Sales Tax Act R/W 23(3) of Delhi Sales Tax Act,1975 wherein demand of '' 166,697/- was raised which was reduced to Rs, 113,957/- vide review order. The Company had deposited a sum of Rs, 68,516/- being undisputed demand and Company had filed an appeal against the balance demand of Rs, 45,441/- before the Joint Commissioner of Sales Tax (Appeals). and stay granted vide order no F/PA/Jt. Comm. (KDU) /02/Stay/ 410-411 dated 18.08.06 out of total demand of Rs, 351,890/- the Company had deposited Rs, 306,449/- being undisputed demand.
(vi) A demand of Rs, 8,455,357/- had been raised by BSES Rajdhani Ltd. for making payments of arrears for the misuse of electricity. The Company had filed a suit against BSES with District Court and won the case in its favour. However, BSES has filed an appeal with Hon''ble High Court but the notice for listing the matter not received from the court.
(vii) Demand of excise duty of Rs, 105,896/- along with penalty of Rs, 105,896/- was imposed on the Company by Additional Commissioner, Central Excise, Delhi, for Cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944. The Company had filed an appeal against the aforesaid order with Commissioner of Central Excise, Okhla. The Commissioner of central excise has rejected the appeal. Thereafter, the Company has filed the appeal with the Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(viii) Demand of excise duty of Rs, 3,536,033/- along with penalty of Rs, 3,536,033/- was imposed on the Company by Addl. Commissioner, Central Excise, Delhi, for Cenvat credit taken on payment of duty through DEPB license, under the Central Excise Act, 1944. The Company had filed an appeal against the aforesaid order with Commissioner of Central Excise, Okhla. The Commissioner of Central Excise has rejected the appeal. Thereafter, the Company has filed the appeal with the Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal is pending. (The case relates to the period August 2003 - August 2004).
(ix) With reference to Company''s plant at Pathredi, RIICO has raised a demand of '' 10,357,127/- towards delay in commencement of production along with stipulated investment. The Company has contested the same with RIICO Limited, Bhiwadi, Rajsthan to drop the demand.
* The details of amounts outstanding to Micro and Small Enterprises under the Micro, Small and Medium Enterprises Development Act, 2006 are as per the available information with the Company.
12. Information under Section 186(4) of the Companies Act 2013:
A. The Company has not provided any loan during the year.
B. Investment
There is no investment besides those shown in Note No. 11.
C. The Company has not provided any guarantee during the year.
D. The Company has not provided any security during the year.
13. Balances of certain debtors, creditors, loans and advances are subject to confirmation.
14. In the opinion of the Management current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated except where indicated otherwise.
15. The previous yearâs figures have been accordingly regrouped / reclassified to conform to the current yearâs classification.
.
Mar 31, 2015
1.1 Equity shares carry voting rights at the general meeting of the
Company and are entitled to dividend.
1.2 The details of shareholders holding more than 5% equity shares in
the Company
1.3 No shares out of the issued, subscribed and paid up share capital
were allotted as bonus shares in the last five years by capitalization
of reserves.
2 Long-Term Borrowings
Nature of security and terms of repayment for long term secured
borrowings:
Long term borrowings represent term loans and vehicle loans from ICICI
bank limited and HDFC bank limited. Term loans are secured by 1st
charge on all movable assets (present and future) of the Company. Term
loans are further secured by way of equitable mortgage on factory land
and building of the Company situated at Kasna, Greater Noida. The
charges are ranked pari-passu with the charges shared with other
multiple banker.
Vehicle loans are secured against respective assets financed from ICICI
bank limited and HDFC bank limited. Vehicle loans are repaid in
monthly installments.
2.1 Liability for employee benefits has been determined by an actuary,
appointed for the purpose, in conformity with the principles set out in
the Accounting Standard 15 (Revised) the details of which are as
hereunder: Actuarial Method
a) Projected unit credit (PUC) actuarial method has been used to assess
the plan's liabilities of exit employees for retirement,
death-in-service and withdrawals (Resignations / Terminations).
b) Under the PUC method a projected accrued benefit is calculated at
the beginning of the period and again at the end of the period for each
benefit that will accrue for all active member of the plan. The
projected accrued benefit is based on the plan accrual formula and upon
service as of the beginning or end of period, but using member's
final compensation, projected to the age at which the employee is
assumed to leave active service. The plan liability is the actuarial
present value of the projected accrued benefits as on the date of
valuation.
2.2 Actuarial assumptions Economic assumptions
The principal assumptions are the discount rate & salary growth rate.
The discount rate is generally based upon the market yields available
on Government bonds at the accounting date with a term that matches
that of the liabilities & the salary growth rate takes account of
inflation, seniority, promotion and other relevant factors on long term
basis. Valuation assumptions are as follows which have been agreed by
the company:
3 Related Party Disclosures
Related Party Transactions, as required by Accounting Standard - 18,
"Related Party Disclosures" Related Parties in the group where common
control exists :
Kalindi Farms Private Limited
Ajay Poly Private Limited (up to financial year 2013-14)
Key Management Personnel of the Company:
Sh. Ajay Kumar Jain - Chairman & Managing Director Sh. Abhishek Jain -
Whole Time Director Joint Ventures
PPAP Tokai India Rubber Private Limited
Associate Companies
PPAP Automotive Chennai Private Limited PPAP Automotive Technology
Private Limited Relatives of the Key Management Personnel
Smt. Vinay Kumari Jain
4 Segment Reporting
Manufacturing of automotive components is the company's only business
segment and domestic operations is the only significant geographical
segment and hence disclosure of segment wise information is not
applicable under Accounting Standard 17- "Segment Reporting".
Amount in Rs.
5 Contingent Liabilities & Commitments As at As at
31.03.2015 31.03.2014
Contingent Liabilities not provided for
in respect of :
Letters of guarantees - 37,480,800
Letters of credit 37,263,760 58,759,404
Income tax appeal - -
For assessment year 2003-04 55,655 55,655
For assessment year 2004-05 - -
For assessment year 2007-08 - 927,572
For assessment year 2009-10 2,690,995 1,975,945
For assessment year 2010-11 2,939,730 2,680,825
For assessment year 2011-12 243,430 3,463,470
For assessment year 2012-13 300,190 -
Service tax - -
Sales tax / VAT/ Entry tax 44,541 351,890
Civil suit 8,455,357 8,455,357
Central excise (duty paid under protest is
Rs. 1,489,081/-) 7,283,858 7,283,858
59,277,516 121,434,776
Notes :-
(i) A demand of Rs. 55,655/- has been raised for the assessment year
2003-04. However an appeal is pending before the Hon'ble CIT Appeal.
(ii) A demand of Rs. 927,572/- has been raised for the assessment year
2007-08 and an appeal was pending before the Hon'ble CIT Appeal.
Hon'ble CIT Appeal has duly allowed the appeal.
(iii) A demand of Rs. 2,690,995/- has been raised for the assessment year
2009-10. However case is decided in favour of the Company and effect of
appeal to cancel the demand of Rs. 1,975,945 is pending before the DCIT,
Circle 19(2). An appeal against demand of Rs. 715,050 is pending before
Hon'ble CIT Appeal.
(iv) A demand of Rs. 2,939,730/- has been raised for the assessment year
2010-11. An application for rectification of mistake u/s 154 of the
Income Tax Act has been filed on 02.04.2015 and once the rectification
order is passed, demand will reduce to Nil.
(v) A demand of Rs. 3,463,470/- has been raised for the assessment year
2011-12. However an appeal is pending before the Hon'ble CIT Appeal.
The demand determined by DCIT Cir -19(2) after adjustment of refund is
Rs. 243,430/-.
(vi) A demand of Rs. 300,190/- has been raised for the assessment year
2012-13. However an appeal is pending before the Hon'ble CIT Appeal.
(vii) Central sales tax assessment for the assessment year 2004-05 was
completed under Section 9 of Central Sales Tax Act R/W 23(3) of Delhi
Sales Tax Act, 1975 wherein demand of Rs. 1,66,697/- was raised which was
reduced to Rs. 1,13,957/- vide review order. The Company had deposited a
sum of Rs. 68,516/- being undisputed demand and company had filed an
appeal against the balance demand of Rs. 45,441/- before the Joint
Commissioner of Sales Tax (Appeals) and stay granted vide order no
F/PA/Jt. Comm. (KDU) /02/ Stay/ 410-411 dated 18.08.06. Out of total
demand of Rs.351,890 the Company had deposited Rs. 3,06,449 being
undisputed demand.
(viii) A demand of Rs. 8,455,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
Company had filed a suit against BSES with District Court and won the
case in its favour. However, BSES has filed an appeal with Hon'ble
High Court but the notice for listing the matter not received from the
court.
(ix) Demand of excise duty of Rs. 105,896/- along with penalty of Rs.
1,05,896/- was imposed on the Company by Additional Commissioner,
Central Excise, Delhi, for Cenvat credit taken on payment of duty
through DEPB license, under the Central Excise Act, 1944. The Company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of central excise has rejected
the appeal. Thereafter, the Company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(x) Demand of excise duty of Rs. 3,536,033/- along with penalty of Rs.
3,536,033/- was imposed on the Company by Addl. Commissioner, Central
Excise, Delhi, for Cenvat credit taken on payment of duty through DEPB
license, under the Central Excise Act, 1944. The Company had filed an
appeal against the aforesaid order with Commissioner of Central Excise,
Okhla. The Commissioner of Central Excise has rejected the appeal.
Thereafter, the Company has filed the appeal with the Central Excise &
Service Tax Appellate Tribunal (CESTAT) and the appeal is pending. (The
case relates to the period August 2003 - August 2004).
6 Depreciation and amortization on tangible and intangible fixed
assets
The Company was hitherto charging depreciation on straight line method
at the rates provided in schedule XIV of the Companies Act, 1956. in
the current year, the Company has reassessed the useful life of assets,
and adopted the useful life as provided in schedule II of the Companies
Act, 2013 except in the following cases:
Consequent to change of useful life as above, an amount of Rs.
7,273,875/- representing WDV of those assets whose useful life had
already expired as on 1st April, 2014 has been adjusted against the
General Reserve.
The depreciation charged for the year would have been higher by Rs.
9,379,522/- and profit for the year would have been lower by Rs.
9,379,522/-, if there had been no change in the useful life of the
assets due to the Companies Act, 2013.
7 The previous year's figures have been accordingly
regrouped/reclassified to conform to the current year's
classification.
Mar 31, 2014
1 Liability for employee benefits has been determined by an
actuary,appointed for the pupose,in confirmity with the principles set
out in the Accounting Standard 15 (Revised) the details of which are as
hereunder :
Actuarial Method
a) Projected unit credit (PUC) actuarial method has been used to assess
the plan''s liabilities of exit employees for retirement, death-in-
service and withdrawals (Resignations / Terminations).
b) Under the PUC method a projected accrued benefit is calculated at
the beginning of the period and again at the end of the period for each
benefit that will accrue for all active member of the plan. The
projected accrued benefit is based on the plan accrual formula and upon
service as of the beginning or end of period, but using member''s final
compensation, projected to the age at which the employee is assumed to
leave active service. The plan liability is the actuarial present value
of the projected accrued benefits as on the date of valuation.
2 Actuarial Assumptions
i). RELATED PARTY DISCLOSURES
A Related Party T ransactions, as required by AS - 18, " Related Party
Disclosures " are as given below :
i Related Parties in the group where common control exists :
a) Ajay Poly Private Ltd.
b) A I C (Plastic) Private Ltd.
c) Ajay Industrial Corporation Ltd.
d) Kalindi Farms Pvt. Ltd.
e) Ajay Industrial Polymers Pvt. Ltd.
f) Seiki Auto India Pvt. Ltd.
ii Key Management Personnel of the Company :
a) Sh. Ajay Kumar Jain : Chairman & Managing Director
b) Sh. Abhishek Jain : Whole Time Director
iii Joint Venture
a) PPAP Tokai India Rubber Pvt. Ltd.
iv Relatives of the Key Management Personnel
a) M/s. D. C. Jain (H. U. F)
b) Sh. S.C. Jain
c) Sh. Rajiv Jain
3. CONTINGENT LIABILITIES & COMMITMENTS
PARTICULARS As At As At
31.03.2014 31.03.2013
CONTINGENT LIABILITIES NOT
PROVIDED FOR IN RESPECT OF:
i) Letters of Guarantees 37,480,800 20,000
ii) Letters of Credit 58,759,404 12,606,735
iii) Income Tax Appeal :
For Asst.Year.2003-04 55,655 55,655
For Asst. Year 2007-08 927,572 927,572
For Asst. Year 2009-10 1,975,945 1,975,945
For Asst. Year 2010-11 2,680,825 2,680,825
For Asst. Year 2011-12 3,463,470 -
iv) Sales Tax / VAT/ Entry Tax 351,890 476,492
v) Service Tax 63,630 63,630
vi) Civil Suit 8,455,357 8,455,357
vii) Central Excise (Duty paid
under protest is Rs.1,489,081/-) 7,283,858 15,705,198
121,498,406 42,967,409
Notes :-
(i) The Deputy commissioner of income tax has imposed a penalty of Rs.
55,655/- u/s 271 (1) (c) of the The Income Tax Act, 1961. for A.Y.
2003-04. The company had filed an appeal against the aforesaid order
with CIT (Appeals) and the same is pending before CIT (Appeals).
(ii) Income Tax Assessment for the A.Y. 2007-2008 was completed under
section 143(3) of the Income Tax Act, 1961, wherein demand of Rs.
9,27,572/- was raised. The company had filed an appeal against the
aforesaid order with CIT (Appeals)
(iii) A demand of Rs. 19,75,945/- for the Assessment Year 2009-10 and
Rs. 26,80,825/- for the Assessment Year 2010-11 was raised u/s 143(3)
of the Income Tax Act,1961. The Company had filed an appeal against the
demand with CIT (Appeals) and the same is pending before CIT (Appeals).
(iv) A case for demand of service tax of Rs. 63,630/- pertaining to
17.02.2002 to 31.03.2004 is pending before Deputy Commissioner.
(v) Central Sales Tax Assessment for the Assessment Year 2004-05 was
completed under section 9 of Central Sales Tax Act R/W 23(3) of Delhi
Sales Tax Act,1975 wherein demand of Rs.1,66,697/- was raised which was
reduced to Rs.1,13,957/- vide review order. The company had deposited a
sum of Rs. 68,516/- being undisputed demand and company had filed an
appeal against the balance demand of Rs. 45,441/- before the Joint
Commissioner of Sales Tax (Appeals) and stay granted vide order no
F/PA/ Jt. Comm. (KDU) /02/Stay/ 410-411 dt. 18.08.06.
(vi) A demand of Rs. 84,55,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
company had filed a suit against BSES with District Court and won the
case in its favour. However, BSES has filed an appeal with High Court
but the notice for listing not received from the court.
(vii) Demand of excise duty of Rs.1,05,836/- alongwith penalty of
Rs.1,05,836/- was imposed on the company by Addl. Commissioner, Central
Excise, Delhi, for Cenvet credit taken on payment of duty through DEPB
licence, under the Central Excise Act, 1944. The company had filed an
appeal against the aforesaid order with Commissioner of Central Excise,
Okhla. The Commissioner of Central Excise has rejected the appeal.
Thereafter, the company has filed the appeal with the Central Excise &
Service Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(viii) Demand of excise duty of Rs. 35,36,033/- alongwith penalty of
Rs. 35,36,033/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence,under the Central Excise Act, 1944. The company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of Central Excise has rejected
the appeal. Thereafter, the company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(ix) Sales Tax Assessments of the Company has been completed till
F.Y.2009-2010 in the case of UP Units wherein Net Demand of
Rs.4,31,051/- was imposed & such amount has not been provided in the
Books of Accounts and Sales Tax Assessment for Delhi Units completed
upto F.Y. 2010-2011 and demand raised were paid.
(x) Income tax assessments of the Company were completed till the
assessment year 2010-11. However, appeals for the Assessment Year
2007-08 and 2009-10 are pending before the Hon''ble CIT Appeal. No
provision has been made in the accounts for additional income tax
liabilities for Assessment Year 2010-11 to 2011-12 as amount is
unascertained.
4 The previous year''s figures have been accordingly
regrouped/reclassfied to conform to the current year''s classification.
The figures of previous year were audited by a firm of Chartered
Accountants other than M/s O.P. Bagla & Co.
Mar 31, 2013
BASIS OF PREPARATION:
These financial statements have been prepared in accordance with the
generally accepted accounting principles in India under the historical
cost convention on accrual basis. These financial statements have been
prepared to comply in all material aspects with the accounting
standards notified under Section 211(3C) [(Companies (Accounting
Standards) Rule ,2006 ,as amended ] and the other relevant provisions
of the Companies Act,1956.
All assets and liabilities have been classified as current or
non-current as per the company''s normal operating cycle and other
criteria set out in the Revised Schedule VI to the Companies Act, 1956.
Based on the nature of products and the time between the acquisition of
assets for processing and their realisation in cash and cash
equivalents, the Company has ascertained its operating cycle as 12
months for the purpose of current- non current classification of assets
and liabilities.
1.1 Liability for employee benefits has been determined by an
actuary,appointed for the pupose,in confirmity with the principles set
out in the Accounting Standard 15 (Revised) the details of which are as
hereunder :
Actuarial Method
a) Projected unit credit (PUC) actuarial method has been used to assess
the plan''s liabilities of exit employees for retirement,
death-in-service and withdrawals (Resignations/ Terminations).
b) Under the PUC method a projected accrued benefit is calculated at
the beginning of the period and again at the end of the period for each
benefit that will accrue for all active member of the plan. The
projected accrued benefit is based on the plan accrual formula and upon
service as of the beginning or end of period, but using member''s
final compensation, projected to the age at which the employee is
assumed to leave active service. The plan liability is the actuarial
present value of the projected accrued benefits as on the date of
valuation.
1.2 ACTUARIAL ASSUMPTIONS
1.3(1) Economic Assumptions
The principal assumptions are the discount rate & salary growth rate.
The discount rate is generally based upon the market yields available
on Government bonds at the accounting date with a term that matches
that of the liabilities & the salary growth rate takes account of
inflation, seniority, promotion and other relevant factors on long term
basis. Valuation assumptions are as follows which have been agreed by
the company:
2 RELATED PARTY DISCLOSURES
A Related Party Transactions, as required by AS - 18, " Related Party
Disclosures " are as given below :
i Related Parties in the group where common control exists :
a) Ajay Poly Private Ltd.
b) A I C (Plastic) Private Ltd
c) Ajay Industrial Corporation Ltd.
d) Kalindi Farms Pvt. Ltd.
e) Ajay Industrial Polymers Pvt. Ltd
f) Seiki Auto India Pvt. Ltd.
ii Key Management Personnel of the Company :
a) Sh. Devendra Chandra Jain : Chairman
b) Sh. Sharat Chand Jain : Ex. Vice - Chairman
c) Sh. Ajay Kumar Jain : Managing Director
d) Sh. Rajeev Jain : Whole Time Director
e) Sh. Anuj Jain : Director
f) Sh. Abhishek Jain : Whole Time Director
g) Sh. B B Tandan : Independent Director
h) Sh. K K Mathur : Independent Director
i) Sh. S K Tuteja : Independent Director
j) Sh. Vinod Vaish : Independent Director
k) Sh. Ashok Kumar Agrawal : Independent Director
l) Sh. M.S. Kapur : Independent Director
iii Relatives of the Key Management Personnel
a) M/s. D. C. Jain (H. U. F)
b) M/s. A. K. Jain (H. U. F)
c) Smt. Kanupriya Jain
d) Sh. Nitin Jain
e) Smt. Asha Jain
f) Sh. Akhil Jain
g) Smt. Bina Jain
h) Smt. Vinay Kumari Jain
i) Smt. Anuradha Jain
j) Smt. Lata Jain
3 SEGMENT REPORTING
i) PRIMARY BUSINESS SEGMENTS
The Company reviewed the disclosure of Business segmen twise and is of
the view that the Company is mainly in the business of manufacture of
PVC Profiles for Automobiles Industries and other business of the
Company is to manufacture the PVC Profiles for Refrigerator Industries,
Electrical Industries, and Building Construction Industries. Since, no
other single segment constitute revenue/ results/ assets more than 10%
of total (in accordance with AS - 17), Accordingly segment information
is not required to be disclosed.
II) GEOGRAPHICAL SEGMENTS :
The Company caters mainly to the needs of Indian market and the export
turnover being 1.19% ( Previous year 2.80%) of the total turnover of
the Company, there are no reportable geographical segments.
iii) ASSETS BY GEOGRAPHICAL AREA :
All segment assets of the Company are located in Northern Part of India
.i.e., in Delhi & Noida.
4 CONTINGENT LIABILITIES & COMMITMENTS
PARTICULARS AS AT AS AT
31.03.2013 31.03.2012
CONTINGENT LIABILITIES NOT PROVIDED FOR
IN RESPECT OF:
i) Letters of Guarantees 20,000 20,000
ii) Letters of Credit 12,606,735 77,762,423
iii) Income Tax Appeal :
For Asst.Year.2003-04 55,655 55,655
For Asst. Year 2007-08 927,572 927,572
For Asst. Year 2009-10 1,975,945 1,975,945
For Asst. Year 2010-11 2,680,825 -
iv) Sales Tax / VAT/ Entry Tax 476,492 45,441
v) Service Tax 63,630 63,630
vi) Civil Suit 8,455,357 8,455,357
vii) Central Excise (Duty paid under
protest is Rs.1489081/-) 15,705,198 15,705,198
42,967,409 105,011,221
Notes :
(i) The Deputy commissioner of income tax has imposed a penalty of Rs.
55655/- u/s 271 (1) (c ) of the The Income Tax Act, 1961. for
A.Y.2003-04. The company had filed an appeal against the aforesaid
order with CIT (Appeals) and the same is pending before CIT ( Appeals).
(ii) Income Tax Assessment for the A.Y. 2007-2008 was completed under
section 143(3) of the Income Tax Act, 1961, wherein demand of Rs.
927572/- was raised. The company had filed an appeal against the
aforesaid order with CIT (Appeals)
(iii) A demand of Rs. 19,75,945/- for the Assessment Year 2009-10 and
Rs. 26,80,825/- for the Assessment Year 2010-11 was raised u/s 143(3)
of the Income Tax Act,1961. The Company had filed an appeal against
the demand with CIT (Appeals) and the same is pending before CIT
(Appeals).
(iv) A case for demand of service tax of Rs.63,630/- pertaining to
17.02.2002 to 31.03.2004 is pending before Deputy Commissioner.
(v) Central Sales Tax Assessment for the Assessment Year 2004-05 was
completed under section 9 of Central Sales Tax Act R/W 23(3) of Delhi
Sales Tax Act,1975 wherein demand of Rs.1,66,697/- was raised which was
reduced to Rs.1,13,957/- vide review order. The company had deposited a
sum of Rs.68,516/- being undisputed demand and company had filed an
appeal against the balance demand of Rs. 45,441/- before the Joint
Commissioner of Sales Tax (Appeals) and stay granted vide order no
F/PA/Jt. Comm. (KDU) /02/Stay/ 410-411 dt. 18.08.06.
(vi) A demand of Rs. 84,55,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
company had filed a suit against BSES with District Court and won the
case in its favour. However, BSES has filed an appeal with High Court
but the notice for listing not received from the court.
(vii) Demand of excise duty of Rs.42,10,670/- alongwith penalty of
Rs.42,10,670/- was imposed on the company by Addl. Commissioner,
Central Commissionerate, Noida, for Cenvat credit taken on payment of
duty through DEPB licence, under the Central Excise Act, 1944. The
company filed before the Commissioner (Appeals), Central Excise, Noida.
The Commissioner (Appeals) rejected the appeal. The company has filed
the appeal with the Central Excise & Service Tax Appellate Tribunal
(CESTAT) which has been decided in favor of the company.
(viii) Demand of excise duty of Rs.1,05,836/- along with penalty of
Rs.1,05,836/- was imposed on the company by Addl. Commissioner, Central
Excise, Delhi, for Cenvat credit taken on payment of duty through DEPB
licence, under the Central Excise Act, 1944. The company had filed an
appeal against the aforesaid order with Commissioner of Central Excise,
Okhla. The Commissioner of Central Excise has rejected the appeal.
Thereafter, the company has filed the appeal with the Central Excise &
Service Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(ix) Demand of excise duty of Rs.35,36,033/- along with penalty of
Rs.35,36,033/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence, under the Central Excise Act, 1944. The company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of Central Excise has rejected
the appeal. Thereafter, the company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(x) Wealth Tax assessment of the company has been completed up to the
Assessment year 2010-11. No provision has been made in the accounts for
additional Wealth tax liabilities for the assessment year 2010-11 to
2012-13 as amount is unascertained.
(xi) Sales Tax Assessments of the Company has been completed till
F.Y.2009-2010 in the case of UP Unite wherein Net Demand of
Rs.4,31,051/- was imposed & such amount has not been provided in the
Books of Accounts and Sales Tax Assessment for Delhi Units completed
upto F.Y. 2010-2011 and demand raised were paid.
(xii) Income tax assessments of the Company were completed till the
assessment year 2009-10. However, appeals for the Assessment Year
2007-08 and 2009-10 are pending before the Hon''ble CIT Appeal. No
provision has been made in the accounts for additional income tax
liabilities for Assessment Year 2010-11 to 2011-12 as amount is
unascertained.
(xiii) In view of the revision to the Schedule VI as per notification
issued by the Central Government, the financial statement for the year
ended 31st March, 2013 have been prepared as per the requirement of the
Revised Schedule VI to the Companies Act, 1956. The previous period''s
figures have been accordingly regrouped/classfied to confirm to the
current year''s classification.
Mar 31, 2012
1.1 During the year, the company has started making provision of
retirement benefits and leave encashment to employees according to
actuarial valuation as per AS-15(Revised).The difference between the
amounts provided till 31.03.2011 and that as per actuarial valuation
has been disclosed as an exceptional item in the Statement of Profit
and Loss for the year ended 31st March,2012.As the valuation has been
carried out in current year, the previous year numbers are not disclosed.
1.2 As per Accounting Standard 15 'Employee Benefits", the
disclosures as defined in the Accounting Standard are given below:
Actuarial Method
a) Projected unit credit (PUC) actuarial method has been used to assess
the plan's liabilities of exit employees for retirement,
death-in-service and withdrawals (Resignations/Terminations).
b) Under the PUC method a projected accrued benefit is calculated at
the beginning of the period and again at the end of the period for each
benefit that will accrue for all active member of the plan. The
projected accrued benefit is based on the plan accrual formula and upon
service as of the beginning or end of period, but using member's final
compensation, projected to the age at which the employee is assumed to
leave active service. The plan liability is the actuarial present value
ofthe projected accrued benefits as on the date of valuation.
1.3 Actuarial Assumptions
1.3 (i) Economic Assumptions
The principal assumptions are the discount rate & salary growth rate.
The discount rate Is generally based upon the market yields available
on Government bonds at the accounting date with a term that matches
that ofthe liabilities & the salary growth rate takes account of
Inflation, seniority, promotion and other relevant factors on long term
basis. Valuation assumptions are as follows which have been agreed by
the company:
2 RELATED PARTY DISCLOSURES
A RELATED PARTY TRANSACTIONS, AS REQUIRED BY AS -18," RELATED PARTY
DISCLOSURES "ARE AS GIVEN BELOW:
i Related Parties in the group where common control exists:
A) AJAY POLY PRIVATE LTD.
B) AI C (PLASTIC) PRIVATE LTD
C) AJAY INDUSTRIAL CORPORATION LTD.
D) KALINDI FARMS PVT. LTD.
E) AJAY INDUSTRIAL POLYMERS PVT. LTD
F) SEIKI AUTO INDIA PVT. LTD.
II KEY MANAGEMENT PERSONAL OF THE COMPANY:
A) SH.DEVENDRA CHANDRA JAIN : CHAIRMAN
B) SH. SHARAT CHAND JAIN : EX. VICE - CHAIRMAN
C) SH. AJAY KUMAR JAIN : MANAGING DIRECTOR
D) SH. RAJEEV JAIN : WHOLE TIME DIRECTOR
E) SH. ANUJ JAIN : DIRECTOR
F) SH. ABHISHEK JAIN : WHOLE TIME DIRECTOR
G) SH. B B TANDAN : INDEPENDENT DIRECTOR
H) SH. K K MATHUR : INDEPENDENT DIRECTOR
I) SH. S K TUTEJA : INDEPENDENT DIRECTOR J) SH. VINOD VAISH :
INDEPENDENT DIRECTOR K)SH.ASHOK KUMAR AGRAWAL : INDEPENDENT DIRECTOR L)
SH. M.S. KAPUR : INDEPENDENT DIRECTOR
iii RELATIVES OF THE KEY MANAGEMENT PERSONAL
A) M/S. D. C. JAIN (H. U. F)
B) M/S. A. K. JAIN (H. U. F)
C) SMT. KANUPRIYAJAIN
D) SH. NITIN JAIN
E) SMT. ASHA JAIN
F) SH.AKHIL JAIN
G) SMT. BINA JAIN
H) SMT. VINAY KUMARI JAIN
I) SMT. ANURADHA JAIN J) SMT. LATA JAIN
4 SEGMENT REPORTING
i) PRIMARY BUSINESS SEGMENTS
The Company reviewed the disclosure of Business segmentwlse and Is of
the view that the Company Is mainly In the business of manufacture of
PVC Profiles for Automobiles Industries and other business of the
Company is to manufacture the PVC ProfilesforRefrigerator Industries,
Electrical Industries, and Building Construction Industries. Since, no
other single segment constitute revenue/ results/ assets more than 10%
of total (in accordance with AS - 17), Accordingly segment information
is not required to be disclosed.
ii) GEOGRAPHICAL SEGMENTS:
The Company caters mainly to the needs of Indian market and the export
turnover being 1.19% (Previous year 2.80%) of the total turnoverof the
Company, there are no reportable geographical segments.
Notes
(I) The Deputy commissioner of income tax has impose dapenalty of
Rs.55655/-u/s271 (1)(c)of the The IncomeTaxAct, 1961.for A.Y. 2003-04.
The company had filed an appeal against the aforesaid order with CIT
(Appeals) and the same is pending before CIT (Appeals).
(II Income taxassessment forthe assessment year 2007-2008was completed
under section 143(3) of the Income Tax Act, 1961, wherein demand of Rs.
927572-I- was raised.The company had filed an appeal against the
aforesaid orderwith CIT (Appeals).
(iii) AdemandofRs. 19,75,945 for theAssessmentYear2009-10
wasraisedu/st43(3)ofthelncome TaxAct,1961.TheCompanyhadfiledan appeal
against the demand with CIT (Appeals) and the same is pending before
CIT (Appeals).
(iv) A case for demand of service tax of Rs.63,630/- pertaining to
17.02.2002 to 31.03.2004 is pending before Deputy Commissioner.
(v) Central Sales Tax assessment forthe assessment year 2004-05 was
completed under section 9 of Central Sales Tax Act R/W23(3)of Delhi
Sales Tax Act, 1975 wherein demand pf Rs. 1,66,697/- was raised which
was reduced to Rs. 1,13,957/- vide review order. The company had
deposited a sum of Rs.68,516/- being undisputed demand and company had
filed an appeal against the balance demand of Rs. 45,441/- before the
Joint Commissioner of Sales Tax (Appeals), and stay granted vide order
no F/PA/Jt. Comm. (KDU) /02/Stay/ 410-411 dt. 18.08.06.
(vi) A demand of Rs. 84,55,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
company had filed a suit against BSES with District Court and won the
case its favour. However, BSES has filed an appeal with High Court but
the notice for listing not received from the court.
(vii) Demand of excise duty of Rs.42,10,670/- alongwith penalty of
Rs.42,10,670/- was imposed on the company by Addl. Commissioner,
Central Commissionerate, Noida, for Cenvet credit taken on payment of
duty through DEPB licence, underthe Central Excise Act, 1944. The
company filed before the Commissioner (Appeals), Central Excise, Noida.
The Commissioner (Appeals) rejected the appeal. The company has filed
the appeal with the Central Excise & Service TaxAppellate Tribunal
(CESTAT) and the appeal is pending.
(viii) Demand of excise duty of Rs.1,05,836/- alongwith penalty of
Rs.1,05,836/- was imposed on the company by Addl. Commissioner, Central
Excise, Delhi, for Cenvet credit taken on payment of duty through DEPB
licence, underthe Central Excise Act, 1944. The company had filed an
appeal against the aforesaid orderwith Commissioner of Central Excise,
Okhla. The Commissioner of Central Excise has rejected the appeal.
Thereafter, the company has filed the appeal with the Central Excise &
Sen/ice Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(ix) Demand of excise duty of Rs.35,36,033/- alongwith penalty of
Rs.35,36,033/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence,underthe Central Excise Act, 1944. The company had
filed an appeal against the aforesaid orderwith Commissioner of Central
Excise, Okhla. The Commissioner of Central Excise has rejected the
appeal. Thereafter, the company has filed the appeal with the Central
Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal is
pending.
(x) Wealth Tax assessment of thecompany has been completed upto
theAssessmentyear2010-11. Noprovision hasbeen made in theaccounts
foradditional Wealth tax liabilities forthe assessment year 2010-11
to2012-13 asamountis unascertained.
(xi) Sales tax assessments of the Company has been completed till the
Mar. 2008 in the case of UP Units and in case of Delhi units up to F.
Y. 2008-09).
5.Initial Public Offer
i) The Company had made a Public issue of 50,00,000 Equity Shares of
Rs. 101- each at a premium of Rs. 140/- per share for setting up of new
unit at Surajpur Industrial Area, UP and for expansion of existing
operations and production capacities during December, 2007. The share
issue proceeds aggregating to Rs.75.00 Crores have been fully utilized
in accordance with the prospectus dated 28th December, 2007.
ii) Treatment of IPO Expenses
IPO expenses aggregating Rs.63005867/- net of service tax (including
payment to auditors Rs.80000/-), has been amortised equally in 5 years.
6 Income tax assessments of the Company were completed till the
assessment year 2009-10. However, appeals for the assessment year
2007-08 and 2009-10 are pending before the Hon'ble CIT Appeal. No
provision has been made in the accounts for additional income tax
liabilities for AssessmentYear 2010-11 to 2011 -12 as amount is
unascertained.
7 In view ofthe revision to the Schedule VI as per notification issued
by the Central Government, the financial statement for the year ended
31 st March, 2012 have been prepared as per the requirement of the
Revised Schedule VI to the Companies Act, 1956. The previous period's
figures have been accordingly regrouped/reclassfied to confirm to the
current year's classification.
Mar 31, 2011
31st March, 2011 31st March, 2010
AMOUNT ( RS. ) AMOUNT ( RS. )
1 CONTINGENT LIABILITIES NOT
PROVIDED FOR IN RESPECT OF :
i) Letters of Guarantees 20,000 20,000
ii) Letters of Credit 8,10,00,507 -
iii) Income Tax Appeal :
For Asst.Yr.2003-04 55,655 55,655
For Asst.Yr.2004-05 - 3,90,788
For Asst. Year 2006-07 8,48,415 8,48,415
For Asst. Year 2007-08 9,27,572 9,27,572
For Asst. Year 2008-09 11,93,596 -
iv) Trade Tax /Sales Tax/VAT 45,441 9,16,737
v) Service Tax 63,630 63,630
vi) Electricity Demand 84,55,357 84,55,357
vii) Central Excise (Duty paid
under protest is Rs.1489081/-) 1,57,05,198 1,57,05,198
10,83,15,371 2,73,83,352
NOTES :-(i) The Deputy commissioner of income tax has imposed a penalty
of Rs. 55655/- u/s 271 (1) (c ) of the The Income Tax Act, 1961. for
A.Y.2003-04. The company had filed an appeal against the aforesaid
order with CIT (Appeals) and the same is pending before CIT ( Appeals).
(ii) A demand of Rs. 8,48,415/- for the Assessment Year 2006-07 was
raised u/s 143(3) of the Income Tax Act, 1961. The Company had filed an
appeal aginst the demand with CIT (Appeals) and the same is pending
before CIT (Appeals).
(iii) Income tax assessment for the assessment year 2007-2008 was
completed under section 143(3) of the Income Tax Act, 1961, wherein
demand of Rs. 927572-/- was raised.The company had filed an appeal
against the aforesaid order with CIT (Appeals).
(iv) A demand of Rs. 11,93,596 for the Assessment Year 2008-09 was
raised u/s 143(3) of the Income Tax Act,1961. The Company had filed an
appeal against the demand with CIT (Appeals) and the same is pending
before CIT (Appeals).
(v) A case for demand of service tax of Rs.63,630/- pertaining to
17.02.2002 to 31.03.2004 is pending before Deputy Commisioner.
(vi) Central Sales Tax assessment for the assessment year 2004-05 was
completed under section 9 of Central Sales Tax Act R/W 23(3) of Delhi
Sales Tax Act,1975 wherein demand pf Rs.1,66,697/- was raised which was
reduced to Rs.1,13,957/- vide review order. The company had deposited a
sum of Rs.68,516/- being undisputed demand and company had filed an
appeal against the balance demand of Rs. 45,441/- before the Joint
Commissioner of Sales Tax (Appeals). and stay granted vide order no
F/PA/Jt. Comm. (KDU) /02/Stay/ 410-411 dt. 18.08.06.
(vii) A demand of Rs. 84,55,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
company had filed a suit against aforesaid with High Court. The matter
is pending
(viii) Demand of excise duty of Rs.42,10,670/- alongwith penalty of
Rs.42,10,670/- was imposed on the company by Addl. Commissioner,
Central Commissioner, Noida, for Cenvet credit taken on payment of duty
through DEPB licence, under the Central Excise Act, 1944. The company
filed before the Commissioner (Appeals), Central Excise, Noida. The
Commissioner (Appeals) rejected the appeal. The company has filed the
appeal with the Central Excise & Service Tax Appellate Tribunal
(CESTAT) and the appeal is pending.
(ix) Demand of excise duty of Rs.1,05,836/- alongwith penalty of
Rs.1,05,836/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence, under the Central Excise Act, 1944. The company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of Central Excise has rejected
the appeal. Thereafter, the company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(x) Demand of excise duty of Rs.35,36,033/- alongwith penalty of
Rs.35,36,033/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence,under the Central Excise Act, 1944. The company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of Central Excise has rejected
the appeal. Thereafter, the company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(xi) Company has paid Rs. 4,83,96,003/- to RIICO Ltd. (Rajasthan State
Industrial Development and Investment Corporation Ltd) against purchase
of Industrial Plot at Bhiwadi, Rajasthan and plot has been registered
in the name of the company on 09th May'2011.
2 Initial Public Offer
i) The Company had made a Public issue of 50,00,000 Equity Shares of
Rs. 10/- each at a premium of Rs. 140/- per share for setting up of new
unit at Surajpur Industrial Area, UP and for expansion of existing
operations and production capacities during December, 2007. The share
issue proceeds aggregating to Rs.75.00 Crores have been fully utilized
in accordance with the prospectus dated 28th December, 2007.
ii) Treatment of IPO Expenses
IPO expenses aggregating Rs.63005867- net of service tax (including
payment to auditors Rs.80000/-), shall be amortised equally in 5 years.
3 SEGMENT REPORTING
i) PRIMARY BUSINESS SEGMENTS 1
The Company reviewed the disclosure of Business segmentwise and is of
the view that the Company is mainly in the business of manufacture of
PVC Profiles for Automobiles Industries and other business of the
Company is to manufacture the PVC Profiles for Refrigerator Industries,
Electrical Industries, and Building Construction Industries. Since, no
other single segment constitute revenue/ results/ assets more than 10%
of total (in accordance with AS - 17), Accordingly segment information
is not required to be disclosed.
ii) GEOGRAPHICAL SEGMENTS :
The Company caters mainly to the needs of Indian market and the export
turnover being 1.06% ( Previous year 1.52%) of the total turnover of
the Company, there are no reportable geographical segments.
iii) ASSETS BY GEOGRAPHICAL AREA :
All segment assets of the Company are located in Northern Part of India
.i.e., in Delhi & Noida.
4 RELATED PARTY DISCLOSURES
A Related Party Transactions, as required by AS - 18, " Related Party
Disclosures " are as given below :
i Related Parties in the group where common control exists :
a) Ajay Poly Private Ltd.
b) A I C (Plastic) Private Ltd
c) Ajay Industrial Corporation Ltd.
d) Kalindi Farms Pvt. Ltd.
e) Ajay Industrial Polymers Pvt. Ltd
f) Seiki Auto India Pvt. Ltd.
ii Key Management Personal of the Company :
a) Sh. Devendra Chandra Jain : Chairman
b) Sh. Sharat Chand Jain : Ex. Vice - Chairman
c) Sh. Ajay Kumar Jain : Managing Director
d) Sh. Rajeev Jain : Whole Time Director
e) Sh. Anuj Jain : Director
f) Sh. Abhishek Jain : Whole Time Director
g) Sh. B B Tandan : Independent Director
h) Sh. K K Mathur : Independent Director
i) Sh. S K Tuteja : Independent Director
j) Sh. Vinod Vaish : Independent Director
k) Sh. Ashok Kumar Agrawal : Independent Director
l) Sh. M.S. Kapur : Independent Director
iii Relatives of the Key Management Personal
a) M/S. D. C. Jain (H. U. F)
b) M/S. A. K Jain (H. U. F)
c) SMT KANUPRIYA JAIN
d) Sh. Nitin Jain
e) Smt. Asha Jain
f) Sh. Akhil Jain
g) Smt. Bina Jain
h) Smt. Vinay Kumari Jain
i) Smt. Anuradha Jain
j) Smt. Lata Jain
5 The name of the Micro and Small Enterprises to whom amounts are due
for not more than 30 days as at 31st March, 2011 are as under
1 NILANCHAL PACKAGING INDUSTRIES
2 OASIS INDUSTRIES
3 K M G ATOZ SYSTEMS PVT LTD
4 SHRI RAM INDUSTRIES
5 ZYLOG PLASTALLOYS PVT LTD
6 TECHNO FERRITES
The above information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available to the Company.
6 Income tax assessments of the Company were completed till the
assessment year 2008-09. However, appeals for the assessment year
2006-07,2007-08 and 2008-09 are pending before the Hon'ble CIT Appeal.
No provision has been made in the accounts for additional income tax
liabilities for Assessment Year 2009-10 to 2011 - 2012 as amount is
unascertained.
7 Income Tax Assessment for the Block Period from 01.04.1995 to
05.02.2002 & regular assessment for the period 06.02.2002 to 31.03.2002
(assesssment year 2002-2003) has been completed. Hon'ble Settlement
Commision has raised a demand of RS. 44,54,340 & provision has been
made accordingly.
8 Wealth Tax assessment of the company has been completed up to the
Assessment year 2008-09. No provision has been made in the accounts for
additional Wealth tax liabilities for the assessment year 2009-10 to
2011-12 as amount is unascertained.
9 Assessment of Fringe benefit tax for the Assessment year 2008-09 is
completed. No provision has been made in the accounts for the
assessment year 2009 - 2010. Amount unascertained.
10 Sales tax assessments of the Company has been completed till the
March 2008 in the case of UP Units and in case of Delhi units up to F.
Y. 2006-07.
11 The previous year's figures have been re-grouped, re-arranged,
re-classified and re-worked, wherever necessary to make them comparable
with those of current year.
Mar 31, 2010
31st March,
2010 31st March,
2009
AMOUNT
( RS. ) AMOUNT ( RS.)
1 CONTINGENT LIABILITIES NOT PROVIDED
FOR IN RESPECT OF:
i) Letters of Guarantees 20.000 3,770,000
ii) Letters of Credit 77,147,799 65,617,457
iii) Income Tax Appeal For Asst.Yr.2003-04 55,655 55,655
For Asst.Yr.2004-05 390,788 -
For Asst. Year 2006-07 848,415 848,415
For Asst. Year 2007-08 927572 -
iv) Trade Tax/Sales Tax/VAT 916.737.00 1,410,315
v) Service Tax 63,630 63,630
vi) Civil Suit 8,455,357 8,455,357
vii) Centra! Excise (Duty paid under
protest is Rs. 1489081/-) 15.705,198 15,705,198
104,531,151 95,926,027
NOTES :-(i) The Deputy commissioner of income tax has imposed a penalty
of Rs. 55655/- u/s 271 (1) (c ) of the The Income Tax Act, 1961. for
A.Y.2003-04. The company had filed an appeal against the aforesaid
order with CIT (Appeals) and the same is pending before CIT ( Appeals).
(ii) The demand of Rs. 390788/- was raised on the reassessment of set
aside order passed by Commissioner of Income Tax and the Company has
filed an appeal against the order of the Ld. Commissioner of Income
Tax for the rectification.
(iii) A demand of Rs. 8,48,415/- for the Assessment Year 2006-07 was
raised u/s 143(3) of the Income Tax Act. 1961. The Company had filed an
appeal aginst the demand with CIT (Appeals) and the same is pending
before CIT (Appeals).
(iv) Income tax assessment for the assessment year 2007-2008 was
completed under section 143(3) of the Income Tax Act, 1961, wherein
demand of Rs. 927572-/- was raised.The company had filed an appeal
against the aforesaid order with CIT (Appeals).
(v) A case for demand of service tax of Rs.63,630/- pertaining to
17.02.2002 to 31.03.2004 is pending before Deputy Commisione.
(vi) Central Sales Tax assessment for the assessment year 2004-05 was
completed under section 9 of Central Sales Tax Act R/W 23(3) of Delhi
Sales Tax Act,1975 wherein demand pf Rs.1,66,697/- was raised which was
reduced to Rs. 1,13,957/- vide review order. The company had deposited
a sum of Rs.68,516/- being undisputed demand and company had filed an
appeal against the balance demand of Rs. 45.441/- before the Joint
Commissioner of Sales Tax (Appeals).
(vii) - Assessment of UP Trade tax for the assessment year 2005-06
under the Central & Local has been completed by the department and
wherein demand of RS.69566/- in Central and of Rs 4i/-in Local has been
raised under rule 45 of UP Central Trade Tax Rules , 1948. The company
will file an appeal aginst this demand.
(viii) Assessment of UP Trade tax for the assessment year 2006-07 under
the Central & Local has been completed by the department and wherein
demand of RS.421622/- in Central . and of Rs 17215/-in Local has been
raised under rule 45 of UP Central Trade Tax Rules , 1948. The Company
has paid against this demnd Rs. 400000/- under protest and will file an
appeal aginst this demand.
(ix) Assessment of UP Trade tax for the assessment year 2007-08 (from
01.04.07 to 31.12.07) under the Central & Local has been completed by
the department and wherein demand of RS. 66417/-/- in Central and of
Rs 55620/-in Local has been raised under Rule 41(8) of Trade Tax and
Central Sales Tax Rules , 1948. The company will file an appeal aginst
this demand.
(x) Two Demand notices of Rs.173315/ - and Rs. 67500/ for assessment
year 2008-2009 have been issued by UP Trade Tax department u/s 50 of UP
Value Added Tax Act to the company. The Company will file an appeal
aginst these demands before the department on appropriate time.
(xi) A demand of Rs. 84,55,357/- had been raised by BSES Rajdhani Ltd.
for making payments of arrears for the misuse of electricity. The
company had filed a suit against aforesaid with District Court. The
matter is pending
(xii) Demand of excise duty of Rs.42,10,670/- alongwith penalty of
Rs.42,10,670/- was imposed on the company by Addl. Commissioner,
Central Commissionerate, Noida, for Cenvet credit taken on payment of
duty through DEPB licence, under the Central Excise Act, 1944. The
company filed before the Commissioner (Appeals), Central Excise, Noida.
The Commissioner (Appeals) rejected the appeal. The company has filed
the appeal with the Central Excise & Service Tax Appellate Tribunal
(CESTAT) and the appeal is pending.
(xiii) Demand of excise duty of Rs. 1,05,836/- alongwith penalty of Rs.
1,05,836/- was imposed on the company by Addl. Commissioner, Central
Excise, Delhi, for Cenvet credit taken on payment of duty through DEPB
licence, under the Central Excise Act, 1944. The company had filed an
appeal against the aforesaid order with Commissioner of Central Excise,
Oknla. The Commissioner of Central Excise has rejected the appeal.
Thereafter, the company has filed the appeal with the Central Excise &
Service Tax Appellate Tribunal (CESTAT) and the appeal is pending.
(xiv) Demand of excise duty of Rs.35,36,033/- alongwith penalty of
Rs.35,36,033/- was imposed on the company by Addl. Commissioner,
Central Excise, Delhi, for Cenvet credit taken on payment of duty
through DEPB licence,under the Central Excise Act, 1944. The company
had filed an appeal against the aforesaid order with Commissioner of
Central Excise, Okhla. The Commissioner of Central Excise has rejected
the appeal. Thereafter, the company has filed the appeal with the
Central Excise & Service Tax Appellate Tribunal (CESTAT) and the appeal
is pending.
(XV) Company has paid Rs. 4,80,77,335/- to RIICO Ltd. (Rajasthan State
Industrial Development and Investment Corporation Ltd) against purchase
of Industrial Plot at Bhiwadi, Rajasthan but the plot is yet to be
registered in the name of the company.
2 Initial Public Offer
i) The Company had made a Public issue of 50,00,000 Equity Shares of
Rs. 10/- each at a premium of Rs. 140/- per share tor setting up of new
unit at Surajpur Industrial Area, UP and for expansion of existing
operations and production capacities &.;::nq December, 2007. The share
issue proceeds aggregating to Rs.75.00 Crores have been fully utilized
in accord;, oe with the prospectus dated 28th December, 2007.
ii) Treatment of ,PO Expenses
IPO expenses aggregating Rs.63005867- net of service tax (including
payment to auditors Rs.80000/-), shall be amortised equally in 5 years.
3 SEGMENT REPORTING
i) PRIMARY BUSINESS SEGMENTS
The Company reviewed the disclosure of Business segmentwise and is of
the view that the Company is mainly in the business of manufacture of
PVC Profiles for Automobiles Industries and other business of the
Company is to manufacture the PVC Profiles for Refrigerator Industries,
Electrical Industries, and Building Construction Industries. Since, no
other single segment constitute revenue/ results/ assets more than 10%
of total (in accordance with AS - 17), Accordingly segment information
is not required to be disclosed.
ii) GEOGRAPHICAL SEGMENTS:
The Company caters mainly to the needs of Indian market and the export
turnover being 1.06% ( Previous year 1.52%) of the total turnover of
the Company, there are no reportable geographical segments.
iii) ASSETS BY GEOGRAPHICAL AREA :
All segment assets of the Company are located in Northern Part of India
.i.e., in Delhi & Noida.
4 RELATED PARTY DISCLOSURES
A Related Party Transactions, as required by AS - 18, " Related Party
Disclosures " are as given below : i Related Parties in the group where
common control exists :
a) Ajay Poly Private Ltd.
b) A I C (Plastic) Private Ltd
c) Ajay industrial Corporation Ltd.
d) Kalindi Farms Pvt. Ltd.
e) Ajay Industrial Polymers Pvt. Ltd
f) Seiki Auto India Pvt. Ltd.
ii Key Management Personal of the Company :
a) Sh. Devendra Chandra Jain : Chairman
b) Sh. Sharat Chand Jain : Vice - Chairman
c) Sh. Ajay Kumar Jain : Managing Director
d) Sh. Rajeev Jain : Whole Time Director
e) Sh. Anuj Jain : Director
f) Sh. Abhishek Jain : Whole Time Director
g) Sh. B B Tandan : Independent Director
h) Sh. K K Mathur : Independent Director
i) Sh. Satish Lai Tandan : Independent Director
j) Sh. S K Tuteja : Independent Director
k) Sh. Vinod Vaish : Independent
Director
I) Sh. S K Duggal : Independent Director
m) Sh. Ashok Kuma Agrawal : Independent Director
iii Relatives of the Key Management Personal
a) M/S. D. C. Jain (H. U. F)
b) M/S. A. K. Jain (H. U. F)
c) SMT. KANUPRIYA JAIN
d) Sh. Nitin Jain
e) Smt. Asha Jain
f) Sh. Akhil Jain
g) Smt. Bina Jain
h) Smt. Vinay Kumari Jain
i) Smt. Anuradha Jain
j) Smt. Lata Jain
19 The name of the Micro and Small Enterprises to whom amounts are due
for not more than 30 days as at 31st March, 2010 are as under
1 Nilanchal Packaging Industries
2 OASIS INDUSTRIES
3 K M G ATOZ SYSTEMS PVT LTD
4 SHRI RAM INDUSTRIES
5 ZYLOG PLASTALLOYS PVT LTD
5 TECHNO FERRITES
The above information as required to be disclosed under the Micro,
Small and Medium Enterprises Development Act, 2006 has been determined
to the extent such parties have been identified on the basis of
information available to the Company.
6 Income tax assessments of the Company were completed till the
assessment year 2007-2008. However, appeals for the assessment , year
2006 - 2007 and 2007-2008 are pending before the Honble CIT Appeal. No
provision has been made in the accounts for additional income tax
liabilities for Assessment Year 2008 - 2009 to 2010 - 2011 as amount is
unascertained.
7 A Search u/s. 132 of the Income Tax Act, 1961 was made by the Income
tax department on dated 05.02.2002 / 06.02.2002. No provision has been
made in the accounts for additional income tax liabilities for Block
Assessment Period, i.e., 01.04.1995 to 05.02.2002 (Except Rs.
2,10,000.00 as per Block return filled U/s. 158 BC. Plus Rs.
1,91,340.00 while application before Settlement Commission allowed to
be proceeded with). Final disposal of petition before the Honble
Settlement Commission is pending. Amount unascertained.
8 Income tax assessment for the Block Period, from 01.04.1995 to
05.02.2002 and for Regular assessment for the period from 06.02.2002 to
31.03.2002 (A.Y. 2002-2003) are pending before the Honble Settlement
Commission. No provision has been made in the accounts for additional
income tax liabilities for the Block Period and for Regular assessment
year 2002 - 2003 (Except Rs. 1,91,340.00 for Block Period and Rs.
2,713.00 for Regular assessment year 2002 - 2003 while application
before Settlement Commission allowed to be proceeded with). Final
disposal of petition before the Honble Settlement Commission is
pending. Amount unascertained.
9 Wealth Tax assessment of the company has been completed up to the
Assessment year 2007-2008. No provision has been made in the accounts
for additional Wealth tax liabilities for the assessment year 2008-
2009 to 2010-2011 as amount is unascertained.
10 Assessment of Fringe benefit tax for the Assessment year 2007- 2008
is completed. No provision has been made in the accounts for additional
fringe benefit tax liabilities for the assessment year 2008 - 2009 to
2009 - 2010. Amount unascertained.
11 Sales tax assessments of the Company were completed till the
December 2007 in the case of UP Units (Delhi units up to F. Y 2006-
2007). However, no provision has been made in accounts for additional
sales tax liabilities for the quarter ended March 2008, Financial Year
from 2008 - 2009 and 2009 - 2010 in the case of UP units and from
2007-2008 to 2009-2010 in the case of Delhi units. Amount
unascertained.
12 The previous years figures have been re-grouped, re-arranged,
re-classified and re-worked, wherever necessary to make them f
comparable with those of current year.
Notes:
1 The above Cash Flow Statement has been prepared pursuant to Clause 32
of Listing Agreement with Stock Exchanges and under the indirect method
set out in Accounting Standard-3 issued by ICAI.
2 Figures in bracket indicate cash outflow.
3 Significant Accounting Policies and Notes to Accounts form an
integral part of the Cash Flow Statement.