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Notes to Accounts of Premier Ltd.

Mar 31, 2015

Corporate Information

Premier Ltd. is a BSE and NSE listed public company, incorporated under the Companies Act, 1913. It operates in two business segments: Engineering & Automotive. The Engineering segment consists of Manufacture of CNC Machines and large mechanical components for the wind energy and infrastructure sectors and professional and engineering services related thereto. The Automotive Segment consists of Manufacture of Light and Sport Utility Vehicles along with related spare parts as well as auto components for other OEM's.

The registered office and plant of the company is located at Chinchwad, Pune while the Corporate office is located at Mumbai. The company has also its branch offices at Bangaluru, Chennai, Kolkata and Delhi.

(A) The Rights, Preferences, Restriction including restriction on the distribution of dividend and repayments of capital

1. The Company is having only one class of shares, that is Equity carrying nominal value of Rs.10 per share.

2. Every holder of equity share of the Company is entitled to one vote per share held.

3. In the event of liquidation of the Company, the equity share holder will be entitled to receive remaining assets of the Company after the distribution / repayments of all creditors. The distribution to the share holder will be in proportion of the number of shares held by each share holder.

4. The Company declares and pays dividend on the equity shares in Indian Rupees. Dividend proposed by the Board of Directors is subject to approval of the share holders at the ensuing Annual General Meeting.

5. During the year ended 31st March,2015 no dividend is proposed for the equity share holders [Previous year Rs.3.00 per equity share (30%)]

(B) Shares held by holding/ultimate holding company and/or their subsidiaries / associates

The company is not a Subsidiary of any other company.

(C) The Company had issued 43,26,000 Convertible warrants in the Year 2006-07. Out of these, for 19,86,674 warrants equivalent number of shares were allotted in the year 2007-08, for 23,18,053 warrants equivalent number of shares were allotted in the year 2008-09 and the balance 21,273 warrants were forfeited by the Company in the year 2009-10.

(a) Term Loan of Rs. 14950 Lakhs (Previous year: Rs. 15000 Lakhs) from State bank of India (SBI) is secured by way of first charge on current assets on pari-passu basis with other lenders and first pari-passu charge on fixed assets of the company at Chinchwad along with The Jammu & Kashmir Bank Ltd (J & K Bank). Also SBI holds an exclusive 1st mortgage charge on the 41.44 acres of Company's land located at Kalyan/ Dombivli towards their loan.

This loan is for a tenure of eight and a half years. The repayment installments are spread over 84 months, commenced from 31/10/2014 and the last installment falling due on 30/09/2021. The first two installments are of Rs. 5 Lakhs each, the next 4 installments are of Rs. 10 Lakhs each, next 10 installments are of Rs. 20 Lakhs each, next 2 installments are of Rs. 25 Lakhs each, next 6 installments are of Rs. 150 Lakhs each, next 24 installments are of Rs. 200 Lakhs each and the next 36 installments are of Rs. 250 Lakhs each. Annual rate of Interest is 2.30% above SBI base rate. As on 31st March 2015, interest of Rs 288.96 Lakhs remains unpaid for a period ranging between 0-60 days.

(b) Corporate Loan of Rs. 7800 Lakhs (Previous Year Rs. 10000 Lakhs) from J&K Bank is secured by way of first pari- passu charge on plant and machinery and fixed assets of the company located at Chinchwad, Pune and second pari-passu charge on current assets of the company. This loan is for a total tenure of 36 months, repayable in 18 equal installments. There are 17 monthly installments each of Rs. 550 Lakhs with the first installment due on 30/09/2014. The last installment (18th installment) is of Rs. 650 Lakhs due on 29/02/2016. Annual rate of Interest is 2% over J&K Bank Base rate. As on 31st March 2015, Principal amount of Rs 1650 Lakhs (since repaid Rs 550 Lakhs) and interest of Rs 206.99 Lakhs (since paid Rs. 55 Lakhs) remain unpaid for a period ranging between 0-70 days.

(c) Hire purchase Loan of Rs 331.47 Lakhs for a tenure of 4 years from First leasing Company of India Limited is secured under the specific Fixed Asset procured against the said Loans.

Rs. 331.47 Lakhs is repayable in 19 variable monthly installments till October 2016. Annual rate of Interest is 2% above SBI base rate.

All the above facilities covered under a to c are also secured by the personal guarantee of Mr. Maitreya V. Doshi, Chairman and Managing Director of the company.

(d) Deposits accepted from public and shareholders prior to 1.4.2014 carry varying rate of interest from 11.50% to 12.50% p.a. depending upon the cumulative/non-cumulative option and the period of maturity from 1 year to 3 year. As on 31st March 2015, the outstanding fixed deposits were Rs.3974.66 Lakhs with maturity spread over a period of next 2 years. As per section 74(1) (b) of the Companies Act, 2013, the Company was required to repay all such deposits on 31.3.2015. Out of these, deposits of Rs.190.30 Lakhs (331 deposit holders) and interest of Rs.93.47 Lakhs remained unpaid for a period ranging between 0-30 days. (Since repaid Rs.86.75 Lakhs and interest of Rs. 93.47 Lakhs respectively).

The Company, therefore, has filed a petition before the Company Law Board, Western Region Bench at Mumbai as contemplated under section 74(2) of the Companies Act, 2013, praying for time to repay all such outstanding deposits as per their original maturities. Pending disposal of the said petition, deposits are classified as short term or non-current depending upon the original maturities.

The deposits unclaimed as on 31.03.2015 are Rs. 163.65 Lakhs.

3. Short Term Borrowings

(a) The Working Capital facilities (Cash Credit Rs. 6000 Lakhs, non- funded facilities Rs. 5000 Lakhs, totaling to Rs. 11000 Lakhs, Previous Year Rs.13500 Lakhs) are under a consortium banking arrangement with State Bank of India - as the lead banker having a share of Rs. 8500 Lakhs (Previous year Rs. 10000 Lakhs) along with State Bank of Hyderabad Rs. 1500 Lakhs (Previous year Rs.2500 Lakhs) and Corporation Bank Rs.1000 Lakhs (Previous year 1000 Lakhs). These facilities are secured by way of first pari-passu charge on Company's current assets located at the plant at Chinchwad or in transit and second pari-passu charge on Company's present and future fixed assets at Chinchwad, Pune. Annual rate of Interest varies from 0.50% above base rate to 5% above the Base Rates of these banks.

All the above facilities are also secured by the personal guarantee of Mr. Maitreya V. Doshi, Chairman and Managing Director of the company.

(b) Short Term Loan of Rs. Nil (Previous Year Rs. 2500 Lakhs) from Corporation Bank was secured by way of first pari- passu charge on the plant and machinery and fixed assets of the Company located at Chinchwad, Pune and second pari-passu charge on current assets of the company located at Chinchwad, Pune. This loan is fully repaid during FY 2014-15 along with interest at the rate 2.35 % over Corporation Bank Base rate.

(c) Short Term Loan of Rs. Nil from Sicom Investments & Finance Ltd. (Previous year Rs. 500 Lakhs) was repaid during FY 2014-15.

(d) The Inter Corporate Deposits of Rs.2365.50 Lakhs (Previous year Rs. 3565 Lakhs) are unsecured short term Loans repayable within 3 to 6 months with Interest rate varying 14.50% to 17.00% p.a. The above includes Rs. 1170.50 Lakhs (Previous year 1250 Lakhs) borrowed by the Company for which the promoters have pledged their shares.

(a) Sale of Land

During the year, the Company received an amount of Rs.15107.12 Lakhs from Horizon Projects Pvt. Ltd. against the balance consideration of Rs.22000 Lakhs which was due from them on account of land transaction executed with them in the year 2012-13.The said balance consideration of Rs.22000 Lakhs was to be received from them subject to adjustments on account of exact measurement of land being carried out. The balance amount of Rs.5052.78 Lakhs (Rs. 22000 Lakhs less Rs.15107.12 Lakhs received in current year less Rs.1840.10 Lakhs received in previous year), has not been received as on date from them as the process of handing over of possession is underway for certain portions of land to them as well as certain other portions of said land is also under compulsory acquisition by the railways and the acquisition process is yet to be concluded.

The Company is in the process of handing over the said land to Horizon Projects Pvt. Ltd. in a phased manner and the balance amount of Rs.5052.78 Lakhs would be received as and when possession of the land is handed over to Horizon Projects Pvt. Ltd. and the Indian Railways. The final closure would be accounted after this process is completed.

During the previous year an amount of Rs.1840.10 Lakhs was paid to the Government of Maharashtra "under protest" towards "Unearned Income" on Sale Company's land in the year 2012-13 and is reflected under "Loans and Advances". The company's Revision Application Challenging the liability on account of Unearned Income is pending for disposal before the Revenue Minister of The Government of Maharashtra.

(b) Compulsory acquisition of Company's land at Dombivli by the Indian Railways

The Company had received in the year 2012-13 notices from the Deputy Collector (Land Acquisition) and Competent Authority informing about the compulsory acquisition of land admeasuring about 30 acres for the Dedicated Freight Corridor Project of the Indian Railways.

During the previous year, out of the above, about 17 acres of the Company's Land was acquired by Indian Railways for a Compensation of Rs.6413.16 Lakhs and the profit arising there from was reflected under "Exceptional Items". An amount of Rs. 468.12 Lakhs has been deducted by the Railways towards "Unearned Income" while disbursing the Compensation amount and the same has been reflected under "Loans and Advances". The company's Revision Application Challenging the liability on account of Unearned Income is pending for disposal before the Revenue Minister of The Government of Maharashtra.

Regarding the balance land of about 13 acre under acquisition by Indian Railways, the Competent Authority, Dedicated Freight Corridor Corporation of India Ltd. (DFCC) and Government Land Records have already conducted joint measurement, marking exact area of 51,270 Sq Meters (about 13 acres) for acquisition. A copy of such joint measurement has been received by the company. This has also been confirmed by DFCC vide its letter dated 18.6.2014 and 3.9.2014. Based on the Railway Amendment Act, 2008, the compensation amount towards the said 13 acres acquistion would be around Rs.11200 Lakhs and the same would be accounted upon receipt of the compensation amount and handing over of the possession of the land under acquisition.

(c) Revaluation of Land

The Company had revalued its land in July 2010 through an external valuer at fair market value and the increase of Rs. 50100 Lakhs due to revaluation has been added to the book value of land and to the revaluation reserve. The revaluation reserve is released to statement of Profit and Loss in subsequent years upon sale of land.

During the previous year, in view of Compulsory Acquisition of 17 acres of Company's Land at Dombivli by the Indian Railways, revaluation reserve amounting to Rs.2911.93 Lakhs, on a pro-rata basis, has been released to the Statement of Profit and Loss, since the profits are realized and shown under 'Exceptional Items'.

On the grounds of prudence and as per the legal opinion obtained, the surplus of Rs.1417.07 Lakhs (Previous year Rs. 1417.07 Lakhs) arose upon re-conversion of stock-in trade into land in the financial year 2008-09 continues to be included in the General Reserve of the company and will not be considered for distribution till it is realized.

During the year, the Company continued its activity on developing, upgrading and improving its Auto Products in order to achieve technologically advanced and competitive products which will ultimately result in acceptability for the Company's products. This process is expected to be continued and completed soon and is expected to result in growth in revenue, profits and cash generation of the company in future. A sum of Rs.298.56 Lakhs (Previous year Rs.2827.98 Lakhs) has been incurred on this account during the current year making a total of Rs.3126.54 Lakhs and reflected as 'Intangible Assets under Development' as on 31.03.2015.

The Company would give appropriate effects in the accounts as and when the said product development/ improvement is completed.

4. Non Current Investments (Long term investments)

(a) Company's long term investment in PAL Credit and Capital Limited, an RBI registered and listed NBFC promoted by the company, is Rs.362.22 Lakhs (after making provision for diminution in the value of investment of Rs.289.48 Lakhs in the financial year 2007-08) represented by 58,99,169 equity shares of Re. 1/- (Previous year Rs. 1/-) each fully paid. Considering the intrinsic business value of PAL Credit & Capital Limited and its business synergies for the Company, as well as the holding being in the nature of controlling interest with long term strategies and business revival plan, no further diminution in value is considered necessary. Further in order to continue with its revival plan, the company has further advanced during the year an amount of Rs.35.58 Lakhs carrying interest at the rate of 12%p.a. (Previous year Rs.32.15 Lakhs), making the total advance including interest at the end of March'15 of Rs. 246.11 Lakhs (Previous year Rs.186.15 Lakhs). The said advance is included under Loans and Advances (Refer note. No.13)

(b) The Company has in its possession the share certificates and the blank transfer forms executed by Automobiles Peugeot in respect of 8,40,25,000 equity shares of Pal-Peugeot Ltd (under liquidation) gifted by them in the year 1999. These shares could not be transferred in company's name as Pal-Peugeot Ltd was not functioning. The Company has filed a petition before the Hon'ble Bombay High Court for permission to transfer the said shares in the name of the Company and the petition is pending for disposal by the Court. Meantime, the Company is holding these shares as 'holder in due course'.

(a) Tax provision under Minimum Alternate Tax (MAT) as per provisions of section 115 JB of the Income Tax Act, 1961 is Rs. NIL in the absence of any taxable income for the current year (Previous year Rs.NIL).

(b) The benefit of credit against the payments made towards MAT for the earlier years is available in accordance with the provisions of section 115JAA over a period of subsequent ten assessment years and the same will be accounted for when they actually arise.

(c) Estimated Net Deferred tax asset of Rs.4585.15 Lakhs has been recognized as at the year end (Previous year - Net Deferred tax asset of Rs.1649.67 Lakhs). The management is confident of virtual certainty of realizing the same in view of the Long term capital gain that will arise on the Compulsory Acquisition of Land by Railways, the joint measurement of Land in respect of the same is completed and award is expected in near future. The company also has a sound order book as on date to be executed.

5. Depreciation and Amortization Expense

The useful life of fixed assets have been revised in accordance with the Schedule II of the Companies Act, 2013. On account of this, depreciation for the year is higher by Rs. 1637 lakhs. Depreciation of earlier years of Rs.442.32 lakhs (Net of Tax of Rs.197.80 lakhs) has been adjusted against the opening General Reserve of the Company as per transitional provision of schedule II.

6. Exceptional Items

The Company had received a letter from the Excise department demanding Rs. 389.61 Lakhs as Interest on the excise duty of Rs 4928 lakhs of earlier years paid by the Company. The Company had filed writ petition before the Hon'ble Bombay High Court challenging the same and same had been dismissed by the Hon'ble Bombay High Court in 2014.

The Company has challenged the order of the Hon'ble Bombay High Court by filing Special Leave Petition before the Hon'ble Supreme Court of India. The said Special leave petition is pending for disposal. Meanwhile the Company has paid an amount of Rs.100 Lakhs "under protest" to the excise department.

7. Contingent Liabilities Not Provided For in Respect of

(a) Disputed indeterminate claims made by the employees regarding reinstatement, wages for the period of suspension etc. relating to the past years pending before Industrial Tribunals/High Court.

(b) There are certain disputed excise demands of Rs.10.00 Lakhs (Previous year Rs. 64.05 Lakhs).The same are being contested by company in appeals at various levels. The company foresees no liability in the above case as the management believes that it has strong case in the appeal.

(c) The Company has paid an amount of Rs. 2308.22 Lakhs (Previous year Rs 2308.22 Lakhs, to the Government of Maharashtra "under protest" towards "Unearned Income" on sale of land and compulsory acquisition of land. The Company's appeal in this regard is pending before the Government of Maharashtra. This forms part of "Loans & Advances" and is considered as a contingent liability.

(d) Additional compensation, if any, in relation to certain demands in Consumer Forum cases, amount unascertained but considered to be insignificant.

(e) Claims against company not acknowledged as debt amounting to Rs.143.45 Lakhs (Previous year: Rs 143.45 Lakhs)

(f) Guarantees issued by bank amounting to Rs. 757.35 lakhs (Previous year: Rs. 694.81 lakhs)

8. Capital Commitments & Other Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs. 0.84 Lakhs (Previous Year Rs.Nil).

There are no other commitments made by the company except for Rs.29 Lakhs (Previous year Rs.89 Lakhs) to be funded to PAL Credit and Capital Limited.

9. Lease

B) Lease payments recognised in the Statement of Profit and Loss Rs. 206.28 Lakhs (Previous year Rs. 202.29 Lakhs)

C) General description of leasing arrangement

i) Leased Assets :- Motor Cars and Machinery

ii) Future Lease rentals are determined on the basis of agreed terms.

10. Segment Reporting

Information given in accordance with the requirement of Accounting Standard 17 (AS 17), on "Segment Reporting". Company's Primary business segments are as under:

(i) Engineering: Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines. Specialized engineering solution for various applications, machining of precision components, sub-assemblies.

(ii) Automotive: Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment.

ii. Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

Segment Results: Information about primary business segments

11. Related Party Disclosures

a. List of Related Parties where control exists and related party with whom transactions have taken place and Relationships:

i. Associate Companies:

(a) PAL Credit & Capital Ltd.

(b) Premier Auto Ltd.

II. Enterprise over which Key Managerial Personnel (Chairman & Managing Director) are able to exercise significant influence :

(a) Doshi Holdings Pvt. Ltd.

(b) DHPL Marine Pvt. Ltd.

(c) Shri Lalchand Hirachand Premier Trust

iii. Key Managerial Personnel

a. Mr Maitreya V.Doshi - Chairman & Managing Director

b. Mr Ramesh M. Tavhare - Company Secretary

c. Mr K.S. Nair - Chief Financial Officer

iv. Relative Of Key Managerial Personnel

a. Smt. Saryu Doshi - Mother of Mr Maitreya V.Doshi

b. Mrs Rohita Doshi - Wife of Mr Maitreya V.Doshi

12. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor is any interest payable to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

13. Balances of Debtors & Creditors and advances/deposits received from dealers/customers are as per books of account. Letters have been sent seeking confirmation of balances and replies in some cases are awaited. Adjustments, if any, will be made on receipt of such confirmations and due reconciliation.

14. Previous year figures have been regrouped and/or rearranged whenever necessary.


Mar 31, 2014

Corporate Information

Premier Ltd. is a BSE and NSE listed public company, incorporated under the Companies Act, 1913. It operates in two business segments: Engineering & Automotive. The Engineering segment consists of Manufacture of CNC Machines and large mechanical components for the wind energy and infrastructure sectors and professional and engineering services related thereto. The Automotive Segment consists of Manufacture of Light and Sport Utility Vehicles along with related spare parts as well as auto components for other OEM"s.

The registered office and plant of the company is located at Chinchwad, Pune while the Corporate office is located at Mumbai. The company has also its branch offices at Bangaluru, Chennai, Kolkata and Delhi.

1. Capital Commitments & Other Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs. Nil (Previous Year Rs.53.13 Lakhs).

There are no other commitments made by the company except for Rs.89 Lakhs (Previous year Rs.21 Lakhs) to be funded to PAL Credit and Capital Limited.

B) Lease payments recognised in the Statement of Profit and Loss Rs. 202.29 Lakhs (Previous year Rs. 206.85 Lakhs)

C) General description of leasing arrangement

i) Leased Assets :- Motor Cars and Machinery ii) Future Lease rentals are determined on the basis of agreed terms.

2. Segment Reporting

Information given in accordance with the requirement of Accounting Standard 17 (AS 17), on "Segment Reporting".

Company"s Primary business segments are as under:

(i) Engineering: Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines. Specialized engineering solution for various applications, machining of precision components, sub-assemblies.

(ii) Automotive: Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with / allocable to the segment.

ii.Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

3. Related Party Disclosures

a. List of related parties with whom transactions have taken place and relationships:

Particulars

1 Doshi Holdings Pvt. Ltd. Associate Company

2 DHPL Marine Pvt. Ltd. Subsidiary of Associate Company

3 PAL Credti and Capital Ltd. Associate Company

4 Premier Auto Ltd. Associate Company

5 Shri Lalchand Hirachand Trust Promoter Related Trust

6 Mr. Maitreya V. Doshi Key Management Personnel

7 Mr. Udo Weigel Director

8 Mrs. Kavita Khanna Director

9 Relative of Key Management Personnel i. Smt. Saryu Doshi

ii. Mrs. Rohita Doshi

4. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor is any interest payable to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

5. Balances of Debtors & Creditors and advances/deposits received from dealers/customers are as per books of account. Letters have been sent seeking confirmation of balances and replies in some cases are awaited. Adjustments, if any, will be made on receipt of such confirmations and due reconciliation.

6. Previous year figures have been regrouped and/or rearranged whenever necessary.


Mar 31, 2013

Corporate Information

Premier Ltd. is a BSE and NSE listed public company, incorporated under the Companies Act, 1913. It operates in two business segments: Engineering & Automotive. The Engineering segment consists of Manufacture of CNC Machines and large mechanical components for the wind energy and infrastructure sectors and professional and engineering services related thereto. The Automotive Segment consists of Manufacture of Light and Sport Utility Vehicles along with related spare parts as well as auto components for other OEM''s.

The registered office and plant of the company is located at Chinchwad, Pune while the Corporate office is located at Mumbai. The company has also its branch offices at Bangaluru, Chennai, Kolkata and Delhi.

(A) The Rights, Preferences, Restriction including restriction on the distribution of dividend and repayments of capital

1. The Company is having only one class of shares, that is Equity carrying nominal value of Rs.10 per share.

2. Every holder of equity share of the Company is entitled to one vote per share held.

3. In the event of liquidation of the Company, the equity share holder will be entitled to receive remaining assets of the Company after the distribution / repayments of all creditors. The distribution to the share holder will be in proportion of the number of shares held by each share holder.

4. The Company declares and pays dividend on the equity shares in Indian Rupees. Dividend proposed by the Board of Directors is subject to approval of the share holders at the ensuing Annual General Meeting.

5. During the year ended 31st March,2013 an amount of Rs.3.00 per equity share (30%) is proposed as dividend for the equity share holders (Previous year Rs. 3.00 per equity share ) Also a one-time special dividend of Rs.4.00 per equity share (40%) has been proposed, making a total dividend of Rs.7.00 per equity share(70%).

(B) Shares held by holding/ultimate holding company and/or their subsidiaries / associates

The company is not a Subsidiary of any other company.

(C) The Company had issued 43,26,000 Convertible warrants in the Year 2006-07. Out of these for 19,86,674 warrants equivalent numbers of shares were allotted in the year 2007-08, for 23,18,053 warrants equivalent number of shares were allotted in the year 2008-09, and the balance 21,273 warrants were forfeited by the Company in the year 2009-10.

(a) Term Loan of Rs. 15000 Lakhs (Previous year: Nil) from SBI is secured by way of first charge on current assets on pari-passu basis with other lenders and 1st pari-passu charge on fixed assets of the company at Chinchwad along with J & K Bank. Also exclusive mortgage charge on 41.44 acres of land located at Kalyan/ Dombivli.

The above loan of Rs.15000 Lakhs is for a tenure of eight and a half years including a moratorium of 18 months. The repayment installments are spread over 84 months commencing from 31/10/2014 and the last installment falling due on 30/09/2021. The 1st two installments are of Rs. 5 lakhs each, the next 4 installments are of Rs. 10 lakhs each, next 10 installments are of Rs. 20 lakhs each, next 2 installments are of Rs. 25 lakhs each, next 6 installments are of Rs. 150 lakhs each, next 24 installments are of Rs. 200 lakhs each and the next 36 installments are of Rs. 250 lakhs each. Annual rate of Interest is 2.30% above SBI base rate.

(b) Term Loan of Rs. 737.50 Lakhs (Previous year: Rs.950 Lakhs) from State Bank of Hyderabad is secured by way of first pari-passu charge on Company''s fixed assets at Chinchwad, Pune (both present and future) and Second pari-passu charge on Company''s current assets located at the plant at Chinchwad or in transit. This loan is repayable in 42 Monthly installments from December 2011. and ending on May 2015. Annual rate of Interest is 5% above SBH base rate. This entire loan is fully prepaid on 16th April, 2013.

(c) Term Loan of Rs. 4643 Lakhs (Previous year: Rs.5000 Lakhs) from Corporation Bank, is secured by way of first pari-passu charge on Company''s present and future fixed assets at Chinchwad, Pune and Second pari-passu charge on Company''s current assets located at the plant at Chinchwad or in transit. This loan is repayable in 13 quarterly installments of Rs 357 Lakhs each and last installment of Rs 359 Lakhs. Loan installments are starting from February 2013 and the last installment is falling due on May 2016. Annual rate of Interest is 3.25% over Corporation Bank Base rate. This entire loan is since prepaid.

(d) Corporate Loan Rs. Nil (Previous Year Rs. 4000 Lakhs) from The Jammu & Kashmir Bank Ltd. which was secured by way of first pari-passu charge on Company''s present and future fixed assets at Chinchwad, Pune. Annual rate of Interest is 3.75% over J&K Bank Base rate. The above loan is fully repaid during the year 2012-13 on due dates along with applicable interest thereon.

(e) Corporate Loan Rs. 10000 Lakhs (Previous Year Rs. Nil) from The Jammu & Kashmir Bank Ltd. is secured by way of first pari-passu charge on plant and machinery and fixed assets of the company located at Chinchwad, Pune and second pari-passu charge on current assets of the company. This loan is for a total tenure of 36 months, repayable in 18 equal installments after a moratorium period of 18 months. There are 17 monthly installments each of Rs. 550 lakhs with the first installment due on 30/09/2014. The last installment (18th installment) is of Rs. 650 lakhs due on 29/02/2016. Annual rate of Interest is 2% over J&K Bank Base rate.

(f) Buyers Credit facility of Rs.Nil (Previous year Rs.887.40 Lakhs) from Federal Bank Limited which was secured by way of first pari-passu charge on plant and machinery and fixed assets of the company located at chinchwad, Pune. This loan is fully pre-paid during the year along with applicable interest.

(g) Term Loan of Rs. Nil (Previous year Rs.2500 Lakhs) from HDFC Ltd., which was secured by way of first pari-passu charge on Company''s land located at Dombivli, Kalyan. This loan is fully pre-paid during FY 2012-13 along with applicable interest.!!

(h) Medium Term Loan of Rs. Nil (Previous year: Rs. 5000 Lakhs) from SICOM Ltd., is secured by way of first pari-passu charge on Company''s land located at Dombivli, Kalyan. This loan is fully pre-paid during the year FY 2012-13 along with applicable interest.

(i) Hire purchase Loan of Rs 637.65 Lakhs for a tenure of 4 to 5 years from First leasing Company of India Limited is secured under the specific Fixed Asset procured against the said Loans.

Rs. 637.65 Lakhs is repayable in 43 variable monthly installments till October 2016. Annual rate of Interest is 2% above SBI base rate.

All the above facilities covered under a to i are also secured by the personal guarantee of Mr. Maitreya V. Doshi, Chairman and Managing Director of the company.

(j) Deposits accepted from public and share holders carry varying rate of interest from 11% to 12.50% p.a. depending upon the cumulative/ non cumulative option and the period of maturity such as 1 year, 2 year or 3 year.

(a) The Working Capital facilities (Cash Credit Rs. 6000 lakhs, non- funded facilities Rs. 10500 lakhs, totaling to Rs. 16500 lakhs, same limits as previous year) are under a consortium banking arrangement with State Bank of India - as the lead banker having a share of Rs. 10500 lakhs (previous year Rs. 10500 lakhs) along with State Bank of Hyderabad Rs. 4500 lakhs (previous year Rs.4500 lakhs) and Corporation Bank Rs.1500 lakhs (previous year 1500 lakhs). These facilities are secured by way of first pari-passu charge on Company''s current assets located at the plant at Chinchwad or in transit and second pari-passu charge on Company''s present and future fixed assets at Chinchwad, Pune. Annual rate of Interest varies from 0.50% above base rate to 5% above the Base Rates of these banks.

All the above facilities are also secured by the personal guarantee of Mr. Maitreya V. Doshi, Chairman and Managing Director of the company.

(b) The Inter Corporate Deposits of Rs.1430 Lakhs (previous year Rs. 3495) are unsecured short term Loans repayable within 3 to 6 months with Interest rate varying 14.50% to 17.00% p.a. The above includes Rs.215 Lakhs borrowed by the Company for which the promoters have pledged their shares.

During the last year, the Company had entered into a memorandum of understanding with Shri. LH Premier Trust to sell certain land of the Company at Chinchwad and had received earnest Money of Rs.980 Lakhs. Pending completion of the process of obtaining the necessary approvals from the appropriate authorities for concluding the sale, the said advance received continues to be reflected as a current liability.

(a) Sale of Land

During the year, the Company has sold and conveyed 150 acres (out of 218 acres) of its land at Dombivli, to Horizon Projects Pvt. Ltd., a part of Runwal Group for a total consideration of Rs.44000 Lakhs.

Consequent to the above, during the year, the Company has received Rs.22000 Lakhs as a part consideration. The balance consideration of Rs.22000 Lakhs which is to be received on 31.12.2014 is subject to such amount, if any, required to be deducted therefrom on account of payments to be made/financed by the purchaser and adjustable therefrom. The said deduction amount is not crystallized and quantifiable as on date. The Company will account for such adjustments as and when crystallized. Subject to this, the Company has accounted for the sale at a total consideration of Rs.44000 Lakhs and recognized the profits accordingly during the year.

This balance consideration of Rs.22000 Lakhs, receivable on 31.12.2014, is adequately secured through a registered mortgage in favour of the Company for 71 acres of land (out of 150 acres) conveyed to the developer and a post-dated cheque not exceeding Rs.22000 Lakhs given by the developer.

Profit on Sale of Land of Rs.4735.63 Lakhs is arrived at after adjusting an amount of Rs.8076.38 Lakhs paid to the Maharashtra Government ''under protest'' for issues pertaining to Urban Land Ceiling (Regulations) Act, 1976 in respect of the Company''s land at Dombivli. The Company has filed a writ petition in the High Court, Bombay challenging the notification of the Government under which the said payment has been made. The Company would be entitled for refund of this amount if the said dispute is resolved in favour of the Company.

(b) Compulsory acquisition of Company''s land at Dombivli by the Indian Railways

The Company has received notices from the Deputy Collector (Land Acquisition) and Competent Authority informing about the compulsory acquisition of land admeasuring about 26 acres for the Dedicated Freight Corridor Project of the Indian Railways. After the acquisition process is completed, the Company would be left with 42 acres of land at Dombivli. The said acquisition would be accounted in the books after the receipt of compensation amount and handing over of possession of the land under acquisition.

(c) Revaluation of Land

The Company had revalued its land in July 2010 through an external valuer at fair market value and the increase of Rs.50100 Lakhs due to revaluation has been added to the book value of land and to the revaluation reserve.

During the year, in view of sale of 150 acres of land at Dombivli, revaluation reserve amounting to Rs.26013.09 Lakhs, on a pro-rata basis, has been released to the statement of Profit & Loss since the profits are realized and shown under ''Other Income''.

On the grounds of prudence and as per the legal opinion obtained, the surplus of Rs. 1889.44 lakhs (Previous year Rs.6057.31 lakhs) arose upon re-conversion of stock-in trade into land in the financial year 2008-09 continues to be included in the General Reserve of the company and will not be considered for distribution till it is realized.

(a) Company''s long term investment in PAL Credit and Capital Limited, an RBI registered and listed NBFC promoted by the company, is Rs.362.22 Lakhs (after making provision for diminution in the value of investment of Rs.289.48 Lakhs in the financial year 2007-08) represented by 58,99,169 equity shares of Rs.10 each fully paid. Considering the intrinsic business value of PAL Credit & Capital Limited and its business synergies for the Company, as well as the holding being in the nature of controlling interest with long term strategies and business revival plan, no further diminution in value is considered necessary. Further in order to continue with its revival plan, the company has further advanced during the year an amount of Rs. 52.43 Lakhs (Previous year Rs. 101.57 Lakhs) making the total advance paid up to the end of March''13 of Rs. 154 Lakhs. The said advance is included under Loans and Advances (refer note. No. 13).

(b) The Company has in its possession the share certificates and the blank transfer forms executed by Automobiles Peugeot in respect of 8,40,25,000 equity shares of Pal-Peugeot Ltd (under liquidation) gifted by them in the year 1999.These shares could not be transferred in company''s name as Pal-Peugeot Ltd was not functioning. The Company has filed a petition before the Hon''ble Bombay High Court for permission to transfer the said shares in the name of the Company and the petition is pending for disposal by the Court. Meantime, the Company is holding these shares as ''holder in due course''.

(c) During the year the Company was allotted 50,000 equity shares of Premier Auto Ltd. and subsequently 25,500 shares were sold and the balance holding of 24,500 shares are shown as investments. Premier Auto Ltd. has not started any operations as yet.

(a) Provision for current tax is made under Minimum Alternate Tax (MAT) as per provisions of section 115 JB of the Income Tax Act, 1961.

(b) The benefit of credit against the payments made towards MAT for the earlier years is available in accordance with the provisions of section 115JAA over a period of subsequent ten assessment years and the same will be accounted for when actually arise.

(c) Estimated Net Deferred tax asset/(Liability) of (Rs.1399.70 Lakhs) has been recognized during the year (previous year Rs. 1158 Lakhs). The management is confident and virtually certain of realizing the same.

1. The Supreme Court of India vide its order dated 29.08.2012 allowed the appeal of the excise department confirming excise duty demand of Rs.4928.80 Lakhs on the Company regarding a dispute which was won by the Company before the Customs Excise And Service Tax Appellate Tribunal (CESTAT) pertaining to a 15 year old dispute on valuation of Uno cars then manufactured by the Company.

The Review and Curative Petition filed by the Company were also dismissed by the court. The Company has paid the said duty demand in full to the department during the year and the same has been shown under ''Non Recurring Items''.

Despite above, the Company has been now been legally advised to file a Writ Petition in the High Court, Bombay challenging the computation errors by the department which were not taken up and heard by the Supreme Court. Accordingly, the Company has filed a petition and the same is pending disposal.

2. As part of the Company''s product rationalization strategy, a comprehensive review was carried out by management during the year in respect of its various business segments and various Product Development Projects and expenses related thereto. As an outcome of the review (a) to concentrate and focus on core competency and (b) to rationalize the products of various business segments of the Company, management has taken the following decisions:

(a) CNC Machines Business : Entire product portfolio of CNC Machines was reassessed. Certain machine products were found to be not commercially viable in future. Therefore, management has decided not to pursue such products developments anymore and not to put further resources for their developments. Therefore, it was felt prudent to write off such product development expenses of Rs.2272 Lakhs related to such machines.

(b) Heavy Engineering Business : Contracts from various customers for heavy engineering business were reassessed for the commercial viability consequent to the design changes made by customers and possibility of repeat orders. Despite protracted negotiations with the customers, certain contracts were found commercially unviable by the management on such reassessment. Also, some customers changed their product design, making related investments till date redundant. Therefore, it was felt prudent to write off product development expenses of Rs.1084 Lakhs related to such contracts.

(c) Automobile Business : Despite the continued product development in relation to Company''s Sigma Vans and Roadstar pick up trucks and having adequate dealer network, the business could not reach the projected volumes. Therefore, it was felt prudent to write off such product development expenses of Rs.5777 Lakhs related to these products.

The Company''s Peugeot TUD 5 Engine had to be localized involving investment in vendor toolings. Further, the said engine had to be upgraded for meeting Bharat stage II standard requirements. It was further upgraded to Bharat Stage III with turbo charger. However, the future sale of this engine is uncertain as it is not CRDi and also not Bharat IV stage emission norms complaint. Considering the fact that the Company has already started using Fiat CRDi Euro-IV engine, further development on TUD 5 is not envisaged now. Therefore, it is prudent to write off product development expenses of Rs.531 lakhs relating to TUD 5 Engine.

In case of company''s compact SUV RiO, there are two facelifts, changes in interiors, initially using TUD 5 engine and now using FIAT CRDi engine. Though the product continues to show the market acceptance, certain product versions are discontinued and will no longer been manufactured. Therefore, it was felt prudent to write off product development expenses of Rs.2937 Lakhs related to such discontinued versions.

In view of the above, all these product development expenses amounting to Rs.12601 Lakhs have been written off in the Statement of Profit & Loss and have been shown as ''Non recurring item''.

2. Contingent Liabilities Not Provided For in Respect of

(a) Disputed indeterminate claims made by the employees regarding reinstatement, wages for the period of suspension etc. relating to the past years pending before Industrial Tribunals/High Court.

(b) There are certain disputed excise and FEMA demands amounting to Rs.129.54 Lakhs (Previous Year 129.54 Lakhs). The same are being contested by company in appeals at various levels. The company foresees no liability in the above case as the management believes that it has strong case in the appeal.

(c) Additional compensation, if any, in relation to certain demands in Consumer Forum cases, amount unascertained but considered to be insignificant.

(d) Guarantees issued by bank amounting to Rs.1456.52 Lakhs (Previous year: Rs. 1172.38 Lakhs).

(e) Bank guarantee Liability of Rs.18 Lakhs pertaining to the guarantee already encashed by one of the CNC Machine customer.

3. Capital Commitments & Other Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs.53.13 Lakhs (Previous Year Rs.150.64 Lakhs).

There are no other commitments made by the company except for Rs.21 Lakhs ( Previous year Rs.28.43 Lakhs) to be funded to PAL Credit and Capital Limited.

B) Lease payments recognised in the Statement of Profit and Loss Rs. 206.85 Lakhs (Previous year Rs.61.44 Lakhs)

C) General description of leasing arrangement

i) Leased Assets :- Motor Cars and Machinery

ii) Future Lease rentals are determined on the basis of agreed terms.

B) General description of leasing arrangement

i) Leased Assets :- D.G. Sets, Machinery

ii) Total Finance lease payments as on Balance Sheet date Rs. 293.96 Lakhs (Previous Year Rs. 817.56 Lakhs)

(Present Value Rs.240.96 Lakhs, Previous Year. Rs. 636.51 Lakhs)

C) The Company has option to buy the assets under finance lease at Rs.1/- each at the end of the lease period.

4. Capitalisation of Expenditure

Company has undertaken a major expansion cum modernization projects. During the year Company has capitalised the following expenses of revenue nature.

5. Segment Reporting

Information given in accordance with the requirement of Accounting Standard 17, on "Segment Reporting".

Company''s Primary business segments are as under:

(i) Engineering:

Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines. Specialized engineering solution for various applications, machining of precision components, sub-assemblies.

(ii) Automotive:

Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company.

However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with/ allocable to the segment.

ii. Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

* Total Liabilities exclude Secured loans Rs.33683.98 Lakhs (Previous year Rs. 26080.86 Lakhs) and Unsecured loans Rs.8293.71 Lakhs (Previous year Rs. 9472.33 Lakhs).

6. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

7. Balances of Debtors & Creditors and advances/deposits received from dealers/ customers are as per books of account. Letters have been sent seeking confirmation of balances and replies in some cases are awaited. Adjustments, if any, will be made on receipt of such confirmations and due reconciliation.

8. Previous year figures have been regrouped and/or rearranged whenever necessary.


Mar 31, 2012

Corporate Information

Premier Ltd. is a BSE and NSE listed public company, incorporated under the Companies Act, 1913. It operates in two business segments: Engineering & Automotive. The Engineering segment consists of Manufacture of CNC Machines and large mechanical components for the wind energy and infrastructure sectors and professional and engineering services related thereto. The Automotive Segment consists of Manufacture of Light and Sport Utility Vehicles along with related spare parts as well as auto components for other OEM's.

The registered office and plant of the company is located at Chinchwad, Pune while the Corporate office is located at Mumbai. The company has also its branch offices at Bangaluru, Chennai, Kolkata and Delhi.

1. Contingent Liabilities Not Provided For in Respect of

(a) Disputed indeterminate claims made by the employees regarding reinstatement, wages for the period of suspension etc. relating to the past years pending before Industrial Tribunals/High Court.

(b) There are certain disputed excise and FEMA demands amounting to Rs.129.54 Lakhs (Previous Year Rs. 319.54 Lakhs). The same are being contested by company in appeals at various levels. The company foresees no liability in the above case as the management believes that it has strong case in the appeal.

(c) Additional compensation, if any, in relation to certain demands in Consumer Forum cases, amount unascertained but considered to be insignificant.

(d) Guarantees issued by bank amounting to Rs.1172.38 Lakhs (Previous year Rs. 1180.85 Lakhs).

(e) There are no claims against the Company in respect of taxi refund case (Previous Year Rs.16.32 Lakhs). The Company has filed a recovery suit in the Bombay High Court against the ex-dealer for recovery of taxi refunds paid by the company.

2. Capital Commitments & Other Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs.150.64 Lakhs (Previous Year Rs.721.19 Lakhs).

There are no other commitments made by the company except for Rs.28.43 Lakhs to be funded to PAL Credit and Capital Limited.

B) General description of leasing arrangement

i) Leased Assets :- D.G. Sets, Machinery

ii) Total lease payments as on Balance Sheet date Rs.817.56 Lakhs (Previous Year Rs.517.44 Lakhs)

(Present Value Rs.636.51 Lakhs, Previous Year Rs. 371.45 Lakhs)

C) The Company has option to buy the assets under finance lease at Rs.1/- each at the end of the lease period.

3. Effect of Change in Accounting Policy

During the year, option has been exercised by the company in terms of GOI's G.S.R. 914(E) dated 29th December, 2011 and accordingly foreign exchange fluctuation of Rs.71.79 Lakhs has been capitalized, which hitherto was been written off to profit and loss account.

4. Segment Reporting

Information given in accordance with the requirement of Accounting Standard 17, on "Segment Reporting".

Company's Primary business segments are as under:

(i) Engineering:

Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines. Specialized engineering solution for various applications, machining of precision components, sub-assemblies.

(ii) Automotive:

Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with/ allocable to the segment.

ii. Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

* Total liabilities excludes Secured loans Rs. 26675.86 Lakhs (Previous year Rs. 23488.01 Lakhs) and Unsecured loans Rs. 8877.33 Lakhs (Previous year Rs. 6241.93 Lakhs)

** Previous year's unallocated capital expenditures includes Rs. 50100 lakhs arising out of revaluation of Land

5. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

6. Balances of Debtors & Creditors and advances/deposits received from dealers/ customers are as per books of account. Letters have been sent seeking confirmation of balances and replies in some cases are awaited. Adjustments, if any, will be made on receipt of such confirmations.

7. Previous Year Figures :

Till the year ended 31st March 2011, the company was using pre-revised Schedule VI to the Companies Act 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the company. The company has reclassified previous year figures to conform to this year's classification. It significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2011

(1) Contingent liabilities not provided for, in respect of:

a. Disputed indeterminate claims made by the employees regarding reinstatement, wages for the period of suspension etc. relating to the past years pending before Industrial Tribunals/High Court.

b. There are certain disputed excise, custom duty, Income Tax and FEMA demands amounting to Rs. 319.54 lakhs (Previous Year Rs. 834.10 lakhs). The same are being contested by company in appeals at various levels. The company foresees no liability in the above case as the management believes that it has strong case in the appeal.

c. Additional compensation, if any, in relation to certain demands in Consumer Forum cases, amount unascertained but considered to be insignificant.

d. Guarantees issued by bank amounting to Rs. 1180.85 lakhs (Previous year Rs. 1080.01 lakhs).

e. Claims against company in taxi refund case amounting to Rs. 16.32 lakhs (Previous Year Rs. 208 lakhs) not acknowledged as debt. The Company has filed a recovery suit in the Bombay High Court against the ex-dealer towards the payment of taxi refunds made.

(2) Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs. 721.19 lakhs (Previous Year Rs. 1147.08 lakhs.)

(3) Operating Lease:

B. Lease payments recognised in the Profit and Loss Account Rs. 54.77 lakhs (Previous year Rs. 63.98 lakhs)

C. General description of leasing arrangement

i) Leased Assets :- Motor Cars & D.G.Set

ii) Future Lease rentals are determined on the basis of agreed terms.

(4) Finance Lease

B. General description of leasing arrangement i) Leased Assets :- D.G. Sets, Machinery

ii) Total lease payments as on Balance Sheet date Rs. 517.44 lakhs (Previous YearRs. 197.58 Lakhs)

(Present Value Rs. 371.45 Lakhs, Previous Year Rs. 148.50 Lakhs)

c. The Company has option to buy the assets under finance lease at Rs. 1/- each at the end of the lease period.

(5) Company has undertaken a major expansion cum modernization projects. Borrowing cost attributable to above during the year amounting to Rs. 1014.18 lakhs (Previous year - Rs. 1557.04 lakhs ) is capitalized.

(6) a. Provision for current tax is made under Minimum Alternate Tax (MAT) as per provisions of section 115 JB of the Income Tax Act, 1961.

b. The benefit of credit against the payments made towards MAT for the earlier years is available in accordance with the provisions of section 1151AA over a period of subsequent ten assessment years and the same will be accounted for when actually arise.

c. Estimated Deferred tax asset (net) of Rs. 1448.23 lakhs (Previous year Rs.4495.42 lakhs) has not been recognized as a measure of prudence.

(7) a. Companys long term investment in PAL Credit and Capital Limited, an RBI registered and listed NBFC promoted by the company, is Rs. 362.22 lakhs (after making provision for diminution in the value of investment of Rs. 289.48 lakhs in the financial year 2007-08) represented by 58,99,169 equity shares of Rs. 10 each fully paid. Considering the intrinsic business value of PAL Credit & Capital Limited and its business synergies to the Company, as well as the holding being in the nature of controlling interest with long term strategies and business revival plan, no further diminution in value is considered necessary.

b. During the year, Company has sold its holding of 7,90,84,000 equity shares of Pal-Peugeot Ltd (under liquidation) with the approval of the Honble Bombay High Court. This sale has no material impact on the current years Profit & Loss Account, as in the earlier years, the Company had fully provided for the diminution in value of shares.

c. The Company has in its possession the share certificates and the blank transfer forms executed by Automobiles Peugeot in respect of 8,40,25,000 equity shares of Pal-Peugeot Ltd. (under liquidation) gifted by them in the year 1999. These shares could not be transferred in companys name as Pal- Peugeot Ltd was not functioning. The Company has filed a petition before the Honble Bombay High Court for permission to transfer the said shares in the name of the Company and the petition is pending for disposal by the Court. Pending completion of the requisite formalities for transfer of shares, these shares are not accounted in the books.

(8) a. i) Working Capital facilities of Rs. 90 crores (Previous year: Rs. 90 crores) with State Bank of India (SBI) are secured by way of first pari-passu charge on Companys current assets lying in the stores of company premises and godown situated at Mumbai Pune Road, Chinchwad or elsewhere in transit and first pari-passu charge on Companys fixed assets at Chinchwad, Pune (both present and future).

ii) Working Capital facilities of Rs. 60 crores (Previous year: Rs. Nil) with State Bank of Hyderabad (SBH) are secured by way of first charge on Companys current assets lying in the stores of company premises and godown situated at Mumbai Pune Road, Chinchwad or elsewhere in transit and second pari- passu charge on the Companys fixed assets located at Chinchwad, Pune (both present and future).

iii) Working capital facilities of Rs. 20 crores from Federal Bank Ltd. is secured against 1st pari-passu only on the current assets relating to RiO SUV division and second pari-passu charges on all the fixed assets of the Company.

b. Term Loan of Rs. 30.88 crores (Previous year: Rs. 46.44 crores) from SBI is secured by way of first pari-passu charge on Companys fixed assets (both present and future) at Chinchwad, Pune.

c. Term Loan of Rs. 8.78 crores (Previous year: Rs. 17.34 crores) from SICOM Ltd., is secured by way of first pari-passu charge on Companys fixed assets at Chinchwad, Pune (both present and future) and Companys land located at Dombivli, Kalyan.

d. Term loan of Rs. 28.75 crores (previous year Rs. 15 crores ) from SICOM Ltd. Is secured by way of first pari-passu charge by Equitable Mortgage on companys Land located at Dombivali, Kalyan.

e. Term Loan of Rs. 25 crores (Previous year: Rs. 20 crores) from HDFC Ltd., is secured by way of first pari-passu charge on Companys land located at Dombivli, Kalyan.

f. Short Term Loan of Rs. 10 crores (Previous Year Rs. Nil) from Sicom Investments & Finance Ltd is secured by way of first pari-passu by Equitable Mortgage on Companys land located at Dombivli, Kalyan.

g. Corporate Loan Rs. 40 crores (Previous Year Rs. Nil) from The Jammu & Kashmir Bank Ltd., is secured by way of first pari-passu charge on Companys Plant at Chinchwad, Pune, including Land, Building & Machine (both present & future), post dated cheques and also secured by Personal Guarantee of Chairman & Managing Director of the Company.

h. Short Term Loan of Rs. 15 crores (Previous Year Rs. Nil) from State Bank of Travancore is secured by way of sub-sevient charge on Companys fixed assets (both present and future) at Chinchwad, Pune, post dated cheques and pledge of promoters shares in the Company and personal guarantee of Chairman & Managing Director.

i. Short Term Loan of Rs. 30 crores (Previous Year Rs. Nil) from Canara Bank is secured by way of pledge of promoters shares in the Company

j. Bridge Loans of Rs. 26.95 crores (Previous Year Rs. 18 crores) are secured by pledge of the shares of the Company owned by the promoter. The entire pledge of shares by the promoters is solely to facilitate borrowings by the Company to fund its operating needs.

(13) Managerial Remuneration:

Notes:

i. The above figures do not include provision for gratuity and leave encashment for which separate figures are not available as they are included in the Companys total liability for gratuity and leave encashment as per actuarial valuation which is disclosed in note no 14.

ii. The computation of profit under section 349 of the Companies Act, 1956 is not considered necessary as the managerial remuneration that is paid is minimum remuneration based on the effective capital of the company as prescribed under Schedule XIII of the said Act.

iii. Commission payable to the non-executive director amounting to Rs. 31.50 lakhs (Previous year Rs. 31.50 lakhs) is in accordance with the approval granted by the Ministry of Corporate Affairs, The Government of India vide its letters dated 8th April, 2008 and 25th April, 2008.

(9) The Company continues with the product development of its existing light commercial vehicles such as Van & Pick- up trucks based on the market feed- back. Both these products and its variants are gaining acceptance in the market. The commercial and technical feasibility of the product will be achieved on sale volume of 2000 pick-up trucks and 1000 vans as envisaged.

The Company has successfully introduced "Indias First Compact Diesel SUV" under the brand name "Premier RiO". The Company has received good response for this product. Development of this product for meeting specific Indian condition and market need is progressing satisfactorily.

The Company has commissioned a dedicated assembly line for "Premier RiO" having an annual capacity of 30,000 vehicles to take care of the market demand. Trial production has commenced on this line.

In the meanwhile (a) the product development expenditure including licence/ technical know-how fees and pre-launch expenses incurred thereon has been shown as capital work in progress (b) Painted bodies/body parts of vehicles are imported and assembled with indigenous body parts, other sub-assemblies & components, which have been sold and accounted as sales.

(10) Segment Reporting:

Information given in accordance with the requirement of Accounting Standard 17, on Segment Reporting.

Companys business segments are as under:

(i) Engineering:

Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines. Specialized engineering solution for various applications, machining of precision components, sub-assemblies.

(ii) Automotive:

Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with/ allocable to the segment.

ii. Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

(11) Related Party Disclosures:

a. List of related parties with whom transactions have taken place and relationships:

1) Associate Companies: 4) Relative of Key Management

1. Doshi Holdings Pvt. Ltd. Personnel

2. PAL Credit & Capital Ltd. 1. Mrs. Saryu Doshi

2) Key Management Personnel 2. Mrs. Rohita Doshi

1. Mr. Maitreya Doshi 3. Mrs. Kavita Khanna

3) Director

1. Mr. Udo Weigel

(12) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(13) Previous year figures have been regrouped and/or rearranged wherever necessary.


Mar 31, 2010

(1) Issued, Subscribed and Paid-up Capital includes :

a. 15,98,150 equity shares of Rs.10 each allotted on conversion of debentures into fully paid equity shares.

b. 6,00,000 equity shares of Rs.10 each allotted on conversion of term loans/debentures into fully paid equity shares to financial institutions.

c. 80,84,910 equity shares of Rs.10 each allotted as fully paid bonus shares by capitalization of reserves.

d. 43,04,727 equity shares of Rs. 10 each fully paid, allotted at a premium of Rs. 29.43 per share on conversion of warrants issued on preferential basis.

(2) On the grounds of prudence and as per the legal opinion obtained, the surplus of Rs.6057.31 lakhs arose upon re-conversion of stock-in trade into land in the financial year 2008-09 continues to be included in the General Reserve of the Company and will not be considered for distribution till it is realized.

(3) Balances of Debtors & Creditors and advances/deposits received from dealers/customers are as per books of account. Letters have been sent seeking confirmation of balances and replies in some cases are awaited. Adjustments, if any, will be made on receipt of such confirmations.

(4) Contingent liabilities not provided for, in respect of:

a. Disputed indeterminate claims made by the employees regarding reinstatement, wages for the period of suspension etc. relating to the past years pending before Industrial Tribunals/ High Court.

b. There are certain disputed excise, custom duty,Income Tax and FEMA demands amounting to Rs.834.10 lakhs (Previous Year Rs.319.54 lakhs). The same are being contested by Company in appeals at various levels. The Company foresees no liability in the above case as the management believes that it has strong case in the appeal.

c. Additional compensation, if any, in relation to certain demands in Consumer Forum cases, amount unascertained but considered to be insignificant.

d. Guarantees issued by bank amounting to Rs.1100 lakhs (Previous year: Rs.738.03 lakhs).

e. Claims against Company in taxi refund case amounting to Rs. 208 lakhs (Previous Year Rs 229.78 lakhs) not acknowledged as debt against which Company has filed a counter claim on an ex-dealer.

f. Income tax demand for A.Y 2007-08 pending before appellate authorities Rs. 5.14 crores(net-off Rs.2 Cr. paid )

(5) Estimated amount of contracts remaining to be executed on capital account (net of advances) is approximately Rs. 1147.08 (Previous Year Rs.650 lakhs.)

(6) Operating Lease:

A. Total of the future minimum lease payments under non-cancellable operating leases for each of the following periods are as follows:

(7) A. Total of the future minimum lease payments under finance leases for each of the following periods are as follows:

(8) Company has undertaken a major expansion cum modernization projects. Borrowing cost attributable to above during the year amount to Rs. 1557.04 lakhs (Previous year - Rs.1194.23 lakhs ) is capitalized.

(9) a. Provision for current tax is made under Minimum Alternate Tax (MAT) as per provisions ofsection 115 JB of theIncome Tax Act, 1961.

b. The benefit of credit against the payments made towards MAT for the earlier years is available in accordance with the provisions of section 115JAA over a period of subsequent ten assessment years and the same will be accounted for when actually arise.

c. Deferred tax asset (net) of Rs. 4495.42 lakhs (Previous year Rs.5279.76 lakhs) has not beenrecognized as a measure of prudence.

(10) a. Company?s long term investment in PAL Credit and Capital Limited, an RBI registered and

listed NBFC promoted by the Company, is Rs. 362.22 lakhs (after making provision for diminution in the value of investment of Rs.289.48 lakhs in the financial year 2007-08) represented by 58,99,169 equity shares of Rs.10 each fully paid. Considering the intrinsic business value of PAL Credit & Capital Limited and its business synergies to the Company, as well as the holding being in the nature of controlling interest with long term strategies and business revival plan, no further diminution in value is considered necessary.

b. Subsequent to close of the financial year, the Company has sold its holding of 7,90,84,000 equity shares of Pal-Peugeot Ltd (under liquidation) with the approval of the Hon?ble Bombay High Court. The Company had already provided for the diminution of full value of the investment against these shares in the earlier years and therefore there is no impact in the accounts.

c. The Company has in its possession the share certificates and the blank transfer forms executed by Automobiles Peugeot in respect of 8,40,25,000 equity shares of Pal-Peugeot Ltd. (under liquidation) gifted by them in the year 1999.These shares could not be transferred in Company?s name as Pal-Peugeot Ltd was not functioning. Pending the completion of all the requisite formalities these shares are not accounted in the books.

(11) a. Working Capital facilities of Rs 90 crores (Previous year: Rs.65 crores) with State Bank of India (SBI) are secured by way of first charge on Company?s current assets lying in the stores of Company premises and godown situated at Mumbai Pune Road, Chinchwad or elsewhere in transit and first pari-passu charge on Company?s fixed assets at Chinchwad, Pune (both present and future).

b. Term Loan of Rs 46.44 crores (Previous year: Rs.58.14 crores) from SBI is secured by way of first pari-passu charge on Company?s fixed assets (both present and future) at Chinchwad, Pune.

c. Term Loan of Rs. 17.34 crores (Previous year: Rs.24.85 crores) from SICOM Ltd., is secured by way of first pari-passu charge on Company?s fixed assets at Chinchwad, Pune (both present and future) and Company?s land located at Dombivli, Kalyan.

d. Term loan of Rs. 15 crores ( previous year Rs. Nil ) from SICOM Ltd. Is secured by way of first pari-passu charge by Equitable Mortgage in favour of SICOM, and HDFC Ltd. on Company?s Land located at Dombivali, Kalyan.

e. Term Loan of Rs. 20 crores (Previous year: 10 crores) from HDFC Ltd., is secured by way of first pari-passu charge on Company?s land located at Dombivli, Kalyan.

f. Bridge Loans of Rs.18 crores is secured against pledge of the shares of the Company owned by the promoter.

g. Letter of Credit facilities of Rs.20 crores from Federal Bank Ltd. is secured against exclusive charge of specific current assets procured under LC and First pari-passu equitable charge along with SICOM and HDFC Ltd. on Company?s land located at Dombivali,Kalyan.

(13) Managerial Remuneration:

The profit and loss account includes payment/provision on account of remuneration to the managerial personnel as under:

(14) The Company continues with the product development of its existing light commercial vehicles such as Van & Pick- up trucks based on the market feed-back. Both these products and its variants are gaining acceptance in the market. The commercial and technical feasibility of the product will be achieved on sale volume of 2000 pick-up trucks and 1000 vans as envisaged.

During the year, Company has successfully introduced "India?s First Compact Diesel SUV" under the brand name "Premier RiO". The Company has received good response for this product. Development of this product for meeting specific Indian condition and market need is progressing satisfactorily.

The Company is in the process of commissioning a dedicated assembly line for "Premier RiO" having an annual capacity of 25,000 vehicles to take care of the market demand. This line is planned to be fully operational during the first quarter of 2010-11.

In the meanwhile (a) the product development expenditure including licence/ technical know- how fees and pre-launch expenses incurred thereon has been shown as capital work in progress (b) Painted bodies/body parts of vehicles are imported and assembled with indigenous body parts, other sub-assemblies & components, which have been sold and accounted as sales.

(16) Segment Reporting:

Information given in accordance with the requirement of Accounting Standard 17, on Segment Reporting.

Companys business segments are as under:

(i) Engineering:

Engaged in Engineering, manufacturing of machine tools of gear cutting, vertical and horizontal machining centre and special purpose machines, specialized engineering solution for various applications, machining of precision components, sub-assemblies, etc.

(ii) Automotive:

Automotive segment consists of two distinct activities viz. assembly of vehicles from imported painted bodies (already commenced) and indigenous production of vehicle bodies (yet to commence). During the year the Company has undertaken only the assembly of the vehicles from imported painted bodies and indigenous production activity of bodies has not commenced.

Segment Accounting Policies:

Segment accounting disclosures are in line with accounting policies of the Company. However, the following specific accounting policies have been followed for segment reporting.

i. Segment Revenue includes Sales and other income directly identifiable with/allocable to the segment.

ii. Expenses that are directly identifiable with /allocable to segments are considered for determining the Segment Result. The expenses, which relate to the Company as a whole and not allocable to segments, are included under "Un-allocable expenditure".

iii. Income which relates to the Company as a whole and not allocable to segments is included in "Un-allocable Income".

iv. Segment assets and liabilities include those directly identifiable with the respective segments.

v. The Company has no Secondary Reportable Segment.

(17) Additional information pursuant to paragraphs 4(C) and 4(D) of Para II of Schedule VI of the Companies Act ,1956.

(18) There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days as at the Balance Sheet date. Further, the Company has neither paid nor payable any interest to any Micro, Small and Medium Enterprises on the Balance Sheet date. The above information has been determined to the extent such parties have been identified on the basis of information available with the Company. This has been relied upon by the auditors.

(19) Previous year figures have been regrouped and/or rearranged wherever necessary.

 
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