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Notes to Accounts of Ram Ratna Wires Ltd.

Mar 31, 2015

1 Company Overview

The Company is engaged in the business of manufacturing engineering goods such as Enamelled Copper Wire & Strips, Enamelled Alluminium Wire, Submersible Winding Wire, Fibre Glass Covered Copper Wire & Strips, Paper Covered Copper Wire & Strips.

1.1 Terms/ rights attached to Equity Shares

The Company has only one class of shares referred to as equity shares having face value of ' 5/- per share. Each holder of equity shares is entitled to one vote per share. The dividend proposed by Board of Directors is subject to approval of the Shareholders in the ensuring Annual General Meeting, except in the case of interim dividend.

As per the Companies Act, 2013 the holders of equity shares will be entitled to receive remaining assets of the Company, after the distribution of all preferential amounts in the event of the liquidation of the Company. The distribution will be in proportion to the number of equity shares held by the Shareholders.

1.2 Term Loan is secured by way of first pari passu charge with the consortium lenders over the existing immovable properties (excluding immovable property at Rakholi, Silvassa) and the present and future movable fixed assets of the Company and pari passu second charge with the consortium lenders over the present and future current assets of the Company and further secured by personal guarantees of some Directors and a relative of Directors.

1.3 Interest on External Commercial Borrowing ( ECB ) is hedged through Interest rate swap @ 5.51%.

1.4 Vehicle Loans are secured by way of hypothecation of specific vehicle.

1.5 Public Deposits taken by the Company are under the provisions of the Companies Act, 1956 and rules made there under. Fixed deposits carry interest rates from 9.50% to 11% depending upon their tenure.

1.6 Other Unsecured Loans carry interest rates from 11% to 13% with tenure more than two years.

2.1 Secured Working Capital Loans are secured by first pari passu charge with the consortium lenders over the entire current assets, present and future, such as stock, book debts, other receivables, etc. and pari passu second charge with the consortium lenders over the existing immovable properties (excluding immovable property at Rakholi, Silvassa) and the present and future movable fixed assets of the Company and further secured by personal guarantees of some Directors and a relative of Directors.

2.2 Personal guarantees have been given by some of the Directors for unsecured loans.

3.1 For relevant Accounting Policies refer Notes 2.3, 2.4, 2.8 & 2.13

3.2 Net Exchange Difference of Rs. 0.98 lacs ( Previous Year Rs. 4.02 lacs) on Factory Buildings and Rs. 2.62 lacs (Previous Year Rs. 5.45 lacs) on Plant & Machineries is capitalized.

3.3 Interest of Rs. 5.06 lacs ( Previous Year Rs. 12.24 lacs) on Plant & Machineries is capitalised.

3.4 Amount of depreciation adjusted to retained profit is being carrying amount of assets after retaining residual value, whose revised useful life as per schedule II of the Companies Act, 2013 has expired as on 1st April, 2014.

4.1 Rental Deposits include Rs. 28.00 lacs (P.Y. Rs. 45.50 lacs) due from related parties and Rs. 3.50 lacs (P.Y. Rs. 3.50 lacs) due from a Private Company in which one of the Director is interested (Note 34)

5 Contingent Liabilities and Commitments (Rs. in Lacs)

Particulars 2014-15 2013-14

A. Contingent Liabilities

Bank Guarantees (Suppliers) 282.00 852.00

Bank Guarantees (Job work) 50.00 50.00

Bank Guarantees (Channel Financing) 696.24 -

Bill Discounting 388.84 244.32

Income Tax Demand 51.52 76.80

Excise 666.00 666.00

Service Tax 8.95 8.95

B. Commitments

Estimated amount of contracts remaining to be executed and not provided for

i) On Capital Account (Net of advance) 368.47 75.77

ii) Corporate Social Responsibility 5.25 -

Estimated amount of Investment in Joint Venture remaining to be made - US$ 0.23 Lacs (P.Y. US$ 0.76 Lacs) 14.16 45.45

6 Excise Duty

Excise duty is accounted as and when the goods are cleared. Accordingly, excise duty amounting to Rs. 47.85 lacs has not been accounted and considered for valuation of finished stocks. The said practice has no effect on the Statement of Profit and Loss for the year.

7 Borrowing in Foreign Currency

The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2011 relating to Accounting Standard 11 (AS-11) notified by the Government of India on 29th December, 2011, under the Companies Act, 1956 read with Section 133 of the Companies Act, 2013 and rule 7 of the Companies (Accounts) Rules, 2014, which allows foreign exchange difference on long term monetary items to be capitalized to the extent they related to acquisition of depreciable assets and in other cases to amortize over the period of the monetary assets / liabilities or the period up to 31st March, 2020, whichever is earlier.

Exchange Difference loss of Rs. 5.80 Lacs (P.Y.Rs. 23.73 Lacs) related to acquisition of Depreciable Capital Assets has been adjusted to respective Fixed Assets.

Had this change not been effected, the profit for the year would have been lower by Rs. 5.74 Lacs (net of depreciation) (P.Y. Rs. 23.52 Lacs). Fixed Assets would have been lower by Rs. 5.74 Lacs (P.Y. Rs. 23.52 Lacs) and consequently the Surplus in Statement of Profit & Loss would have been lower by Rs. 5.74 Lacs (P.Y. Rs. 23.52 Lacs).

8 Financial and Derivatives Contract

The Company uses forward contracts to mitigate the risks associated with foreign currency fluctuations. The Company does not enter into any forward contracts which are intended for trading or speculative purposes.

9 The useful life of fixed assets were revised in accordance with Schedule II to the Companies Act, 2013. Accordingly the depreciation charge for the year ended March 31, 2015 is higher by Rs. 100.35 Lacs and further, in respect of the assets, whose revised useful life had expired prior to April 1,2014, an amount of Rs. 23.12 Lacs (net of deferred tax) has been adjusted from the retained earnings.

10 Details of Investments made & Guarantee given covered U/s 186(4) of the Companies Act, 2013

a) Details of Investments made are given in Note 13.

b) Corporate Guarantees given by the Company in respect of Loan taken by the Company's dealers under channel financing refer Note 28.

11 Previous year's figures

The Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2014

1 Company Overview

The Company is engaged in the business of manufacturing engineering goods such as Enamelled Copper Wire & Strips, Enamelled Alluminium Wire, Submersible Winding Wire, Fibre Glass Covered Copper Wire & Strips, Paper Covered Copper Wire & Strips.

2 Contingent Liabilities and Commitments (Rs. in Lacs) Particulars 2013-14 2012-13

A. Contingent Liabilities

Bank Guarantees 902.00 1,165.00

Bill Discounting 244.32 403.64

Income Tax Demand 76.80 72.49

Excise 666.00 670.40

Service Tax 8.95 21.43

B. Commitments

Estimated amount of contracts remaining to be executed on Capital Account 75.77 0.57 (Net of advance) not provided for

Estimated amount of Investment in Joint Venture remaining to be made -US $ 45.45 42.75 0.76 Lacs (P.Y. US $ 0.79 Lacs)

Letter of Credit -Nil (P. Y. US $ 4.39 Lacs) - 238.88

3 Excise Duty

Excise duty is accounted as and when the goods are cleared. Accordingly, excise duty amounting to Rs. 19.15 lacs has not been accounted and considered for valuation of finished stocks. The said practice has no effect on the Statement of Profit and Loss for the year.

4 Borrowing in Foreign Currency

The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2009 relating to Accounting Standard 11 (AS-11) notified by the Government of India on 31st March, 2009, which allows foreign exchange difference on long term monetary items to be capitalized to the extent they related to acquisition of depreciable assets and in other cases to amortize over the period of the monetary assets / liabilities or the period up to 31st March, 2020, whichever is earlier.

Exchange Difference loss of Rs. 23.73 Lacs (P.Y.Rs. 16.00 Lacs) related to acquisition of Depreciable Capital Assets has been adjusted to respective Fixed Assets.

Had this change not been effected, the profit for the year would have been lower by Rs. 23.52 Lacs (net of depreciation) (P.Y. Rs. 15.96 Lacs). Fixed Assets would have been lower by Rs. 23.52 Lacs (P.Y. Rs. 15.96 Lacs) and consequently the Surplus in Statement of Profit & Loss would have been lower by Rs. 23.52 Lacs (P.Y. Rs. 15.96 Lacs).

5 Disclosure in respect of Related Parties pursuant to Accounting Standard 18

List of Related Parties with whom transactions have taken place -

a) Key Management Personnel

Shri Tribhuvanprasad Kabra - Managing Director

Shri Mahendrakumar Kabra - Director

b) Relatives of Key Management Personnel

Shri Rameshwarlal Kabra - Father of Shri Tribhuvanprasad Kabra & Shri Mahendrakumar Kabra

Smt. Ratnidevi Kabra - Mother of Shri Tribhuvanprasad Kabra & Shri Mahendrakumar Kabra

Shri Shreegopal Kabra - Brother of Shri Tribhuvanprasad Kabra & Shri Mahendrakumar Kabra

Smt. Umadevi Kabra - Wife of Shri Tribhuvanprasad Kabra

Late Smt. Hemlata Kabra - Wife of Shri Mahendrakumar Kabra

Shri Mahesh Kabra - Son of Shri Tribhuvanprasad Kabra

Shri Sumeet Kabra Son of Shri Mahendrakumar Kabra

Shri Hemant Kabra - Son of Shri Mahendrakumar Kabra

c) Entities over which Key Management and their relatives are able to exercise significant influence

MEW Electricals Limited RR Kabel Limited

Ram Ratna International Ram Ratna Research & Holdings Private Limited

Ram Ratna Infrastructure Private Limited Shreegopal Kabra (HUF)

Kabel Buildcon Solutions Private Limited Rameshwarlal Kabra (HUF)

Ram Ratna Electricals Limited

d) Joint Venture

RR-Imperial Electricals Limited- Bangladesh

6 Financial and Derivatives Contract

The Company uses forward contracts to mitigate the risks associated with foreign currency fluctuations. The Company does not enter into any forward contracts which are intended for trading or speculative purposes.

7 Previous year''s figures

The Previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2013

Note 1 Contingent Liabilities and Commitments (Rs.in Lacs)

Particulars 2012-13 2011-2012

A. Contingent Liabilities

Bank Guarantees given 1,165.00 165.00

Bill Discounting 403.64 672.28

Income Tax Demands 72.49 58.64

Excise/Service Tax Demands 691.83 668.07

B. Commitments

Estimated amount of contracts remaining to be executed on Capital Account 0.57 29.28

(Net of advance) not provided for

Estimated amount of Investment in Joint Venture remaining to be made 42.75 95.30

Letter of Credit (USD 4.39 Lacs) 238.88

Note 2 Borrowing in Foreign Currency

The Company has opted for accounting the exchange difference arising on reporting of long term foreign currency monetary items in line with Companies (Accounting Standards) Amendment Rules, 2009 relating to Accounting Standard 11 (AS-11) notified by Government of India on 31st March, 2009, which allows foreign exchange difference on long term monetary items to be capitalized to the extent they related to acquisition of depreciable assets and in other cases to amortize over the period of the monetary assets /liabilities or the period up to 31st March, 2020, whichever is earlier.

Exchange Difference loss ofRs. 16.00 Lacs ( P.Y. Rs. 32.93 Lacs) related to acquisition of Depreciable Capital Assets has been adjusted to respective Fixed Assets.

Had this change not been effected, the profit for the year would have been lower by Rs. 15.96 Lacs (net of depreciation) (P.Y. Rs. 31.91 Lacs). Fixed Assets would have been lower by Rs. 15.96 Lacs (P.Y. Rs. 31.91 Lacs) and consequently the Surplus in Statement of Profit & Loss would have been lower by Rs. 15.96 Lacs ( P.Y. X 31.91 Lacs).

Note 3 Disclosure in respect of Related Parties pursuant to Accounting Standard 18 List of Related Parties with whom transactions have taken place -

(a) Key Management Personnel

ShriTribhuvanprasad Kabra Managing Director

Shri Mahendra Kumar Kabra Director

(b) Relatives of Key Management Personnel

Shri Rameshwarlal Kabra Father of ShriTribhuvanprasad Kabra & Shri Mahendrakumar Kabra

Shri Shreegopal Kabra Brother of Shri Tribhuvanprasad Kabra & Shri Mahendrakumar Kabra

Smt. Umadevi Kabra Wife of Shri Tribhuvanprasad Kabra

Smt. Hemlata Kabra (Passed away on 05-04-2013) Wife of Shri Mahendrakumar Kabra

Shri Hemant Kabra Son of Shri Mahendrakumar Kabra

(c) Entities over which Key Management and their relatives are able to exercise control or significant influence - MEW Electricals Limited Ram Ratna Electricals Limited

Ram Ratna International RR Kabel Limited

RR-lmperial Electricals Limited- Bangladesh TMG Global FZCO

Ram Ratna Infrastructure Private Limited Ram Ratna Research & Holdings Private Limited

Kabel Buildcon Solutions Private Limited Shreegopal Kabra (HUF)

Dues to Micro and Small Enterprises have been determined to the extent such parties have been identified on the basis of information collected by the Management. This has been relied upon by the auditors.

Note 4 Previous year''s figures

The Previous year''s figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2012

1.1 The Term Loans is pari passu secured by first charge with the consortium lenders over the existing immoveable properties (excluding immoveable property at Rakholi, Silvassa) and the present and future moveable fixed assets of the Company and pari passu second charge with the consortium lenders over the present and future Current Assets of the Company and further secured by personal guarantees of some directors and a promoter.

2.1 The Secured Working Capital Loans are pari passu secured by first charge with the consortium lenders over the entire Current Assets, present and future, such as stock, book debts, etc. and pari passu second charge with the consortium lenders over the existing immoveable properties (excluding immoveable property at Rakholi, Silvassa) and the present and future moveable fixed assets of the Company and further secured by personal guarantees of some directors and a promoter.

2.2 For the Unsecured Working Capital Loans, personal guarantees have been given by some directors and a promoter.

3.1 For relevant Accounting Policies refer Note No. 1.3, 1.4, 1.8, 1.12 & 1.13 under the head Significant Accounting Policies.

3.2 Exchange Difference of Rs. 5.64 lacs (Previous Year Rs. Nil) on Factory Buildings and Rs. 24.17 lacs (Previous Year Rs. 17.59 lacs) on Plant & Machineries is capitalized.

3.3 Interest of Rs. Nil (Previous Year Rs. 3.36 lacs) on Factory Buildings and Rs. 8.40 lacs (Previous Year Rs. 43.99 lacs) on Plant & Machineries is capitalized.

4.1 Rental Deposits include Rs. 45.50 lacs (Previous Year Rs. 45.50 lacs) due from related parties and Rs. 3.50 lacs (Previous Year Rs. 3.50 lacs) due from a Private Company in which one of the Director is interested (For details refer Note 30 under the head Notes to financial statements).

5.1 For mode of valuation for each class of Inventories refer Note 1.5 under the head Significant Accounting Policies.

6.1 For determination of cost refer Note 1.5 under the head Significant Accounting Policies.

Note 7 Contingent Liabilities and Commitments (Rs. in Lacs)

Particulars 2011-12 2010-11

Bank Guarantees given 165.00 160.00

Estimated amount of contracts/ Investment remained to be executed on Capital Account (Net of advance) (includes for Joint Venture) 124.58 298.73

Bill Discounting 672.28 73.02

Income Tax Demands 58.64 55.46

Excise/Service Tax Demands 668.07 4.76

Note 8 Excise duty

Excise duty is accounted as and when the goods are cleared. Accordingly, excise duty amounting to Rs. 54.73 lacs has not been accounted and considered for valuation of stocks. The said practice has no effect on the Statement of Profit and Loss for the year.

Note 9 Disclosure in respect of Related Parties pursuant to Accounting Standard 18

List of Related Parties where control exists and with whom transactions have taken place:

(a) Key Management Personnel:

Shri Tribhuvanprasad Kabra Shri Mahendrakumar Kabra (Managing Director) (Director)

(b) Relatives of Key Management:

Shri Rameshwarlal Kabra Smt. Hemlata Kabra

Shri Shreegopal Kabra (HUF) Smt. Priti Saboo

Smt.Umadevi Kabra Shri Shreegopal Kabra

Shri Hemant Kabra

(c) Entities over which Key Management Personnel and their Relatives are able to exercise significant Influence / Control:

Ram Ratna Research and Holdings Jag-Bid Finvest Pvt. Ltd. Pvt. Ltd.

Kabel Buildcon Solutions Pvt. Ltd. Ram Ratna Infrastructure Pvt. Ltd.

Ram Ratna International R R Imperial Electricals Limited, Bangladesh

RR Kabel Limited MEW Electricals Limited



Note 10 Previous year's figures

The Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary to confirm to this year's classification which is as per Revised Schedule VI.


Mar 31, 2011

1. Contingent Liabilities not provided for in respect of: (Rs. in Lacs)

Particulars 2010-11 2009-10

Bank Guarantees given 160.00 110.00

Estimated amount of contracts / Investment remained to be executed on Capital 298.73 1.39 Account (Net of advance)

Bill Discounting 73.02 35.18

Income Tax 55.46 30.58

Excise / Service Tax 4.76 1.15

2. Excise duty is accounted as and when the goods are cleared. Accordingly, excise duty amounting to Rs. 64.67 Lacs has not been accounted and considered for valuation of stocks. The said practice has no effect on the Profit and Loss Account for the year.

3. The Company has written to all suppliers enquiring about their status under MSMED Act, 2006. However information is not received from all the suppliers. In case of suppliers who have informed and are covered under the Act, the Company has made the payment in time.

4. Capacity and Production :

Notes:

a) Installed capacity is on a single shift and single product basis.

b) Production of Enamelled Copper Winding Wire, Enamelled Copper Strips and Enamelled Aluminium Winding Wire are exempt from the licensing requirement.

c) Previous years figures are written in brackets.

d) Major increase in capacity is effected in 4th quarter of the current year.

11. Disclosure in respect of Related Parties pursuant to Accounting Standard 18:

I) List of Related Parties where control exists and with whom transactions have taken place:

a) Key Management Personnel:

Shri Tribhuvanprasad Kabra (Managing Director) Shri Mahendra Kumar Kabra (Director)

b) Relatives of Key Management:

Shri Rameshwarlal Kabra Smt. Hemlata Kabra

Shri Shreegopal Kabra (HUF)) Smt. Priti Saboo

Smt.Umadevi Kabra

c) Entities over which Key Management Personnel and their Relatives are able to exercise significant influence/Control:

RR Kabel Limited MEW Electricals Ltd.

Ram Ratna Research and Holdings Pvt. Ltd. Jag-Bid Finvest Pvt. Ltd.

Kabel Buildcon Solutions Pvt. Ltd. Ram Ratna Infrastructure Pvt. Ltd.

M/c Ram Ratna International

5. Financial and Derivatives Contract:

The Company used forward contract to mitigate the risks associated with foreign currency fluctuations. The Company does not enter into any forward contract which is intended for trading or speculative purposes.

6. The Previous year's figures have been reworked, regrouped, rearranged and reclassified wherever necessary.


Mar 31, 2010

1. Contingent Liabilities not provided for in respect of

(Rs. in Lacs)

Particulars 2009-10 2008-09

Bank Guarantees given 110.00 110.00

Estimated amount of contracts remained to be executed on Capital Account 1.39 19.21

(Net of advance)

Bill Discounting 35.18 69.73

Income Tax 30.58 Nil

Excise / Service Tax 1.15 Nil

Notes:

a) Installed capacity is on a single shift and single product basis.

b) Production of Enamelled Copper Winding Wire, Enamelled Copper Strips and Enamelled Aluminium Winding Wire are exempt from the licensing requirement.

c) The production of Enamelled Copper Winding Wire include 2.276 MTs (P.Y. 4.512 MTs) subsequently converted in Scrap.

d) Previous years figures are written in brackets

2. Disclosure in respect of Related Parties pursuant to Accounting Standard 18

I) List of Related Parties where control exists and with whom transactions have taken place

a) Key Management Personnel

Shri Tribhuvanprasad Kabra (Managing Director) Shri Mahendra Kumar Kabra (Director)

b) Relatives of Key Management:

Shri Rameshwarlal Kabra Smt. Hemlata Kabra

Shri Shreegopal Kabra (HUF) Smt. Priti Saboo

c) Entities over which Key Management Personnel and their relatives are able to exercise significant nfluence/Control :

RR Kabel Limited MEW Electricals Limited

Ram Ratna Research and Holdings Private Limited Jag-Bid Finvest Private Limited

Kabel Buildcon Solution Private Limited M/s. Ram Ratna International

3. The Previous years figures have been reworked, regrouped, rearranged and reclassified wherever necessary.

 
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