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Notes to Accounts of Salzer Electronics Ltd.

Mar 31, 2014

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.0I.I985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited.

NOTE 2: ESOS - 2013:

Pursuant to the decision of the shareholders at their meeting held on 11.08.2012, the company has established "Salzer Electronics Limited Employees Stock Option Scheme 2012-13 (Salzer ESOS-2012-13) and the Scheme is being administered by the Employees Compensation Committee" of the Board of Directors. Since the vesting period runs over two financial years (2013-14 & 2014-15) and the employees have not yet exercised their right to vest on option till 31.03.2014, there is no impact on the financials of the company during the relevant financial year 2013-14 and hence the same has not been dealt with the accounts. The same will be suitably dealt with in the accounts relating to the financial year 2014-15, being the relevant financial year, wherein the vesting date falls and attains finality.

NOTE 3: CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.2909.10 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.610.63 Lakhs

3. Obligation towards Bank Guarantee is Rs.23.80 Lakhs.

NOTE 4: IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

NOTE 5:

In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

NOTE 6:

In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

NOTE 7:

The outstanding debtors for more than six months include Rs.30.04 lakhs due from M/s. Crompton Greaves Ltd, Mumbai.

NOTE 8:

Previous year''s figures have been regrouped/rearranged wherever necessary, to confirm with current year''s presentation.

NOTE 9:

Figures have been rounded off to the nearest rupee.

NOTE 9:

Research and Development:

The capital expenditure on R&D incurred during the year by the Company was Rs.435.26 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure Rs.133.62 lakhs is charged to the Profit & Loss account, of which Rs.80.35 lakhs is incurred for new products & process development. Rs.52.47 lakhs represented the salary and other expenses of R&D personnel which is included under Note No.22 - Employees Benefit expenses.


Mar 31, 2013

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.01.1985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited.

NOTE: 2. RELATED PARTY DISCLOSURE

Related parties with whom transactions have taken place during the year:

a. Key Management Personnel :

b. Relative of Key Management Personnel :

c. Enterprise owned or significantly influenced by key management personnel or their relatives:

NOTE: 3. CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.2016.05 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.272.40 Lakhs

3. Obligation towards Bank Guarantee is Rs.17.00 Lakhs.

NOTE: 4. IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.

NOTE: 5.

In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

NOTE: 6.

In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

NOTE: 7.

The outstanding debtors for more than six months include Rs.70.00 lakhs due from M/s.Crompton Greaves Ltd, Mumbai. The company has already taken legal course of action in the matter for recovery of the same. The company is confident of recovering this amount in full and so considered the debt as good.

NOTE: 8.

Previous year''s figures have been regrouped/rearranged wherever necessary, to confirm with current year''s presentation.

NOTE: 9.

Figures have been rounded off to the nearest rupee.

NOTE: 10. Research and Development:

The capital expenditure on R&D incurred during the year by the Company was Rs.400.91 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure Rs. 133.62 lakhs is charged to the Profit & Loss account, of which Rs.85.47 lakhs is incurred for new products & process development. Rs.48.15 lakhs represented the salary and other expenses of R&D personal which is included under Note No.22 Employees Benefit expenses.


Mar 31, 2012

NOTE 1: Corporate information & history:

Salzer Electronics Ltd is incorporated on 08.01.1985 for manufacture of electrical installation products such as CAM operated rotary switches, switch gear products and allied products and is an ongoing concern since then. The company is listed in the Bombay Stock Exchange Limited and Coimbatore Stock Exchange Limited.

a. Terms/rights attached to the Equity Shares.

* The Company has only one class of Equity share having par value of Rs. 10/- per share. Each holder of Equity shares is entitled to one vote per share. The company declares and pays Divided in Indian Rupees.

* The Dividend Proposed is as recommended by the Board of Directors and subject to the approval of the Shareholders' in the ensuing Annual General Meeting.

* For The year Ended 31st March 2012, The Amount of Dividend per share recognized as distributions to Equity is Rs. 1.20/- (31st March, 2011 : Rs. 1.60/-)

NOTE: 2. RELATED PARTY DISCLOSURE

Related parties with whom transactions have taken place during the year:

a. Key Management Personnel :

b. Relative of Key Management Personnel :

c. Enterprise owned or significantly influenced by key management personnel or their relatives:

NOTE: 3. CONTINGENT LIABILITIES

1. Towards Import obligation under EPCG Scheme is Rs.169.58 Lakhs

2. Letter of credit (foreign and inland) for import and purchase of raw materials is Rs.803.28 Lakhs

3. Obligation towards Bank Guarantee is Rs.192.24 Lakhs.

NOTE: 4. DETAILS OF DUES TO MICRO AND SMALL ENTERPRISES AS DEFINED UNDER THE MICRO, SMALL AND MEDIUM ENTERPRISES DEVELOPMENT ACT, 2006

The Company has sent request letter to all its suppliers calling for their status under MSMED Act, 2006 and since many of them have not responded, the amount payable to these parties could not be disclosed. However, no party has claimed any interest for the due payable by the Company details furnished below:

NOTE: 5. IMPAIRMENT OF ASSETS

No material Impairment of Assets has been identified by the Company and as such no provision is required as per Accounting Standards (AS 28) issued by the Institute of Chartered Accountants of India.


Mar 31, 2010

(A) A list of related parties and relationships (as identified and certified by the Management).

1. Parties where control exists: NIL

2. Other related parties with whom transactions have taken place during the year.

Party Name Relationship

Micro Instruments Ltd : Directors Interested Company

Salzer Exports Ltd : Directors Interested Company

Salzer Spinners Ltd : Directors Interested Company

Plitron Mfg. Inc : Directors Interested Firm (Collaborator)

K.Rangaswamy Naidu : Directors Interested Firm & Sons

Plitron Global Corp. : Directors Interested Company

Key Management Personnel :

R.Doraiswamy : Managing Director

D.Rajeshkumar : Joint Managing Director

P.Ramachandran : Whole Time Director

(g) Contingent Liabilities not provided for in the accounts :

1. Towards Import obligation Rs.6.14 lakhs under EPCG Scheme Bank guarantees (expiring in 2013-14)

2. Letter of credit (foreign and inland) Nil for Import And purchase of raw materials

3. Obligation towards Bank Rs.329.39 lakhs Guarantee

(h) Estimated amount of the contracts remaining to be executed on capital account and not provided for (net of advances )-Rs. NIL (Previous Year - Rs. NIL)

(i) Open Cash Credit facility from Canara Bank has been secured on hypothecation of Raw materials, Stock-in- process and Finished goods and first charge on Land & Building and Plant & Machinery. (Unit-I)

(j) Term Loan from Canara Bank, IF Branch, Coimbatore, includes funding of Wind Mill-IV, funding of Energy Saver Project. Loan is secured by assets purchased on the loans and extension of equitable mortgage of land and building of the Company.

(k) Term Loan from Bank of India, Saibaba Colony branch is for funding Windmill-Ill and purchase of Plant & Machineries. Loans are secured by the assets purchased under the loan and extension of equitable mortgage of land and building ofthe Company

(l) Term loan for L & T Finance Ltd is secured by first charge on Plant & Machineries of Unit IV purchased outofL&Tfunding.

(m) Working Capital facilities from Bank of India is secured by First Charge on Land, Building and Plant & Machinery of the Company and hypothecation of Stocks and Debtors and extension of Hypothecation of Wind Mill-Ill. (Unit-II)

(n) Working capital facility from Union Bank of India is secured by First Charge on inventories including imported stocks of Unit IV and first charge on Fixed Assets of Unit - IV except machineries items financed by L&T.

(o) All the Term loans and working capital loans are guaranteed by Mr.R.Doraiswamy, Managing Director and Mr.D.Rajeshkumar, Joint Managing Director.

(p) There is no overdue interest or principal amount as on 31st March 2010 in respect of Term loan and working Capital loan.

(q) In the opinion of the Board, the Current Assets, Loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

(r) In respect of debtors, creditors and other parties request for confirmations of balances were sent and reconciliations with the parties are carried out as an ongoing process.

(s) Sales include direct export of Rs. 1009.52 lakhs, indirect export of Rs.608.18 lakhs.

(u) Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, 2006.

The Company has sent request letter to all its suppliers calling for their status under MSMED Act, 2006 and since many of them have not responded, the amount payable to these parties could not be disclosed. However, no party has claimed any interest for the due payable by the Company

w) Salary & Wages include Remuneration of Rs.3086633/- paid to Whole time Directors - Managing Director, Joint Managing Director and Whole time Director, as stated under note 2(a) on accounts. No person was paid remuneration of Rs.200000/- per month or Rs.2400000/- per annum during the year.

(x) In the opinion of the Management there is no impairment loss on fixed assets during the year.

(y) The income tax assessment has been completed upto the Financial Year 2006 - 2007 (Assessment Year 2007 - 2008) and there is no disputed liability or arrears of tax to be paid. The Sales tax Assessment has been completed upto the year 2007 - 2008 and there is no disputed liability or pending appeals.

(z) Previous years figures have been regrouped/ rearranged wherever necessary, to confirm with current years presentation.

(za) Figures have been rounded off to the nearest rupee


Mar 31, 2009

A Scheme of Amalgamation (Schem) of SCL with the Company was sanctioned by the Honble High Court of Judicature at Madras vide its order dated 04.11.2009. The amalgamation is an amaglgamation in the nature of pooling of interest method as defined by Accounting Standard (AS)-14 "Accounting for Amalgamations" issued by the Institute of Chartered Accountants of India. Entries have been passed in the books of account to give effect to the scheme, as follows:

(i) With effect from the Appointed date i.e., 1st April, 2008, all the assets and liabilities of SCL are transferred to and recorded in the books of the Company at their fair values, aggregating to Rs. 15.45 crores.

(ii) 36,58,737 equity shares of Rs.10/- each at par are allotted to the equity share holders of SCL in the ratio of 9 equity shares of the Company for every 38 equity shares of SCL.

(iii) The difference of Rs.11.79 crores between (i) the net assets as stated in paragraph (a) above, and (ii) the values of equity shares, as stated in paragraphs (b) above respectively is credited to Amalgamation Reserve Account.

(iv) The Amalgamation Reserve of Rs.11.79 Crores in the books is credited to the General Reserve Account. Had the Scheme not prescribed the above treatment, the amount would have been treated as Capital Reserve as prescribed by AS-14.

(v) Accordingly, the brought forward balance of the Amalgamation Reserve of the Company has also been transferred to Reserve Account.

(vi) Inter company balances are cancelled.

(e) Previous years figures have been regrouped, wherever necessary, to conform with current years presentation. Current years figures include the figures of SCL (see Note 4 above) and hence not comparable with that of the previous year.

(a) Figures have been rounded off to the nearest rupee.

(b) There is no amount due from the Directors.

(c) Contingent Liabilities not provided for in the accounts :

1. Towards Import obligation under EPCG Scheme Bank guarantees (expiring in 2013-14) ] Rs.6.14 lakhs

2. Letter of credit (foreign and inland) for Import ] Rs.202.47 lakhs And purchase of raw materials

3. Obligation towards Bank Guarantee ] Rs.35.88 lakhs

(i) Estimated amount of the contracts remaining to be executed on capital account and not provided for (net of advances ) - Rs. NIL (Previous Year - Rs. NIL)

(j) As on 31st March 2009, there are no amounts due to be deposited with the Investor Education and Protection Fund, in respect of unclaimed matured fixed deposits and unclaimed dividends.

(k) Open Cash Credit facility from Canara Bank has been secured on hypothecation of Raw materials, Stock-in-process and Finished goods and first charge on Land & Building and Plant & Machinery. (Unit-I)

(l) Term Loan from Canara Bank, IF Branch, Coimbatore includes funding of Wind Mill-IV, funding of Energy Saver Project. Loan is secured by assets purchased on the loans and extension of equitable mortgage of land and building of the company.

(m) Term Loan from Bank of India, Saibaba Colony branch is for funding Windmill-III and purchase of Plant & Machineries. Loans are secured by the assets purchased under the loan and extension of equitable mortgage of land and building of the company.

(n) Term loan from ICICI is against hypothecation of companys car and secured by the car.

(o) Term loan for L & T Finance Ltd is secured by first charge on Plant & Machineries of Unit IV.

(p) Working Capital facilities from Bank of India is secured by First Charge on Land, Building and Plant & Machinery of the Company and hypothecation of Stocks and Debtors and extension of Hypothecation of Wind Mill-Ill. (Unit-II)

(q) Working capital facilities for Union Bank of India is secured by first charge on inventories including imported stocks of Unit-IV and second charge on machineries of Unit - IV.

(r) All the Term loans and working capital loans are guaranteed by Mr.R.Doraiswamy, Managing Director and Mr.D.Rajeshkumar, Joint Managing Director.

(s) There is no overdue interest or principal amount as on 31st March 2009 in respect of Term loan and working Capital loan.

(t) Interest on LIC loan accrued but not due is Rs.1.72 lakhs.

(u) Managing Directors remuneration Rs. 1,20,000/- per month, Joint Managing Directors remuneration Rs.1,20,000/- per month and the Whole Time Directors remuneration is Rs.8,500/- per month, excluding Bonus, Commission and PF Contribution.

(v) Sales are shown inclusive of duty and taxes collected. Sales include direct export of Rs.862.31 lakhs, Indirect export of Rs.810.91 lakhs, sale is inclusive of Excise duty of Rs.1076.34 lakhs and Sales Tax of Rs.406.39 lakhs and packing material receipts of Rs.5.23 lakhs.

(w) The sundry creditors include Rs.35.37 lakhs due to Micro and Small enterprises covered under "The Micro, Small and Medium Enterprises Act, 2006" to the extent such parties have been identified from the available information. The company has not received any claim for interest from any party covered under the said Act.

(x) Salary & Wages include Remuneration of Rs.27,80,273/- paid to Whole time Directors - Managing Director, Joint Managing Director and Whole time Director, as stated under note 2(a) on accounts. No person was paid a remuneration of Rs.2,00,000/- per month or Rs.24,00,000 per annum during the year.

(ab) The income tax assessment has been completed upto the Financial Year 2007 - 2008 (Assessment year 2008 - 2009) and there is no disputed liability or arrears of tax to be paid. The Sales tax assessment has been completed upto the year 2007 - 2008 and there is no disputed liability or pending appeals.

(ac) There is no amount due and outstanding to be credited to investor Education and Protection Fund.

 
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