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Notes to Accounts of Salzer Electronics Ltd.

Mar 31, 2016

d. Terms/rights attached to the Equity Shares.

- The Company has only one class of Equity Shares 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 ensuring Annual General Meeting.

- For the year Ended 31st March,2016, The amount of dividend per share recognized as distributions to Equity is RS,1.60.(31st March, 2015 : RS,1.50)

- In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts.

- The distribution will be in proportion to the number of equity shares held by the shareholders

c. Terms of offer

- the allotment of shares against warrants shall only be made in dematerialized form and shall be subject to the provisions of Memorandum of Association and Articles of Association of the Company;

- The price of each equity share to be issued in lieu of the Warrants will be calculated in accordance with the provisions of Regulation 76(1) of Chapter VII of the SEBI (Issue of Capital and Disclosure Requirements) Regulations 2009 (shortly "SEBI (ICDR) Regulations”) on the basis of the relevant date;

- Amount equivalent to at least 25% of the consideration determined in terms of Regulation 76 of the SEBI ICDR Regulations shall be paid against each Warrant on the date of allotment of Warrants and the balance consideration i.e. 75% shall be paid on or before allotment of equity shares pursuant to exercise of option against each such Warrant;

- In case the option to subscribe to equity shares against such Warrants is not exercised by the Allottee within 18 (eighteen) months from the date of allotment of the warrants, the warrants shall lapse and the consideration paid by the Allottee in respect of such Warrant shall be forfeited by the Company;

- The Warrants issued and allotted will be transferable within the Promoter Group subject to provisions of the SEBI (ICDR) Regulations and subject to receipt of such other approvals as may be necessary.

- Pursuant to Regulation 78 of the SEBI ICDR Regulations, the entire pre-preferential allotment shareholding of the Allottee, if any, shall be locked-in from the relevant date up to a period of six months from the date of trading approval granted by the Stock Exchange.

During the period under review, the Company issued 10,00,000 share warrants to the Promoters and Promoters group on July 14, 2015 at an issue price of RS,251.45 per warrant, having option to apply for and be allotted an equivalent number of equity shares of a face value of RS,10 each at a premium of RS,241.45 each within 18 months from the date of allotment of such warrants,

In terms of the issue, an amount equivalent to at least 25% of the issue price of H251.45 paid upfront and balance 75% paid on or before allotment of equity shares against exercise of 4,20,000 warrants, Upon the receipt of full consideration, the Company allotted 4,20,000 equity shares against exercise of warrants by the Promoters during the year.

c. Terms of Grant

- Granting Stock options constituting 10% of the Total paid up shares as at March 31, 2012,

- Options carry one year vesting period and five years exercise period from the date of vesting,

- The shares being so allotted upon exercise of stock options will carry two years lock in period,

- Promoters, Independent Directors and Nominee Directors are not entitled for any stock options,

- Options are not transferrable, not entitled for dividend and will not carry any voting rights and

- Grant price of the option fixed as RS,40/-.

NOTE :1

Employees'' "tock option "cheme 2012-2013

Pursuant to the decision of the shareholders, at their meeting held on 1 1.08.2012, the company has established an "Employees Stock Option Scheme 2012-2013” (ESOS 2012-2013 or the Scheme) being administered by the Employees Compensation Committee (ECC) of the Board of Directors.

Under the Scheme, option not exceeding 10,28,000 have been reserved to be issued to the eligible employees. The option granted under the scheme vest not less than 1 year from the date of grant of option. The option granted to the employees would be capable of being exercised within a period of 5 years from the date of vesting.

Accordingly, 10,28,000 granted to the employees on November 19,2013 with vesting period of one year at a grant price RS,40/-against the closing market price of RS,48.60/- on November 18,2013 resulting in a employees compensation cost of RS,88,40,800/-which has duly been written off during the vesting period.

All the granted options vested on November 19,2014 with the exercise period of five years there from. During the year, the Company has allotted 2,98,450 shares upon exercise of stock options by the employees. Upon the allotted aforesaid shares, an amount of RS,25,66,670/-, being the employees compensation cost for 2,98,450 shares, has been reversed from the total such compensation cost and added to the share premium account in accordance with Accounting Standards and the Company has received RS,10.60 Lacs on 26,500 options having been exercised by the employees during the quarter January to March 2016 and against which, allotment of equivalent shares are pending.

NOTE: 2

Energy Saver Projects (PPP)

During the financial year, the company has commenced executing contracts with corporations/ municipal authorities in Tamilnadu with obligations over five year period. In accordance with the contractual terms, the company has recognized revenue after supply of materials, installation and commissioning. Amount receivable in future years is shown under Other Non-Current Assets. Service revenues attributable to these contracts will be recognized on certification by corporation/municipal authorities on fulfillment of performance obligations.

NOTE: 3 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

The following table provides the total amount of transactions that have been entered into with related parties for the financial year 2015-2016

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 : PENDING LITIGATION

CESTAT Appeal regarding dispute between notification for amount of RS,36,94,921/-, out of whicRs, H12 Lakhs has been paid condition of CESTAT Appeal No.C.CUS.No.675/2014 dt.15.04.2014

Appeal bearing No. 1/2011 before the Labour court at Coimbatore filed by the Employee is pending in the Labour Court at Coimbatore.

NOTE 7 :

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 on-going process.

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,50.13 lakhs and shown as additions to fixed assets of the Company. The revenue expenditure RS,143.64 lakhs is charged to the Profit & Loss account, is incurred for new products & process development. Further RS,61.10 lakhs represented the salary and other expenses of R&D personal which is included under Note No.22 - Employees Benefit expenses


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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