Mar 31, 2018
1. COMPANY OVERVIEW AND SIGNIFICANT ACCOUNTING POLICIES:
1.1 Description of Business
SHILCHAR TECHNOLOGIES LIMITED (âthe Companyâ), incorporated in the year 1986 is Public Limited Company and engaged in the business of manufacturing of âDistribution & Power Transformersâ as well âElectronics & Telecommunication Transformers.â
The Company made its public issue in the year 1995 and is listed on Mumbai Stock Exchange.
1.2 Basis of Preparation of Financial Statements
i. Compliance with Ind AS
The financial statements comply in all material aspects with Indian Accounting Standards (âInd ASâ) notified under section 133 of the Companies Act, 2013 (âthe Actâ), Companies (Indian Accounting Standards) Rules, 2015 as amended by Companies (Indian Accounting Standards) (Amendment) Rules, 2016 and other relevant provisions of the Act as applicable.
The financial statements up to year ended March 31, 2017 were prepared in accordance with the Accounting Standards notified under section 133 of the Act read together with paragraph 7 of the Companies (Accounts) Rules, 2014 (âIndian GAAPâ) and other relevant provisions of the Act as applicable.
These financial statements are the Companyâs first Ind AS financial statements and are covered by Ind AS 101- First time Adoption of Indian Accounting Standards. The transition to Ind AS has been carried out from the accounting principles generally accepted in India (âIndian GAAPâ) which is considered as the âPrevious GAAPâ for purposes of Ind AS 101. An explanation of how the transition to Ind AS has affected the Companyâs financial position, financial performance and cash flows is provided in Note 47 of the financial statement.
ii. Historical cost convention
The financial statements have been prepared on a historical cost basis, except the following:
- Certain financial assets and liabilities that are measured at fair value;
- Defined benefit plans - plan assets measured at fair value.
iii. Functional and presentation currency
These financial statements are presented in Indian Rupees, which is the Companyâs functional currency, and all values are rounded to the nearest lakhs, except otherwise indicated.
iv. Composition of Financial Statements
The financial statements comprise:
- Balance Sheet
- Statement of Profit and Loss
- Statement of Cash Flow
- Statement of Changes in Equity
- Notes to Financial Statements
1.3 Key Accounting Judgments, Estimates and Assumptions
In preparing these financial statements, management has made judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expense. Actual results may differ from these estimates
Estimates and underlying assumptions are reviewed on an ongoing basis. Any change in these estimates and assumptions will generally be reflected in the financial statements in current period or prospectively, unless they are required to be treated retrospectively under relevant accounting standards.
2. RECENT ACCOUNTING PRONOUNCEMENTS:
Ind AS 115: Revenue from contracts with Customers
On 28th March, 2018, Ministry of Corporate Affairs (MCA), has notified the Ind AS 115, Revenue from contracts with Customers. The core principal of new standard is that an Entity should recognise the revenue to depict the transfer of promised goods or services to Customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. Further, the new standard requires enhanced disclosures about the nature, amount, timing and uncertainty of revenue and cash flow arising from the entityâs contracts with customers. The effective date for adoption of Ind AS 115 is financial period beginning on or after 1st April, 2018. The Company will adopt the standard on 1st April, 2018 using cumulative catch up transition method and accordingly comparative for the year ending or ended 31st March, 2018 will not be retrospectively adjusted. The effect on adoption of Ind AS 115 on the operation of the Company is being assessed by the Company.
3 Earnings per share (EPS)
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
4 Disclosure as required under Ind AS 19 - Employee Benefits
[A] Defined contribution plans:
The Company makes contributions towards provident fund to defined contribution retirement benefit plan for qualifying employees. The provident fund contributions are made to Government administered Employees Provident Fund. Both the employees and the Company make monthly contributions to the Provident Fund Plan equal to a specified percentage of the covered employeeâs salary.
The Company recognised Rs. 12.93 Lakhs (P.Y : Rs. 11.22 Lakhs ) for provident fund contributions in the Statement of Profit and Loss.
[B] Defined benefit plan:
The Company makes annual contributions to Shilchar Technologies Limited Employeesâ Gratuity Fund managed by LIC, a funded defined benefit plan for qualifying employees. The scheme provides for payment to vested employees as under:
i) On normal retirement / early retirement / withdrawal / resignation: As per the provisions of Payment of Gratuity Act, 1972 with vesting period of 5 years of service.
ii) On death in service: As per the provisions of Payment of Gratuity Act, 1972 without any vesting period.
The following table sets out the status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at March 31, 2018.
5 Disclosure pursuant to Ind AS 17 - Leases
The Company has obtained premises for its business operations under operating lease or leave and license agreements. These are not non-cancellable and are renewable by mutual consent on mutually agreeable terms.
Lease payments are recognised in Statement of Profit and Loss under the head âRent Expenseâ in note no 32.
6 Disclosure related to Micro and Small Enterprises
The Company has certain dues to suppliers registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act). The Disclosure Pursuant to the said MSMED Act is as follows:
Note 1: 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 2: There is no interest paid during the year or payable at the end of the year to any of the Micro and Small Enterprises.
7 Corporate Social Responsibility (CSR)
As per section 135 of the Companies Act , 2013 , a CSR committee has been formed by the company. The areas for CSR activities are promoting education, art and culture, healthcare, destitute care and rehabilitation and rural development projects as specified in Schedule VII of the Companies Act, 2013.The details of amount required to be spent and actual expenses spent during the year is as under:
(a) Gross amount required to be spent by the company during the year: Rs. 28.03 Lakhs (Previous Year Rs. 18.16 Lakhs)
(b) Amount spent during the year on:
8 Operating Segments
The activities of the Company relate to only one segment i.e. Transformers & Parts.
Geographical Information
The analysis of geographical information is based on the geographical location of the customers. The geographical information considered for disclosure are as follows:
Property, Plant and Equipment by Geographical Locations
The Company has common PPE for producing goods for domestic as well as overseas market. There are no PPE situated outside India. Hence, additional segment-wise information for PPE / additions to PPE has not been furnished.
9 Financial Risk Management
The Companyâs Board of Directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework.
The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Companyâs activities.
(A) Credit risk
Credit risk is the risk of incurring a loss that may arise from a borrower or debtor failing to make required payments. Credit risk arises mainly from outstanding receivables from free market dealers, cash and cash equivalents, employee advances and security deposits. The Company manages and analyses the credit risk for each of its new clients before standard payment and delivery terms and conditions are offered.
(i) Credit risk management
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer and including the default risk of the industry, also has an influence on credit risk assessment. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business;
ii) Actual or expected significant changes in the operating results of the counterparty;
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations;
iv) Significant increase in credit risk on other financial instruments of the same counterparty;
v) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assests are written off when there is no reasonable expectations of recovery, such as a debtor failing to engage in a repayment plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized as income in the statement of profit and loss.
For trade receivables, the Company applies the simplified approach permitted by Ind AS 109 Financial Instrument, which requires expected lifetime losses to be recognized from initial recognition of the receivables. When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating expected credit losses, the Company considers reasonable and relevant information that is available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Companyâs historical experience and informed credit assessment and including forward looking information.
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Companyâs short-term, medium-term and long-term funding and liquidity management requirements. The Company manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.
(i) Maturities of financial liabilities
The tables herewith analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
(i) Foreign currency risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices -will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.
The risk is measured through a forecast of foreign currency for the Companyâs operations.
The Companys exposure to foreign currency risk at the end of the reporting period expressed in Indian Rupee, are as follows:
10 Capital Management Risk management
For the purpose of the companyâs capital management, equity includes equity share capital and all other equity reserves attributable to the equity holders of the Company. The Company manages its capital to optimise returns to the shareholders and makes adjustments to it in light of changes in economic conditions or its business requirements. The Companyâs objectives are to safeguard continuity, maintain a strong credit rating and healthy capital ratios in order to support its business and provide adequate return to shareholders through continuing growth and maximise the shareholders value. The Company funds its operation through internal accruals. The management and Board of Directors monitor the return on capital as well as the level of dividends to shareholders.
11 Disclosure as required by Ind AS 101 first time adoption of Indian Accounting Standards Transition to Ind AS
These are the Companyâs first Standalone Financial Statements prepared in accordance with Ind AS.
The accounting standards notified u/s 133 of the Companies Act, 2013 and the Accounting policies set out in note 1.2 have been applied in preparing the financial statements for the year ended March 31, 2018, the comparative information presented in these financial statements for the year ended March 31, 2017 and in the preparation of an opening Ind AS balance sheet at April 1, 2016 (The Companyâs date of transition). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP or Indian GAAP).
An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and notes.
A. Exemptions and exceptions availed
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied by the Company in the transition from previous GAAP to Ind AS.
A.1 Ind AS optional exemptions
Ind AS 101 permits a first time adopter to elect to continue with the carrying value for all of its Property, Plant and Equipment (PPE) as recognized in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments for decommissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets. Accordingly, the Company as elected to measure all of its PPE and Intangible assets at their previous GAAP carrying value.
A.1.2 Designation of previously recognized financial instruments
Ind AS 101 allows an entity to designate investments in equity instruments at Fair Value through Other Comprehensive Income (FVOCI) on the basis of the facts and circumstances at the date of transition to Ind AS. The Company has elected to apply this exemption for its investment in equity investments.
A.2 Ind AS Mandatory Exceptions A.2.1 Estimates
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error. Ind AS estimates as at April 1, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for following items in accordance with Ind AS at the date of transition as these were not required under previous GAAP: -Investment in equity instruments carried at FVOCI;and - Investment in mutual funds carried at Fair Value through Profit and Loss (FVTPL).
A.2.2 De-recognition of financial assets and liabilities
Ind AS 101 requires a first time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. However, Ind AS 101 allows a first time adopter to apply the derecognition requirements in Ind AS 109 retrospectively from a date of the entityâs choosing, provided that the information needed to apply Ind AS 109 to financial assets and financial liabilities derecognized as a result of past transactions was obtained at the time of initially accounting for those transactions. The Company has elected to apply the de-recognition provisions of Ind AS 109 prospectively from the date of transition to Ind AS.
A.2.3 Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
C. Notes to First time adoption
1 Fair valuation of investments
Under the previous GAAP, investments in mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability.Current investments were carried at lower of cost and fair value. Under Ind AS, these investments are required to be measured at fair value. The resulting fair value changes in investment in mutual funds have been recognized in retained earnings as at the date of transition and subsequently in the profit and loss for the year ended March 31, 2017. This increased the retained earnings by Rs.1.66 Lakhs as at March 31, 2017 (April 1, 2016 - Rs.0.12 Lakhs).
2 Loss allowance
On transition to Ind AS, the company has recognised impairment loss on trade receivables based on the expected credit loss model as required by Ind AS 109. Consequently, trade receivables have been reduced with a corresponding decrease in retained earnings on the date of transition and there has been an incremental provision for the year ended 31 March 2017 resulting in decreased in carrying amount by Rs.6.08 Lakhs as at 31 March 2017 and by Rs.6.61 Lakhs as at 1 April 2016.
3 Retained Earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS adjustments.
4 Deferred tax
Deferred tax have been recognized on the adjustments made on transition to Ind AS.
5 Reversal of Dividend provided
Under previous GAAP, dividend on equity shares, which was recommended by the board of directors after the end of reporting period but before the financial statement were recognised in the financial statements as a liability. Under Ind AS, such dividend are recognised when declared by the members in a general meeting. The effect of this change is an increase in total equity as at 31st march 2016 of Rs. 22.95 Lakhs, but does not affect profit before tax and total profit for the year ended 31st March 2017.
6 Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income instead of profit and loss. Under the previous GAAP, these remeasurements were forming part of the profit and loss for the year.
12 Event after reporting Period
The Board of Director recommended final dividend of Rs.2 per equity share for the financial year ended on 31st March, 2018. The payment is subject to approval of share holder in ensuing Annual General Meeting of the Company. (Previous year Rs. 3 per equity share).
13 These Financial Statements were authorised for issue in accordance with the resolution of the Board of Directors in its meeting held on 28th May, 2018.
14 The figures as on the transition date and previous year have been re-arranged and regrouped wherever necessary to make them comparable with those of the current year.
The accompanying notes are an integral part of the financial statements.
Mar 31, 2016
(d) The Company has a single class of equity shares which are having par value of Rs. 10 per equity share. All shares rank pari passu with reference to all rights relating thereto. Each Shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportions to their shareholding.
The Bank facilities of Working Capital being Cash Credit, Export Packing Credit and other Facilities obtained from Bank of Baroda are secured by Hypothecation of Stocks, Book Debts, Extension of charge on Current Assets for Letters of Credit, Hypothecation of Plant and Machinery (both present and future) and Equitable Mortgage of entire Factory Land and Building including Corporate Office of the Company. The Bills discounting facilities obtained from ICICI Bank are against LCâs of customers duly confirmed by their respective bankers
Micro and Small Enterprises:
With reference to amounts shown as payable to Micro, Small and Medium Enterprises, the information has been compiled in respect of parties to the extent they could be identified as Micro, Small and Medium Enterprises on the basis of information collected and available with the Company and same has been relied upon by the auditors. The Company deals with various ''--
Micro Small and Medium Enterprises on mutually accepted terms and conditions. No interest is payable if the mutual terms are adhered to by the Company.
Accordingly, no interest has been paid during the year and further no provision for interest payable to such units is required or has been made under Micro, Small and Medium Enterprises Development Act, 2006. Hence, information as required under Schedule VI of the Companies Act, 1956 relating to delayed payments and interest on delayed payments to Micro, Medium and Small Enterprises has not been compiled and presented.
Advances received from customers includes credits in the Bank Accounts of the Company not identifiable with a particular party. The same are adjusted against the relevant parties on receipt of information / confirmation of balances with the said parties.
1. Sundry Creditors and Sundry Debtors are as per books and have not been corroborated by circulation / confirmation of balances / reconciliation of accounts. Confirmations of parties concerned, for the amount receivable / due to them as per accounts of the company, are under process of reconciliation and adjustments required, if any, will be made as and when the accounts are settled.
2. In the opinion of the Board, the Current Assets, Loans and Advances which are considered good are expected to realize at least the amount at which they are stated, if realized in the ordinary course of business. Further, in the opinion of the Board, provision of all known liabilities has been adequately made in the accounts and as per management experience and estimates no additional provision is required for guarantees and warranties, liquidated damages etc
Legal Case Filed against Company by its Creditors-Rs.22,900/-
Legal Case Filed by Company against Debtors with amount still outstanding in books-Rs.78,780/-Guarantees:
The Company has given Corporate Guarantees for Performance of Products to the tune of Rs.18,185,778/- (p.y. Rs.24,108,111/-) to EPC Customers being Private Companies.
Bank Guarantees outstanding as on 31st March, 2016, amounted to Rs 173,036,439/- (p.y. Rs.186,864,755/-) and Letters of Credit outstanding as at 31st March 2016, amounted to Rs.77,929,348/- (p.y. Rs.85,096,478/-) against which the company has kept the Margin Money in the form of Fixed Deposit worth Rs. 29,357,317/- (p.y. Rs.30,673,311/-).
3. Commitments (to the extent not provided for)
Estimated amt. of contracts remaining to be executed on capital account: Nil (p.y. Nil)
Other Commitments : Nil
4. Proposed Dividend :
Amount of Rs.0.50 per Equity Share aggregating to Rs.1,906,700/- is being proposed as dividend on equity shares. There are no arrears of dividends.
5. Post Employment Benefits:
Provident Fund dues amounting to Rs. 1,104,269/- (PY Rs. 960,739/-) paid during the year being defined contributions has been charged to the Statement of Profit and Loss.
The value of obligation towards entitlement of employees accumulating earned leave and eligibility of compensation or encashment of the same is determined on the basis of the expected amount required to be paid as a result of actual unused entitlement standing to the credit of the employees as at end of the year based on current salary standards measured by actuarial valuation using projected unit credit method as at the balance sheet date. Accordingly a sum of Rs.1,435,213/- (p.y. Rs.2,243,699/-) has been determined as obligation as at the year end. The current year cost including actuarial gains / losses of Rs. 108,665/- (p.y Rs. 1,458,375/-) has been charged to the Statement of Profit and Loss Account and the benefit pay out of Rs. 917,151/- (p.y Rs. 507,336/-) has been deducted from the overall liability which is unfunded.
The Company has a defined benefit gratuity plan. As per the Payment of Gratuity Act, 1972, every employee who has completed five or more years of service is eligible for gratuity @ 15 days salary (last drawn) for every completed year of service with an overall ceiling of Rs. 10,00,000 (PY Rs. 10,00,000) at the time of separation from the Company or retirement whichever is earlier. The Company has taken a Group Gratuity cum Life Insurance Policy from Life Insurance Corporation of India (a qualifying policy ) and makes annual contributions to the same to create a fund to meet this defined benefit gratuity obligation.
6. Segment Reporting
With respect to Accounting Standard-17, the Management of the Company is of the view that the products offered by the Company are in the nature of Transformers and its related products, having the same risks and returns, same type and class of customers and regulatory environment. Hence, the business of production and sale of transformers and its related products belong to one business segment only.
7. Disclosure as per Accounting Standard 19 on âAccounting for Leasesâ
The Company has obtained certain premises and equipment on lease / leave and license basis. All the agreements fall under operational leases as per the accounting and recognition policy of the Company.
Weighted Average Number of Equity Shares 38,13,400*12/12 = 38,13,400 (P.Y. 38,13,400)
8. Related Party Transactions
The Company has identified all the related parties having transactions during the year, as per details given below, in line with Accounting Standard-18. In respect of the outstanding balance receivable as on 31.3.2016 no provision for doubtful debts / advances is required to be made.
9. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has considered the technical Valuation carried out by expert in the recent. In terms of the valuation report and further in absence of any indications, external or internal, as to any probable impairment of assets, no provision has been made for the same during the year under report. However, Valuation relating to Delhi Office and Furniture has not been obtained and hence it is not possible to determine the impairment, if any, on account of those assets.
10. Corporate Social Responsibility:
Gross Amount required to be spent by the Company during the year is Rs. 9.63 Lacs as per the provisions of Section 135 of the Companies Act, 2013 read with the rules thereon.
The entire amount has been spent by the Company during the year through contributions made to registered trusts inter-alia involved in the activities specified in schedule VII of the Companies Act, 2013 and having a established track record of more than 3 years for the same.
11. The Company did not have any forward contracts outstanding as at the year and hence no need for recognizing any mark-to-market losses in term of ICAI announcement dtd. 29th March, 2008 on âAccounting for Derivativesâ
12. The Company has acquired a new land for future expansion purposes in the preceding financial year. The company has incurred various expenditures in relation to the said land for the purpose of the development of the same. The development cost incurred in respect of the said land has been capitalized.
The Managing Director is eligible for Gratuity as well as Leave Encashment and is covered there-under along with other employees of the Company. However, the above amounts do not include contribution to gratuity fund and provision for leave encashment as well as perquisite for free usage of car as separate figures are not available.
13. The Company owns a Windmill which produces power. The income from units generated from windmill is booked as income and simultaneously the gross power cost of the Company is expensed off.
14. There are no amounts pending to be transferred to the Investors Education and Protection Fund as at the end of the year.
15. The figures in respect of previous year have been regrouped / recast wherever necessary to confirm to the current yearâs classification.
Mar 31, 2014
1. General Information of the Company.
SHILCHAR TECHNOLOGIES LIMITED ("the Company"), incorporated in the year
1986 is a Vadodara, Gujarat, based ISO 9001:2008 profit making and
dividend paying Public Limited Company engaged in the business of
manufacturing of "Distribution & Power Transformers" as well
"Electronics & Telecommunication Transformers."
The Company made its public issue in the year 1995 and is listed on
Mumbai Stock Exchange and Vadodara Stock Exchange.
2. The Company has a single class of equity shares which are having
par value of Rs. 10 per equity share. All shares rank pari passu with
reference to all rights relating thereto. Each Shareholder is eligible
for one vote per share held. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend. In the
event of liquidation, the equity shareholders are eligible to receive
the remaining assets of the Company after distribution of all
preferential amounts, in proportions to their shareholding.
Micro and Small Enterprises:
With reference to amounts shown as payable to Micro, Small and Medium
Enterprises, the information has been compiled in respect of parties to
the extent they could be identified as Micro, Small and Medium
Enterprises on the basis of information collected and available with
the Company and same has been relied upon by the auditors. The Company
deals with various Micro Small and Medium Enterprises on mutually
accepted terms and conditions. No interest is payable if the mutual
terms are adhered to by the Company.
Accordingly, no interest has been paid during the year and further no
provision for interest payable to such units is required or has been
made under Micro, Small and Medium Enterprises Development Act, 2006.
Hence, information as required under Schedule VI of the Companies Act,
1956 relating to delayed payments and interest on delayed payments to
Micro, Medium and Small Enterprises has not been compiled and
presented.
3. Sundry Creditors and Sundry Debtors are as per books and have not
been corroborated by circulation / confirmation of balances /
reconciliation of accounts. Confirmations of parties concerned, for the
amount receivable / due to them as per accounts of the company, are
under process of reconciliation and adjustments required, if any, will
be made as and when the accounts are settled.
4. In the opinion of the Board, the Current Assets, Loans and
Advances which are considered good are expected to realize at least the
amount at which they are stated, if realized in the ordinary course of
business. Further, in the opinion of the Board, provision of all known
liabilities has been adequately made in the accounts and as per
management experience and estimates no additional provision is required
for guarantees and warranties, liquidated damages etc
5. Contingent Liabilities (to the extent not provided for)
Claims against the Company not acknowledged as debt:
Service Tax Credits Reversed under Protest-Rs. 6,52,179/- (Decision
Pending).
VAT Demand on Assessment for 2007-08 Rs.1,08,366/- towards disallowance
of Input Tax Credit for the purchases from cancelled dealers and
Rs.32,510/- as penalty on it.
CST Demand on Assessment for the year 2007-08 Rs.4,45,455/- towards CST
on Freight charged in Invoices as well interest there on.
(Company has preferred Second Appeal at Tribunal - Ahmedabad for both
the disallowances after fully paying both the demand, hearing is
awaited.)
CST Demand on Assessment for 2008-09 Rs. 3,82,863/-
(Against above demand, the Company has filed appeal before Jt.
Commissioner of Commercial Tax (Appeals) against the Assessment Order
which is pending.)
CST Demand on Assessment for 2009-10 Rs. 19,58,175/-
(Against above demand, the Company has filed appeal before Jt.
Commissioner of Commercial Tax (Appeals) against the Assessment Order
which is pending.)
Legal Case Filed against Company by its Creditors-Rs.22,900/-
Legal Case Filed by Company against Debtors with amount still
outstanding in books-Rs.1,98,085/- Guarantees:
The Company has given Corporate Guarantees for Performance of Products
to the tune of Rs.2,42,77,391/- (p.y. Rs.2,42,77,391/-) to EPC
Customers being Private Companies.
Bank Guarantees outstanding as on 31st March, 2014, amounted to Rs
16,51,78,896/- (p.y. Rs.17,37,74,365/-) and Letters of Credit
outstanding as at 31st March 2014, amounted to Rs.7,31,82,256/- (p.y.
Rs. 9,69,49,897/-) against which the company has kept the Margin Money
in the form of Fixed Deposit worth Rs. 2,69,13,734/- (p.y. Rs.
2,95,73,729/-).
6. Commitments (to the extent not provided for)
Estimated amt. of contracts remaining to
be executed on capitalaccount : Nil (p.y. Nil)
Other Commitments : Nil
7. Proposed Dividend :
Amount of Rs. 1.00 per Equity Share aggregating to Rs. 38,13,400 is
being proposed as dividend on equity shares. There are no arrears of
dividends.
Post Employment Benefits:
Provident Fund dues amounting to Rs. 7,78,314 (PY Rs. 8,00,846) paid
during the year being defined contributions has been charged to the
Statement of Profit and Loss.
The value of obligation towards entitlement of employees accumulating
earned leave and eligibility of compensation or encashment of the same
is determined on the basis of the expected amount required to be paid
as a result of actual unused entitlement standing to the credit of the
employees as at end of the year based on current salary standards
measured by actuarial valuation using projected unit credit method as
at the balance sheet date. Accordingly a sum of Rs. 12,92,660 (p.y.
Rs. 9,71,463) has been determined as obligation as at the year end. The
current year cost including actuarial gains / losses of Rs. 8,38,301
(p.y Rs. 4,01,847/-) has been charged to the Statement of Profit and
Loss Account and the benefit pay out of Rs. 5,17,104/- (p.y Rs.
3,89,037/-) has been deducted from the overall liability which is
unfunded.
The Company has a defined benefit gratuity plan. As per the Payment of
Gratuity Act, 1972, every employee who has completed five or more years
of service is eligible for gratuity @ 15 days salary (last drawn) for
every completed year of service with an overall ceiling of Rs.
10,00,000 (PY Rs. 10,00,000) at the time of separation from the Company
or retirement whichever is earlier. The Company has taken a Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India ( a qualifying policy ) and makes annual contributions to the
same to create a fund to meet this defined benefit gratuity obligation.
8. Segment Reporting
With respect to Accounting Standard-17, the Management of the Company
is of the view that the products offered by the Company are in the
nature of Transformers and its related products, having the same risks
and returns, same type and class of customers and regulatory
environment. Hence, the business of production and sale of transformers
and its related products belong to one business segment only.
9. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has
considered the technical Valuation carried out by expert in the recent.
In terms of the valuation report and further in absence of any
indications, external or internal, as to any probable impairment of
assets, no provision has been made for the same during the year under
report. However, Valuation relating to Delhi Office and Furniture has
not been obtained and hence it is not possible to determine the
impairment, if any, on account of those assets.
10. The Company did not have any forward contracts outstanding as at
the year and hence no need for recognizing any mark- to-market losses
in term of ICAI announcement dtd. 29th March, 2008 on "Accounting for
Derivatives"
11. The Company has acquired a new land for future expansion purposes
in the preceding financial year. The company has incurred various
expenditures in relation to the said land for the purpose of the
development of the same. The development cost incurred in respect of
the said land has been capitalized.
12. The Company owns a Windmill which produces power. The Units of
Power generated from the Windmill are setoff against the monthly power
bill of the Company. Consequently, the power cost of the Company for
the year under report is net of the setoff of the power units generated
from the Windmill
13. There are no amounts pending to be transferred to the Investors
Education and Protection Fund as at the end of the year.
14. The figures in respect of previous year have been regrouped /
recast wherever necessary to confirm to the current year''s
classification.
Mar 31, 2013
1. General Information of the Company.
SHILCHAR TECHNOLOGIES LIMITED ("the Company"), incorporated in the year
1986 is a Vadodara, Gujarat, based ISO 9001:2008 profit making and
dividend paying Public Limited Company engaged in the business of
manufacturing of "Distribution & Power Transformers" as well
"Electronics & Telecommunication Transformers." The Company made its
public issue in the year 1995 and is listed on Mumbai Stock Exchange
and Vadodara Stock Exchange.
2. Sundry Creditors and Sundry Debtors are as per books and have not
been corroborated by circulation / confirmation of balances /
reconciliation of accounts. Confirmations of parties concerned, for the
amount receivable / due to them as per accounts of the company, are
under process of reconciliation and adjustments required, if any, will
be made as and when the accounts are settled.
3. In the opinion of the Board, the Current Assets, Loans and
Advances which are considered good are expected to realise at least the
amount at which they are stated, if realized in the ordinary course of
business. Further, in the opinion of the Board, provision of all known
liabilities has been adequately made in the accounts and as per
management experience and estimates no additional provision is required
for guarantees and warranties, liquidated damages etc
4. Contingent Liabilities (to the extent not provided for)
Claims against the Company not acknowledged as debt : Service Tax
Credits Reversed under ProtestÂRs. 652179/- (Decision Pending) VAT/CST
Demand on Assessment for 2007-08 Rs. 2455370 CST Demand on Assessment
Order for 2008-09 Â Rs. 382863/- (Against both of the above demands,
the Company has filed appeal before Jt. Commissioner of Commercial Tax
(Appeals) against the Assessment Order which is pending.)
Legal Case Filed against Company by its Creditors-Rs.1,64,340/- Legal
Case Filed by Company against Debtors with amount still outstanding in
books-Rs.78,780/- Guarantees :
The Company has given Corporate Guarantees for Performance of Products
to the tune of Rs.2,42,77,391/- (p.y. Rs.1,38,97,990/-) to EPC
Customers being Private Companies.
Bank Guarantees outstanding as on 31st March, 2013, amounted to Rs
17,37,74,365/- (p.y. Rs 19,06,75,639/-) and Letters of Credit
outstanding as at 31st March 2013, amounted to Rs 9,69,49,897/- (p.y.
Rs. 16,54,25,325/-) against which the company has kept the Margin Money
in the form of Fixed Deposit worth Rs. 2,95,73,729/- (p.y. Rs.
3,88,79,437/-).
5. Commitments (to the extent not provided for)
Estimated amt. of contracts remaining to be executed on capital account
: Nil (p.y. Nil) Other Commitments : Nil
6. Proposed Dividend :
Amount of Rs. 0.50 per Equity Share aggregating to Rs. 1,906,700 is
being proposed as dividend on equity shares. There are no arrears of
dividends.
7. Post Employment Benefits:
Provident Fund dues amounting to Rs. 8,00,846 (PY Rs. 8,43,479) paid
during the year being defined contributions has been charged to the
Statement of Profit and Loss.
The value of obligation towards entitlement of employees accumulating
earned leave and eligibility of compensation or encashment of the same
is determined on the basis of the expected amount required to be paid
as a result of actual unused entitlement standing to the credit of the
employees as at end of the year based on current salary standards
measured by actuarial valuation using projected unit credit method as
at the balance sheet date. Accordingly a sum of Rs. 9,71,463 (p.y. Rs.
9,58,653) has been determined as obligation as at the year end. The
current year cost including actuarial gains / losses of Rs. 4,01,847/-
(p.y Rs. 5,23,136/-) has been charged to the Statement of Profit and
Loss Account and the benefit pay out of Rs. 3,89,037/- (p.y Rs.
5,64,705/-) has been deducted from the overall liability which is
unfunded.
The Company has a defined benefit gratuity plan. As per the Payment of
Gratuity Act, 1972, every employee who has completed five or more years
of service is eligible for gratuity @ 15 days salary (last drawn) for
every completed year of service with an overall ceiling of Rs.
10,00,000 (PY Rs. 10,00,000) at the time of separation from the Company
or retirement whichever is earlier. The Company has taken a Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India ( a qualifying policy ) and makes annual contributions to the
same to create a fund to meet this defined benefit gratuity obligation.
8. Segment Reporting
With respect to Accounting Standard-17, the Management of the Company
is of the view that the products offered by the Company are in the
nature of Transformers and its related products, having the same risks
and returns, same type and class of customers and regulatory
environment. Hence, the business of production and sale of transformers
and its related products belong to one business segment only.
9. Disclosure as per Accounting Standard 19 on "Accounting for Leases"
The Company has obtained certain premises and equipment on lease /
leave and license basis. All the agreements fall under operational
leases as per the accounting and recognition policy of the Company.
10. Related Party Transactions
The Company has identified all the related parties having transactions
during the year, as per details given below, in line with Accounting
Standard-18. In respect of the outstanding balance receivable as on
31.3.2012 no provision for doubtful debts / advances is required to be
made.
11. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has
considered the technical Valuation carried out by expert in the recent.
In terms of the valuation report and further in absence of any
indications, external or internal, as to any probable impairment of
assets, no provision has been made for the same during the year under
report. However, Valuation relating to Delhi Office and Furniture has
not been obtained and hence it is not possible to determine the
impairment, if any, on account of those assets.
12. The Company did not have any forward contracts outstanding as at
the year and hence no need for recognizing any mark- to-market losses
in term of ICAI announcement dtd. 29th March, 2008 on "Accounting for
Derivatives"
13. The Company has acquired a new land for future expansion purposes
in the preceding financial year. The company has incurred various
expenditures in relation to the said land for the purpose of the
development of the same. The development cost incurred in respect of
the said land has been accounted under the head of Capital Work in
Progress.
14. Directors'' remuneration is within the limits prescribed by Section
II of Part II of Schedule XIII of the Companies Act, 1956. The amounts
paid included the following :
The Managing Director is eligible for Gratuity as well as Leave
Encashment and is covered there-under alongwith other employees of the
Company. However, the above amounts do not include contribution to
gratuity fund and provision for leave encashment as well as perquisite
for free usage of car as separate figures are not available.
15. The Company owns a Windmill which produces power. The Units of
Power generated from the Windmill are setoff against the monthly power
bill of the Company. Consequently, the power cost of the Company for
the year under report is net of the setoff of the power units generated
from the Windmill
16. There are no amounts pending to be transferred to the Investors
Education and Protection Fund as at the end of the year.
17. The figures in respect of previous year have been regrouped /
recast wherever necessary to confirm to the current years''
classification.
Mar 31, 2012
1. General Information of the Company.
SHILCHAR TECHNOLOGIES LIMITED ("the Company"), incorporated in the year
1986 is a Vadodara, Gujarat, based ISO 9001:2008 profit making and
dividend paying Public Limited Company engaged in the business of
manufacturing of "Distribution & Power Transformers" as well
"Electronics & Telecommunication Transformers."
The Company made its public issue in the year 1995 and is listed on
Mumbai Stock Exchange and Vadodara Stock Exchange.
(a) The Company has a single class of equity shares which are having
par value of Rs. 10 per equity share. All shares rank pari passu with
reference to all rights relating thereto. Each Shareholder is eligible
for one vote per share held. The dividend proposed by the Board of
Directors is subject to the approval of the shareholders in the ensuing
Annual General Meeting, except in case of interim dividend. In the
event of liquidation, the equity shareholders are eligible to receive
the remaining assets of the Company after distribution of all
preferential amounts, in proportions to their shareholding.
Long Term Unsecured Loans represent balance out of the External
Commercial Borrowings (ECB's) obtained by the Company from one of its
Foreign Equity holders to the tune of US$ 350000 for the purpose of its
erstwhile expansion project in terms of relevant rules of the Reserve
Bank of India. Company had initially obtained deferment on repayment of
the balance of the principal amount. However, Company has started
repayment of the Loan as per installments agreed upon. The interest as
well as exchange rate difference is being duly provided on the balance
amounts.
Deferred Tax Assets on Account of Provision for Diminution in Value of
Investments are not recognized since there is no reasonable certainty
that Company will have future taxable capital gains income against
which such deferred tax assets can be realized.
The Bank facilities of Working Capital being Cash Credit, Export
Packing Credit and other Facilities obtained from Bank of Baroda are
secured by Hypothecation of Stocks, Book Debts, Extension of charge on
Current Assets for Letters of Credit, Hypothecation of Plant and
Machinery (both present and future) and Equitable Mortgage of entire
Factory Land and Building including Corporate Office of the Company.
The Bank Facilities of Working Capital being Cash Credit Facilities,
Working Capital Demand Loans and other facilities obtained from
Standard Chartered Bank are secured by way of a pari passu charge on
the above assets of the Company. The Bills discounting facilities
obtained from Kotak Mahindra Bank and ICICI Bank are against LC's of
customers duly confirmed by their respective bankers
Micro and Small Enterprises :
With reference to amounts shown as payable to Micro, Small and Medium
Enterprises, the information has been compiled in respect of parties to
the extent they could be identified as Micro, Small and Medium
Enterprises on the basis of information collected and available with
the Company and same has been relied upon by the auditors. The Company
deals with various Micro Small and Medium Enterprises on mutually
accepted terms and conditions. No interest is payable if the mutual
terms are adhered to by the Company.
Accordingly, no interest has been paid during the year and further no
provision for interest payable to such units is required or has been
made under Micro, Small and Medium Enterprises Development Act, 2006.
Hence, information as required under Schedule VI of the Companies Act,
1956 relating to delayed payments and interest on delayed payments to
Micro, Medium and Small Enterprises has not been compiled and
presented.
In case of Sundry Debtors outstanding for more than one year, certain
sums are outstanding against deductions made on account of quality,
late delivery etc. by the parties to whom supplies were made. However,
the Management is pursuing the matters with the respective parties and
is confident of recovering the amount and hence no provision has been
made against the same. Similarly, in case of delayed delivery beyond
the stipulated terms of supply order, expected deduction for later
delivery based on contractual terms is not provided for since
Management is confident of being able to pursue the matters and
recovering the amounts, if deducted.
1. Sundry Creditors and Sundry Debtors are as per books and have not
been corroborated by circulation / confirmation of balances /
reconciliation of accounts. Confirmations of parties concerned, for the
amount receivable / due to them as per accounts of the company, are
under process of reconciliation and adjustments required, if any, will
be made as and when the accounts are settled.
2. In the opinion of the Board, the Current Assets, Loans and
Advances which are considered good are expected to realise at least the
amount at which they are stated, if realized in the ordinary course of
business. Further, in the opinion of the Board, provision of all known
liabilities has been adequately made in the accounts and as per
management experience and estimates no additional provision is required
for guarantees and warranties, liquidated damages etc
3. Contingent Liabilities (to the extent not provided for)
Claims against the Company not acknowledged as debt:
Service Tax Credits Reversed under Protest-Rs. 654717/- (Decision
Pending)
CST Demand on receipt of Appellate Order for 2006-07 - Rs. 310023
(Company is contemplating filing appeal before the Tribunal within 60
days)
VAT/CST Demand on Assessment for 2007-08 Rs. 2455370
Demand expected to be reduced to approx. Rs. 800000 on receipt of
effect of appellate order for 2006-07. Company has also filed appeal
before Jt. Commissioner of Sales Tax (Appeals) against the Assessment
Order which is pending. Demand for 2008-09 by Excise Dept-Rs.
3,40,420/- (disallowance of credit availed). Company has won its appeal
before the Asst. Commissioner of Central Excise. However, the
Department has preferred further appeal Legal Case Filed against
Company by its Creditors-Rs.1,64,340/-
Legal Case Filed by Company against Debtors with amount still
outstanding in books-Rs. 78,780 Guarantees :
The Company has given Corporate Guarantees for Performance of Products
to the tune of Rs.1,38,97,990/- (p.y. Rs.96,24,351/-) to EPC Customers
being Private Companies.
Bank Guarantees outstanding as on 31st March, 2012, amounted to Rs
19,06,75,639/- (p.y. Rs 11,81,47,311/-) and Letters of Credit
outstanding as at 31st March 2012, amounted to Rs 16,54,25,325/- (p.y.
Rs. 13,14,79,845/-) against which the company has kept the Margin Money
in the form of Fixed Deposit worth Rs. 3,88,79,437/- (p.y. Rs.
3,28,81,715/-).
4. Commitments (to the extent not provided for)
Estimated amt. of contracts remaining to be executed on capital
account: Ni (p.y. Rs. 300 lacs)
Other Commitments : Nil
5. Proposed Dividend :
Amount of Rs. 0.50 per Equity Share aggregating to Rs. 1,906,700 is
being proposed as dividend on equity shares.
There are no arrears of dividends.
6. Post Employment Benefits:
Provident Fund dues amounting to Rs. 8,43,479 (PY Rs. 8,85,579) paid
during the year being defined contributions has been charged to the
Statement of Profit and Loss.
The value of obligation towards entitlement of employees accumulating
earned leave and eligibility of compensation or encashment of the
same is determined on the basis of the expected amount required to be
paid as a result of actual unused entitlement standing to the credit of
the employees as at end of the year based on current salary standards
measured by actuarial valuation using projected unit credit method as
at the balance sheet date. Accordingly a sum of Rs. 9,58,653 (p.y. Rs.
10,00,222) has been determined as obligation as at the year end. The
differential of Rs. 523,136 (p.y. 689,439) between the obligation as
at the end of previous year, compensation paid during the year and the
obligation as the year end has been charged to the Statement of Profit
and Loss.
The Company has a defined benefit gratuity plan. As per the Payment of
Gratuity Act, 1972, every employee who has completed five or more years
of service is eligible for gratuity @ 15 days salary (last drawn) for
every completed year of service with an overall ceiling of Rs.
10,00,000 (PY Rs. 3,50,000) at the time of separation from the Company
or retirement whichever is earlier. The Company has taken a Group
Gratuity cum Life Insurance Policy from Life Insurance Corporation of
India ( a qualifying policy ) and makes annual contributions to the
same to create a fund to meet this defined benefit gratuity obligation.
7. Segment Reporting
With respect to Accounting Standard-17, the Management of the Company
is of the view that the products offered by the Company are in the
nature of Transformers and its related products, having the same risks
and returns, same type and class of customers and regulatory
environment. Hence, the business of production and sale of transformers
and its related products belong to one business segment only.
8. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has
considered the technical Valuation carried out by expert in the recent.
In terms of the valuation report and further in absence of any
indications, external or internal, as to any probable impairment of
assets, no provision has been made for the same during the year under
report. However, Valuation relating to Delhi Office and Furniture has
not been obtained and hence it is not possible to determine the
impairment, if any, on account of those assets.
9. The Company did not have any forward contracts outstanding as at
the year and hence no need for recognizing any mark- to-market losses
in term of ICAI announcement dtd. 29th March, 2008 on "Accounting for
Derivatives"
10. The Company has acquired new land for future expansion purposes.
Company has been making payments of the total determined consideration
in installments since the previous financial year. The acquisition of
land took a substantial period of time. Hence, after more than 6 months
had elapsed from the payment of the first installment, the Company
decided to capitalise the total borrowing costs related to the above
land acquisition based on the installments paid right from the date of
the first installment, in terms of the accounting practice followed by
the Company in consonance with Accounting Standard- 16 Borrowing
Costs,.
Accordingly, total Borrowing Costs of Rs. 49,65,436 have been worked
out and capitalized during the year to the cost of acquisition of the
said land. Since there are no separate borrowings for the said
acquisition, the costs have been worked out by calculation
proportionate interests from the total interest costs incurred by the
company. Out of the total capitalized borrowing costs a sum of Rs.
5,15,342 is relating to the last quarter of the previous financial year
when the first installment was paid and hence has been treated as prior
period income.
The Managing Director is eligible for Gratuity as well as Leave
Encashment and is covered there-under along with other employees of the
Company. However, the above amounts do not include contribution to
gratuity fund and provision for leave encashment as well as perquisite
for free usage of car as separate figures are not available.
11. The Company owns a Windmill which produces power. The Units of
Power generated from the Windmill are setoff against the monthly power
bill of the Company. Consequently, the power cost of the Company for
the year under report is net of the setoff of the power units generated
from the Windmill
12. There are no amounts pending to be transferred to the Investors
Education and Protection Fund as at the end of the year.
13. These financial statements have been prepared in the format
prescribed by the Revised Schedule VI to the Companies Act, 1956.
Previous periods figures have been recast / restated.
Mar 31, 2011
1. The Bank facilities of Working Capital being Cash Credit, Export
Packing Credit and other Facilities obtained from Bank of Baroda are
secured by Hypothecation of Stocks, Book Debts, Extension of charge on
Current Assets for Letters of Credit, Hypothecation of Plant and
Machinery (both present and future) and Equitable Mortgage of entire
Factory Land and Building including Corporate Office of the Company.
The Bank Facilities of Working Capital being Cash Credit Facilities,
Working Capital Demand Loans and other facilities obtained from
Standard Chartered Bank are secured by way of a pari passu charge on
the above assets of the Company. The Bills discounting facilities
obtained from Kotak Mahindra Bank and ICICI Bank are against LCs of
customers duly confirmed by their respective bankers
2. Long Term Unsecured Loans represent balance out of the External
Commercial Borrowings (ECBs) obtained by the Company from one of its
Foreign Equity holders to the tune of US$ 350000 for the purpose of its
erstwhile expansion project in terms of relevant rules of the Reserve
Bank of India. Company had initially obtained deferment on repayment of
the balance of the principal amount. However, from the current year the
Company has started repayment of the Loan as per installments agreed
upon. The interest as well as exchange rate difference is being duly
provided on the balance amounts.
3. Long Term Investments held by the Company to the tune of Rs.
990615/- were diminished fully till the end of the previous financial
year and have not been reflected in the Schedules to the Balance Sheet
since their net carrying cost has been reduced to Nil
No new Provision has been made for diminution (not considered as
temporary) in the value of Long Term Investments during the year.
4. Sundry Debtors are as per books and have not been corroborated by
circulation / confirmation of balances. As for Sundry Creditors,
confirmation of parties concerned, for the amount due to them as per
accounts of the company, are received for some of the parties and for
others, adjustments if any, required will be made as and when the
accounts are settled.
5. Other Current Liabilities include credits in the Bank Accounts of
the Company not identifiable with a particular party. The same are
adjusted against the relevant parties on receipt of information /
confirmation of balances with the said parties.
6. With reference to amounts shown as payable to Micro, Small and
Medium Enterprises, the information has been compiled in respect of
parties to the extent they could be identified as Micro, Small and
Medium Enterprises on the basis of information collected and available
with the Company and same has been relied upon by the auditors. The
Company deals with various Micro Small and Medium Enterprises on
mutually accepted terms and conditions. No interest is payable if the
mutual terms are adhered to by the Company.
Accordingly, no interest has been paid during the year and further no
provision for interest payable to such units is required or has been
made under Micro, Small and Medium Enterprises Development Act, 2006.
Hence, information as required under Schedule VI of the Companies Act,
1956 relating to delayed payments and interest on delayed payments to
Micro, Medium and Small Enterprises has not been compiled and
presented.
7. During the year, Company has sold certain very old machineries.
However, in absence of detailed Fixed Assets Register for the period
prior to the year 2000, the actual cost / revalued cost of particular
machineries sold as covered under the Gross Block of Plant & Machinery
in the Fixed Assets Schedule could not be ascertained. Hence, the
Profit or Loss on sale of these assets have been worked out by taking
the cost of these machineries as per Valuation Report on Machineries
and after adjusting the depreciation for period / years of use.
8. In the opinion of the Board, the Current Assets, Loans and
Advances which are considered good are expected to realise at least the
amount at which they are stated, if realized in the ordinary course of
business. Further, in the opinion of the Board, provision of all known
liabilities has been adequately made in the accounts and as per
management experience and estimates no additional provision is required
for guarantees and warranties, liquidated damages etc.
In case of Sundry Debtors outstanding for more than one year, certain
sums are outstanding against deductions made on account of quality,
late delivery etc. by the parties to whom supplies were made. However,
the Management is pursuing the matters with the respective parties and
is confident of recovering the amount and hence no provision has been
made against the same. Similarly, in case of delayed delivery beyond
the stipulated terms of supply order, expected deduction for later
delivery based on contractual terms is not provided for since
Management is confident of being able to pursue the matters and
recovering the amounts, if deducted.
9. The Managing Director is eligible for Gratuity as well as Leave
Encashment and is covered there-under alongwith other employees of the
Company. However, the above amounts do not include contribution to
gratuity fund and provision for leave encashment as well as perquisite
for free usage of car as separate figures are not available.
10. No Borrowing Costs were eligible for capitalization during the
year.
11. The Company owns a Windmill which produces power. The Units of
Power generated from the Windmill are setoff against the monthly power
bill of the Company. Consequently, the power cost of the Company for
the year under report is net of the setoff of the power units generated
from the Windmill.
12. Foreign Currency Monetary Item Translation Difference :
In terms of Notification issued by the Ministry of Corporate Affairs on
31st March, 2009 and accepted by the Institute of Chartered Accountants
of India, the Company had opted for accumulating the Exchange Rate
Difference arising on reporting of its Long-term Foreign Currency Item
viz. Foreign Currency Monetary Item Translation Difference Account
(FCMITD). As per the conditions stipulated in the said notification
for exercise of the above option, the Company has accumulated the
exchange rate difference arising on its Long Term External Commercial
Borrowings (ECB) upto 31st March, 2011 to the above account amounting
to Rs. 22,40,000/- including reversal of exchange rate gains arising in
the accounting periods commencing after 7th December, 2006.
As stipulated by the said notification, the above balance was to be
written off in two installments in 2009-10 and 2010-11. Accordingly,
after adjusting the gain on ECB for the 2009-10 of Rs. 1,70,417,
one-half of the balance of Rs. 5,39,583/- was been written off during
2009-10. After further adjusting the gain on ECB for the current year,
the balance outstanding as at the year end has been fully written off
13. The Company did not have any forward contracts outstanding as at
the year and hence no need for recognizing any mark-to- market losses
in term of ICAI announcement dtd. 29th March, 2008 on "Accounting for
Derivatives"
14. The Company has carried out transactions in Commodity Futures of
Aluminium and Copper with Dhaneshwari Commodity Services Ltd. as a tool
to hedge against the risk in fluctuation of prices of these essential
raw materials.
The only open position as at 31st March, 2011 was a Buy of 5000 Kgs. of
Copper. Net Profit / (Loss) of Rs. (16,534) shown in the Profit and
Loss Account above as well as balance appearing in the name of
Dhaneshvari Commodities Pvt. Ltd. is after Mark-to-Market adjustment
for the above open position.
15. Contingent Liabilities
Bank Guarantees outstanding as on 31st March, 2011, amounted to Rs
11,81,47,311/- (p.y. Rs 9,83,67,176/-) and Letters of Credit
outstanding as at 31st March 2011, amounted to Rs 13,14,79,845/- (p.y.
Rs. 6,41,90,080/-) against which the company has kept the Margin Money
in the form of Fixed Deposit worth Rs. 3,28,81,715 (p.y. Rs.
1,99,27,057/-).
The Company has given Corporate Guarantees for Performance of Products
to the tune of Rs.96,24,351/- (p.y. Rs. 6,14,679/-) to EPC Customers
being Private Companies.
Income Tax Assessment Demand for AY 2007-08 of Rs. 3,59,880/-. Company
has filed an appeal against the same before the Commissioner of Income
Tax (Appeals) Vadodara, which is pending to be heard. However, the
demand has been paid off by the Company.
Service Tax Credits Reversed under ProtestÃRs. 654717/- (Decision
Pending)
Demand for 2008-09 by Excise DeptÃRs. 3,40,420/- (disallowance of
credit availed). Company has won its appeal before the Asst.
Commissioner of Central Excise. However, the Department has preferred
further appeal VAT / CST Credit Reversal & Penalty for 2006-07 Ã Rs.
576170 Ã Appeal Filed is Pending Legal Case Filed against Company by
its Creditors-Rs.1,64,340/- Legal Case Filed by Company against Debtors
with amount still outstanding in books-Rs. 78,780 There are no other
claims against the Company to be acknowledged as debt. Estimated
amount of contracts to be executed on Capital Account: Rs. 200 Lacs
(p.y. Rs Nil)
16. Post Employment Benefits:
Provident Fund dues amounting to Rs. 8,85,578 (PY Rs. 8,59,740) paid
during the year being defined contributions has been charged to the
Profit and Loss Account.
Employee Benefits on account of compensated absences are considered as
Short Term Benefits considering the
Leave Encashment Policy and have been accounted based on the actual
leave standing to the credit of the employees as at the year end.
The Company has a defined benefit gratuity plan. Every employee who has
completed five or more years of service is eligible for gratuity @ 15
days salary (last drawn) for every completed year of service with an
overall ceiling of Rs. 10,00,000 (PY Rs. 3,50,000). The Company has
taken a Group Gratuity cum Life Insurance Policy from Life Insurance
Corporation of India (a qualifying policy) and makes annual
contributions to the same to create a fund to meet this defined benefit
gratuity obligation.
17. Segment Reporting
With respect to Accounting Standard-17, The Management of the Company
is of the view that the products offered by the Company are in the
nature of Transformers and its related products, having the same risks
and returns, same type and class of customers and regulatory
environment. Hence, the business of production and sale of transformers
and its related products belong to one business segment only.
18. Related Party Transactions
The Company has identified all the related parties having transactions
during the year, as per details given below, in line with Accounting
Standard-18. In respect of the outstanding balance receivable as on
31.3.2011 no provision for doubtful debts / advances is required to be
made.
19. Deferred Taxes
In compliance with Accounting Standard à 22 on Taxes on Income, the
Company has disclosed deferred tax liabilities and deferred tax assets
as under for the year ended 31st March, 2011 after charging the net
deferred tax liability for the year under report of Rs. Ã 4,46,604
(p.y. Rs. 8,60,259) the profit and loss account.
Deferred Tax Assets on Account of Provision for Diminution in Value of
Investments are not recognized since there is no reasonable certainty
that Company will have future taxable capital gains income against
which such deferred tax assets can be realized.
20. Disclosure as per Accounting Standard 19 on "Accounting for Leases"
The Company has obtained certain premises and equipment on lease /
leave and license basis. All the agreements fall under operational
leases as per the accounting and recognition policy of the Company.
21. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has
considered the technical Valuation carried out by expert in the recent.
In terms of the valuation report and further in absence of any
indications, external or internal, as to any probable impairment of
assets, no provision has been made for the same during the year under
report. However, Valuation relating to Delhi Office and Furniture has
not been obtained and hence it is not possible to determine the
impairment, if any, on account of those assets.
22. There are no amounts pending to be transferred to the Investors
Education and Protection Fund as at the end of the year.
23. The figures in respect of previous year have been regrouped /
recast wherever necessary to conform to the current years
classifications
Mar 31, 2010
1. Foreign Currency Monetary Item Translation Difference :
In terms of Notification issued by the Ministry of Corporate Affairs on
31st March, 2009 and accepted by the Institute of Chartered Accountants
of India, the Company had opted for accumulating the Exchange
2. During the year, the Company has sold its investments in shares of
Intech Agenci|s Private Limited (the then Company under thsj same
Management), The Company held 105000 eqiçty shares of Rs. 10/- each
costing a sum totaliof Rs. 10,50,000A. Provision for diminution in
value his been made for this entire amount of Rs. 10,00,000/- in
earlier years. During the year, these investments were disposed off for
Rs. 55000/-. Company hasrayersed the provision for diminutionto that
extent and adjusted the sale proceeds against the same
3. Long Term Investments held by the Company to thetune of sRss
é89985/r were diminished fully till the end of the previous financial
year and have not been reflected in the Schedules to the Balance Sheet
since their net carrying cost has been reduced to Nil
No new Provision has been made for diminution (not considered as
temporary) in the value of Long Term Investments during the year.
4. No Borrowing Costs were eligible for capitalization during the
year.
5. Sundry Debtors are as per books and have not been corroborated by
circulation / confirmation of balances. As for Sundry Creditors,
confirmation of parties concerned, for the amount due to them as per
accounts of the company, are received for some of the parties and for
others, adjustments if any, required will be made as and when the
accounts are settled.
6. Other Current Liabilities include credits in the Bank Accounts of
the Company not identifiable with a particular party. The same are
adjusted against the relevant parties on receipt of information /
confirmation of balances with the said parties.
7. With reference to amounts shown as payable to Micro, Small and
Medium Enterprises, the information has been compiled in respect of
parties to the extent they could be identified as Micro, Small and
Medium Enterprises on the basis pffrtfo^ and same has been relied upon
by the auditors. The Company deals with various Micro Small and Medium
Enterprises on mutually accepted terms and conditions. No interest is
payable if the mutual terms are adhered to by the Company.
Accordingly, no interest has been paid during the year and further no
provision for interest payable to such units is required or has been
made underMicro,. Small and Medium Enterprises Development Act, 2006.
Hence, informatioias required under Schedule VI of the Companies Act, 1
956 relating to delayed payments and interest c|n delayed payments to
Micro, Medium and Small Enterprises has not been compiled and
presented,
8. The Company owns a Windmill which produces power. The Units of
Power generated from the Windmill are setoff against the monthly power
bill of the Company. Consequently, the power cost of the Company for
the year under reports net of the setoff of the power units generated
from the Windmill.
9. During the year, Company has sold a piece of Land for Rs.
44,00,000. However, In absence of detailed Fixed Assets Register f
orjthe period pjior to the year 2000, the actual cost / revalued cost
of this particular land as covered under the Gross Block of Land in the
Fixed Assets Schedule could not be ascertained. The Company has worked
out the actual acquisition and development cost of Rs. 611795 and
treated the balance amount of Rs> 37,88,205lasProfit.on thesale.
10. In the opinion of the Board, the Current Assets, Loans and Advances
which are considered good are expected to realise at least the amount
at which they are stated, if realized in the ordinary course of
business. Further, in the opinion of the Board, provision of all known
liabilities has been adequately made in the accounts and as per
management experience and estimates no provision is required for
guarantees and warranties, liquidated damages etc.
11. Contingent Liabilities
Bank Guarantees outstanding as on 31st March, 2010, amounted to Rs
9,83,67,176/- (p.y. Rs 5,61,74,100/-) and Letters of Credit outstanding
as at 31st March 2010, amounted to Rs 6,41,90,080/- (p.y. Rs.
2,97,80,822/-) against which the company has kept the Margin Money in
the form of Fixed Deposit worth Rs. 1,99,27,057 (p.y. Rs.
1,03,42,206/-).
The Company has given Corporate Guarantees for Performance of Products
to the tune of Rs.6,14,679/ - to EPC Customers being Private Companies.
12. Post Employment Benefits:
Provident Fund dues amounting to Rs. 859740 (PY Rs. 855417) paid during
the year being defined contributions has been charged to the Profit and
Loss Account.
Long Term Employee Benefits on account of compensated absences have
been accounted for on actuarial basis using the Projected Unit Credit
Method.
The Company has a defined benefit gratuity plan. Every employee who has
completed five or more years of service is eligible for gratuity @ 15
days salary (last drawn) for every completed year of service with an
overall ceiling of Rs. 350000. The Company has taken a Group Gratuity
cum Life Insurance Policy from Life Insurance Corporation of India (a
qualifying policy) and makes annual contributions to the same to create
a fund to meet this defined benefit gratuity obligation.
13. Segment Reporting
With respect to Accounting Standard-17, The Management of the Company
is of the view that the products offered by the Company are in the
nature of Transformers and its related products, having the same risks
and returns, same type and class of customers and regulatory
environment. Hence, the business of production and sale of transformers
and its related products belong to one business segment only.
14. Related Party Transactions
The Company has identified all the related parties having transactions
during the year, as per details given below, in line with Accounting
Standard-18. In respect of the outstanding balance receivable as on
31.3.2010 no provision for doubtful debts / advances is required to be
made.
15. Deferred Taxes
In compliance with Accounting Standard - 22 on Taxes on Income issued
by the Institute of Chartered Accountants of India, the Company has
disclosed deferred tax liabilities and deferred tax assets as under for
the year ended 31st March, 2010 after charging the net deferred tax
liability for the year under report of Rs. 8,60,259 (p.y. Rs. 1,40,529)
the profit and loss account.
16. Impairment of Assets:
As a tool to measure to the value of fixed assets, the Company has
considered the technical Valuation carried out by expert in the
immediate past. In terms of the valuation report and further in absence
of any indications, external or internal, as to any probable impairment
of assets, no provision has been made for the same during the year
under report. However, Valuation relating to Delhi Office and Furniture
has not been obtained and hence it is not possible to determine the
impairment, if any, on account of those assets.
17. There are no amounts pending to be transferred to the Investors
Education and Protection Fund as at the end of the year.
18. The figures in respect of previous year have been regrouped /
recast wherever necessary to conform to the current years
classifications