Home  »  Company  »  Steel Strips Wheels  »  Quotes  »  Notes to Account
Enter the first few characters of Company and click 'Go'

Notes to Accounts of Steel Strips Wheels Ltd.

Mar 31, 2015

1. The Company has issued only one class of shares i.e. equity shares of Rs. 10/- per share. All equity shares rank pari passu and carry equal rights with respect to voting and dividend. The dividend proposed by the board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting,except in the case of interim dividend.

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.

2. a)Share Reserved for Issue under Options outstanding as at the end of the Year on unissued share capital Ason31st March 2015, 1,50,000, Employee Stock Options were Outstanding under the Steel Strips wheels Limited Employee Stock Option Scheme 2014of the Company. Each option Wooden title the holder there of to subscribe to one equity share of Rs. 10/-each tan exercise price of Rs. 100/- per share of the company.

51000 options, outstanding as on 31st march 2014 under the Deputy Managing Director employee stock option 2013,have been fully exercised on 02.01.2015 and accordingly 51000 equity sharesofRs.10/- each as fully paid-up have been allotted at an exercisepriceofRs.10per share.(Date of grant was 01.01.2014 and vesting period was1year).

(b) Steel Strips wheels Limited ,employee Stock OptionScheme2014

The Company has established an employee Stock Option scheme (ESOS)in accordance with the Securities and Exchange Board of India(Share Based Employee Benefits)Regulations, 2014 which has been approved by the Board of Directors and Shareholders. All Options under ESOS are Exercisable for Equity shares. The Company has granted 1,50,000 options to employees. Each option is exercisable for one equity shares of Rs. 10/- each fully paid up on a payment of exercise price. The exercise price is Rs. 100 per share. Date of grant is 02.03.2015 and vesting period is one year. Exercise period for the option is within 4yearsfromthe date of grant of the options.

The volatility of the options is based on the historical volatility of the share price applicable to the total expected life of each option.

3. No Shares out of the issued , subscribed and paid up Share Capital were alamedas Bonus Shares in the last five years by capitalization of Securities Premium Reserves.

4. No Shares out of the issued , subscribed and paid up Share Capital were allotted in the last five years pursuant to the various scheme of amalgamation without payment being received in cash.

Securities and Terms of repayments for Secured Long-term borrowings 1) Nature of Securities

a) Rupee Term Loans/Foreign currency loan/Term loans from NBFC

Term Loans from banks, financial institutions and others are secured / to be secured by equitable mortgage created/ to be created by deposit of title deeds of the Company's immovable properties for Dappar and Or Agawam units in addition to the deed of hypothecation charging Company's moveable properties, both present and future and Second charge created /to be created on raw materials, semi-finished goods, consumable stores, finished goods and book debts etc. All secured loans are further secured by personal guarantee of Chairman Director and/or Managing Director of the Company.

During the Year Company has made a provision for accrued liability on account of Gratuity and leave encashment on the basis of actuarial valuation based on projected unit method as required by AS 15 (Revised 2005).

Nature of Securities

Loan payable on Demand

1st pair passé charge by way of hypothecation of entire current asset constituted of raw materials, stock in process, finished goods, consumable stores, book debts, bills whether documentary or clean out standing monies, receivables both present and future of the company.

2nd pair- pass charge on entire moveable assets forming part of fixed/block assets of the company both present and future situated at Village Dappar Tensile Database, Distt. Mohali(Punjab),Orgadam, Chennai (TamilNadu)and Jamshedpur(Jharkhand).

Foreign Currency Loan

Buyer credit loans are secured by way of linen non-funds based working capital limits and counter indemnity the Company. All secured loans are further Secured by personal guarantee of Chairman and Managing Director of the Company.

- Land for Oragadam plantinChennaiisobtainedon99years of lease basis from State Industrial Promotion corporation of Tamilnadu Limited(SIPCOT),a Government of Tamilnadu enterprises. The total cost of Lease hold land is amortized over a period of 99 years. Accordingly a sum of Rs. 12.19 Lacs ( Previous year Rs.12.19 Lacs is amortised during the period).

Preoperative Expenses/Interest pending capitalization consist of expenses incurred /being incurred during implementation of project under installation of new fixed Assets. These will be capitalized with other fixed assets when project/ fixed assets shall commencecommecial production. Interest onterm Loan of Rs.68.69 Lacs (Previous year 78.59 Lacs) has been capitalized during the year.

No Assets of the Company is given on leasehold basis to outsiders.

Addition in assets during the year also includes there instatement of Foreign currency term Loans.

Note 5.

Intangible Assets under Development represents installation of SAP Software in the Company.

Note 6.

(i) Pursuant to applicability of Schedule II, of Companies Act 2013, with effect from 1st April 2014, Management has reassessed the useful life of tangible assets based on the internal and external technical evaluation. The Depreciation on fixed assets is provided on straight line method in accordance with applicable Schedule of the CompaniesAct,2013.

(ii Residual value so assets have been considered at 5% of the Original cost of the assets.

iii) Depreciation on assets carried At carrying amount as on 01.04.2014 and is depreciated as per Straight line method over the remaining useful life of The assets. Further the assets whose remaining useful life are nil, has been recognized in the opening balance of retained earnings. Refer the same as transitional provision of the Companies Act.

(iv) The depreciation calculation is based on the balance useful lives of Assets and shift working. Depreciation on assets used on double shift Basis have been increase by 50% for that period and Depreciation on assets used in triple shift basis have been calculate don the basis of100% for that period, Except for assets in respect of which no extra shift depreciation is permitted (indicated by Neasden Part C of the schedule).

v) Management has reassessed the useful life of plant and machineries based on the internal and external technical evaluation which is different from use full life prescribed under the act.The reassessed use ful lifeis tabulatedas:

As per the provision of Section 115JAA, MAT Credit receivable has-been recognized as an asset tithe extent there is convincing evidence that the Company will pay normal Income tax during the specified period. MAT credit is recognized as an assets in accordance with the recommendation contained in guidance note issued by Institute of Chartered Accountants of India. The said assets is created by the way of credit to the Profit and Loss account and shown as MAT credit Entitlement. The Company will Review the same at each balance sheet date and write down the carrying amount of MAT credit Entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal Income Tax during the specified period.

In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount considered reasonably necessary.

150000 No. of options exercisable into equivalent nose of equity shares of the face value of Rs 10 /- per share have been granted under ESOS Scheme.

The date of grants 02.03.2015 and proportionate shares expenses have been booked for the period as Expenses.Further out standing Options of 51000 shares, which were granted under "DMD ESOS 2013"have been fully exercised during the financial year 2014-15 &proportionate expenses have been accounted for the period as expenses.

The Company has a defined benefit gratuity and Earned Leave plan. Every employee who has completed five years or more of service gets gratuity on departure at15 days salary (last drawn salary) for each completed year of service. And accumulation of EL for Staffisupto60days and for Workers is 90 Days.

The Employee's gratuity fund scheme managed by a Trust (Life Insurance corporation of India is defined benefit plan. The Present Value of obligation is determined based on actuarial valuation using the projected unit credit method which recognize search period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

Net employee benefit expenses(recognized in Employee Cost).

The Following table summarizes components of net benefit expenses recognized in the profit and loss account and amount recognized in the balance sheet.

Note: 7

The retirement age has been uniformly taken as 60 years( PY58years).

The discount rates have been determined by reference to market yields as On 31st march 2015 on CG-Secs of currency and term consistent with those of liability obligations.

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market. Level of price neutralization likely to be affected through periodic wages increase over thenext5 to 10 years.

Pursuant to SEBI (Share based employee benefits) Regulation, 2014 the Board of Directors of the Company had approved to issue up to 150,000 Options exercisable into equivalent nos. of Equity Shares of the face value of Rs. 10/- each at Rs 100/- each Date of grant is02.03.2015. For Diluted EPS, the effect of this 150,000Option have been considered.

NOTE 8

A) Related Party Disclosure

a) Key Managerial Personnel Sh. Dheeraj Garg, (Managing Director)

Sh. Andra Veetil Unnikrishnan-(Deputy Managing Director)

Sh. Naveen Sorot ( CFO)

Sh. Shaman Jindal ( Company Secretary)

Sh. Rajender Kumar Garg, Chairman

b) Relatives of the KMP

Smt. Sunena Garg Ms. Priya Garg

SAB Industries Limited, SAB Udyog Limited, Malwa Chemtex

c) Enterprises over which key management

personnel (KMP) are able to exercise Udyog Ltd., Steel Strips Financial Pvt. Ltd., Munak International

significant control

Pvt. Ltd., S.S. Credits Pvt. Ltd., S.J. Mercantile Pvt. Ltd., Malwa

Holdings Pvt. Ltd., Munak Investment Pvt. Ltd., Steel Strips Holdings Pvt. Limited, Chandigarh Developers Pvt. Limited, DHG Marketing Pvt. Ltd & Hans Raj Trust.

NOTE 9.

SEGMENT REPORTING

A)PRIMARY SEGMENT(BUSINESS SEGMENT)

A business segment is a distinguishable component of an enterprise that is engaged in providing an individual product or service or a group of related products or services and that is subject to risks and returns that are different from those of other business segments. The Company's Operation predominately comprise of only one segment i.e Automotive Wheels. In view of the same, separate segmental information is not Required to be given as per the requirements of Accounting Standard 17.


Mar 31, 2014

Note 1(1)

- Land for Oragadam plant in Chennai is obtained on 99 years of lease basis from State Industrial Promotion corporation of Tamilnadu Limited (SIPCOT), a Governmentof Tamilnadu enterprises. The total cost of Lease hold land is amortised over a period of 99years. Accordingly a sum of Rs. 12.19 Lacs (Previous year Rs.12.19Lacs) is amortised during the period.

Note 1(2)

Preoperative Expenses/ Interest pending capitalizationconsist of expenses incurred/being incurred during implementation of project under installation of new fixedAssets. These will be capitalized with other fixed assets when project /fixed assets shall commence commercial production. Interest on term Loan of Rs. 78.59 Lacs (Previous year 191.52 Lacs) has been captalised during the year.

Note 1(3)

No Assets of the Company is given on lease hold basis to out siders.

Note 1(4)

Addition in assets during the year also includes there in statement of Foreign Currency Term Loans.

Note 1(5)

Intangible Assets under Development represents installation of SAP software in the Company.

Note 1(6)

Straight Line Method of Depreciation on Plant and Machineries is provided as under:

- In case of Oragadam ( Tamilnadu) unit on double shift basis exceptmachineries of Phase IInd, which is on single shift basis.

- Incase of Dappar (Punjab) unit on tripple shift basis.

- Incaseof Jamshedpur( Jharkhand)unit on Double Shiftbasis exceptutility plant and paint plantwhichis on single shift basis.

Note 1(7)

Depriciation ofassetsCosting Rs.5000 or Lessis provided 100%on proratabasis fordaysput in use.

The Income Tax Assessment of the Company has been completed upto the Assessment year 2006-07. There is no demand on company. Therefore no provision has been made by the company.

The Company has entered intoanagreement for purchaseof land admeasuring 304 kanals approxatvillage Bir Farozari, Distt. Panchkula, at costof Rs. 133.00 Lacs for settingupa auto component unit. The land has not yet been registeredinthe name of Company .Pending the same,the advance ofRs.35.00 Lacspaid bythe Companyhas beenshown asadvances recoverable and being under legal suit, a provisionforthe same has been made. The lower court has passed decree in favour of company and now the appeal have been filedinHigh Court byboth the parties.

Note :

a) Key Managerial Personnel :

Sh R.K Garg, Chairman & Sh. Dheeraj Garg, Managing Director, Ms. Ute Mayr, WholeTime Director, Sh. A.V. Unnikrishnan, Deputy Managing Director.

b) Enterprises over which key management personnel (KMP) are able to exercise significant control with which transactions have taken place duringtheyear.

SAB Industries Limited, SAB Udyog Limited, Malwa Chemtex Udyog Ltd., Steel Strips Financial Pvt. Ltd., Munak International Pvt. Ltd., S.S. Credits Pvt. Ltd., S.J. Mercantile Pvt. Ltd., Malwa Holdings Pvt. Ltd., Munak Investment Pvt. Ltd., Steel Strips Holding Pvt. Ltd. & Chandigarh Developer Pvt. Limited, DHG Marketing Pvt. Ltd. & Hans Raj Trust.

c) Relatives of the KMP with whom transactions have taken place :Smt. Sunena Garg and Ms. Priya Garg.

NOTE 2

CONTINGENT LIABILITIES NOT PROVIDED FOR ON ACCOUNT OF : Rs. in Lacs

PARTICULARS AS AT March31,2014 AS AT March 31, 2013

A. Letter of Credit/ Bank of Guarantee Outstanding for Import/ 2,565.22 885.12 Purchase of Raw Materials, Spares and Plant and Machinery

B. Estimated amount of Contracts remaining to be executed 1,953.87 1,325.25 on account of Capital account and not provided for (net of advances)


Mar 31, 2013

Note 1(1)

- Land for Oragadam plant is obtained on 99 years of lease basis from State Industrial Promotion corporation of Tamilnadu Limited(SIPCOT), a Government of Tamilnadu enterprises. The total cost of Lease hold land is mortised overa period of99 years. Accordingly a sum of Rs. 12.19 Lacs( Previous year Rs. 12.19 Lacs) is amortized during the period.

Note 1 (2)

Preoperative Expenses/ Interest pending capitalization consist of expenses incurred /being incurred during implementation of project under installation of new fixed Assets. These will be capitalized with other fixed assets when project /fixed assets shall commence commercial production. Interest on term Loan of Rs. 191.52 Lacs (Previous year 295.97 Lacs) has been capitalized during the year.

Note 1 (3)

No Company is given on lease hold basis to outsiders.

Note 1 (4)

Addition in assets during the year also includes the reinstatement of Foreign Currency Term Loans.

Note 1 (5)

Intangible Assets under Development represents installation of SAP software in the Company.

Note 1 (6)

Straight Line Method of Depreciation on Plant and Machineries is provided as under:

- In case of Oragadam (Tamilnadu) uniton double shift basis except machineries of Phase llnd, which is on single shift basis.

- In case of Dappar ( Punjab) unit on tripple shift basis.

- In case of Jamshedpur (Jharkhand) uniton Double Shift basis except utility plant and paint plant which is on single shift basis.

The Income Tax Assessment of the Company has been completed up to the Assessment year 2009-10. The Income tax Demand of Rs. 23.09 Lac has been raised on the Company for the Assessment Year 2010-11 under Summary Assessment. The company had filed an appeal before CIT (A) as well as a rectification application against the aforesaid demand which is pending to be disposed. Therefore no provision has been made by the company.

The Company has entered into an agreement for purchase of land admeasuring 304 kanals approx at village Bir Farozari, Distt. Panchkula, at cost of Rs. 133.00 Lacs for setting up and auto component unit. The land has not yet been registered in the name of Company . Pending the same , the advance of Rs. 35.00 Lacs paid by the Company has been shown as advances recoverable and being under legal suit, a provision for the same has been made. The lower court has given decree in favour of company and now the appeal have been filed in High Court.

As per the provision of Section 115JAA, MAT Credit receivable has been recognized as an asset to the extent there is convincing evidence that the Company will pay normal Income tax during the specified period. MAT credit is recognized as an assets in accordance with the recommendation contained in guidance note issued by Institute of Chartered Accountants of India. The said assets is created by the way of credit to the Profit and Loss account and shown as MAT credit Entitlement. The Company will review the same at each balance sheet date and write down the carrying amount of MAT credit Entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal Income Tax during the specified period.

In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount considered reasonably necessary.

The Company has a defined benefit gratuity and Earned Leave plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. And accumulation of EL for Staff is up to 60days andforWorkersis90Days

The following tables summarize the components of net benefit expense recognized in the Profit and Loss Account and the amounts recognized in the balance sheet.

The Employee''s gratuity fund scheme managed bya Trust (Life insurance corporation of India) is defined benefit plan. The Present Value of obligation is determined based on actuarial valuation using the projected unit credit method which recognizes each period of service as giving rise to additional unit of employee benefits entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

Note : The estimates of future salary increases, considered in actuarial valuation take account of inflation, seniority promotion and other relevant factors such as supply and demand in the employment market. The discount rates have been determined by reference to market yields as on 31st March 2013onCG Secs of currency and terms consistent with those of liability obligations.

Note:

a) Key Managerial Personnel: Sh R.K Garg, Chairman & Sh. Dheeraj Garg, Managing Director, Ms. Ute Mayr, Whole Time Director, Sh. A.V. Unnikrishnan, Deputy Managing Director.

b) Enterprises over which key management personnel (KMP) are able to exercise significant control with which transactions have taken place during the year.

SAB Industries Limited, SAB Udyog Limited, Malwa Chemtex Udyog Ltd., Steel Strips Financial Pvt. Ltd., Munak International Pvt. Ltd., S.S. Credits Pvt. Ltd., S.J. Mercantile Pvt. Ltd., Malwa Holdings Pvt. Ltd., Munak Investment Pvt. Ltd., Steel Strips Holding Pvt. Ltd. & Chandigarh Developer Pvt. Limited .

c) Relatives of the KMP with whom transactions have taken place: Smt. SunenaGarg and Ms. PriyaGarg.


Mar 31, 2012

NOTE 1

CONTINGENT LIABILITIES NOT PROVIDED FOR ON ACCOUNT OF :

Rs. in Lacs

March 31,2012 March 31,2011

A. Letter of Credit Outstanding for Import/Purchase of 2,532.61 1,444.78 Raw Materials, Spares and Plant and Machinery

B. Estimated amount of Contracts remaining to be executed 1,708.16 4,582.68 on account of Capital account and not provided for (net of advances)


Mar 31, 2011

CONTINGENT LIABILITIES NOT PROVIDED FOR ON ACCOUNT OF:

(Rupees in Lacs)

31.03.2011 31.03.2010 b) Estimated amount of 4,582.68 5,108.39 executed oZ3 account and not provided for (net or advances)

2. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

3. Depreciation on plant and machineries is provided as under

a. In case of Oragadam (Tamil Nadu) unit on double shift basis as the unit functioned on double shift.

b. In case of Dappar unit on triple shift basis as the unit functioned on triple shift.

c. In case of Jamshedpur (Jharkhand) unit on single shift basis as the unitfunctioned on single shift.

4. Debit and Credit Balances in the accounts of suppliers and others are subject to confirmation and reconciliation.

5. The Income Tax assessment of the Company has been completed upto Assmt Year 2008-09. The Income Tax demand of Rs.99.56 lakhs for the Assmt. Year 2008-09, out of which Rs.25.00 Lacs has been deposited and Rs.74.56 Lacs is pending, the same has been stayed by Chief Commissioner of Income Tax. The appeal of the Company is pending before Commissioner of Income Tax (Appeals), Chandigarh. In the opinion of the Company the demand is likely to be deleted in view of the decision of various appellate authorities and interpretation of other relevant provisions of the Income Tax Act, 1961. Accordingly, no provision has been made.

6. The Company had been granted exemption from Sales Tax under the Punjab Industrial Policies, 1989 and 1996 for its Dappar unit. The said exemption is available upto March, 2012 orsuch period when amount of exemption is fully utilized, whichever is earlier. From 01.06.2010 part of VAT liability is being set off under exemption and part is being paid as per applicable rules and regulations of the Punjab VAT Act, 2005. In respect of Chennai & Jamshedpur unit all sales tax liabilities are being paid as per applicable rules and provisions. Any liability on account of Sales Tax, if arises, shall be accounted for at the time of assessment.

7. Sundry Creditors include a sum of Rs. 367.45 Lakhs (Previous year 209.27 lakhs) due to Micro and Small Scale Undertakings. This information is required to be disclosed under the Micro, Small and Medium Enterprises development Act 2006, as determined to the extent the parties have been identified on the basis of information with the company.

8. During the year the Company has made a provision for accrued liability on account of Gratuity and leave encashment on the basis actuarial valuation based on projected unit method as required by AS 15 (Revised 2005) - Employee Benefits issued by The Institute of Chartered Accountant of India, New Delhi.

9. In compliance with AS 22 issued by ICAI on Accounting for the Taxes on Income, a sum of Rs. 541.50 lakhs (Previous Year Rs. 51.70 lakhs) has been considered as deferred tax liability in respect of timing difference for the year under consideration and the same has been charged to profit & loss account.

10. The company had entered into an agreement for purchase of land admeasuring 304 kanals approx at village Bir Farozari, Distt. Panchkula, at a cost of Rs. 133.00 lacs for setting up an auto component unit. The land has not yet been registered in the name of the company. Pending the same, the advance of Rs. 35.00 lacs paid by the company has been shown as 'Advances Recoverable' in the Schedule of 'Loans & Advances' and being Under Legal suit, a provision for the same has been made.

11. Related Party Disclosures

Detail of transactions entered into with related parties during the year as required by Accounting Standard 18 on "Related Party Disclosures" issued by the Institute of Chartered Accountants of India are as under:-

12. As per the provision of Section 115JAA, MAT Credit receivable has been recognized as an asset to the extent there is convincing evidence that the Company will pay normal Income Tax during the specified period. MAT credit is recognized as an asset in accordance with the recommendation contained in guidance note issued by the Institute of Chartered Accountants of India. The said assets is created by the way of credit to the Profit and Loss Account and shown as MAT Credit Entitlement. The company will review the same at each balance sheet date and write down the carrying amount of MAT credit entitlement to the extent there is no longer convincing evidence to the effect that the company will pay normal Income Tax during the specified period.

13. Pre-operative expenses pending capitalization (as per schedule 25) consists of expenses incurred/ being incurred during implementation of project or installation of new fixed assets. These will be capitalized with other fixed assets when project/ fixed assets shall commence commercial production.

14. Previous year figures have been re-grouped and rearranged wherever considered necessary to make them comparable with those of current year. Figures have been rounded off to the nearest rupee.

15. The company is in the business of manufacture and sale of wheel rims and there is no other segment as per Accounting Standard (AS -17) dealing with the segment reporting.

16. Land for Oragadam plant is obtained on 99 years lease basis from State Industries Promotion Corporation of Tamilnadu Limited (SIPCOT), a Govt of Tamilnadu enterprise. Total cost of leasehold land is amortized over a period of 99 years. Accordingly a sum of Rs. 12.19 lakh (previous year Rs. 42.68 lakh) is amortized during the year.

17. Schedule 1 to 26 form an integral part of the Balance Sheet, Profit & Loss Account and Cash Flow Statement.


Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR ON ACCOUNT OF:

(Rupees in Lacs)

As at As at 31.03.2010 31.03.2009

a) Letters of Credit 1,556.88 2145.00 outstanding for import/Purchase of Raw Material, Spares and Plant & Machinery.

b) Estimated amount of 5,108.39 4334.51 contracts remaining to be executed on capital account and not provided for (net of advances)

2. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated if realized in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of amount considered reasonably necessary.

3. Depreciation on plant and machineries is provided as under:

a. In case of Oragadam (Tamil Nadu) unit on single shift basis as the unit functioned on single shift.

b. In case of Dappar unit

- Paint plant, except for Truck line, on double shift basis upto 30/09/2009 and triple shift basis after that as the plant functioned accordingly.

- Paint plant for Truck line on single shift basis as the plant functioned on single shift basis.

- Other plant and machineries on double and/ or triple shift basis depending on use.

4. Debit and Credit Balances in the accounts of a few suppliers and others are subject to confirmation and reconciliation.

5. The Income Tax assessment of the Company has been completed upto Asstt Year 2007-08. The Income Tax demand of Rs. 99.44 lakhs for the Asstt. Year 2007-08 is pending and the same has been stayed by Chief Commissioner of Income Tax. The appeal of the Company is pending before Commissioner of Income Tax (Appeals), Chandigarh. In the opinion of the Company the demand is likely To be deleted in view of the decision of various appellate authorities and interpretation of other relevant provisions of the Income Tax Act, 1961. Accordingly, no provision has been made.

6. The Company had been granted exemption from Sales Tax under the Punjab Industrial Policies, 1989 and 1996 for its Dappar unit. The said exemption is available upto March, 2012 or such period when amount of exemption is fully utilized, whichever is earlier. In respect of Chennai unit all sales tax liabilities are being paid as per applicable rules and provisions. Any liability on account of Sales Tax, if arises, shall be accounted for at the time of assessment.

7. Sundry Creditors include a sum of Rs. 209.27 Lakhs (Previous year 91.72 lakhs) due to Micro and Small Scale Undertakings. This information is required to be disclosed under the Micro, Small and Medium Enterprises development Act 2006, as determined to the extent the parties have been identified on the basis of information with the company.

8. During the year the Company has made a provision for accrued liability on account of Gratuity and leave encashment on the basis actuarial valuation as required by AS 15 (Revised 2005) - Employee Benefits issued by The Institute of Chartered Accountant of India, New Delhi.

9. In compliance with AS 22 issued by ICAI on Accounting for the Taxes on Income, a sum of Rs. 51.70 lakhs (Previous Y ear Rs. 318.00 lakhs) has been considered as deferred tax liability in respect of timing difference for the year under consideration and the same has been charged to profit & loss account.

10. The company had entered into an agreement for purchase of land admeasuring 304 kanals approx at village Bir Farozari, Distt. Panchkula, at a cost of Rs. 133.00 lacs for setting up an auto component unit. The land has not yet been registered in the name of the company. Pending the same, the advance of Rs. 35.00 lacs paid by the company has been shown as Advances Recoverable in the Schedule of Loans & Advances and being Under Legal suit, a provision for the same has been made.

Note:

a) Key Management personnel: Sh. Dheeraj Garg, Managing Director

b) Enterprises over which Key Management Personnel (KMP) are able to exercise significant control with whom transactions have taken place during the year: SAB Industries Ltd.

c) Relatives of the Key Management Personnel (with whom transactions have taken place):

Sh. R. K. Garg, Chairman ana Director

11. Events after Balance Sheet date

The company issued and allotted 5,50,000 Equity Shares of Rs. 10/- each for cash, at a price of Rs. 105/- (Rupees One hundred five only) per equity shares i.e. at a premium of Rs. 95/- each per share to Sh. Dheeraj Garg on Preferential allotment basis on 6 April, 2010.

12. Pre-operative expenses pending capitalization (as per schedule 25) consists of expenses incurred/ being incurred during implementation of project or installation of new fixed assets. These will be capitalized with other fixed assets when project/ fixed assets shall commence commercial production. During the year the Company incurred such expenses on implementation of Jamshedpur project which shall be capitalized on commencement of commercial production. Accordingly these are carried to Capital work-in-process.

13. Previous year figures have been re-grouped and rearranged wherever considered necessary to make them comparable with those of current year. Figures have been rounded off to the nearest rupee.

14. The company is in the business of manufacture and sale of wheel rims and there is no other segment as per Accounting Standard (AS -17) dealing with the segment reporting.

15. Land for Oragadam plant is obtained on 99 years lease basis from State Industries Promotion Corporation of Tamilnadu Limited (SIPCOT), a Govt of Tamilnadu enterprise. Total cost of leasehold land is amortized over a period of 99 years. Accordingly a sum of Rs. 42.68 lakh is amortized during the year.

16. Schedule 1 to 26 form an integral part of the Balance Sheet, Profit & Loss Account and Cash Flow Statement.















 
Subscribe now to get personal finance updates in your inbox!