Mar 31, 2018
1. Share Capital (Contd.)
D. Rights attached to the Equity Shares
The company has only one class of equity shares having a face value of Rs. 10/- per share with one vote per each share. The company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
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.
The above sensitivity analysis is based on a change in an assumption while holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to significant actuarial assumptions the same method (projected unit credit method) has been applied as when calculating the defined benefit obligation recognised within the Balance Sheet.
2. Other Information:
i. The company has invested planned assets with Life Insurance Corporation of India. Expected Return on Assets is based on rate of return declared by fund managers.
ii. Present value of defined benefit obligation:
Present value of the defined benefit obligation is calculated by using Projected Unit Credit method (PUC Method). Under the PUC method a âprojected accrued benefitâ is calculated at the beginning of the year and again at the end of the year for each benefit that will accrue for all active members of the Plan. The âprojected accrued benefitâ is based on the Planâs accrual formula and upon service as of the beginning or end of the year, but using a memberâs final compensation, projected to the age at which the employee is assumed to leave active service. The Plan Liability is the actuarial present value of the âprojected accrued benefitsâ as of the beginning of the year for active members.
B. Compensated absences amounting to Rs. 78,81,730 (March 31, 2017: 1,14,05,478) is recognised as expense and included in the Note 24âSalaries, wages and bonusâ.
3. Fair Value of Financial Instruments:
The management assessed that cash and cash equivalents, trade receivables, trade payables, and other current assets and liabilities approximate to their carrying amount largely due to the short-term maturities of these instruments.
The fair value of the financials assets and liabilities is reported at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values:
a. The fair values of the quoted instruments are based on price quotations at the reporting date. The fair value of unquoted instruments are based on the Net Asset Value provided by the Management as on the date of reporting.
b. Fair value of Interest free Security deposits are calculated by discounting future cash flows using rates currently available for debt on similar terms, credit risk and remaining maturities.
Description of significant observable inputs to valuation:
- Interest free Security Deposits (assets& liabilities):
Interest Rate factor has been considered at a rate currently available for debt on similar terms, by the company for discounting the amount receivable at the time of maturity.
4. Related Party Transactions:
During the year under reference the Company has entered following transactions with Related Parties:
Names of the Related parties and description of relationship:
i) Key Management Personnel
Name of the Key Description of Relationship
Management Personnel
Mr. V.K.Surendra Chairman
Mr. V.P.Mahendra Vice Chairman & Managing Director
Mr. K.U.Subbaiah Chief Executive Officer
Mr. P.M. Keshava* Chief Financial Officer
Mr.B.C.S. Iyengar# Whole Time Director (Refer Note below)
Mr.R.Thiyagarajan## Chief Financial Officer (Refer Note below)
Mr.Chinmaya Khatua Company Secretary
Mr. K.M. Pai Non-Executive Director
Mr. M.K. Bannerjee Non-Executive Director
Mr. V.V. Pravindra Non-Executive Director
Mr. R. Subramanian Non-Executive Director
Mr. V.T. Ravindra Non-Executive Director
Mrs. Siva Kameswari Vissa Non-Executive Director
ii) Enterprises over which the Shareholders of the Company, KMP/relatives of KMP exercise Control or significant influence:
1. VST Motors Private Limited
2. VST & Sons
3. Gove Finance Limited
4. Automobile Service Centre
5. Anand & Associates
Note: The details of related parties with whom the company has entered into transactions during the reporting periods have been disclosed.
# Mr.B.C.S.Iyengar resigned from the post of Whole time director with effect from April 30, 2016.
## Mr.R.Thiyagarajan served as CFO for the year 2016-17 and Whole time director and CFO for the period October 19, 2016 to March 31, 2017.
* Mr.P.M.Keshava has been appointed as CFO from June 01, 2017.
5. Financial Risk Management objectives and policies:
The company is exposed to financial risks arising from its operations and the use of financial instruments. The key financial risks include interest rate risk, foreign currency risk, market risk, credit risk and liquidity risk. The companyâs risk management policies focus on the unpredictability of financial markets and seek to, where appropriate, minimize potential and guidelines and there has been no change to the companyâs exposure to these financial risks or the manner in which it manages and measures the risks or the manner in which it manages and measures the risks.
The following sections provide the details regarding the Companyâs exposure to the financial risks associated with financial instruments held in the ordinary course of business and the objectives, policies and processes for the management of these risks.
i. Market Risk:
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market prices comprise three types of risk: currency rate risk, interest rate risk and other price risks, such as equity risk. Financial instruments affected by market risk include loans and advances, deposits, investments in debt securities, mutual funds, and other equity funds.
a. Interest rate risk:
Interest rate risk is the risk that the fair value or future cash flows of the Company and the Companyâs financial instruments will fluctuate because of changes in market interest rates. The Companyâs exposure to interest rate risk arises primarily from the investment in debt securities, investment in debt mutual funds and cash and cash equivalents.
The companyâs policy is to manage its interest rate risk by investing in fixed deposits, debt securities and debt mutual funds. Further, as there are no borrowings, the companyâs policy to manage its interest cost does not arise.
b. Foreign Currency Risk:
Currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. Currency risk arises when transactions are denominated in foreign currencies.
The Company has transactional currency exposures arising from Exports or imports that are denominated in a currency other than the functional currency. The foreign currencies in which these transactions are denominated are mainly in US Dollars ($). The Companyâs trade receivable and trade payable balances at the end of the reporting period have similar exposures.
The Company does not use any financial derivatives such as foreign currency forward contracts, foreign currency options or swaps for hedging purposes.
ii. Credit risk:
Credit risk is the risk of loss that may arise on outstanding financial instruments when a counterparty default on its obligations. The Companyâs exposure to credit risk arises primarily from trade and other receivables. For other financial assets (including investment securities, cash and short-term deposit), the Company minimizes the credit risk by dealing exclusively with high credit rating counterparties. The Companyâs objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Company trades only with recognised and creditworthy third parties. It is the Companyâs policy that all customers who wish to trade on credit terms are subject to credit verification procedures.
In addition, Outstanding customer receivables are regularly monitored and any credit to new customers are generally covered by appropriate security in the form of deposits.
a. Exposure to credit risk:
At the end of the reporting period, the Companyâs maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position. No other financial assets carry a significant exposure to credit risk.
b. Credit risk concentration profile:
At the end of the reporting period, there were no significant concentrations of credit risk. The maximum exposures to credit risk in relation to each class of recognised financial assets is represented by the carrying amount of each financial assets as indicated in the balance sheet.
c. Financial assets that are neither past due nor impaired:
Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment record with the Company. Cash and short-term deposits, investment securities that are neither past due nor impaired are placed with or entered with reputable banks, financial institutions or companies with high credit ratings and no history of default.
d. Financial assets that are either past due or impaired:
Trade receivables that are past due or impaired at the end of the reporting period, for which life time expected credit loss has been provided by the company according to its policy. These are shown in the balance sheet at carrying value less impairment/expected credit loss (information provided in note no. 11).
iii. Liquidity risk:
The risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.
The company ensures that it has sufficient cash on demand to meet expected operational demands, including the servicing of financial obligations; this excludes the potential impact of extreme circumstances that cannot reasonably be predicted.
The table below summarises the maturity profile of the Companyâs financial liabilities based on contractual undiscounted payments which are payable within 12 months.
6. Investment Property:
The company recognizes the income earned from renting of Investment property under the head other income with all the incidental expenditure in relation to the property under their respective sub-heads in Other expenses.
Note: The fair values of investment properties have been determined by independent valuers. The main inputs used are the rental growth rates, terminal yields and discount rates based on comparable transactions and industry data. All resulting fair value estimates for investment properties are included in level 3.
Depreciation and Useful Life: Depreciation method used by the entity for Investment Property is Straight line method. Useful life of buildings is considered as 30-60 years.
Transfer from PPE to Investment Property:
During the year 2017-18, the company has transferred Land amounting to 36,92,815/- from Property Plant and Equipment to Investment Property which are held for earning income by way of rental or for capital appreciation.
7. Capital Management:
Capital includes equity attributable to the equity holders of the parent. The primary objective of the capital management is to ensure that it maintain an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholderâs value.
The company manages its capital structure and make adjustments to it, in light of changes in economic conditions or its business requirements. To maintain or adjust the capital structure, company may adjust the dividend payment to shareholders return capital to shareholders or issue new shares.
Currently the company does not have any borrowings and maintains the entire capital in form of equity share capital.
8. The Board of Directors of the company have recommended 500% dividend (150% normal dividend and 350% Special dividend on account of Golden Jubilee year) on Equity share (Rs. 50 per share) for the Financial year 2017-18.
9. The Company has established internal financial controls over accounting of expenditure in the accounting system (ERP) and payments process. As per the established process, the entries accounted in ERP and EDI (Electronic Data Interchange) files generated from ERP for the payment purpose, are to be reviewed and approved by the Manager-Finance. However, Internal Financial Controls were not effective with respect to (1) review of payment voucher by Manager-Finance; (2) restriction of EDI files for editing; and (3) segregation of duties in respect of EDI file generation, which enabled the Deputy Officer - Finance to make fictitious accounting entries in the Companyâs ERP system to divert funds to his personal bank account by modifying the EDI files generated from ERP before uploading them in the bankâs website by the AGM - Finance.
The management has identified that in the month of April 2018, the fraudulent siphoning of funds by the Deputy Officer-Finance to the tune of Rs. 37,89,699, of which an amount of Rs. 33,50,000 has been recovered from the employee concerned as on date of May 11, 2018. The concerned employee has submitted his resignation and legal proceedings have been initiated, including the recovery of the balance amount. Further, Management is evaluating to appoint an independent agency to carry out a detailed investigation.
Subsequently, the Company has taken adequate steps for(1) review and approval of expenditure entries; (2) generation of EDI files with appropriate segregation of duties; and (3) review of EDI files before uploading in bankâs website.
10. First Time Adoption of Ind AS:
The company has adopted Indian Accounting Standards (Ind AS) as notified by the Ministry of Corporate Affairs with effect from April 01, 2017, with a transition date of April 01, 2016. These financial statements for the year ended March 31, 2018 are the first financial statements the company has prepared under Ind AS.
For all periods, up to and including the year ended March 31, 2017, the company has prepared its financial statements in accordance with generally accepted accounting principles and accounting standards notified under section 133 of the Companies Act 2013 read together with paragraph 7 of the Companies (Accounts) Rules 2014 (âPrevious GAAPâ). This note explains the principle adjustment made by the company in restating its Previous GAAP Balance Sheet.
Mandatory exceptions to retrospective applications:
i. Estimates:
On assessment of the estimates made under the previous GAAP financial statements, the company has concluded that there is no necessity to revise the estimates under Ind AS, as there is no objective evidence of an error in those estimates.
However, estimates that were required under Ind AS but not required under previous GAAP are made by the company for the relevant reporting dates reflecting conditions existing as at that date.
ii. De-recognition of Financial assets and liabilities:
There are no items of financial asset and liabilities which are required to be de-recognised as per Ind AS 109.
iii. Classification of Financial Assets:
The company has classified financial assets in accordance with conditions that existed at the date of transition to Ind AS.
Optional exemptions applied: i. Deemed-Cost Previous GAAP carrying amount:
For transition to Ind AS, the Company has elected to carry the values of Property Plant and Equipment, intangible assets and investment property recognized as of March 31, 2016 measured as per previous GAAP and used that carrying value as its deemed cost.
Explanatory Notes
1. The company has elected to carry the values of Property, Plant and Equipment as at March 31, 2016 measured as per previous GAAP and used that carrying value as its deemed cost. Thus, the revaluation reserve balance as on March 31, 2016 under IGAAP is adjusted.
2. Under previous GAAP, current investments were measured at lower of cost or fair value and long-term investments were measured at cost less diminution in value (which is other than temporary). Under Ind AS 109, Financial assets other than amortized cost are measured at fair value through Profit and Loss and are reported at fair value as at April 01, 2016.
Accordingly, the company has recognized a net fair value gain of Rs.72,06,347/-on non-current investments and Rs. 1,22,77,939/- on current investments as on April 01, 2016,by crediting to Retained Earnings.
3. Under previous GAAP, interest free security deposits received/given (that are refundable in cash on completion of its term) are recorded at their transaction value. Under Ind AS, the company has fair valued these security deposits as per Ind AS 109.
The difference between fair value and transaction value of the security deposits received, have been recognized as deferred revenue. Consequent to this change, the amount of security deposit received has been decreased by Rs.7,24,960/-. The Deferred income has been increased by Rs. 5,47,866/-. The differential amount of Rs.1,77,094/-has been credited to retained earnings as on April 01, 2016.
The difference between fair value and transaction value of the security deposits given, have been recognized as Prepaid lease rentals. Consequent to this change, the amount of security deposit given has been decreased by Rs.5,10,479/. The prepaid lease rentals has been increased by Rs. 4,64,402/-. The differential amount of Rs. 46,077/-has been debited to retained earnings as on April 01, 2016
4. The company has accounted for the deferred tax on the various adjustments between Previous GAAP and Ind AS at the tax rate at which they are expected to be reversed. Accordingly, the resultant deferred tax is recorded in the books of accounts as at April 01, 2016.
1. Under previous GAAP, current investments were measured at lower of cost or fair value and long- term investments were measured at cost less diminution in value (which is other than temporary). Under Ind AS 109, Financial assets other than amortized cost are measured at fair value through Profit and Loss and are reported at fair value as at April 01, 2016.
Accordingly, the company has recognized a net fair value gain of Rs. 1,94,84,286/-as on April 01, 2016,by crediting to retained earnings and as on the reporting date March 31, 2017 the company has additionally recognized a fair value gain on Investments ofRs. 10,49,58,134/- credited to Statement of Profit and Loss under the head Other Income.
2. Under previous GAAP, interest free security deposits received/given (that are refundable in cash on completion of its term) are recorded at their transaction value. Under Ind AS, the company has fair valued these security deposits as per Ind AS 109.
Consequent to this change, on security deposits received,the Company has recorded a deferred income of Rs. 3,44,899/and interest cost of Rs. 4,40,956/-for the year ended March 31, 2017.
On security deposits given, the company has recorded an interest income of Rs. 2,15,309/-and prepaid lease rentals expense of Rs. 2,07,835/-for the year ended March 31, 2017.
3. The company has accounted for the deferred tax on the various adjustments between Previous GAAP and Ind AS at the tax rate at which they are expected to be reversed. Accordingly, the resultant deferred tax is recorded in the books of accounts as at March 31, 2017.
Explanatory Notes:
1 Under Previous GAAP, Company followed the policy of recognizing the trade discounts, cash discounts and other discounts under the head Selling expenses. Based on the requirements of Ind AS 18, Revenue from operations is recognised at the fair value of consideration received/receivable, after deduction of any discounts, rebates, price reductions and incentives given to customers.
The change has resulted in re-classification of discount expenditure amounting to Rs. 19,77,34,166/- from Selling expenses to Revenue from Operations. However, there is no impact on the Total Comprehensive Income for the period ended March 31, 2017.
2 Under previous GAAP, current investments were measured at lower of cost or fair value and long-term investments were measured at cost less diminution in value (which is other than temporary). Under Ind AS 109, Financial Assets other than Amortized cost have been designated at fair value through profit or loss and reported at fair value as at March 31, 2017.
The resulting fair value changes of these investments are recognized in the Statement of Profit and Loss, amounting to Rs. 10,49,58,134/-.
3 Under previous GAAP, interest free security deposits received/given (that are refundable in cash on completion of its term) are recorded at their transaction value. Under Ind AS, the company has fair valued these security deposits as per Ind AS 109.
Consequent to this change, on security deposits received, the Company has recorded a deferred rental income of Rs. 3,44,899/- and interest cost of Rs. 4,40,956/- for the year ended March 31, 2017.
On security deposits given, the Company has recorded an interest income of Rs. 2,15,309/- and prepaid lease rentals expenditure of Rs. 2,07,835/ for the year ended March 31, 2017.
4 The company has accounted for the deferred tax on the various adjustments between Previous GAAP and Ind AS at the tax rate at which they are expected to be reversed. Accordingly, the resultant deferred tax is recorded in the books of accounts as at March 31, 2017.
5 Under Ind AS, re-measurements of post-employment benefits i.e., actuarial gain and losses and the return on plan assets, except for amounts included in the net interest expense on the net defined liability are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these measurements were forming part of the profit or loss. As a result, profit for the year ended March 31, 2016 is increased by Rs.1,66,15,787/-. There is no impact on the total equity as at March 31, 2017.
Mar 31, 2017
1 The Actuarial value of gratuity liability as at 31st March 2017 is Rs. 8,80,92,911/- (31st March, 2016 is Rs. 6,63,74,616/-) as per the workings under AS 15 (Revised) issued by the Institute of Chartered Accountants of India.
The following table sets out the funded status of the gratuity'' and the amounts recognized in the companyâs financial statements as at March 31, 2017.
Notes :
1 The estimates of future salary increases considered in actuarial valuation take into consideration for inflation, seniority, promotion and other relevant factors.
2 The expected return on plan assets is determined considering several applicable factors such as the composition o the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the company policy for plan assets is expected to vary from year to year reflecting the returns on matching Government bonds.
3 Related Party Transactions:
Information given in accordance with the requirements of Accounting Standard 18 - Related party disclosures notified by Ministry of Corpora Mafias under Section 33 of the Companies Act, 203.
Name of the Related Party Nature of Relationship
a) Mitsubishi Heavy Industries-VSD''esel Engines Private Limited Associates/Joint Ventures
b) Anand & Associates Associates/JointVentures
c) Automobile Service Centr e Associates/Joint Ventures
d) VST & Sons Associates/JointVentures
e) Gove Finance Limited Common Director
f) VST Motors Private Limited Company where directors are interested
g) MrV.P.Mahendr a Key Management Personnel
h) M!B.C.S.Iyengar Key ManagementPersonnel
i) MlR.Thiyagarajan# Key Management Personnel
* Managerial remuneration includes Commission.
MrB.C.S.Iyengar has resigned from the post of Whole time director with effect from April 30 2016.
# Mr.Thiyagarajan has served as Whole time director and CFO for the period October 19 , 2016 to March 31, 2017.
4 Corporate Social Responsibility (CSR) Expenditure
CSR amount required to be spent by the Company during the year is Rs. 2,21,87,888
Mar 31, 2016
(b) Terms/ rights attached to equity shares
The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity share is entitled to one vote per share.
In the event of liquidation of the company, the holders of equity shares would 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.
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
1 The actuarial value of gratuity liability as at 31st March 2016 is Rs.6,63,74,616/-( Rs.7,44,01,266) as per the workings under AS 15 (Revised) issued by the Institute of Chartered Accountants of India.
Gratuity report under AS-15 (Revised 2005) for the year ended March 31, 2016
The following table sets out the funded status of the gratuity plans and the amounts recognized in the companyâs financial statements as at March 31, 2016.
Notes :
2 The estimates of future salary increases considered in actuarial valuation take into consideration for inflation, seniority, promotion and other relevant factors.
3 The expected return on plan assets is determined considering several applicable factors such as the composition of the plan assets held, assessed risks of asset management, historical results of the return on plan assets and the companyâs policy for plan assets is expected to vary from year to year reflecting the returns on matching Government bonds.
4 Related Party Transactions:
Information given in accordance with the requirements of Accounting Standard 18 - Related party disclosures notified by Ministry of Corporate Affairs under sub section (3C) of Section 211 of the Companies Act, 1956 read with General circular 8/2014 dated April 04,2014, issued by the Ministry of Corporate Affairs.
Name of the Party Nature of Relationship
a) Mitsubishi Heavy Industries-VST Diesel Engines Private Limited Associates/Joint Ventures
b) Anand & Associates Associates/Joint Ventures
c) Automobile Service Centre Associates/Joint Ventures
d) VST & Sons Associates/Joint Ventures
e) Mr.V.P.Mahendra Key Management Personnel
f) Mr.V.V.Pravindra Key Management Personnel
g) Mr.B.C.S.Iyengar Key Management Personnel
5 a. These financial statements have been prepared in the format prescribed by the Revised Schedule III to the Companies Act 2013.
b. Previous year figures have been recast/restated to conform to the classification of the current year.
c. Company doesnât have any amount outstanding to be transferred to the Investor Education and Protection Fund.
d. Company doesnât have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
Mar 31, 2015
(A) Terms/ rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity share is entitled to one vote
per share.
In the event of liquidation of the Company, the holders of equity
shares would 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.
As per records of the Company, including its register of shareholders/
members, the above shareholding represent legal ownership of shares.
(d) Shares allotted as fully paid up by way of bonus shares (during 5
years preceding March 31, 2015)
Issued, Subscribed and Paid-up Capital includes 28,79,843 equity shares
of Rs.10 each, which were allotted as fully paid up by way of bonus
shares by capitalisation of Share Premium on 9th Feb, 2010.
2 Contingent Liabilities
a) Cases filed by customers in various
consumer courts not acknowledged as debts 43,79,000 43,79,000
b) Appeal filed by company in respect of 2,40,20,873 -
income tax matters
c) Estimated amount of contracts remaining
to be executed on capital accounts and not
provided for (net of advances). 42,42,977 4,22,57,591
d) Bank guarantees issued to Government
agencies by way of security 1,15,36,907 56,49,300
The vendor financing facility with M/s AXIS Bank Limited aggregating to
Rs.25.00 crores to the vendors of the company is with recourse to the
company on the delayed payment at interest rate of 2% p.a. over and
above the contracted rate.
3 Micro, Small and Medium Enterprises Development Act, 2006 (MSMED
Act):
Based on the information available with the company, there are no
Micro, Small and Medium enterprises, to which the company owes dues,
which are outstanding for more than 45 days as at March 31, 2015.
Further, no interest during the year has been paid or payable under the
terms of the MSMED Act, 2006.
4 The actuarial value of gratuity liablity as at 31st March 2015 is
Rs.7,44,01,266/- (Rs.6,61,58,554) as per the workings under AS 15
(Revised) Employee Benefits, notified by Ministry of Corporate Affairs
Under Subsection 3C of Section 211 of the Companies Act, 1956 read with
GeneralCircular 8/2014 dated April 04, 2014, issued by the Ministry of
Corporate Affairs.
Gratuity report under AS-15 (Revised 2005) for the year ended March 31,
2015
The following table sets out the funded status of the gratuity plans
and the amounts recognised in the company's financial statements as
at March 31, 2015.
Notes :
1. 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.
2. The expected return on plan assets is determined considering several
applicable factors such as the composition of the plan assets held,
assessed risks of asset management, historical results of the return on
plan assets and the company's policy for plan assets is expected to
vary from year to year reflecting the returns on matching Government
bonds.
3. Gratuity liability in case of employees of Precision Components
Division, Mysore are unfunded and the gratuity liability for the year
was Rs.9,11,997 (31st March, 2014 Rs.3,13,444) and the cumulative
liability as on 31st March 2015 was Rs.43,18,763 (31st March, 2014
Rs.34,99,015).
5 Related Party Transactions:
Information given in accordance with the requirements of Accounting
Standard 18 - Related Party disclosures notified by Ministry of
Corporate Affairs Under sub section (3C) of Section 211 of the
Companies Act, 1956 read with General circular 8/2014 dated April 04,
2014, issued by the Ministry of Corporate Affairs
Name of the Party Nature of Relationship
a) India Garage Service Station Associates/Joint Ventures
b) India Garage Petrol Pump Associates/Joint Ventures
c) MHI-VST Diesel Engines Private Ltd Associates/Joint Ventures
d) Anand & Associates Associates/Joint Ventures
e) Automobile Service Centre Associates/Joint Ventures
f) VST & Sons Associates/Joint Ventures
g) Mr.V.P.Mahendra Key Management Personnel
h) Mr.V.V.Pravindra Key Management Personnel
i) Mr.B.C.S.Iyengar Key Management Personnel
Mar 31, 2013
Note 1: Company overview
VSt tillers tractors Limited (VttL) was incorporated on December 18,
1967in Bangalore, India. It was promoted by the VSt Group, a well-known
business house in South India, in technical collaboration and joint
venture with Mitsubishi Heavy Industries and Mitsubishi Corporation,
Japan for the manufacture of Power tillers and Diesel Engines. the
plant went into production in the year 1970.
In 1984, an additional technical and financial collaboration with
Mitsubishi Agricultural Machinery Company Ltd, Japan for the
manufacture of 18.5 HP, 4 wheel drive tractor was entered into. the
company was incorporated for the purpose of manufacture and or deal
with tractor, tillers, Diesel Engines, Harvestors, Reapers, Binders,
transplanters/ planters, trench Cutters, Front end Loaders and all
kinds of allied agricultural, plantation and horticultural machinery
including attachments, components, accessories, spares implements and
other equipments required for the satisfactory functioning of the
agricultural equipments.
2 Contingent Liabilities
a) Cases fled by customers in various consumer
courts not acknowledged as debts 43,79,000 47,04,000
b) Estimated amount of contracts remaining to
be executed on capital accounts and not
provided for (net of advances). 8,68,66,454 4,64,44,394
c) Bank Guarantees issued to Government
agencies by way of security. 1,33,62,500 63,80,500
the Vendor Financing Facility with M/S. Axis Bank Ltd., aggregating to
Rs. 25.00 Crores to the vendors of the Company is with recourse to the
Company on the delayed payments at interest rate of 2% p.a over and
above the contracted rate.
3 Micro, Small and Medium Enterprises Development Act, 2006 (MSMED
Act):
Based on the information available with the company, there are no
Micro, Small and Medium enterprises, to which the company owes dues,
which are outstanding for more than 45 days as at 31st March, 2013.
Further, no interest during the year has been paid or payable under the
terms of the MSMED Act, 2006.
4 The actuarial value of gratuity liability as at 31st March 2013 is
Rs.5,74,97,126/- (Rs.5,11,09,025) as per the workings under AS
15(Revised) issued by the institute of charted accountants of India.
Gratuity Report under AS-15 (Revised 2005) for year ended March 31,
2013
the following tables sets out the funded status of the gratuity plans
and the amounts recognized in the Company''s fnancial statements as at
March 31, 2013.
5 Previous year fgures have been regrouped/reclassifed to conform to
the classifcation of the current year.
Mar 31, 2012
Note 1: Company overview
V.S.T. Tillers Tractors Limited (VTTL) was incorporated on December 18,
1967 in Bangalore, India. It was promoted by the V.S.T Group, a
well-known business house in South India, in technical collaboration
and joint venture with Mitsubishi Heavy Industries and Mitsubishi
Corporation, Japan for the manufacture of Power Tillers and Diesel
Engines. The plant went into production in the year 1970.
In 1984, an additional technical and financial collaboration with
Mitsubishi Agricultural Machinery Company Ltd, Japan for the
manufacture of 18.5 HP, 4 wheel drive Tractor was entered into.
The company was incorporated for the purpose of manufacture and or deal
with Tractor, Tillers, Diesel Engines, Harvestors, Reapers, Binders,
Transplanters/ planters, Trench Cutters, Front end Loaders and all
kinds of allied agricultural, plantation and horticultural machinery
including attachments, components, accessories, spares implements and
other equipments required for the satisfactory functioning of the
agricultural equipments.
2 Share Capital
(a) Terms/rights attached to equity shares
The Company has only one class of equity shares having a par value of
Rs. 10 per share. Each holder of equity share is entitled to one vote
per share.
In the event of liquidation of the Company, the holders of equity
shares would be entitled to receive remaining assets of the Company,
after distribution of all preferential amounts. The distribution will
be in proportion to the number of equity shares held by the
shareholders.
(c) Details of shareholders holding more than 5% shares in the Company
(1) includes all schemes under their management
As per records of the Company, including its register of
shareholders/members, the above shareholding represent legal ownership
of shares.
(d) Shares allotted as fully paid up by way of bonus shares (during 5
years preceding March 31, 2012)
Issued, Subscribed and Paid-up Capital includes 28,79,843 equity shares
of Rs. 10 each, which were allotted as fully paid up by way of bonus
shares by capitalisation of Share Premium on Feb 9, 2010.
3 Micro, Small and Medium Enterprises Development Act, 2006 (MSMED
Act):
Based on the information available with the company, there are no
Micro, Small and Medium enterprises, to which the company owes dues,
which are outstanding for more than 45 days as at 31st March, 2012.
Further, no interest during the year has been paid or payable under the
terms of the MSMED Act, 2006.
Notes :
1. The estimates of future salary increases considered in actuarial
valuation take into consideration for inflation, seniority, promotion
and other relevant factors
2. The expected return on plan assets is determined considering
several applicable factors such as the composition of the plan assets
held, assessed risks of asset management, historical results of the
return on plan assets and the company's policy for plan assets is
expected to vary from year to year reflecting the returns on matching
Government bonds.
3. Gratuity liability in case of employees of Precision Components
Division, Mysore are unfunded and the gratuity liability for the year
was Rs. 8,60,525 and the cumulative liability as on 31 March, 2012 was
Rs. 25,84,555.
4 Related Party Transactions:
Information given in accordance with the requirements of Accounting
Standard 18 on related party disclosures issued by the Institute of
Chartered Accountants of India
Name of the Party Nature of Relationship
i. Vinay Industries Associates/Joint Ventures
ii. India Garage Service Station Associates/Joint Ventures
iii. India Garage Petrol Pump Associates/Joint Ventures
iv. MHI-VST Diesel Engines Private Associates/Joint Ventures
Limited
v. Anand & Associates Associates/Joint Ventures
vi. Rama Infotech Associates/Joint Ventures
vii. Mr. V.P.Mahendra Key Management Personnel
ix. Mr. V.V.Pravindra Key Management Personnel
x. Mr. B.C.S.Iyengar Key Management Personnel
4 These financial statements have been prepared in the format
prescribed by the Revised Schedule VI to the Companies Act 1956.
Previous period figures have been recast/restated to conform to the
classification of the current year.
Mar 31, 2011
BACK GROUND
V.S.T. Tillers Tractors Limited (VTTL) was incorporated on December 18,
1967 in Bangalore, India. It was promoted by the V.S.T Group, a well
known business house in South India, in technical collaboration and
joint venture with Mitsubishi Heavy Industries and Mitsubishi
Corporation, Japan for the manufacture of Power Tillers and Diesel
Engines. The plant went into production in the year 1970.
In 1984, an additional technical and financial collaboration with
Mitsubishi Agricultural Machinery Company Ltd, Japan for the
manufacture of 18.5 H P, 4 wheel drive Tractor was entered into.
The company was incorporated for the purpose of manufacture and or deal
with Tractor, Tillers, Diesel Engines, Harvesters, Reapers, Binders,
Transplanters/ planters, Trench Cutters, Front end Loaders and all
kinds of allied agricultural, plantation and horticultural machinery
including attachments, components, accessories, spares implements and
other equipments required for the satisfactory functioning of the
agricultural equipments.
1. Share capital
i) Issued, Subscribed and Paid-up Capital includes 1,50,000 (Previous
year: 1,50,000) equity shares of Rs.10 each, which were allotted as
fully paid pursuant to a contract for consideration other than cash.
ii) issued, Subscribed and Paid-up Capital includes 28,79,843 (Previous
year: 28,79,843) equity shares of Rs.10 each, which were allotted as
fully paid up by way of bonus shares by capitalisation of share
premium.
2. Secured Loans
Working Capital loans sanctioned by Commercial Banks are secured by way
of first charge on hypothecation of inventories, bills receivable and
other current assets and a second charge on all fixed assets of the
company, ranking pari passu basis with other members of the consortium.
3. Receivables
Sundry debtors includes amount due from firms in which Directors of the
company are partner of Rs.56,57,207 (previous year Rs. 39,15,592)
(Maximum balance outstanding at any time during the year Rs.90,71,338/-
(P.Y. Rs.83,00,967/-).
4. Central Government approval under section 297 of the Companies Act,
1956
The Company has applied to Central Government on 3rd July 2009, 2nd
April 2010 and 2nd November 2010 for approval under section 297 of the
Companies Act, 1956 for the execution of contracts in which Directors
are interested, pending approval from Central Government the company
has executed the contracts with such parties. The Company is confident
of getting the approval from the concerned authorities from the date of
filing of application.
5. Cash and Bank balance
Bank balance with others on deposit account includes deposit with West
Bengal State Rural Cooperative Bank Limited of Rs. 1,50,000 (previous
year Rs. 1,00,000). Maximum amount outstanding at any time during the
year was Rs. 1,50,000 (previous year Rs. 1,00,000). None of the
Directors are interested in the Bank and none of the Directors are
relatives of the Directors of the Bank.
6. Micro, Small and Medium Enterprises Development Act, 2006(MSMED
Act)
7. Depreciation on Research and Development assets and Revalued assets
i. Depreciation on Research and Development assets amounting to
Rs.7,37,178 (Previous year Rs.8,68,754) has been charged off during the
current year. Capital expenditure on Research and Development Rs.Nil
(Previous year Rs.Nil) is shown as addition to fixed assets.
ii. Depreciation on the revalued assets amounting to Rs.64,575
(Previous year Rs. 64,575) has been deducted from the Revaluation
Reserve.
8. Contingent Liabilities not provided for
I. Cases filed by the customers in various consumer courts not
acknowledged as debt Rs.42,37,000 (Previous year Rs. 41,85,000)
II. Bank Guarantee Outstanding with Canara Bank Rs.62,22,000/- as at
March 31, 2011 (Previous year 1,07,74,500/-)
III. Foreign Letter of Credit (FLC) Outstanding with Canara Bank Rs.
2,08,74,488/- as at March 31, 2011 (Previous year Nil)
IV. Input Cenvat claim not admitted by the department of Customs,
Central Excise and Service Tax is Rs.l 1,56,440. Company has appealed
to the Commissioner (Appeals) of Customs, Central Excise and Service
Tax.
9. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
accounts and not provided for (net of advances) Rs.169,16,720 (previous
year Rs. 112,34,822).
10. RELATED PARTY TRANSACTIONS
a) Names of related parties and description of relationship :
Description of relationship Names of Related Parties
i) Associates :
VST Auto Ancilliaries Pvt. Limited
Vinay Industries
India Garage Service Station
India Garage Petrol Pump
MHI-VST Diesel Engines Private Limited
Anand & Associates
Rama Infotech
ii) Joint Ventures MHI-VST Diesel Engines Pvt. Limited
iii) Key Management Personnel :
Managing Director Mr. V. P. Mahendra
Whole Time Directors Mr. V. V. Pravindra
Mr. B.C.S. Iyengar
b) Defined Benefit Plan:
The employees gratuity fund scheme managed by a Trust (Life Insurance
Corporation of India for Bangalore unit Employees) is a defined benefit
plan. The present value of obligation is determined based on actuarial
valuation using the Projected Unit Credit Method, which recognises each
period of service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation. The obligation for leave encashment is recognised in the
same manner as gratuity.
11. DETAILS OF JOINT VENTURE
1. Name of Joint Venture MHI-VST Diesel Engines Private Limited
2. Description of Interest Jointly Controlled Entity
3. Financial Interest in Jointly Controlled Entity (*)
Amount in Rs.
a Assets 46,90,00,000
b Liabilities 46,90,00,000
c Income 21,38,25,936
d Expenditure 31,68,21,829
e Capital Commitments -
f Contingent Liabilities -
(*) The above are as per the unaudited information furnished by the
Joint Venture Company as on 31st March, 2011.
12. Figures for the previous year have been re-grouped wherever
necessary for comparison purposes.
Mar 31, 2010
1) Contingent Liabilities not provided for
A) Cases filed by the customers in various consumer courts not
acknowledged as debt Rs.41,85,000 (previous year Rs.37,12,000).
B) Demands raised by Central Excise Department not acknowledged as debt
Rs.4,18,564. The Company has filed appeals before The Revision
Authority, Department of Revenue, Ministry of Finance, New Delhi
challenging the demands raised by the department.
2) Estimated amount of contracts remaining to be executed on capital
accounts and not provided for (net of advances) Rs. 1, 12,34,822
(previous year Rs.34,05,617)
3) Figures for the previous year have been re-grouped wherever
necessary for comparison purposes.