Mar 31, 2019
1. Corporate information
Indag Rubber Limited (hereinafter referred to as âthe Companyâ) is a Public Limited Company incorporated and domiciled in India. The registered office of the Company is located at 11 Community Center, Saket, New Delhi-110017, India. The Companyâs CIN is - L74899DL1978PLC009038.
The Companyâs shares are listed on Bombay Stock Exchange (âBSEâ). The Company is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.
These financial statements were approved by the Board of Directors and authorised for issue on April 20, 2019.
a. Terms/rights attached to equity shares
The Company has only one class of equity shares having par value of Rs. 2 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees.
Notes
(i) Capital reserve
Capital reserve represents the amount on account of forfeiture of equity shares of the Company.
(ii) Securities premium
Securities Premium represents amount received on issue of shares in excess of the par value.
(iii) General reserve
This represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income. Central cash subsidy amounting to Rs. 30 lakh received for the installation of plant at Nalagarh in 2006 is included in general reserve.
(iv) Retained earnings
Retained earnings comprises of prior years undistributed earnings after taxes.
For the year ended 31 March 2019, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 2.40 (Previous Year Rs 2.40)
The board of directors in its meeting held on April 20, 2019, has proposed final dividend @75% of paid up capital (i.e. Rs 1.50 per equity share of Rs 2 each)
(v) Other comprehensive income
It comprises amounts that will not be re-classifed to profit & loss and are eligible to be re-classified in retained earning.
2 Segment Information
The Operating Segment have been reported in a manner consistent with the internal reporting provided to the Chief Financial Officer and the Chief Executive Officer who are the Chief Operating Decision Maker (CODM).The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres and providing tyre retreading service. These products do not have any different risk and returns and thus the CODM performs review based on one operating segment.
There are no single customer whose sales are exceeding 10% of the turnover.
3 Obligations under leases
The Company has taken offices, guest house, residence and warehouse premises under operating lease agreements. There are no purchase options in the lease agreements. There is an escalation clause in some lease agreements. There are no restrictions imposed by lease arrangements. There are no subleases. The agreements are generally cancelable at the mutual consent of both the lessor and the lessee.
# The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax on all goods entering the state with effect from 24th January, 2011. The Honâble High Court, Himachal Pradesh while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as ââdepositââ with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. The company has deposited Rs. 451.33 lakh and furnished bank guarantees of Rs. 793.35 lakh till 30.06.2017. Since the cash payment as per court order is in the nature of deposits, no amount has been expensed off in the financial statements as entry tax.
While Honâble Supreme Court has upheld the constitutional validity of Entry Tax in their judgement dated 11th November, 2016, the issue of discrimination under Article 304(a) and scope of local area is left to be determined by respective High Courts. Honâble High Court, Shimla has issued notice on the writ petition filed by the Company and ordered that bank guarantee will not be encashed and department will maintain status quo.
* Based on the discussions with the solicitor/ expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.
* Excluding dividend of Rs. 270.84 lakh (Rs. 270.84 Lakh for year ended 31 March, 2018) credited to FCNR/NRE account of NRIâs / paid to Overseas Corporate Bodies on repatriation basis.
4 Employee benefit plans
a. Defined contribution plans
The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
b. Defined benefit plan Gratuity
The Company has a defined benefit gratuity plan. Employee who have 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.
The most recent valuation of the present value of defined benefit obligation was carried as at 31 March, 2019 in which the present value of the defined benefit obligation, and the related current service cost and past service cost were measured using the project unit credit method.
i. The current service cost and the net interest expenses for the year are included in the âEmployee benefits expenseâ line item in the Statement of profit and loss.
ii. The remeasurement of the net defined liability is included in other comprehensive income.
The fund invested in LIC of India (âinsurerâ). The future information of fund investments are not available with the Company.
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
Notes
i. Sensitivities due to mortality and withdrawals are not material and hence impact of change not calculated.
ii. Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 0.50 percentage, keeping all other actuarial assumptions constant.
5 Financial instruments
A. Capital Management
The Companyâs objective for capital management is to maximise shareholders value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated.
C. Financial risk
In the course of its business, the Company is exposed primarily to fluctuations in Interest rates, security price risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments, the operation of the Company did not have an exposure for foreign currency exchange rates as the majority of the operations are in India only. The Company has a risk management policy covering risks associated with the financial assets and liabilities such as interest rate risk, security price risk and credit risk. The risk management policy has been approved by the board of directors. The risk management framework aims to:
- Create a stable business planning environment by reducing the impact of interest rate fluctuations on the Companyâs business plan.
- Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance.
The Company did not use the derivative financial instruments for risk mitigation.
a. Market risk
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates, interest rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
i. Foreign currency exchange rate risk
The Company operates majorly in India but is exposed to foreign exchange risk arising through its sale and purchase of goods and services with overseas suppliers and investment in foreign currency transactions primarily with respect to US Dollar (âUSDâ). The Company does not use the derivative financial instruments to manage their risk.
iii. Interest rate risk Financial liabilities
The Company has not regularly utilised the borrowed fund, hence the Company is not significantly exposed to interest rate risk.
Financial assets
The Companyâs investments are primarily in fixed rate interest bearing investments. Hence the Company is not significantly exposed to interest rate risk.
b. Security price risk
The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance sheet as fair value through OCI.
i. Equity price sensitivity analysis
The sensitivity analysis below has been determined based on the exposure to equity price risks at the end of the year.
If the equity instruments (equity shares and equity linked mutual fund) prices had been 5% higher / lower:
Other comprehensive income for the year ended 31 March 2019 would increase / decrease by Rs. 224.43 Lakh (for the year ended 31 March 2018: increase / decrease by Rs. 277.23 lakh) as a result of the change in fair value of equity investment measured at FVTOCI.
ii. Exposure in mutual funds (Other than equity linked mutual fund)
The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investments.
Mutual fund price sensitivity analysis The sensitivity analysis below have been determined based on Mutual Fund Investment at the end of the year.
If NAV has been 1% higher / lower: Profit for the year ended 31 March 2019 would increase / decrease by Rs. 29.43 lakh (for the year ended 31.03.2018 by Rs. 39.98 Lakh as a result of the changes in fair value of mutual fund investments.
iii. If the tax free bonds and investment in preference shares prices had been 1% higher / lower:
Profit for the year ended 31 March 2019 would increase / decrease by Rs. 8.33 Lakh (for the year ended 31 March 2018: increase / decrease by Rs. 8.54 lakh) as a result of the change if there is no change in the market risk and other assumptions.
c. Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations. To manage trade receivable, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and ageing of such receivables.
Financial instruments that are subject to such risk, principally consist of investments, trade receivables and loans and advances. None of the financial instruments of the Company results in material concentration of credit risks. Financial assets for which loss allowance is measured:
Other than financial assets mentioned above, none of the Companyâs financial assets are either impaired or past due, and there were no indications that defaults in payment obligations would occur and exposure to Trade Receivable is diversified and no single customer contributes to more than 10% of outstanding trade receivable as at 31 March, 2019 and 31 March, 2018.
d. Liquidity risk
Liquidity risk refers to the risk that the Company can not meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per the requirements.
During the year, the Company generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.
Valuation technique
Level 1: Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market. This category consists of quoted equity shares and debt based open ended mutual funds.
Level 2: Valuation techniques with observable inputs. This level of hierarchy includes items measured using inputs other than quoted prices included within Level 1 that are observable for such items, either directly or indirectly. This level of hierarchy consists of debt based close ended mutual fund investments and over the counter (OTC) derivative contracts.
Level 3: Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data. The main item in this category are unquoted equity instruments.
The fair value of the financial assets are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:
a. Investments in debt mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.
b. Quoted equity investments: Fair value is derived from quoted market prices in active markets.
c. Unquoted equity investments: Fair value is derived on the basis of income approach, in this approach the discounted cash flow method is used to capture the present value of the expected future economic benefits to be derived from the ownership of these investments.
Derivative contracts: The Company has not entered into any forward contracts and swaps to manage its exposure as the Company management expect that there are nominal exposure of the Company for foreign exchange and they are capable to manage these risks.
6 Events after the reporting period
The board of directors in its meeting held on April 20, 2019, has proposed final dividend @75% of paid up capital (i.e. Rs 1.50 per equity share of Rs 2 each) subject to approval of shareholders at the Annual General Meeting.
7 Previous year figures
Previous year figures have been regrouped/reclassified, wherever necessary to conform to this yearâs classification.
Mar 31, 2018
1. Corporate information
Indag Rubber Limited (hereinafter referred to as âthe Companyâ) is a Public Limited Company incorporated and domiciled in India. The registered office of the Company is located at 11 Community Center, Saket, New Delhi-110017, India. The Companyâs CIN is - L74899DL1978PLC009038.
The Companyâs shares are listed on Bombay Stock Exchange (âBSEâ). The Company is engaged in the manufacturing and selling of Precured Tread Rubber and allied products.
These financial statements were approved by the Board of Directors and authorised for issue on May 24, 2018.
Notes:
a. There are no customers who represent more than 5% of the total balance of trade receivables.
b. The credit period generally allowed on sales of goods and services varies from 21 to 60 days.
c. The provision for doubtful debts at the reporting period are analysed by the Company on case to case basis.
d. Movement in the expected credit loss allowances:
Note:
Cash credit from banks are secured by first pari passu charge on entire current assets including stocks lying at the Companyâs factory at Nalagarh and other stock points, on book debts and on entire fixed assets of the Company, present and future. The cash credit is repayable on demand and carries interest @ 9.75% p.a. to 10.80% p.a.
The Company has not utilised Cash Credit as on 31 March,2018, 31 March,2017 and 1 April, 2016.
Notes
(i) Capital reserve
Capital reserve represents the amount on account of forfeiture of equity shares of the Company.
(ii) Securities premium reserve
Securities Premium represents amount received on issue of shares in excess of the par value.
(iii) General reserves
This represents appropriation of profit by the Company. General reserve is created by a transfer from one component of equity to another and is not an item of other comprehensive income. Central cash subsidy amounting to Rs. 30 lakh received for the installation of plant at Nalagarh in 2006 have been transferred to the general reserves as on 1 April, 2016.
(iv) Retained earnings
Retained earnings comprises of prior years undistributed earnings after taxes.
For the year ended 31 March 2018, the amount of per share dividend recognised as distribution to equity shareholders was Rs. 2.40 (Previous year Rs. 2.40).
The board of directors in its meeting held on May 24, 2018, has proposed final dividend @ 75% of paid up capital (i.e. Rs. 1.50 per equity share of Rs. 2 each).
(v) Other comprehensive income
It comprises amounts that will not be re-classifed to profit & loss and are eligible to be re-classified in retained earning.
*Export entitlements in the form of Duty Drawback Scheme, Focus Product Scheme and Merchandise Export from India are recognized in the statement of profit and loss when the right to receive credit as per the terms of the scheme is established in respect of exports made and when there is no significant uncertainty regarding the ultimate collection of the relevant export proceeds.
2 Segment Information
The Operating Segment have been reported in a manner consistent with the internal reporting provided to the Chief Financial Officer and the Chief Executive Officer who are the Chief Operating Decision Maker (CODM).The Company is engaged in the manufacturing of the Precured Tread Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are used for retreading of tyres and providing tyre retreading service. These products do not have any different risk and returns and thus the CODM performs review based on one operating segment.
There are no single customer whose sales are exceeding 10% of the turnover.
3 Related party disclosures
Name and relationships of related-parties:
a. Subsidiary Company
i. SUN - AMP Solar India Private Limited (w.e.f. October 13, 2016)
b. Step - down Subsidiary Company
i. Samyama Jyothi Solar Energy Private Limited (w.e.f. October 13, 2016)
c. Key management personnel
i. Mr. Nand Khemka (Chairman cum Managing Director)
ii. Mr. Shiv Vikram Khemka (Non Executive Director)
iii. Mr. Uday Harsh Khemka (Non Executive Director)
iv. Mr. K.K. Kapur (CEO and Whole Time Director)
v. Mr. J.K Jain (CFO)
vi. Mrs. Manali D. Bijlani (CS)
vii. Ms. Bindu Saxena (Independent Director)
viii. Mr. R Parameswar (Independent Director)
ix. Mr. P.R. Khanna (Independent Director)
x. Mr. Harjiv Singh (Independent Director) - till 12-09-2017
d. Relatives of key management personnel
i. Mrs. Jeet Khemka, wife of Mr. Nand Khemka
ii. Mrs. Urvashi Khemka, wife of Mr. Shiv Vikram Khemka
iii. Mrs. Nitya Mohan Khemka, wife of Mr. Uday Harsh Khemka
e. Enterprises owned or significantly influenced by key management personnel or their relatives (either individually or with others)
i. Unipatch Rubber Limited
ii. Khemka Aviation Private Limited
iii. Nand and Jeet Khemka Foundation
iv. Khemka & Company Private Limited
v. Pankaj Dilip Private Limited
vi. Sun Securities Limited
vii. Sun London Limited
viii. Khemka Technical Services Private Limited
ix. Khemka Instruments Private Limited
x. Youth Reach
xi. SRL 142 Holdings Limited
xii. The Nabha Foundation
c. The Company has other commitments, for purchase of goods and services and employee benefits, in normal course of business.
d. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
e. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
4 Obligations under operating leases
The Company has taken offices, guest house, residence and warehouse premises under operating lease agreements.
There are no purchase options in the lease agreements. There is an escalation clause in some lease agreements.
There are no restrictions imposed by lease arrangements. There are no subleases. The agreements are generally cancelable at the mutual consent of both the lessor and the lessee.
a. Lease expenses recognised during the year
# The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax on all goods entering the state with effect from 24th January, 2011. The Honâble High Court, Himachal Pradesh while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as ââdepositââ with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. The company has deposited Rs. 451.33 lakh till 30.06.2017 (Previous year Rs 437.46 lakh ) and furnished bank guarantees of Rs. 793.35 lakh till 30.06.2017 (Previous year Rs 770.57 lakh). Since the cash payment as per court order is in the nature of deposits, no amount has been expensed off in the financial statements as entry tax.
While Honâble Supreme Court has upheld the constitutional validity of Entry Tax in their judgement dated 11 November, 2016, the issue of discrimination under Article 304(a) and scope of local area is left to be determined by respective High Courts. Honâble High Court, Shimla has issued notice on the writ petition filed by the Company and ordered that bank guarantee will not be encashed and department will maintain status quo.
The entry tax has been abolished due to implementation of GST w.e.f 01.07.2017
* Based on the discussions with the solicitor/ expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.
** Based on future sales plan, the management is quite hopeful to meet the obligations by executing the required volume of sales in future.
d. The Company has other commitments, for purchase of goods and services and employee benefits, in normal course of business. The Company does not have any long term commitments/contracts including derivative contracts for which there will be any material foreseeable losses.
e. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
5 Employee benefit plans
a. Defined contribution plans
The Company makes Provident Fund and Employee State Insurance Scheme contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.
b. Defined benefit plan Gratuity
The Company has a defined benefit gratuity plan. Employee who have 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.
The most recent valuation of the present value of defined benefit obligation were carried as at 31 March, 2018 in which the present value of the defined benefit obligation, and the related current service cost and past service cost were measured using the project unit credit method.
Notes:
i. The current service cost and the net interest expenses for the year are included in the âEmployee benefits expenseâ line item in the Statement of profit and loss.
ii. The remeasurement of the net defined liability is included in other comprehensive income.
The amount included in the balance sheet arising from the Companyâs obligation in respect of defined benefit plans is as follows:
The fund invested in LIC of India (âinsurerâ). The future information of fund investments are not available with the Company.
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analysis below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
Sensitivity analysis:
If the expected salary growth and discount rate increases (decreases) by 0.50%, the defined benefit obligation would changes as:
Notes
i. Sensitivities due to mortality and withdrawals are not material and hence impact of change not calculated.
ii. Sensitivity for significant actuarial assumptions is computed by varying one actuarial assumption used for the valuation of the defined benefit obligation by 0.50 percentage, keeping all other actuarial assumptions constant.
6 Financial instruments
A. Capital Management
The Companyâs objective for capital management is to maximise shareholders value, safeguard business continuity and support the growth of the Company. The Company determines the capital requirement based on annual operating plans and long-term and other strategic investment plans. The funding requirements are met through equity and operating cash flows generated.
C. Financial risk
In the course of its business, the Company is exposed primarily to fluctuations in Interest rates, security price risk, credit risk and liquidity risk which may adversely impact the fair value of its financial instruments, the operation of the Company did not give an exposure for foreign currency exchange rates as the majority of the operations are in India only. The Company has a risk management policy covering risks associated with the financial assets and liabilities such as interest rate risk, security price risk and credit risk. The risk management policy has been approved by the board of directors. The risk management framework aims to:
- Create a stable business planning environment by reducing the impact of interest rate fluctuations on the Companyâs business plan.
- Achieve greater predictability to earnings by determining the financial value of the expected earnings in advance. The Company did not use the derivative financial instruments for risk mitigation.
a. Market risk
Market risk is the risk of any loss in future earnings, in realisable fair values or in future cash flows that may result from a change in the price of a financial instrument. The value of a financial instrument may change as a result of changes in the foreign currency exchange rates, interest rates, liquidity and other market changes. Future specific market movements cannot be normally predicted with reasonable accuracy.
i. Foreign currency exchange rate risk
The Company operates majorly in India but exposed to foreign exchange risk arising through its sale and purchase of goods and services with overseas suppliers and investment in foreign currency transactions primarily with respect to US Dollar (âUSDâ), Euro and YEN. The Company does not use the derivative financial instruments to manage their risk.
The company exposes to foreign currency risk are as follows:
Financial assets
The Companyâs investments are primarily in fixed rate interest bearing investments. Hence the Company is not significantly exposed to interest rate risk.
b. Security price risk
The Company is exposed to equity price risks arising from equity investments held by the Company and classified in the balance sheet as fair value through OCI.
i. Equity price sensitivity analysis
The sensitivity analysis below have been determined based on the exposure to equity price risks at the end of the year.
If the equity instruments (equity shares and equity linked mutual fund) prices had been 5% higher / lower:
Other comprehensive income for the year ended 31 March 2018 would increase / decrease by Rs. 277.23 Lakh (for the year ended 31 March 2017: increase / decrease by Rs. 183.42 lakh) as a result of the change in fair value of equity investment measured at FVTOCI.
ii. Exposure in mutual funds (Other than equity linked mutual fund)
The Company manages the surplus funds majorly through investments in debt based mutual fund schemes. The price of investment in these mutual fund schemes is reflected though Net Asset Value (NAV) declared by the Asset Management Company on daily basis as reflected by the movement in the NAV of invested schemes. The Company is exposed to price risk on such Investments.
Mutual fund price sensitivity analysis The sensitivity analysis below have been determined based on Mutual Fund Investment at the end of the year.
If NAV has been 1% higher / lower: Profit for year ended 31 March 2018 would increase / decrease by Rs. 39.98 lakhs (for the year ended 31.03.2017 by Rs. 45.28 Lakh as a result of the changes in fair value of mutual fund investments.
iii. If the tax free bonds and investment in preference shares prices had been 1% higher / lower:
Profit for the year ended 31 March 2018 would increase / decrease by Rs. 8.54 Lakh (for the year ended 31 March 2017: increase / decrease by Rs. 7.75 lakh) as a result of the change if there is no change in the market risk and other assumptions.
c. Credit risk
Credit risk arises from the possibility that the counter party may not be able to settle their obligations. To manage trade receivable, the Company periodically assesses the financial reliability of customers, taking into account the financial conditions, economic trends, analysis of historical bad debts and aging of such receivables.
Financial instruments that are subject to such risk, principally consist of investments, trade receivables and loans and advances. None of the financial instruments of the Company results in material concentration of credit risks. Financial assets for which loss allowance is measured:
Other than financial assets mentioned above, none of the Companyâs financial assets are either impaired or past due, and there were no indications that defaults in payment obligations would occur and exposure to Trade Receivable is diversified and no single customer contributes to more than 10% of outstanding trade receivable as at 31,March 2018 and 31 March 2017.
d. Liquidity risk
Liquidity risk refers to the risk that the Company can not meet its financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per the requirements.
During the year, the Company generated sufficient cash flows from operations to meet its financial obligations as and when they fall due.
The table below provides details regarding the contractual maturities of significant financial liabilities as at:
7 First time adoption - Transition to Ind AS
These are the Companyâs first financial statements prepared in accordance with Ind AS. The accounting policies set out in note 2 have been applied in preparing these financial statements for the year ended 31 March, 2018, the comparative information presented in these financial statements for the year ending 31 March, 2017 and in preparation of opening Ind AS balance sheet at 1 April, 2016 (âthe date of transitionâ). 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 section 133 of the Companies Act 2013 (the âActâ) read with Rule 7 of the Companies (Accounts) Rules, 2014 (referred to as âIndian GAAPâ) as amended by Companies (Accounting Standard) Rules, 2016 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 note 42 of the financial statements.
The exemptions availed by the Company are as follows:
i. Deemed cost for property, plant and equipment and intangible assets
The Company has elected to continue with the carrying value of all of its Property, plant and equipment and intangible assets recognized as of April 1, 2016 measured as per the previous GAAP and use that carrying value as its deemed cost as of the transition date.
ii. Equity investments at FVTOCI
The Company has designated investment in equity share, equity mutual funds, compulsory convertible preference shares, capital venture funds at FVTOCI on the basis of facts and circumstances that existed at the transition date.
8 First Time Adoption of Ind AS reconciliations
These are the Companyâs first financial statements prepared in accordance with Ind AS.
The effect of the Companyâs transition to Ind AS is summarised in the following notes:
i. Transition elections.
ii. Reconciliation of equity, total comprehensive income and cash flows as reported as per Ind AS, in this financial statement with as reported in previous years as per previous Indian GAAP.
Transition elections
The Company has prepared the opening balance sheet as per Ind AS as of 1 April, 2016 (the transition date) by recognising all assets and liabilities whose recognition is required by Ind AS, not recognising items of assets or liabilities which are not permitted by Ind AS, by reclassifying items from previous GAAP to Ind AS as required under Ind AS, and applying Ind AS in measurement of recognised assets and liabilities. However, this principle is subject to the certain exception and certain optional exemptions availed by the Company. The Company has applied the following transition exemptions apart from mandatory exceptions in Ind-AS 101 :
i. Deemed cost of property, plant and equipment and other intangible assets
ii. Investments in subsidiaries in separate financial statements
iii. Designation of equity investments at FVTOCI.
Deemed cost of property, plant and equipment and other intangible assets
In accordance with Ind-AS transitional provisions, the Company opted to consider previous GAAP carrying value of property, plant and equipment and other intangible assets as deemed cost on transition date.
Investments in subsidiary in separate financial statements
In accordance with Ind-AS, the Company opted to consider cost as value of investments for investments in subsidiary in separate financial statement.
Designation of equity investments at FVTOCI
Ind AS 101 allows an entity to designate previously recognised financial instruments basis the facts and circumstances that existed as on transition date. The Company has elected to designate equity investments in long term investments (equity instrument and equity mutual funds) at FVTOCI on the basis of the facts and circumstances at the date of transition to Ind AS.
Notes
a. Under the previous GAAP, investment in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. 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 of these investments (other than equity instruments designated as at FVTOCI) have been recognised in retained earnings as at the date of transition and subsequently in the statement of profit and loss. For equity instruments (including equity linked mutual funds and excluding subsidiary those are valued at cost) designated at FVTOCI resulting fair value gains and losses have been recognised in other comprehensive income.
b. Deferred tax have been recognised on the adjustments made on transition to Ind AS.
Notes
a. Under the previous GAAP, investment in equity instruments and mutual funds were classified as long-term investments or current investments based on the intended holding period and realisability. Long-term investments were carried at cost less provision for other than temporary decline in the value of such investments. 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 of these investments (other than equity instruments designated as at FVTOCI) have been recognised in retained earnings as at the date of transition and subsequently in the statement of profit and loss. For equity instruments (including equity linked mutual funds and excluding subsidiary those are valued at cost) designated at FVTOCI resulting fair value gains and losses have been recognised in other comprehensive income.
b. Deferred tax have been recognised on the adjustments made on transition to Ind AS.
c. Income tax with respect to the adjustments pertaining to OCI are regrouped from profit and loss to OCI.
d. Under previous GAAP, actuarial gains and losses were recognised in profit or loss. Under Ind AS, the actuarial gains and losses from part of remeasurement of the net defined benefit liability / asset which is recognised in other comprehensive income. Consequently, the tax effect of the same has also been recognised in other comprehensive income under Ind AS instead of profit or loss. This change does not affect total equity.
9 Fair value measurements
a. Fair value of financial assets and financial liabilities that are measured at fair value on a recurring basis
Financial assets and financial liabilities are measured at fair value at the end of each year. The information of the valuation techniques and the input used are as follows:
Valuation technique
Level 1: Quoted prices in the active market. This level of hierarchy includes financial assets that are measured by reference to quoted prices in the active market. This category consists of quoted equity shares and debt based open ended mutual funds.
Level 2: Valuation techniques with observable inputs. This level of hierarchy includes items measured using inputs other than quoted prices included within Level 1 that are observable for such items, either directly or indirectly. This level of hierarchy consists of debt based close ended mutual fund investments and over the counter (OTC) derivative contracts.
Level 3: Valuation techniques with unobservable inputs. This level of hierarchy includes items measured using inputs that are not based on observable market data (unobservable inputs). Fair value determined in whole or in part, using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instruments nor based on available market data. The main item in this category are unquoted equity instruments.
The fair value of the financial assets are determined at the amount that would be received to sell an asset in an orderly transaction between market participants. The following methods and assumptions were used to estimate the fair values:
a. Investments in debt mutual funds: Fair value is determined by reference to quotes from the financial institutions, i.e. net asset value (NAV) for investments in mutual funds declared by mutual fund house.
b. Quoted equity investments: Fair value is derived from quoted market prices in active markets.
c. Unquoted equity investments: Fair value is derived on the basis of income approach, in this approach the discounted cash flow method is used to capture the present value of the expected future economic benefits to be derived from the ownership of these investments.
Derivative contracts: The Company has not entered into any forward contracts and swaps to manage its exposure as the Company management expect that there are nominal exposure of the Company for foreign exchange and they are capable to manage these risks.
10 Events after the reporting period
There are no other subsequent events which require any adjustment in financial statement.
Mar 31, 2017
Names of related parties and their relationships
(a) Subsidiary Company
- Sun - Amp Solar India Pvt Ltd (wef October 13, 2016)
(b) Step - down Subsidiary Company
- Samyama Jyothi Solar Energy Pvt Ltd (wef October 13, 2016)
(c) Key management personnel
- Mr. Nand Khemka (Chairman cum Managing Director)
- Mr. K.K. Kapur (Whole Time Director)
(d) Relatives of key management personnel
- Mrs. Jeet Khemka, wife of Mr. Nand Khemka
- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka
- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka
- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka
- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka
(e) Enterprises owned or significantly influenced by key management personnel or their relatives (either individually or with others)
- Unipatch Rubber Limited
- Khemka Aviation Private Limited
- Nand and Jeet Khemka Foundation
- Khemka & Co. Pvt. Ltd.
- Pankaj Dilip Pvt. Ltd.
- Sun Securities Ltd.
- Sun London Limited
- Khemka Technical Services Pvt. Ltd.
- Khemka Instruments Pvt. Ltd.
- Youth Reach
- SRL 142 Holdings Ltd
- The Nabha Foundation
No amount has been provided as doubtful debt or advance written off or written back in the year in respect of debts due from/to above related parties.
# The Company had obtained a stay of the Himachal Pradesh Government order levying entry tax @ 2% on all goods entering the state with effect from 24th January, 2011. The same has been reduced to 1% w.e.f. July 13, 2011 and again increased to 2% w.e.f. March 01, 2014 and again reduced to 1% from 01 September, 2016. The Hon''ble High Court, Himachal Pradesh while staying the levy in an interim order, directed the Company to deposit 1/3rd of the assessed amount as â''deposit'''' with the state government and furnish a bank guarantee for the balance 2/3rd amount to them. Since the cash payment as per court order is in the nature of deposits, no amount has been expensed off in the financial statements as entry tax. However, the cash (w.e.f jan 16 the ratio of deposit & bank guarantee has been changed to 50:50) deposited so far is Rs.437.46 lacs (previous year Rs.343.84 lacs) and bank guarantee furnished is for an amount of Rs.770.57 lacs (previous year Rs. 702.99 lacs). While Hon''ble Supreme Court has upheld the constitutional validity of Entry Tax in their judgment dated 11th November, 2016, the issue of discrimination under Article 304(a) and scope of local area is left to be determined by respective High Courts. The Company has filed a fresh writ before Hon''ble High Court, Shimla on 7th April,2017 and got a notice issued that the department will maintain status quo.
* Based on the discussions with the solicitor/ expert opinions taken/status of the case, the management believes that the Company has strong chances of success in above mentioned cases and hence no provision there against is considered necessary at this point in time.
** Based on future sales plan, the management is quite hopeful to meet the obligations by executing the required volume of sales in future.
1.. [11] Book value and Market value of Quoted investments Non-current investments
As of 31 March 2017 and 31 March 2016, the book value of quoted investments is Rs. 565.23 lacs and Rs. 914.29 lacs respectively.
As of 31 March 2017 and 31 March 2016, the market value of quoted investments is Rs. 496.43 lacs and Rs 808.28 lacs respectively.
Note:- In the opinion of the management, decline in market value of quoted investments in the shares of certain equity instruments aggregating to Rs. 86.47 lacs (previous year Rs. 137.43 lacs) at the year end is temporary and hence does not call for any provision there against.
* These balances are not available for use by the Company as they represent corresponding unpaid dividend liabilities.
2.. Amounts disclosed under abridged financial statements are same as that shown in the corresponding aggregated heads in the financial statement prepared in accordance with Schedule III to the Companies Act, 2013 or as near thereto as possible.
3. Previous year''s figures have been regrouped wherever necessary to conform to this year''s classification.
Mar 31, 2015
1. [i] Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are
used for retreading of tyres. These products do not have any different
risk and returns and thus the Company has only one business segment.
Segment Information Geographical Segments
The Company has organized its manufacturing operations into two major
geographical segments : Domestic (in India) and Overseas (Outside
India).
The analysis of geographical segments is based on the geographical
location of the customers.
The geographical segments considered for disclosure are as follows:
- Sales within India include sales to customers located within India.
- Sales outside India include sales to customers located outside
India.
The following table shows the distribution of the Company's
consolidated sales and trade receivables by geographical market,
regardless of where the goods were produced:
The Company has common fixed assets in India for producing
goods/providing services to domestic as well as overseas market. Hence,
separate figures for fixed assets/ addition to fixed assets have not
been furnished.
2. [ii] Related party disclosures
The Company has the following related parties in accordance with
Accounting Standard- 18 "Related Party Disclosures" notified under
the Companies (Accounting Standards) Rules, 2006 (as amended).
Names of related parties and their relationships
(a) Key management personnel
- Mr. Nand Khemka (Chairman cum Managing Director)
- Mr. K.K. Kapur (Whole Time Director)
(b) Relatives of key management personnel
- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka
- Mrs. Jeet Khemka, wife of Mr. Nand Khemka
- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka
- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka
- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka
- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka
(c) Enterprises owned or significantly influenced by key management
personnel or their relatives (ei- ther individually or with others)
- Unipatch Rubber Limited
- Khemka Aviation Private Limited
- Nand and Jeet Khemka Foundation
- Khemka & Co. Pvt. Ltd.
- Pankaj Dilip Pvt. Ltd.
- Sun Securities Ltd.
- Sun London Limited
- Khemka Technical Services Pvt. Ltd.
- Khemka Instruments Pvt. Ltd.
- Youth Reach
No amount has been provided as doubtful debt or advance written off or
written back in the year in respect of debts due from/to above related
parties.
3. [i] Contingent liabilities (not provided for) in respect of:
31 March 2015 31 March 2014
(Rs. in lacs) (Rs. in lacs)
a) The Company is under litigation with
the revenue authorities 159.15 159.15
regarding an expenditure claimed by the
Company arising out of an arbitration
award. As per the Company, the
expenditure should be allowed to them
in the year the arbitrator has passed
the award. The department is of the view
that the liability is not accrued till the
award becomes a rule of court and has
therefore disallowed the expenditure in
the AY 98-99 (the year in which the
Company claimed the expenditure). During
the financial year 2006-2007, the Company
has received a demand notice from Income
tax authorities pursuant to the order by
Income Tax Appellate Tribunal, Delhi. The
Company is presently in appeal before the
Hon'ble High Court. The Company has
deposited Rs. 20.00 lacs against the above
demand which is included in the 'Advance
Tax' under note no. 10 of complete set of
financial statements.
b) Pending Labour cases 5.31 5.31
c) Demand raised by the Excise Authorities,
being disputed 6.90 6.90
by the Company.
d) Claims against the Company not
acknowledged as debts. The 4.78 4.63
Company has deposited Rs. 4.23 lacs
against the above claim
which is included in the 'Deposits' under
note no. 10 of complete set
of financial statements.
e) Demand raised by the Sales Tax Authorities,
being disputed by 1.66 -
the Company.
f) Entry tax demand being disputed by the
Company ( excluding 793.85 510.41
the amount of interest and penalty, if any,
which can't be determined at this stage)
Total 971.65 686.4
The Company had obtained a stay of the Himachal Pradesh Government
order levying entry tax @ 2% on all goods entering the state with
effect from 24th January, 2011. The same has been reduced to 1% w.e.f.
July 13, 2011 and again increased to 2% w.e.f. March 01, 2014. The
Hon'ble High Court while staying the levy in an interim order, directed
the Company to deposit 1/3rd of the assessed amount as ''deposit''
with the state government and furnish a bank guarantee for the balance
2/3rd amount to them. Since the cash payment as per court order is in
the nature of deposits, no amount has been charged to the accounts as
entry tax. However, the cash deposited so far is Rs. 238.08 lacs
(previous year Rs. 164.12 lacs) and bank guarantee furnished is for an
amount of Rs. 476.16 lacs (previous year Rs. 328.24 lacs).
* Based on the discussions with the solicitor/ expert opinions
taken/status of the case, the management believes that the Company has
strong chances of success in above mentioned cases and hence no
provision there against is considered necessary at this point in time.
4 [11] Book value and Market value of Quoted investments Non-current
investments
As of 31 March 2015 and 31 March 2014, the book value of quoted
investments is Rs. 438.74 lacs and Nil respectively.
As of 31 March 2015 and 31 March 2014, the market value of quoted
investments is Rs. 461.49 lacs and Nil respectively.
* These balances are not available for use by the Company as they
represent corresponding unpaid dividend liabilities.
5. Pending enactment of the income tax rates proposed in Finance Bill,
2015, the Company has recognized deferred tax credit and made provision
towards tax on proposed final dividend for the current year at the
rates prevailing as at 31 March 2015.
6. Amounts disclosed under abridged financial statements are same as
that shown in the corresponding aggregated heads in the financial
statement prepared in accordance with Revised Schedule VI or as near
thereto as possible.
7. Previous year's figures have been regrouped wherever necessary to
conform to this year's classification.
Mar 31, 2014
1 Corporate information
Indag Rubber Limited (hereinafter referred to as ''the Company'') is a
public company domiciled in India and incorporated under the provisions
of the Companies Act, 1956. The Company is engaged in the manufacturing
and selling of Precured Tread Rubber and allied products.
2 Basis of preparation
The financial statements have been prepared to comply in all material
respects with the Accounting Standards notified under the Companies
Act, 1956 (the ''Act'') read with General Circular 15/2013 dated
September 13, 2013, issued by the Ministry of Corporate Affairs, in
respect of Section 133 of the Companies Act, 2013. The financial
statements of the Company have been prepared in accordance with
generally accepted accounting principles in India (Indian GAAP). The
financial statements have been prepared on an accrual basis and under
the historical cost convention.
The accounting policies have been consistently applied by the Company
and are consistent with those used in the previous year.
3. Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are
used for retreading of tyres. These products do not have any different
risk and returns and thus the Company has only one business segment.
Segment Information
Geographical Segments
The Company has organized its manufacturing operations into two major
geographical segments: Domestic (in India) and Overseas (Outside
India).
The analysis of geographical segments is based on the geographical
location of the customers.
The geographical segments considered for disclosure are as follows:
Sales within India include sales to customers located within India.
Sales outside India include sales to customers located outside India.
4. Related party disclosures
Names of related parties and their relationships
(a) Key management personnel
- Mr. Nand Khemka (Chairman cum Managing Director)
- Mr. K. K. Kapur (Whole Time Director)
(b) Relatives of key management personnel
- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka
- Mrs. Jeet Khemka, wife of Mr. Nand Khemka
- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka
- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka
- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka
- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka
(c) Enterprises owned or significantly influenced by key management
personnel or their relatives (either individually or with others)
- Unipatch Rubber Limited
- Khemka Aviation Private Limited
- Nand and Jeet Khemka Foundation
- Khemka & Co. Pvt. Ltd.
- Pankaj Dilip Pvt. Ltd.
- Sun Securities Ltd.
- Sun London Limited
- Khemka Technical Services Pvt. Ltd.
- Khemka Instruments Pvt. Ltd.
No amount has been provided as doubtful debt or advance written off or
written back in the year in respect of debts due from/to above related
parties.
5. Income tax
The Company has till date recognized Rs. 162.44 lacs (previous year Rs.
265.21 lacs) as Minimum Alternate Tax (MAT) credit entitlement which
represents that portion of the MAT Liability, the credit of which would
be available based on the provision of Section 115 JAA of the Income
Tax Act, 1961. The management based on the future profitability
projections and also profit earned during the current year is confident
that there would be sufficient taxable profit in future which will
enable the Company to utilize the above MAT credit entitlement.
6. Contingent liabilities (not provided for) in respect of :
31 March 2014 31 March 2013
(Rs. in lacs) (Rs. in lacs)
a) The Company is under litigation
with the revenue authorities 159.15* 159.15*
regarding an expenditure claimed by
the Company arising out of an
arbitration award. As per the Company,
the expenditure should be allowed to
them in the year the arbitrator has
passed the award. The department is
of the view that the liability is not
accrued till the award becomes a rule
of court and has therefore disallowed
the expenditure in the AY 98-99
(the year in which the Company claimed
the expenditure). During the financial
year 2006-2007, the Company has
received a demand notice from Income
tax authorities pursuant to the
order by Income Tax Appellate Tribunal,
Delhi. The Company is presently
in appeal before the Hon''ble High Court.
The Company has deposited Rs. 20 lacs
against the above demand which is
included in the Advance Tax
shown under note no. 10.
b) Pending Labour cases 5.31* 5.31*
c) Demands raised by the Sales Tax
Authorities, being disputed - 21.00*
by the Company.
d) Claims against the Company not
acknowledged as debts. The 4.63* 41.77*
Company has deposited Rs. 4.23 lacs
against the above claim which is
included in the Deposits shown
under note no. 10.
e) Demand raised by the Excise
Authorities, being disputed by the 6.90* -
Company.
f) Entry tax demand being disputed
by the Company (excluding 501.41* 350.17*
the amount of interest and penalty,
if any, which can''t be
determined at this stage) #
Total 686.40 577.40
# The Company had obtained a stay of the Himachal Pradesh Government
order levying entry tax @ 2% on all goods entering the state with
effect from 24th January, 2011. The same has been reduced to 1% w.e.f.
July 13, 2011. The Hon''ble High Court while staying the levy in an
interim order, directed the Company to deposit 1/3rd of the assessed
amount as ''''deposit'''' with the state government and furnish a bank
guarantee for the balance 2/3rd amount to them. Since the cash payment
as per court order is in the nature of deposits, no amount has been
charged to the accounts as entry tax. However, the cash deposited so
far is Rs. 164.12 lacs (previous year Rs. 107.92 lacs) and bank
guarantee furnished is for an amount of Rs. 328.24 lacs (previous year
Rs. 215.84).
* Based on the discussions with the solicitor / expert opinions
taken/status of the case, the management believes that the Company has
strong chances of success in above mentioned cases and hence no
provision there against is considered necessary at this point in time.
7. Leases
Operating Lease
The Company has taken office, residence and warehouse premises under
operating lease agreements. There are no purchase options in the lease
agreements. There is an escalation clause in some of the lease
agreements. There are no restrictions imposed by lease arrangements.
There are no subleases. The agreements are generally cancelable at the
mutual consent of both the lessor and the lessee.
8. Gratuity and other post employment benefit plans
The Company has a defined benefit gratuity 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
or part thereof in excess of six months. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
The following tables summarise the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet for the gratuity plan.
The Company expects to contribute Rs. 23.14 lacs (previous year Rs.
55.01 lacs) to gratuity fund during the next year.
Provident Fund
The provident fund of few employees is being administered by a
provident fund trust. The provident fund being administered by this
Trust is a defined benefit scheme whereby the Company deposits an
amount determined as a fixed percentage of basic pay to the fund every
month. The benefit vests upon commencement of employment. The interest
credited to the accounts of the employees is adjusted on an annual
basis to conform to the interest rate declared by the government for
the Employees Provident Fund. The Guidance Note on implementing AS-15,
Employee Benefits (Revised 2005) issued by the Accounting Standard
Board (ASB) states that provident funds set up by employers, which
requires interest shortfall to be met by the employer, needs to be
treated as defined benefit plan. The Actuarial Society of India has
issued the final guidance for measurement of interest shortfall on
provident fund liabilities. The actuary has accordingly provided a
valuation and based on the below provided assumptions, there is no
shortfall as at 31 March 2014.
9. Previous year comparatives
Previous year''s figures have been regrouped wherever necessary to
conform to this year''s classification.
10. All figures in values are rupees in lacs.
Mar 31, 2013
1 Corporate information
Indag Rubber Limited (hereinafter referred to as ''the Company'') is a
public company domiciled in India and incorporated under the provisions
of the Companies Act,1956. The Company is engaged in the manufacturing
and selling of Precured Tread Rubber and allied products.
2 Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAP). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention.
The accounting policies adopted in the preparation of financial
statements are consistent with those of previous year.
3. Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are
used for retreading of tyres. These products do not have any different
risk and returns and thus the Company has only one business segment.
Segment Information
Geographical Segments
The Company has organized its manufacturing operations into two major
geographical segments :
Domestic (in India) and Export (Outside India)
The analysis of geographical segments is based on the geographical
location of the customers.
The geographical segments considered for disclosure are as follows:
- Sales within India include sales to customers located within India.
- Sales outside India include sales to customers located outside India.
4. Related party disclosures
Name of related parties and their relationships
(a) Key management personnel
- Mr. Nand Khemka (Chairman cum Managing Director)
- Mr. K.K.Kapur (Whole Time Director)
(b) Relatives of key management personnel
- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka
- Mrs. Jeet Khemka, wife of Mr. Nand Khemka
- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka
- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka
- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka
- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka
(c) Enterprises owned or significantly influenced by key management
personnel or their relatives (either individually or with others)
- Unipatch Rubber Limited
- Khemka Aviation Private Limited
- Nand and Jeet Khemka Foundation
- Khemka & Co. Pvt. Ltd.
- Pankaj Dilip Pvt. Ltd.
- Sun Securities Ltd.
- Sun London Limited
- Khemka Technical Services Pvt. Ltd.
- Khemka Instruments Pvt. Ltd.
No amount has been provided as doubtful debt or advance written off or
written back in the year in respect of debts due from / to above
related parties.
5. Income tax
The Company has till date recognised Rs. 265.21 lacs (previous year Rs.
356.01 lacs) as Minimum Alternate Tax (MAT) credit entitlement which
represents that portion of the MAT Liability, the credit of which would
be available based on the provision of Section 115 JAA of the Income
Tax Act, 1961. The management is confident, based on the future
profitability projections and profit earned during the current year
that there would be sufficient taxable profit in future which will
enable the Company to utilise the above MAT credit entitlement.
6. Leases
Operating Lease
The Company has taken office and warehouse premises under operating
lease agreements. There are no purchase options in the lease
agreements. There is no escalation clause in the lease agreements.
There are no restrictions imposed by lease arrangements. There are no
subleases. The agreements are generally cancellable at the mutual
consent of both the lessor and the lessee.
7. The Company had obtained a stay of the Himachal Pradesh Government
order levying entry tax @ 2% on all goods entering the state w.e.f. 24
January 2011. The same has been reduced to 1% w.e.f. 13 July 2011. The
Hon''ble High Court while staying the levy in an interim order, directed
the Company to deposit 1/3rd of the assessed amount as ''''deposit'''' with
the state government and furnish a bank guarantee for the balance 2/3rd
amount to them. Since the cash payment as per Court order is in the
nature of deposits, no amount has been charged to the accounts as entry
tax. The estimated amount of entry tax upto 31 March 2013 is Rs. 350.17
lacs (excluding the amount of interest and penalty, if any, which can''t
be determined at this stage). However, the cash deposited so far is Rs.
107.92 lacs and bank guarantee furnished is for an amount of Rs. 215.84
lacs.
8. As per the requirement of Clause 40A of the Listing Agreement, the
minimum public shareholding in a public listed Company should at least
be 25% or above of the total paid up capital. Pursuant to Securities
Contracts (Regulation) (Second Amendment) Rules, 2010- Amendment in
rules 2, 19 and 19A (Notification no. G.S.R. 662(E) dated August 09,
2010, any listed Company which has public shareholding below 25% shall
increase its public shareholding to atleast 25% latest by June 2013.
The public shareholding of the Company as at 31 March 2013 was 22.95%.
The promoters of the Company are in the process of off loading the
shares to ensure that the Company complies with the aforesaid clause.
9. Gratuity and other post employment benefit plans
The Company has a defined benefit gratuity plan. Every employee who has
completed five years or more of service gets gratuity on departure at
15 days salary (last drawn salary) for each completed year of service
or part thereof in excess of six months. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
The following tables summarise the components of net benefit expenses
recognised in the statement of profit and loss and the funded status
and amount recognised in the balance sheet for the gratuity plan.
10. Previous year comparitives
Previous year figures have been regrouped wherever necessary to conform
to this year''s classification.
11. All figures in values are rupees in lacs.
Mar 31, 2012
1 Corporate information
Indag Rubber Limited (hereinafter referred to as 'the Company') is a
public company domiciled in India and incorporated under the provisions
of the Companies Act,1956. The Company is engaged in the manufacturing
and selling of Precured Tread Rubber and allied products.
2 Basis of preparation
The financial statements of the Company have been prepared in
accordance with generally accepted accounting principles in India
(Indian GAAp). The Company has prepared these financial statements to
comply in all material respects with the accounting standards notified
under the Companies (Accounting Standards) Rules, 2006, (as amended)
and the relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on an accrual basis and under the
historical cost convention. The accounting policies adopted in the
preparation of financial statements are consistent with those of
previous year.
(a) Terms/ rights attached to equity shares
The Company has only one class of equity shares having par value of Rs.
10 per share. Each holder of equity shares is entitled to one vote per
share. The Company declares and pays 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.
During the year ended 31 March 2012, the amount of per share dividend
recognized as distributions to equity shareholders was Rs. 6.00,
previous year Rs. 4.00.
3. Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are
used for retreading of tyres. These products do not have any different
risk and returns and thus the Company has only one business segment.
Segment Information
Geographical Segments
The Company has organized its manufacturing operations into two major
geographical segments :
Domestic (in India) and Export (Outside India)
The analysis of geographical segments is based on the geographical
location of the customers.
The geographical segments considered for disclosure are as follows:
- Sales within India include sales to customers located within India.
- Sales outside India include sales to customers located outside
India.
The following table shows the distribution of the Company's
consolidated sales and debtors by geographical market, regardless of
where the goods were produced:
4. Related party disclosures
Names of related parties and related party relationship
(a) Key management personnel and their relatives
- Mr. Nand Khemka (Chairman cum Managing Director)
- Mr. K. K. Kapur (Whole Time Director)
(b) Relatives of key management personnel
- Mr. Shyam Lal Khemka, brother of Mr. Nand Khemka
- Mrs. Jeet Khemka, wife of Mr. Nand Khemka
- Mr. Shiv Vikram Khemka, son of Mr. Nand Khemka
- Mr. Uday Harsh Khemka, son of Mr. Nand Khemka
- Mrs. Urvashi Khemka, daughter-in-law of Mr. Nand Khemka
- Mrs. Nitya Mohan Khemka, daughter-in-law of Mr. Nand Khemka
(c) Enterprises owned or significantly influenced by key management
personnel or their relatives (either individually or with others)
- Unipatch Rubber Limited
- Khemka Aviation Private Limited
- Nand and Jeet Khemka Foundation
- Khemka & Co. Pvt. Ltd.
- Pankaj Dilip Pvt. Ltd.
- Sun Securities Ltd.
- Sun London Limited
- Khemka Technical Services Pvt. Ltd.
- Khemka Instruments Pvt. Ltd.
No amount has been provided as doubtful debt or advance written off or
written back in the period in respect of debts due from/ to above
related parties.
5. Income tax
The Company has till date recognized Rs. 356.01 lacs (previous year Rs.
388.82 lacs) as Minimum Alternate Tax (MAT) credit entitlement which
represents that portion of the MAT Liability, the credit of which would
be available based on the provision of Section 115 JAA of the Income
Tax Act, 1961. The management based on the future profitability
projections and also profit earned during the period is confident that
there would be sufficient taxable profit in future which will enable
the Company to utilize the above MAT credit entitlement.
6. Contingent liabilities (not provided for) in respect of :
31 March 2012 31 March 2011
(Rs. in lacs) (Rs. in lacs)
a) The Company is under litigation
with the revenue authorities
regarding 159.15* 159.15*
an expenditure claimed by the Company
arising out of an arbitration award.
As per the Company, the expenditure
should be allowed to them in the
year the arbitrator has passed the
award. The department is of the view
that the liability is not accrued
till the award becomes a rule of
court and has therefore disallowed
the expenditure in the AY 98-99 (the
year in which the Company claimed the
expenditure). During the financial
year 2006-2007, the Company has
received a demand notice from Income
tax authorities pursuant to the
order by Income Tax Appellate Tribunal,
Delhi. The Company is presently
in appeal before the Hon'ble High Court.
The Company has deposited Rs. 20 lacs
against the demand which is
appearing in the note of Loans and
advances
b) Demands raised by the Service Tax
Authorities but disputed by the 1.93* 1.93*
Company and the appeal is pending
before the CESTAT.
c) Pending Labour cases 9.75* 12.50*
d) Demands raised by the Sales Tax
Authorities, being disputed by the 22.27* 11.11*
Company.
e) Differential amount of custom
duty payable by the Company in case of 22.67 22.67
non-fulfillment of export obligation
including interest thereon against the
import of capital goods made at
concessional rate of duty. Based on
future sales plans, management is quite
hopeful to meet out the export
obligation by executing the required
volume of exports in the future.
f) Claims against the Company not
acknowledged as debts 28.95* 18.29*
Total 244.72 225.65
* Based on the discussions with the solicitor/expert opinions
taken/status of the case, the management believes that the Company has
strong chances of success in above mentioned cases and hence no
provision there against is considered necessary at this point in time.
7. The Company had obtained a stay of the Himachal Pradesh Government
order levying entry tax @ 2% on all goods entering the state with
effect from 24th January, 2011. The same has been reduced to 1% w.e.f.
July 13, 2011. The Hon'ble High Court while staying the levy in an
interim order, directed the Company to deposit 1/3rd of the assessed
amount as "deposit" with the state government and furnish a bank
guarantee for the balance 2/3rd amount to them. Since the cash payment
as per court order is in the nature of deposits, no amount has been
charged to the accounts as entry tax. The estimated amount of entry tax
upto 31 March 2012 is Rs. 193.15 lacs (excluding the amount of interest
and penalty, if any, which can't be determined at this stage).
However, the cash deposited so far is Rs. 50.13 lacs and bank guarantee
furnished is for an amount of Rs. 100.25 lacs.
8. As per the requirement of Clause 40A of the Listing Agreement, the
minimum public shareholding in a public listed company should at least
be 25% or above of the total paid up capital. Pursuant to Securities
Contracts (Regulation) (Second Amendment) Rules, 2010- Amendment in
rules 2, 19 and 19A (Notification no. G.S.R. 662(E) dated August 09,
2010, any listed company which has public shareholding below 25% shall
increase its public shareholding to atleast 25% within a period of 3
years i.e. latest by August 08, 2013. The public shareholding of the
Company as at March 31, 2012 was 22.95%. The promoters of the Company
are in the process of off loading the shares to ensure that the Company
complies with the aforesaid clause.
9. Gratuity and other post employment benefit plans
The Company has a defined benefit gratuity 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
or part thereof in excess of six months. The scheme is funded with an
insurance company in the form of a qualifying insurance policy.
The following tables summarise the components of net benefit expense
recognized in the statement of profit and loss and the funded status
and amounts recognized in the balance sheet for the gratuity plan.
Provident Fund
The provident fund being administered by a Trust is a defined benefit
scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standard Board (ASB) states that provident
funds set up by employers, which requires interest shortfall to be met
by the employer, needs to be treated as defined benefit plan. The
Actuarial Society of India has issued the final guidance for
measurement of provident fund liabilities. The actuary has accordingly
provided a valuation and based on the below provided assumptions, there
is no shortfall as at 31 March 2012.
10. Previous year figures
Till the year ended 31 March 2011, the Company was using pre-revised
Schedule VI to the Companies Act 1956, for preparation and presentation
of its financial statements. During the year ended 31 March 2012, the
revised Schedule VI notified under the Companies Act 1956, has become
applicable to the Company. The Company has re-classified previous year
figures to conform to this year's classification. The adoption of
revised Schedule VI does not impact recognition and measurement
principles followed for preparation of financial statements. However,
it significantly impacts presentation and disclosures made in the
financial statements, particularly presentation of balance sheet.
11. All figures in values are rupees in lacs.
Mar 31, 2011
1. Nature of Operations
Indag Rubber Limited (here in after referred to as 'the Company') is
engaged in the manufacturing and selling of Precured Tread Rubber and
allied products.
2. Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion.Gum and Rubber Cement, which are
used for fixing on old used tyres. These products do not have any
different risk and returns and thus the Company has only one business
segment.
Segment Information
The Company has organized its manufacturing operations into two major
geographical segments : Domestic (in India) and Export (Outside India)
The analysis of geographical segments is based on the geographical
location of the customers.
The geographical segments considered for disclosure are as follows:
- Sales within India include sales to customers located within India.
- Sales outside India include sales to customers located outside India.
3. Income tax
The Company has till date recognized Rs. 38,882 (previous year Rs.
42.830) as Minimum Alternate Tax (MAT) credit entitlement, which
represents that portion of the MAT Liability, the credit of which would
be available based on the provision of Section 115 JAA of the Income
Tax Act, 1961 .The Management based on the future profitability
projections and also profit earned during the year is confident that
there would be sufficient taxable profit in future which will enable
the Company to utilize the above MAT credit entitlement.
4. Contingent Liabilities (not provided for) in
respect of: (Rs. '000)
31st 31st
March March
2011 2010
a) The Company is under litigation with the 15,915* 15,915*
revenue authorities regarding icais* expenditure
claimed by the Company arising out of an arbitr
-ation award. As perthe Company, the expenditure
should be allowed to them in the year the arbitr
-ator has passed the award.The department is of
the view that the liability is not accrued till
the award becomes a rule of court and has there
-fore disallowed the expenditure in the AY 98-99
(the year in which the Company claimed the expen
-diture). During the financial year 2006-2007,
the Company has received a demand notice from
Income tax authorities pursuant to the order by
Income tax Appellate Tribunal, Delhi. The Company
is presently in appeal before the Hon'ble High
Court. The Company has deposited Rs. 2,000
against the demand and which is appearing in the
schedule of Loans and Advances.
b) Demands raised by the Service Tax Authorities 193* 193*
but disputed by the Company and the appeal is
pending before the CESTAT.
c} Pending Labour cases 1,250* 1,120*
d) Demands raised by the Sales Tax Authorities, 1,111* 1,158*
being disputed by the Company.
e) Excise duty liability for DG Set case pending - 917*
before CESTAT
f) Differential amount of custom duty payable by 2,267 2 267
the Company in case of non-fulfiilment of export
obligation including interest there against the
import of capital goods made at concessional
rate of duty. Based on future sales plans,
management is quite hopeful to meet out the
export obligation by executing the required
volume of exports in the future
g) Claims against the Company not acknowledged 1,829* -
as debts Based on the discussions with the
solicitor expert opinions taken/status of the
case, the management believes that the Company
has strong chances ot success in above mentioned
cases and hence no provision there against is
considered necessary at this point in time.
22,565 21,570
5. Leases
Operating Lease
The Company has taken office and warehouse premises under operating
lease agreements. There is no purchase option in the lease agreements.
There is no escalation clause in the lease agreement. There are no
restrictions imposed by lease arrangements. There are no subleases. The
agreements are generally cancelable at the mutual consent of both the
lessor and the lessee.
6. As per the requirement of Clause 40A of the Listing Agreement, the
minimum public shareholding in a public limited company should atleast
be 25% or above of the total paid up capital. The public shareholding
of the Company at March 31. 2011 was 22.95%. The promoters of the
Company are in the process of off loading the share ensure that the
Company complies with the aforesaid clause.
7. The Company has a defined benefit gratuity 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 or part there of in excess of six months.The scheme is
funded with an insurance company in the form of a qualifying insurance
policy.
The Provident Fund being administered by a Trust is a defined benefit
scheme where by the Company deposit an amount determined as a fixed
percentage of basic pay to the fund every month. The benefit vests us
commencement of employment. The interest credited to the accounts of
the employees is adjusted on annual basis to confirm to the interest
rate declared by the Government for the Employees Provident Fund,
guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standard Board (ASB) states that provident
funds set up by employers, which requires interest shortfall to be met
by employer, needs to be treated as defined benefit plan. Pending the
issuance of the Guidance Note from Actuarial Society of India, the
Company's actuary has expressed his inability to reliably measure the
provident fund liability.There is no deficit in the fund.
8. There were fraudulant electronic transfers of Rs.700 thousand from
the Company's bank account to the bank accounts of three individuals,
out of which Rs.400 thousand were recovered before withdrawal from
these bank accounts of individuals and the balance amount of Rs. 300
thousand has not been recovered.The Company has taken up the matter
with the bank for the recovery of the balance amount and considered the
amount as fully recoverable.
9. Previous Year Comparatives
Previous year's figures have been regrouped where necessary to conform
to this year's classification.
10. All figures In values are rupees In thousands.
Mar 31, 2010
1. Nature of Operations
Indag Rubber Limited (hereinafter referred to as the Company) is
engaged in the manufacturing and selling of Precured Tread Rubber and
allied products.
2. Segment Information
The Company is engaged in the manufacturing of the Precured Tread
Rubber, Bonding Repair and Extrusion Gum and Rubber Cement, which are
used for fixing on old used tyres. These products do not have any
different risk and returns and thus the Company has only one business
segment.
Segment Information Geographic Segments
The Company organized its manufacturing operations into two major
geographical segments : Domestic (in India) and Export (Outside India)
The analysis of geographical segments is based on the geographical
location of the customers. The geographical segments considered for
disclosure are as follows:
- Sales within India include sales to customers located within India.
- Sales outside India include sales to customers located outside India.
The following table shows the distribution of the Companys
consolidated sales and debtors by geographical market, regardless of
where the goods were produced:
Names of Related Parties
Key Management Personnel
Mr. Nand Khemka (Chairman)
Mr. K. K. Kapur (Whole Time Director)
Relatives of key management personnel
Mr. Shyam Lai Khemka Mrs. Jeet Khemka Mr. Shiv Vikram Khemka Mr. Uday
Harsh Khemka Mrs Nitya Mohan Khemka Mrs Urvashi khemka
Enterprises owned or significantly influenced by key management
personnel or their relatives. (either individually or with others)
Unipatch Rubber Limited
Khemka Aviation Private Limited
Nand and Jeet Khemka Foundation
Khemka & Go. Pvt. Ltd
Pankaj Dilip Pvt. Ltd.
Sun Securities Ltd.
Sun London Limited
Khemka Technical Services Pvt. Ltd
Khemka Instruments Pvt. Ltd
No amount has been provided as doubtful debt or advance written off or
written back in the year in respect of debts due from/to above related
parties.
3. Income tax
The Company has till date recognized Rs. 42,830 (previous year Rs.
23,342) as Minimum Alternate Tax (MAT) credit entitlement (including
Rs. 19,914 (previous year Rs. 8,591) recognized during the current
year), which represents that portion of the MAT Liability, the credit
of which would be available based on the provision of Section 115 JAA
of the Income Tax Act, 1961. The Management based on the future
profitability projections and also profit earned during the year is
confident that there would be sufficient taxable profit in future which
will enable the Company to utilize the above MAT credit entitlement.
(Rs. 000) 31st 31st
March, March,
2010 2009
8. Contingent Liabilities (not
provided for) in respect of:
a) The Company is under litigation
with the revenue authorities 15,915* 15,915*
regarding expenditure claimed by the
Company arising out of an
arbitration award. As per the Company,
the expenditure should be allowed to
them in the year the arbitrator has
passed the award.
The department is of the view that
the liability is not accrued till the
award becomes a rule of court and has
therefore disallowed the expenditure
in the AY 98-99 (the year in which the
Company claimed the expenditure).
During the financial year 2006-2007,
the Company has received a demand
notice from Income tax authorities
pursuant to the order by Income tax
Appellate Tribunal, Delhi. The Company
is presently in appeal before the Honble
High Court. The Company has deposited
Rs. 2,000 against the demand and which
is appearingin the schedule of Loans and Advances.
b) Demands raised by the Service Tax
Authorities but disputed by the 193* 193*
Company and the appeal is pending before
the CESTAT.
c) Pending Labour cases 1,120* 1,450*
d) Demands raised by the Sales Tax
Authorities, being disputed by 1,158* --
the Company. The Company has deposited
Rs. 241 against the demands and which is
appearing in the schedule of Loans and
Advances.
e) Excise duty liability for DG Set case
pending before CESTAT. The 917* 917*
Company has deposited Rs. 464 against the
demand and which is appearing in the
schedule of Loans and Advances.
* Based on the discussions with the solicitor/ expert opinions taken/
status of the case, the management believes that the Company has strong
chances of success in above mentioned cases and hence no provision
there against is considered necessary at this point in time.
f) Guarantees given by the Company. 13,513 12,696
g) Differential amount of custom duty payable
by the Company in case 2,267 2,267
of non-fulfillment of export obligation
including interest thereon
against the import of capital goods made
at concessional rate of duty. Based on future
sales plans, management is quite hopeful
to meet out the export obligation by executing
the required volume of exports in
the future. 35,083 33,438
10. As per the requirement of Clause 40A of the Listing Agreement, the
minimum public shareholding in a public listed company should at least
be 25% or above of the total paid up capital. The public shareholding
of the Company as at March 31, 2010 was 20.13%.
During the previous year, the Company had applied to Bombay Stock
Exchange seeking the extension of time for compliance of Clause 40A and
received the approval letter dated April 2, 2009 from the exchange
giving the extension time upto April 30, 2009. The Company had again
requested Bombay Stock Exchange for grant of further extension of time
for compliance of clause 40A of the listing agreement. The Company
during the current year has received show cause notice from Bombay
Stock Exchange to increase the minimum public shareholding from
promoters. The promoters of the Company are in the process of off
loaded the shares to ensure that Company complies the said clause.
4. The Company has a defined benefit gratuity 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.
The scheme is funded with an insurance company in the form of a
qualifying insurance policy.
The Provident Fund being administered by a Trust is a defined benefit
scheme whereby the Company deposits an amount determined as a fixed
percentage of basic pay to the fund every month. The benefit vests upon
commencement of employment. The interest credited to the accounts of
the employees is adjusted on an annual basis to confirm to the interest
rate declared by the Government for the Employees Provident Fund. The
Guidance Note on implementing AS-15, Employee Benefits (Revised 2005)
issued by the Accounting Standard Board (ASB) states that provident
funds set up by employers, which requires interest shortfall to be met
by the employer, needs to be treated as defined benefit plan. Pending
the issuance of the Guidance Note from the Actuarial Society of India,
the Companys actuary has expressed his inability to reliably measure
the provident fund liability. There is no deficit in the fund.
The following tables summarize the components of net benefit expense
recognized in the Profit and Loss Account and the funded status and
amounts recognized in the Balance Sheet for the gratuity.
5. Previous Year Comparatives
Previous years figures have been regrouped where necessary to conform
to this years classification.
6. All figures in values are rupees in thousands.