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Notes to Accounts of Indag Rubber Ltd.

Mar 31, 2019

1. Corporate information

Indag Rubber Limited (hereinafter referred to as “the Company”) 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 Company’s CIN is - L74899DL1978PLC009038.

The Company’s shares are listed on Bombay Stock Exchange (‘BSE’). 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 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 ‘‘deposit’’ 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 Hon’ble 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. Hon’ble 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 NRI’s / 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 ‘Employee benefits expense’ 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 (“insurer”). 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 Company’s 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 Company’s 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 (‘USD’). 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 Company’s 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 Company’s 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 year’s classification.


Mar 31, 2018

1. Corporate information

Indag Rubber Limited (hereinafter referred to as “the Company”) 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 Company’s CIN is - L74899DL1978PLC009038.

The Company’s shares are listed on Bombay Stock Exchange (‘BSE’). 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 Company’s 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 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 ‘‘deposit’’ 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 Hon’ble 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. Hon’ble 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 ‘Employee benefits expense’ 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 Company’s obligation in respect of defined benefit plans is as follows:

The fund invested in LIC of India (“insurer”). 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 Company’s 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 Company’s 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 (‘USD’), 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 Company’s 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 Company’s 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 Company’s 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 (‘the date of transition’). In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under section 133 of the Companies Act 2013 (the ‘Act’) read with Rule 7 of the Companies (Accounts) Rules, 2014 (referred to as ‘Indian GAAP’) 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 Company’s 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 Company’s first financial statements prepared in accordance with Ind AS.

The effect of the Company’s 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 ‘''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.

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