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Notes to Accounts of UCAL Ltd.

Mar 31, 2018

1. Investment in Equity:

The company has equity investment aggregating to Rs.20,877.28 lakhs in Amtec Precision Products Inc., a wholly owned subsidiary. The subsidiary has made net profit during the previous year ended 31st march 2018, based on the audited accounts. It has restructured its loan, improved fund availability and enhanced its operational performance. Accordingly, no provision is considered necessary in respect of diminution in value of investments

2. Windmill Power Generation:

Electricity charges debited to Profit & Loss account is net of Rs.127.85 lakhs (previous year Rs.126.42 lakhs) being the electricity generated through company owned Wind Turbine Generators.

3. Managerial Remuneration:

Managerial Remuneration provided/ paid for the year ended 31st March 2018 based on the approval of the shareholders in the AGM held on 28th September 2017 stands at Rs.259.07 (including a sum of Rs.37.29 lakhs provided and yet to be paid) It is in accordance with the approval of the Central Government dated 12th July,2017.

4. Deferred Tax:

Foreign currency Trade Receivables of INR 2,854.06 lacs and loan receivable of INR 12,337.79 lacs have been written off and deferred tax Asset of INR 3,403 lacs has been recognized in the financials. The management firmly believes that adequate taxable profit would be earned in the years to come other than the reversal of taxable timing differences. The company has been earning profit before tax during a considerable number of its past years. The loss incurred during the year was on account of the aforesaid write-off and accordingly recognized as deferred tax asset.

*FVTPL=> Fair Value Through Profit and Loss

a. Financial Assets and Liabilities not carried at Fair Values:

The management considers that the carrying amount approximates the fair value in respect of financial assets and financial liabilities carried at amortized cost, such fair values have been computed using Level 3 inputs.

b. Assets and Liabilities that are measured at Fair Value on a recurring basis:

Fair Value Hierarchies as per Indian Accounting Standard 114 - Fair Value measurement:

Level 1: Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date. The asset included in this hierarchy are listed equity shares that are carried at fair value using the closing prices of such instruments as at the close of the reporting period.

Level 2: Level 2 hierarchy uses inputs that are inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly. As on the balance sheet date there were no assets or liabilities for which the fair values were determined using Level 2 hierarchy.

Level 3: Level 3 hierarchy uses inputs that are unobservable for determination of fair value. Level 3 inputs were used in determination of fair value of investment in unquoted equity shares.

There were no transfers between fair value hierarchies during the reported years. The company’s policy is to recognize transfers in and transfers out of fair value hierarchy levels as at the end of the reporting period.

5. Financial Assets Risk Management:

The company is exposed to risks in the form of Market Risk, Liquidity Risk and Credit Risk. The risk management policies of the company are monitored by the board of directors. The nature and extent of risks have been disclosed in this note.

a) Market Risk

The risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: currency risk, interest rate risk and other price risk.

i) Currency Risk:

The company has foreign currency receivable and payables denominated in currency other than INR exposing the company to currency risk. The company’s significant foreign currency exposures at the end of the reporting period expressed in INR is as below:

The company is exposed to foreign currency risk as it does not hold any forward contracts for hedging the risk. Any weakening in the functional currency might increase the cost of imports and borrowing cost towards buyer’s credit.

Sensitivity Analysis

The sensitivity of profit or loss and equity to changes in the USD exchange rate arises mainly from foreign currency denominated financial instruments as disclosed above and has been computed in assuming an 5% increase or decrease in the exchange rate:

*Holding all other variable constant. In management’s opinion, the sensitivity analysis is unrepresentative of the inherent foreign exchange risk because the exposure at the end of the reporting period does not reflect the exposure during the year.

ii) Interest Rate Risk:

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The company has availed loans at floating interest rate exposing the company to interest rate risk. The company has not hedged its interest rate risk using interest rate swaps and is exposed to the risk. The total exposure of the company to interest rate risk as at the balance sheet date has been disclosed below:

Sensitivity Analysis:

The sensitivity to the changes in the interest rate have been determined by assuming that the amount of liability as at the end of the reporting period was outstanding through out the year. A 50-basis points fluctuation has been used to demonstrate the sensitivity of profit or loss and equity to interest rate holding all other variables constant.

iii) Equity Price Risk:

Investments in equity instruments of the subsidiary companies are not held for trading and are carried at cost, hence are not exposed to equity price risk. The company holds certain investments in equity instruments that are quoted in stock exchanges and such investments are designated as measured at fair value through profit and loss statement exposing the company to equity price risk. Exposure to Equity price risk was INR 194.35 lacs (INR 153.58 lacs).

b) Liquidity Risk:

Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per requirements. The company has obtained fund and non-fund based working capital limits from various bankers which is used to manage the liquidity position and meet obligations on time.

c) Credit Risk:

Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. The management evaluates the credit risk of individual financial assets at each reporting date. An expected credit loss is recognized if the credit risk has increased significantly since the initial recognition of the financial instrument. In general, the company assumes that there has been a significant increase in credit risk since initial recognition if the amounts are 30 days past due from the initial or extended due date. However, in specific cases the credit risk is not assessed to be significant even if the asset is due beyond a period of 30 days depending on the credit history of the customer with the company and business relation with the customer. A default on a financial asset is when the counter party fails to make contractual payments within 1 year from the date they fall due from the initial or extended due date. The definition of default is adopted given the industry in which the entity operates.

Write off of Financial Assets:

To the extent a financial asset is irrecoverable, it is written off by recognizing an expense in the statement of profit and loss. Such assets are written off after obtaining necessary approvals from appropriate levels of management when it is estimated that there is no realistic probability of recovery and the amount of loss has been determined. Subsequent recoveries, if any of amounts previously written off are recognized as an income in the statement of profit and loss in the period of recovery.

The company considers the following to be indicators of remote possibility of recovery:

a) the counterparty is in continuous default of principal or interest payments

b) the counterparty has filed for bankruptcy

c) the counterparty has been incurring continuous loss during its considerable number its past accounting periods The company assesses changes in the credit risk of a financial instrument taking into consideration ageing of bills outstanding on the reporting date, responsiveness of the counterparty towards requests for payment, forward looking information including macroeconomic information and other party specific information that might come to the notice of the company. In general, it is assumed that the counterparty continues his credit habits in future.

The possibility of recovering the Trade Receivables of INR 2,854.06 lacs and loan receivable of INR 12,337.79 lacs due from its wholly owned subsidiary Amtec Precision Products Inc., were judged to be remote, accordingly these financial assets have been written off and the loss has been disclosed as an exceptional item in the statement of profit and loss. The company has initiated necessary action to secure approvals from the Reserve Bank of India in this regard.

6. Capital Management:

The company manages its capital to ensure the continuation of going concern, to meet the funding requirements and to maximize the return to its equity shareholders. The company is not subject to any capital maintenance requirement by law. Capital budgeting is being carried out by the company at appropriate intervals to ensure availability of capital and optimization of balance between external and internal sources of funding. The capital of the company consists of equity shares and accumulated internal accruals. Changes in the capital have been disclosed with additional details in the Statement of Changes in Equity.

B. Exemptions and Exceptions availed:

The company has applied all the mandatory exceptions and availed certain optional exemptions required/allowed by IndAS 101 - First Time adoption of Indian Accounting Standards.

B.1 IndAS optional Exemptions availed:

B.1.1 Deemed Cost - Property, Plant and Equipment and Intangible Assets:

IndAS 101 exempts entities from retrospective application of IndAS 16 Property, plant and Equipment and IndAS 38 Intangible Assets if the deemed cost exemption is applied. The standard inter-alia permits previous GAAP carrying value or Fair Value on the date of transition to IndAS to be adopted as deemed cost for the purpose of transition to IndAS.

Accordingly, the company has applied the exemption by adopting fair value on the date of transition as deemed cost of land and previous GAAP carrying value as deemed cost in respect of other assets. Consequential changes in the equity has been adjusted in the opening balance the reserves.

B.1.2 Deemed Cost - Equity Instruments:

IndAS 27 requires an entity to account for investments in subsidiaries, joint ventures and associates either at cost or in accordance with IndAS 109. IndAS 101 allows adoption of deemed cost if an entity opts to account for these investments at cost as per IndAS 27. The deemed cost can be the fair value at the entity’s date of transition to IndAS in its separate financial statements or the carrying value of the investments as per the previous GAAP.

The company has availed this exemption and has elected to account for the Investments in all the subsidiaries at carrying value as per previous GAAP adopting the same as deemed cost.

B.1.3 Designation of previously recognized financial instruments:

IndAS 101 allows designation of a financial asset as measured at fair value through profit or loss in accordance with IndAS 109 - Financial Instruments on the basis of the facts and circumstances that exist at the date of transition to IndAS.

Accordingly, the company has designated all its investments in Equity instruments other than investments in subsidiary companies as measured at fair value through profit or loss. Changes to total equity as at the date of transition to IndAS has been adjusted to the opening balance of retained earnings and changes in fair value during the year 2016-17 has been presented in the statement of profit and loss.

B.2 Mandatory Exceptions applied:

B.2.1 Estimates:

IndAS 101 requires that an entity’s estimates in accordance with IndAS at the date of transition to IndAS shall be consistent with estimates made for the same date in accordance with previous GAAP unless there is objective evidence that those estimates were in error. Ind AS estimates as at 01-04-2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.

B.2.2 Classification and measurement of financial Assets:

As per IndAS 109, a financial instrument shall be classified based on the facts and circumstances existing on the date of initial recognition of the financial instrument. IndAS 101 allows a first-time adopter to classify their financial instruments based on the facts and circumstances existing at the date of transition to IndAS. The company applied this exemption in classifying its financial instruments on the date of transition to IndAS.

B.2.3 Derecognition of Financial Assets and Financial Liabilities:

A first-time adopter shall not apply the derecognition requirements of IndAS 109 Financial Instruments retrospectively except as permitted by IndAS101. Accordingly, the company has applied the derecognition requirements of IndAS 109 only for accounting periods beginning with the date of transition to IndAS.

C. Notes to First Time Adoption:

C.1 Excise duty impact on revenue from Operations:

The Statement of Profit and Loss has been prepared in accordance with the Division II of Schedule III to Companies Act, 2013. The format specified in the statute as aforesaid has not mandated the separate disclosure of excise duty unlike the previous format prescribed by the statute. Accordingly, the excise duty collectible from the customers has been added to Revenue from operations. This treatment has increased the revenue reported for the year 2016-17 to the extent of excise duty included therein. A comparative statement has been presented below:

*Excise duty included in revenue from sale of products for the year 2017-18 contains excise duty collectible/collected from the customers upto 30th June 2017 after the which the excise duty regime was replaced with goods and service tax regime. Goods and Services Tax payable to the tax authorities are being accounted for as a liability and included in statutory liabilities under other current liabilities.

C.2 Remeasurements of post-employment benefit obligations:

Under IndAS, remeasurements i.e., actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognized in other comprehensive income. Under the previous GAAP, these remeasurements were forming part of the profit or loss for the year. As a result of this change, the profit for the year ended 31st March 2017 has increased by INR 70.45 lacs. There is no impact on equity as on 31st March 2017.

C.3 Depreciation of Leasehold Land:

The company had entered into long term lease agreement with the development authorities of industrial estates (lessor) in respect of factory land in certain locations. The leases were for a fixed period of time from the date of inception and were classified as finance leases in the books of accounts. Under the lease arrangement the possession of the leased lands have to be transferred to the lessor at the end of the lease term unless renewed or extended Accordingly, the lease hold land may be controlled by the company only upto the end of the lease term. In line with IndAS 16 - Property, Plant and Equipment the deemed cost of the leased hold land as at the date of transition to IndAS is being amortized equally over the unexpired period of lease as at the even date.

C.4 Proposed Dividend and Tax on Distribution:

A provision shall be recognized only if there is a present obligation arising from past events. Dividend proposed by the board does not give rise any right to claim the dividend unless the dividend is declared by the shareholders in the annual general meeting. Accordingly, the proposed dividend presented as a liability as per previous GAAP has been added back to equity.

Valuations of defined employee benefit obligations are performed on certain basic set of pre-determined assumptions and other regulatory framework which may vary over time. Thus, the company is exposed to various risks in providing the above gratuity benefit which are as follows:

In addition to Interest Rate risk and liquidity risk explained in the Note No. 37 the company is also exposed to the below risks on account of valuation of defined benefit obligations:

a) Salary Escalation Risk: The present value of the defined benefit plan is calculated with the assumption of salary increase rate of plan participants in future. Deviation in the rate of increase of salary in future for plan participants from the rate of increase in salary used to determine the present value of obligation will have a bearing on the plan’s liability.

b) Demographic Risk: The Company has used certain mortality and attrition assumptions in valuation of the liability. The Company is exposed to the risk of actual experience turning out to be worse compared to the assumptions.

c) Regulatory Risk: Gratuity benefit is paid in accordance with the requirements of the Payment of Gratuity Act, 1972 (as amended from time to time). There is a risk of change in regulations requiring higher gratuity payouts (e.g. Increase in the maximum limit on gratuity payout).

d) I nvestment Risk: The probability or likelihood of occurrence of losses relative to the expected return on any particular investment.

7. Related Party Disclosure:

1. Related parties where control exists

a) Holding Company Carburettors Limited

b) Subsidiaries

Ucal Polymer Industries Limited

UPIL, USA (Wholly Owned Subsidiary of UPIL)

Amtec Precision Products Inc. USA

North American Acquisition Corporation (Wholly Owned Subsidiary of Amtec)

Amtec Moulded Products Inc. USA (Wholly Owned Subsidiary of Amtec)

2. Other Related parties

a) Fellow Subsidiaries

RD Electrocircuits Private Limited

b) Key Managerial Personnel

Mr. Jayakar Krishnamurthy - Chairman and Managing Director

Mr. Ram Ramamurthy - Whole Time Director and Chief financial officer

Ms. Rekha Raghunathan - Director and Company Secretary

c) Enterprises controlled or jointly controlled by KMP or directors Minica Real Estates Private Limited

Minica Property Holdings Private Limited Bangalore Union Services Private Limited Sujo Land and Properties Private Limited UCAL - JAP Systems Limited Minica Services Private Limited Southern Ceramics Private Limited

d) Relatives of Key Managerial Personnel Dr. V Krishnamurthy

e) Entities controlled by relatives of KMP Magnetic Meter Systems (India) Limited Bharat Technologies Auto Components Limited

f) Entities in which KMP or relatives are trustees or members of managing committee Culture and Heritage Trust of Karuveli

Dr. V Krishnamurthy Educational Foundation

8. MSME disclosure:

Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act (MSMED) 2006 have been determined based on the information available with the company. The required disclosures under MSMED Act are given below:

9. Proposed Dividend and Tax thereon:

The board of directors in their meeting held on 21st May 2018, have proposed a dividend of INR 2211.36 lacs (100% on the paid up equity share capital). Distribution of dividend is subject to approval by the shareholders in the annual general meeting. On distribution the company would be liable to pay a tax of INR 437.75 lacs as dividend distribution tax under section 115-O.

10. Corporate Social Responsibility:

Expenditure incurred on corporate social responsibility (CSR) activities:

(a) Gross amount required to be spent during the year is Rs.59.34 lacs (last year INR 45.43 lacs)

(b) Amount spent during the year

11. The company is engaged in the business of manufacture and sale of automotive components. There are no other reportable segments of operation of the company.

12. The balances outstanding as on 31st March 2018 in respect of Sundry Debtors, Loans & Advances and sundry creditors wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

Subject to the above, in the opinion of the board, current assets, loans and advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and for all other known liabilities is considered adequate and are not in excess of the amounts reasonable necessary.

13. Previous year’s figures have been regrouped wherever necessary to conform to current year’s grouping.


Mar 31, 2016

(b) Rights and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of '' 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(d) Pursuant to a change in the shareholding pattern as disclosed above, UCAL Fuel Systems Limited has become a subsidiary of Carburetors Ltd during the year.

(e) Details of Shares allotted as fully paid up by way of bonus shares (during 5 yrs immediately preceding 31.03.2016) - Nil

The company has a) equity investment aggregating to Rs,15,492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with b) interest free advance of Rs,12,506.18 lakhs, (Previous Year Rs,12,244.24 lakhs) and

c) bank guarantees given to banks on its behalf aggregating to Rs,10,547.66 lakhs(Previous year Rs,9,954.23 lakhs). The subsidiary has made an operating profit (before interest expense, depreciation and taxes) during the previous year ended 31st March, 2015, based on the audited accounts. The subsidiary is also restructuring its loans in order to improve the fund availability to enhance operational performance. Accordingly no provision is considered necessary in respect of diminution in value of investments.

Note 30

Trade receivables outstanding for a period of less than six months includes a sum of Rs, 3,272.16 lakhs (Previous year Rs, 3,087.56 lakhs) due from M/s Amtec Precision Products, Inc.,USA, a wholly owned subsidiary. The company and its subsidiary has worked out a deferred payment plan and made representations to the bankers, according to which these amounts are expected to be realized at the earliest.

Note 1

The Payment of Bonus Amendment Bill, 2015 was passed in Parliament in December, 2015 and seeks to amend the Payment of Bonus act, 1965 with retrospective effect from April,2015.However the Madras High Court has passed a Stay Order granting interim stay of the retrospective effect of the amendment to the Payment of Bonus Act, 1965.Hence bonus provisions have been recognized for the current year as in the past without giving effect to the amendment mentioned above.

Note 2

Micro, Small and Medium Enterprises under the Micro, Small and Medium Enterprises Development Act (MSMED) 2006 have been determined based on the information available with the company. The required disclosures under MSMED Act are given below:

The balances outstanding as on 31st March, 2016 in respect of Sundry Debtors, Loans and Advances and Sundry Creditors, wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

Note 3

Subject to the observation in Note 33 above, in the opinion of the Board of Directors, Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and for all other known liabilities is considered adequate and are not in excess of the amount reasonably necessary.

Note 4

Research and Development expenditure includes Salaries, Wages and Bonus amounting to Rs, 336.21 lakhs (previous year Rs, 382.52 lakhs), Travel expenses Rs, 30.62 Lakhs (previous year Rs, 25.60 lakhs) and Rent Rs, 233.23 Lakhs (previous year Rs, 198.00 Lakhs)

Note 5

Electricity charges debited to Profit and Loss account is net of Rs,84.94 lakhs (previous year Rs,97.05 lakhs) being the electricity generated through company owned Wind Turbine Generators.

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the balance sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit and loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded). During the current year, the actuarial valuation has taken cognizance of a change in the estimation provided by the company, wherein the internal policy of the company provides for non-payment of leave encashment to employees on resignation from service.

The Central Government has not granted approval to pay managerial remuneration at 7.5% to Mr. Jayakar Krishnamurthy Chairman and Managing Director, for the financial years 2014-15 and 2015-16. Accordingly, provision has been made in accounts for collection of refund of excess managerial remuneration paid to him during the years 2014-15 and 2015-16 amounting to Rs,73.13 lakhs and Rs,47.12 lakhs respectively.

Commission payable to Mr. Jayakar Krishnamurthy during the year 2014-15 and provided for in the books of accounts in the FY-2014-15 has not been paid. This amount has been set off against the refund collectable from him for the FY-2014-15. Hence the total refund due from Mr. Jayakar Krishnamurthy is Rs, 69.26lakhs (FY-2014-15- Rs, 22.14 lakhs and FY-2015-16- Rs, 47.12 lakhs) which will be recovered from him during the FY-2016-17.

As the Company''s business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specified in the Companies (Accenting Standards) Rules 2006 are not applicable.

Note 6

Related Party Disclosures

I. NAME OF THE RELATED PARTIES AND RELATIONSHIP

(i) HOLDING COMPANY a. Carburetors Limited

(ii) SUBSIDIARIES OF THE COMPANY

a. Ucal Polymer Industries Limited

b. UPIL,USA (Wholly Owned Subsidiary of UPIL)

c. Amtec Precision Products Inc. USA

d. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

e. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

(iii) KEY MANAGEMENT PERSONNEL

a. Mr.Jayakar Krishnamurthy - Chairman and Managing Director

b. Mr. Ram Ramamurthy - Whole-time Director and

Chief Financial Officer (With effect from 12th November, 2015)

c. Ms. Rekha Raghunathan - Director and Company Secretary

d. Mr.N.Gnanasambandan - Chief Financial Officer (Upto 30th September, 2015)

(iv) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services Private Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties Private Limited

f. Magnetic Meter Systems (India) Limited

g. Bangalore Union Services Private Limited

h. Culture and Heritage Trust of Karuveli

i. Academy of Higher Education,National College,Trichy j. UCAL-JAP

(v) RELATIVES OF KEY MANAGEMENT PERSONNEL Dr. V. Krishnamurthy

Note : Related party relationship is identified by the company and relied upon by the auditors.


Mar 31, 2015

1. Rights and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(All Amounts in Rs. Lakhs, unless otherwise stated)

As at As at 31st March 31st March 2015 2014

2. Contingent Liabilities, Guarantees and Commitment Contingent Liabilities

Claims against the company not acknowledged as debts :-

i) Sales Tax 88.88 88.88

ii) Excise Duty 223.64 221.69

iii) Service Tax 1.23 8.66

iv) Income Tax 871.40 299.71

v) Stamp Duty 31.37 31.37

Other moneys for which the company is contingently liable

i) In respect of Letter of Credits Outstanding 543.20 458.80

ii) Guarantees given by the company to the banks, with regard to credit facilities extended to M/s.Amtec Precision Products Inc., USA, a wholly owned subsidiary 9,954.23 10,269.04

iii) Guarantees given by Banks on behalf of the company 169.10 123.27 Commitment

Estimated amount of contracts remaining to be executed on capital account, 202 12 49.51 net of advances, not provided for :

3. The company has a) equity investment aggregating to Rs. 15,492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with b) interest free advance of Rs. 12,244.24 lakhs, (Previous Year Rs. 12,048.81 lakhs) and c) bank guarantees given to banks on its behalf aggregating to Rs. 9,954.23 (Previous year Rs. 10,269.04 lakhs). The operations of this subsidiary have shown marked improvements compared to previous years. Accordingly no provision is considered necessary in respect of investment in it as well as advances due from it as at the year end, though the net worth of the subsidiary has been fully eroded.

4. Sundry debtors includes a sum of Rs. 3,087.56 lakhs (previous year Rs. 2,905.61 lakhs) due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary. The Company is working out a deferred payment plan for the dues from Amtec Precision Products, Inc, USA to be approved by their lenders, according to which the amount is expected to be realised over a period of time. Accordingly these have been classified as short term.

5. Effective from April 1, 2014, the company has charged depreciation based on the revised remaining useful life of the assets as per the requirement of Schedule II of the Companies Act, 2013. Due to above, depreciation charge for the year ended March 31, 2015 is higher by Rs. 571.40 lakhs. Further, based on transitional provisions provided in Note 7(b) of Schedule II, an amount of Rs. 357.46 lakhs (net of deferred Tax) has been adjusted with retained earnings.

The balances outstanding as on 31st March 2015 in respect of Sundry Debtors, Loans and Advances and Sundry Creditors, wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

6. Subject to the observation in Note 35 above, in the opinion of the Board, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and for all known liabilities is considered adequate and are not in excess of the amounts reasonably necessary.

7.

Research and Development expenditure includes salaries, wages and bonus amounting to Rs. 382.52 lakhs (Previous year Rs. 424.34 lakhs), travel expenses Rs. 25.60 lakhs (Previous year Rs. 30.52 lakhs) and Rent Rs. 198.00 lakhs (Previous year Rs. 198.00 lakhs).

8.

Electricity charges debited to Profit and Loss account is net of Rs. 97.05 lakhs (previous year Rs. 126.62 lakhs) being the electricity generated through company owned Wind Turbine Generators.

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the balance sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit and loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded).

The Remuneration to the Managing Director was provided, based on the approval of the Shareholders in the AGM held on 30th September, 2011 at Rs. 185.28 Lakhs and Rs. 184.68 Lakhs respectively for the years ended 31st March, 2013 and 2014 which however was in excess of the limits specified under Section-198/309 of the Companies Act, 1956 by a sum of Rs. 51.78 Lakhs and Rs. 75.52 Lakhs respectively for those two years. The excess paid for year ended 31st March, 2013 of Rs. 51.78 lakhs not being approved by the Central Government, had been received during the current year and credited to miscellaneous income. The excess provision of Rs. 75.52 Lakhs for the year ended 31st March, 2014 and the full provision for the current year amounting to Rs. 235.68 Lakhs are subject to the approval of the Central Government.

As the Company's business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specifued in the Companies (Accounting Standards) Rules 2006 (as amended) are not applicable.

9. Related Party Disclosures

1 Name of the related parties and Relationship

(i) SUBSIDIARIES OF THE COMPANY

a. Ucal Polymer Industries Limited

b. Amtec Precision Products Inc. USA

c. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

e. UPIL, USA (Wholly Owned Subsidiary of UPIL)

(ii) KEY MANAGEMENT PERSONNEL

a. Mr. Jayakar Krishnamurthy Chairman and Managing Director

b. Mr. Ram Ramamurthy -Whole Time Director (Appointed with effect from 04.09.2014)

c. Ms. Rekha Raghunathan -Director and Company Secretary

d. Mr. N. Gnanasambandan - Chief Financial Officer

(iii) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services Private Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties Private Limited

f. Carburettors Limitted

g. Magnetic Meter Systems (India) Limited

h. Bangalore Union Services Private Limited

i. Culture and Heritage Trust of Karuveli

j. Academy of Higher Education, National College, Trichy

Previous year's figures have been reclassified and regrouped wherever necessary to conform to current year's classification/ disclosure.


Mar 31, 2014

(A) Rights and restrictions attached to shares

Equity Shares: The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(B) NATURE OF SECURITY AND TERMS OF REPAYMENT FOR SECURED BORROWINGS

NATURE OF SECURITY

Loan amount of Rs.12.16 crores is secured by hypothecation of Plant & Machinery newly acquired during 2010-11 and held at Plants 7, 8 & 9 situate at MMNagar & Puducherry valued at Rs.18.78 crores on exclusive basis.

TERMS OF REPAYMENT

Repayable in monthly instalments of Rs.41.67 lakhs each. The period of maturity with reference to Balance Sheet date is 28 months. Rate of interest-15.25%

Loan amount of Rs.1.65 crores is secured by exclusive charge on the assets, including mortgage over leasehold rights created out of term loan on paripassu basis.

Repayable in quarterly instalments of Rs. 57.50 lakhs each. The period of maturity with reference to Balance Sheet date is 9 months. Rate of interest-14%

Loan amount of Rs.6.83 crores is secured by exclusive charge on the assets ,including mortgage over leasehold rights created out of term loan on paripassu basis.

Repayable in quarterly instalments of Rs.25 lakhs (2 years), Rs.50 lakhs & Rs.90 lakhs (1 year) each. The period of maturity with reference to Balance Sheet date is 3 years. Rate of interest-14.75%

Loan amount of Rs.1.15 crores is secured by first Charge on Fixed assets on pari passu with other banks under Multiple banking arrangement.

Repayable in quarterly instalments of Rs.25 lakhs each. The period of maturity with reference to Balance Sheet date is 1 year. Rate of interest-14.75%

Loan amount of Rs.8.79 crores is secured by first charge on fixed Assets (present & future)on pari passu basis with other term lenders except those assets specifically charged to other banks.

Repayable in quarterly instalments of Rs.100 lakhs each. The period of maturity with reference to Balance Sheet date is 2 years. Rate of interest-14.75%

Loan amount of Rs.4.23 crores is secured by first charge on assets created out of Term Loan.

Repayable in quarterly instalments of Rs.30 lakhs (3 years) & Rs.36.50 lakhs (1 year) each.The period of maturity with reference to Balance Sheet date is 3 years. Rate of interest- 14.75%

Loan amount of Rs. 16 crores is secured by first charge on fixed Assets (present & future) on pari passu basis with other term lenders except those assets specifically charged to other banks.

Repayable in quarterly instalments of Rs.100 lakhs each. The period of maturity with reference to Balance Sheet date is 4 years. Rate of Interest-14.75%

Term loan of Rs.17.72 crores is secured by first charge by way of hypothecation over all moveable fixed assets and mortgage of all immovable properties of UCAL, both present & future, except those assets specifically charged to other banks.

Repayable in step up quarterly instalments of Rs.1.20 crores/1.40 crores & 1.50 crores each. The period of maturity with reference to Balance Sheet date is 3 years. Rate of interest-12.5%

Term loan of Rs.8 crores is secured by paripassu first charge on the entire moveable & immoveable fixed assets of UCAL, present & future, except those assets specifically charged to other banks.

Repayable in quarterly instalments of Rs.50 lakhs (8 instalments) & Rs.75 lakhs (8 instalments). The period of maturity with reference to Balance Sheet date is 3 years. Rate of Interest-12.5%

Term loan of Rs.4 crores is secured by paripassu first charge on the entire moveable & immoveable fixed assets of UCAL, present & future, except those assets specifically charged to other banks.

Repayable in 20 step-up quarterly instalments. The period of maturity with reference to Balance Sheet date is 3 years. Rate of Interest-12.5%

OIF Term loan of USD -6.65 million is secured by Paripassu first charge on the entire moveable & immoveable fixed assets of UCAL, present & future, except those assets specifically charged to other banks.

Repayable in 28 step-up quarterly instalments commencing from 2012-13. The period of maturity with reference to Balance Sheet date is 6 years.

(a) NATURE OF SECURITY AND TERMS OF REPAYMENT FOR SECURED BORROWINGS

NATURE OF SECURITY

Term loan of Rs.23.69 crores is secured by paripassu first charge on the land at Bawal and exclusive charge on the Building, Plant & Machinery at Bawal.

TERMS OF REPAYMENT

Repayable in monthly instalments of Rs.50 lakhs each. The period of maturity with reference to Balance Sheet date is 4 years. Rate of interest-14.75%

(a) NATURE OF SECURITY AND TERMS OF REPAYMENT FOR SHORT TERM BORROWINGS

NATURE OF SECURITY

Working capital facilities from banks are secured by first charge on raw materials, work-in-progress, finished goods and book debts.

TERMS OF REPAYMENT

The facility is renewable on an annual basis and is repayable on demand.

(b) NATURE OF SECURITY AND TERMS OF REPAYMENT FOR UNSECURED BORROWINGS

i) Inter Corporate Deposit Not secured.

Inter Corporate Deposit is repayable within one year. Rate of interest-12%

ii) Short term loan from others Not secured.

Short term loan is repayable within one year. Rate of interest-12.75%

As at 31st As at 31st March 2014 March 2013 Note 1

Contingent Liabilities, Guarantees and Commitment

Contingent Liabilities Claims against the company not acknowledged as debts :-

i) Sales Tax 88.88 88.88

ii) Excise Duty 221.69 221.89

iii) Service Tax 8.66 35.91

iv) Income Tax 299.71 299.71

v) ESI - 1.27

vi) Stamp Duty 31.37 31.37

Other moneys for which the company is contingently liable

i) In respect of Letter of Credits Outstanding 458.80 590.19

ii) Guarantees given by the company to the banks, with regard to credit facilities extended to M/s. Amtec Precision Products Inc., USA, a wholly owned subsidiary 10,269.04 9,446.29

iii) Guarantees given by Banks on behalf of the company 123.27 31.26 Commitment

Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for : 49.51 72.22

Note 2

The company has a) equity investment aggregating to Rs.15,492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with b) interest free advance of Rs.12,048.81 lakhs, (Previous Year Rs. 11,647.02 lakhs) and c) bank guarantees given to banks on its behalf aggregating to Rs.10,269.04 (Previous year Rs.9,446.29 lakhs). The operations of this subsidiary have shown improvements compared to previous years. Accordingly no provision is considered necessary in respect of investment in it as well as advances due from it as at the year end, though the net worth of the subsidiary has been fully eroded.

Note 3

Sundry debtors includes a sum of Rs. 2,905.61 lakhs (previous year Rs. 2,535.41 lakhs) due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary. The Company has worked out a deferred payment plan, according to which these amounts are expected to be realized over a period of time. Accordingly these have been classified as outstanding for less than 6 months.

Note 4

The balances outstanding as on 31st March 2014 in respect of Sundry Debtors, Loans and Advances and Sundry Creditors, wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

Note 5

Subject to the observation in Note 34 above, in the opinion of the Board, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and for all known liabilities is considered adequate and are not in excess of the amounts reasonably necessary.

Note 6

Research and Development expenditure includes salaries, wages and bonus amounting to Rs. 424.34 lakhs (previous year Rs. 479.12 lakhs), travel expenses Rs. 30.52 Lakhs (Previous year Rs. 22.65 lakhs) and Rent Rs. 198.00 Lakhs (Previous year Rs. 198.00 Lakhs)

Note 7

Electricity charges debited to Profit & Loss account is net of Rs.126.62 lakhs (previous year Rs.148.68 lakhs) being the electricity generated through company owned Wind Turbine Generators.

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the balance sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit & loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded).

Note 8

The managerial remuneration of Rs.260.48 lakhs paid for the year 2012-13 is in excess of the limits specified under Section 198/309 of the Companies Act, 1956, by a sum of Rs.51.78 lakhs, on account of inadequacy of profits. The shareholders have already approved in the AGM held on 30th September 2011, the continuation of payment of remuneration, in case of inadequacy of profit subject to Central Government approval. Accordingly, the company has already applied for Central Government approval.

The managerial remuneration of Rs.260.11 lakhs paid for the year 2013-14 is in excess of the limits specified under Section 198/309 of the Companies Act, 1956, by a sum of Rs.75.52 lakhs, on account of inadequacy of profits. The shareholders have already approved in the AGM held on 30th September 2011, the continuation of payment of remuneration, in case of inadequacy of profit subject to Central Government approval. Accordingly, the Company is in the process of filing the application for approval from the Central Government.

Note 9

As the Company''s business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specifised in the Companies (Accounting Standards) Rules 2006 are not applicable.

Note 10

Related Party Disclosures

I Name of the related parties and Relationship (i) SUBSIDIARIES OF THE COMPANY

a. Ucal Polymer Industries Limited

b. Amtec Precision Products Inc. USA

c. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

e. UPIL, USA (Wholly owned Subsidiary of UPIL)

(ii) Key Management Personnel

a. Mr. Jayakar Krishnamurthy (Chairman and Managing Director)

b. Mr. R. Sundararaman (Joint Managing Director - ceased to director with effect from 01.04.2014)

(iii) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services Private Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties Private Limited

f. Carburettors Limited

g. Magnetic Meter Systems (India) Limited h. Bangalore Union Services Private Limited

Figures in brackets represent corresponding amount of previous year

1) There are no transactions exceeding 10% with respect to one related party that are not disclosed.

Note 11

Previous year''s figures have been reclassified and regrouped wherever necessary to conform to current year''s classification.


Mar 31, 2013

As at 31st As at 31st March 2013 March 2012

Note 1

Contingent Liabilities, Guarantees and Commitment

Contingent Liabilities

Claims against the company not acknowledged as debts :-

i) Sales Tax 88.88 44.14

ii) Excise Duty 221.89 2,390.00

iii) Service Tax 35.91 148.02

iv) Income Tax 299.71 297.62

v) ESI 1.27 1.27

vi) Stamp Duty 31.37 31.37

Other moneys for which the company is contingently liable

i) In respect of Letter of Credits Outstanding 590.19 806.30

ii) In respect of Buyers Credit outstanding - 99.67

iii) Guarantees given by the company to the banks, with regard to credit facilities extended to M/s. Amtec Precision Products Inc., USA, a wholly owned subsidiary 9,446.29 10,334.97

iv) Guarantees given by Banks on behalf of the company 31.26 30.22 Commitment

Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for: 72.22 676.61

Note 2

The company has a) equity investment aggregating to Rs. 15,492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with b) interest free advance of Rs. 11,647.02 lakhs, (Previous Year Rs.10,193.27 lakhs) and c) bank guarantees given to banks on its behalf aggregating to Rs.9,446.29 lakhs (Previous year Rs.10,334.97 lakhs). The operations of this subsidiary have shown marked improvements compared to previous years.Accordingly no provision is considered necessary in respect of investment in it as well as advances due from it as at the year end, though the net worth of the subsidiary has been fully eroded.

Note 3

Sundry debtors includes a sum of Rs. 2,057.43 lakhs (previous year Rs. 2,167.00 lakhs) due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary. The Company has worked out a deferred payment plan, according to which these amounts are expected to be realized over a period of time. Accordingly these have been classified as outstanding for less than 6 months.

Note 4

Micro, Small and Medium Enterprises under the Micro, Small & Medium Enterprises Development Act (MSMED) 2006 have been determined based on the information available with the company. The required disclosures under MSMED Act are given below:

Note 5

The balances outstanding as on 31st March 2013 in respect of Sundry Debtors, Loans and Advances and Sundry Creditors, wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

Note 6

Subject to the observation in Note 34 above, in the opinion of the Board, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.The provision for depreciation and for all known liabilities is considered adequate and are not in excess of the amounts reasonably necessary.

Note 7

Research and Development expenditure includes salaries, wages and bonus amounting to Rs.479.12 lakhs (previous year Rs. 446.76 lakhs), travel expenses Rs. 22.65 lakhs (Previous year Rs. 26.14 lakhs) and Rent Rs. 198.00 lakhs (Previous year Rs. 198.00 lakhs)

Note 8

Electricity charges debited to Profit & Loss account is net of Rs. 148.68 lakhs (previous year Rs.99.94 lakhs) being the electricity generated through company owned Wind Turbine Generators.

Note 9

The managerial remuneration of Rs. 260.48 lakhs paid for the year is in excess of the limits specified under Section 198/309 of the Companies Act, 1956, by a sum of Rs. 51.78 lakhs, on account of inadequacy of profits. The shareholders have already approved in the AGM held on 30th September 2011, the continuation of payment of remuneration, in case of inadequacy of profit subject to Central Government approval. Accordingly, Central Government approval is now being sought.

Note 10

As the Company''s business activity falls within a single primary business segment viz automobile parts and in a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specified in the Companies (Accounting Standards) Rules 2006 are not applicable.

Note 11

Related Party Disclosures

I Name of the related parties and Relationship (i) SUBSIDIARIES OF THE COMPANY

a. Ucal Polymer Industries Limited

b. Amtec Precision Products Inc. USA

c. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

e. UP1L, USA (Wholly owned Subsidiary of UPIL)

(ii) Key Management Personnel

a. Mr. Jayakar Krishnamurthy (Chairman and Managing Director)

b. Mr. R. Sundararaman (Joint Managing Director)

(iii) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services Private Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties Private Limited

f. Carburettors Limited

g. Magnetic Meter Systems (India) Limited h. Bangalore Union Services Private Limited

(iv) RELATIVES OF KEY MANAGEMENT PERSONNEL

a. Dr. V. Krishnamurthy

b. Mrs. Meenakshi Jayakar

Note 12

Previous year''s figures have been reclassified and regrouped wherever necessary to conform to current year''s classification.


Mar 31, 2012

1. As at As at 31.03.2012 31.03.2011

Note 1

Contingent Liabilities,Guarantees and Commitment

Contingent Liabilities

Claims against the company not acknowledged as debts :-

i) Sales Tax 44.14 Nil

ii) Excise Duty 2,390.00 2,420.82

iii) Service Tax 148.02 246.99

iv) Income Tax 297.62 54.89

v) ESI 1.27 1.27

vi) Stamp Duty 31.37 31.37

Other moneys for which the company is contingently liable

i) In respect of Letter of Credits Outstanding 806.30 504.06

ii) In respect of Buyers Credit outstanding 99.67 -

iii) Guarantees given by the company to the banks, with regard to credit facilities extended to M/s. Amtec Precision Products Inc., USA, a wholly owned subsidiary 10,334.97 9,325.77

iv) Guarantees given by Banks on behalf of the company 30.22 19.80

Commitment

Estimated amount of contracts remaining to be executed on capital account, net of advances, not provided for: 676.61 671.93

Note 2

The company has equity investment aggregating to Rs. 15,492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with interest free advance of Rs. 10,193.27 lakhs, (Previous Year Rs. 9,540.27 lakhs) and bank guarantees given to bank on its behalf aggregating to Rs. 10,334.97 Lakhs (Previous year Rs 9,325.77 lakhs). The operations of this subsidiary have shown marked improvements compared to previous years. Accordingly no provision is considered necessary in respect of investment in it as well as advances due from it as at the year end, though the net worth of the subsidiary has been fully eroded.

Note 3

The company has during the year purchased land and building for Rs. 18.21 crores vide agreement to sell dt.29th March 2012 which was re-validated again vide agreement dt.29th fune 2012,which is pending registration in the name of the company.

Note 4

Sundry debtors includes a sum of Rs.2,167.00 lakhs (previous year Rs. 1,885.26 lakhs) due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary. The Company has worked out a deferred payment plan, according to which these amounts are expected to be realized over a period of time. Accordingly these have been classified as outstanding for less than 6 months.

Note 5

Other current liabilities include Rs. 80.13 lakhs (previous year Rs. 49.78 lakhs) due to Directors on current account.

Note 6

The balances outstanding as on 31st March 2012 in respect of Sundry Debtors, Loans and Advances and Sundry Creditors, wherever not confirmed by them, in so far as they have not been subsequently recovered or adjusted are subject to confirmation or reconciliation.

Note 7

Subject to the observation in Note 36 above, in the opinion of the Board, Current Assets, Loans and Advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. The provision for depreciation and for all other known liabilities is considered adequate and are not in excess of the amount reasonably necessary.

Note 8

Research and Development expenditure includes salaries, wages and bonus amounting to Rs.446.76 lakhs (previous year Rs. 483.42 lakhs), travel expenses Rs. 26.14 Lakhs (Previous year Rs. 35.25 lakhs) and Rent Rs 198.00 Lakhs (Previous year Rs 198.00 Lakhs)

Note 9

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the balance sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit & loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded).

Note 10

As the Company's business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specified in the Companies (Accounting Standards) Rules 2006 are not applicable.

Note 11

Related Party Disclosures

I Name of the related parties and Relationship (i) SUBSIDIARIES OF THE COMPANY

a. Ileal Polymer Industries Limited (LIPIL)

b. Amtec Precision Products Inc. USA

c. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

e. UPIL, USA (Wholly owned Subsidiary of UPIL)

(ii) Key Management Personnel

a. Mr. Jayakar Krishnamurthy (Chairman and Managing Director)

b. Mr. P.P.R. Rao (Executive Director - upto 25.9.2011)

c. Mr. R. Sundararaman (Joint Managing Director - w.e.f 8.09.2011)

(iii) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services Private Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties Private ltd

f. Carburettors Limitted

g. Magnetic Meter Systems (India) Limited h. Bangalore Union Services Private Limited i. Ucal Consultants Private Limited

(iv) RELATIVES OF KEY MANAGEMENT PERSONNEL Dr. V. Krishnamurthy Mrs. Meenakshi Jayakar

Note : Related party relationship is identified by the company and relied upon by the auditors.

Note 12

Previous year's figures have been reclassified and regrouped wherever necessary to conform to current year's classification according to revised Schedule VI Format.

Note 13

Figures have been rounded off to the nearest lakhs.


Mar 31, 2011

1. The company has equity investment aggregating to Rs. 15, 492.48 lakhs in Amtec Precision Products Inc., USA., a Wholly Owned Subsidiary coupled with interest free advance of Rs.9,540.27 lakhs, (Previous Year Rs 9733.17 lakhs) and bank guarantees given to bank on its behalf aggregating to Rs.9,325.77 Lakhs (Previous year Rs 11,240 lakhs). The operations of this subsidiary have shown marked improvements compared to previous years. Accordingly no provision is considered necessary in respect of investment in it as well as advances due from it as at the year end, though the net worth of the subsidiary has been fully eroded.

2. Amount due from the officers of the company Rs.-Nil lakhs (Previous year Rs.0.69 lakhs). Maximum amount due at any time during the year was Rs 0.69 lakhs (Previous year Rs.1.05 lakhs).

3. Sundry debtors includes a sum of Rs.1885.26 lakhs (previous year Rs. 1914.79 lakhs) due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary. The Company has worked out at a deferred payment plan, according to which these amounts are expected to be realized over a period of time. Accordingly these have been classified as outstanding for less than 6 months.

4. Sundry creditors include Rs. 49.78 Lakhs (previous year Rs.21.37 lakhs) due to Directors on current account.

5. Balance of sundry debtors and creditors are subject to confirmation, reconciliation and adjustments, if any. The management does not expect any material adjustment on receipt of confirmation/reconciliation of such balances.

6. Research and Development expenditure includes salaries, wages and bonus amounting to Rs.483.42 lakhs (previous year Rs. 486.58 lakhs), travel expenses Rs. 35.25 Lakhs (Previous year Rs. 25.77 lakhs) and Rent Rs 198.00 Lakhs (Previous year Rs 198.00 Lakhs).

7. Electricity charges debited to Profit & Loss account is net of Rs.95.26 lakhs (previous year Rs. 102.90 lakhs) being the electricity generated through company owned Wind Turbine Generators.

8. Working capital facilities from banks are secured by first charge on raw materials, work-in-progress, finished goods and book debts, outstanding monies, receivable claims, bills contracts, engagements and securities on pari passu basis and are also secured by pari passu second charge on the immovable properties of the company.

The term loan and working capital loan from Financial Institutions are secured by first charge by way of mortgage of immovable properties and hypothecation of all movable fixed assets of the company. In respect of the term loan availed for the construction of the some specific facility at Maraimalai Nagar, exclusive charge on the Assets including mortgage over the lease hold rights has been offered to the Banks funding the term loan.

9. Expenditure incurred on project for manufacture of two/three wheeler injection parts is carried forward as product development expenses and amortised over a period of five years from the month of commencement of production. Of this, an amount of Rs.417.00 lakhs (previous year Rs.417.70 lakhs) has been written off during the year.

10. Warranties which were accounted for on cash basis till last year have been accounted for on accrual basis in this year. Accordingly, year end provision has been made towards warranties on the basis of past experience. As a result of this change in accounting, the profit for the year has gone down by Rs 40.81 Lakhs with corresponding increase in liabilities.

11. Details of Employee Benefits as required by the Accounting Standard 15 (revised) Employee Benefits are as under:

A. Defined contribution plan:

Contribution to defined contribution plans are charged in the Profit & Loss Account for the year: Employers Contribution to Provident Fund:- Rs. 106.22 Lakhs (Previous year Rs. 106.35 lakhs) Employers Contribution to Pension Scheme:- Rs. 46.80 Lakhs (Previous year Rs. 53.44 lakhs) Employers Contribution to Superannuation Scheme:- Rs. 19.17 Lakhs (Previous year Rs. 34.37 lakhs)

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the balance sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit & loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded).

Notes:

1) It is not feasible to give installed capacity as there are numerous in volume having complex composition

2) Figures in brackets are in respect of previous financial year.

12. As the Company's business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specified in the Companies (Accounting Standards) Rules 2006 are not applicable.

13. Related Party Disclosures

I Name of the related parties and Relationship

(i) SUBSIDIARIES OF THE COMPANY

a. UCAL Polymer Industries Limited (UPIL)

b. Amtec Precision Products Inc. USA

c. North American Acquisition Corporation (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc. USA (Wholly owned Subsidiary of Amtec)

e. UPIL, USA (Wholly owned Subsidiary of UPIL)

(ii) Key Management Personnel

a. Mr.Jayakar Krishnamurthy Chairman and Managing Director and Chief Financial Officer

b. Mr.PP.R. Rao, Executive Director

c. Details of remuneration to directors is disclosed in note 5 of Schedule - 19 (iii) OTHER RELATED ENTERPRISES

a. Bharat Technologies Auto Components Limited

b. Minica Real Estates Private Limited

c. Minica Services (P) Limited

d. Southern Ceramics Private Limited

e. Sujo Land and Properties P Ltd

f. Carburettors Limited

(v) RELATIVES OF KEY MANAGEMENT PERSONNEL Dr. V. Krishnamurthy

1) There are no transactions exceeding 10 % with respect to one related party that are not disclosed

* included as capital work in progress.

* * Change due to year end exchange fluctuation adjustment

14 Previous year's figures have been regrouped wherever necessary to conform to current year's classification.


Mar 31, 2010

1. The Company has equity investment aggregating to Rs.15,492.48 Lakhs in Amtec Precision Products, Inc., USA., a Wholly Owned Subsidiary coupled with interest free advance of Rs.9,733.17 Lakhs, and bank guarantees given to bank on its behalf aggregating to Rs.11,240 Lakhs. The performance of the subsidiary has been significantly impacted by the general economic slowdown in USA and as a result the net worth of the Company has been fully eroded.

In consultation with the bankers, UFSL continued financial support to Amtec during 09-10 on a selective basis to bring the operations to a cash breakeven stage. This has since been achieved from October 2009. Short term and long term measures have been taken to improve the operating profits through cost control, renegotiation of various contracts etc., and it is expected that with the improvement in US economy Amtec will do better the coming years. Accordingly no provision is considered necessary in respect of its investments and loans outstanding from the said subsidiary at the year end.

2. Amound due from the officers of the Company Rs. 0.69 Lakhs (Previous year Rs. 1.05 Lakhs). Maximum amount due at any time during the year was Rs. 1.05 Lakhs (Previous year Rs. 1.41 Lakhs)

3. Sundry debtors for more than 6 months includes a sum of Rs.1,914.79 Lakhs. due from M/s. Amtec Precision Products, Inc., USA a wholly owned subsidiary . The Company has worked out at a deferred payment plan, according to which these amounts are expected to be realized over a period of time. Accordingly during the current year, there has been classified as ‘deferred debts.

4. Sundry creditors includes Rs.21.37 Lakhs due to Directors on current account

5. Merger of UCAL Machine Tools Limited

UCAL Machine Tools Limited (UMTL) - Wholly owned subsidiary of UCAL Fuel Systems Limited (UFSL) has been amalgamated with the Company with effect from 1.4.2009 in terms of the Scheme of Amalgamation ("Scheme") approved by Honourable High Court of Madras vide its order dated 22.6.2010 (received on 1.7.2010).

UMTL is engaged in the business of die casting and manufacture of moulds and tools The merger would result in operational synergies: - enhance financial strength and rationalization of costs.

Accordingly UMTL stands dissolved without winding up and all assets and liabilities have been transferred to and vest with the Company with effect from 1.4.2009, the appointed date. As UMTL was wholly owned subsidiary of the Company, no shares were exchanged to effect the amalgamation. The amalgamation was accounted for as per "Pooling of interest method" as prescribed by the Institute of Chartered Accountants of India, read with the court orders.

All the assets excluding immovable assets and liabilities of the Company have been taken over at the respective book values as on the date of amalgamation. The immovable assets have been taken over at their respective fair values.

In accordance with the "Scheme of Amalgamation" approved by the Honourable High Court, the excess of fair value over book value of fixed assets has been credited to General Reserve. The investment in the share capital of UMTL has been adjusted against the value of investments appearing in the books of the Company and excess of share capital over the value of investments has been transferred to general reserve.

Had the treatment based on Accounting Standard 14 on "Accounting for Amalgamation" been followed, the Capital Reserve would have been higher by Rs 2798.98 Lakhs and General Reserve would have been lower by an equivalent amount.

6. Micro, Small and Medium Enterprises under the Micro, Small & Medium Enterprises Development Act (MSMED), 2006, have been determined based on the information available with the Company. The required disclosures under MSMED Act are given below:

7. Balance of sundry debtors and creditors are subject to confirmation, reconciliation and adjustments, if any. The management does not expect any material adjustment on receipt of confirmation / reconciliation of such balances.

8. Research and Development expenditure includes salaries, wages and bonus amounting to Rs.486.58 (previous year Rs. 330.43 Lakhs) and travel expenses Rs.25.77 Lakhs (Previous year Rs. 20.66 Lakhs).

9. Electricity charges debited to Profit & Loss Account is net of Rs.102.90 Lakhs (previous year Rs.90.92 Lakhs) being the electricity generated through Company owned Wind Electric Generators.

10. Working capital facilities from banks are secured by hypothecation of raw materials, work-in-progress, finished goods and book debts, outstanding monies, receivable claims, bills contracts, engagements and securities on pari passu basis and also secured by pari passu second charge on the immovable properties of the Company.

The term loan and working capital loan from Financial Institutions are secured by first charge by way of mortgage of immovable properties and hypothecation of all movable fixed assets of the Company. In respect of the term loan availed for the construction of the new facility at Maraimalai Nagar, exclusive charge on the Assets including mortgage over the lease hold rights has been offered to the Banks funding the term loan.

11. Expenditure incurred on project for manufacture of two/three wheeler injection parts is carried forward as product development expenses and amortised over a period of five years from the month of commencement of production. Of this, an amount of Rs.417.70 Lakhs (previous year Rs.156.42 Lakhs) has been written off during the year.

12. Details of Employee Benefits as required by the Accounting Standard 15 (revised) Employee Benefits are as under:

A. Defined contribution plan:

Contribution to defined contribution plans are charged in the Profit & Loss Account for the year: Employers Contribution to Provident Fund:- Rs.106.35 Lakhs (Previous year Rs.64.44 Lakhs)

Employers Contribution to Pension Scheme:- Rs.53.44 Lakhs (Previous year Rs.52.72 Lakhs)

Employers Contribution to Superannuation Scheme:- Rs.34.37 Lakhs (Previous year Rs.22.11 Lakhs)

B. Defined Benefit Plan:

The Company provides for gratuity, a defined benefit plan, to certain categories of employees. Liability with regard to gratuity plan is accrued based on actuarial valuation, based on projected unit credited method, and carried out by an independent actuary, at the Balance Sheet date. Actuarial gains and losses comprise experience adjustments and effect of changes in the actuarial assumptions and are recognized immediately in the profit & loss account as income or expense. This defined benefit plan is maintained by the Life Insurance Corporation of India (Funded). But for the Leave Encashment, the liability on the leave encashment is determined on actuarial valuation (Non-funded).

13. As the Companys business activity falls within a single primary business segment viz automobile parts and is a single geographical segment, the disclosure requirements of Accounting Standard (AS-17) "Segment Reporting" specified in the Companies (Accounting Standards) Rules, 2006, are not applicable.

14. Related Party Disclosures

I Name of the related parties and Relationship

(i) Subsidiaries of the Company

a. UCAL Polymer Industries Limited

b. Amtec Precision Products, Inc., USA

c. North American Acquisition Corporation, Inc., USA (Wholly owned Subsidiary of Amtec)

d. Amtec Moulded Products Inc., USA (Wholly owned Subsidiary of Amtec)

(ii) Key Management Personnel

Mr. Jayakar Krishnamurthy, Chairman & Managing Director and Chief Financial Officer, UFSL.

Mr. P.P.R. Rao, Executive Director, UFSL

Mr. M. Sivaramakrishnan Managing Director, UMTL

Details of Remuneration to Directors is disclosed in Note 5 of Schedule - 19

(iii) Other Related Enterprises

a. Bharat Technologies Auto Components Ltd.

b. Minica Real Estates Private Ltd.

c. Minica Services (P) Ltd.

d. Southern Ceramics Private Ltd.

e. Sujo Land and Properties (P) Ltd.

f. Carburettors Ltd.

g. UCAL Consultants (P) Ltd.

h. UCAL Properties (P) Ltd.

i. UCAL Exports (P) Ltd.

j. UCAL EL-Tech (P) Ltd.

k. IBEX Products (P) Ltd.

l. UCAL Travels (P) Ltd.

(iv) Relatives of Key Management Personnel Dr. V. Krishnamurthy Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

Note : There are no transactions exceeding 10% with respect to one related party that are not disclosed.

15. Previous years figures have been regrouped wherever necessary to conform to current years classification.

16. Figures have been rounded off to the nearest Lakhs

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