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Directors Report
To, The Members, Your Directors are pleased to present the Twenty Fourth Annual Report together with the Audited Annual Accounts of the Company for the year ended 31st March, 2010. Financial Results: 2009-10 Profit Before Depreciation and Tax Less : Depreciation Profit for the year before taxation Provision for Taxation: Current Year Tax Deferred Tax Fringe Benefit Tax Profit after taxation Add : Surplus brought forward from previous year Profit available for appropriation 541.00 101.69 0.03 1,270.39 8,658.32 9,928.71 555.00 54.93 11.35 1,236.82 8,024.26 9,261.08 2,810.03 896.92 1,913.11 (Rs. in lacs) 2008-09 2,924.80 1,066.70 1,858.10
Appropriations 1. Proposed Dividend and Tax thereon 2. General Reserve 3. Deferred Tax Liability reduced on recalculation due to different tax rate for Non EOU and EOU from 2002-03 to 2007-08. 4. Balance carried to Balance Sheet ------9,098.64 9,928.71 Review of operations: During the year under review, your Company achieved gross sales turnover of Rs. 15,939.74 lacs compared to previous year sales of Rs. 24,362.20 lacs. The profit before depreciation and tax has (49.44) 8,658.32 9,261.08 702.07 128.00 352.20 300.00
decreased to Rs. 2,810.03 lacs from Rs. 2,924.80 lacs. The net profit after tax has increased to Rs. 1,270.39 lacs from Rs. 1,236.82 lacs. At the end of the year, Companys reserves stood at Rs. 11,317.66 lacs (Previous Year Rs. 10,749.33 lacs) and Book Value of Share stood at Rs. 103.99 per Share (Previous Year Rs. 99.27 per share). Coping with the challenging year Your Company faced a very challenging year wherein the recession hit the overall global markets especially the auto sector, as a result of which the turnover of your company fell to Rs. 15,939.74 lacs from Rs. 24,362.20 lacs. However the management team took up this challenge very effectively and the team carried out a lot of cost reduction initiatives during the year. Few of such initiatives are Six Sigma Projects, manpower rationlisation, waste reduction etc. As a result of the above the Company has ended the year with reasonable profits even after very bad first half of the financial year. Transfer to Reserves: Your Company has proposed to transfer Rs. 128.00 lacs to the General Reserves out of the amount available for appropriations. An amount of Rs. 9,098.64 lacs is proposed to be retained in the Profit and Loss Account. Dividend: Your Directors are pleased to recommend, for approval of Members a Dividend of 50% (Rs. 5/- per share) for the year ended 31st March, 2010 on the Share Capital of Rs. 1,204.14 lacs which will absorb Rs. 602.07 lacs towards Dividend and Rs. 100.00 lacs towards Dividend Tax, resulting in a total outflow of Rs. 702.07 lacs. Fixed Deposits: The company has accepted the deposit from the shareholders as well as from the public. There are no unclaimed or unpaid deposits and interest as on 31st March, 2010. Credit Rating: Your Company has been rated by Credit Analysis & Research Limited (CARE) rating Agency for its long term and short term loans. Your Company has been awarded A rating for its long term loans and PR1+ rating for its short term loans. Issue of Commercial Papers: Your Company has also been awarded Short Term ratings of PR1+ by CARE, the rating agency, for the forthcoming issue of Commercial Papers (CP). Your Company is planning to raise a sum of Rs. 20.00 Crores by way of CP during the year 2010-11. As a result of the issue, your Company would be able to minimize its cost of borrowings.
Capital Expenditure: During the year under review, the Company has incurred Rs. 627.48 lacs on Capital Expenditure. Solar Energy Application Project: Your Company has initiated the new business vertical - Solar Energy Applications. Presently the Project is in the research phase wherein the right product model is being analysed for business viability. Your Company anticipates a huge potential in the solar energy sector in the future years. China Project: To expand its business globally, your Company has incorporated a wholly owned subsidiary in the name of Harsha Engineering Components (Changshu) Co., Ltd, in China and the said subsidiary received the business license (Incorporation Certificate) on 7th April, 2010. The above subsidiary would carry on the same business activity in China as of the holding Company. Approximately the total outlay investment for the said project is Rs. 15.00 Crores. Subsidiary Companies: In accordance with the provisions of Section 212 of the Companies Act, 1956, the Company is required to attach the Directors Report, Balance Sheet, Profit and Loss Accounts, and Auditors Report of its subsidiaries. The Annual Accounts of the Subsidiary Companies are attached with this Annual Reports. The Company has three subsidiaries in India and abroad. Harsha Engineers (India) Private Limited, India and Harsha Engineers Inc., USA are the wholly owned subsidiaries of the Company while Company has the majority stake in the Aastha Tools Private Limited, India. Directors: Mr. Munjal Rangwala who has been appointed as an additional director of the Company by the Board of Directors of the Company. He is also appointed as a Whole Time Director of the Company by Board of Directors at their meeting held on 1st April, 2010. The term of Mr. Munjal Rangwala who has been appointed as an additional director of the Company has come to an end at the ensuing Annual General Meeting. The Company has received notice from a member under Section 257 of the Companies Act, 1956, recommending his appointment as Director of the Company. The Board recommends his appointment as a Director liable to retire by rotation. In accordance with the provisions of the Companies Act, 1956 and the Companys Articles of Association, Mr. Pilak Shah and Mr. Vishal Rangwala retire by rotation at the ensuing annual general meeting and being eligible for reappointment offers themselves for the same.
Auditors and Their Report: Comments of the Auditors in their report and the notes forming part of the Accounts are self explanatory and need no comments. M/S. C. P. Shah & Co., the Company's Auditors will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The directors recommend the re-appointment of M/S. C. P. Shah & Co. and authority to Board to fix their remuneration. Insurance: The Company has taken adequate insurance cover for all movable and immovable assets for various types of risks. Energy Conservation, Technology Absorption, Adaptation, Innovation: a) Conservations of Energy The operation of your Company are not energy intensive as the operations are limited to machining, metal working and finishing of a variety of equipment. b) Technology Absorption, Adoption and Innovation: Continuous efforts are made towards Technology Absorption, Adoption and Innovation. The thrust areas have been improving the quality of all the products and increasing productivity through cost effective programs and value engineering techniques such as six sigma, other lean & improvement projects and narrow Research & Development initiatives. c) Foreign Exchange earnings and outgo: Management has taken the Initiatives to increase the exports and the development of the new export markets for the products of the Company. Foreign exchange earned and used: Foreign Exchange earned and spent by the Company during the year amounts to Rs. 6559.58 lacs and Rs. 1182.09 lacs respectively. Particulars of Employees: The particulars of employees as required by section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended are as under : A. Employed throughout the year and were in receipt of remuneration aggregating not less than Rs. 24,00,000/- per annum.
Sr.
Name of
Age
Qualification BE (Mech.)
Experience (year) 40
BE (Mech.)
40
01.04.96
B.
Employed for part of the year and were in receipt of remuneration aggregating not less than Rs. 2,00,000/- per month: Nil
Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000: In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, your directors state that: (a) In the preparation of accounts, the applicable accounting standards have been followed. (b) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the company as at the end of 31st March, 2010 and the profit of the company for the year ended on that date. (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (d) The annual accounts of the company have been prepared on a going concern basis.
Note on accounts: The notes forming part of the accounts are self-explanatory and therefore, do not call for any further comments. Industrial relations: Relations with the companys employees continue to be cordial. The company has a good track record of harmonious relations with employees.
Acknowledgements: Your Directors gratefully acknowledge the contributions made by the employees towards the success of the Company. Your Directors are also thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments and Local Authorities.
Registered Office: Changodar, Sarkhej-Bavla Road, P.O. Changodar, Ahmedabad 382 213 21 June, 2010
st
By order of the Board of Directors s/d RAJENDRA S. SHAH Chairman & Managing Director
To, The Members, Harsha Engineers Limited 1. We have audited the attached Balance Sheet of Harsha Engineers Limited, as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; iii. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; v. On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 : and (b) in the case of Profit and Loss Account, of the profit for the year ended on that date.
For C. P. Shah & Co. Chartered Accountants s/d Ahmedabad. 21 June, 2010
st
Harsha Engineers Limited Annexure to the Auditors Report Referred to in Paragraph 1 of our report of even date i. In respect of its fixed assets: a) The Company has maintained proper division-wise records showing detailed full particulars of the fixed assets b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification, which, in our opinion, is reasonable with regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification. c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected. ii. In respect of inventories: a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable. b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material. d) Inventory lying with third parties at year end have been verified by the management with reference to confirmations or statements of accounts or correspondence of third parties or subsequent receipt of the goods. iii. The company has granted the unsecured loan of Rs. 14.31 lacs to its subsidiary Aastha Tools Private Limited. The Company has taken the unsecured loan from seven parties covered in the registers maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 279,841,673/- and the year-end balance of unsecured loans taken from such parties was Rs. 247,265,000/-. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been given / taken from
Company, firm, HUF and other parties listed in the register maintained under section 301 of the Companies Act, 1956, are not prima facie prejudicial to the interest of the Company. The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest. The parties have repaid the principal amounts as stipulated and have been regular in the payments of interest. iv. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. v. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act. 1956 have been so entered. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs or more in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time. vi. In our opinion and according to the information and explanation given to us, the company has complied with the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. vii. In our opinion, the company has an internal audit system commensurate with the size and nature of its business. viii. Maintenances of cost records under section 209 (1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government, for the products of the Company. ix. In respect of statutory dues: a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, custom duty, excise duty, cess and
other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amount is payable in respect of income tax, wealth tax, sales tax, customs duty, excise duty and cess, etc., for a period of more than six months from the date they became payable. b) According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax and cess which have not been deposited on accounts of any dispute. An amount of Rs. 15.05 lacs is disputed under the Excise Act. x. In our opinion, the Company has not incurred any cash loss during the financial year covered by our audit and the immediately preceding financial year and is not a sick industrial company within the meaning of the clause (o) of sub-section (1) of section 3 of the Sick Industries Companies (Special Provisions) Act, 1985. xi. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holder. xii. According to the information and explanations given to us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company. xiv. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company. xv. In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institutions are not prejudicial to the interest of the company. xvi. In our opinion, the term loans have been applied for the purpose for which they were raised. xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-term assets except permanent working capital.
xviii. The Company has not made preferential allotment of shares to the parties covered in the register maintained under Section 301 of the Companies Act, 1956 xix. In our opinion and according to the information and explanation given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xx. xxi. The Company has not raised any money by way of public issue during the year. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
For C. P. Shah & Co. Chartered Accountants s/d Ahmedabad. 21st June, 2010 Chetan P. Shah Proprietor M. No. 31239
1 2
120,414,000 1,074,933,378 1,195,347,378 460,841,042 217,708,215 552,438,594 82,539,144 1,887,157,757 678,549,257 72,369,823 1,946,266,458
3 4
275,173,594 277,265,000
NOTES FORMING PART OF THE ACCOUNTS As per our Report of even date attached For C. P. Shah & Co. Chartered Accountants
21
14
21
s/d Harish R. Rangwala Joint Managing Director s/d Amit Patel Company Secretary
HARSHA ENGINEERS LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 1 : SHARE CAPITAL Authorised Share Capital 15,000,000 Equity Shares of Rs.10/ each (Previous Year 15,000,000 equity Shares of Rs.10 each) Issued, Subscribed & Paid Up Capital 12,041,400 Equity Shares of Rs.10/- each Fully paid up (Previous Year 12,000,000 Equity Shares of Rs.10/- each) 31st March,2009 Rupees
150,000,000
150,000,000
120,414,000
120,414,000
120,414,000 SCHEDULE 2 : RESERVES & SURPLUS General Reserve : Balance As Per Last Balance Sheet Add: Deferred Tax Liability reduced on recalculation due to different tax rate for Non EOU and EOU From 2002-03 to 2007-08 Add : Transferred From Profit & Loss Account Profit & Loss Account : Opening Balance Add: Profit during the year Add: Deferred Tax Liability reduced on recalculation due to different tax rate for Non EOU and EOU From 2002-03 to 2007-08
120,414,000
209,101,620
163,848,803
909,864,399 1,131,766,019
SCHEDULE 3 : SECURED LOANS From STATE BANK OF INDIA Cash Credit Account Term Loan Bills Discounted and Export Packing Credit (Secured by Hypothecation of Inventories, Movable Assets and Registered Mortgage of all immovable properties) From CITI BANK N.A. Term Loan Bills Discounted and Export Packing Credit ( Secured by hypothecation of Inventories, ranking pari passu with SBI and exclusive charge on assets acquired out of term loan) From ICICI BANK LTD. Term Loan (USD ECB) ( Secured by exclusive charge on Plant & Machinery and Other Assets of DGBB Plant, acquired out of term loan) SCHEDULE 4 : UNSECURED LOANS Deposits from Shareholders and Others Deposits from Directors Loans from Bank
Land Factory Building Factory Building (Leased) Administrative Building Furniture & Fittings Plant & Machinery Office Equipments Electrical Fittings Vehicles Tools & Equipments Computer & Peripherals Wind Mill AC Plant and ACs TOTAL Previous Year
HARSHA ENGINEERS LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 6 : INVESTMENTS (A) Long Term Investment 130 Equity shares (Previous Year 130) of G V M S A V Limited of Rs.100/- each fully paid (at cost, unquoted) Investment in Subsidiary Companies(unquoted) 10,000 Equity shares (Previous Year NIL) of Harsha Engineers (India) Pvt. Ltd. of Rs.10/- each fully paid (at cost, unquoted) 15,000 Equity shares of Rs.100 each (Previous Year NIL) of Aastha Tools P. Ltd. ,purchased at rate of Rs.1040/- (at cost, unquoted) (B) Current Investment Investment in Subsidiary-Harsha Engineers Inc. Investment in Mutual Funds(cost Rs.600.08 lacs,unquoted)
-SDFS-15 Months-5-Growth 500648.877 units-NAV @ Rs.10 -BSL FTP-RETAIL Series BB-Growth 317807.383 units-NAV @ Rs.15.7328 -L & T Select Income Fund-Flexi Debt Inst. 488916.268 units-NAV @ Rs.10.2267 -L & T FREEDOM INCOME FUND 674441.395 units-NAV @ Rs.14.8294 -Reliance Medium Term Fund 264600.665 units-NAV @ Rs.18.8964 -Reliance Medium Term Fund 524051.336 units-NAV @ Rs.19.0821 -SHF-Ultra ST-Inst Plan-Growth 978636.3681 units-NAV @ Rs.20.4366
13,000
100,000
100,000
SCHEDULE 7 : INVENTORIES (As taken, valued & certified by Management) Raw Materials Semi Finished Goods Finished Goods Stores & Spares Toolings
SCHEDULE 8 : SUNDRY DEBTORS (Unsecured) Debts exceeding six months Considered Good Considered Doubtful Less: Provision for Doubtful Debts Other Debts Considered Good
HARSHA ENGINEERS LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 9 : CASH AND BANK BALANCES Cash on Hand Balances with Scheduled Banks In Current Accounts In Fixed Deposit Accounts 31st March,2009 Rupees
SCHEDULE 10 : LOANS AND ADVANCES (Unsecured, Considered Good) Advances recoverable in cash or kind or for value to be received Advances Debit Balances of Creditors Deposits with Govt. Authorities Other Deposits Loans to Staff Prepaid Expenses 96,272,705 7,196,763 86,801,131 371,450 4,090,343 6,179,436 200,911,828 SCHEDULE 11 : CURRENT LIABILITIES Creditors for goods and services Advances from Customers Statutory Liabilities Other Liabilities 126,942,428 10,700,915 119,837,244 58,450 2,196,394 5,910,261 265,645,692
SCHEDULE 12 : PROVISIONS Provision for Taxation Provision For Gratuity Provision For Leave Salary Proposed Dividend Corporate Dividend Tax
SCHEDULE 13 : GROSS SALES Gross Sales (Domestic) Gross Sales (Export) Gross Sales Less: Excise Duty
SCHEDULE 14 : OTHER INCOME Wind Mill Power Generation DEPB Income ERF & Gain/Loss on Hedging Contracts Miscellaneous Income Bad Debts Recovery Income Tax Refund Excess Provision of Tax Excess Provision Written Back
HARSHA ENGINEERS LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 15 : (INCREASE)/DECREASE IN STOCKS Semi finished goods opening stock Less : Semi finished goods closing stock 31st March,2009 Rupees
16,783,488 16,162,969 620,519 85,657,573 93,264,376 (7,606,803) 196,006,097 262,431,352 (66,425,255) (73,411,539)
19,507,266 16,783,488 2,723,778 112,272,269 85,657,573 26,614,696 156,314,698 196,006,097 (39,691,399) (10,352,925)
SCHEDULE 17 : STORES, POWER, FUEL AND OPERATIVE EXPENSES Stores Consumed Packing Materials Consumed Factory power consumption Machinery Repairs Windmill Maintenance Labour Charges Non Quality Expenses Non-quality Expenses (Traveling) Inward Cartage D G Set Maintenance Material Testing Charges Water Charges
96,991,419 37,555,149 50,658,399 2,109,313 1,043,086 16,993,549 3,832,997 461,023 2,798,224 189,125 152,222 1,877 212,786,383
107,761,606 47,382,782 50,338,327 1,654,551 1,724,008 26,399,590 6,949,415 517,609 5,094,662 40,960 54,493 247,918,003
SCHEDULE 18 : SALARIES, WAGES AND OTHER EMPLOYEE EXPENSES Salaries,Wages,Allowances,Bonus etc. Contribution to PF, FPF, ESI etc. Staff Welfare Remuneration to Directors
HARSHA ENGINEERS LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 19 : ADMINISTRATIVE AND OTHER EXPENSES Advertisement & Sales Promotion Audit Fees Bad Debts Bank Charges & Processing Fees Books & Periodicals Celebration Expenses Computer Expenses Conveyance DEPB Exp. DEPB License Discount Exp. Domestic Freight Domestic Traveling Domestic Warehousing Donation ECGC Premium Excise Expenses Export Expenses Export Freight Factory License Fees Foreign Traveling Expenses Foreign Currency Conversion Charges Gardening Expenses General Expenses Insurance Premium Lease Rent Legal & Professional Charges Loss on Sale of Assets Membership Fee & Seminar Exps. Municipal Tax Overseas Warehousing Postage, telephone & telex Product Liability Insurance Professional Tax Quality Certification Exps. Recruitment Expenses Repairs & Maintenance Round Off Sales Tax Security Service Staff Training Stationery & Printing Transit Insurance Vehicle Expenses Wind mill Insurance Xerox Expenses Income-tax Wealth Tax 31st March,2009 Rupees
2,068,078 675,000 1,849,525 113,605 483,994 45,213 462,163 18,810 1,313,795 10,197,864 1,186,975 374,356 242,000 6,959 2,348,179 2,792,725 47,071,179 49,290 2,598,816 126,446 501,884 3,674,620 514,040 308,550 3,650,412 (5,724,715) 36,747 105,782 4,050,796 2,010,042 6,023,890 4,800 298,284 325,910 7,885,329 (976) 26,111,648 2,574,737 791,721 208,007 149,971 559,625 100,713 270,052 230,580 128,687,421
4,709,163 850,000 535,428 2,274,525 101,101 540,625 18,570 379,750 13,734 307,830 6,702,771 1,893,037 556,857 562,000 975,273 (4,032,497) 9,546,646 86,899,250 13,862 4,932,628 144,230 465,546 3,605,918 850,727 8,694,200 2,849,525 351,130 193,222 4,793,637 2,473,241 4,637,530 4,800 519,784 417,654 10,889,239 (1,019) 38,421,163 2,190,269 2,479,363 436,864 722,473 710,899 115,045 327,121 5,604,366 808,030 210,485,510
SCHEDULE 20 : INTEREST (NET) On Term Loans On Working Capital Loans On Deposits Interest to Others Less : Interest Income
I.
SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF ACCOUNTING: The financial statements are prepared under historical cost convention and to comply, in all material respects, with the notified accounting standards by the Companies Accounting standard Rules - 2006 and the relevant provisions of Companies Act, 1956, Accounting Policies have been consistently applied by the company. 2. USE OF ESTIMATES: The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statement are prudent and reasonable. Future results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. 3. INVENTORY: Inventory of Stores and Spares, Raw materials and Semi finished goods are valued at cost, net of cenvat, on weighted average basis. Inventory of toolings is valued at cost, as reduced by normal wear and tear, if any, as certified by management. Inventory of finished goods is valued at lower of cost or net realizable value and relevant excise duty at applicable rates has been added. 4. REVENUE RECOGNITION: i) In appropriate circumstances, revenue is recognized on accrual basis when no significant uncertainty as to determination or realization exists. ii) Sales are accounted for on gross sales less excise duty. Sales do not include inter division transfer. Sales are accounted on dispatch of goods from the company premises.
iii)
The profit or loss on account of hedging of foreign currency export sales transactions have been merged with export sales account as both are interdependent and inter-connected.
iv)
All the items of expenses and income are accounted on accrual basis, except overdue interest on invoices and certain unforeseen income, which are accounted on receipt basis.
v)
Export incentives under the Duty Entitlement Pass Book Scheme are accounted in the year of export.
5. FIXED ASSETS AND DEPRECIATION: Tangible fixed assets are stated at cost of acquisition less accumulated depreciation / amortization. The cost of acquisition includes inward freight, non-refundable duties, taxes and other directly attributable incidental expenses, net of cenvat credit and value added tax and excluding foreign exchange fluctuation gain / loss on imported assets. Depreciation is provided on the straight line method, at the rate specified in schedule XIV to the Companies Act, 1956. Looking to the nature of the industry and particularly business and production process of the Company, the normal wear & tear is very less and also the life of plant and machinery and other assets used in the production is normally ranging from 15 to 20 years, which is more than the life as per the rate prescribed in Schedule XIV of the Companies Act, 1956. Therefore management have not considered any impairment for such assets during the year under consideration. 6. TRANSACTIONS IN FOREIGN CURRENCIES: Foreign Currency transaction are recorded in the reporting currency by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transactions. Foreign Currency Monetary items are reported using the closing rate. Non Monetary items which are carried in terms of historical cost denominated in foreign currency are reported using the exchange rate at the date of transaction. Exchange differences arising on the settlement of monetary items as well as gain / loss on hedging transaction are recognized as income or as expense in the year in which they arise. Export Sales are accounted for at the Custom exchange rates specified every month by the Customs Authorities. Monetary assets & liabilities denominated in foreign currency remaining unsettled at the year-end are translated at closing rates.
7. INVESTMENTS: Long Term investments are stated at cost unless there is permanent diminution in value as at the date of the Balance sheet. Current investments are stated at lower of cost and market value. Diminution in value is charged to Profit & Loss Account. 8. EMPLOYEE BENEFITS: a. Post Employment Benefits: i. Defined Contribution Plans: The Company has Defined Contribution Plans for Post Employment Benefits in the form of Provident Fund for all Employees, which is administered by the relevant authorities. Provident Fund is classified as a defined contribution plan as the Company has no further obligation beyond contributing. The Companys contributions to Defined Contributions Plans are charged to the Profit and Loss Account as and when incurred. ii. Defined Benefit Plans: Funded Plan: The Company has a defined benefit plan for Post Employment Benefit in the form of Gratuity for management employees, which is administered through Life Insurance Corporation (LIC). Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit Method. iii. Other Long Term Employee Benefits: Liability for Compensated Absences is provided based on valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Accrued Benefit method, which is the same as the Projected Unit Credit method in respect of past service. Under this method, the Defined Benefit Obligation is calculated taking into account pattern of availment of leave whilst in service and qualifying salary on the date of availment of leave. In respect of encashment of leave, the Defined Benefit Obligation is calculated taking into account all types of increment of qualifying salary projected up to the assumed date of encashment. b. Short Term Employee Benefits: i. Shortterm non-accumulating compensated absences: Shot-term non-accumulating compensated absences are encashable as per the Company rules and policy. Liability for non-accumulating compensated absences is worked out as at the Balance Sheet date on undiscounted basis, by proportionally
apportioning the balance of such leaves up to the Balance Sheet Date, against the total leaves credited for the calendar year 2010, less any leave / leaves utilized by the employee as at the Balance Sheet Date. Basic rate of salary for the year 200910 as at 31st March, 2010 is used to work out this liability. ii. Bonus Plans: The Company has provided for Bonus, payable to its employees, for their services rendered during the year, as per the Companys rules and policy, on an undiscounted basis. c. Termination benefits are recognized as an expense as and when incurred. d. The Actuarial gains and losses arising during the year are recognized in the Profit and Loss Account of the year without resorting to any amortization. 9. BORROWING COST: Borrowing Cost relating to acquisition, construction of fixed assets or production of qualifying assets which takes substantial period of time to get ready for its intended use are also included to the extent they relate to period till such assets are ready to be put to use . Other borrowing Cost are recognized as an expense in the period in which these are incurred. 10. SEGMENT REPORTING: In terms of AS-17 on Segment Reporting the company neither has more than one business segment nor more than one geographical segment requiring separate disclosures as there are no more distinguishable component or economic environments of the enterprise engaged in providing individual product or service or a group of related products or services and the same are not subjected to different risks and returns either of business or geographical segments. 11. LEASE: (a) Assets acquired under lease where the company has substantially all risk and rewards incidental to ownership are classified as finance leases. Such assets are capitalized at the inception of lease at the lower of fair value or the present value of minimum lease payment and a liability is created for an equivalent amount. Each lease rental paid is allocated between the liability and the interest cost, so as to obtain a constant periodic rate of interest on the outstanding liability of each period. There are no finance lease transactions entered in to by the company.
(b) Assets acquired on lease where a significant portion of risk and rewards incidental to ownership is retained by the leasor are classified as operating lease. Lease rental are charged to the profit and loss account on accrual basis. 12. EARNING PER SHARE: The basic earning per Share is calculated by dividing the Net profit or loss for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The basic and diluted EPS are same as the company has no such instruments. 13. ACCOUNTING FOR TAXES ON INCOME: Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized if there is virtual certainty that sufficient future taxable income will be available against which such assets can be realized. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed at each Balance sheet date to reassess realization. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. 14. RESEARCH AND DEVELOPMENT : Since various years in past, the Company has been carrying on various activities such as design, development, engineering, cost reduction and various similar activities which are, partly or fully falling in the nature of research and development activities. The company has not classified various capital and revenue expenditure related to the research and development activities separately in the audited books of account. However the detailed information is available separately for any such reference. 15. PROVISION, CONTINGENT LIABILITIES AND CONTINGENT ASSETS: Provisions involving substantial degree of estimation in measurement are recognized when there is a present obligation as a result of past events and it is probable that there will be an outflow of resources. Contingent Liabilities are not recognized but are disclosed in the Notes. Contingent Assets are neither recognized nor disclosed in the financial statements.
II.
NOTES TO ACCOUNTS 1. CONTINGENT LIABILITIES NOT PROVIDED FOR: Particulars i) Letter of Credit & Bank Guarantee ii)Corporate guarantee for Aastha Tools Pvt. Ltd in favor of State Bank of India (Subsidiary Company) iii) Disputes pending under Excise Act 2009-10 38.91 75.00 15.05 (Rs. in lacs) 2008-09 335.46 95.00 19.74
2. Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided for Rs. 356.37 lacs. 3. EMPLOYEE BENEFITS: (i) The Accounting Standard 15 (revised 2005) on Employee Benefits AS 15 (revised 2005) issued by the Institute of Chartered Accountants of India has been followed by the Company. In accordance with the above standard, the obligations of the Company, on account of employee benefits, based on independent actuarial valuation, have been accounted for. The details are as under : (ii) Defined Contribution Plans: 2009-10 89.34 Nil Nil (Rs. in lacs) 2008-09 86.70 Nil Nil
The Company has recognized the following amounts in the Profit and Loss Account for the year (a) Contribution to Employees Provident Fund (b) Contribution to Employees Family Pension Fund (c) Contribution to Employees Superannuation Fund (iii) Detailed Benefit Plan
(Rs. in lacs)
2009-10 Gratuity Leave Total Encashment Changes in the Present Value of Obligation Present value of 213.44 60.98 274.42 obligation as at April 01, 2009 Interest cost 17.61 5.03 22.64 Past Service Cost Current Service Cost 25.24 11.75 36.99 Curtailment Cost / (Credit) Settlement Cost / (Credit) Benefits Paid (10.67) (8.88) (19.55) Actuarial (Gain) / Loss (3.49) 13.04 9.55 Present value of 242.13 81.92 324.05 obligation as at March 31, 2010 Gratuity 2008-09 Leave Total Encashment 61.11 4.89 2.77 (7.51) (0.28) 60.98 224.95 18.00 27.42 (24.39) 28.44 274.42
(i) (a) (b) (c) (d) (e) (f) (g) (h) (i)
(Rs. in lacs)
2009-10 Gratuity Leave Total Encashment (ii) Changes in the Present Value of Plan Assets (a) Present value of Plan Assets as at April 01, 2009 (b) Expected Return on Plan Assets (c) Actuarial Gain / (Loss) (d) Employers Contributions (e) Employees Contributions (f) Benefits Paid 197.48 19.23 (0.08) 31.56 (10.67) 197.48 19.23 (0.08) 31.56 (10.67) Gratuity 2008-09 Leave Total Encashment 159.91 15.81 (0.11) 38.75 (16.88)
(g) Present value of Plan 237.52 237.52 197.48 197.48 Assets as at March 31, 2010 (iii) Amount recognized in the Balance Sheet including a reconciliation of the Present Value of Defined Benefit Obligation and the Fair Value of Assets (a) Present value of Funded 237.52 Obligation as at March 31, 2010 (b) Fair Value of Plan Assets 237.52 as at March 31, 2010 (c) Funded (Asset) / Liability recognized in the Balance Sheet (d) Present Value of 4.61 81.91 Unfunded Obligation as at March 31, 2010 (e) Unrecognized Past Service Cost (f) Unrecognized Actuarial (Gains) / Losses (g) Unfunded Net Liability 4.61 81.91 recognized in the Balance Sheet (iv) Expenses recognized in the Profit and Loss Account (a) (b) (c) (d) (e) (f) (g) (h) (i) Current Service Cost Past Service Cost Interest Cost Expected return on Plan Assets Curtailment Cost / (Credit) Settlement Cost / (Credit) Net actuarial (Gain) / Loss Employees Contribution Total Expenses recognized in the Profit and Loss Account 25.24 17.61 (19.23) (3.41) 20.21 11.75 5.03 13.04 29.82 237.52 237.52 86.52 86.52 197.48 197.48 15.96 15.96 60.98 60.98 197.48 197.48 76.94 76.94
Percentage of each category of Plan Assets to total Fair Value of Plan Assets Government of India Securities High quality corporate bonds Equity shares of listed companies Property Insurer managed funds Bank balance Others 100% -
The overall expected rate of return on assets is based on the expectation of the average longterm rate of return on investments of the fund during the estimated term of the obligations. Following are the Principal Actuarial Assumptions used as at the balance sheet date: Particulars (a)Discount Rate (b)Expected rate of return on Plan Assets (c)Salary Escalation Rate 2009-10 8.25 % 9.25 % 6.00 % 2008-09 8.00 % 9.25 % 6.00 %
The Estimates of future salary increases considered in actuarial valuation takes in to account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market. 4. LEASE: A. Disclosure in respect of assets taken on lease: The Company has not taken any asset being in the nature of finance lease. The Company has acquired land on operating lease for the purpose of installation of windmill in the year 2004 and the details are as under. Date of lease agreement Period of lease agreement Total leasehold land Lease rental p.a. Total lease rental 21st September 2004 Fifteen Years 9.35 hectare Rs.11000/- per hectare p. a. Rs. 1,02,850/-
The Company has recognized Rs. 3,08,550/- as lease rent expenses for during the year for the aforesaid operating lease.
B. Disclosure in respect of assets given on lease: Operating Lease The Company has leased a portion of its factory premises situated at Odhav to AIA Engineering Ltd., only for four months with a consideration of monthly lease rental of Rs. 25,000/-. The company has recognized Rs. 1,00,000/- as income during the year for the said lease and has provided Depreciation in the same manner as owned assets. The said property has been sold during the year. Further details as required under the Accounting Standard AS 19 Accounting for Leases are as below: Category of Assets Gross carrying amount of the portion of premises leased, included in Schedule 5 Fixed Assets" Factory Building (leased) 19.60 10.45 0.62 Accumulated Depreciation (Rs. in lacs) Depreciation recognized in the Profit and Loss Account
5. EARNINGS PER SHARE CALCULATION : The above is as required under the Accounting Standard AS-20, Earning per share, and it is as follows: Total shares issued (Nos.) of Rs.10/- each Profit after tax for the year (Rs. In lacs) Earning per share (Rs.) 6. RELATED PARTY TRANSACTIONS: (Rs. In Lacs)
Nature of Transactions Subsidiaries 2009-10 Purchase of Goods - Aastha Tools Pvt. Ltd. Sales of Goods / Assets Aastha Tools Pvt. Ltd. Loans Given - Aastha Tools Pvt. Ltd. Loans Received Back Aastha Tools Pvt. Ltd. Interest Income - Aastha Tools Pvt. Ltd. 404.49 17.64 14.31 5.50 1.93 2008-09 534.83 3.31 42.00 2.67 Key Management Personnel 2009-10 2008-09 Relative of Key Management Personnel 2009-10 2008-09 -
Nature of Transactions
Key Management Personnel 2009-10 45.00 45.00 21.00 30.00 (17.18) 51.97 300.00 373.00 29.38 30.98 33.00 42.57 2008-09 90.00 90.00 42.00 60.00 110.97 23.66 (286.66) (288.98) 20.07 20.10 29.04 29.68 -
Relative of Key Management Personnel 2009-10 2008-09 45.00 7.50 7.50 7.50 7.50 45.00 30.00 9.00 81.31 (20.95) (0.40) (1.54) (0.33) (0.12) 31.99 (5.72) (0.20) (0.34) (0.74) 7.87 47.24 3.03 3.37 7.54 3.41 3.02 28.14 31.24 3.69 3.26 90.00 15.00 15.00 15.00 15.00 90.00 60.00 18.00 (0.01) 4.12 12.70 (3.77) 13.16 14.45 (0.01) (93.39) (4.48) 16.95 (0.71) 0.15 48.48 2.26 3.59 5.96 2.38 0.24 36.39 29.71 2.58 2.93
Dividend Paid (1) Rajendra S. Shah (2) Harish R.Rangwala (3) Visahl H.Rangwala (4) Pilak R.Shah (5) Nirmala R. Shah (6) Hetal R. Shah (7) Milly R. Shah (8) Krina R.Shah (9) Vaishali P.Shah (10) Charusheela H.Rangwala (11) Munjal H.Rangwala (12) Tanvi V. Rangwala Deposits Accepted /(Repaid) (1) Rajendra S. Shah (2) Harish R.Rangwala (3) Visahl H.Rangwala (4) Pilak R.Shah (5) Rajendra S. Shah (HUF) (6) Nirmala R. Shah (7) Hetal R. Shah (8) Milly R. Shah (9) Krina R.Shah (10) Vaishali P.Shah (11) Harish R.Rangwala (HUF) (12) Charusheela H.Rangwala (13) Munjal H.Rangwala (14) Tanvi V. Rangwala (15) Zaverben R.Rangwala Interest Paid (1) Rajendra S. Shah (2) Harish R.Rangwala (3) Visahl H.Rangwala (4) Pilak R.Shah (5) Rajendra S. Shah (HUF) (6) Nirmala R. Shah (7) Hetal R. Shah (8) Milly R. Shah (9) Krina R.Shah (10) Vaishali P.Shah (11) Harish R. Rangwala (HUF) (12) Charusheela H. Rangwala (13) Munjal H.Rangwala (14) Tanvi V. Rangwala (15) Zaverben R.Rangwala
7. DEFERRED TAXATION: As required by the Accounting Standard AS-22 Accounting for taxes on income, the major components of deferred tax liabilities and deferred tax assets are as follows: (Rs. in lacs) Components of Deferred Tax Liability/(Asset) are as under: Deferred Tax Liability: Amount Difference between book and tax depreciation 232.38 Allowable under Income-tax Act 1961 234.63 Deferred Tax Assets: Disallowable under Income-tax Act 1961 (160.89) Net Deferred Tax Liability 306.12 8. SUBSIDIARY COMPANY: The Company has a wholly owned subsidiary company Harsha Engineers Inc., in U.S.A. The said subsidiary company has not carried on any business activity during the year. Statements as required under the provisions of section 212 of the Companies Act, 1956, are attached with the Annual Report of the Company. The company has a majority stake in subsidiary company Aastha Tools Private Limited. Statements as required under the provisions of section 212 of the Companies Act, 1956, are attached with the Annual Report of the Company. The company has a wholly owned subsidiary company Harsha Engineers (India) Private Limited. The company has not carried on any business activities during the year. Statements as required under the provisions of section 212 of the Companies Act, 1956, are attached with the Annual Report of the Company. During the year the company has initiated the procedure for forming a wholly owned subsidiary in China. As on 31st March, 2010 the name approval process of the said subsidiary was over. Harsha Engineering Components (Changshu) Co., Limited, the said subsidiary has been issued business license w.e.f 7th April, 2010. The above subsidiary would carry on the same business activities in China as of the holding company. 9. ADDITIONAL INFORMATION PURSUANT TO PARAGRAPH 3 & 4 OF PART II OF SCHEDULE VI OF THE COMPANIES ACT, 1956: i) Quantitative details in respect of Raw Material as certified by the management Particulars Opening Stock: Add: Purchase during the year Total Less: Consumed in Production Closing Stock CRCA Strips 2009-10 1,097.54 15,106.55 16,204.09 14,493.00 1,711.09 2008-09 2,209.16 19,630.07 21,839.23 20,741.69 1,097.54 (Qty in M. T.) Brass Tubes, Castings, Strips and Scrap 2009-10 2008-09 104.27 231.01 2,624.36 4,272.46 2,728.63 4,503.47 2,609.02 4,399.20 119.61 104.27 Deferred Tax 77.20 77.94 (53.45) 101.69
ii) Quantitative details in respect of Finished Goods as certified by the management. Particulars Opening Stock Add: Quantity manufactured during the year Total Less: Sales during the year Closing Stock Taper Cages 2009-10 50.01 490.79 540.80 500.45 40.35 2008-09 44.59 575.51 620.10 570.09 50.01 Ball Bearing Cages 2009-10 175.90 2,578.61 2,754.51 2,638.80 115.71 2008-09 324.92 2,093.43 2,418.35 2,242.45 175.90 (Nos. in lacs) Brass Cages 2009-10 1.88 16.19 18.07 17.04 1.03 2008-09 0.86 22.23 23.09 21.21 1.88
Note: The above figures are as per the bonded store room (BSR) report, required to be maintained under Excise Rules, 2002. There could be minor and negligible difference between the above quantities and quantities as per accounts, due to technically different definition of the finished goods as per Excise Act and SAP, our accounting software. iii) Remuneration to Auditors comprises of : Particulars Audit Fees Other services Total iv) Managerial Remuneration: Particulars i) Managing Directors Remuneration (One) Salary HRA Contribution to Provident Fund & Other Fund * Perquisites Total ii) Joint Managing Director's Remuneration (One) Salary HRA Contribution to Provident Fund & Other Fund * Perquisites Total iii) Whole Time Directors' Remuneration (Two) Salary HRA Contribution to Provident Fund & Other Fund * Perquisites Total (Rs. in lacs) For the year ended on 31st March 2010 11.88 3.73 1.43 0.81 17.85 11.88 3.73 1.42 1.80 18.83 13.02 3.48 1.56 18.06 2009-10 7.50 6.00 13.50 (Rs. in lacs) 2008-09 7.50 6.00 13.50
(*) Note: The above mentioned figures do not include figures of leave encashment and contribution made to gratuity fund during the year as separate actuarial valuation is not available for the Directors Computation of Net profit as per section 349 read with section 309(5) and section 198 of the Companies Act, 1956: Particulars Profit before Tax & M.R. as per P & L A/c (A) Add: -Loss on Sale of Assets -Wealth Tax -Depreciation (as per Books) - Salary perquisites & Other benefits of Managerial Personnel Total (B) Less: -Short Term Capital Gain On Investment -Long Term Capital Gain On Investment -Income Tax Refund -Profit on Sale of Assets -Depreciation as per Section 350 Total (C) Net Profit for Managerial Remuneration (A+B-C) Managerial Remuneration @ 1% to CMD Managerial Remuneration @ 1% to JMD 10. EXPENDITURE IN FOREIGN CURRENCY: (Rs. in lacs) Particulars (i)CIF Value of Imported material a) Raw Material & Spares b) Capital Goods (ii)Payment of Principal and Interest on Loan, Export Rejection, Commission etc. (iii)Payment for Foreign Tour 14.05 8.79 145.67 249.01 773.36 224.80 461.93 1059.19 2009-2010 2008-2009 (Rs. in lacs) For the year ended on 31st March 2010 1951.44 3.25 2.31 896.92 54.74 957.22 24.22 5.90 4.65 60.49 896.92 992.18 1916.48 19.16 19.16
11. EARNING IN FOREIGN CURRENCY: 2009-2010 ( Rs. in lacs) 6559.58 2008-2009 ( Rs. in lacs) 16803.57
12. In the opinion of the Board, Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary. 13. Capital Work In Progress includes preoperative expenditure pending allocation to a project under implementation are as under. Preoperative Expenses Consultancy fees Bank charges Traveling expenses Other expenses Total (Rs. in lacs) Amount 48.02 0.06 0.27 0.08 48.43
14. Tax assessment of the company under Income Tax Act 1961, has been completed up to Financial Year 2006-07 and the sales tax assessment up to Financial Year 2005-06. 15. The Inventory amounting to Rs. 107.17 lacs (Previous Year Rs.76.86 lacs) was lying with the job workers for future processing at the close of the year. Out of that majority of the confirmations have been received. 16. The Company has entered into a few Derivative/Forward/Option contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee. The counter parties to such contracts are banks. These contracts are entered into, to hedge the foreign currency risks. The actual gain/loss could vary and be determined only on settlement of the contract on their respective due dates. 17. Foreign currency exposures at the year end are as under: Particulars Outstanding Foreign Customers - Receivable in USD - Receivable in Eur - Equivalent Rupee In Lacs (FEDAI rate considered) Outstanding Import Suppliers - Payable in Eur - Payable in JPY - Payable in SEK - Equivalent Rupee In Lacs (FEDAI rate considered) 111,040.41 108,000.00 40,334.90 70.16 4,183,289.59 1,195,146.57 2,600.79 As at 31st March 2010
Advance Payment to Import Suppliers - Advance paid in USD - Advance paid in EUR - Advance paid in JPY - Equivalent Rupee in lacs (FEDAI rate considered) Advance payment to Subsidiary - Adv paid to Harsha Engineers Inc. in USD - Adv paid to Harsha Engineers Inc. (Rs. in lacs) 6,391.21 2.87 576.36 52,820.00 141,499.40 32.87
18. In view of withdrawal of the Announcement issued by the Institute of Chartered Accountants of India on Treatment of Exchange Differences under Accounting Standard (AS) 11 (revised 2003), The Effects of Changes in Foreign Exchange Rates vis--vis Schedule VI to the Companies Act,1956, any income or expense on account of exchange difference related to foreign exchange liabilities pertaining to purchase of fixed assets is recognized in the Profit and Loss Account instead of giving effect thereof to the cost of the fixed assets. This change has resulted into increase in profit of the Company for the year ended 31st March, 2010 by Rs. 1.91 lacs (during the previous year there was a decrease in profit by Rs.2.30 lacs) 19. During the year there are few inter-unit transactions between the Changodar and Moraiya units within the company. The same have been booked as sales at prevailing market rates. However these transfers are eliminated at the company level during the year end. The details of such inter-unit transfers are as under. (Rs. in lacs) Particulars Brass Casting Sales Scrap Sales Tools Sales Asset Sales Total From Changodar to Moraiya 703.84 51.73 0.40 755.97 From Moraiya to Changodar 549.56 137.46 19.04 706.06 549.56 841.30 51.73 19.44 1462.03 Total
20. Balances of Debtors, Creditors and Loans & Advances are subject to confirmation. Adjustments, if any, will be made at the time of reconciliation of accounts. The confirmation in respect of sundry creditors has been called for during the year and 50 % confirmations have been received satisfactorily.
21. In the absence of any intimation from vendors regarding the status of their registration under the Micro, Small and Medium Enterprises Development Act, 2006, the company is unable to comply with the disclosures require to be made under the said act. 22. Figures have been rounded off to the nearest rupee. 23. Previous years figures have been regrouped / reclassified to make them comparable with those of the current year, wherever necessary.
SIGNATURES TO SCHEDULES 1 TO 21
As Per Our Report of even date For C. P. Shah & Co. Chartered Accountants
s/d s/d Chetan P. Shah Proprietor M. No. 31239 Ahmedabad 21 June, 2010.
st
Harish R. Rangwala Joint Managing Director s/d Amit Patel Company Secretary
(A)
(B)
(C)
(D)
s/d Rajendra S. Shah Chairman & Managing Director s/d Harish R. Rangwala Joint Managing Director s/d Amit Patel Company Secretary
ABSTRACT OF THE BALANCE SHEET AS AT 31.03.2010 AND COMPANY'S GENERAL BUSINESS PROFILE AS PER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956. I. REGISTRATION DETAILS Registration No. Balance Sheet Date II. CAPITAL RAISED DURING THE YEAR (Amount in Rs.) Public issue Bonus issue Nil Nil Rights issue Private Placement Nil Nil
U29259GJ1986PLC008520 31.03.2010
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUND (Amount in Rs.) Total Liabilities 2,290,065,966 Total Assets 2,290,065,966
(A) SOURCES OF FUND (excluding Deferred Tax Liabilities) Paid-up Capital 120,414,000 Reserve & Surplus Secured Loans 275,173,594 Unsecured Loans (B) APPLICATION OF FUNDS (excluding Deferred Tax Assets) Net Fixed Assets 978,883,951 Investment Net Current Assets 832,278,791 Misc. Expenditure Accumulated Losses Nil IV. PERFORMANCE OF COMPANY (Amount in Rs.) Turnover (+/-) Profit/ Loss before Tax Earnings Per Share in Rs. 1,531,100,523 Total Expenditure(Excl. Tax) 191,311,359 (+/-) Profit/ Loss after Tax 10.55 Dividend rate %
1,131,766,019 277,265,000
75,995,015 -
1,339,789,164 127,039,271 50
V. GENERIC NAMES OF PRINCIPAL PRODUCTS OF THE COMPANY (as per monetary terms)
Product Description Ball or Roller Bearing Cage Bearing Housing Taper Roller Bearing Cage On behalf of the Board of Directors
Statement pursuant to section 212 of the Companies Act, 1956 relating to subsidiary companies
Sr. No. 1 2 Particulars Financial Year of the Subsidiary Company ended on Shares of the Subsidiary held on the above date: (a) Number of Equity Shares (b) Face Value (c) Extent of Holding 3 Net aggregate amount of profit/loss of the subsidiary for the above financial year so far as they concern the members of the Company. (a) dealt with in the accounts of the Company for the period ended 31st March 2010 (b) not dealt with in the accounts of the Company for the period ended 31st March, 2010 4 Net aggregate amount of profit/loss of the subsidiary for the previous financial year so far as they concern the members of the Company not dealt with in the accounts of the Company. Material Changes between the end of the subsidiary's financial year and 31st March, 2010 ---------15,000 100/75% 10,000 10/100% 850 0/100% Aastha Ltd. Tools Pvt. Harsha Engineers Harsha (India) Pvt. Ltd. Inc. 31st March, 2010 Engineers
15,46,750/-
----
----
24,84,993/-
N.A.
N.A.
N.A.
N.A.
N.A.
To, The Members, Your Directors are pleased to present the Annual Report along with the Audited Accounts for the year ended 31st March, 2010. Financial Results: During the year under review, no financial / commercial transactions were entered into by the Company. Apart from the Unsecured loan from the Holding Company and Bank Balances there is no assets or liabilities of the Company. Review of operations: During the year under review, the principal activity of your company was to develop new business opportunity and to provide overseas business development support to Harsha Engineers Limited, the holding company. During the year under review no major financial transactions were taken place. Dividend: Your directors do not recommend any dividend for the year under review. Fixed Deposits: The company has not accepted any deposit from the public during the year under review. Directors: Mr. Harish Rangwala, Mr. Rajendra Shah and Mr. Harish Pandhi are on the Board of the Company. There is no change in the Board during the year under review. Auditors and Their Report: Comments of the Auditors in their report and the notes forming part of the Accounts are self explanatory and need no comments. M/S. C. P. Shah & Co., the Company's Auditors will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment.
Holding Company During the year under review, there were no changes in the holding of Harsha Engineers Limited and the Company remains the subsidiary of Harsha Engineers Limited. Other Particulars: Information pertaining to Section 217 (1) (e) and 217 (2A) of the Indian Companies Act, 1956 are not applicable. Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000: In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, your directors state that: (a) In the preparation of accounts, the applicable accounting standards have been followed. (b) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the company as at the end of 31st March, 2010 and the profit of the company for the year ended on that date. (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (d) The annual accounts of the company have been prepared on a going concern basis.
Notes on accounts: The notes forming part of the accounts are self-explanatory and therefore, do not call for any further comments. Acknowledgements: Your Directors are also thankful for the co-operation and assistance received from the Financial Institutions, Bankers, Collaborators, Central and State Government Departments and Local Authorities.
By order of the Board of Directors Ahmedabad 21st June, 2010 s/d RAJENDRA S. SHAH Director s/d HARISH R. RANGWALA Director
To, The Members, Harsha Engineers Inc. 1. We have audited the attached Balance Sheet of Harsha Engineers Inc, as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.
4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; iii. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; v. On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 : and (b) in the case of Profit and Loss Account, of the profit for the year ended on that date.
For C. P. Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M. No. 31239
Referred to in Paragraph 1 of our report of even date i. ii. There are no Fixed Assets with the Company. There are no Stocks with the Company or third parties.
iii.
The company has not granted any unsecured loan to the Companies, firms or parties listed in the register maintained under section 301 of the Companies Act, 1956.
iv.
The company did not have an internal audit system during the year.
v.
According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act. 1956 have been so entered.
vi.
The Company has not accepted any deposit from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under.
vii.
Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government, for the products of the Company.
viii. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holder. ix. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company.
x.
In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.
xi. xii.
The Company has not obtained any term loans. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long-term investment.
xiii. The Company has not made any preferential allotment of shares to the parties covered in the register maintained under Section 301 of the Companies Act, 1956. xiv. In our opinion and according to the information and explanation given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xv. xvi. The Company has not raised any money by way of public issue during the year. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit.
For C. P. Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M. No. 31239
II Application of Funds CURRENT ASSETS, LOANS & ADVANCES Cash & Bank Balances NET CURRENT ASSETS
NOTES FORMING PART OF THE ACCOUNTS As per our Report of even date attached For C. P. Shah & Co. Chartered Accountants
HARSHA ENGINEERS INC. SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 1 : UNSECURED LOANS Deposit from Harsha Engineers Ltd. 286,965 286,965 324,162 324,162 31st March,2009 Rupees
SCHEDULE 2 : CASH AND BANK BALANCES Bank Balance 286,965 286,965 324,162 324,162
II. 1.
NOTES TO ACCOUNTS Since there were no financial transactions entered into by the company, no profit and loss account has been prepared.
2.
RELATED PARTY TRANSACTIONS: As required by the accounting standard AS 18, Related Party Disclosures, the Company had no such transactions during the year. The details of the Related Parties are as under: i. Name of Party : Harsha Engineers Limited; : Holding Company : NIL
In the opinion of the Board, Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business.
4.
Other Disclosure requirements of schedule VI of the Companies Act, 1956 are not applicable to the Company.
SIGNATURES TO SCHEDULES 1 TO 3 As Per Our Report of even date s/d Rajendra S. Shah Director
s/d Chetan P. Shah Proprietor M. No. 31239 Ahmedabad 21st June, 2010
To, The Members, Your Directors are pleased to present the Second Annual Report together with the Audited Statements of Accounts for the year ended 31st March, 2010. Financial Results: 2009-10 (50890) Nil (50890) (Amount in Rs.) 2008-09 Nil Nil Nil
Loss before taxation Provision for Taxation: Current Year Tax Profit after taxation Review of operations:
During the year under review, the Company has not started its commercial activities. Dividend: Your directors do not recommend any dividend for the year under review. Fixed Deposits: During the period under review, the company has not accepted the deposit form the public. Shifting of Registered Office: During the period under review, the company has changed its registered office to Plot No. 388, Sarkhej Bavla Road, P.O. Changodar, Ahmedabad 382213. The holding Companys registered office is also situated at Changodar and all the directors of the company sits at the Changodar so the business activities of the Company can be carried out more efficiently and smoothly. Change in Main Object Clause of the Company: The Company has changes its main object clause of the Memorandum of Association to include the business related to Solar Energy Application.
Directors: In accordance with the provisions of the Companies Act, 1956 Mr. Rajendra Shah, retires by rotation at the ensuing annual general meeting and being eligible for reappointment offers himself for the same. Auditors and Their Report: Comments of the Auditors in their report and the notes forming part of the Accounts are self explanatory and need no comments. M/S. C. P. Shah & Co., the Company's Auditors will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The directors recommend the re-appointment of M/S. C. P. Shah & Co. and authority to Board to fix their remuneration. Holding Company During the year under review, there were no changes in the holding of Harsha Engineers Limited and the Company remains the Wholly Owned Subsidiary of Harsha Engineers Limited. Energy Conservation, Technology Absorption, Adaptation, Innovation: As the Company has not started any commercial activity, a statement containing the information as per section 217 (1) (e) of the Companies Act is not appended. During the year under review, there was no foreign exchange earnings and outgo. Particulars of Employees: The particulars of employees as required by section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended is not given as no employee is in receipt of remuneration of Rs. 24,00,000/- or more per annum or 2,00,000/- or more per month. Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000: In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, your directors state that: (a). (b). In the preparation of accounts, the applicable accounting standards have been followed. Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the
company as at the end of 31st March, 2010 and the profit of the company for the year ended on that date. (c). Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (d). The annual accounts of the company have been prepared on a going concern basis.
Notes on accounts: The notes forming part of the accounts are self-explanatory and therefore, do not call for any further comments. Acknowledgements: Your Directors are thankful for the co-operation and assistance received from the Bankers, Central and State Government Departments and Local Authorities.
Registered Office: Plot No. 388, Sarkhej Bavla Road, P.O. Changodar, Ahmedabad - 382 213 21 June, 2010
st
To, The Members, Harsha Engineers (India) Private Limited 1. We have audited the attached Balance Sheet of Harsha Engineers (India) Private Limited, as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order. 4. Further to our comments in the Annexure referred to above, we report that: i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; iii. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;
iv. In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; v. On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : (a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 : and (b) In the case of Profit and Loss Account, of the profit for the year ended on that date.
For C. P. Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M. No. 31239
Referred to in Paragraph 1 of our report of even date i. ii. iii. There are no fixed Assets with the company. There are no Stocks with the Company or third parties. The company has not granted any unsecured loan to the Companies, firms or parties listed in the register maintained under section 301 of the Companies Act, 1956. iv. v. The company did not have an internal audit system during the year. According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act. 1956 have been so entered. vi. The Company has not accepted any deposit from the public within the meaning of Section 58A and 58AA of the Act and the rules framed there under. vii. Maintenances of cost records under section 209 (1) (d) of the Companies Act, 1956 has not been prescribed by the Central Government, for the products of the Company. viii. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution, bank or debenture holder. ix. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the companies (Auditors Report) Order, 2003 are not applicable to the company. x. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company. xi. During the year under review, Company has not obtained the Term Loan.
xii.
The Company has not made any preferential allotment of shares to the parties covered in the register maintained under Section 301 of the Companies Act, 1956
xiii. In our opinion and according to the information and explanation given to us, the Company has not issued any secured debentures during the period covered by our report. Accordingly, the provisions of clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company. xiv. xv. The Company has not raised any money by way of public issue during the year. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit. For C.P.Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M. No. 31239
Schedule I
Sources of Funds
SHAREHOLDERS' FUNDS Share Capital LOAN FUNDS Unsecured Loans DEFERRED TAX LIABILITY 1 100,000 100,000
148,700 248,700
148,700 248,700
II
Application of Funds
CURRENT ASSETS, LOANS & ADVANCES Cash & Bank Balances MISCELLANEOUS EXPENDITURE Preliminary Expenses (To the extent not written off or adjusted) Balance of Profit and Loss Account
NOTES FORMING PART OF THE ACCOUNTS As per our Report of even date attached For C. P. Shah & Co. Chartered Accountants
Ahmedabad
st 21 June, 2010
Harsha Engineers (India) Private Limited Profit and Loss Account for the Year Ended 31st March,2010
Schedule INCOME TOTAL EXPENDITURE Administrative & Other Expenses TOTAL Loss Before Tax Current Tax Loss After Tax NOTES FORMING PART OF THE ACCOUNTS ACCOUNTS As per our Report of even date attached For C. P. Shah & Co. Chartered Accountants 5 50,890 50,890 (50,890) (50,890) For the Year Ended 31st March 2010 (Rs) For the Year Ended 31st March 2009 (Rs)
31st March,2010 Rupees SCHEDULE 1 : SHARE CAPITAL Authorised Share Capital 10,00,000 Equity Shares of Rs.10/ each Issued, Subscribed & Paid Up Capital 10,000 Equity Shares of Rs.10/- each 10,000,000
100,000 100,000
100,000 100,000
148,700 148,700
148,700 148,700
6,850 6,850
10,000 10,000
SCHEDULE 4 : MISCELLANEOUS EXPENDITURE Preliminary Expenditure (1/5 of Expenses have been written off) Preliminary Expenditure - To the extent not written off or adjusted Balance of Profit and Loss Account
238,700 238,700
SCHEDULE 5 : ADMINISTRATIVE AND OTHER EXPENSES Stationary & Printing ROC Filing Charges Preliminary Expenses written off
II. NOTES TO ACCOUNTS 1. Since the project and commercial activity is yet to commence, all the required disclosures under the Notes to Accounts are not available. 2. During the year under review, the holding of the Harsha Engineers Limited remains the same and the Company remains the Wholly Owned Subsidiaries of Harsha Engineers Limited. 3. As required by the accounting standard AS 18, Related Party Disclosures, the Company had no such transactions during the year. The details of the Related Parties are as under: (i) Name of Party (ii) Nature of Relationship (iii) Nature of Transaction : Harsha Engineers Limited; : Holding Company : NIL
4. Figures have been rounded off to the nearest rupee. 5. Additional Information as required by Schedule VI to the Companies Act, 1956 has been given to the extent applicable to the Company.
s/d Rajendra S. Shah For C. P. Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M. No. 31239 Ahmedabad 21st June, 2010 s/d Harish R. Rangwala Director Director
ABSTRACT OF THE BALANCE SHEET AS AT 31.03.2010 AND COMPANY'S GENERAL BUSINESS PROFILE AS PER PART IV OF SCHEDULE VI TO THE COMPANIES ACT, 1956. I. REGISTRATION DETAILS Registration No. Balance Sheet Date
U35303GJ2008PTC054503 31.03.2010
II. CAPITAL RAISED DURING THE YEAR (Amount in Rs.) Public issue Bonus issue Nil Rights issue Nil Private Placement Nil Nil
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUND (Amount in Rs.) Total Liabilities 248,700 Total Assets 248,700
(A) SOURCES OF FUND (excluding Deferred Tax Liabilities) Paid-up Capital 100,000 Reserve & Surplus Secured Loans Nil Unsecured Loans (B) APPLICATION OF FUNDS (excluding Deferred Tax Assets) Net Fixed Assets Nil Investment Net Current Assets 6,850 Misc. Expenditure Accumulated Losses Nil IV. PERFORMANCE OF COMPANY (Amount in Rs.) Turnover (+/-) Profit/ Loss before Tax Earnings Per Share in Rs. Nil Total Expenditure(Excl. Ta (50,890) (+/-) Profit/ Loss after Tax Nil Dividend rate %
Nil 148,700
Nil 190,960
V. GENERIC NAMES OF PRINCIPAL PRODUCTS OF THE COMPANY (as per monetary terms) Item Code No. (ITC Code) N.A. Product Description
N.A.
To, The Members, Your Directors are pleased to present the Eighth Annual Report together with the Audited Annual Accounts of the Company for the year ended 31st March, 2010. FINANCIAL RESULTS: 2009-2010 (Rs.) Profit/(Loss) Before Depreciation and Tax Less : Depreciation Profit for the year before taxation Provision for Taxation: Current Year Tax Deferred Tax Fringe Benefit Tax Profit after taxation Add: Brought forward balance of Profit & loss A/c. Balance Carried to next year accounts REVIEW OF OPERATIONS During The year under review, your Company achieved net sales turnover of Rs. 3,60,23,272 compared to previous year sales of 4,62,44,512. The Profit before depreciation and tax has decreased to Rs. 43,74,888 from Rs. 58,76,825.The net profit after tax has decreased to Rs. 20,62,334 from 33,17,324. At the end of the year, Companys reserves stood at Rs.1,60,49,332 (Previous Year Rs. 1,39,86,998). Dividend: In order to preserve liquidity, your directors do not recommend for payment of any dividend on equity shares for the year ended 31/03/2010 994,000 (47,570) 2,062,334 13,986,998 16,049,332 1,360,000 (105,239) 28,774 3,317,324 10,669,674 13,986,998 4,374,888 1,366,124 3,008,764 2008-2009 (Rs.) 5,876,825 1,275,966 4,600,859
Fixed Deposits: The company has not accepted any deposits from the public during the year ended 31st March 2010 within the meaning of sec 58A of the companies Act 1956 Capital Expenditure: During the year under review, the Company has incurred Rs. 17.28 lacs on Capital Expenditure. Holding Company During the year under review, there were no changes in the holding of Harsha Engineers Ltd. and the company remains the subsidiary company of Harsha Engineers Ltd. Directors In accordance with the provisions of the Companies Act, 1956 Mr. Pilak Shah retires by rotation at the ensuing annual general meeting and being eligible for reappointment offers himself for the same. Auditors and Their Report: Comments of the Auditors in their report and the notes forming part of the Accounts are self explanatory and need no comments. M/S. C. P. Shah & Co., the Company's Auditors will retire at the conclusion of the ensuing Annual General Meeting and being eligible offers themselves for re-appointment. The Company has received a certificate from the auditors to the effect that their re-appointment if made, would be in accordance with the provisions of section 224(1B) of the Companies Act, 1956. The directors recommend the re-appointment of M/S. C. P. Shah & Co. and authority to Board to fix their remuneration. Insurance: The Company has taken adequate insurance cover for all movable and immovable assets for various types of risks. Energy Conservation, Technology Absorption, Adaptation, Innovation:
a)
Conservations of Energy The operation of your Company are not energy intensive as the operations are limited to machining, metal working and finishing of a variety of Press Tools, Jig, fixtures.
b)
Technology Absorption, Adoption and Innovation: Continuous efforts are made towards Technology Absorption, Adoption and Innovation. The thrust areas have been improving the quality of all the products and increasing productivity through cost effective programs and value engineering techniques such as six sigma and other lean & improvement projects.
c)
Particulars of Employees The particulars of employees as required by section 217 (2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975 as amended are not required to be given as the Company has no such employees. A. Employed throughout the year and were in receipt of remuneration aggregating not less than Rs. 24,00,000/- per annum: Nil B. Employed for part of the year and were in receipt of remuneration aggregating not less than Rs. 2,00,000/- per month: Nil Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000: In accordance with the provisions of section 217(2AA) of the Companies Act, 1956, your directors state that: (a) In the preparation of accounts, the applicable accounting standards have been followed. (b) Accounting policies selected were applied consistently. Reasonable and prudent judgments and estimates were made so as to give a true and fair view of the state of affairs of the company as at the end of 31st March, 2010 and the profit of the company for the year ended on that date. (c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 1956 for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities. (d) The annual accounts of the company have been prepared on a going concern basis.
Secretarial Compliance Certificate: Secretarial compliance certificate as required u/s 383 [A] of the Companies Act, 1956 is annexed hereto. Note on accounts The notes forming part of the accounts are Self-explanatory and therefore, do not call for any further comments. Industrial relations: Relations with the companys employees continue to be cordial. The company has a good track record of harmonious relations with employees. Acknowledgements: Your Directors gratefully acknowledge the contributions made by the employees towards the success of the Company. Your Directors are also thankful for the co-operation and assistance received from the Bankers, Central and State Government Departments and Local Authorities.
Registered Office: 388/A, Changodar Industrial Estate, Sarkhej-Bavla Road, P.O.Changodar, Ahmedabad 7 June, 2010
th
Auditors Report
To, The Members, Aastha Tools Private Limited 1. We have audited the attached Balance Sheet of Aastha Tools Private Limited, as at 31st March 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit. 2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. 3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order. 4. Further to our comments in the Annexure referred to above, we report that: i ii We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit; In our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books; iii The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account; iv In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;
On the basis of written representation received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause(g) of sub-section (1) of section 274 of the Companies Act, 1956 ;
vi
In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India : (a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 : and (b) in the case of Profit and Loss Account, of the Profit for the year ended on that date.
For C. P. Shah & Co. Chartered Accountants s/d Ahmedabad. 7th June, 2010 Chetan P. Shah Proprietor M. No. 31239
Referred to in Paragraph 1 of our report of even date 1. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. We are informed that the fixed assets of the Company have been physically verified by the management during the year at reasonable intervals and no material discrepancies were noticed on such verification. 2. 3. None of the fixed assets have been revalued during the year under review. Physical verification has been conducted by the management at reasonable intervals in respect of stores & spares. 4. The procedures of physical verification of stocks followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and nature of its business. 5. We are informed by the management that no material discrepancies have been noticed on physical verification of the stocks as compared to book records. 6. In our opinion, the valuation of stocks is fair and proper in accordance with the normally accepted accounting principles. 7. The Company has taken unsecured loan from a limited company listed in the register maintained under section 301 and section 370 of the Companies Act, 1956. 8. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under 301 & 370 (1B) of the Companies Act, 1956. 9. The Company has made loans or advances in the nature of loan to various parties for which no stipulation is made for repayment of the principal amount and interest.
10.
In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business for the purchase of stores, plant & machinery, equipments and other assets and with regard to sale of goods.
11.
According to the information and explanations given to us, transactions of purchase of goods, materials and sale of goods, materials and services made in pursuance of contracts or agreements entered in the register maintained under section 301 of the Companies Act, 1956 and aggregating to Rs.5,00,000/- or more in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices as available with the company for such goods, materials or services or made with other parties.
12.
The Company has a system of determining unserviceable or damaged stores on the basis of technical evaluation and on such basis, in our opinion, adequate amounts have been written off of such stocks in the accounts.
13.
In our opinion and according to the information & explanations given to us, the Company has not accepted any deposit from public and hence the question of compliance of provisions of section 58A of the Companies Act, 1956 and rules framed there under does not arise.
14.
In our opinion reasonable records have been maintained by the company for sale or disposal of scrap. The Company has no by-products.
15.
Maintenance of cost records has not been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956, for the products of the company.
16.
According to the records of the Company, Provident Fund dues have been regularly deposited with the appropriate authorities during the year.
17.
According to the information and explanations given to us no undisputed amount payable in respect of Income-tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.
18.
In our opinion, the term loans have been applied for the purpose for which they were raised.
19.
The Company is not a sick industrial company within the meaning of section 3(1) (o) of the sick Industrial Companies (Special Provisions) Act, 1985.
20.
For C. P. Shah & Co. Chartered Accountants s/d Ahmedabad. 7th June, 2010 Chetan P. Shah Proprietor M. No. 31239
1 2
2,000,000 16,049,332
18,049,332
2,000,000 13,986,998
15,986,998
3 4
II Application of Funds FIXED ASSETS Gross Block Less:Depreciation Net Block Capital Work in Progress CURRENT ASSETS, LOANS & ADVANCES Inventories Sundry Debtors Cash & Bank Balances Loans and Advances LESS: CURRENT LIABILITIES & PROVISIONS Current Liabilities Provisions NET CURRENT ASSETS
6 7 8 9
10 11
NOTES FORMING PART OF THE ACCOUNTS As per our Report of even date attached For C. P. Shah & Co. Chartered Accountants s/d Chetan P. Shah Proprietor M.No.31239 Ahmedabad 7th June,2010 I Aastha Tools Pvt.Ltd I
20
12 13
PROFIT AFTER TAXATION BALANCE TRANSFERED TO RESERVE & SURPLUS NOTES FORMING PART OF THE ACCOUNTS As per our Report of even date attached For C.P.Shah & Co. Chartered Accountants
AASTHA TOOLS PRIVATE LIMITED SCHEDULES FORMING PART OF THE ACCOUNTS 31st March,2010 Rupees SCHEDULE 1 : SHARE CAPITAL Authorised Share Capital 20000 Equity Shares of Rs.100/- each Issued, Subscribed & paid Up Capital 20000 Equity Shares of Rs. 100/- each Fully Paid up 31st March,2009 Rupees
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
SCHEDULE 2 : RESERVES & SURPLUS Balance Of Profit & Loss Account Profit for the year
SCHEDULE 3 : SECURED LOANS State Bank of India,Overseas Br.(Term Loan) (Secured against hypothecation of stocks of Raw Materials,Stores & Spares Parts, Finished Goods,Book Debts,Plant & Machiney,other Equipments And further secured by Equitable mortgage over Factory land and buliding at changodar, In addition to the above 542,522 1,987,067
542,522
1,987,067
2,934,001
1,859,555
2,934,001
1,859,555
AASTHA TOOLS PRIVATE LIMITED SCHEDULE 5 : Fixed Assets As on 31/03/2010 GROSS BLOCK Additions Deduction DEPRECIATION Additions Deduction NET BLOCK Balance on Balance on 31-Mar-10 01-Apr-10 246,176 2,171,377 260,449 9,292,934 89,512 67,112 336,569 343,952 219,828 109,819 980,350 14118078 246,176 2,267,340 274,080 9,157,061 60,984 47,269 362,901 374,306 563,650 116,638 997,431 14467836
Sr. No. 1 2 3 4 5 6 7 8 9 10 11
Balance on 01-Apr-09 246,176 2,873,151 399,576 12,113,649 76,217 62,143 554,359 835,517 784,159 143,552 1,047,917 19136416
Balance on 31-Mar-10 246,176 2,873,151 411,240 12,981,794 110,491 78,143 554,359 921,186 419,426 143,552 1,047,917 19787435
Balance 01-Apr-09 605,811 125,496 2,956,588 15,233 14,874 191,458 461,211 220,509 26,914 50,486 4668580
Balance 31-Mar-10 701,774 150,791 3,688,860 20,979 11,031 217,790 577,234 199,598 33,733 67,567 5669357
Office Equipments Electrical Fittings Computer & Peripherals Motor Car Airconditioners Internal Road TOTAL
95,963 25,295 955,118 5,746 4,278 26,332 147,023 82,469 6,819 17,081 1366124
31st March,2010 Rupees SCHEDULE 6: INVENTORIES (As taken,valued & Certified by Management) Stores & Spares Raw Material Stock Semifinished Stock 2,047,448 2,516,539 3,749,800
8,313,787 SCHEDULE 7 : SUNDRY DEBTORS (Unsecured & Considered Good) Debts exceeding six months Other Harsha Engineers Ltd. & Others 9,108,791
4,829,350
5,493,636
9,108,791 SCHEDULE 8 : CASH AND BANK BALANCES Cash on Hand Balances with Scheduled Bank In State Bank of India Current A/c.-Changodar,Br. In State Bank of India Cash Credit A/c.-Overseas,Br. State Bank of India A/c.(Margin Money)
5,493,636
1,392
50,111
4,460,429 20,785 -
4,482,606 SCHEDULE 9 : LOANS AND ADVANCES (Unsecured, Considerd Good) Advances recoverable in cash or kind or for value to be received Advances Debit Balances of Creditors Deposits with Govt. Authorities Loans to Staff Prepaid Expenses 790,533 239,064 139,995 40,867
1,079,134
1,210,459 SCHEDULE 10 : CURRENT LIABILITIES Creditors for goods and services Statutory Liabilities Other Liabilities 11,778,575 1,069,835 228,053
1,683,948
13,076,463 SCHEDULE 11 : PROVISIONS Provision for Taxation Provision For Gratuity Provision For Leave Salary 994,000 78,342 455,359
4,807,772
1,527,701
1,761,240
31st March,2010 Rupees SCHEDULE 12 : NET SALES Sales 36,023,272 36,023,272 SCHEDULE 13 : OTHERS INCOME PROFIT ON SALE OF COMPUTER & PERIPHERALS FBT-REFUND Rent Income 4,000 2,150 50,400 56,550
46,244,512 46,244,512
50,400 50,400
SCHEDULE 14 : (INCREASE)/DECREASE IN STOCKS Semi Finished goods Opening stock Less:Semi Finished goods Closing stock
(2,699,563) SCHEDULE 15 : RAW MATERIAL CONSUMED Material Testing. RM Inward Freight Raw Material Consumed 30,695 126,450 18,772,345 18,929,490
1,317,024
SCHEDULE 16 : STORES,POWER,FUEL AND OPERATIVE EXPENSES Stores & Spares Consumed Finished Component Purchase Factory power consumption Labour Charges Machinery Repairs Inward Cartage Other Freight Octroi On Stores 1,223,960 875,867 802,026 4,865,201 521,727 110,355 17,212 465 8,416,813 1,998,143 701,529 844,745 5,434,552 63,985 149,426 35,894 9,228,274
SCHEDULE 17 : SALARIES,WAGES AND OTHER EMPLOYEE EXPENSES Salaries,Wages,Allowances,Bonus etc. Contribution to PF,FPF etc. Staff \ Labour Welfare Manager Salary Remuneration to Directors 3,906,943 316,663 459,178 558,212 559,327 5,800,323 4,175,643 317,918 387,893 574,088 572,644 6,028,186
SCHEDULE 18 : ADMINISTRATIVE AND OTHER EXPENSES Audit fees Advertisement charges Bank charges Boarding & Lodging(Domestic) Building repairs Car Fuel Exps. Car Maintenance Exps. Celebration exps. Computer exps. Conveyance exps. Courier Charges Domestic travelling exps. Electric exps. Filing fee Fire & Earthquake Insurance Gardening exp. House keeping exps. Income Tax Legal & professonal fee Legal charges Motor-Car Insurance Municipal Tax Membership Subscription A/c. Other repairs & maint. Outward Cartage Post & telegram exps. Professional tax Round off Security service charges Stationary & printing exps. Telephone exps.-(Mobile) Telephone exps.-(Fix-Line) Upfront & Processing Fee On Term Loan Loss of Sale of Asset 25,000 1,338 3,400 44,430 15,947 2,886 2,411 6,348 5,856 2,100 13,050 1,868 27,247 5,400 59,724 22,570 124,301 2,557 21,575 28,815 580 2,400 178 129,141 65,435 23,632 14,253 12,000 215,702 880,144 25,000 2,500 7,286 1,250 4,100 48,403 6,429 13,235 8,475 6,778 2,700 560 3,996 29,405 17,400 60,640 73,057 179,351 250 18,171 2,980 7,000 44,291 38,430 350 2,400 88 101,844 79,372 27,482 14,027 12,000 839,250
SCHEDULE 19 : INTEREST (NET) Interest to Depositors Interest to SBI Term Loan A/c.No.30051152508 Interest to Others
19,257 377,727
18,750 678,439
I.
SIGNIFICANT ACCOUNTING POLICIES 1. BASIS OF ACCOUNTING: The financial statements are prepared under historical cost convention and to comply with in all material respect with the notified accounting standards by the Companies Accounting standard Rules - 2006 and the relevant provisions of Companies Act, 1956. Accounting Policies have been consistently applied by the company. 2. USE OF ESTIMATES: The preparation of the financial statements in conformity with the generally accepted accounting principles requires estimates and assumptions to be made that affect the reported amount of assets and liabilities on the date of financial statements and the reported amount of revenues and expenses during the reporting period. Management believes that the estimates used in the preparation of financial statement are prudent and reasonable. Future results could differ from these estimates. Difference between the actual results and estimates are recognized in the period in which the results are known / materialized. 3. INVENTORY: A. Inventory of Stores and Spares, Raw materials and Semi finished goods are valued at cost, net of cenvat (on weighted average basis). Inventory of toolings is valued at cost, as reduced by normal wear and tear, if any, as certified by management. Inventory of finished goods is valued at lower of cost or net realizable value and relevant excise duty at applicable rates has been added. 4. REVENUE RECOGNITION i) In appropriate circumstances, revenue is recognized on accrual basis when no significant uncertainty as to determination or realization exists. ii) iii) Sales are accounted for on net sales basis.(Excluding Excise-duty, Sales-Tax, etc.) All the items of expenses and income are accounted on accrual basis, except overdue interest on bills receivable is accounted on receipt basis.
5. FIXED ASSETS AND DEPRECIATION A. FIXED ASSETS: Fixed Assets are stated at cost of acquisition less depreciation. B. DEPRECIATION: Depreciation is provided on Straight Line Method at the rates and in the manner specified in Schedule XIV of the Companies Act, 1956. 6. EMPLOYEE BENEFITS a. Post Employment Benefits: i. Defined Contribution Plans: The Company has Defined Contribution Plans for Post Employment Benefits in the form of Provident Fund for all Employees, which is administered by the relevant authorities. Provident Fund is classified as a defined contribution plan as the Company has no further obligation beyond contributing. The Companys contributions to Defined Contributions Plans are charged to the Profit and Loss Account as and when incurred. ii. Defined Benefit Plans: Funded Plan: The Company has a defined benefit plan for Post Employment Benefit in the form of Gratuity for management employees, which is administered through Life Insurance Corporation (LIC). Liability for the above defined benefit plan is provided on the basis of valuation, as at the Balance Sheet date, carried out by an independent actuary. The actuarial method used for measuring the liability is the Projected Unit Credit Method. iii. Other Long Term Employee Benefits: Liability for Compensated Absences is provided based on valuation, as at the Balance Sheet date, carried out by an independent actuary. The Actuarial valuation method used for measuring the liability is the Projected Accrued Benefit method, which is the same as the Projected Unit Credit method in respect of past service. Under this method, the Defined Benefit Obligation is calculated taking into account pattern of availment of leave whilst in service and qualifying salary on the date of availment of leave. In respect of encashment of leave, the Defined Benefit Obligation is
calculated taking into account all types of decrement of qualifying salary projected up to the assumed date of encashment. b. Short Term Employee Benefits: i. Shortterm non-accumulating compensated absences: Short-term non-accumulating compensated absences are encashable as per the Company rules and policy. Liability for non-accumulating compensated absences is worked out as at the Balance Sheet date on undiscounted basis, by proportionally apportioning the balance of such leaves up to the Balance Sheet Date, against the total leaves credited for the calendar year 2010, less any leave / leaves utilized by the employee as at the Balance Sheet Date. Basic rate of salary for the 2009-10 at 31st March, 2010 is used to work out this liability. ii. Bonus Plans: The Company has provided for Bonus, payable to its employees, for their services rendered during the year, as per the Companys rules and policy, on an undiscounted basis. c. Termination benefits are recognized as an expense as and when incurred. d. The Actuarial gains and losses arising during the year are recognized in the Profit and Loss Account of the year without resorting to any amortization. 7. LOANS AND ADVANCES : Loans and advances recoverable in cash or in kind are shown at the realisable value. 8. EARNING PER SHARE: The basic earning per Share is calculated by dividing the Net profit or loss for the year attributable to Equity Shareholders by the weighted average number of equity shares outstanding during the year. The basic and diluted EPS are same as the company has no such instruments. 9. ACCOUNTING FOR TAXES ON INCOME: Current tax is determined as the amount of tax payable in respect of taxable income for the year. Deferred tax is recognized, on timing difference, being the difference between taxable income and accounting income that originate in one period and are capable of reversal in one or more subsequent periods. Where there is unabsorbed depreciation or carry forward losses, deferred tax assets are recognized if there is virtual certainty that
sufficient future taxable income will be available against which such assets can be realized. Other deferred tax assets are recognized only to the extent there is reasonable certainty of realization in future. Such assets are reviewed at each Balance sheet date to reassess realization. Deferred tax assets and liabilities are measured using the tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. II. NOTES TO ACCOUNTS 1. Contingent liabilities not provided for : Estimated amount of contracts remaining to be executed on capital accounts and not provided for : N I L.
2. In the opinion of the Board, Current Assets, Loans and Advances are approximately of the value stated if realised in the ordinary course of business. The provision for all known liabilities is adequate and not in excess of the amount reasonably necessary.
3. Balances of Debtors, Creditors and Loans & Advances are subject to confirmation. Adjustments, if any, will be made at the time of reconciliation of accounts. 4. EMPLOYEE BENEFITS (i) The Accounting Standard 15 (revised 2005) on Employee Benefits AS 15 (revised 2005) issued by the Institute of Chartered Accountants of India has been followed by the Company. In accordance with the above standard, the additional obligations of the Company, on account of employee benefits, based on independent actuarial valuation, have been accounted for. The details are as under :
(ii) Defined Contribution Plans: The Company has recognized the following amounts in the Profit and Loss Account for the year: (a)Contribution to Employees Provident Fund (b)Contribution to Employees Family Pension Fund (c)Contribution to Employees Superannuation Fund 2.90 Nil Nil 2.91 Nil Nil 2009-10 (Rs. in lacs) 2008-09
(iii)
(i)
Changes in the Present Value of Obligation 4.58 0.38 0.91 3.32 0.27 0.60 (0.56) 0.81 4.44 7.90 0.65 1.50 (1.17) 1.08 9.96 3.54 0.28 0.89 (0.73) 0.60 4.58 3.33 0.27 0.52 (0.39) (0.41) 3.32 6.87 0.55 1.41 (1.12) 0.19 7.90
(a) Present value of obligation as at April 01, 2009 (b) Interest cost (c) Past Service Cost (d) Current Service Cost (e) Curtailment Cost / (Credit) (f) Settlement Cost / (Credit)
(g) Benefits Paid (h) Actuarial (Gain) / Loss (i) Present value of obligation as at March 31, 2010
(ii) Changes in the Present Value of Plan Assets (a) Present value of Plan Assets as at April 01, 2009 (b) Expected Return on Plan Assets (c) Actuarial Gain / (Loss) (d) Employers Contributions (e) Employees Contributions (f) Benefits Paid (g) Present value of Plan Assets as at March 31, 2010 4.00 0.38 0.01 0.95 (0.61) 4.74 4.00 0.38 0.01 0.95 (0.61) 4.74 3.43 0.34 0.97 (0.73) 4.00 3.43 0.34 0.97 (0.73) 4.00
(iii) Amount recognized in the Balance Sheet including a reconciliation of the Present Value of Defined Benefit Obligation and the Fair Value of Assets (a) Present value of Funded Obligation as at March 31, 2010 (b) Fair Value of Plan Assets as at March 31, 2010 (c) Funded (Asset) / Liability recognized in the Balance Sheet (d) Present Value of Unfunded Obligation as at March 31, 2010 (e) Unrecognized Past Service Cost (f) Unrecognized Actuarial (Gains) / Losses 4.74 4.74 0.78 0.78 4.44 4.44 4.74 4.74 4.91 4.91 4.00 4.00 0.57 0.57 3.32 3.32 4.00 4.00 3.89 3.89
2009-10
Gratuity Leave Total Encashment Gratuity
(iv) Expenses recognized in the Profit and Loss Account (a) (b) (c) (d) (e) (f) (g) (h) (i) Current Service Cost Past Service Cost Interest Cost Expected return on Plan Assets Curtailment Cost / (Credit) Settlement Cost / (Credit) Net actuarial (Gain) / Loss Employees Contribution Total Expenses recognized in the Profit and Loss Account 0.91 0.38 (0.38) 0.26 1.16 0.60 0.27 0.81 1.68 1.50 0.65 (0.38) 0.76 2.53 0.89 0.28 (0.34) 0.60 1.43 0.52 0.27 (0.41) 0.38 1.41 0.55 (15.80) 0.19 1.81
2009-10
Leave Gratuity Encashment Percentage of each category of Plan Assets to total Fair Value of Plan Assets Government of India Securities High quality corporate bonds Equity shares of listed companies Property Insurer managed funds Bank balance Others 100% Gratuity
2008-09
Leave Encashment
100% -
The overall expected rate of return on assets is based on the expectation of the average long-term rate of return expected on investments of the Fund during the estimated term of the obligations. Following are the Principal Actuarial Assumptions used as at the balance sheet date:
2009-2010 Particulars
2008-2009 Leave
Gratuity
Discount Rate Expected rate of return on Plan Assets Salary Escalation Rate
The Estimates of future salary increases considered in actuarial valuation takes into account inflation, seniority, promotion and other relevant factors such as supply and demand in the employment market.
5. EARNINGS PER SHARE CALCULATION : The above is as required under the Accounting Standard AS-20, Earning per share, and it is as follows: Total shares issued (Nos.) of Rs.100/- each Profit after tax for the year (Rs. In lacs) Earning per share (Rs.) 6. RELATED PARTY TRANSACTIONS: As required by the Accounting Standard AS-18, Related Party Disclosures, during the year, the Company had transactions with related parties, as under: (i) Name of Party: (ii) Nature of relationship: (iii) Nature of transaction: Harsha Engineers Limited. Holding Company As mentioned below. (Rs. in lacs)
Nature of Transactions Sales of Goods / Assets Purchase of Goods / Assets Loans Received Loans Repaid Interest Expense 2009-10 404.49 17.64 14.31 5.5 1.93 2008-09 534.83 3.31 42 2.67
7. DEFERRED TAXATION: As required by the Accounting Standard AS-22 Accounting for taxes on income, the major components of deferred tax liabilities and deferred tax assets are as follows: Components of Deferred Tax Liability/(Asset) are as under: Deferred Tax Liability: Difference between book and tax depreciation Allowable under Income-tax Act 1961 Deferred Tax Assets: Disallowable under Income-tax Act 1961 Net Deferred Tax Liability 8. HOLDING COMPANY: During the year under review, these were no changes in the holding of Harsha Engineers Ltd. and the company remains the subsidiary company of Harsha Engineers Ltd. Amount(Rs.) 2,15,349 4,97,491 (8,66,789) (1,53,949) Deferred Tax(Rs.) 66,543 1,53,725 (2,67,838) (47,570)
9. Additional information pursuant to paragraph 3 & 4 of Part II of Schedule VI of the Companies Act, 1956. (i) Quantitative details in respect of Raw Material as certified by the management. Particulars Alloy Steels (Qty in K.G.) 2009-10 2008-09 7,779.64 1,26,085.12 1,33,864.76 1,20,594.21 13,270.55 12,679.87 1,20,706.03 1,33,385.90 1,25,606.26 7,779.64 Alloy Steels (Qty in Nos.) 2009-10 2008-09 23.00 993.00 1,016.00 998.00 18.00 8.00 1,496.00 1,504.00 1,481.00 23.00
Opening Stock: Add: Purchase during the year Total Less: Consumed in Production Closing Stock
(ii) Quantitative details in respect of Finished Goods as certified by the management. Particulars Opening Stock Add: Quantity manufactured during the year Total Less: Sales during the year Closing Stock (iii) Remuneration to Auditors comprises of : Particulars Audit Fees Other services Total (iv) Managerial Remuneration : 2009-2010 (Rs.) Salary *Contribution to Provident & Other Funds 5,59,327.00 27,360.00 5,86,687.00 2008-2009 (Rs.) 5,72,644.00 27,360.00 6,00,004.00 2009-10 25,000.00 50,000.00
75,000.00
(Qty in Nos.) Press Tools 2009-10 2008-09 2.00 32,275.00 38,773.00 32277.00 38,773.00 32277.00 38,771.00 2.00
(*) Note: The above mentioned figures of Contribution to Provident and other funds does not include figures of leave encashment and contribution made to gratuity fund during the year as separate actuarial valuation is not available for the Directors
10. Expenditure In Foreign Currency 2009-2010 (Rs.) (i) CIF Value of Imported material a) Raw Material & Spares b) Capital Goods Nil Nil Nil Nil 2008-2009 (Rs.)
11. In the opinion of the Board, Current Assets, Loans and Advances are approximately of the value stated if realized in the ordinary course of business. The provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary. 12. Tax assessment of the company under Income Tax Act 1961, has been completed up to Financial Year 2007-08 and the sales tax assessment up to Financial Year 2005-06. 13. The Inventory amounting to Rs. 2,04,246 (Previous Year Rs.63,504) was lying with the job workers for future processing at the close of the year. Out of that majority of the confirmations have been received. 14. Figures have been rounded off to the nearest rupee. 15. Previous years figures have been regrouped / reclassified to make them comparable with those of the current year, wherever necessary. SIGNATURES TO SCHEDULES 1 TO 20 As Per Our Report of even date s/d For, C. P. Shah & Co. Chartered Accountant s/d Chetan P.Shah Proprietor M. No. 31239 Ahmedabad. 7th June, 2010 s/d Pilak R. Shah Director Atul P. Kapadia Director
(A)
(B)
(C)
(D)
ABSTRACT OF THE BALANCE SHEET AS AT 31.03.2010 AND COMPANY'S GENERAL BUSINESS PROFILE AS PER PART IV OF SCHEDULE VI TO THE COMPANIES ACT,1956. I. REGISTRATION DETAILS Registration No. Balance Sheet Date
U29199GJ2002PTC041072 31.03.2010
II. CAPITAL RAISED DURING THE YEAR (Amount in Rs.) Public issue Bonus issue Nil Nil Rights issue Private Placement Nil Nil
III. POSITION OF MOBILISATION AND DEPLOYMENT OF FUND (Amount in Rs.) Total Liabilities 22,629,557 Total Assets 22,629,557
(A) SOURCES OF FUND (excluding Deferred Tax Liabilities) Paid-up Capital 2,000,000 Reserve & Surplus Secured Loans 542,522 Unsecured Loans (B) APPLICATION OF FUNDS (excluding Deferred Tax Assets) Net Fixed Assets 14,118,078 Investment Net Current Assets 8,511,479 Misc. Expenditure Accumulated Losses Nil IV. PERFORMANCE OF COMPANY (Amount in Rs.) Turnover (+/-) Profit/Loss before Tax Earning Per Share in Rs. 36,079,822 Total Expenditure(Excl. Tax) 3,008,764 (+/-) Profit/Loss after Tax 103 Dividend rate %
16,049,332 2,934,001
V. GENERIC NAMES OF PRINCIPAL PRODUCTS OF THE COMPANY (as per monetary terms)