Change in Accounting Policy: With effect from October 01, 2013, in case
of certain long term contracts involving design, supply, erection and
commissioning of complex machinery, the company has changed to
Accounting Standard 7 (Construction Contracts) from Accounting Standard
9 (Revenue Recognition) notified under the Companies (Accounting
Standards) Rules, 2006 (as amended), for recognizing revenue, being a
more appropriate method of accounting, considering the nature of the
activity. As a result of this change, revenue from operations for the
year is higher by Rs. 1,770.38 Lakhs and loss for the year is lower by an
2 Consequent to the proceedings under section 132 of the Income Tax
Act, 1961 initiated by the Department in the month of December, 2012,
the Company has filed an application before the settlement commission,
which has been admitted for further hearings and the proceedings are in
progress. The income tax liability arising thereof, relating to the
earlier years, has been provided for in the books of accounts and
included under tax for earlier years in the previous year.
3 RELATED PARTY DISCLOSURES
Related party disclosures as required under Accounting Standard 18
(Related Party Disclosures), notified under the Companies (Accounting
Standards) Rules, 2006 (as amended) are given below:
(i) Individuals owning, directly or indirectly, an interest in the
voting power of the reporting enterprise that gives them control or
significant influence over the enterprise and relatives of any such
Name of the individual : Designation / Relation
Mr. Chakor L. Doshi : Chairman
Mrs. Champa C. Doshi : Wife
Mr. Chirag C. Doshi : Son
Mrs. Kanika G. Sanger : Daughter
Mrs. Tanaz Chirag Doshi : Daughter-in-law
(ii) Key Management personnel and relatives:
Name of the individual : Designation / Relation
Mr. G. K. Pillai : Managing Director & CEO
Mr. Chirag C. Doshi : Managing Director
Mr. Hiren Buch : Chief Financial Officer
Mr. G. S. Agrawal : Vice President (Legal & Taxation)
& Company Secretary
(iii) Enterprises over which any person described in (i) or (ii)
above are able to exercise significant influence:
Bombay Cycle & Motor Agency Ltd. (BCMA) Olsson Holdings Inc.
Walchand Great Achievers Pvt. Ltd. Vinod Shashank Chakor Pvt.
Walchand Kamdhenu Commercials Pvt. Ltd. Chirag Enterprises
Walchand Chiranika Trading Pvt. Ltd. Walchand Engineers Pvt.
Chakor Doshi HUF Walchand Projects Pvt. Ltd.
Chirag Doshi HUF Walchand Power Systems
Chiranika Enterprises Walchand Oil & Gas Pvt.ltd.
Chiranika Corporation Walchand Leisure Realty
Chiranika Properties Walchand BMH Pvt. Ltd.
Walchand Botanicals Pvt. Ltd. Walchand Solar Pvt. Ltd.
Rodin Holdings Inc. Trust Finlease Pvt. Ltd.
Details of transactions relating to the individuals / enterprises
referred to in item (i), (ii) and (iii) above are as follows. The same
are in the ordinary course of business.
The Company has a practice of revaluing its certain assets at certain
intervals. On the basis of valuation reports submitted by approved
valuers, M/s. D. K. Nagarseth & Associates, certain fixed assets
comprising of Land, Building and Plant and Machineries were further
revalued at Market Value/ Current Replacement Costs as at September 30,
2013 as follows:
4 EMPLOYEE BENEFITS (REFER NOTE NO. 7)
The Disclosure in terms of Accounting Standard 15 (Revised) - Employee
Benefits, notified under the Companies (Accounting Standards) Rules,
2006 (as amended), has been given on the basis of Actuarial Valuation
Certificate for the year ended September 30, 2014 as below:
(a) Claims against the company not acknowledged as debt
(a) Demand of Non Agricultural (NA) Tax of Rs. 161.37 Lakhs is raised by
Tahshildar, Indapur (Previous year Rs. 161.37 Lakhs) out of which Rs. 20
Lakhs is paid under protest by the Company. No provision has been made
in the accounts as the company has not accepted the liability and the
matter is sub-judice.
(b) Demand on account of fixation of Annual Rateable Value of Property
at Pune, amounting to Rs. 325.07 Lakhs (for the period 1.4.2008 to
31.3.2012) was raised by the local authorities (Previous Year Rs. 325.07
Lakhs). No provision has been made in the books of accounts. The
Company has not accepted the liability and the same is sub-judice.
(c) The Central Excise Authorities have raised a demand of Rs. 266.19
Lakhs (Previous Year Rs. 266.19 Lakhs) (Net of Cenvat Reversal and
Payment) denying the exemption from the excise duty on non-conventional
energy devices/ systems supplied by the Company. The Company has
disputed the demand and has preferred an appeal which is pending before
CESTAT, Mumbai. On the basis of legal opinion, the Company does not
accept any liability.
(d) The Central Excise Authorities have raised a demand of Rs. 82.73
Lakhs (Previous Year Rs. 82.73 Lakhs) on bought out items supplied for
Centrifugals, which has already suffered duty at manufacturers'' end.
The Company has disputed the demand and has preferred an appeal which
is pending before the Supreme court. Company has dicharged a liability
of Rs. 29.45 Lakhs by reversal of CENVAT availed and paid Rs. 10 Lakhs
under protest (included under the head loans and advances). On the
basis of legal opinion, the Company does not expect any liability.
(e) The sales Tax Authority, Maharashtra has raised demand of Rs. 159.83
Lakhs (Previous Year Rs. 159.83 Lakhs) as per section 6(2) of the Central
Sales Tax Act,1956. The Company has disputed the demand and has
preferred an appeal before The Sales Tax Appellate Commissioner.
Company has paid Rs. 30.00 Lakhs under protest (included under the head
loans and advances). On the basis of legal opinion the Company does not
expect any liability.
(f) Service Tax demand of Rs. 362.65 Lakhs on sale of bought out items
has been raised by the concerned authorities. The company has
discharged liability of Rs. 28.76 Lakhs by way of CENVAT reversal under
protest and has preferred an appeal which is pending before the CESTAT.
(g) Company has received a demand of Rs. 50.68 Lakhs from Employee''s
Provident Fund office. The company has contested the demand raised, and
filled a writ petition with Mumbai High Court. No provision is being
made against the same based on the legal advise.
(h) Certain cases filed against the company by the Ex-employees of
Heavy Engineering Division and Foundry Division for compensation are
pending before the labour courts - Amounts unascertained.
(i) The Central Excise Authorities have raised demand of Rs. 2.47 Lakhs
(Previous Year Nil) on bought out items supplier for centrifugals,
which has already suffered duty at manufacturers end. The company had
disputed demand of Rs. 2.47 Lakhs before CESTAT against order passed by
Commissioner (Appeals). The Stay order has been granted and Rs. 0.50
Lakhs paid as ordered by CESTAT.
(j) Certain customers of the Company have deducted Liquidated Damages
amounting to Rs. 1,311.29 Lakhs due to delays in supplies/ services. The
Company contends that the delays are not attributable to it and has
submitted the waiver applications to these parties. Based on past
experience, the Company is confident of getting these Liquidated
5 Previous year''s figures have been regrouped/ reclassified /
rearranged wherever necessary, to conform to current year''s
presentation. As per our report attached