WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM ...

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WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM equity share of Rs.5/- credited as fully paid up for every one equity share of Rs.10/- held in the Demerged Company. 2.3 In terms of the Scheme, the appointed date for the transfer of the demerged undertaking, namely brakes business is 1 st January 2007, the shares were deemed to have been allotted from the Appointed date. 2.4 In terms of the Scheme, the share capital of Rs.5.00 lakhs held by the Demerged Company stood cancelled and got extinguished and correspondingly, the aforesaid amount has been credited to ‘capital reorganization reserve’ as stated in the financial accounts of the Company for the year ended 31 st March 2008. 2.5 The general reserves of the Company for the year ended 31 st March 2008 include Rs.7,832.12 lakhs being the reserves and Rs.3,435.13 lakhs being balance in the profit and loss account i.e. surplus transferred from the Demerged Company in terms of the Scheme. 3. Secured Loans: The Company did not have any outstanding secured loans as at March 31, 2005, March 31, 2006 and March 31 2007. The secured loans as at 31 st March 2008 represents cash credit availed from the State Bank of India, CAG Branch, Chennai 600 006. 4. Unsecured Loans: Unsecured loan for the year ended 31 st March 2008 represents unsecured loan availed from State Bank of India, Chennai 600 006 against current account. 5. Inventories: Inventories are valued in accordance with the method of valuation prescribed by The Institute of Chartered Accountants of India at lower of weighted average cost or net realisable value. 6. Retirement benefits: i. Retirement benefits in the form of Provident Fund and Superannuation Schemes are charged to the Profit and Loss Account of the year when the contributions to the respective funds are due. ii. Gratuity liability under the Payment of Gratuity Act 1972 and provision for leave encashment is provided for on the basis of actuarial valuation made at the end of each financial year. iii. Retirement benefits also include payments made under the Voluntary Retirement Scheme and senior staff pension. 7. Provisions: A provision is recognised when an enterprise has a present obligation as a result of past event; it is probable that an outflow of resources will be required to settle the obligation, in respect of which a reliable estimate can be made. Provisions are not discounted to its present value and are determined based on best estimate required to settle the obligation at the balance sheet date. These are reviewed at each balance sheet date and adjusted to reflect the current best estimates. Page 50 of 95
WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM 8. Foreign currency: Foreign Currency transactions are recorded at the exchange rates prevailing on the date of such transactions. Monetary assets and liabilities as at the Balance Sheet date are translated at the rates of exchange prevailing at the date of Balance Sheet. Gains and losses arising on account of difference in foreign exchange rates on settlement/translation of monetary assets and liabilities are recognized in the Profit and Loss Account. 9. Taxation: Tax expense comprises of current, deferred and fringe benefit tax. Current income tax and fringe benefit tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income Tax Act 1961. Deferred income taxes reflect the impact of current year timing differences between taxable income and accounting income for the year. Deferred tax is measured based on the tax rates and the tax laws enacted or substantively enacted at the balance sheet date. 10. Miscellaneous Expenditure: This represents preliminary expenses and the same has been expensed during the year ended 31 st March 2008. 11. Earnings per share: Basic and diluted earnings per share are calculated by dividing the net profit or loss for the year attributable to equity shareholders by the number of equity shares outstanding as at the end of the financial year. 12. Segment reporting: The operations of the company relate to manufacture of brakes and software design. The income from software design business is not adequate to qualify for disclosure as a reportable segment. 13. Manufacturing and other expenses: Materials consumed: Rs. in lakhs Opening stock – transfer from Sundaram-Clayton Limited, Chennai on de-merger Raw materials 1,261.81 Work-in-process 79.85 Finished goods 190.81 ----------- 1,532.47 Add: Purchases during the year 31,656.05 ---------------- 33,188.52 Less:Closing Stock (31 st March 2008) Raw materials 2,082.02 Work-in-process 119.29 Finished goods 364.99 ----------- 2,566.30 --------------- Consumption during the year 30,622.22 --------------- Page 51 of 95
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WABCO-TVS (INDIA) LIMITED INFORMATION MEMORANDUM ...

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