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FINANCIALACCOUNTS2009-10
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Notice is hereby given that the 34th Annual General Meeting
of the Company will be held on Thursday, the 30th
December, 2010 at 12.30 P.M. at Hotel Golden Landmark,
45/A, K.R.S. Road, Metagalli, Mysore 570 016 to transact the
following business:
ORDINARY BUSINESS:1. To receive, consider and adopt the audited Balance Sheet
of the Company as at 30th September, 2010 and the
Profit and Loss Account for the period ended on the said
date, along with the Report of Directors’ and Auditors’
thereon.
2. To declare Dividend.
3. To appoint Director in the place of Mr. Ambuj Kumar Jain,
who retires by rotation and being eligible offers himself
for reappointment.
4. To appoint Director in the place of Mr. K.N. Prithviraj, who
retires by rotation and being eligible offers himself for
reappointment.
5. To appoint M/S K.N.Gutgutia & Co. Auditors to hold
office from the conclusion of this Annual General Meeting
till the conclusion of the next Annual General Meeting
and to authorize the Board of Directors to fix their
remuneration.
SPECIAL BUSINESS:6. To consider and, if thought fit, to pass, with or without
modification, the following resolutions as Ordinary
Resolutions:
“RESOLVED THAT Mr. Vijay Vaid, who was appointed by
the Board of Directors as an Additional Director of the
Company with effect from 14th August 2010 and holds
office upto the date of this Annual General Meeting, in
terms of Section 260 of the Companies Act, 1956 and
under Article 96 of Articles of Association of the Company
and in respect of whom the Company has received a
notice under Section 257 of the Companies Act, 1956,
be and is hereby appointed as a Director of the Company
liable to retire by rotation”.
7. To consider and, if thought fit, to pass, with or without
modification, the following resolutions as Special
Resolution:
“RESOLVED THAT in partial modification to the Resolution
passed by the Members in the Extra Ordinary General
Meeting held on 10th September, 2009 approving the
appointment and terms of remuneration of Mr. Sunil
Bhansali as Executive Director, the Company hereby
approves, in accordance with the provisions of Sections
198, 269, 309, 310 read together with Schedule XIII and
other applicable provisions, if any, of the Companies Act,
1956, the increase in the remuneration of Mr. Sunil
Bhansali for the remaining period of his tenure of office,
w.e.f. 1st April, 2010, as set out in the explanatory
statement annexed to the notice conveying this Meeting.
RESOLVED FURTHER THAT all other terms and conditions
of appointment of Mr. Sunil Bhansali as approved earlier
by the Members, shall remain unchanged.
RESOLVED FURTHER THAT any one of the Directors or the
Company Secretary of the Company be and is hereby
authorized to do all necessary acts, deeds and things,
which may be usual, expedient or proper to give effect to
the above resolution”.
By the order of the Board
Kolkata M.C.Bhansali
12th November, 2010 Company Secretary
Notes:1. A MEMBER ENTITLED TO ATTEND AND VOTE AT THE
MEETING IS ALSO ENTITLED TO APPOINT A PROXY TO
ATTEND AND VOTE ON POLL INSTEAD OF HIMSELF AND
SUCH PROXY NEED NOT BE A MEMBER OF THE
COMPANY. PROXY FORM DULY FILLED AND SIGNED
MUST BE RECEIVED BY THE COMPANY AT THE
REGISTERED OFFICE NOT LESS THAN 48 HOURS BEFORE
THE MEETING.
NOTICE
2. The relative explanatory statement pursuant to section
173(2) of the Companies Act 1956, in respect of the
business under item No.6 and 7 as setout above are
annexed hereto.
3. The Register of Members and the Share Transfer Books of
the Company will remain closed from 25th December,
2010 to 30th December, 2010 (both days inclusive).
4. Members/ Proxie’s are requested to bring their copies of
the attendance slip duly filled in along with Annual Report
and the Admission slip to the meeting. Annual Reports
will not be distributed at the meeting.
5. Members are requested to furnish bank details, change
of address, if any to the Company’s Registrars and share
transfer Agent Integrated Enterprise Limited( formerly
known as Alpha Systems Pvt. Ltd.,) Bengaluru, so as to
reach them latest by 27th December, 2010 in order to
take note of the same. In respect of members holding
shares in electronic mode, the details as would be
furnished by the depositories as at the close of the
aforesaid date will be considered by the Company/
Company’s Registrars and Share Transfer Agents.
6. All documents referred to in the notice and
accompanying the Explanatory statement are open for
inspection at the Registered office of the Company on all
working days, except Saturdays, between 11.00 A.M and
1.00 P M, upto the date of the Annual General Meeting.
7. Pursuant to Section 205A(5) of the Companies Act, 1956,
the unpaid/unclaimed dividends for the year 2002-03 was
transferred to the Investor Education and Protection
Fund.
Shareholders who have not yet encashed their dividend
warrants for the year 2003-04 to 2008-09 may
approach the Company/ Company’s Registrars and Share
Transfer Agents for revalidation, issue of duplicate
warrants etc., Dividend which remains unpaid /
unclaimed over a period of 7 years from the date of
declaration shall be transferred to the Investor Education
and Protection Fund. 27
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Explanatory Statement pursuant to section 173(2) of the
Companies Act, 1956.
ITEM NO.6The Board of Directors have appointed Mr. Vijay Vaid, as
Additional Director on 14.08.2010. As per Section 260 of
the Companies Act, 1956, the above said Additional
Director holds office upto the date of this Annual General
Meeting and is eligible for appointment as Director. The
Company had received a notice in writing from a member
proposing the candidature of Mr. Vijay Vaid, for the office
of Director under the provisions of Sec.257 of the
Companies Act, 1956. Mr. Vijay Vaid is a B.Com graduate
from Sydnahem college, Mumbai having 35 years of
experience of running a medium scale Rubber Auto
Components manufacturing company. He was an
independent Director in Indusind Bank Ltd. for 8 years.
The Directors, therefore, recommend the Ordinary
Resolution. None of the Directors, except Mr. Vijay Vaid, is
interested in the above said resolution.
ITEM No. 7The Members of the Company at the Extra Ordinary
General Meeting held on 10th September, 2009 approved
the appointment of Mr. Sunil Bhansali as Executive
Director, for the period of three years w.e.f. 30th
September, 2008.
The compensation packages of the staff and executives of
the Company have been increased w.e.f. 1st April 2010.
This was done taking into consideration the prevailing
trends in the industries in terms of compensation
packages. It is proposed to revise the salary of Mr. Sunil
Bhansali by increasing in remuneration by present amount
of Rs 30 Lacs to Rs 34 Lacs per annum w.e.f. 1st April
2010, which was approved by the Board of Directors at
their Meeting held on 12th November, 2010. However, all
other terms and condition of the appointment will remain
unchanged. The increased remuneration will be subject to
the overall limits as provided under section 198, 269, 309,
310 read together with Schedule XIII and other applicable
provisions, if any, of the Companies Act, 1956.
The Directors of the Company on recommendation made
by the Remuneration Committee have approved the
proposal of increase in his remuneration, subject to the
approval of the members. Your Directors recommend the
resolution for approval by the members of the Company.
The above variation in the terms of remuneration of Mr.
Sunil Bhansali as mentioned in Item No. 7 of the Notice
will be treated as an abstract under Section 302 of the
Companies Act, 1956.
None of the Directors of the Company except Mr. Sunil
Bhansali, is in any way concerned or interested in this
resolution.
The Members are requested to consider and approve the
above proposal for increase in the salary of Mr. Sunil
Bhansali.
By the order of the Board
Kolkata M.C.Bhansali
12th November, 2010 Company Secretary
ANNEXURE TO THE NOTICE
Turnover
25563.4232178.63
49559.05
85146.30 84434.77
Turnover
2005-06 2006-07 2007-08 2008-09*(18 Months)
2009-10
Year
Rs
in L
acs
900008000070000600005000040000300002000010000
0
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Your Directors have pleasure in presenting the 34th Annual
Report and Audited Accounts of the Company for the year
ended 30th September, 2010.
Your Company has achieved the highest ever Turnover of Rs.
844.35 Crores with highest ever Profit before Tax at Rs. 65.79
Crores and Profit after Tax at Rs. 51.64 Crores.
The Year under review was best ever year in the history of the
Company. The Company has significantly improved in all
parameters like production, sales and profitability. This was
possible due to better operating efficiencies, higher
productivity, all round cost reduction measures and richer
product mix.
Your Company has achieved significant improvement in the
period under review on account of better operating
efficiencies, higher productivity, all round cost reduction
measures and richer product mix.
DIRECTORS’ REPORT
2005-06 2006-07 2007-08 2008-09*(18 Months)
2009-10
PBT PATYear
Rs
in L
acs
7000
6000
5000
4000
3000
2000
1000
0
PBT and PAT Trend
512.42 591.12 803.60
362.56 396.31 563.59
3895.37
3001.82
6578.46
5163.46
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FINANCIAL RESULT - STANDALONE (Rs. in Lacs)
Sl Particulars 2009-10 2008-09No. (12 Months) (18 Months)
i) Gross Turnover 84434.77 85146.30ii) Net Turnover 78810.41 78386.17iii) Other Income 566.33 341.49iv) Total Revenue 79376.74 78727.66v) Profit before Interest, Depreciation & Taxation (EBIDTA) 9008.23 6744.39vi) Interest 1652.11 2004.57vii) Depreciation 777.66 844.45viii) Profit before Taxation & Exceptional Item 6578.46 3895.37ix) Exceptional Items -- --x) Profit before Taxation (PBT) 6578.46 3895.37xi) Tax including Deferred Tax and Fringe Benefit Tax 1415.00 896.13xii) Excess Provision of Earlier Year Written Back (Net) – Income Tax + FBT -- -2.58xiii) Profit after Taxation (PAT) 5163.46 3001.82xiv) Profit brought forward from previous year 205.90 169.33xv) Amount available for Appropriation 5369.36 3171.15xvi) Appropriations
Transfer to General Reserve 3500.00 2500.00Interim Dividend -- 142.02Proposed Final Dividend 852.14 255.64Corporate Dividend Tax 144.82 67.59Total
xvii) Balance carried to Balance Sheet 872.40 205.90
STANDALONE PERFORMANCE Your Company's turnover for the year under review at Rs.844.35 Crores represents an annualized increase of 49% overthe previous period (18 months) turnover at Rs. 851.46Crores. Profit before Interest, Depreciation and Taxes at Rs.90.08 Crores represented an annualized increase of 100%over the previous period (18 Months) figure of Rs. 67.44Crores. The Profit before Tax at Rs. 65.78 Crores representedan annualized increase of 153% over the previous period (18Months) figure of Rs. 38.95 Crores. Profit after Tax at Rs. 51.64Crores represented an annualized increase of 158% over theprevious period (18 months) figure of Rs. 30.02 Crores.
Production of Tyres and Tubes, during the year under reviewstood at 37660 M.T. with an annualized increase of 28% overpervious period. The Company has partnered with OriginalEquipment Manufacturers and has kept pace by developingTyres for newer models in a short span of time.
Your Company has made its presence felt in a big way in OE,Replacement and Export Segments in the Current year.Concerted efforts towards an ambitious plan bore fruitfulresults in these segments.
CO-GEN PLANT / EXPANSION Your Directors are happy to inform you that the benefit ofCo-Gen Power Plant has started flowing to the Company. The
Description UOM 2009-10 2008-09(12 Months) (18 Months)
EBITDA/ Gross Turnover % 10.7 7.90Profit Before Tax / Gross Turnover % 7.8 4.6Profit After Tax / Gross Turnover % 6.1 3.5Return On Capital Employed % 15.7 8.5Earnings Per Share at a Face Value of Rs. 5/- Per Share Rs. 15.15 8.81
Some of the Key Performance ratios on standalone basis are furnished below:
power produced by Co-Gen has not only helped in improvingthe productivity but also it’s by-product Steam was availablefree of cost to the plant. The uninterrupted power supplythrough Co-Gen plant has helped in reducing the scrap andimproving the quality of the product.
Your Company has already started work on 5 Lacs Tyresexpansion plant at Mysore. Your Company is further planningto put additional 5 Lacs Tyres expansion at Haridwar & activelyconsidering foraying into 4-wheeler segment
CUSTOMERS FIRST
Your Company is having a policy of “Customers First” and dueto this we have been able to continue to be associated withmajor Automobile Companies (OE’s) and enjoying theprivileged position with all the OE’s. The most conservativeOE’s also recognize our Services and Quality and we arebecoming, a significant suppliers for them.
SUBSIDIARY
During the year under review, Monotona Tyres Limited (MTL) become subsidiary of the Company. w.e.f. 21st of May’2010 where your Company holds 54 Lacs shares out of 72Lacs shares i.e. 75% of the paid up and subscribed capital ofthe Company. The synergy between the two Companieshaving similar kind of products will bore fruitful results in theyear to come.
Pursuant to Accounting Standard (AS – 21) issued by theInstitute of Chartered Accountants of India, ConsolidatedFinancial Statements presented by the Company in thisAnnual Report include financial information of its subsidiary.
APPROPRIATIONS
DIVIDEND
Your Directors recommend a Dividend of Rs. 2.50 per equityshare (i.e. 50%) for the financial year ended 30th September,2010. The proposed dividend together with CorporateDividend Tax will absorb Rs. 9.97 Crores. The dividend ifapproved, shall be payable to shareholders registered in thebooks of the Company and to the beneficial owners furnishedby the depositories as determined with reference to the bookclosure from 25th December, 2010 to 30th December, 2010(both days inclusive).
The total outflow on account of Equity Dividend togetherwith Corporate Dividend Tax will be Rs. 9.97 Crores, vis a visRs. 4.65 Crores paid for fiscal 2008-09 (18 Months).
TRANSFER TO GENERAL RESERVE
The Board has recommended a transfer of Rs. 35 Crores tothe General Reserve.
QUALITY MANAGEMENT SYSTEMYour Company has been conforming with certifications byM/s TUV, SUDD, South Asia Pvt. Ltd., with respect to ISO9001:2008 & ISO / TS16949: 2009 for Quality ManagementSystem were re-certified in Feb 2010 and ISO 14001:2004 &OHSAS 18001:2007 for Environment, Occupational Health &Safety Assessment Series Management Systems, whichalready certified. Up-gradation of ISO 9001:2000 wasupgraded to ISO 9001:2008 and ISO/TS16949:2002 toISO/TS16949:2009 during the year.
DIRECTORSIn accordance with the Companies Act, 1956 read with theArticles of Association of the Company, Mr. Ambuj K Jain &Mr. K.N. Prithiviraj, Directors of the Company will retire byrotation at this meeting and being eligible offers themselvesfor re-appointment.
During the year under review Mr. Vijay Vaid was appointedw.e.f. 14th August, 2010
Your Board recommends the above re-appointment /appointment.
AUDITORSM/s. K.N. Gutgutia & Co., Chartered Accountants auditors ofthe Company, retire at the conclusion of the ensuing AnnualGeneral Meeting and have expressed their willingness to actas auditors of the Company, if appointed, and have furtherconfirmed that the said appointment would be in conformitywith the provisions of Section 224(1B) of the Companies Act.The observations of the Auditors in their Report on Accountsread with the relevant notes are self-explanatory.
COST AUDITThe Board of Directors have appointed Mr. T.L.Sangameswaran,Cost Accountant, Mysore to carry out Audit of the CostAccounts of the Company relating to the manufacture of Tyres& Tubes for the period ended 30th September 2010 incompliance with the Central Government Order in this regard.
FIXED DEPOSITSDuring the year under review, your Company has neitherinvited nor accepted any deposits from the public.
PARTICULARS OF EMPLOYMENTAs required under the provisions of Sec. 217(2A) of theCompanies Act, 1956, read with the Rules framedthereunder, a statement of particulars of the employees hasbeen annexed to this report and included as Annexure-I.
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CONSERVATION OF ENERGY, TECHNOLOGYABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGOInformation pursuant to Sec. 217(1)(e) of the Companies Act,1956, read with Companies (Disclosure of particulars in theReport of Board of Directors) Rules, 1988, is furnished inAnnexure-II.
INDUSTRIAL RELATIONSDuring the year your Company has finalized 3.3 years longterm wage agreement with union. The Company maintainedharmonious and cordial Industrial Relations during the periodunder review. A regular system of holding bi-partitediscussion with the recognized Union regarding the issue ofcommon interest of all employees was adopted.
SAFETYYour Company has a well-defined Safety ManagementSystem. Continuous endeavor is made to create safetyawareness among the employees. As part of this forums likeWorks Committee, Plant Safety Committee are functioningfor taking up necessary preventive/ corrective actionswherever required and to create awareness among theemployees on Safety and Health. Your Company has alsoappointed a team headed by AGM Safety for the purpose.Safety Day has been observed in the Company.
CORPORATE SOCIAL RESPONSIBILITY (CSR)Your Company is pro-active to it’s Corporate SocialResponsibility. The following are few of the activitiesorganized by your Company during the period under review:
i) Ganesh Festival: The Company has joined hand with theemployees to celebrate the Ganesh Festival, which is oneof the biggest festival in Karnataka and observed ritualand festivity with equal fervor.
ii) May Day Celebration: 1st May of the year is beingobserved as workers day in the whole world. YourCompany also joins hands with Employees and theirfamily in observing the day where Company sponsoredvarious sports and cultural activities are performed.Winner of the sports event are rewarded with the prizesand sweets were distributed.
iii) Green Revolution: The Company has developed a greenbelt in and around the Company premises for betterenvironment. During the year the Company has plantedmore than 3000 plants.
iv) Training to School/ College Students: Your Company isregularly providing training to engineering students andmanagement trainees of various institutes and colleges.
In addition to this your Company had sponsored theFactory visit of College students.
DIRECTORS' RESPONSIBILITY STATEMENTPursuant to the requirement under Sec. 217 (2AA) of theCompanies Act, 1956, with respect to Director’sResponsibility Statement, it is hereby confirmed:
(i) That in the preparation of the accounts for the financialyear ended 30th September, 2010 the applicableaccounting standards have been followed along withproper explanation relating to material departures;
(ii) That the Directors have selected such accounting policiesand applied them consistently and made judgments andestimates that were reasonable and prudent so as to givea true and fair view of the state of affairs of the Companyat the end of the financial period and of the profit or lossof the Company for the year under review;
(iii) That the Directors have taken proper and sufficient carefor the maintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company and forpreventing and detecting fraud and other irregularities;
(iv) That the Directors have prepared the accounts for thefinancial period ended 30th September, 2010 on a goingconcern basis.
CORPORATE GOVERNANCEPursuant to the provisions contained in the Listing agreement,a Management Discussion and Analysis Report, a report onCorporate Governance together with the Auditor's Certificateon the compliance of conditions of Corporate Governance isfurnished as Annexure forming part of this Directors' Report.
APPRECIATION & ACKNOWLEDGMENTYour Directors acknowledge the continued support and co-operation from the Financial Institutions, Banks, Customers,Vendors, Dealers and Government Authorities during the yearunder review. Further your Directors thank the Shareholdersfor their continued confidence in the Company. The Boardalso places on record its appreciation for the devoted anddedicated contribution made by the employees at all levels inachieving these results.
On behalf of the Board of Directors
Place: Kolkata Sunil Bhansali S. RaviDate: 12th November, 2010 Executive Director Director
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Statement of particulars of employees pursuant to the provisions of Section 217(2A) of the Companies Act, 1956 read with
the Companies (Particulars of Employees) Rules, 1975 forming part of the Directors Report for the period ended September 30,
2010
Statement Pursuant to Sec.217 (1) (e) of the Companies Act, 1956
A. CONSERVATION OF ENERGY
a) Energy conservation / Modification measures taken1) Up-gradation of Devon Bead Winding machine for higher productivity
2) Additional capacitor banks incorporated to improve the power factor
3) Water & Energy Management
b) Impact of measures taken1) Reduction in scrap
2) Consistency in quality of products
c) Additional investments / modifications proposed
1) Rain Water Harvesting
2) Generation of Bio Gas by using waste
d) Impact of proposed measures
1) Savings in Power, water and fuel Cost
2) Increase in productivity with quality
Sl.No Name of the Employee Desig- Remun- Qualification & Date of Age Lastnation eration (Rs.) Experience Commencement Employment
of Employment held
1 Mr. Pawan Kumar Ruia Executive 4,07,80,000 B.Com(Hons),Chairman AICWA, 01.04.2007 51
FCA, LL.B,AASM, MIIA
(USA) 25 Years
ANNEXURE - I
ANNEXURE - II
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Description 2009-2010 2008-2009(12 Months) (18 Months)
1. Electricitya. Purchased:
- Total Units 2371880 16066000- Total Amount (Rs.in lakhs) 178.65 794.12- Rate per unit (Rs.) 7.53 4.94
b. Own Generation:- Units Generated 15420366 7004017- Total Biomass, Coal/Diesel Cost (Rs.Lacs) 667.75 403.27- Cost per unit (Rs.) 4.33 5.76
2. Fuel :a) Furnace oil :
- Quantity (K.L.) ---- 111.00- Total Cost (Rs. Lacs) ---- 29.85- Rate per Ltr. (Rs.) ---- 26.94
b) Biomass, Coal & Others -Quantity (M.T.) 19931 20338- Total Cost (Rs. lacs) 807.18 820.44- Rate per Kg. (Rs.) 4.05 4.03
Total Fuel Details:-c) Total Fuel Cost (Rs.in lakhs) 807.18 850.29d) Fuel Cost/Kg. on Production (Rs.) 2.20 2.09
3. Consumption per Kg.of -- Production of Tyre & Tube:-
- Electricity (Units/Kg.) 0.486 0.566- Biomass, Coal & Other Fuels (Kgs../Kg.) 0.544 0.502
Disclosure of Particulars with respect to Conservation of Energy:
POWER AND FUEL CONSUMPTION
FORM-A
A. TECHNOLOGY ABSORPTION:1. Research & Development:
a) Developed tubeless tyres for Scooters / MotorCycles
b) Developed low rolling resistance tread compoundwith Silica base.
c) Added new patterns and designs for increasedmarket requirements
d) Introduction of new products and sizes to improvethe product mix
e) Developed low profile Scooter tyres exclusively forOE segment.
f) Development of FEM Analysis model for predictingthe actual Tyre Dimensions.
2. Benefits derived as a result of the above R & D
a) Optimization of the installed capacity of tyres andtubes resulted in increased productivity and
savings on energy front.
b) Consistency in quality of the finished goods
3. Future Plan of action:
a) To develop wide range of tyres and tubes in two,three, four wheeler and industrial segments forexport market.
b) To develop hi-tech low cost tyres in scooter &motor cycle segments
c) High Powered Motorcycles are developed byOEMs, for which, 60 aspect ratio Motorcycle tyresare being developed.
B. TECHNOLOGY ABSORPTION, ADAPTATIONAND INNOVATION1) Efforts in brief made towards technology absorption,
adoption and innovation:
a) New Products and new patterns developed andare approved by OEMs
b) During the period under review, the TAA (Technical
FORM-B
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Aid Agreement) with SRI (Sumitomo RubberIndustries), Japan has been renewed and relevantaudit and development assurance with SRI wastransacted.
c) Building Machine modified to produce tubelesstyres.
2) Benefits derived as a result of the above efforts
a) Enhanced market share with OEMs and exports
3) In case of imported technology (imported during last5 years reckoned from the beginning of the financialyear) the following information may be furnished.
a) Technology imported Ô Not Applicableb) Year of Import Ô Not Applicablec) Has technology been Ô Not Applicable
fully absorbed
d) If Not fully absorbed, Ô Not Applicableareas where this has notbeen taken place, reasonstherefore and future plansfor action
C. FOREIGN EXCHANGE EARNINGS ANDOUTGOForeign Exchange earned and used:
(Rs. in Lacs)
Particulars 2009-10 2008-09
(12 Months) (18 Months)
i) Foreign Exchange Earned 1315.66 3828.35
ii) Foreign Exchange Used 7600.79 6774.06
Statement pursuant to Section 212 of the Companies Act, 1956 relating to Holding Company'sinterest in the Subsidiary Companies
* As Monotona Tyres Limited has become subsidiary of Falcon Tyres Limited w.e.f. 21st of May, 2010, where Falcon has
acquired 53,99,600 Nos. of shares out of 72,00,000 Nos. i.e. 75% of the subscribed and paid up capital of Monotona Tyres
Limited, the same is not applicable.
Financial year of the Subsidiary ended on March 31, 2010
1. (a) Number of shares held by Falcon Tyres Limited at the end of the above date NIL
(b) Extent of Interest on above date NIL
2. Net aggregate amount of the Subsidiary Company's Profit/ (Loss) so far it concerns Rs. in Lacs
members of the Holding Company and
(a) is not dealt in the Company's account
(i) for the financial year ended March 31, 2010 Not Applicable*
(ii) for the previous financial year since it become a subsidiary Not Applicable*
(b) is dealt in the Company's account
(i) for the financial year ended March 31, 2010 Not Applicable *
(ii) for the previous financial year since it become a subsidiary Not Applicable*
Change in the interest of Falcon Tyres Limited between the end of the subsidiary's financial year
March 31, 2010 and September 30, 2010
- Number of shares acquired 5,399,600
Material changes between the end of the subsidiary's financial year March 31, 2010 and Rs.in Lacs
September 30, 2010
(i) Fixed Assets (net additions) 9094.79
(ii) Investments NIL
(iii) Moneys lent by the subsidiary NIL
(iv) Moneys borrowed by the subsidiary company other than for meeting current laibilities NIL
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Management Discussion and Analysis Report
The Indian tyre industry growth in the current year has been
fuelled by the growth in 2-3 wheeler segment. The Indian tyre
Industry with a total production number of 971.37 Lacs has
grown up by 18% in comparison to previous period number
of 821.07 Lacs. Out of the above Number, 2-3 wheeler tyre
production number at 492.22 Lacs has grown by 20% in
comparison to previous period number of 410.31 Lacs.
[Source: ATMA]
Although, Indian 2-3 wheeler tyre industry has consolidated
to a great extent with 5 leading players controlling a large
chunk of the production capacity, the balance capacity is still
fragmented.
After 2 years of low growth, in 2009-10 the 2 & 3 wheeler
industry has shown a remarkable growth. Early recovery of
the economy from the financial crisis and resurgence in
domestic demand aided by fiscal stimulus resulted in
exceptional growth of 33% and 40% in third and fourth
quarters of 2009-10 respectively in 2 wheeler industry,
resulting in an annual growth rate of 24% for the year in 2
wheeler industry, which helped tyre industry to substantially
increase tyres production. 2-3 wheeler Tyre production in
2009-10 has been increased to 492.22 Lacs in Nos. from
410.31 Lacs in Nos. showing a increase of 20%. 2-3
wheeler industries have witnessed a capacity addition by all
the major players in the last year.
Industry structure and Developments:
The Automotive sector was a great beneficiary of the
overall recovery during 2009-10 and registered a healthy
growth. Due to this 2-3 wheeler tyre industry also has
shown a very impressive growth of 20%. With buoyancy
in 2-3 wheeler market, 2-3 wheeler tyre industry is
expected to perform well.
On the other hand Raw Materials prices are a cause of
concern with Natural Rubber prices continuously
increased due to short supply and prices reached to
historical high of Rs. 200 per kg. Synthetic rubber and
other input prices also witnessed a significant increase.
Business Outlook And Overview
Year 2009-10 has witnessed extraordinary demand for
products of the Company and industry due to higher 2-3
wheeler production and increased demand from
replacement market. Driven by economical improvements
and around 30 % year on year growth by OEMs in new
Vehicle manufacturing, the 2-3 wheeler tyre market has
witnessed tremendous demand for products and this has
generated need of expansion and increased productivity
for all tyres Companies.
The increased 2-3 Vehicle Population will lead to much
higher Tyres demand from replacement markets and it is
much likely that all 2-3 tyres Companies are expected to
do well.
Company Performance
Domestic Segment
In motorcycle category, the Company achieved a sales
growth of 26.1% during 2009-10. Sales in the
replacement segment grew by an impressive 45.6% and
in OE segment it grew by 12.8%. The Company has
launched the Challenger series of “High End Tyres”,
which is expected to contribute significantly in the
coming years. Overall growth in the Domestic segment is
very impressive.
Export Segment
During the year, the Company has Directly/ Indirectly sold
3.81 Lacs tyres in comparison to 5.06 Lacs tyres sold
during the last period. Although there is slight decline in
volume, the same is because of very high demand in
Domestic Segment.
Opportunity And Threats
Growth in two-wheeler demand is mainly coming from
youth and lower middle class population. Urbanization
of smaller town also fuels the demand in 2-3 wheeler
segment. Smaller towns are expected to contribute
significantly to our segment.
The Company has tested few Radial Tyres also during the
last year and the responses to the same are positive.
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Moreover the challenger series of Tyres has also got very
good response.
High inflation and rising Interest cost is always a threat
to the Industry. Another threat to the industry is the
volatility in the prices of Raw Materials specially Natural
Rubber. Low cost tyre import from China is also a threat
to the industry.
Operation Review
Operational Performance:
The production of Tyres and Tubes at 37660 MT in the
current year (12 months) was highest ever in the history
of the Company. On an annualized basis production has
increased by about 28% in comparison to last period (18
months) production of 43967 MT of tyres and tubes.
Financial Performance:
The Company achieved a turnover of Rs.84435 Lacs for
the year ended 30th September 2010, as against previous
period (18 months) turnover of Rs. 85146 Lacs with an
annualized increase of 49%. These results were achieved
despite severe competition in the Industry. The PBT for the
year under review at Rs. 6578 Lacs was highest ever as
against previous period (18 months) PBT of Rs. 3895 Lacs.
The Company’s sales in various market segment are as
given below:
Risks & ConcernThe constant rise in prices of Natural Rubber and major
Raw Materials is a big challenge for our industry. Any
failure of monsoon could trigger a significant rise in
inflation and interest rates thus squeezing the disposable
income of the customers.
Internal Controls And Their AdequacyThe Company has proper and adequate internal control
system to ensure that all the assets of the Company are
safeguarded and protected against any loss and that all the
transactions are properly authorized, recorded and
reported. The Company has effective internal control
systems across the Manufacturing locations, marketing
locations and other offices to maintain the Operational
efficiencies and to comply with all financial policies and
applicable laws and regulations. The Company has full-
fledged Internal Audit department, which covers all the
areas of the Organization to ensure conformance to internal
checks and controls. Internal Audit department carries out
audit throughout the year and their reports, along with the
action taken are reviewed by Senior Management and
placed before Audit Committee of the Board of Directors.
Human Resource DevelopmentHuman Resource Development is focused and aligned to
business needs towards improved performance and
business results through the HR roadmap evolved over
the years. The key components of the roadmap are –
Employee engagement, Resourcing, Performance &
compensation management, Competency based
development, Career & succession planning and
Organization building. The Company continues to be an
employees choice in the region.
The Company continued to have cordial and harmonious
relations with its employees. In line with the changing
business environment, your Company is imparting
training aimed at nurturing the Human Resources.
Career planning and succession plans are in place for all
critical roles. Towards Leadership development key
competencies have been identified and executive
assessment and development programs are run.
Some of the key activities carried out to make the success
story happen are summarized below:
= Involving the Field Marketing Personnel on the
Strategic Decision Making and planning the route
map for the Future,= Recognizing the Outstanding Performers in the
Annual Sales Meet etc ensured the motivation of the
Personnel.= Identifying the Right people with the right attitude
for the key jobs.
Environment, Health & Safety (EHS) Several training programs, structured to the needs of
individual employees and also to meet the requirements
Description UOM 2009-10 2008-09(12 Months) (18 Months)
OEM’s Rs. in Lacs 31,693.64 32,347.83 Replacement Rs. in Lacs 49,112.31 48,970.12Exports Rs. in Lacs 3,226.90 3,828.35Others Rs. in Lacs 401.92 --Total Rs. in Lacs 84,434.77 85,146.30
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of ISO / TS 16949: 2009,EMS & OHSAS systems, were
conducted during the year. Competent professionals do
regular audits on safety and environment and the
recommendations are implemented to provide a safe and
healthy work environment. Regular training programs on
safety are conducted to increase awareness and
commitment for safety. Effective training to all new
recruits has further improved the safety standards in the
Company.
Cautionary StatementStatements in the management discussion and analysis
report describing the Company’s objectives, projections,
estimates and expectations may be “forward looking
statements” within the meaning of applicable securities
laws and regulations. Actual results could differ materially
from those expressed or implied. Important factors that
could make a difference to the Company’s operations
include, among others, economic conditions affecting
demand/supply and price conditions in the domestic and
overseas market in which Company operates, changes in
the government regulations, tax laws and other statutes
and incidental factors.
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CORPORATE GOVERNANCE REPORTA) The Company’s Corporate Governance Philosophy
The Company has set itself the objective of expanding its
capacities and becoming globally competitive in its
business. As a part of its growth strategy, the Company
believes in adopting the ‘best practices’ that are followed
in the area of Corporate Governance across various
geographies. The Company emphasizes the need for full
transparency and accountability in all its operations, in
order to protect the interests of its stakeholders. It is
believed that the imperative for good corporate
governance lies not merely in drafting a code of corporate
governance but in practicing it.
B) Board of DirectorsIn terms of the Company’s Corporate Governance Policy,
all statutory and other significant and material
information mentioned in Clause 49 of the Listing
Agreement are placed before the Board to enable it to
discharge its responsibilities of strategic supervision of the
Company and as trustees of stakeholders.
Composition of the Board & Directorship held:As the Company has an Executive Chairman viz., Mr.Pawan K Ruia the Board is required, in terms ofclause 49 of the Listing Agreement, to have fiftypercent of its Directors as Independent Directors.
As on 30th September, 2010 the Company has 8Directors on its Board, of which 5 Directors areIndependent Directors. Thus, the composition of theCompany’s board is in conformity with the ListingAgreement. None of the Directors on the Board is aMember on more than 10 committees and Chairmanof more than 5 Committees (as specified in Clause49), across all the Companies in which he is a Director.The necessary disclosures regarding Committeepositions have been made by the Directors.
The names and categories of the Directors on theBoard, their attendance at Board Meetings duringthe year and at the last Annual General Meeting, asalso the number of Directorships and CommitteeMemberships held by them in other Companies aregiven below:
Name of Category * No. of Directorship No. Of membership / chairmanship inthe Director in other Companies Committees of other companies
Membership Chairmanship Total
Mr. Pawan Kumar Ruia Executive Chairman 4 -- -- --
Mr. Tarun Gandhi Independent 3 -- -- --
Mr. A.K. Jain Independent 1 -- -- --
Mr. K.N. Prithviraj Independent 6 5 3 8
Mr. Prakash P. Mallya Independent 3 4 5 9
Mr. Vijay Vaid Independent 1 - - -
Mr. S. Ravi Non-Executive 2 3 1 4
Mr. Sunil Bhansali Executive Nil Nil Nil Nil
* Does not include Directorships in Private Limited Companies
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The Board periodically reviews compliance reports of all laws applicable to the Company. Steps are taken by the Company torectify instances of non-compliance, if any.
The last Annual General Meeting of the Company was held on 29th December, 2009 and Extra Ordinary General Meeting washeld on 9th November, 2009 and 3rd March, 2010.
The following are the details of attendance of Directors at Board Meeting and at the Annual General Meeting and Extra OrdinaryGeneral Meeting held during the year:
Attendance of the Directors for BOD, AGM & EGM
* Number of Board Meetings indicated is with reference to date of appointment / resignation of the Directors.
Name of Directors No. of Board Meetings No. of Board Attendance Attendance held during the tenure of Meetings at Last at Two EGMthe Director in 2009-10* attended AGM 09.11.2009 03.03.2010
Mr. Pawan Kumar Ruia 8 7 Yes No No
Mr. Tarun Gandhi 8 2 No No No
Mr. A. K. Jain 8 5 No Yes Yes
Mr. K. N. Prithviraj 8 4 No No Yes
Mr. Prakash P. Mallya 8 6 Yes Yes No
Mr. S. Ravi 8 8 Yes Yes Yes
Mr. Sunil Bhansali 8 8 Yes Yes Yes
Part of the YearMr. Vijay Vaid 1 1 -- -- --(Appointed as Additional Directorw.e.f. 14/08/2010)
24th October, 2009 29th January, 2010 6th July, 2010
12th November, 2009 3rd March, 2010 14th August, 2010
29th December, 2009 22nd April, 2010
The Board meets atleast once in a quarter to review the Company’s performance and financial results and more often, ifconsidered necessary, to transact other business.
Attendance of each Director at Board Meetings, last Annual General Meeting and Extra Ordinary General Meeting:
Eight Board Meetings were held during the year 2009-10 and the gap between two meetings did not exceed four months.The dates on which the Board Meetings were held were as follows:
C) Audit CommitteeThe terms of reference of the Audit Committee is based
on Clause 49 of the Listing Agreement and the applicable
provisions of the Companies Act, 1956.
The Audit Committee comprises of five Directors, all of
them being Non-Executive Directors.
Mr. A.K. Jain - Chairman
Mr. Tarun Gandhi - Member
Mr. K.N. Prithviraj - Member
Mr. Prakash P. Mallya - Member
Mr. S. Ravi - Member
All these Directors possess knowledge of corporate
finance, accounts and company law. The Chairman of the
Committee is an Independent and Non-Executive Director
nominated by the Board. The Company Secretary,
Statutory Auditors, Internal Auditors are permanent
invitees at the meetings of the Committee.
The gist of terms of reference is given below:
a) Review of Company’s financial reporting process.
b) Review of Quarterly and Annual Financial Statements,
before submission to the Board.
c) Review with External Auditors, on areas of concern.
d) Recommending appointment of External Auditor and
fixation of audit fees.
e) To Review the projects performance of the company
f) To ensure compliance of internal control system and
action taken on internal audit report.
g) Review of findings etc., of internal investigations by
Internal Auditors and reporting thereof to the Board.
h) To hold periodical discussion with statutory auditors
on the scope and content of audit.
i) To review the Company’s Financial and Risk
Management Policies.
j) To appraise the Board on the impact of accounting
policies, accounting standards and legislation.
k) Review of reasons for defaults if any in payment to
shareholders / creditors etc.
l) Review of adequacy of internal audit function.
During the period ended 30th September, 2010 the
Committee met 5 (five) times from 1st October 2009 to
30th September, 2010, i.e.
Sl. No. Date of the Audit Committee Meeting
1 24th October, 2009
2 12th November 2009
3 29th January, 2010
4 22nd April, 2010
5 14th August, 2010
D) Remuneration Committee
The Remuneration Committee is composing of 4 (four) Directors, which is as follows.
Mr. K.N. Prithviraj Chairman
Mr. A.K. Jain Independent Director
Mr. Tarun Gandhi Independent Director
Mr. S. Ravi Independent Director
Attendance at Audit Committee Meetings.
Name of Directors No. of Audit Meetings held during the tenure of the No. of Meetings attendedDirector in 2009-10 *
Mr. A.K. Jain 5 4
Mr. Tarun Gandhi 5 2
Mr. K.N. Prithviraj 5 3
Mr. Prakash P. Mallya 5 5
Mr. S. Ravi 5 5
*No. of Audit Committe Meetings indicated is with reference to date of appointment/resignations of the Directors.
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The remuneration Committee met on 29th January, 2009 in which the remuneration to the Executive Chairman had been
increased considering the relevant remuneration for managerial personnel in the industry of similar size and nature. This
remuneration was approved by the Board of Directors in their Meeting held on 29th January, 2010 and the shareholders in the
Extra Ordinary General Meeting dated 3rd March, 2010 subject to the approval of Central Government.
Details of Service Contract with the Directors: -
For any termination of service contract, either the Company or the Executive Chairman is required to give a notice of not less
than forty five days.
Equity share held by the Non Executive Directors: Nil
The Non-Executive Directors do not draw any remuneration from the Company, except sitting fees for attending the Board
Meetings. The details of sitting fees paid to the Non-Executive Directors are as follows:
Name of the Directors Sitting Fees Paid during the Year (Rs.)
Mr. Tarun Gandhi 20,000
Mr. A.K. Jain 50,000
Mr. K.N. Prithviraj 40,000
Mr. Prakash P. Mallya 60,000
Mr. Vijay Vaid 10,000
Mr. S. Ravi 60,000
TOTAL 2,40,000
Name Designation Salary Other allowance Provident Fund Retirement/Re-imbursement & Other Fund
Mr. Pawan Kumar Ruia Executive Chairman 360.00 192.00 97.20 Gratuity &Medi-claim as
per rules ofthe Company
(Rs. in Lacs)
E) Investors’ / Shareholders’ Grievances Committee
As of 30th September, 2010, the Committee consists of four Directors, namely,
Mr. K.N. Prithviraj Chairman (Independent Director)
Mr. Tarun Gandhi Member (Independent Director)
Mr. S. Ravi Member (Non-executive Director)
Mr. Sunil Bhansali Member (Executive Director)
Mr. M.C.Bhansali Company Secretary, has been designated as Compliance Officer. The Committee looks into redressing of
grievances of the investors namely shareholders. The Committee deals with grievances pertaining to transfer of shares, non-
receipt of Balance Sheet, non-receipt of dividend, dematerialization of shares, complaint letters received from Stock Exchanges,
SEBI etc.
During the period, five complaints were received from shareholders and the same were resolved.
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F) General Body Meetings
Location and time where last three Annual General Meetings of the Company were held are given below:
Financial Year Date of Meeting Location of the Meeting Time
2006-2007 28/09/2007 Hotel Woodlands (Pvt.) Ltd. 11.30 a.m.No.5, Raja Ram mohan Roy Road, Bengaluru – 560 025
2007-2008 30/09/2008 Hotel Woodlands (Pvt.) Ltd. 11.30 a.m.No.5, Raja Ram mohan Roy Road, Bengaluru – 560 025
2008-2009 29/12/2009 Golden Landmark, 12.30 a.m.45/A, K.R.S. Road, Metagalli, Mysore- 570 016
Extra Ordinary General Meetings
Financial Year Date of the Meeting Location Time
2008-2009 09/11/2009 Golden Landmark, 12.30 p.m.45/A, K.R.S. Road, Metagalli,
Mysore- 570 016
2008-2009 03/03/2010 Golden Landmark, 11.45 a.m.45/A, K.R.S. Road, Metagalli,
Mysore- 570 016
G) Disclosuresi) During the year, there were no transactions of material
nature with the Promoters, Directors or the management,
their subsidiaries or relatives that had potential conflict with
the interest of the Company. Register of Contract containing
the transactions in which Directors are interested is placed
before the Board regularly for signature of Directors.
Transactions with related parties are disclosed in Note No.20B
(13) to the Accounts in the Annual Report.
ii) The Company has complied with the requirements of the
regulatory authorities on Capital Markets and no non-
compliances, penalties, strictures were imposed on the
Company by Stock Exchange or SEBI or any statutory
authority during the last three years.
iii) The Non-Mandatory requirements have been adopted as
stated in this report against the relevant items.
H) Means of CommunicationQuarterly results of the Company are published in English
daily news paper having nation wide circulation and in one
daily regional language news paper. Quarterly reports are not
mailed to the shareholders. However, all the quarterly results
and the audited annual results are displayed in the
Company’s website (www.falcontyres.com), apart from
providing to Stock Exchanges and Press.
No presentations made to institutional investors or to analyst,
other than the published information / press releases.
The Management Discussion of Analysis Report forms part of
this Annual Report, and is attached to the Director’s Report.
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I) General Shareholders information
Annual General Meeting
The Annual General Meeting is proposed to be held on 30th December, 2010 at 12.30 p.m. at Hotel Golden Landmark,
45/A, K.R.S. Road, Metagalli, Mysore- 570016
Financial Period 1st October, 2009 to 30th September, 2010
Date of Book Closure 25th December, 2010 to 30th December, 2010
(Both days inclusive)
Dividend Payment Date The Dividend Warrants will be dispatched
within the statutory time limit.
Listing on Stock Exchanges
The Equity Shares of the Company are listed on Mumbai and Chennai Stock Exchanges. During the year your company has
been delisted from the Bangalore Stock Exchange.
Listing fee has been paid to the above Stock Exchanges for and up to the year 2010-11
Stock Code
Bombay Stock Exchange 509527
Chennai Stock Exchange FALCOTYR
Demat ISIN INE511B01024
Market Price Movement
The Monthly high and low quotations of the shares regularly traded on the Bombay Stock Exchange is as follows:
MONTH High (Rs.) Low (Rs.)
October, 2009 161.00 127.20
November, 2009 163.30 141.00
December, 2009 193.85 146.75
January, 2010 199.00 142.00
February, 2010 233.95 156.00
March, 2010 179.90 128.25
April, 2010 183.95 144.60
May, 2010 188.00 150.00
June, 2010 190.00 151.50
July, 2010 191.00 168.65
August, 2010 195.00 165.25
September, 2010 187.00 155.80
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Stock performance in comparison to Broad based indices such as BSE Sensex
21000
19000
17000
15000
13000
11000
9000
7000
5000
3000
1000
-1000
200
180
160
140
120
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80
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20
0Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun- Jul- Aug- Sep-09 09 09 10 10 10 10 10 10 10 10 10
BSE
Inde
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FALC
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ARE
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Sensex
Falcon
Price of shares which are mentioned are at the end of the each month.= Source: BSE official website
Registrar and Transfer Agents
Integrated Enterprises (India) Ltd.(formerly known as Alpha Systems Private Limited)
30, Ramana Residency, 4th Cross
Sampige Road, Malleswaram
Bengaluru – 560 003
Tel: 080-23460815
Fax: 080-23460819
Share Transfer System
97.75 % of shares of the Company are in the electronic form. Transfer of these shares are done through the depositories with
no involvement of the Company. As regards transfer of shares held in physical form, the transfer documents can be lodged with
Integrated Enterprises (India) Ltd. at the above mentioned address.
The transfer of shares in physical form are normally processed within 15 days from the date of receipt, if the documents are
complete in all respects. The Directors, and the Company Secretary are jointly empowered to approve transfers.
Holders Holders Holding HoldingsNo. of holders % No. of shares held %
Upto 1000 1943 80.76 367103 1.08
1001 - 2500 260 10.81 441169 1.29
2501 - 5000 132 5.49 440212 1.29
5001 - 10000 39 1.62 265099 0.78
10001 and above 32 1.33 32571949 95.56
TOTAL 2406 100.00 34085532 100.00
No. of equity shares
Distribution of Shareholding as on 30th September, 2010
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Shares Holders No. of equity Percentage ofShares Held Shareholding
A. Promoters Holding
1. Promoters
Indian Promoters 54,25,980 15.92
Foreign Promoters 2,35,13,100 68.98
2. Persons acting in concert -- -
Sub-Total 2,89,39,080 84.90
B. Non Promoters Holding
3. Institutional Investors
a. Mutual Fund and UTI -- --
b. Banks, Financial Institutions, Insurance Companies 2,75,678 0.81(Central/State Govt. Institutions)
c. FIIs -- --
Sub-Total 2,75,678 0.81
4. Others
a. Private Corporate Bodies 28,83,638 8.46
b. Indian Public 19,62,669 5.76
c. NRIs/OBCs 13,826 0.03
d. Any other(Clearing Member) 10,641 0.04
Sub-Total 48,70,774 14.29
Grand Total 3,40,85,532 100.00
Dematerialization of Shares and Liquidity the Company’s shares are compulsory traded in dematerialized form and are traded
on both the depositories in India viz. National Securities Depository Limited (NSDL) and Central Depository Services (India)
Limited (CDSL). Equity shares of the Company representing 97.75% of the Company’s Share Capital are dematerialized as on
30th September 2010. The Company’s shares are regularly traded on Bombay Stock Exchange Limited in electronic form.
Investors Protection Fund
Shareholders who have not yet encashed their dividind warrants for the year 2003-04 to 2008-09 may approach the
Company/Companys Registrars and Share Transfer agents for revalidation, issue of duplicate warrants etc., Dividend which
remains unpaid/ unclaimed over a period of 7 years from the date of declaration shall be transfered to the Investor Education
and Protection Fund.
Plant Location
K.R.S. Road, Metagalli, Mysore – 570 016
Outstanding GDRs / ADRs / Warrants or any convertible instruments
There are no outstanding GDRs / ADRs / Warrants or any convertible instruments
Address for Correspondence
K.R.S. Road, Metagalli, Mysore-570 016 Tel : 0821-2582055/2582041 Fax : 0821-2582321 Email: [email protected]
Shareholding pattern as on 30th September, 2010
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It is hereby declared that all the members of the Board and Senior Management personnel have affirmed compliance with the
“Code of Conduct for Members of the Board and Senior Management of Falcon Tyres Limited” during the Financial Year ended
30th September, 2010.
Kolkata Sunil Bhansali
12th November, 2010 Executive Director
DECLARATION
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AUDITORS’ CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERANCE
To the Members of
FALCON TYRES LIMITED
1. We have examined the compliance of the conditions of Corporate Governance by Falcon Tyres Limited for the year ended30th September, 2010 as stipulated in Clause 49 of the Listing Agreement of the said Company with Stock Exchange inIndia.
2. The Compliance of conditions of Corporate Governance is the responsibility of the management. Our examination wascarried out in accordance with the Guidance Note on Certification of Corporate Governance (as stipulated in Clause 49 ofthe Listing Agreement) issued by the Institute of Chartered Accounts of India and limited to the procedures ofimplementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance.It is neither an audit nor an expression of the opinion on the financial statements of the Company.
3. In our opinion and to the best of our information and explanations given to us and the representations made by theDirectors and the management, we certify that the Company has complied with the conditions of Corporate Governanceas stipulated in the above-mentioned Listing Agreement.
4. We further state that such compliance is neither an assurance as to future viability of the Company nor the efficiency oreffectiveness with which the management has conducted the affairs of the Company.
For K.N. Gutgutia & Co.Chartered Accountants
Kolkata
12th November, 2010
Subhasish PorePartner
Membership No: 055862
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Auditors' ReportTo the members of
FALCON TYRES LIMITED
We have audited the attached Balance Sheet of Falcon Tyres Limited (‘the Company’) as at 30th September, 2010, the annexedProfit and Loss Account for the year ended on that date and also the Cash Flow Statement for the year ended on that date whichwe have signed this day under reference to this report. These financial statements are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these financial statements based on our audit.
We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financialstatements. An audit also includes, assessing the accounting principles used and significant estimates made by themanagement, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonablebasis for expressing our opinion.
1. As required by the Companies (Auditor’s Report) Order, 2003 as amended by the Companies (Auditor’s Report) Order 2004(‘the Order’), issued by the Central Government in exercise of the power conferred by section 227 (4A) of the CompaniesAct, 1956 (“the Act”) and according to the information and explanation given to us and on the basis of such checks aswe considered appropriate, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe Order.
2. Further to the above, we report that:
a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessaryfor the purpose of our audit.
b) In our opinion, proper books of account as required by law have been kept by the company so far as appears fromour examination of those books;
c) The Company’s balance sheet, profit and loss account and cash flow statement dealt with by this report are inagreement with the books of account;
d) In our opinion, the profit and loss account balance sheet and cash flow statement comply with the accountingstandards referred to in sub section (3C) of section 211 of the Act.;
e) On the basis of written representations received from the Directors and taken on record by the Board, none of suchDirectors is disqualified as on 30th September, 2010 from being appointed as a Director of the Company under clause(g) of sub section (1) of section 274 of the Act.
f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts readtogether with the accounting policies and notes thereon give the information required by the Act in the manner sorequired and give a true and fair view –
(i) in the case of the Balance sheet, of the state of affairs of the Company as at 30th September, 2010;
ii) in the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date; and
iii) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date .
For K.N. Gutgutia & Co.Chartered Accountants
Kolkata12th November, 2010
Subhasish Pore Partner
Membership No.055862
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ANNEXURE (referred to in paragraph 1 of our report of even date)i) a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of
the fixed assets.
b) These fixed assets have been physically verified by the management in a phased manner at reasonable intervals. No
material discrepancies were noticed on such verification.
c) No substantial part of fixed assets has been disposed off during the year.
ii) a) Physical verification of inventory has been conducted at reasonable intervals by the management
b) The procedure of physical verification of inventory followed by the management are reasonable and adequate
in relation to the size of the Company and the nature of its business.
c) The Company is maintaining proper record of inventory and no material discrepancies were noticed on physical
verification.
iii) The Company has neither granted nor taken any loan secured or unsecured from Companies, firms or other Parties covered
in the register maintained under section 301 of the Act.
iv) There is an adequate internal control system commensurate with the size of the Company and the nature of its business,
for the purchase of inventory and fixed assets and for the sale of goods. There is not major weakness in internal control
system.
v) a) The particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register
required to be maintained under that section.
b) The transactions made in pursuance of such contract or arrangement have been made at prices which are reasonable
having regard to the prevailing market prices at the relevant time.
vi) The Company has not accepted deposits from the public.
vii) The Company has an in-house internal audit system generally commensurate with its size and nature of its business.
viii) The maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of
section 209 of the Act, and such accounts and records have been made and maintained. We have broadly reviewed such
books of accounts.
ix) a) The Company is generally regular in depositing un-disputed Statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise
Duty, Cess and any other statutory dues with the appropriate authorities.
x) The Company has no accumulated Losses at the end of the financial year and has not incurred Cash Losses in such financial
ear and in the immediately preceding financial year.
xi) The Company has not defaulted in repayment of dues to Banks.
xii) The Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other
securities.
xiii) The Company is not a Chit fund or a Nidhi/Mutual benefit fund/Society.
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xiv) The Company is not dealing or trading in shares, securities, debentures and other investments.
xv) The Company has given a corporate guarantee and the terms and conditions whereof are not prejudicial to the Company.
xvi) Term Loans were applied for the purpose for which the loans were obtained.
xvii) The funds raised on short term basis have not been used for long term investments.
xviii) The Company has not made any preferential allotment of shares to parties and companies covered in the register
maintained under section 301 of the Act.
xix) The Company has not issued any debentures.
xx) The Company has not raised money by public issue.
xxi) During the course of our examination of books of accounts carried out in accordance with generally accepted auditing
practices in India, we have neither come across any fraud on or by the Company nor have we been informed of any such
case by the management.
For K.N. Gutgutia & Co.Chartered Accountants
Kolkata12th November, 2010 Subhasish Pore
PartnerMembership No.055862
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BALANCE SHEET AS AT 30TH SEPTEMBER, 2010(Rs. In Lacs)
Schedule As at As at
No. 30th September, 2010 30th September, 2009
I Sources of Funds
1. Shareholders ' Funds(a) Share Capital 1 1704.27 1704.27(b) Reserves & Surplus 2 16110.62 17814.89 12196.27 13900.54
2. Loan Funds(a) Secured 3 15022.60 13798.62(b) Unsecured 4 8171.80 23194.40 6954.80 20753.42
3. Deferred Taxtion - Net 726.95 794.16Total 41736.24 35448.12
II Application of Funds1. Fixed Assets 5
Gross Block 25015.45 23783.46Less: Depreciation 6516.52 5386.71Net Block 18498.93 18396.75Capital Work - in - Progress 3863.68 22362.61 440.97 18837.72
2. Investments 6 8863.00 5.97
3. Current Assets,Loans & Advances(a) Inventories 7 7218.21 3445.79(b) Sundry Debtors 8 11236.94 9716.30(c) Cash & Bank balances 9 3218.55 2098.80(d) Loans & Advances 10 4829.60 10891.80
26503.30 26152.69Less:
4. Current Liabil it ies & Provisions(a) Liabilities 11 12250.85 8283.87(b) Provisions 12 3741.82 1264.74
15992.67 9548.61Net Current Assets 10510.63 16604.08Miscellaneous Expenditure 13 0.35(to the extent not written off)Total 41736.24 35448.12
Significant Accounting Policies and Notes on Accounts 20
Schedules annexed are an integral part of this Balance Sheet and should be read in conjunction therewith.
As per our report of even date attached For and on behalf of the Board
For and on behalf ofK.N.Gutgutia & Co.
Chartered AccountantsM.C. Bhansali Sunil Bhansali S. Ravi
Company Secretary Executive Director DirectorSubhasish PorePartnerMembership No.: 055862Kolkata, 12th November, 2010
Schedules annexed are an integral part of this Profit & Loss Account and should be read in conjunction therewith.
As per our report of even date attached For and on behalf of the Board
For and on behalf ofK.N.Gutgutia & Co.
Chartered AccountantsM.C. Bhansali Sunil Bhansali S. Ravi
Company Secretary Executive Director DirectorSubhasish PorePartnerMembership No.: 055862Kolkata, 12th November, 2010
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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED 30TH SEPTEMBER, 2010(Rs. In Lacs)
Schedule 30th September, 2010 30th September, 2009
No. (12 Months) (18 Months)
IncomeGross Sales (net of returns & discounts) 84434.77 85146.30Less: Excise Duty 5624.36 78810.41 6760.13 78386.17Other Income 14 566.33 341.49
79376.74 78727.66Expenditure
Raw Materials Consumed 15 42031.91 40569.21Increase(-)/Decrease(+) in stock 16 -1,593.61 1207.11Factored Goods Consumption 17 11388.94 13215.87Manufacturing, Administrative, Selling & Distribution Expenses 18 18541.27 16991.08Interest (Net) 19 1652.11 2004.57Depreciation 1129.81 1386.16Less: Transfer to Revaluation Reserve 352.15 777.66 541.71 844.45
72798.28 74832.29Profit Before Taxation 6578.46 3895.37
Provision for Taxation: For Current Year - Current Tax 1482.21 599.00
- Fringe Benefit Tax - 18.27- Deferred Tax -67.21 278.86
1415.00 896.13Excess Provision of Income Tax of Earlier Year Written Back - -2.58
1415.00 893.55Profit After Taxation 5163.46 3001.82Profit Brought forward from Previous Year 205.90 169.33Profit Available for Appropriation 5369.36 3171.15Appropriations:
Less:Transfer to General Reserve 3500.00 2500.00Intereim Dividend - 142.02Proposed Dividend 852.14 255.64Corporate Dividend Tax 144.82 4496.96 67.59 2965.25
Balance carried to Balance Sheet 872.40 205.90
Basic & Diluted Earning Per Share 15.15 8.81Significant Accounting Policies and Notes on Accounts 20
SCHEDULE FORMING PART OF THE ACCOUNTS
As at As at
30th September, 2010 30th September, 2009
(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 1
SHARE CAPITAL:
Authorised :
20,00,00,000 equity shares of Rs. 5/- each 10000.00 2350.00
Issued, Subscribed and Paid up
340,85,532 (340,85,532) Equity Shares of Rs.5/- each fully paid 1704.27 1704.27
(294,60,744 Equity Shares of Rs.5/- each held by DIL Rim and
Wheel Corporation Ltd., Mauritius the holding Company
and it's subsidiaries)
TOTAL 1704.27 1704.27
SCHEDULE 2
RESERVES & SURPLUS:
Revaluation Reserve
As per last Balance Sheet 8008.01 8549.72
Less: Transferred to Profit & Loss Account 352.15 541.71
7655.86 8008.01
Share Premium
As per last Balance Sheet 165.87 165.87
Capital Reserve
(Capital Subsidy Received from Government through MNRE) 100.00 -
General Reserve
As per last Balance Sheet 3816.49 2452.67
Less: Transfer to Share Capital Account consequent to issue of
Bonus shares - 1136.18
Add: Transferred from Profit & Loss Account 3500.00 2500.00
7316.49 3816.49
Surplus as per Profit & Loss Account 872.40 205.90
TOTAL 16110.62 12196.27
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SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
As at As at
30th September, 2010 30th September, 2009
(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 3
SECURED LOANS:
7713.37 7264.78
2615.81 3674.75
2186.36 2859.09
2507.06 -
15022.60 13798.62
Cash Credit from Banks
(Secured by hypothecation of Company's present and
future fixed assets, current assets, stock and book
debts and pari-passu charge on Company's present and
future fixed assets)
Term Loan - Syndicate Bank
(Secured by hypothecation of Company's Plant &
Machinery and Immovable Propoerties situated at
Mysore and pari-passu first charge on the Current assets
and fixed assets of the Company)
Term Loan - Yes Bank
(Secured by subservient charge on current assets and
fixed assets, Corporate gurantee of Monotona Tyres
Limited a subsidiary Company. This is to be further
secured by first pari-passu charge on assets and pledge
of shares of said subsidiary Company)
Term Loan - Central Bank of India
(Secured by exclusive first charge by way of
hypothecation of Plant & Machinery & Civil works, etc.
arising out of the Term Loan. Second charge on all
other existing fixed assets)
TOTAL
SCHEDULE 4
UNSECURED LOANS:
Short term loan
Interest free loan from body corporates 5771.80 5654.80
Loan from Customers 2400.00 1300.00
TOTAL 8171.80 6954.80
FIX
ED A
SSET
S:(R
s. in
Lac
s)
PART
ICU
LARS
GRO
SS B
LOCK
DEP
RECI
ATIO
NN
ET B
LOCK
As
atA
dditi
ons
Sale
of A
sset
As
atU
p To
For t
heSa
le o
f Ass
etU
p To
As
atA
s at
30.0
9.20
0930
.09.
2010
30.0
9.20
09Pe
riod
For t
he P
erio
d30
.09.
2010
30.0
9.20
1030
.09.
2009
Land
4625
.00
--
4625
.00
--
-0.
00
4625
.00
4625
.00
Build
ings
2761
.73
980.
05-
3741
.78
591.
0789
.13
-68
0.20
3061
.58
2170
.66
Plan
t &
Mac
hine
ry15
543.
3424
2.72
-15
786.
0643
64.3
795
8.38
-53
22.7
510
463.
3111
178.
97
Com
pute
rs15
3.14
4.39
-15
7.53
116.
6413
.97
-13
0.61
26.9
236
.50
Elec
tric
al In
stal
latio
n45
8.70
--
458.
7019
5.99
18.0
9-
214.
08
244.
6226
2.71
Off
ice
& L
ab E
quip
men
t30
.83
2.01
-
32.8
417
.40
1.48
-
18.8
813
.96
13.4
3
Furn
iture
& F
ixtu
res
73.6
10.
21-
73.8
251
.91
3.13
-55
.04
18.7
821
.70
Vehi
cles
39.7
8 3.
050.
44
42.3
916
.14
3.65
0.22
19
.57
22.8
223
.64
Low
Val
ue A
sset
s9.
73-
-9.
738.
620.
08-
8.70
1.03
1.11
Tech
nica
l Kno
w-h
ow87
.60
--
87.6
024
.57
42.1
2-
66.6
920
.91
63.0
3
TOTA
L2
37
83
.46
1
23
2.4
30
.44
2
50
15
.45
53
86
.71
11
30
.03
0.2
26
51
6.5
21
84
98
.93
18
39
6.7
5
Prev
ious
yea
r fig
ures
17
369.
1364
14.8
00.
4723
783.
4640
00.7
013
86.1
60.
1553
86.7
118
396.
7513
368.
43as
at
30.0
9.20
09
SCH
EDU
LE F
ORM
ING
PA
RT O
F TH
E A
CCO
UN
TS (C
ON
TD.)
SCH
EDU
LE 5
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SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
As at As at
30th September, 2010 30th September, 2009
(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 6
INVESTMENTS (AT COST):
Long term: Other than trade
Equity share fully Paid up - Un-quoted
1 Share of Rs.1000/- in FTL House Building Co-operative Society 0.01 0.01
5000 Shares of GBP 1 each in Global Finvest Ltd. 4.00 4.00
53,99,400 shares of Rs.10/-each in Monotona Tyres Limited 8857.03 -
Equity share fully Paid up - Quoted
11,500 Equity Shares of Rs. 10/- each in Union Bank of India 1.84 1.84
200 Equity Shares of Rs. 10/- each in UCO Bank 0.02 0.02
400 Equity Shares of Rs. 10/- each in Indian Overseas Bank 0.10 0.10
Aggregate Market Value of quoted investments as on
30.09.2010 Rs. 45.41 lacs (Rs. 28.21 lacs)
TOTAL 8863.00 5.97
SCHEDULE 7
INVENTORIES:
(As per stocks taken, valued and certified by Management)
Raw Materials 3050.47 1925.81
Stores & Spares 257.62 209.30
Work - in - Process 369.26 219.28
Finished Goods (Including Factored Goods) 3540.86 1091.40
TOTAL 7218.21 3445.79
SCHEDULE 8
SUNDRY DEBTORS:
Debts Outstanding for a period exceeding six months
- considered good 4.32 0.60
- considered doubtful - -
4.32 0.60
Other debts - considered good 11232.62 9715.70
TOTAL 11236.94 9716.30
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As at As at30th September, 2010 30th September, 2009
(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 9CASH & BANK BALANCES:
Cash in hand 6.10 7.24
Cheques in Transit 1658.20 827.78
Balances with Scheduled Banks :
In Current Accounts 625.66 597.78
In Unpaid Dividend Accounts 6.58 6.50
In Unpaid Debenture Account 9.10 9.10
In Deposit Accounts 912.91 650.40
(Under lien to various Banks against Letter of Credits,
Bank Guarantees and borrowings)
TOTAL 3218.55 2098.80
SCHEDULE 10
LOANS & ADVANCES:
(Unsecured, considered
good, unless otherwise stated)
Advances Recoverable in cash or in
kind or for value to be received 3241.00 1462.48
Advance for Purchase of Shares - 8857.03
Other Deposits 167.93 143.77
Advance Payment:
- Taxation 1420.67 428.52
TOTAL 4829.60 10891.80
SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
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SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
As at As at
30th September, 2010 30th September, 2009
(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 11CURRENT LIABILITIES:
Acceptance 2206.55 2190.26
Sundry Creditors 3325.22 1940.30
Unclaimed Dividend * 6.58 6.50
Unclaimed Debenture * 9.10 9.10
Balance with Central Excise & Customs Authorities 218.14 124.46
Deposits from Dealer 2040.19 1578.35
Other liabilities 4401.42 2337.41
Interest accrued but not due on loan 43.65 97.49
* Does not include any amounts due for deposit to the
Investor Education & Protection Fund
TOTAL 12250.85 8283.87
SCHEDULE 12
PROVISIONS FOR:
- Taxation 2307.99 825.78
- Fringe Benefit Tax 42.87 42.87
- Proposed Dividend 852.14 255.64
- Corporate Dividend Tax 144.82 43.45
- Warranty 394.00 97.00
TOTAL 3741.82 1264.74
SCHEDULE 13
MISCELLANEOUS EXPENDITURE (To the extent not written off):
- Payments under Voluntary Retirement Scheme 0.35 17.54
- Less: Amortised during the year (included under staff cost) 0.35 17.19
TOTAL - 0.35
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SCHEDULE 15
RAW MATERIAL CONSUMED:Opening Stock 1925.81 1865.29
Add: Purchases 43156.57 40629.73
45082.38 42495.02
Less: Closing Stock 3050.47 1925.81
TOTAL 42031.91 40569.21
SCHEDULE 17
CONSUMPTION OF TRADED GOODS:
Opening Stock 148.98 172.35
Add: Purchases 12394.77 13192.50
Less: Closing Stock 1154.81 148.98
TOTAL 11388.94 13215.87
SCHEDULE 16
(INCREASE)/DECREASE IN STOCK:
Opening StockWork in process 219.28 662.36Finished Goods 942.42 1706.45
1161.70 2368.81Less: Closing StockWork in process (WIP) 369.26 219.28Finished Goods 2386.05 942.42
2755.31 1161.70TOTAL Increase (-)/ Decrease(+) in Stock -1593.61 1207.11
30th September, 2010 30th September, 2009(12 Months) (18 months)(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
SCHEDULE 14
OTHER INCOME:Sale of Scrap 324.79 161.65
Exchange difference (Net) 6.68 -
Export Incentives 193.55 176.94
Dividend from long term, other than trade investments 35.36 1.06
Miscellaneous Income 5.95 1.84
TOTAL 566.33 341.49
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SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
30th September, 2010 30th September, 2009(12 months) (18 months)(Rs. in Lacs) (Rs. in Lacs)
SCHEDULE 18
MANUFACTURING,ADMINISTRATIVE,SELLING &DISTRIBUTION EXPENSES:
Stores Consumed 185.77 218.01Power , Fuel and Water Charges 2182.67 2126.33Mixing & Conversion Charges 1837.34 2201.88Increase / Decrease in Excise Duty Provision 223.59 -148.09Salaries , Wages and Bonus etc. 3703.67 3909.47Contribution to Provident, Gratuity & Other Funds 639.40 488.95Staff Welfare Expenses 235.66 254.69Repairs - Plant & Machinery 565.43 519.33Repairs - Buildings 16.76 36.76Repairs - Others 40.84 92.39Rent 28.20 29.00Rates & Taxes 67.29 29.53Insurance 25.41 32.38Directors Sitting Fees 2.40 3.10Selling & Distribution Expenses 2990.99 2495.07Commission 481.30 385.50Discount 2387.75 1941.72Provision for Bad & Doubtful Debts -1.09 6.27Royalty 1501.28 937.65Printing & Stationery 44.01 45.70Communication 44.76 64.18Travelling & Conveyance 273.00 246.40Bank Charges 207.19 316.06Donation 0.31 5.17Miscellaneous Expenses 857.34 753.63TOTAL 18541.27 16991.08
SCHEDULE 19
INTEREST & FINANCE CHARGES:Interest on
Term Loan 707.55 678.71
Cash Credit Account 914.13 997.26
Other Finance Charges 70.08 384.47
1691.76 2060.44
Less: Interest Received (Gross) 39.65 55.87
[Includes TDS Rs. 17.64 lacs (Rs.15.49 lacs)]
TOTAL 1652.11 2004.57
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SCHEDULE 20
A. SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounts
The accounts have been prepared according to historical cost convention, adjusted by revaluation of fixed assets. All expensesand income to the extent considered payable and receivable, unless stated otherwise, have been accounted for on accrual basis.
Use of Estimates
The preparation of financial statement require management to make estimates and assumptions that affect the reported amountof assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reportedamounts of income and expenses during the year.
Provision for contingencies are recorded when it is probable that a liability will be incurred and the amounts can reasonably beestimated. Differences between the actual results and estimates are recognized in the year in which the results are known /materialised.
Sales
Sales are accounted for on passing of title to the customers. Returns and rebates and discounts against goods sold are recognisedas and when ascertained and deducted from sales. Sales includes excise duty.
Export Benefits
Export benefits arising on account of entitlement for duty free imports are accounted for at the time of receipt of material.Other export benefits are accounted for as and when accrued.
Fixed Assets
Fixed Assets are stated at cost of acquisition / construction (net of CENVAT/VAT and other credits) or at revalued amount as thecase may be and inclusive of incidental expenses, erection / commissioning expenses, revamping expenses, pre-operative expenses,interest, etc. upto the date the asset is put to use.
Depreciation / Amortisation
a) The classification of Plant & Machinery into continuous and non-continuous is carried as per technical certification and depreciation thereon, is provided accordingly, on straight-line method at the rates prescribed in schedule XIV of theCompanies Act, 1956.
b) Additional depreciation attributable to the increase in the value of assets on account of revaluation is transferred fromRevaluation Reserve to the Profit and Loss account.
c) Computer software, Intangible assets are amortised over the period of six years.
Impairment
Fixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assetseither belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greaterof assets net selling price or its value in use. In assessing value in use, the estimated future cash flow from the use of the assetsis discounted to their present value at appropriate rate. An impairment loss is reversed if there has been a change in therecoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof, which in case ofCGU, are allocated to its assets on a pro rata basis, is adjusted to carrying value of its respective assets.
Investments
Long Term Investments are valued “at cost” except where there is a diminution in value, other than temporary, in which case,adequate provision is made against such shortfall.
NOTES FORMING PART OF ACCOUNTS
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Inventory
Inventories are valued at lower of cost or estimated net realisable value. Cost of inventories has been computed on weightedaverage basis. In case of work in progress and finished goods cost represents materials, direct labour and appropriate portionof factory overheads. Adequate provision for defective, slow/non moving, obsolete stocks are made on the basis of technicalevaluation.
Transactions in Foreign Currency
Transaction in foreign currency is accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using the closing exchange rates whereas non-monetary assets aretranslated at the rate on the date of the transaction. The gain and loss thereon and also on the exchange differences on settlementof the foreign currency transactions during the year are recognised as income or expense and are adjusted to the profit and lossaccount.
Employee Benefits
Employee benefits are accrued in the year in which the employees have rendered services.
Contribution to defined contribution schemes such as Provident Fund, Superannuation Fund etc. are recognized as and whenincurred.
Long-term employee benefits under defined benefit scheme such as gratuity, leave etc. are determined at the end of the year atpresent value of the amount payable using actuarial valuation techniques.
Actuarial gain and losses are recognized in the year when they arise.
Research and development expenditure
Research and development expenditure of revenue nature are charged to the profit & loss account, while capital expendituresare added to fixed assets in the year in which they are incurred.
Contingencies
Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingentand disclosed by way of Notes to the Accounts.
Borrowing costs
Borrowing costs incurred in relation to the acquisition, construction of assets are capitalised as part of the costs of such assetsupto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in whichthese are incurred.
Taxes on Income
Provision for Current Income Tax is made on the taxable income using the applicable tax rates and tax laws. Deferred tax arisingon account of timing differences and which are capable of reversal in one or more subsequent periods, is recognised using thetax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent thatthere is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can berealized. In situation where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets arerecognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxableprofits.
Warranties
Warranty costs are accrued in the year of sale, based on past experience.
Miscellaneous Expenditure
Expenses incurred under voluntary retirement scheme are amortized over a period of five years unless required to be amortizedover a shorter period by the relevant accounting standard.
NOTES FORMING PART OF ACCOUNTS (CONTD.)
6. Provisions of Accounting Standard 29 on ‘Provision, Contingent Liabilities and Contingent Assets:- Disclosures in this respect as required in terms of the said Accounting Standard are as follows:
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B. NOTES ON ACCOUNTS
1. Contingent liabilities not provided for
2. Estimated amount of contracts remaining to be executed on Capital account (net of advances) Rs. 5025.03 Lacs (Rs. 233.56 Lacs)
3. a) Pursuant to an agreement dated 20th December 2006 with Blessing Commercial Private Limited (BCPL), a GroupCompany, the Company has agreed to purchase 54 Lacs of equity shares of Monotona Tyres Limited (MTL) held byBCPL and Rs. 7500 Lacs has been paid towards the same. 53,99,400 shares are transferred in the name of Falcon TyresLimited as on 21st May 2010.
b) Finance charges aggregating to Rs. 1357.03 Lacs on term loan taken for acquiring the shares, have been shown asInvestment along with above Rs.7500 Lacs.
4. a) Major expansion projects undertaken by the company inter-alia includes installation of various tyres curing presses. b) Capital work in progress includes capital advances of Rs.2919.64 Lacs (Rs. 30.39 Lacs).
Sl. No. Particulars Amount as on Amount as on30.09.2010 30.09 .2009
1 Claims not acknowledged as debt 39.53 38.12
2 Input Tax Credit on Sales Tax -- 132.99
3 Corporate Guarantee 4800.00 4800.00
(Rs. In Lacs)
(Rs. In Lacs) 5. Micro, Small and Medium Enterprise
For the Period ended 30.09.2010
Principal Interest
Amount due to vendors 18.01 Nil
Principal amount and interest paid beyond the appointment date Nil Nil
Interest accrued and remaining unpaid beyond the appointment date
(other than interest specified u/s 18 of the Act) Nil Nil
Interest accrued and remaining unpaid as at the end of the year
(As per the Act) Nil 0.22
Particulars
Nature of Item Warranty
2009-10 (12 months) 2008-09 (18 months)
Opening Provision 97.00 92.00
Provided during the Year 902.95 348.75
Amount Utilized 605.95 343.75
Closing Provision 394.00 97.00
( Rs. in Lacs)
The above Warranty Cost represents the expected cost of free replacement as estimated in terms of the stipulation for sales/ industry practice, on the basis of the past experience in respect of the goods sold during the last two years. Liabilityagainst such provision is expected to occur in the next financial year.
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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7. Salary, Wages and bonus include retainer-ship fees amounting to Rs.69.60 Lacs (Rs. 33.43 Lacs).8. The disclosures required under Accounting Standard 15 " Employee Benefits" notified in the Companies (Accounting
Standards) Rules 2006, are given below:Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognised for the year are as under:
Defined Benefit Scheme
The employee's gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan.The Present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Methodwhich recognises each period of services as giving rise to additional unit of employee benefit entitlement and measures each unit seperately to build up the final obligation.
(Rs. in Lacs)
As at 30.09.2010 As at 30.09.2009
i Employer's Contribution to Provident Fund 206.31 238.78
ii. Employer's Contribution to Superannuation Fund 61.87 58.40
(Rs. in Lacs)
Gratuity (Funded)
As at 30.09.2010 As at 30.09.2009
i Change in the present value of the defined benefit obligation representing reconcil iation of opening and closing balances thereof are as follows:
Liability at the beginning of the year 660.32 529.87Interest Cost 71.91 44.24Current Cost 52.07 31.08Actuarial ( gain) / loss on obligations 271.76 129.76Past Service Cost 10.73 -Benefits paid (75.70) (74.63)Liability at the end of the year 991.09 660.32
ii. Change in the Fair Value of Plan Asset representing reconcil iation of opening and closing balances thereof are as follows:
Fair value of Plan Assets at the beginning of the year 431.65 386.20
Expected Return on Plan Assets 45.13 29.87
Contributions by the Company 35.69 85.64
Benefits paid (75.70) (74.63)
Actuarial gain/(loss) on the Plan Assets 7.30 4.57
Fair Value of Plan Assets at the end of the year 444.07 431.65
Total actuarial gain/(loss) to be Recognised 264.59 125.19
i i i . Actual return on Plan Assets
Expected return on Plan Assets 45.13 29.87
Actual gain/(loss) on Plan Assets 7.30 4.57
Actual Return on Plan Assets 52.43 34.44
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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(Rs. in Lacs)
Gratuity (Funded)
As at 30.09.2010 As at 30.09.2009
iv. Amount Recognised in Balance Sheet
Liability at the end of the year 991.09 660.32
Fair value of Plan Assets at the end of the year 444.07 431.65
Unrecognised Past service Cost 3.93 -
Amount Recognised in the Balance Sheet 543.09 228.67
v. Expenses Recognised in the Income Statement
Current Service Cost 52.07 31.08
Interest Cost 71.91 44.24
Expected Return on Plan Assets (45.13) (29.87)
Net Actuarial (gain)/loss to be Recognised 264.59 125.19
Past Service Cost 6.67 -
Expenses Recognised in Profits & Loss Account 350.11 170.64
vi. Balance Sheet Reconcil iation
Opening Net Liability 228.67 143.67
Expenses as above 350.11 170.64
Employers Contribution (35.69) (85.64)
Amount Recognised in Balance Sheet 543.09 228.67
vi i . Prinicipal Actuarial assumptions at the Balance Sheet
Discount Rate 7.95% 7.05%
Rate of Return on Plan Assets 7.50% 7.50%
vii i . Experience Adjustment
Experience adjustments on Plan liabilities 72.55 39.61
Experience adjustments on Plan Assets (7.30) (4.57)
65.25 35.04
Compensated Absences
The obligations for compensated absences is recognised in the same manner as gratuity. The actuarial liability of CompensatedAbsences (unfunded) of accumulated privileged, sick and casual leaves of the employees of the Company as at 30th September2010 is given below:
(Rs. in Lacs)
Particulars Amount as at Amount as at30.09.2010 30.09.2009
Privileged Leave 187.42 133.35
Sick Leave 19.93 18.72
Casual Leave 21.59 18.39
Total 228.94 170.46
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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NOTES FORMING PART OF ACCOUNTS (CONTD.)
12. Auditors’ Remuneration (included in Miscellaneous expenses) –
(Rs. in Lacs)
30.09.2010 30.09.200912 months 18 months
Audit Fees 3.50 5.25
In other Capacity (excluding service tax ) 1.75 2.62
Total 5.25 7.87
11. Remuneration paid to Executive Chairman & Executive Director
(Rs. in Lacs)
30.09.2010 30.09.200912 months 18 months
Salary 318.86 305.08
Perquisites 43.02 42.32
Contribution to PF & other funds 67.30 52.16
Total 429.18 399.56
10. Earning per share has been calculated on the basis of number of equity shares outstanding during the period ended 30thSeptember, 2010 in accordance with the provisions of Accounting Standard-20 "Earning Per Share".
30.09.2010 30.09.2009 (12 months) 18 months
Profit attributable to Equity Shareholders (Rs. in lacs) 5163.46 3001.82
No. of shares @ basic value Rs.5/- each 34085532 34085532
Basic and diluted earning per share (in Rs.) 15.15 8.81
9. The break up of deferred tax Assets and Liabilities are as under:
(Rs. in Lacs)
Provision for Deferred Tax Opening as at Charge / (Credit) Closing as at
01.10.2009 30.09.2010
Deferred Tax Assets
Expenses allowable on Payment basis:
- Retirement benefits 107.36 18.81 126.17
- Unabsorbed Depreciation 361.48 (361.48) --
- Amount Inadmissible under Sec 43B -- -- --
Sub Total 468.84 (342.67) 126.17
Deferred Tax Liabil it ies
Depreciation 1263.00 (409.88) 853.12
Net Deferred Tax Liabil ity 794.16 (67.21) 726.95
13. Related party disclosures as required as per Accounting Standard (AS-18) on "Related Party Disclosures" are as below:
a) All the Companies in the group as discussed below are directly / indirectly controlled by the Ruia Group of Companies underthe Leadership of Sri Pawan Kumar Ruia and its various Subsidiary / Associate Companies which held the controlling stakein the Company during the year ended 30th September 2010.
b) Holding company: Wealth Sea Pte. Ltd., (Singapore) through DIL Rim and Wheel Corporation Limited, Mauritius.
c) Associates / Group Companies
i. With whom the Company has transactionAnoush Traders Pvt. Ltd., Dunlop India Limited, Dunlop Polymers Pvt. Ltd., Falcon Tyres & Rubber Pvt. Ltd., Falcon TyresImpex Pvt. Ltd., Global Finvest Ltd., Jessop & Co. Ltd., Manali Properties & Finance Pvt. Ltd., Ruia Sons Pvt. Ltd., RuiaCorporate Services Pvt. Ltd., Sanjose Polymers Pvt.Ltd., Suryamani Financing Company Ltd., Tulip Machineries Pvt Ltd.,Vidyuth Petrochem Pvt. Ltd., Walker Properties Pvt. Ltd.
ii. Subsidiary : Monotona Tyres Limited
iii. Others
Aparupa Properties Pvt. Ltd.; Alpha Airwayys Pvt. Ltd. ; Acurate Traders Pvt. Ltd. ; American Merchandising Ltd. ;Aakashdeep Properties Pvt. Ltd. ; Ayodhya Properties & Finance Pvt. Ltd. ; Alwaye Properties & Finance Pvt. Ltd. ; AnchitaCommercials Pvt. Ltd. ; Angan Properties Private Limited; Ajit Commercials Pvt. Ltd. ; Anish Traders Pvt. Ltd. ; Aniket TradersPvt. Ltd. ; Anumala Traders Pvt. Ltd. ; Adhishwar Nivesh Pvt. Ltd. ; Brawany Nivesh Pvt. Ltd. ; Blackstone Holdings PrivateLtd. ; Bhartiya Hotels Limited; Borneo Traders Pvt. Ltd. ; Banalata Traders Pvt. Ltd. ; Beadon Traders Pvt. Ltd. ; BandanaCommercials Pvt. Ltd. ; Bipul Commercials Pvt. Ltd. ; Ballard Commercials Pvt Ltd. ; Bharat Vidyut Co. Ltd. ;.. BlessingsCommercials Pvt. Ltd. ; Bengal Institute of Neurosciences Ltd. ; Bloom Billions Sdn Bhd-Malaysia; BTR Sealing System ULLtd. - UK; Chinsurah Chemicals Pvt. Ltd. ; Climber Properties Pvt. Ltd. ; Chemical Corporation of India Ltd. ; Chaman TradeLinks Pvt. Ltd. ; Chorus Trade Links Pvt. Ltd. ; Chambal Marketing Pvt. Ltd. ; Chaity Commercials Pvt. Ltd. ; Camac TradersPvt. Ltd. ; Dunlop Latex Foam Europe Ltd. ; Draftex Automitive , GMBH; Dunlop UK Ltd. - ..Mauritius; Dunlop TyresLimited; Dunlop Rubbers Limited; Dunlop Investments Limited; Dunlop Estates Private Limited; Dunlop InfrastructurePrivate Limited; Dunlop Properties Pvt. Ltd. ; Deblok Traders Pvt. Ltd. ; Dadar Properties & Finance Pvt. Ltd. ; DeogharProperties & Finance Pvt. Ltd. ; Durg Properties & Finance Pvt. Ltd. ; Dipti Commercials Pvt. Ltd. ; Divya Mercantile Ltd. ;Dhan E Commerce Pvt. Ltd. Double Plus Software (P) Ltd.; D K Properties Pvt. Ltd.; Eco Traders Pte Ltd.; Elloit MercantilePvt. Ltd.; Enormous Nivesh Pvt. Ltd. ; Edina Marketing Pvt. Ltd. ; Empire Minerals Pvt. Ltd. ; Eyelid Mercantile Pvt. Ltd. ;Electric Corporation of India Ltd. ; Ebony Commercials Pvt. Ltd. ; eMotions Media Pvt. Ltd. ; Fiber Foam (Bombay) Pvt. Ltd.; Fabulous Nivesh Pvt. Ltd. ; Fragment Nivesh Pvt. Ltd. ; Gain Dot Com Pvt. Ltd. ; Gain E-Commerce Pvt. Ltd. ; Gyan WebsitePvt. Ltd. ; Global Fin Pro Ltd. ; Globe Sugar Refinery Ltd. ; Goldman Securities Ltd. ; Goldman Stocks & Share Brokers Pvt.Ltd. ; Hardcore Viniyog Pvt. Ltd. ; Himadri Properties Pvt Ltd. ; Hirakud Industrial Works Ltd. ; Hirakud Rolling Mills Ltd. ;Hiland Traders Pvt. Ltd. ; Hiker Properties Pvt. Ltd. ; Hriday Commercials Pvt. Ltd. ; Herald Investments Pvt. Ltd. ; HindustanTexknit Pvt. Ltd. ; Hindustan Bauxite Ltd. ; India Tyre & Rubber Co. (India) Ltd. ; Indo Wagon Engineering Ltd. ;Ibcon(Calcutta) Pvt. Ltd. ; India Finance Ltd. ; Jessop Infotech Pvt. Ltd. ; Jessop Shipyard Limited; Jessop Estates Pvt. Ltd.; Jessop Properties Pvt. Ltd. ; Jessop Infrastructure Pvt. Ltd. ; Jessop Wagons & Coaches Ltd. ; Jai Gokul Towers Pvt. Ltd.; Jai Brijmohan Niketan Pvt. Ltd. ; Jai Badrinath Niketan Pvt. Ltd. ; Jai Raghuvir Enclave Pvt. Ltd. ; Jai Vaibhav Niketan Pvt.Ltd. ; Jai Tridev Vihar Pvt. Ltd. ; Jai Ganga Nirman Pvt. Ltd. ; Jai Harihor Tower Pvt. Ltd. ; Janaki Marketing Pvt. Ltd. ; KailashEnterprises(ND) Pvt. Ltd. ; Kulu Properties & Finance Pvt. Ltd. ; Kothi Lefin Pvt. Ltd. ; Kamlapur Alcohol Limited; KamlapurSugar & Industries Ltd; Kanti Commercials Pvt. Ltd. ; Lona Commercials Pvt. Ltd. ; ..Liluah Ceramics Pvt. Ltd. ; ManavendraCommercials Pvt. Ltd. ; Mayank Services Ltd. ; Mandhatri Traders Pvt. Ltd. ; Metropole Hills Hotels Pvt. Ltd. ; MudrikaCommercials Pvt. Ltd. ; Mugdha Properties Pvt. Ltd. ; Malini Properties Pvt. Ltd. ; Manjari Properties Pvt. Ltd. ; Manidipa
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NOTES FORMING PART OF ACCOUNTS (CONTD.)
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Properties Pvt. Ltd. ; Metro Developers Ltd. ; Mahant Merchandise Pvt. Ltd. ; Moulishree Electricals & Electronics Ltd. ;Monarch Exim Pvt. Ltd. ; Mridula Marketing Pvt. Ltd. ; Nivedita Properties Pvt. Ltd. ; Nandini Properties Pvt. Ltd. ; NandanSuppliers & Contractors Pvt. Ltd. ; Onix Business Services Ltd. ; Ocean Cement Limited; Ocean Constructions Pte Ltd. ;Our Films Productions Pvt. Ltd. ; OM Cotex Ltd. (Formerly Ruia Cotex Ltd.) ; Olivia Tours & Travels Pvt. Ltd.; Pacific WebsitePvt. Ltd. ; Pacific Apparels Ltd. ; Pawan Herbals Pvt. Ltd. ; Parnika Marketing Private Ltd. ; P.K. Constructions Pvt. Ltd. ;Payneganga Sugars & Chemicals Ltd. ; Power Corporation of India Ltd. ; Pallavi Manufacturers Pvt. Ltd. ; Rose E-CommercePvt. Ltd. ; Radient Investment Ltd.-Mauritius; Raghav Industries Ltd. ; Rapid Investment Ltd.-Mauritius; Ruia Agro ProductsPvt. Ltd. ; Ruia Hospital & Educational Research Institution; Ryham Pte Ltd. - Singapore; Rose Investment Ltd.- Mauritius;Ruia Hotels Pvt. Ltd. ; Ruia Electronics Pvt. Ltd. ; Renuka Resorts Pvt. Ltd. ; Resource Cement Ltd. ; Ruia Iron & Steel Co.Pvt. Ltd. ; Ruia Overseas Private Limited; Ruia Technologies Ltd. ; Ruia Marketing Ltd. ; Satarupa Properties Pvt. Ltd. ;Shalini Properties & Developers Pvt. Ltd. ; Sheetal Exports Ltd. ; SPR Resorts Ltd. ; Securities Brokers of India Ltd. ; SagarikaProperties Pvt. Ltd. ; Shakambari Communications Pvt. Ltd. ; Shankar Traders & Dealers Ltd. ; Sarvan Commercials Pvt.Ltd. ; Shresth (India) Pvt. Ltd. ; Skypak Properties & Finance Pvt. Ltd. ; Subhlaxmi Compusis Pvt. Ltd. ; Sayaji MarketingPvt. Ltd. ; Stephen Financial Services Pvt. Ltd. ; SPR Sugar & Chemicals Ltd. ; Sterling Share Brokers (P) Ltd. ; ShalimarTowers Pvt. Ltd. ; Sugandha Industries Pvt. Ltd. ; Schlegal Automative Europe Ltd. - U.K. ; Schlegal Automative India Pvt.Ltd. ; Spices Valley Estates Ltd. ; SPR Textiles Pvt. Ltd., Subhra Marketing Ltd., Sukaram Marketing Ltd., Surag CommercialPvt. Ltd. Tribhuban Marketing (p) Ltd., Udbav Commercials Pvt. Ltd., U. P. Hydro Projects Ltd., U. P. Bio Chem Ltd., vanturaProject Pvt Ltd., Vilas Marketing Private Limited., Wealth sea Ltd., Mauritius Wealth Overseas Ptc Ltd., Singapore WealthOcen Ptc Ltd., Singapore Wizer Advertising Pvt. Ltd., Yamuna Website Pvt. Ltd., Zipco Industrial Finance Pvt. Ltd., ZealInfotech Pvt. Ltd.,
d) Key Management Personnel:a) Mr. Pawan Kumar Ruia (Executive Chairman)b) Mr. Sunil Bhansali (Executive Director)
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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RELATED PARTY TRANSACTION: (Rs.in Lacs) Nature of Transaction Subsidiary Associates Key Management Total
Personnel
30.09.2010 30.09.2009 30.09.2010 30.09.2009 30.09.2010 30.09.2009 30.09.2010 30.09.2009Income Sale of Finished Goods
Falcon Tyres Impex Pvt. Ltd. - - 1791.54 542.55 - - 1,791.54 542.55 Sale of Materials
Dunlop India Ltd. - - 6.15 - - - 6.15 - Dunlop Polymers Pvt. Ltd - - 4447.49 4,447.49 -
Debit note on RM PurchasesDunlop India Ltd. - - 28.96 84.43 - - 28.96 84.43
OthersDunlop India Ltd. - - 0.31 - - - 0.31 - Dunlop Polymers Pvt. Ltd. - - 33.31 - - - 33.31 - Monotona Tyres Limited 120.88 - - - - - 120.88 -
ExpensesRoyalty - -
Ruia Sons Pvt. Ltd. - - 1193.89 775.01 - - 1,193.89 775.01 Purchase of Traded Goods
Dunlop India Ltd. - - 15.30 - - - 15.30 - Dunlop Polymers Pvt. Ltd. - - 4227.04 - - - 4,227.04 - Monotona Tyre Limited 7,017.91 - - 5,834.71 - - 7,017.91 5,834.71
RemunerationPawan Kumar Ruia - - - - 437.80 339.60 437.80 339.60 Sunil Bhansali - - - - 32.00 30.00 32.00 30.00 A. Sadasivam - - - - - 12.00 - 12.00 Umesh Bhargava - - - - - 17.96 - 17.96
Mixing ChargesDunlop India Ltd. - - 577.42 - - - 577.42 -
OthersAnoush Traders Pvt. Ltd. - - - 4.00 - - - 4.00 Falcon Tyres Impex Pvt. Ltd. - - 69.44 8.13 - - 69.44 8.13 Jessop & Co. Ltd. - - - 1.54 - - - 1.54 Ruia Corporate Services Pvt. Ltd. - - 21.85 - - - 21.85 - Ruia Sons Pvt. Ltd. - - 76.41 28.57 - - 76.41 28.57
Misc Management Charges - - Ruia Sons Pvt. Ltd. - - 431.96 518.58 - - 431.96 518.58
AssetsAdvance Paid
Dunlop India Ltd. - - 2289.94 50.00 - - 2,289.94 50.00 Falcon Tyres Impex Pvt. Ltd. - - 3.15 2.37 - - 3.15 2.37 Falcon Tyres Rubbers Pvt. Ltd. - - 0.38 0.36 - - 0.38 0.36 Jessop & Co. Ltd. - - 16.00 - - - 16.00 - Tulip Machineries Pvt. Ltd. - - 1,067.52 - - - 1,067.52 - Vidyuth Petrochem Pvt. Ltd. - - 62.50 - - - 62.50 - Walker Properties Pvt. Ltd. - - - 80.00 - - - 80.00
Advance given for purchase of sharesBlessing Comercials Pvt. Ltd. - - - 652.52 - - - 652.52
Assignments TransferManali Properties & Finance Pvt. Ltd. - - - 1,373.51 - - - 1,373.51 Sanjose Polymers Pvt. Ltd. - - - 140.00 - - - 140.00 Suryamani Financing Co. Ltd. - - - 375.00 - - - 375.00
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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RELATED PARTY TRANSACTION (CONTD.): (Rs.in Lacs) Nature of Transaction Enterprises where Associates Key Management Total
control exits or which Personnelexercise control
30.09.2010 30.09.2009 30.09.2010 30.09.2009 30.09.2010 30.09.2009 30.09.2010 30.09.2009
* Sales, Purchase & Other expenses are inclusive of Taxes
The above related party information have been disclosed to the extent such parties have been identified by the managementon the basis of information available. This has been relied upon by the auditors.
NOTES FORMING PART OF ACCOUNTS (CONTD.)
InvestmentsInvested in shares
Global Finvest Limited - - - 4.00 - - - 4.00 Monotona Tyres Limited 8,857.03 - - - - - 8,857.03 -
Liabil it iesUnsecured Loan Taken
Manali Properties & Finance Pvt. Ltd. - - - 1,000.00 - - - 1,000.00
Transfer of C& F DepositsDunlop India Ltd. - - 48.39 112.90 - - 48.39 112.90
Assignments TransferWalker Properties Pvt. Ltd. - - - 80.00 - - - 80.00 Manali Properties & Finance Pvt. Ltd. - - - 3,428.31 - - - 3,428.31 Sanjose Polymers Pvt. Ltd. - - - 140.00 - - - 140.00
Balance as on 30.09.2010Loans and Advances
Dunlop India Ltd. - - 2289.94 - - - 2,289.94 - Jessop & Co. Ltd. - - 16.00 - - - 16.00 - Falcon Tyres Impex Pvt. Ltd. - - 4.78 2.37 - - 4.78 2.37 Ruia Sons Pvt. Ltd. - - 144.42 - - - 144.42 - Ruia Corporate Services Pvt. Ltd. - - 2.90 0.36 - - 2.90 0.36 Tulip Machineires Pvt. Ltd. - - 1067.52 - - - 1,067.52 - Vidyuth Petrochem Pvt. Ltd. - - 62.50 - - - 62.50 -
Creditor BalanceDunlop Polymers Pvt. Ltd. - - 242.34 - - - 242.34 - Falcon Tyres Impex Pvt. Ltd. - - 1.34 2.33 - - 1.34 2.33 Falcon Tyres Rubbers Pvt. Ltd. - - 0.63 190.83 - - 0.63 190.83 Monotona Tyres Limited 842.36 - - 288.52 - - 842.36 288.52
Current l iabil it iesDunlop India Ltd. - - - 4.45 - - - 4.45 Manali Properties & Finance Pvt. Ltd. - - 5,696.80 5,654.80 - - 5,696.80 5,654.80 Suryamani Financing Co. Ltd. - - 75.00 - - - 75.00 -
ReceivableFalcon Tyres Impex Pvt. Ltd. - - 149.23 76.11 - - 149.23 76.11
14. Particulars in terms of disclosure required as per Clause 32 of the Listing Agreement:
Amount of loans and advances in nature of loan to subsidiaries and associates as on 30th September 2010
(Rs.in Lacs)
Party Name Maximum Outstanding Closing Outstanding
Dunlop India Limited 2289.94 2289.94
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15. The Company's operations predominantly of only one product segment, Tyres and Tubes. The export sales of the Company
are insignificant as compared to total sales during the year so as to constitute a geographical segment. Therefore, seperate
segment information as required in terms of Accounting Standard (AS 17) on Segment Reporting has not been considered.
Further as income from Co-Gen is less than 10% of the total segment the same has not been considered to be a separate
segment.
16. Quantitative & Other Information
TYRES TUBES FLAPS TOTAL
Qty Value Qty Value Qty Value Value
Nos Rs. in lacs Nos Rs. in lacs Nos Rs. in lacs Rs. in lacs
Installed Capacity ( Per annum ) * 10800000 5400000
(10200000) (5400000)
Production ** 10211634 7255101
(11341202) (12817718)
Purchases-Factored Goods 565632 4,395.25 6186489 7997.65 1237 1.87 12,394.77
(1174611) (11,315.59) (1469946) (1870.26) (6216) (6.65) (13,192.50)
Opening Stock 173065 617.90 577711 471.26 2211 2.24 1,091.40
(352020) (1410.61) (504632) (467.70) (1238) (0.49) (1,878.80)
Sales 10523463 66418.14 12952018 17613.46 866 1.21 84,032.81
(12694768) (68306.17) (14214585) (16834.31) (5243) (5.82) (85,146.30)
Closing Stock 426868 2318.08 1067283 1219.63 2582 3.15 3,540.86
(173065) (617.90) (577711) (471.26) (2211) (2.24) (1,091.40)
NOTES FORMING PART OF ACCOUNTS (CONTD.)
Tonnage Information (Metric Ton)
Tyres Tubes
Installed Capacity ( Per annum) 36183 2566
(33528) (2495)
Production 34212 3448
(37980) (5987)
* The installed capacity is as certified by the management, and being a technical matter reliance has been placed by theauditors.
** Production includes, Production on Job Work basis.
Previous year's figures are not comparable as current year figures are for 12 months and previous year figures are for 18
months.
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17. Raw materials, stores and spares consumed:
Particulars 30.09.2010 30.09.2009
(12 months) (18 months)
QTY. VALUE QTY. VALUE
In M.T. Rs. in lacs In M.T. Rs. in lacs
Rubber and Rubber products 21198 24743.79 23293 21982.65
Fabric 2330 5606.57 2699 5702.32
Carbon Black 10388 5812.58 11433 6150.87
Chemicals 4826 3709.21 5677 4238.68
Others 2109 2159.76 2337 2494.69
Total - Raw Materials 40851 42031.91 45439 40569.21
Stores and Spares 185.77 218.01
Total 42217.68 40787.22
18. Expenditure in foreign currency
- Travelling - Rs. 26.75 Lacs (Rs. 4.38 Lacs)
- Royalty - Rs. 141.44 Lacs ( Rs. 57.92 Lacs)
- Others - Rs. Nil ( Rs. 0.71 Lacs)
Note: Consumption of Raw Materials includes sale of Raw Materials
NOTES FORMING PART OF ACCOUNTS (CONTD.)
21. CIF Value of imports during the period
Particulars 30.09.2010 30.09.2009
(12 months) (18 months)
QTY. VALUE QTY. VALUE
In M.T. Rs. in Lacs In M.T. Rs. in Lacs
Raw Materials 6242.50 7215.19 6121.40 6597.74
Capital Goods -- 2.48 -- 15.00
Stores & Spares -- -- -- 0.34
Total 7217.67 6613.08
19. Remittances in foreign currency for Dividends
The Company has remitted the Dividend in foreign currency for the year ended 30.09.2010 is as follows:
(Rs.in Lacs)
Particulars No.of Non-Resident No. of Equity Gross amount
Shareholders Shares held of Dividend
Final Dividend for the period ended 30.09.2009 1 23513100 214.93
20. Research and Development Expenditure (charged to Profit and Loss Account) - Rs.17.58 Lacs (Rs. 15.02 Lacs)
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22. Value of Raw Materials, Spares and Components consumed
Particulars 30.09.2010 30.09.2009
(12 months) (18 months)
VALUE % of Total VALUE % of Total
Rs. in Lacs consumption Rs. in Lacs consumption
Raw materials
a) Imported 6917.56 16.46% 6562.45 16.20%
b) Indigenous 35114.35 83.54% 34006.76 83.80%
Total 42031.91 100.00% 40569.21 100.00%
Stores & Spares
a) Imported - - 0.34 0.20%
b) Indigenous 185.77 100.00% 217.67 99.80%
Total 185.77 100.00% 218.01 100.00%
23. Earnings in Foreign Exchange on account of export of goods calculated on FOB basis Rs. 1315.66 Lacs (Rs.3828.35 Lacs)
24. a) The Previous year's figures have been re-grouped / re-arranged wherever considered necessary.
b) Figures in brackets relates to the previous year.
c) Previous year's figures are not comparable as current year figures are for 12 months and previous year figures
are for 18 months.
NOTES FORMING PART OF ACCOUNTS (CONTD.)
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BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details
I I. Capital Raised during the year (Amount in Rs.Thousands)
II I . Position of Mobil isation and Deployment of Funds (Amount in Rs.Thousands).
Registration No.
0 0 2 4 5 5
State code
0 8
Balance Sheet DateDay Month Year
3 0 0 9 2 0 1 0
Public Issue
N I L
Bonus Issue
N I L
Rights Issue (Pref. Allotment)
N I L
Total Liabilities
4 1 7 3 6 2 4
Secured Loans
1 5 0 2 2 6 0
Total Assets
4 1 7 3 6 2 4
Deferred Tax
7 2 6 9 5
Unsecured Loans
8 1 7 1 8 0
Paid-up Capital
Sources of Funds
Application of funds
1 7 0 4 2 7
Reserves & Surplus
1 6 1 1 0 6 2
Misc. Expenditure
N I L
Net fixed assets
2 2 3 6 2 6 1
Net current assets
1 0 5 1 0 6 3
Accumulated losses
N I L
Investments
8 8 6 3
Private Placement
N I L
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IV. Performance of Company (Amount in Rs.Thousands)
V. Generic names of three principal products / service of company (as per monetery terms)
Turnover
8 4 4 3 4 7 7
Item Code No. (ITC Code)
Product Description
4 0 1 1
N E W P N E U M A T I C
T Y R E S O F
R U B B E R
Item Code No. (ITC Code)
Product Description
4 0 1 3
I N N E R T U B E S
O F R U B B E R
Item Code No. (ITC Code)
Product Description
4 0 1 2
T Y R E F L A P S
Total expenditure
7 2 7 9 8 2 8
+ Profit / - Loss before tax
+ 6 5 7 8 4 6
+ Profit / - Loss after tax
+ 5 1 6 3 4 6
Earning per share in Rs.
1 5 . 1 5
Dividend @ %
5 0
As per our report of even date attached
For and on behalf of For and on behalf of the Board
K.N.Gutgutia & Co.
Chartered Accountants
Subhasish Pore M. C. Bhansali Sunil Bhansali S. Ravi
Partner Company Secretary Executive Director Director
Membership No.: 055862
Kolkata, 12th November, 2010
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CASH FLOW STATEMENT FOR THE PERIOD ENDED 30TH SEPTEMBER, 2010(Rs. in Lacs)
Period ended Year endedParticulars 30.09.2010 30.09.2009
(12 Months) (18 Months)(A) CASH FLOW FROM OPERATING ACTIVITIES
Net profit before tax 6578.46 3895.37 Adjustment for:Depreciation 777.66 844.45 Interest Income (39.65) ( 55.87)Interest Expense 1691.76 2060.44 Dividend Received (35.36) (1.06)Miscellaneous Expenditure written off 0.35 17.19 (Profit) /Loss from Sale of Fixed Assets 0.01 0.11Operating profit before working capital change 8973.23 6760.63Adjustment for Change in Working Capital:(Increase)/ Decrease in Sundry debtors (1520.64) (6565.33) (Increase)/ Decrease in Inventories (3772.42) 1093.62(Increase)/ Decrease in Loans & Advances (1714.35) 303.91Increase/ (Decrease) in Current Liabilities 1913.12 1264.81 Increase/ (Decrease) in Provisions 297.00 5.00 Cash Generated from Operations 4175.94 2862.64 Direct taxes paid (992.15) (340.78)NET CASH FROM OPERATING ACTIVITIES 3183.79 2521.86
(B) CASH FLOW FROM INVESTING ACTIVITIESAdditions to Fixed assets (Including capital work - in - progress) (2694.60) (1423.90)Sale of Fixed Assets (0.01) (0.21) Purchase of investment (8857.03) (4.00)Advance given for purchase of Investment 8857.03 (652.52)Capital Subsidy Received 100.00 Interest Received 45.00 101.41 Dividend Received 35.36 1.06 NET CASH USED IN INVESTING ACTIVITIES (2514.25) ( 1978.16)
(C) CASH FLOW FROM FINANCING ACTIVITIESUn-secured loans received 1,217.00 3,979.80Borrowings from Banks 1,277.82 (976.15) Interest / Finance Charges paid (1745.60) (1993.05)Debenture Paid 0.00 ( 0.01)Dividend paid (255.56) (342.36)Corporate Dividend Tax Paid (43.45) (57.93)
NET CASH USED IN FINANCIAL ACTIVITIES 450.21 610.30 NET CASH FLOWS DURING THE YEAR (A+B+C) 1119.75 1154.00CASH AND CASH EQUIVALENTS (OPENING BALANCE) 2098.80 944.80 CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 3218.55 2098.80
Previous year figures have been re-grouped / re-arranged, wherever considered necessary.
As per our report of even date attached
For and on behalf of For and on behalf of the Board
K.N.Gutgutia & Co.
Chartered Accountants
Subhasish Pore M. C. Bhansali Sunil Bhansali S. Ravi
Partner Company Secretary Executive Director Director
Membership No.: 055862
Kolkata, 12th November, 2010
To the members of
MONOTONA TYRES LIMITED
1. Your Directors submit the Fifteenth Annual Report along with Audited Statements of Accounts for the year ended 31stMarch 2010.
2. FINANCIAL RESULTS
3. PERFORMANCE
Your Company’s Turnover for the year under review hasgrown over previous year, to Rs. 13764 Lacs, frommanufacturing activities. On the flip side, the prices ofthe major raw materials, particularly natural rubber andpetroleum based inputs have gone up substantially,during the year Inspite of this, due to your Company’ssustained cost reduction measures, your Company wasable to muster a higher profit before tax (PBT) at Rs.158.36 Lacs as against Rs. 142.99 Lacs in the perviousyear.
4. DIVIDEND
Your Directors recommend a dividend of Rs. 0.60 perequity share for the financial year 2009-10.
5. GLOBAL PRESENCE
Your Company has been exporting tyres over 11 countriesi.e. Dubai (U.A.E.), Myanmar, Sri Lanka, Syria, Egypt,Sudan Pakistan, Nepal, Ecuador, Kenya and Tema Ghana,across the Globe. Export Turnover during the year underreview has grown to Rs. 29.46 crores. It is a matter ofgreat pride the “MTL Tyre” is recognized as a good brand
in a large number of highly sophisticated global markets.
During the year under review, your Company hassuccessfully launched several new products and newsizes, in various segments of the export market, whichhas started yielding results to your Company. YourCompany continues to explore various new businesssegment and geographical territories, for identifyingprofitable growth opportunities.
Your Company is evaluating various options for servicingthese export customers in a cost effective manner. YourCompany’s share in Export market is expected to grow ata much faster rate, in the coming years and yourCompany is gearing up its efforts to meet the increasingdemand from this segment.
6. ECONOMY
Indian economy continues in its march ahead byregistering 9% growth in the past 3 years and shown itsresilience in the wake of global slow down.Manufacturing sector has contributed significantly to thisimpressive growth. Large investments are underway inoil major segments of the manufacturing sector. This will
DIRECTORS’ REPORT
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(Rs. in Lacs)
Particulars 2009-10 2008-09
Sales and Other Income 14002.32 20983.58Gross Profit before Depreciation & Tax 713.68 690.06Depreciation 440.05 436.49Profit Before Tax 273.63 253.57Provision for Tax Current Tax 145.85 131.75Deferred Tax -30.59 -24.29Fringe Benefit Tax NIL 3.12Net Profit After Tax 158.36 142.99Profit Brought Forward From Previous Year 67.00 2.12Profit Available For Appropriation 225.36 145.11Dividend 43.20 41.13Corporate Tax on Dividend 7.34 6.99Transfer to General Reserve 30.00 30.00Balance Carried To Balance Sheet 144.82 67.00
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propel further growth in year ahead
Significantly higher spend on infrastructure, education,health, agriculture & rural development will ensureinclusive growth and provide boost to the Indianeconomy. Easier availability of finances at competitiveinterest rates has led to increased demand formanufactured products. This trend has been reversed inthe recent past, which has hampered growth. DespiteImproved liquidity, interest rates have been superficiallykept high, leading to higher cost of production. Thedeveloped nations have taken note of this trend andhave taken several measures to reduce interest rates. Ourresponses have been slow and interest rate continue tobe at significantly higher levels impactingcompetitiveness of the manufacturing sector.
7. OUTLOOK
The recent budget has provided further impetus to thegrowth of the automotive sector apart from layingemphasis on infrastructure development. This augurswell for the future of the tyre industry. Your company haspositioned itself well to cater to the growing demand fortyres by undertaking several modifications in its existingPlant & Machineries. These modifications will lead togenerate more productivity and reduction in themanufacturing cost to certain extent.
8. MARKETING
Today, India is in the midst of rapid economic growth.The government’s continued emphasis on buildinginfrastructure has given a tremendous fillip to thedevelopment of road infrastructure and transportobviously, the no. of vehicles on road have shown amarked increase. As a direct fallout of this scenario, thetyre industry has had the good fortune of receivingincreasing orders from OEM’S and replacement marketalike.
Indian tyre manufacturing companies are re-engineeringtheir business and looking at strategic tie-ups worldwide.The future is expected to see many strategic alliancesamong the domestic and global players. Meanwhile,alliances have also included the OEM segment withvehicle manufacturers looking for fresh tie-ups orstrengthening of existing partnerships. The world tyremarket is essentially a replacement market in terms ofvolume and value. Even though vehicle manufacturersaccount for only one – quarter of road tyres sold, thissegment of the market is of primary significance becauseit drives technical development and greatly influences themarket.
India is being increasingly looked at as a competitiveoutsourcing destination for automobile componentsgiven the progress and growth of the Indian automobileindustry. Tyre companies in India will therefore continue
to expand their reach to foreign shores to build up scaleeither through marketing or manufacturing tie up aidedin no small measure by increasing access and acceptanceof products through the automobile export route.
9. NEW PRODUCT DEVELOPMENT
Your Company continues to lay utmost thrust on newProduct Development, in order to cater to the evolvingmarket requirements. Your Company has committedconsiderable investment in this area, to power thegrowth of business.
10. OPPORTUNITIES
The national thrust in road infrastructure andconstruction of expressway and national highwaypresents a range to opportunists for the tyre industry andMonotona Tyres Ltd., aims to make the most of these.Creation of road infrastructure has given, and willincreasingly give, a tremendous fillip to surfacetransportation in the coming years. The tyre industry willcontinue to play an important role in this dynamic andevolving situation. Monotona’s leadership position in thecommercial vehicle segment will enable the company toleverage new and related business opportunities. Wehave already started leveraging these opportunities toour benefit with our new product segments. Growthwithin India also supports the Company’s aim to be aleader in the global industry and partake in overseasmarkets like Europe.
11. DIRECTORS RESPONSIBILITY STATEMENT
Pursuant to the requirement under Section 217(2AA) ofthe Companies (Amendment) Act, 1956, your Directorshereby confirm that:
• In preparation of the annual accounts for the yearended 31st March, 2010, the applicable accountingstandards have been followed along with properexplanation relating to material departures..
• Appropriate accounting principles have been selectedand applied consistently and have made judgmentsand estimates that are reasonable and prudent so asto give a true and fair view of the state of affairs ofthe Company as at 31st March, 2010 and of the Profitfor the period ended 31st March, 2010
• Proper and sufficient care has been taken for themaintenance of adequate accounting records inaccordance with the provisions of the Companies Act,1956 for safeguarding the assets of the Company andfor preventing and detecting fraud and otherirregularities.
• The annual accounts for the year ended 31st March2010 have been prepared on going concern basis.
12.RISKS & CONCERNS
Being the wheels that keep the nation in motion, the tyre
industry and economic development of the country areinterdependent. The growth of the tyre industry is notonly dependent on economic growth and infrastructuraldevelopment, but also on the growth in the automobileindustry, which is cyclical in nature. Also, most of the rawmaterials for the tyre industry are petroleum based andtheir prices are linked to the movement in crude oilprices, which have been continuously increasing. Naturalrubber which is one of the major components of thetotal raw material cost is an agricultural product and issubject to price and production volatility resulting fromspeculating activities and natural causes. The invertedduty structure between tyres and natural rubber putsfurther pressure on the Industry’s revenue andprofitability.
13. AUDIT COMMITTEE
The Board of Directors has constituted Audit Committeeunder Section 292A of the companies act 1956 asamended from time to time for considering all requisitematters and other matters as may be referred by theBoard of Directors. These inter alia, includes theCompany’s financial reporting process disclosure of allthe information to ensure that the financial statementsare correct, sufficient and credible, review of annual andquarterly statements before the submission to theboard and reviewing the adequacy of the internalcontrol system with management and the auditors.
14. FIXED DEPOSIT
During the year the company did not accept any depositnor having any deposit with the company of earlier yearsin terms of section 58-A of the companies Act, 1956.
15. DIRECTORS
During the year under review, Shri N. K. Modi, Shri K. R.Agrawal and Shri V. K. Agrawal were appointed asAdditional Directors of the Company with effect from7th November, 2009, 7th November, 2009 and 1st June,2010 respectively by the Board who will hold Office uptothe date of ensuing Annual General Meeting and areeligible for re-appointment.
Shri D. P. Dani, Shri S. K. Mall and Shri J. R. Banka,resigned as Directors from the Board, all with effect from7th November, 2009. The Board places on record itsdeep appreciation of the services rendered by Shri D. P.Dani, Shri S. K. Mall and Shri J. R. Banka during theirtenure as Directors of the Company.
In accordance with the applicable provisions of theCompanies Act, 1956, Mr. S. Ravi will retire from theBoard by rotation at the ensuing Annual GeneralMeeting and being eligible, offer himself for re-appointment.
16 AUDITORS
M/s. Jain Anchlia & Associates, Chartered Accountants,
Rajasthan, resigned as Statutory Auditors of theCompany w.e.f. 19th July, 2010. The Board placed onrecord its deep appreciation for the valuable servicesrendered by M/s Jain Anchlia & Associates, CharteredAccountants, Rajasthan.
The casual vacancy caused by M/s Jain Anchlia &Associates, Chartered Accountants, Rajasthan isproposed to be filled up by the appointment of M/sRajeev Tandon & Co., Chartered Accountants, Kolkata inaccordance with the approval by the Shareholders in theensuing Annual General Meeting.
The Company has received Letter from M/s RajeevTandon & Co., Chartered Accountants, Kolkata to theeffect that their appointment if made, will be within theprescribed limits under Section 224(1B) of theCompanies Act, 1956. M/s Rajeev Tandon & Co.,Chartered Accountants, Kolkata will hold Office from theconclusion of the ensuring Annual General Meeting untilthe conclusion of the next Annual General Meeting ofthe Company, if appointed by the Members at theensuing Annual General Meeting.
17. CONSERVATION OF ENERGY AND TECHNOLOGIES
Information as per the Companies (Disclosure ofparticulars in the Report of Board of Directors) Rules1988 relating to conservation of energy, technologyabsorption, foreign exchange earnings and out go arefurnished in Annexure.
18 INSURANCE
All insurable interests of the Company includingInventories, Plant and Machineries and Buildings areinsured
19. ACKNOWLEDGEMENT
Your Directors wish to convey their appreciation andsincere thanks to all the employees of the company fortheir hard work, dedication, commitment and collectiveefforts which enabled the company to meet thechallenges and improve its performance and brandequity during the year.
The Directors also wish to place on record their sincerethanks and appreciation for the assistance and co-operation received from the bankers, FinancialInstitutions, Government Authorities, Shareholders,Customers and Business Associates.
On behalf of the Board of Directors
Place: Mumbai D.R.Pahwa S.RaviDate: 19th July 2010 Director Director
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MONOTONA TYRES LTD
ANNEXURE TO THE DIRECTORS' REPORT
Information as per the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules 1988 relatingto conservation of energy, technology absorption, foreign exchange earnings and outgo.
A] CONSERVATION OF ENERGY:
The Company is well aware of the need to conserve energy, both in its own interest and also in the interest of theeconomy. It is constantly taking efforts in improving methods of energy conservation and utilization. The totalenergy consumption and energy consumption per unit of production is given in Form "A".
Form for disclosure of particulars with respect to conservation of energy.
a) POWER AND FUEL CONSUMPTION
1.Electricity purchased
FORM-A
2009-2010 2008-2009
Units 9383717 9222004
Total Amount ( Rs.) 47184923 42356899
Average Rate per Unit (Rs.) 5.03 4.59
2. Own Generation through Diesel Generator Set
b) CONSUMPTION PER UNIT OF PRODUCTION
The electricity consumption per unit of Tyre & Tube cannot be worked out separately
Units 628915 501991
Units per Ltr of Diesel Oil 2.71 2.53
Average Rate/ Unit (Rs.) 13.01 14.34
3. Industrial Oil Consumption
Quantity (Ltrs) 209792 142506
Total Amount ( Rs.) 5915960 4135897
Average Rate (Rs.) 28.20 29.02
4. Steam Coal Consumption
Quantity (Kgs) 11185385 9072075
Total Amount ( Rs.) 48440635 47301630
Average Rate (Rs.) 4.33 5.21
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B) TECHNOLOGY ABORPTION:
FORM-BForm for disclosure of particulars with respect to technology absorption
1. Research & development:
The company does not have a Research & development setup and therefore there is no expenditure under this head
2. Technology Absorption, Adaption & Innovation:
With a view to improve the manufacturing efficiency, concepts like “combining of operations “ and “elimination of nonvalue added operations” were applied across the manufacturing process through “Process Optimisation and valuestream Mapping”. These projects included optimization of mixing cycle, modification of extruded profile, uses of specialbead wire, productivity improvement etc.
C) FOREIGN EARNINGS & OUTGO
2009-2010 2008-2009Rs. Rs.
a) Total Earnings for Foreign Exchange 29,46,12,920 26,55,27,995 b) Total Outgo in Foreign Exchange 3,99,636 5,04,636
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Auditors' ReportTo the members of
MONOTONA TYRES LIMITED(1) We have audited the attached Balance Sheet of MONOTONA TYRES LIMITED as at 31st March 2010 and also the
annexed Profit and Loss Account of the Company for the year ended on that date and reports that annexed thereto bothof which we have signed under reference to this report. These financial statements are the responsibility of thecompany’s 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 auditing and assurance standards generally accepted in India. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes, examining on test basis, evidence supporting theamounts and disclosures in the financial statements. An Audit also includes assessing the accounting principals usedand significant estimates made by management, as well as evaluating the overall financial statement presentation. Webelieve 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 ofSection 227 (4A) of the Companies Act, 1956, and on the basis of such checks as we considered appropriate andaccording to the information and explanations given to us, we set out in the annexure a statement on the mattersspecified in paragraphs 4 & 5 of the said order.
(4) Further to our comments in the Annexure referred to in paragraph (3) above we report that:
1. We have obtained all the information and explanations which, to the best of our knowledge and belief, werenecessary for the purpose of our audit.
2. In our opinion, proper books of account as required by law, have been kept by the Company so far as appears fromour examination of books. However, the liability in respect of retirement benefits are not actuarially determined asper AS 15(Revised).
3. The Balance Sheet and Profit and Loss Account, dealt with by this report, are in agreement with the books ofaccount.
4. On the basis of written representation received from the Directors and taken on records by the Board of Directors,we report that none of the Directors is disqualified as at 31st March 2010 from being appointed as a director interms of clause (g) of Sub-section (I) of Section 274 of the Companies Act, 1956.
5. In our opinion, the Profit & Loss Account and the Balance Sheet comply with the Accounting Standards referred toin sub-section (3c) of Section 211 of the Companies Act, 1956 except AS 15 (Revised) in respect of employeesbenefits.
6. Attention is invited to:
1. Note No. B-4, regarding insurance claim.
2. Non provision of Doubtful Debts and loans and advances as referred in Note No. B-11 of Notes on Accounts.
3. Note No.B-13, in respect of advances accounted as recoverable and its consequential adjustment if any, arisingthere from.
4. Note No.B-14 regarding unclaimed dividend.
Subject to above,
In our opinion and to the best of our information and according to the explanations given to us, the saidaccounts read together with the Notes thereon, give the information required by the Companies Act, 1956 in themanner so required and give a true and fair view:
1. In case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010 and;
2. In case of Profit and Loss Account, of the Profit of the Company for the year ended on that date.
3. In the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
For Jain Anchlia & AssociatesChartered Accountants
Place: Mumbai
Date: 19th July 2010Paras Kumar Jain
ProprietorM.N0-078996
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Annexure To Auditors’ ReportAnnexure referred to in Paragraph 3 of the Auditors’ Report of Even date to the Member of Monotona TyresLimitedi) a) The Fixed Assets register showing full particulars including quantitative details, location & identification is still under
compilation. We are informed that the company will follow the procedure, to carry out the physical verification inphased manner and the discrepancy, if any, will be accordingly dealt with.
b) During the year, the company has not disposed off a substantial part of its fixed assets so as to affect it as a goingconcern.
ii) a) The inventory has been physically verified by the management during the year. In our opinion the frequency ofverification is reasonable.
b) The procedures for physical verification of Inventories followed by the management are reasonable and adequate inrelation to the size of the company and the nature of its business.
c) In our opinion, the company is maintaining records of inventory. However, the system of maintaining the recordsneeds to be strengthened. The discrepancies noticed on verification between the physical stocks and the books recordswere not material.
iii) The Company has neither granted nor taken any loans during the year, secured or unsecured, from companies, firms orother parties listed in the register maintained under Section 301 of the Act and accordingly, paragraphs 4 (iii)(b),(c) and(d) of the Order are not applicable.
iv) In our opinion internal control procedures need to be strengthened and improved to make a commensurate with the sizeof the Company particularly in respect of purchase and sale of goods, inventory and fixed assets.
a) According to the information and explanations given to us, we are of the opinion that the transactions that needto be entered into the register maintained under section 301 have been so entered.
b) In our opinion and according to the information and explanations given to us, the transaction made in pursuant tosuch contract or agreement entered in the registered maintained under section 301 of the Companies Act 1956, havebeen at a price which are reasonable having regards to prevailing market price at the relevant time.
v) In our opinion, and according to the information and explanations given to us, the company has not accepted any fixeddeposit which are covered under provision of section 58 A and 58 AA of the Companies Act, 1956 and the Companies(Acceptance of Deposits) Rule 1975.
vi) During the year, the Company does not have any internal audit system. However, we are informed that necessary stepsare being taken to implement the same.
vii) The cost records as prescribed pursuant to the rules made by the Central Government under section 209(1)(d) of theCompanies Act, 1956 are under compilation.
viii) a) According to the information and explanations given to us and the records of the Company examined by us, in ouropinion, the Company is regular in depositing the undisputed statutory dues including provident fund, employees’state insurance, sales-tax, wealth tax, customs duty, excise duty, cess and other statutory dues as applicable with theappropriate authorities except Income Tax and Corporate Tax on Dividend.
b) According to the information and explanations given to us and the records of the company examined by us theCompany has no disputed dues of Income-tax, customs duty, wealth tax, excise duty and cess as at 31st March2010.
ix) The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses in the financialyear ended on that date or in the immediately preceding financial year.
x) According to the records of the Company examined by us and the information and explanations given to us, the companyhas defaulted in repayment of dues to a financial institution.
xi) During the year, the Company has not granted loans and advances on the basis of security by way of pledge of shares,debentures and other securities.
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xii) The provisions of any special stature applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to theCompany.
xiii) In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.
xiv) The Company has not given guarantee for loans taken by the others from bank or financial institutions, the terms andconditions whereof are prejudicial to the interest of the Company.
xv) In our opinion, and according to the information and explanations given to us, on an overall basis, the term loans havebeen applied for the purposes to which they were obtained.
xvi) According to information and explanation given to us and overall examination of the balance sheet of the Company wereport that no funds raised on short term basis have been used for long term investment.
xvii) The company has not made any preferential allotment of shares to parties and companies covered in the registermaintained under Section 301 of the Act during the year.
xviii) The Company has not issued any debenture till date. Therefore creation of securities in respect of debentures does notarise.
xix) The Company has not raised any money by public issues.
xx) During the course of our examination of the Books and records of the Company, carried out in accordance with thegenerally accepted auditing practices in India, and according to the information and explanations given to us. However,we have not come across any fraud during the course of our checking.
For Jain Anchlia & AssociatesChartered Accountants
Place: Mumbai
Date: 19th July 2010Paras Kumar Jain
ProprietorM.N0-078996
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As per our report of even date attachedd For and on behalf of the BoardFor and on behalf of Jain Anchlia & AssociatesChartered Accountants D.R.Pahwa S.Ravi
Director DirectorParas Kumar JainProprietorMembership No.: 078996Place: Mumbai
Date: 19th July 2010
MONOTONA TYRES LTD
BALANCE SHEET AS AT 31ST March, 2010(Amount in Rs.)
PARTICULARS Schedule As at As at
No. 31-03-2010 31-03-2009
I Sources of Funds
SHAREHOLDERS' FUNDShare Capital `A' 72,000,000 64,000,000 Share Application Money - 80,000,000 Reserves & Surplus `B' 731,974,311 699,780,346
LOAN FUNDSSecured Loans `C' 480,160,469 206,528,649 Unsecured Loans `D' 530,957,199 740,833,119 Deferred Tax Liability 29,391,527 32,450,340
Total 1,844,483,506 1,823,592,454 APPLICATION OF FUNDSFIXED ASSETS `E' Gross Block 1,388,670,081 1,246,351,195 Less : Depreciation 451,708,538 357,340,357 Net Block 936,961,543 889,010,838 Capital W.I.P. Including Advances 1,464,610 1,899,200
938,426,153 890,910,038 INVESTMENT(Equity Shares of SPR Textiles Pvt Ltd) 365,000,000 CURRENT ASSETS LOANS & ADVANCESInventories `F' 214,199,006 188,468,373 Sundry Debtors `G' 495,107,679 575,439,703 Cash & Bank Balances `H' 5,107,607 4,608,246 Loans & Advances `I' 580,386,587 152,780,550
1,294,800,878 1,286,296,872 Less : CURRENT LIABILITIES & PROVISIONS `J' 388,743,525 353,614,456
NET CURRENT ASSETS 906,057,353 932,682,416 TOTAL 1,844,483,506 1,823,592,454
NOTES ON ACCOUNT `P' - -
Schedules `A' to `P' form part of the Accounts
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PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 31ST MARCH,2010.(Amount in Rs.)
PARTICULARS Schedule Year Ended Year Ended
No. 31-03-2010 31-03-2009
INCOMESales. 1,376,413,607 2,079,307,419 Other Income. K' 23,818,667 19,050,452 Increase / (Decrease) In Stock. 'L' 10,605,087 -21,818,819
1,410,837,361 2,076,539,052 EXPENDITUREManufacturing & Administrative Expenses. 'M' 1,208,620,766 1,720,479,614 Excise Duty 84,434,381 117,819,948 Selling & Distribution Exp. 'N' 21,316,184 35,852,437 Interest 'O' 25,098,487 133,381,001
Profit Before Depreciation & Tax 71,367,542 69,006,052 Depreciation (Including Revaluation) 94,593,207 99,797,044 Less : Amount Transf.from Revaluation.Res. 50,588,347 56,148,121 Net Depreciation 44,004,860 43,648,923
Profit Before Tax 27,362,682 25,357,129 Less : Provision for Taxation
Current Tax 14,585,000 13,175,000 Deferred Tax -3,058,813 -2,429,342 Fringe Benefit Tax - 312,298
Profit After Tax 15,836,495 14,299,173 Balance Brought Forward 6,699,884 212,130 Profit Available for Appropriation 22,536,379 14,511,303 APPROPRIATIONS :Transfer to General Reserve 3,000,000 3,000,000 Proposed Dividend 4,320,000 4,112,500 Corporat Dividend Tax 734,184 698,920 Balance carried to the Balance Sheet 14,482,195 6,699,883 E.P.S.- Basic & Diluted 2.47 2.23 NOTES ON ACCOUNTS 'P'Schedules 'A' to 'P' form part of the Accounts
As per our report of even date attachedd For and on behalf of the BoardFor and on behalf of Jain Anchlia & AssociatesChartered Accountants D.R.Pahwa S.Ravi
Director DirectorParas Kumar JainProprietorMembership No.: 078996Place: Mumbai
Date: 19th July 2010
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SCHEDULE FORMING PART OF THE ACCOUNTS
As at As at
31-03-2010 31-03-2009
(Rs.) (Rs.)
SCHEDULE ASHARE CAPITAL
Authorised
7200000 Equity Shares of 72,000,000 65,000,000
Rs.10/- each.
72,000,000 65,000,000
Issued, Subscribed and Paid up
7200000 Equity Shares of Rs.10/- each 72,000,000 64,000,000
Fully Paid up.
TOTAL 72,000,000 64,000,000
SCHEDULE BRESERVES & SURPLUS
General Reserves 47,807,533 44,807,533
Add : Transfer from Profit & loss A/c 3,000,000 3,000,000
50,807,533 47,807,533
Share Premium A/c 162,000,000 90,000,000
Revaluation Reserves 555,272,930 611,421,051
Less : Transferred to Profit & Loss A/c 50,588,347 56,148,121,
Balance In Profit & Loss A/c 504,684,583 555,272,930
14,482,195 6,699,883
TOTAL 731,974,311 699,780,346
SCHEDULE CSECURED LOANS FROM BANKS
Working Capital Finance from Banks 170,578,079 166,528,649
(Secured by hypothecation of Inventories, Book Debts &
Movable Assets)
GTF Bil l Discounting 283,082,390 -
(Secured by Second Charge of Fixed Assets)
SBI WCDL LOAN 26,500,000 40,000,000
(Secured by first charge on Fixed Assets of the Company)
(The above Loans are also secured by Personal Guarantee
of an Ex-Director and by Corporate Guarantee)
TOTAL 480,160,469 206,528,649
SCHEDULE DUNSECURED LOANS
Sales Tax Loan 195,986,660 195,986,660
Almondz Finanz Ltd. 20,197,260 -
GTF Bill Discounting - 296,856,910
Falcon Tyres Ltd. (Loan) 20,000,000 10,000,000
Religare Finvest Ltd. 294,773,279 237,989,549
TOTAL 530,957,199 740,833,119
MONOTONA TYRES LTD
89
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AN
CIA
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STA
TEM
ENT
OF
FIX
ED A
SSET
S
(A
mou
nt in
Rs.
)
GRO
SS B
LOCK
(At
Cost
)D
EPRE
CIAT
ION
NET
BLO
CK
As
atA
dditi
ons
Ded
uctio
nA
s at
Up
ToFo
r the
Ded
uctio
nU
p To
As
atA
s at
31.0
3.20
0931
.03.
2010
31.0
3.20
09Ye
ar
31.0
3.20
1031
.03.
2010
31.0
3.20
09
Land
Fre
e ho
ld30
5,51
4,58
3 -
-
305,
514,
583
-
-
-
-
305,
514,
583
305,
514,
583
Build
ing
201,
530,
634
3,56
2,00
0 19
7,96
8,63
4 23
,918
,349
4,
574,
081
28,4
92,4
30
169,
476,
204
177,
612,
285
Plan
t an
d M
achi
nery
699,
215,
819
152,
780,
676
* 7
,301
,137
844
,695
,358
30
3,24
0,83
5 84
,561
,802
-
387,
802,
637
456,
892,
721
395,
974,
984
Mou
lds
31,1
91,1
05
559,
521
-
31,7
50,6
26
27,1
81,5
84
4,56
9,04
2 -
31
,750
,626
-
4,
009,
521
Com
pute
r2,
916,
675
451,
879
-
3,36
8,55
4 1,
538,
348
523,
726
-
2,06
2,07
4 1,
306,
480
1,37
8,32
7
Vehi
cles
765,
282
-
753,
282
12,0
00
177,
068
55,0
06
225,
026
7,04
8 4,
952
588,
214
Furn
iture
& F
ixtu
res
3,81
9,75
1 41
,998
-
3,
861,
749
1,04
4,99
8 24
2,01
6 -
1,
287,
014
2,57
4,73
5 2,
774,
753
Off
ice
Equi
pmen
t1,
397,
347
101,
230
-
1,49
8,57
7 23
9,17
5 67
,534
30
6,70
9 1,
191,
868
1,15
8,17
2
TOTA
L1,
246,
351,
196
153,
935,
304
11,6
16,4
191,
388,
670,
081
357,
340,
357
94,5
93,2
07
225,
026
451,
708,
538
936,
961,
543
889,
010,
839
Prev
ious
Yea
r1,
241,
948,
450
4,40
2,74
6 -
1,24
6,35
1,19
6 25
7,54
3,31
3 99
,797
,044
-
35
7,34
0,35
7 88
9,01
0,83
9
Capi
tal W
ork
In P
rogr
ess
1,46
4,61
0 1,
899,
200
SCH
EDU
LE F
ORM
ING
PA
RT O
F TH
E A
CCO
UN
TS (C
ON
TD.)
SCH
EDU
LE E
Dep
reci
atio
n fo
r the
yea
r inc
lude
s am
ount
of R
s 50
,588
,347
Bei
ng d
epre
ciat
ion
on re
valu
atio
n as
sets
.G
ross
blo
ck in
clud
esRs
6,7
3,66
1,84
7/-
tow
ard
reva
luat
ion
of a
sset
s*
As
Cert
ified
by
the
Man
agem
ent.
MONOTONA TYRES LTD
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SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
As at As at
31-03-2010 31-03-2009
(Rs.) (Rs.)
SCHEDULE FINVENTORIES(As taken, valued & certified by the management )Raw Materials 104,822,757 97,873,152 Stores & Spares 19,927,475 11,751,535 Work In Progress 48,040,202 45,973,246 Finished Goods 41,408,572 32,870,441
TOTAL 214,199,006 188,468,374
SCHEDULE GSUNDRY DEBTORS(Unsecured Considered Good Except Otherwise Stated )For the period more than six months 15,480,883 8,935,957 Others 479,626,796 566,503,746 (REFER NOTE NO.B-12) TOTAL 495,107,679 575,439,703
SCHEDULE HCASH AND BANK BALANCESCash in hand 398,297 129,063 Balance With Scheduled BanksIn Current Account 1,029,310 3,399,183 In Deposit A/C (Margin Money) 3,680,000 1,080,000
TOTAL 5,107,607 4,608,246
SCHEDULE ILOANS AND ADVANCES(Unsecured considered good except otherwise stated )Advances - 51,776,577 Advance recoverable in cash or kind or for value to be received 573,904,422 95,261,095 Deposits 6,482,165 5,742,878
TOTAL 580,386,587 152,780,550
SCHEDULE JCURRENT LIABILITIES AND PROVISIONSLiabil it ies :Sundry Creditors 232,652,172 143,097,780 Other Liabilities & Provisions 125,278,918 192,742,061
Provisions For :-Taxation (Net of Advances) 25,059,331 12,963,195 -Proposed Dividend 4,320,000 4,112,500 -Corporate tax on proposed dividend 1,433,104 698,920
TOTAL 388,743,525 353,614,456
Year Endend Year Endend31-03-2010 31-03-2009
(Rs.) (Rs.)SCHEDULE KOTHER INCOMEExport Incentive 5,321,268 10,339,350 Interest. Received 265,255 331,949 Difference In Exchange 10,160,907 4,977,642 Job Charges Received 3,516,858 - Sale Of Depb Licence - Miscellaneous Income 182,554 Miscellaneous Income (Insurance) 1,322,237 Sundry Credit Bal. W/Back 29,312 209,902 Miscellaneous Sales 3,020,276 3,191,609
TOTAL 23,818,667 19,050,452
MONOTONA TYRES LTD
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SCHEDULE FORMING PART OF THE ACCOUNTS (CONTD.)
Year Ended Year Ended
31-03-2010 31-03-2009
(Rs.) (Rs.)
SCHEDULE LINCREASE / DECREASE IN STOCKSClosing Stock
Work In Progress 48,040,202 45,973,246 Finished Goods 41,408,572 32,870,441
89,448,774 78,843,687 Less:- Opening Stock
Work In Progress 45,973,246 44,624,628 Finished Goods 32,870,441 56,037,878
78,843,687 100,662,506 Increase / (Decrease) In Stocks TOTAL 10,605,087 -21,818,819
SCHEDULE M'MANUFACTURING & ADMINISTRATIVE EXP.Material Cost 800,656,539 1,238,093,166 Sales Tax 86,148,539 182,796,945 Stores Consumption 28,902,056 32,096,417 Payments to & provisions for employees 104,599,795 78,896,329 Power & Fuel 105,895,077 100,996,103 Rent 1,677,472 1,981,077 Repairs & Maintenance
Plant & Machinery 14,111,562 10,081,110 Building 3,303,541 1,688,657 Others 599,214 333,814
Rates & Taxes 2,127,052 1,180,332 Payment to Auditors 340,000 340,000 Security Charges 2,196,530 3,762,399 Labour Charges 8,610,659 8,490,198 Legal & Professional Fees 1,672,075 8,578,873 Management Service Charges 24,000,000 24,000,000 Loss on Sale of Fixed Assets 308,257 - Insurance Premium 844,917 2,635,853 Vehicle hire running expenses 1,020,398 968,408 Water Charges 1,490,836 6,028,472 Miscellaneous Expenses 20,116,246 17,531,461
TOTAL 1,208,620,766 1,720,479,614
SCHEDULE NSELLING & DISTRIBUTION EXPENSESAdvertisement 21,532 1,782 Business Promotion Expenses 477,904 795,000 Cash Discount 109,516 6,304,567 Depot Expenses - 3,606,267 Transportation Charges 16,653,105 20,484,748 Warranty Claim 3,334,081 486,777 Commission on Sales 720,046 4,173,296
TOTAL 21,316,184 35,852,437
SCHEDULE O'INTERESTInterest on Fixed Loans - - Other Interest 25,098,487 133,381,001
TOTAL 25,098,487 133,381,001
92
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NOTES FORMING PART OF ACCOUNTS
SCHEDULE ‘P’
A. SIGNIFICANT ACCOUNTING POLICIES:
1. Method Of Accounting:
The Company follows the mercantile system of accounting. All expenses and income to the extent considered payable andreceivable, unless stated otherwise, have been accounted for on accrual basis. Financial Statements have been prepared accordingto historical Cost Convension adjusted by revaluation of Fixed Assets.
2. Use Of Estimates
The preparation of financial statement require management to make estimates and assumptions that effect the reported amountof assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reportedamounts of income and expenses during the year.Provision for contingencies are recorded when it is possible that a liability will be incurred and the amounts can reasonably beestimated. Differences between the accrual results and estimates are recognized in the year in which the results are known /materialized.
3. Revenue Recognition
Sales are accounted for on dispatches. Turnover includes sale of goods, Sale of DEPB license, services, entry tax, excise duty,Value Added Tax (VAT) (i) Revenue is recognized only when it can be reliably measured and it is reasonable to expect ultimate collection. Interest incomeis recognized on time proportion basis taking into account the amount outstanding and rate applicable.(ii) Export Sales are accounted for on the basis of bill of lading/ dispatches from factory.(iii) Export Incentives are accounted for on mercantile basis.
Fixed Assets
(i) Fixed Assets are stated at the revalued price or cost of acquisition / construction (net of CENVAT/VAT and other credits) as thecase may be and inclusive of incidental expenses, erection / commissioning expenses, pre-operating expenses, interest, etc. uptothe date the asset is put to use, less accumulated depreciation, amortization and impairment losses, except freehold land whichis carried at cost.(ii) Capital work-in-progress is stated at the amount expended up to the date of Balance Sheet.
Depreciation
(i) Depreciation on Fixed Assets is provided on Straight Line Method at the rates & in the manner specified in Schedule XIV ofCompanies Act, 1956.(ii) Depreciation on Fixed Assets added during the year has been provided on pro-rata basis with reference to the dates ofaddition.(iii) Additional depreciation attributable to the increase in the value of assets on account of revaluation is transferred fromRevaluation Reserve to the Profit and Loss account.
6. Impairment Of Assets
At each Balance Sheet date, the company assesses whether there is any indication that any asset may be impaired. If any suchindication exists, the Company estimates the recoverable amount. If the carrying amount of the assets exceeds the recoverableamount, an impairment loss is recognized in the accounts to the extent the carrying amount exceeds the recoverable amount
7. Inventories Valuation
(i) Raw materials - at cost net of excise duty, counter availing duty & Sales Tax / VAT(ii) Finished goods – at cost or realizable value whichever is lower. The cost includes the cost of raw material, labour and factoryoverheads.(iii) W.I.P. and Stores, spares and consumables – at cost(iv) Damaged and unserviceable stocks are written off.
MONOTONA TYRES LTD
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NOTES FORMING PART OF ACCOUNTS (CONTD.)
8. Investments
Long term investments are valued “at cost” except where there is a diminution in value, other than temporary, in which case,adequate provision is made against such shortfall.
9. Leave Encashment
The liability on account of encashment of unavailed accumulated privilege leave of employees as at the balance sheet date isdetermined by the company and provided in the books of account. However, this is not in conformity with AS – 15 (Revised).
10. Excise Duty, Custom Duty And Entry Tax / Value Added Tax (Vat)
(i) Excise duty / custom duty in respect of closing stock / goods in transit are not provided for and the same have also not beenincluded in the valuation of inventories. This has no impact on the profit / loss.(ii) Entry Tax , Value added tax paid is charged to Profit and Loss account.
11. Transaction In Foreign Currency
Transactions in foreign currencies are accounted for at the exchange rate prevailing on the date of transaction. Foreign currencytransactions which are outstanding at the date of Balance Sheet are converted on the basis of rate prevailing at the end of theyear. The gain and loss thereon and also on the exchange differences on settlement of the foreign currency transactions duringthe year are recognized as income or expense and are adjusted to the profit and loss account.
12. Gratuity And Retirement Benefit
Gratuity liability is provided for those employees who are eligible as per provisions of Gratuity Act 1972. However, the liabilitieshave not been actuarially determined and not in conformity with AS 15 (Revised).
13. Contingencies
Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingentand disclosed by way of Notes to the Accounts. Contingent Assets are neither recognized nor disclosed in the financial statements.
14. Borrowing Costs
Borrowing costs incurred in relation to the acquisition, construction of assets are capitalized as part of costs of such assets upto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in whichthese are incurred.
15. Taxes On Income
Provision for taxes is made for both current and deferred taxes. Tax on income for the current period is determined on the basisof taxable income and tax credits computed in accordance with the provisions of Income Tax Act, 1961.Deferred tax are recognized on timing differences between the accounting income and the taxable income for the year whichare capable of reversal in subsequent periods, and quantified using the tax rates and laws enacted or subsequently enacted ason the date of Balance Sheet date.Deferred tax assets are recognized and carried forward to the extent that there is a reasonable / virtual certainty, as required interms of Accounting Standard “AS-22” on “Accounting for Taxes on Income”, that sufficient future taxable income will beavailable against which such deferred tax assets can be realized.
16. Provisions
Provisions are recognized for liabilities that can be measured only by using a substantial degree of estimation, if the companyhas a present obligation as a result of a past event, or a probable outflow of resources is expected to settle the obligation, andthe amount of obligation can be reliably estimated.
17. Prior Period Items
Prior period expenses / income are accounted under the respective heads.
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NOTES FORMING PART OF ACCOUNTS (CONTD.)
B. NOTES TO THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010
1. The previous year’s figures have been reworked, regrouped, rearranged and reclassified wherever necessary. Amounts andother disclosures for the preceding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.
2. As per Accounting Standard 15 “Employee benefits”, the disclosures as defined in the Accounting Standard are given below. Defined Contribution PlansContribution to Defined Contribution Plans, recognized as expense for the year is as under:
2009-10 2008-09Employer’s Contribution to Provident Fund 45,24,309 41,74,116
3. Turnover includes VAT and Entry Tax Rs. 8,63,25,905 (Previous Year Rs. 18,74,37,693) Excise Duty Rs. 8,25,12,394 (PreviousYear-Rs. 8,67,21,458) and freight recovery Rs 76,29,725 (Previous Year - Rs 32,07,172)
4. On 30th March 2010, incidence of fire happened in the factory and godown premises of the company. The company haslodged claim to insurance company for Rs. 2,83,34,900/- for loss of Building, Plant & Machinery and Material.The claim has not been settled/accepted by the insurance company up to Balance Sheet date hence accumulated depreciation reversal is still pending.
5. During the year the company has sold 365000 equity shares of SPR Textiles Pvt. Ltd to Suryamani Financing Company Limited for Rs. 36.50 Crores.
6. Contingent liabilities not provided forAmount in Rs.
S. No. Particulars As at As at31/03/2010 31/03/2009
1 Outstanding Letter of Credit 2,50,06,782 41,27,1122 Guarantee given by bank to Pollution Control Board 1,00,000 1,00,0003 Corporate Guarantee` 37,00,00,000 37,00,00,0004 Regional Provident Fund Commissioner, Thane 35,43,658 Nil5 Sales Tax Demands under appeal or otherwise disputed.
(i) Commercial Taxes Officer, Chennai 2,000 Nil(ii) Commercial Taxes Officer, Attibele (Banglore) 93,049 Nil(iii) JCST (Appeals) Thane 5,99,297 Nil(iv) Commercial Taxes Officer, Ernakulam (Kerala) 2,25,221(v) Additional Commissioner of Sales Tax (VAT),
Mumbai Joint Commissioner of Sales Tax Investigation (VAT) (B) Division, Mumbai 19,08,772 19,08,772
(vi) Joint Commissioner of Sales Tax Investigation (VAT) (B) Division, Mumbai 10,99,53,778 10,99,53,778
6 Claims not acknowledged as debts-SBI Global Factors Limited 81,07,263 Nil
MONOTONA TYRES LTD
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NOTES FORMING PART OF ACCOUNTS (CONTD.)
7. As informed and certified by the company the Income-Tax assessments of the Company have been completed up to Assessment Year 2007-2008. The disputed demands outstanding up to the said assessment year is Rs.: NIL
8. Estimated amount of contracts remaining to be executed on capital account and not provided for Rs : NIL (RS. 18,21,390/-) net of advances paid.
9. During the year the company has made following provisions. The liabilities have been actuarially determined by the HR department and not in conformity with AS 15 (Revised).
Amount in Rs.
10. Confirmations of balances have been sought from Sundry Debtors, Sundry Creditors, other Loans & Advances and in most of cases confirmations have been received.
11. Sundry debtors and loans and advances include Rs. 1,80,80,153/- (Rs.1,06,77,644) and Rs.11,29,126/- (Rs. 11,29,126) respectively which are due from a long time. Since these are recoverable in view of the management no provision has been made in the accounts as the necessary steps (including Legal) have been taken to recover the same.
12. The company has become subsidiary company of M/s Blessing Commercial Pvt. Ltd. (BCPL) with effect from 20.12.2006 on account of acquisition of shares of the company. Pursuant to an agreement between M/s Falcon Tyres Limited (FTL) andBCPL, 54 Lacs of equity shares of the company are agreed to sold by BCPL to FTL and share has been transferred in nameof FTL on 21.05.10.
13. Loans and Advances includes Rs. 4,68,21,703 advances given to bodies corporate for trade advances. which have been given out of the loan and credit facilities availed by the company. Cost of the loan/ credit facilities availed by the companysuch as interest and financial charges are debited to those parties.
14. Dividend of Rs.41,12,500 declared in the previous year has not been encashed by the shareholders and inadvertently thesame could not be transferred to separate unpaid dividend account as required U/s.205A of the Companies Act, 1956.
15. The Company has requested its creditors to confirm the applicability to them under the Micro Small and Medium Enterprises Development Act 2006. Based on the responses received by the Company, the details of dues to Micro enterprises and small enterprises:
Amount in Rs.
Sl. No. Particulars Current Year Previous Years
1 Gratuity 39,77,748 23,09,4722 Leave Encashment 7,02,243 1,72,711
Sl. No. Particulars 31.03.2010 31.03.2009
Principal Interest Principal Interest
1 Amount due to Vendors 25,24,650 Nil 6,20,683 Nil
2 Principal amount and interest paid
beyond the appointment date Nil Nil Nil Nil
3 Interest accrued and remaining
unpaid beyond the appointment
date (other than interest specified
u/s 18 of the Act) Nil Nil Nil Nil
4 Interest accrued and remaining unpaid
as at the end of the period (As per the Act) Nil Nil Nil Nil
MONOTONA TYRES LTD
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16. Auditors Remuneration Amount in Rs.
Particulars 31.03.2010 31.03.2009
( A) Audit Fees Rs.2,90,000/- Rs.2,90,000/-
(B) Tax Audit Fees Rs. 50,000/- Rs. 50,000/-
TOTAL Rs.3,40,000/- Rs.3,40,000/-
Particulars Up to For As at
31.03.2009 the Current Year at 31.03.2010
Deferred Tax Liabil ity
Difference between book and tax Depreciation (A) 3,89,72,616 (11,66,916) 3,78,05,700
Provision for Gratuity And Leave Encashment 28,14,234 18,91,897 47,06,131
Inventory Valuation U/s. 145A 37,08,042 - 37,08,042
Minimum Alternative Tax - - -
TOTAL B 65,22,276 18,91,897 84,14,173
Deferred Tax (Assets)/Liability (Net) (A) - (B) 3,24,50,340 (30,58,813) 2,93,91,527
18. EARNING PER SHARE (EPS)The following table reconciles the numerators and denominators used to calculate Basic and Diluted Earnings per share forthe year ended March 31, 2010 and the year ended March 31, 2009:
* Includes 8,00,000 shares allotted on 20/03/2010
19. RELATED PARTY DISCLOSER (AS-18)
As Required by AS-18, Related Party Disclosure are given below1. Holding Company -
Blessing Commercial Private Limited
2. Enterprises Where Control Exists or Which Exercise ControlFalcon Tyres Limited; Dunlop India Limited
3. AssociatesSubra Marketing Pvt Ltd; Vidyut Petrochem Pvt Ltd; Manali Properties Pvt Ltd; India Finance Ltd; SPR Textiles Pvt Ltd; Ruia &Sons Pvt Ltd; Suryamani Financing Company Ltd
4. Key Management Personnela. Mr Des Raj Pahwa –(Executive Director)*b. Mr S Ravi – (Director)c. Mr Nirmal Kumar Modi – (Director)*d. Mr Kedar Agarwal – (Director)*
* Part of the period
Income available to Equity Shareholders For the Year Ended For the Year Ended
31.03.2010 31.03.2009
Net Profit (After Tax) Rs.1,58,36,495/- Rs.1,42,99,173/-
No. of Shares 72,00,000* 64,00,000
E.P.S. basic & Diluted 2.47 2.23
MONOTONA TYRES LTD
17. Deferred Tax Liability is Comprises of following:- Amount in Rs.
97
20
09
-10
FIN
AN
CIA
LS
RELA
TED
PA
RTY
TRA
NSA
CTIO
N:
Am
ount
in R
s.N
atur
e of
Tra
nsac
tion
Ente
rpris
es w
here
A
ssoc
iate
sKe
y M
anag
emen
tTo
tal
cont
rol e
xits
or w
hich
Pe
rson
nel
exer
cise
con
trol
31.0
3.20
1031
.03.
2009
31
.03.
2010
31
.03.
2009
31
.03.
2010
31
.03.
2009
31
.03.
2010
31
.03.
2009
Inco
me
Sale
of
Fini
shed
Goo
dsFa
lcon
Tyr
es L
td.
499,
221,
599
550,
519,
780
- -
- -
499,
221,
599
550,
519,
780
Dun
lop
Indi
a Lt
d.
2,22
6,72
9 10
,161
,131
-
- 2,
226,
729
10,1
61,1
31
Job
Char
ges
Rece
vied
Falc
on T
yres
Ltd
. 3,
516,
858
- -
- -
- 3,
516,
858
- Ex
pen
ses
Purc
hase
of
Fini
shed
Goo
dsD
unlo
p In
dia
Ltd.
-
13,9
85,3
23
- -
- -
13,9
85,3
23
Falc
on T
yres
Ltd
. 16
,061
,877
-
- -
16
,061
,877
-
Elec
tric
ity E
xpen
ses
Dun
lop
Indi
a Lt
d.
10,9
70
- -
- -
- 10
,970
-
Lega
l & P
rofe
ssio
nal F
ees
Ruia
& S
ons
Pvt.
Ltd
. -
- 26
,472
,000
26
,726
,400
-
- 26
,472
,000
26
,726
,400
A
sset
sEx
pens
es p
aid
by t
he
Com
pany
on
Beha
lf of
th
e A
ssoc
iate
s w
hich
is
adju
sted
aga
inst
eith
er
expe
nses
pai
d by
the
A
ssoc
iate
on
beha
lf of
th
e co
mpa
ny o
r re
imbe
rsed
D
unlo
p In
dia
Ltd.
44
8,31
6 52
0 -
- -
- 44
8,31
6 52
0 Lo
ans
& A
dva
nce
sSu
ryam
ani F
inan
cing
Co. L
td.
- -
46,8
21,7
03
- -
- 46
,821
,703
-
Subh
ra M
arke
ting
Pvt.
Ltd
. -
- -
72,8
91,5
00
- -
- 72
,891
,500
U
nse
cure
d L
oan
Rep
aid
Vid
yut
Petr
oche
m P
vt. L
td.
- -
55,0
68,7
00
- -
- 55
,068
,700
-
Man
ali P
rope
rtie
s Pv
t. L
td.
- -
20,8
00,0
00
- -
- 20
,800
,000
-
Indi
a Fi
nanc
e Lt
d.
- -
1,87
7,45
0 38
,510
,000
-
- 1,
877,
450
38,5
10,0
00
Dun
lop
Indi
a Lt
d.
- 26
,000
,000
-
- -
- -
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00
Inve
stm
ent
SPR
Text
iles
Pvt.
Ltd
. -
- -
365,
000,
000
- -
- 36
5,00
0,00
0
MONOTONA TYRES LTD
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RELA
TED
PA
RTY
TRA
NSA
CTIO
N (C
ON
TD.):
Am
ount
in R
s.N
atur
e of
Tra
nsac
tion
Ente
rpris
es w
here
A
ssoc
iate
sKe
y M
anag
emen
tTo
tal
cont
rol e
xits
or w
hich
Pe
rson
nel
exer
cise
con
trol
31.0
3.20
1031
.03.
2009
31
.03.
2010
31
.03.
2009
31
.03.
2010
31
.03.
2009
31
.03.
2010
31
.03.
2009
Liab
ilit
ies
Expe
nses
pai
d by
the
Ass
ocia
te
on B
ehal
f of t
he C
ompa
ny w
hich
is
adju
sted
aga
inst
eith
erex
pens
es p
aid
by th
e Co
mpa
ny
on b
ehal
f of t
he A
ssoc
iate
or
reim
embe
rsed
Ruia
& S
ons
Pvt.
Ltd
. -
- 46
6,97
4 27
,861
-
- 46
6,97
4 27
,861
D
unlo
p In
dia
Ltd.
19
,912
15
,441
-
- -
- 19
,912
15
,441
Fa
lcon
Tyr
es L
td.
10,0
00,0
00
10,0
00,0
00
- -
-
- -
-
Shar
e A
pp
lica
tio
n M
on
eySu
ryam
ani F
inan
cing
Co.
Ltd
.-
- -
80,0
00,0
00
- -
- 80
,000
,000
In
vest
men
ts S
old
Sury
aman
i Fin
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o. L
td.
- -
365,
000,
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- -
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s &
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Text
iles
Pvt.
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. -
- 1,
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00
- -
1,77
6,57
7 49
,450
,000
Se
curi
ty D
epo
sit
Tran
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Falc
on T
yres
Ltd
. 8,
382,
721
- -
- -
- 8,
382,
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- U
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cure
d L
oan
Vid
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oche
m P
vt. L
td.
- -
55,0
68,7
00
- -
- 55
,068
,700
-
Man
ali P
rope
rtie
s Pv
t. L
td.
- -
20,0
00,0
00
- -
- 20
,000
,000
-
Indi
a Fi
nanc
e Lt
d.
- -
- 36
,632
,550
-
- -
36,6
32,5
50
Dun
lop
Indi
a Lt
d.
- 26
,000
,000
-
- -
- -
26,0
00,0
00
Bal
ance
as
on
31
-03
-20
10
Paya
ble
sRu
ia &
Son
s Pv
t. L
td.
- -
17,9
79,6
83
9,62
7,62
3 -
- 17
,979
,683
9,
627,
623
Man
ali P
rope
rtie
s Pv
t. L
td.
- -
- 80
0,00
0 -
- -
800,
000
Falc
on T
yres
Ltd
. (Lo
an)
20,0
00,0
00
10,0
00,0
00
20,0
00,0
00
10,0
00,0
00
Rec
eiva
ble
sRu
ia &
Son
s Pv
t. L
td.
- -
- 24
2,07
9 -
- -
242,
079
Falc
on T
yres
Ltd
. 49
,207
,364
67
,402
,063
-
- -
- 49
,207
,364
67
,402
,063
D
unlo
p In
dia
Ltd.
-
- 58
2,28
6 -
- -
582,
286
- SP
R Te
xtile
s Pv
t. L
td.
- -
- 1,
776,
577
- -
- 1,
776,
577
Subh
ra M
arke
ting
Pvt.
Ltd
. -
- 72
,891
,500
72
,891
,500
-
- 72
,891
,500
72
,891
,500
Su
ryam
ani F
inan
cing
Co.
Ltd
.-
- 41
1,82
1,67
6 -
- -
411,
821,
676
- In
dia
Fina
nce
Ltd.
-
- -
1,87
7,45
0 -
- -
1,87
7,45
0
MONOTONA TYRES LTD
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20. SEGMENT REPORTING:
The Company has only one business segments Viz. Tyres & tubes, which is considered as the primary segment. Informationregarding the secondary segment, i.e. ‘Geographical segments’ is given below:
Amount in Rs.
21. Particular required to be given pursuant to the provision of part II of the schedule VI of the Companies Act, 1956 are givenhere below :
Sl. No. Particulars Geographical Segments Total
Outside India Within India
1 Segment Revenue Sales and Income from Operations 29,46,12,920 1,11,18,00,687 1,37,64,13,607
a) Details of Opening Stock
Class of Product Unit Qty Value (Rs.)
Tyres Nos. 35,516 2,13,91,074
(87,013) (4,34,81,575)
Tubes Nos. 1,04,865 1,14,79,367
(1,98,432) (1,28,71,388)
Flaps Nos. NIL NIL
(NIL) (NIL)
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c) Details of Sales
Class of Product Unit Qty Value (Rs.)
Tyres Nos. 17,86,835 99,09,89,455
(17.92.482) (98,73,19,624)
Tubes Nos. 31,84,922 38,45,45,860
(27.53.455) (28,46,83,650)
Resale Tyres Nos. Nil Nil
(9.91.690) (80,47,87,498)
Resale Tubes Nos. - -
(-) (-)
Resale Flap Nos. 7,000 8,78,292
(36.160) (25,16,647)
TOTAL Nos. 49,78,757 1,37,64,13,607
(55,73,787) (2,07,93,07,419)
d) Details of Closing Stock
Class of Product Unit Qty Value (Rs.)
Tyres Nos. 44,679 2,83,82,229
(35,516) (2,13,91,074)
Tubes Nos. 1,13,304 1,30,26,343
(1,04,865) (1,14,79,367)
Flaps Pur for resale Nos. Nil Nil
(Nil) (Nil)
b) Production / Purchases
* As certified by the Management
Class of Product Unit Licensed Installed * Actual
Capacity Capacity P.A. Production P.A.
Tyres Nos. N.A. 36,00,000 17,95,998
(36,00,000) (17.40.985)
Tubes Nos. N.A. 50,00,000 31,93,361
(50,00,000) (26.59.888)
Purchase of Tyres for resale Nos. N.A. Nil
(9.91.690)
Purchase of Tubes for resale Nos. N.A. -
(-)
Purchase of Flaps for resale Nos. N.A. 7,000
(36.160)
Total Nos. N.A 49,96,359
(54,28,723)
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e) Raw Material Consumed
Class of Product Unit Qty Value (Rs.)
RUBBER KGS 23,01,874 33,43,18,992
(26,34,055) (32,57,54,371)
CHEMICALS KGS 14,19,357 8,02,25,258
(11,38,105) (6,93,35,835)
CARBON BLACK KGS 21,27,885 11,79,42,747
(18,59,496) (10,33,84,917)
NYLON FABRICS KGS 4,65,604 10,68,19,302
(4,71,245) (10,28,34,156)
OTHRES N.A 16,21,65,241
N.A. (15,73,95,055)
TOTAL 63,14,720 80,14,71,539
(61,02,901) (75,87,04,334)
22. Managerial Remuneration to Executive Director
Particulars 31.03.10 31.03.09
Salary 7,56,000 9,16,129
Allowances 8,41,440 12,24,138
Contribution to PF & other Funds 7,020 9,360
Total 16,04,460 21,49,627
MONOTONA TYRES LTD
23. The figure in the bracket represents the figures of the previous year.
f) Expenditure in Foreign Currency Amt. in Rs.
Travelling Expenses 49,980(5,04,636)
Commission 3,49,656(Nil)
g) Earning in foreign exchangeFOB value of goods exported 29,46,12,920
(26,55,27,995)
h) Value of Import calculated on C.I.F. basis by the company during the financial year in respect of
Raw Materials 16,46,027(17,95,60,948)
i) Imported & Indigenous Consumption
A) Raw Materials % Rs.Imported 0.21 16,46,027
(22.70) (17,22,05,596)Indigenous 99.79 79,98,25,512
(77.30) (58,64,99,738)100.00 80,14,71,539
(100.00) (75,87,04,334)
B) STORESIndigenous 100.00 2,39,02,056
(100.0) (3,20,96,417)
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Additional information pursuant to the provisions of part IV of schedule VI to the Company Act 1956BALANCE SHEET ABSTRACT AND COMPANY'S GENERAL BUSINESS PROFILE
I. Registration Details
I I. Capital Raised during the year (Amount in Rs.)
I I I . Position of Mobil isation and Deployment of Funds (Amount in Rs.)
Registration No.
8 4 9 4 8
State code
1 1
Balance Sheet Date 3 1 0 3 2 0 1 0
Public Issue
N I L
Bonus Issue
N I L
Rights Issue
N I L
Total Liabilities
2 2 3 3 2 2 7 0 3 1
Reserve & Surplus
7 3 1 9 7 4 3 1 1
Total Assets
2 2 3 3 2 2 7 0 3 1
Accumulated Loss
N I L
Paid-up Equity Share Capital
Sources of Funds Application of Funds
7 2 0 0 0 0 0 0
Net Fixes Assets
9 3 8 4 2 6 1 5 3
Paid-up Preference Share Capital
N I L
Net Current Assets
9 0 6 0 5 7 3 5 3
Advance against Share Application Money
N I L
Miscellaneous Expenses
N I L
Secured Loan
4 8 0 1 6 0 4 6 9
Unsecured Loan
5 3 0 9 5 7 1 9 9
Deferred Tax Liability
2 9 3 9 1 5 2 7
Private Placement
08 0 0 0 0 0
MONOTONA TYRES LTD
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IV. Performance of Company (Amount in Rupees)
V. Generic names of three principal products of company
Turnover
1 3 7 6 4 1 3 6 0 7
Other Income
2 3 8 1 8 6 6 7
Item Code No. (ITC Code)
Product Description
3 1 0 1
T Y R E S & T U B E S
F O R M O T O R V E H
I C L E S , T R A C T O
R S
F T S
A N D A I R C R A
Item Code No. (ITC Code)
Product Description
3 1 0 2
T Y R E S & T U B E
S F O R M O T O R
C Y C L E S , S C O O
T E R S A N D T H R
E E W H E E L E R S
Item Code No. (ITC Code)
Product Description
3 1 0 9
O T H E R T Y R E S A
N D T U B E S N E C
Total expenditure
1 3 8 4 3 9 5 7 7 9
Profit after Depreciation & Tax
1 5 8 3 6 4 9 5
As per our report of even date
For Jain Anchlia & Associates For and on behalf of the Board
Chartered Accountants
Paras Kumar Jain
(Proprietor) D.R.Pahwa S.Ravi
Director Director
Membership No.: 078996
Mumbai , 19th July, 2010
MONOTONA TYRES LTD
As per our report of even dateFor Jain Anchlia & Associates For and on behalf of the BoardChartered AccountantsParas Kumar Jain D.R.Pahwa S.Ravi(Proprietor) Director DirectorMembership No.: 078996Mumbai , 19th July, 2010
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CASH FLOW FOR THE YEAR ENDED 31st march 2010(Amount in Rs.)
Year Ended Year endedParticulars 31.03.2010 31.03.2009
(A) Cash Flow From Operating Activit iesNet Profit before Tax and Extra-Ordinary items 27,362,682 25,357,129 Adjustments For
i) Depreciation including on Revaluation 94,593,207 Less : Tranferred from Revaluation Reserve (50,588,347) 44,004,860 43,648,923
ii) Loss on Sale of fixed Assets 308,256 iii) Interest Paid 25,098,487 133,381,001 iv) Interest Received (265,255) 69,146,348 (331,949) 202,055,104
Operating Profit before Working Capital 96,509,030 202,055,104 ChangesAdjustments ForTrade & Other ReceivablesSundry Debtors 80,332,024 Loans & Advances (427,606,037)Inventories (25,730,633) (373,004,645) 97,766,815 Trade PayableSundry Creditors 90,397,629 Other Liabilities (67,463,143)Provision For Taxation (Net of Advance) - 22,934,486 142,598,974 Tax Paid (Current Tax) (2,488,864) (352,559,023) (13,487,298) 226,878,491 Net Cash from Operating Activit ies (256,049,993) 428,933,595
B. Cash Flow from Investing Activit iesPurchase/Sales of Fixed Assets (143,915,404) (4,402,745)Disposal of fixed Assets Less Accu. Depreciation 220,000 Capital WIP 434,590 (641,064)Sale - Investment in Shares 365,000,000 (365,000,000)Interest Received 265,255 331,949 Net cash flow from Investing Activit ies 222,004,441 (369,711,860)
C. Cash Flow from Financing Activit iesProceeds from BorrowingProceeds from issue of Share Capital - 80,000,000 Secured Loan 273,631,820 3,167,019 Unsecured Loan (209,875,920) 63,755,900 (5,153,541)Interest Paid (25,098,487) (133,381,001)Dividend & Dividend TaxProposed Dividend (4,112,500) (4,112,500)Corporate Tax on Proposed Dividend - (4,112,500) 34,544,913 (698,920) (60,178,943)Net cash used in Financining Activity 34,544,913 (60,178,943)Net Increase (Decrease) in Cash &Cash Equivalants (A+B+C) 499,361 (957,208)Cash & Cash Equivalants (Opening Balance) 4,608,246 5,565,454 Cash & Cash Equivalants (Closing Balance) 5,107,607 4,608,246
Notes: 1) The above cash flow statement has been prepared under the 'Indirect Method' as set out in the AS-3 on the cash flow statementissued by the ICAI.
MONOTONA TYRES LTD
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Consolidated Auditors' ReportAUDITORS’ REPORT TO THE BOARD OF DIRECTORS OF FALCON TYRES LIMITED ON THE CONSOLIDATED FINANCIALSTATEMENTS INCLUDING ITS SUBSIDIARY FOR THE YEAR ENDED 30TH SEPTEMBER, 2010
1. We have audited the attached consolidated balance sheet of Messrs. FALCON TYRES LIMITED and its subsidiary
company as at 30th September, 2010 the consolidated profit and loss account for the year ended on that date annexed
thereto and the consolidated cash flow statement for the year ended on that date. The consolidated profit and loss
account and the consolidated cash flow statement comprises yearly results of Falcon Tyres Limited and result from 21st
May, 2010 to 30th September, 2010 of the subsidiary company. These consolidated financial statements are the
responsibility of Falcon Tyres Limited’s management. Our responsibility is to express an opinion on these consolidated
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 prepared in all material respects, in accordance with an identified financial reporting framework and are free of
material misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosures
in the financial statements. An audit also includes assessing the accounting principles used and significant estimates
made by the management, as well as evaluating the overall financial statements presentation. We believe that our audit
provides a reasonable basis for expressing our opinion.
3. We did not audit the financial statements of subsidiary Messrs. Monotona Tyres Limited, whose financial statements
reflect total assets of Rs. 22017.84 Lacs as on 30th September, 2010 and total revenue of Rs. 6629.87 Lacs and net
cash inflow amounting to Rs. 52.05 Lacs for the aforesaid period ended on that date. These financial statements and
other information of the subsidiary has been audited by the other auditor whose reports have been furnished to us,
and our opinion, in so far as it relates to the amounts included in respect of the subsidiary, is based solely on the report
of the other auditor.
4. We report that the consolidated financial statements have been prepared by the Company in accordance with the
requirements of Accounting Standard (AS-21) on Consolidated Financial Statements as per section 211(3C) of the
Companies Act 1956, on the basis of the individual financial statements of Falcon Tyres Limited and its subsidiary
included in the consolidated financial statements.
5. On the basis of information and explanations given to us and on consideration of the separate audit reports on
individual audited financial statements of Falcon Tyres Limited and its subsidiary in our opinion, the consolidated
financial statements give a true and fair view in conformity with accounting principles generally accepted in India:–
a) in the case of the consolidated balance sheet, of the consolidated state of affairs of Falcon Tyres Limited and
its subsidiary as at 30th September, 2010;
b) in case of the consolidated profit and loss account, of the profit for the year ended on that date; and
c) in the case of the consolidated cash flow, of the cash flows for the year ended on that date.
For K.N. Gutgutia & Co.Chartered Accountants
Kolkata12th November, 2010
Subhasish PorePartner
Membership No. 055862
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Schedules annexed are an integral part of this Consolidated Balance Sheet and should be read in conjunction therewith.Previous Year Consolidated figures are not applicable since Monotona Tyres Limited has become subsidiary in the Current Yeari.e. w.e.f. 21st May'2010
As per our report of even date attached For and on behalf of the BoardFor and on behalf of K. N. Gutgutia & Co.Chartered Accountants
M.C. Bhansali Sunil Bhansali S. RaviCompany Secretary Executive Director Director
Subhasish PorePartnerMembership No.: 055862Kolkata, 12th November, 2010
CONSOLIDATED BALANCE SHEET AS AT 30TH SEPTEMBER, 2010(Rs. In Lacs)
Schedule As at
No. 30th September, 2010 I Sources of Funds
1. Shareholders ' Fundsa) Share Capital 1 1704.27b) Reserves & Surplus 2 20429.34 22133.61
2. Loan Fundsa) Secured 3 20160.41b) Unsecured 4 12795.67 32956.08
3. Minority Interest 664.58
4. Deferred Taxation (Net) 1020.87TOTAL
56775.14II Application of Funds
1. Fixed Assets 5 Gross Block 47996.94Less: Depreciation 11941.18Net Block 36055.76Capital Work - in - Progress 3878.33 39934.09
1a. Goodwill on acquisit ion of Monotona Tyres Limited 6631.93
2. Investments 6 5.97
3. Current Assets,Loans & Advancesa) Inventories 7 9411.23b) Sundry Debtors 8 12966.92c) Cash & Bank balances 9 3329.92d) Loans & Advances 10 5147.41
30855.48Less:
4. Current Liabil it ies & Provisionsa) Liabilities 11 16727.58b) Provisions 12 3924.75
20652.33Net Current Assets 10203.15Miscellaneous Expenditure (to the extent not written off) 13 -TOTAL 56775.14Significant Accounting Policies and Notes on Accounts 20
107
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As per our report of even date attached For and on behalf of the BoardFor and on behalf of K. N. Gutgutia & Co.Chartered Accountants
M.C. Bhansali Sunil Bhansali S. RaviCompany Secretary Executive Director DirectorSubhasish Pore
PartnerMembership No.: 055862Kolkata, 12th November, 2010
CONSOLIDATED PROFIT & LOSS ACCOUNT FOR THE YEAR ENDED ON 30TH SEPTEMBER, 2010(Rs. In Lacs)
Schedule Year Ended
No. 30th September,2010 Income
Sales (net of returns & discounts) 88251.06Less: Excise Duty 6218.61 82032.45Other Income 14 600.60
82633.05Expenditure
Raw Materials Consumed 15 46159.06Increase(-)/Decrease(+) in stock 16 -1442.06Factored Goods Consumption 17 8258.35Manufacturing, Administrative, Selling & Distribution Expenses 18 20179.67Interest (Net) 19 2088.45Depreciation 1898.35Less: Transfer to Revaluation Reserve 534.60 1363.75
76607.21Profit Before Taxation 6025.84
Provision for Taxation: For Current Year - Current Tax 1482.21
- Fringe Benefit Tax - - Deferred Tax -67.21
1415.00Excess Provision of Income Tax of Earlier Year Written Back -
1415.00Profit After Taxation 4610.84
Profit Brought forward from Previous Year 205.90Profit Available for Appropriation 4816.74Appropriations:
Transfer to General Reserve 3,500.00 Proposed Dividend 852.14 Corporate Dividend Tax 144.82 4,496.96
Minority Interest -77.44Balance carried to Balance Sheet 397.22
Basic & Diluted Earning Per Share 13.53Significant Accounting Policies and Notes on Accounts 20
Schedules annexed are an integral part of this Consolidated Profit & Loss Account and should be read in conjunction therewith.Previous Year Consolidated figures are not applicable since Monotona Tyres Limited has become subsidiary in the Current Yeari.e. w.e.f. 21st May'2010
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SCHEDULES TO CONSOLIDATED ACCOUNTS
As at
30th September, 2010
(Rs. in Lacs)
SCHEDULE 1
SHARE CAPITAL:
Authorised :
20,00,00,000 equity shares of Rs. 5/- each 10000.00
Issued, Subscribed and Paid up
340,85,532 (340,85,532) Equity shares of Rs.5/- each 1704.27
(294,60,744 Equity Shares of Rs.5/- each held by DIL Rim and
Wheel Corporation Ltd., Mauritius the holding Company and
it's subsidiaries)
TOTAL 1704.27
SCHEDULE 2
RESERVES & SURPLUS:
Revaluation Reserve
As per last Balance Sheet 8008.01
Add: Share of Monotona Tyres Limited on acquisition 4976.35
Less: Transferred to Profit & Loss Account 534.60
12449.76
Share Premium
As per last Balance Sheet 165.87
Capital Reserve
(Capital Subsidy Received from Government through MNRE) 100.00
General Reserve
As per last Balance Sheet 3816.49
Add: Transferred from Profit & Loss Account 3500.00
7316.49
Surplus as per Profit & Loss Account 397.22
TOTAL 20429.34
109
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SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
As at
30th September, 2010
(Rs. in Lacs)
SCHEDULE 3
SECURED LOANS:
Cash Credit from Banks 9647.07
(Secured by hypothecation of Company's present and future fixed assets, current assets,
stock and book debts and pari-passu charge on Company's present and future fixed assets)
Term Loan - Syndicate Bank 2615.81
(Secured by hypothecation of Company's Plant & Machinery and Immovable Propoerties
situated at Mysore and pari-passu first charge on the Current assets and fixed assets of
the Company)
Term Loan - Yes Bank 2186.36
(Secured by subservient charge on current assets and fixed assets, Corporate guarantee of
subsidiary Company. This is to be further secured by first pari-passu charge on assets and
pledge of shares of the subsidiary Company)
Term Loan - Central Bank of India 2507.06
(Secured by exclusive first charge by way of hypothecation of Plant & Machinery & Civil
works, etc. arising out of the Term Loan. Second charge on all other existing fixed assets)
GTF Bil l Discounting 3006.61
(Secured by Second Charge of Fixed Assets of subsidiary company)
SBI WCD Loan 197.50
(Secured by First Charge of Fixed Assets of subsidiary company & Personal Guarantee of
an Ex-Director and Corporate Guarantee of subsidiary company)
TOTAL 20160.41
SCHEDULE 4
UNSECURED LOANS:
Short Term Loan
Interest free loan from body corporates 5771.80
Loan from Customers 2400.00
Sales Tax Loan 1959.87
Religare Finvest Ltd. 2664.00
TOTAL 12795.67
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SCH
EDU
LES
TO C
ON
SOLI
DAT
ED A
CCO
UN
TS (C
ON
TD.)
SCH
EDU
LE 5
FIX
ED A
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111
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SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
As at
30th September, 2010
(Rs. in Lacs)
SCHEDULE 6
INVESTMENTS (AT COST):
Long term: Other than trade
Equity share fully Paid up - Unquoted
1 Share of Rs.1000/- in FTL House Building Co-operative Society 0.01
5000 Shares of GBP 1 each in Global Finvest Ltd. 4.00
Equity share fully Paid up - Quoted
11,500 Equity Shares of Rs. 10/- each in Union Bank of India 1.84
200 Equity Shares of Rs. 10/- each in UCO Bank 0.02
400 Equity Shares of Rs. 10/- each in Indian Overseas Bank 0.10
Aggregate Market Value of quoted investments as on
30.09.2010 Rs. 45.41 lacs
TOTAL 5.97
SCHEDULE 7
INVENTORIES:
Inventories: (As per stocks taken, valued and
certified by the Management)
Raw Materials 4045.36
Stores & Spares 468.95
Work - in - Process 868.40
Finished Goods (Including Factored Goods) 4028.52
TOTAL 9411.23
SCHEDULE 8
SUNDRY DEBTORS:
Debts Outstanding for a period exceeding six months
- considered good 159.13
- considered doubtful -
Other debts - considered good 12807.79
TOTAL 12966.92
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As at30th September, 2010
(Rs. in Lacs)
SCHEDULE 9CASH & BANK BALANCES:
Cash in hand 8.73
Cheques in Transit 1658.20
Balances with Scheduled Banks :
In Current Accounts 667.45
In Unpaid Dividend Accounts 6.58
In Unpaid Debenture Account 9.10
In Deposit Accounts 979.86
(Under lien to various Banks against Letter of Credits,
Bank Guarantees and borrowings)
TOTAL 3329.92
SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
SCHEDULE 10
LOANS & ADVANCES:
(Unsecured, considered
good, unless otherwise stated)
Advances recoverable in cash or in
kind or for value to be received 3712.13
Other Deposits 232.75
Balance with Central Excise & Customs Authorities -218.14
Advance Payment:
-Taxation 1420.67
TOTAL 5147.41
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SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
As at
30th September, 2010
(Rs. in Lacs)
SCHEDULE 11CURRENT LIABILITIES:
Acceptance 2206.55
Sundry Creditors 7305.32
Unclaimed dividend * 6.58
Unclaimed Debenture * 9.10
Balance with Central Excise & Customs Authorities
Deposits from Dealer 2040.19
Other liabilities 5116.19
Interest accrued but not due on loan 43.65
* Does not include any amounts due for deposit to the
Investor Education & Protection Fund
TOTAL 16727.58
SCHEDULE 12
PROVISIONS FOR:
- Taxation 2483.58
- Fringe Benefit Tax 42.87
- Proposed Dividend 852.14
- Corporate Dividend Tax 152.16
- Warranty 394.00
TOTAL 3924.75
SCHEDULE 13
MISCELLANEOUS EXPENDITURE (To the extent not written off):
- Payments under Voluntary Retirement Scheme 0.35
- Less: Amortised during the year (included under staff cost) 0.35
TOTAL 0.00
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SCHEDULE 15
RAW MATERIAL CONSUMED:Opening Stock 1925.81
Add: Stock on acqusition of Monotona Tyres Limited 1081.85
Add: Purchases 47196.76
50204.42
Less: Closing Stock 4045.36
TOTAL 46159.06
SCHEDULE 17
CONSUMPTION OF TRADED GOODS:
Opening Stock 148.98
Add: Purchases 9388.14
Less: Closing Stock 1278.77
TOTAL 8258.35
SCHEDULE 16
(INCREASE)/DECREASE IN STOCK:
Opening StockWork in process (WIP) 219.28Add: WIP on acqusition of Monotona Tyres Limited 587.29Finished Goods (FG) 942.42Add: FG on acqusition of Monotona Tyres Limited 427.10
2176.09 Less: Closing StockWork in process (WIP) 868.40Finished Goods 2749.75
3618.15 TOTAL -1442.06
Year Ended30th September, 2010
(Rs. in Lacs)
SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
SCHEDULE 14
OTHER INCOME:Sale of Scrap 342.98
Exchange difference (Net) 6.68
Export Incentives 193.55
Dividend from Companies - Others 35.36
Miscellaneous Income including Job Charges 22.03
TOTAL 600.60
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SCHEDULES TO CONSOLIDATED ACCOUNTS (CONTD.)
Year Ended30th September, 2010
(Rs. in Lacs)
SCHEDULE 18
MANUFACTURING,ADMINISTRATIVE,SELLING &DISTRIBUTION EXPENSES:
Stores Consumed 233.38Power , Fuel and Water Charges 2766.85Mixing & Conversion Charges 1837.34Increase / Decrease in Excise Duty Provision 223.59Salaries , Wages and Bonus etc. 4185.85Contribution to Provident, Gratuity & Other Funds 665.86 Staff Welfare Expenses 245.53Repairs - Plant & Machinery 667.14Repairs - Buildings 31.89Repairs - Others 40.94Rent 30.20Rates & Taxes 68.11Insurance 28.82 Directors Sitting Fees 2.40 Selling & Distribution Expenses 3068.96Commission 483.29 Discount 2387.75 Provision for Bad & Doubtful Debts -1.09Royalty 1501.28 Printing & Stationery 46.66 Communication 47.17 Travelling & Conveyance 274.90 Bank Charges 228.19 Donation 0.31Miscellaneous Expenses 1114.34TOTAL 20179.67
SCHEDULE 19
INTEREST & FINANCE CHARGES:Interest on
Term Loan 912.83
Cash Credit Account 986.21
Others 229.20
2128.24
Less: Interest Received (Gross) 39.79
[Includes TDS Rs. 17.64 lacs ]
TOTAL 2088.45
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SCHEDULE 20
A. SIGNIFICANT ACCOUNTING POLICIES:
Basis of Accounts
The accounts have been prepared according to historical cost convention, adjusted by revaluation of fixed assets. All expensesand income to the extent considered payable and receivable, unless stated otherwise, have been accounted for on accrual basis.
Use of Estimates
The preparation of financial statement require management to make estimates and assumptions that affect the reported amountof assets and liabilities and disclosures relating to contingent liabilities and assets as at the Balance Sheet date and the reportedamounts of income and expenses during the year.Provision for contingencies are recorded when it is probable that a liability will be incurred and the amounts can reasonably beestimated. Differences between the actual results and estimates are recognized in the year in which the results are known /materialised.
Sales
Sales are accounted for on passing of title to the customers. Returns and rebates and discounts against goods sold are recognisedas and when ascertained and deducted from sales. Sales includes excise duty. Subsidiary Company Sales includes sale of DEPBLicense also.
Export Benefits
Export benefits arising on account of entitlement for duty free imports are accounted for at the time of receipt of material.Other export benefits are accounted for as and when accrued.
Fixed Assets
Fixed Assets are stated at cost of acquisition / construction (net of CENVAT/VAT and other credits) or at revalued amount as thecase may be and inclusive of incidental expenses, erection / commissioning expenses, revamping expenses, pre-operativeexpenses, interest, etc. upto the date the asset is put to use.
Depreciation / Amortisation
a) The classification of Plant & Machinery into continuous and non-continuous is carried as per technical certification anddepreciation thereon, is provided accordingly, on straight-line method at the rates prescribed in schedule XIV of the Companies Act, 1956.
b) Additional depreciation attributable to the increase in the value of assets on account of revaluation is transferred fromRevaluation Reserve to the Profit and Loss account.
c) Computer software, Intangible assets are amortised over the period of six years.ImpairmentFixed assets are reviewed at each balance sheet date for impairment. In case events and circumstances indicate any impairment,recoverable amount of fixed assets is determined. An impairment loss is recognized, whenever the carrying amount of assetseither belonging to Cash Generating Unit (CGU) or otherwise exceeds recoverable amount. The recoverable amount is the greaterof assets net selling price or its value in use. In assessing value in use, the estimated future cash flow from the use of the assetsis discounted to their present value at appropriate rate. An impairment loss is reversed if there has been a change in therecoverable amount and such loss either no longer exists or has decreased. Impairment loss/reversal thereof, which in case ofCGU, are allocated to its assets on a pro rata basis, is adjusted to carrying value of its respective assets.
Investments
Long Term Investments are valued “at cost” except where there is a diminution in value, other than temporary, in which case,adequate provision is made against such shortfall.
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS
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Inventory
Inventories are valued at lower of cost or estimated net realisable value. Cost of inventories has been computed on weightedaverage basis. In case of work in progress and finished goods cost represents materials, direct labour and appropriate portionof factory overheads. Adequate provision for defective, slow/non moving, obsolete stocks are made on the basis of technicalevaluation.In case of subsidiary, excise duty/ custom duty in respect of closing stock is not provided for and the same has also not beenincluded in the valuation of inventories. This has no impact on the profit/loss.
Transactions in Foreign Currency
Transaction in foreign currency is accounted for at the exchange rate prevailing on the date of the transaction. Foreign currencymonetary assets and liabilities at the year-end are translated using the closing exchange rates whereas non-monetary assets aretranslated at the rate on the date of the transaction. The gain and loss thereon and also on the exchange differences on settlementof the foreign currency transactions during the year are recognised as income or expense and are adjusted to the profit and lossaccount.
Employee Benefits
Employee benefits are accrued in the year in which the employees have rendered servicesContribution to defined contribution schemes such as Provident Fund, Superannuation Fund etc. are recognized as and whenincurred.Long-term employee benefits under defined benefit scheme such as gratuity, leave etc. are determined at the end of the year atpresent value of the amount payable using actuarial valuation techniques.In case of subsidiary, gratuity has not been actuarially determined and not in conformity with AS 15 (Revised) Actuarial gain and losses are recognized in the year when they arise.
Research and development expenditure
Research and development expenditure of revenue nature are charged to the profit & loss account, while capital expendituresare added to fixed assets in the year in which they are incurred.
Contingencies
Liabilities which are material and whose future outcome cannot be ascertained with reasonable certainty are treated as contingentand disclosed by way of Notes to the Accounts.
Borrowing costs
Borrowing costs incurred in relation to the acquisition, construction of assets are capitalized as part of the costs of such assetsupto the date when such assets are ready for intended use. Other borrowing costs are charged as an expense in the year in whichthese are incurred.
Taxes on Income
Provision for Current Income Tax is made on the taxable income using the applicable tax rates and tax laws. Deferred tax arisingon account of timing differences and which are capable of reversal in one or more subsequent periods, is recognised using thetax rates and tax laws that have been enacted or substantively enacted. Deferred tax assets are recognised only to the extent thatthere is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can berealized. In situation where the company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets arerecognised only if there is virtual certainty supported by convincing evidence that they can be realized against future taxableprofits.
Warranties
Warranty costs are accrued in the year of sale, based on past experience.
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
Miscellaneous Expenditure
Expenses incurred under voluntary retirement scheme are amortized over a period of five years unless required to be amortizedover a shorter period by the relevant accounting standard.
B. NOTES ON ACCOUNTS
1. Contingent liabilities not provided for
2. Estimated amount of Contracts remaining to be executed on capital account and not provided for Rs. 5043.24 Lacs –netof advances paid.
3. a) Since Monotona Tyers Limited has become subsidiary of Falcon Tyers Limited w.e.f. 21st May, 2010 the consolidatedfigures of Current Year comprises of 12 months results of Falcon Tyres Limited and 21st May, 2010 to 30th September,2010 results of Monotona Tyres Limited and the figures of previous year is not applicable.
4. a) During the previous period the Company has sub divided the face value of the equity shares from Rs 10/- each into2(two) shares of the face value of Rs. 5/- each and capitalized a sum of Rs. 11,36,18,440 from and out of GeneralReserve and applied in payment for 2,27,23,668 Nos. of equity shares of Rs. 5/- each forming part of the unissuedshare capital which shares had been allotted as bonus shares to the members in proportion of 2(two) bonus sharesfor every 1(one) equity share held by the members of the Company.
5. a) Major expansion projects undertaken by the company inter-alia includes installation of various tyres and tubeproducing machineries, captive power plant of the company. .
b) Capital work in progress includes capital advances of Rs.2919.64 Lacs.6. On 30th March 2010, incidence of fire happened in the factory and godown premises of the Subsidiary company. The
company has lodged claim to insurance company for Rs. 2,83,34,900/- for loss of Building, Plant & Machinery and Material.The claim has not been settled/accepted by the insurance company up to Balance Sheet date hence necessary entries ofthe same are pending.
7. In case of subsidiary, Sundry Debtors and loans and advances include Rs. 180.80 Lacs and Rs. 11.29 Lacs respectivelywhich are due from a long time. Since these are recoverable in view of the management no provision has been made inthe accounts as the necessary steps (including legal) have been taken to recover the same.
8. In case of subsidiary, Loans and advances includes Rs. 468.22 Lacs advances given to bodies corporate for trade advances,which have been given out of the loan and credit facilities availed by the subsidiary. Cost of the loan/ credit facilities availedby the subsidiary such as interest and financial charges are debited to those parties.
9. In case of subsidiary, Dividend of Rs. 41.12 Lacs declared in the previous year has not been en-cashed by the shareholdersand inadvertently the same could not be transferred to separate unpaid dividend account as required u/s 205A of theCompanies Act, 1956
10. The disclosures required under Accounting Standard 15 “Employee Benefits" notified in the Companies (AccountingStandards) Rules 2006, are given below:
(Rs. In Lacs)
Sl. No. Particulars Amount as at30.09 .2010
1 Claims not acknowledged as debt 155.45
2 Corporate Guarantee 8500.00
3 Guarantee Given by Bank to Pollution Control Board 1.00
4 Sales Tax demand under various appeal 1127.82
5 Outstanding letter of credit 315.60
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NOTES FORMING PART OF CONSOLIDATED ACCOUNTS(CONTD.)
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Defined Contribution Scheme
Contribution to Defined Contribution Plan, recognised for the period are as under:
(Rs. in Lacs)
As at 30.09.2010
i Employer's Contribution to Provident Fund 206.31
ii. Employer's Contribution to Superannuation Fund 61.87
Defined Benefit Scheme
The employee's gratuity fund scheme managed by Life Insurance Corporation of India is a defined benefit plan. The Presentvalue of obligation is determined based on actuarial valuation using the Projected Unit Credit Method which recognises eachperiod of services as giving rise to additional unit of employee benefit entitlement and measures each unit seperately tobuild up the final obligation.
(Rs. in Lacs)
Gratuity (Funded)
As at 30.09.2010
i Change in the present value of the defined benefit obligation representing
reconcil iation of opening and closing balances thereof are as follows:
Liability at the beginning of the year 660.32
Interest Cost 71.91
Current Cost 52.07
Actuarial (gain) / loss on obligations 271.76
Past Service Cost 10.73
Benefits paid -75.70
Liability at the end of the year 991.09
ii. Change in the Fair Value of Plan Asset representing reconcil iation of opening and
closing balances thereof are as follows:
Fair value of Plan Assets at the beginning of the year 431.65
Expected Return on Plan Assets 45.13
Contributions by the Company 35.69
Benefits paid -75.70
Actuarial gain/(loss) on the Plan Assets 7.30
Fair Value of Plan Assets at the end of the year 444.07
Total actuarial gain/(loss) to be Recognised 264.59
ii i . Actual return on Plan Assets
Expected return on Plan Assets 45.13
Actual gain/(loss) on Plan Assets 7.30
Actual Return on Plan Assets 52.43
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS(CONTD.)
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(Rs. in Lacs)
Gratuity (Funded)
As at 30.09.2010
iv. Amount Recognised in Balance Sheet
Liability at the end of the year 991.09
Fair value of Plan Assets at the end of the year 444.07
Unrecognised Past service Cost 3.93
Amount Recognised in the Balance Sheet 543.09
v. Expenses Recognised in the Income Statement
Current Service Cost 52.07
Interest Cost 71.91
Expected Return on Plan Assets -45.13
Net Actuarial (gain)/loss to be Recognised 264.59
Past Service Cost 6.67
Expenses Recognised in Profits & Loss Account 350.11
vi. Balance Sheet Reconcil iation
Opening Net Liability 228.67
Expenses as above 350.11
Employers Contribution -35.69
Amount Recognised in Balance Sheet 543.09
vii. Prinicipal Actuarial assumptions at the Balance Sheet
Discount Rate 7.95%
Rate of Return on Plan Assets 7.50%
vii i . Experience Adjustment
Experience adjustments on Plan liabilities 72.55
Experience adjustments on Plan Assets -7.30
65.25
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
Compensated Absences
The obligations for compensated absences is recognised in the same manner as gratuity. The actuarial liabilityof Compensated Absences (unfunded) of accumulated privileged, sick and casual leaves of the employees of theCompany as at 30th September 2010 is given below:
(Rs. in Lacs)
Particulars 30.09.2010
Privileged Leave 187.42
Sick Leave 19.93
Casual Leave 21.59
Total 228.94
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12. Provisions of Accounting Standard 29 on ‘Provision, Contingent Liabilities and Contingent Assets:- Disclosures in this respect as required in terms of the said Accounting Standard are as follows:
13. Salary, Wages and bonus include retainer-ship fees amounting to Rs.26.37 Lacs.
(Rs. In Lacs) 11.Micro, Small and Medium Enterprise
For the Period ended 30.09.2010
Principal Interest
Amount due to vendors 37.20 25.25
Principal amount and interest paid beyond the appointment date Nil Nil
Interest accrued and remaining unpaid beyond the appointment date
(other than interest specified u/s 18 of the Act) Nil Nil
Interest accrued and remaining unpaid as at the end of the year
(As per the Act) Nil 0.48
Particulars
Nature of Item Warranty
2009-10
Opening Provision 97.00
Provided during the Year 669.85
Amount Utilized 447.85
Closing Provision 319.00
( Rs. in Lacs)
The above Warranty Cost represents the expected cost of free replacement as estimated in terms of the stipulation for sales/ industry practice, on the basis of the past experience in respect of the goods sold during the last two years. Liability againstsuch provision is expected to occur in the next financial year.
14.The break up of deferred tax Assets and Liabilities are as under:
(Rs. in Lacs)
Provision for Deferred Tax Opening as at On acquisition Charge / (Credit) Closing as at
30.09.2010 of MTL 30.09.2010
Deferred Tax Assets
Expenses allowable on Payment basis:
- Retirement benefits 107.36 47.06 18.81 173.23
- Unabsorbed Depreciation 361.48 -- (361.46) --
- Amount Inadmissible under Sec 43B -- -- -- -
Inventory Valuation U/s 145A -- 37.08 37.08
Sub Total 468.84 84.14 (342.67) 210.31
Deferred Tax Liabil it ies
Depreciation 1263.00 378.06 (409.88) 1231.18
Net Deferred Tax Liabil ity 794.16 293.92 (67.21) 1020.87
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
15. Earning per share has been calculated on the basis of number of equity shares outstanding during the period ended 30thSeptember, 2010 in accordance with the provisions of Accounting Standard-20 "Earning Per Share".
30.09.2010
Profit attributable to Equity Shareholders (Rs. in lacs) 4610.84
No. of shares @ basic value Rs.5/- each 34085532
Basic and diluted earning per share (in Rs.) 13.53
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16. Remuneration paid to Executive Chairman & Executive Director
(Rs. in Lacs)
30.09.2010
Salary 323.27
Perquisites 49.36
Contribution to PF & other funds 67.33
Total 439.96
17. Auditors’ Remuneration (included in Miscellaneous expenses)
(Rs. in Lacs)
30.09.2010
Audit Fees 5.20
In other Capacity (excluding service tax ) 1.75
Total 6.95
18. Related party disclosures as required as per Accounting Standard (AS-18) on "Related Party Disclosures” are as below:a) All the Companies in the group as discussed below are directly / indirectly controlled by the Ruia Group of Companies
under the Leadership of Sri Pawan Kumar Ruia and its various subsidiary / associate companies which held thecontrolling stake in the Company during the year ended 30th September’ 2010.
b) Holding company: Wealth Sea Pte. Ltd., (Singapore) through DIL Rim and Wheel Corporation Limited, Mauritius.c) Associates / Group Companies
i. With whom the Company has transactionDunlop India Limited; Jessop & Co. Ltd.; Suryamani Financing Company Ltd.; Manali Properties & Finance Pvt. Ltd., Dunlop Polymers Pvt. Ltd., Falcon Tyres & Rubber Pvt. Ltd., Falcon Tyres Impex Pvt.Ltd., Ruia & Sons Pvt. Ltd.; Ruia Corporate Services Pvt. Ltd. ; Tulip Machineries Pvt. Ltd.; Vidyut Petrochem Pvt. Ltd.;
ii. Others
Aparupa Properties Pvt. Ltd.; Alpha Airwayys Pvt. Ltd. ; Acurate Traders Pvt. Ltd. ; American Merchandising Ltd. ;Aakashdeep Properties Pvt. Ltd. ; Ayodhya Properties & Finance Pvt. Ltd. ; Alwaye Properties & Finance Pvt. Ltd. ;Anchita Commercials Pvt. Ltd. ; Angan Properties Private Limited; Ajit Commercials Pvt. Ltd. ; Anish Traders Pvt. Ltd. ;Aniket Traders Pvt. Ltd. ; Anumala Traders Pvt. Ltd. ; Adhishwar Nivesh Pvt. Ltd. ; Brawany Nivesh Pvt. Ltd. ; BlackstoneHoldings Private Ltd. ; Bhartiya Hotels Limited; Borneo Traders Pvt. Ltd. ; Banalata Traders Pvt. Ltd. ; Beadon TradersPvt. Ltd. ; Bandana Commercials Pvt. Ltd. ; Bipul Commercials Pvt. Ltd. ; Ballard Commercials Pvt Ltd. ; Bharat VidyutCo. Ltd. ;.. Blessings Commercials Pvt. Ltd. ; Bengal Institute of Neurosciences Ltd. ; Bloom Billions Sdn Bhd-Malaysia;BTR Sealing System UL Ltd. - UK; Chinsurah Chemicals Pvt. Ltd. ; Climber Properties Pvt. Ltd. ; Chemical Corporationof India Ltd. ; Chaman Trade Links Pvt. Ltd. ; Chorus Trade Links Pvt. Ltd. ; Chambal Marketing Pvt. Ltd. ; ChaityCommercials Pvt. Ltd. ; Camac Traders Pvt. Ltd. ; Dunlop Latex Foam Europe Ltd. ; Draftex Automitive , GMBH; DunlopUK Ltd. - .UK; Dunlop Tyres Limited; Dunlop Rubbers Limited; Dunlop Investments Limited; Dunlop Estates PrivateLimited; Dunlop Infrastructure Private Limited; Dunlop Properties Pvt. Ltd. ; Deblok Traders Pvt. Ltd. ; Dadar Properties& Finance Pvt. Ltd. ; Deoghar Properties & Finance Pvt. Ltd. ; Durg Properties & Finance Pvt. Ltd. ; Dipti CommercialsPvt. Ltd. ; Divya Mercantile Ltd. ; Dhan E Commerce Pvt. Ltd. Double Plus Software (P) Ltd.; D K Properties Pvt. Ltd.; EcoTraders Pte Ltd.; Elloit Mercantile Pvt. Ltd.; Enormous Nivesh Pvt. Ltd. ; Edina Marketing Pvt. Ltd. ; Empire Minerals Pvt.;Ltd. ; Eyelid Mercantile Pvt. Ltd. ; Electric Corporation of India Ltd. ; Ebony Commercials Pvt. Ltd. ; eMotions Media Pvt.Ltd. ; Fiber Foam (Bombay) Pvt. Ltd. ; Fabulous Nivesh Pvt. Ltd. ; Fragment Nivesh Pvt. Ltd. ; Gain Dot Com Pvt. Ltd. ;Gain E-Commerce Pvt. Ltd. ; Gyan Website Pvt. Ltd. ; Global Fin Pro Ltd. ; Globe Sugar Refinery Ltd. ; Goldman SecuritiesLtd. ; Goldman Stocks & Share Brokers Pvt. Ltd. ; Hardcore Viniyog Pvt. Ltd. ; Himadri Properties Pvt Ltd. ; Hirakud
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
Industrial Works Ltd. ; Hirakud Rolling Mills Ltd. ; Hiland Traders Pvt. Ltd. ; Hiker Properties Pvt. Ltd. ; Hriday CommercialsPvt. Ltd. ; Herald Investments Pvt. Ltd. ; Hindustan Texknit Pvt. Ltd. ; Hindustan Bauxite Ltd. ; India Tyre & Rubber Co.(India) Ltd. ; Indo Wagon Engineering Ltd. ; Ibcon(Calcutta) Pvt. Ltd. ; India Finance Ltd. ; Jessop Infotech Pvt. Ltd. ;Jessop Shipyard Limited; Jessop Estates Pvt. Ltd. ; Jessop Properties Pvt. Ltd. ; Jessop Infrastructure Pvt. Ltd. ; JessopWagons & Coaches Ltd. ; Jai Gokul Towers Pvt. Ltd. ; Jai Brijmohan Niketan Pvt. Ltd. ; Jai Badrinath Niketan Pvt. Ltd.; Jai Raghuvir Enclave Pvt. Ltd. ; Jai Vaibhav Niketan Pvt. Ltd. ; Jai Tridev Vihar Pvt. Ltd. ; Jai Ganga Nirman Pvt. Ltd. ;Jai Harihor Tower Pvt. Ltd. ; Janaki Marketing Pvt. Ltd. ; Kailash Enterprises(ND) Pvt. Ltd. ; Kulu Properties & FinancePvt. Ltd. ; Kothi Lefin Pvt. Ltd. ; Kamlapur Alcohol Limited; Kamlapur Sugar & Industries Ltd; Kanti Commercials Pvt.Ltd. ; Lona Commercials Pvt. Ltd. ; ..Liluah Ceramics Pvt. Ltd. ; Manavendra Commercials Pvt. Ltd. ; Mayank ServicesLtd. ; Mandhatri Traders Pvt. Ltd. ; Metropole Hills Hotels Pvt. Ltd. ; Mudrika Commercials Pvt. Ltd. ; Mugdha PropertiesPvt. Ltd. ; Malini Properties Pvt. Ltd. ; Manjari Properties Pvt. Ltd. ; Manidipa Properties Pvt. Ltd. ; Metro DevelopersLtd. ; Mahant Merchandise Pvt. Ltd. ; Moulishree Electricals & Electronics Ltd. ; Monarch Exim Pvt. Ltd. ; MridulaMarketing Pvt. Ltd. ; Nivedita Properties Pvt. Ltd. ; Nandini Properties Pvt. Ltd. ; Nandan Suppliers & Contractors Pvt.Ltd. ; Onix Business Services Ltd. ; Ocean Cement Limited; Ocean Constructions Pte Ltd. ; Our Films Productions Pvt.Ltd. ; OM Cotex Ltd. (Formerly Ruia Cotex Ltd.) ; Pacific Website Pvt. Ltd. ; Pacific Apparels Ltd. ; Pawan Herbals Pvt.Ltd. ; Parnika Marketing Private Ltd. ; P.K. Constructions Pvt. Ltd. ; Payneganga Sugars & Chemicals Ltd. ; PowerCorporation of India Ltd. ; Pallavi Manufacturers Pvt. Ltd. ; Rose E-Commerce Pvt. Ltd. ; Radient Investment Ltd.-Mauritius; Raghav Industries Ltd. ; Rapid Investment Ltd.-Mauritius; Ruia Agro Products Pvt. Ltd. ; Ruia Hospital &Educational Research Institution; Ryham Pte Ltd. - Singapore; Rose Investment Ltd.- Mauritius; Ruia Hotels Pvt. Ltd. ;Ruia Electronics Pvt. Ltd. ; Renuka Resorts Pvt. Ltd. ; Resource Cement Ltd. ; Ruia Iron & Steel Co. Pvt. Ltd. ; RuiaOverseas Private Limited; Ruia Technologies Ltd. ; Ruia Marketing Ltd. ; Satarupa Properties Pvt. Ltd. ; Shalini Properties& Developers Pvt. Ltd. ; Sheetal Exports Ltd. ; SPR Resorts Ltd. ; Securities Brokers of India Ltd. ; Sagarika PropertiesPvt. Ltd. ; Shakambari Communications Pvt. Ltd. ; Shankar Traders & Dealers Ltd. ; Sarvan Commercials Pvt. Ltd. ;Shresth (India) Pvt. Ltd. ; Skypak Properties & Finance Pvt. Ltd. ; Subhlaxmi Compusis Pvt. Ltd. ; Sayaji Marketing Pvt.Ltd. ; Stephen Financial Services Pvt. Ltd. ; SPR Sugar & Chemicals Ltd. ; Sterling Share Brokers (P) Ltd. ; Shalimar TowersPvt. Ltd. ; Sugandha Industries Pvt. Ltd. ; Schlegal Automative Europe Ltd. - U.K. ; Schlegal Automative India Pvt. Ltd.; Spices Valley Estates Ltd. ; SPR Textiles Pvt. Ltd. ;Anoush Traders Pvt. Ltd,; Global Finvest Ltd. - UK; Gumasol RubberTex GMBH; Olivia Tours & Travels Pvtl. Ltd.; Ruia Holdings GMBH; Subhra Marketing Ltd.; Sukaram Marketing Ltd.; SuragCommercials Pvt. Ltd.; Tribhuban Marketing (P) Ltd.; U.P. Bio Chem Ltd.; U.P. Hydro Projects Ltd.; Udbav CommercialsPvt. Ltd.; Ventura Project Pvt. Ltd.; Vilas Marketing Private Limited; Walker Properties Pvt. Ltd.; Wealth Ocean Pte. Ltd.;Wealth Overseas Pte. Ltd. - Singapore; Wealth Velly Pte. Ltd.; Wealthsea Ltd. - Maurititius; Wizer Advertising Pvt. Ltd.;Yamina Website Pvt. Ltd.; Zipco Industrial Finance Pvt. Ltd.; Zeal Infotech Pvt. Ltd.; Olivia tour and Travels Pvt. Ltd.; RuiaHoldings GMBH.; Sanjose Polymers Pvt. Ltd.;
d) Key Management Personnel:a) Mr. Pawan Kumar Ruia (Executive Chairman)b) Mr. Sunil Bhansali (Executive Director)c) Mr. Des Raj Pahwa (Executive Director- MTL, Subsidiary Company),
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RELATED PARTY TRANSACTION: (Rs.in Lacs) Nature of Transaction Enterprises where Associates Key Management Total
control exits or which Personnelexercise control
30.09.2010 30.09.2010 30.09.2010 30.09.2010
Income:
Sale of Finished Goods
Falcon Tyres Impex Pvt. Ltd. - 1791.54 - 1,791.54
Sale of Materials
Dunlop India Ltd. - 31.04 - 31.04
Dunlop Polymers Pvt. Ltd 4447.49 4,447.49
Debit note on RM Purchases
Dunlop India Ltd. - 28.96 - 28.96
Others
Dunlop India Ltd. - 0.31 - 0.31
Dunlop Polymers Pvt. Ltd. - 33.31 - 33.31
Expenses:
Royalty -
Ruia & Sons Pvt. Ltd. - 1193.89 - 1,193.89
Purchase of Traded Goods
Dunlop India Ltd. - 15.30 - 15.30
Dunlop Polymers Pvt. Ltd. - 4227.04 - 4,227.04
Remuneration
Pawan Kumar Ruia - - 437.80 437.80
Sunil Bhansali - - 32.00 32.00
Mixing Charges
Dunlop India Ltd. - 577.42 - 577.42
Others:
Falcon Tyres Impex Pvt. Ltd. - 69.44 - 69.44
Ruia Corporate Services Pvt. Ltd. - 21.85 - 21.85
Ruia & Sons Pvt. Ltd. - 76.41 - 76.41
Misc Management Charges -
Ruia & Sons Pvt. Ltd. - 539.96 - 539.96
Assets:
Advance Paid
Dunlop India Ltd. - 2289.94 - 2,289.94
Falcon Tyres Impex Pvt. Ltd. - 3.15 - 3.15
Falcon Tyres Rubbers Pvt. Ltd. - 0.38 - 0.38
Jessop & Co. Ltd. - 16.00 - 16.00
Ruia & Sons Pvt. Ltd. - 613.03 - 613.03
Tulip Machineries Pvt. Ltd. - 1,067.52 - 1,067.52
Vidyuth Petrochem Pvt. Ltd. - 62.50 - 62.50
Transfer of C & F Deposits:
Dunlop India Ltd. - 48.39 - 48.39
Balance as on 30.09.2010:
Loans and Advances
Dunlop India Ltd. - 2299.21 - 2,299.21
Jessop & Co. Ltd. - 16.00 - 16.00
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
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RELATED PARTY TRANSACTION: (Rs.in Lacs) Nature of Transaction Enterprises where Associates Key Management Total
control exits or which Personnelexercise control
30.09.2010 30.09.2010 30.09.2010 30.09.2010
Falcon Tyres Impex Pvt. Ltd. - 4.78 - 4.78
Ruia & Sons Pvt. Ltd. - 919.04 - 919.04
Ruia Corporate Services Pvt. Ltd. - 2.90 - 2.90
Tulip Machineires Pvt. Ltd. - 1067.52 - 1,067.52
Vidyuth Petrochem Pvt. Ltd. - 62.50 - 62.50
Creditor Balance:
Dunlop Polymers Pvt. Ltd. - 242.34 - 242.34
Falcon Tyres Impex Pvt. Ltd. - 1.34 - 1.34
Falcon Tyres Rubbers Pvt. Ltd. - 0.63 - 0.63
Current l iabil it ies:
Manali Properties &
Finance Pvt. Ltd. - 5,696.80 - 5,696.80
Suryamani Financing Co. Ltd. - 75.00 - 75.00 Receivable:Falcon Tyres Impex Pvt. Ltd. - 149.23 - 149.23
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
* Sales, Purchase & Other expenses are inclusive of Taxes
The above related party information have been disclosed to the extent such parties have been identified by themanagement on the basis of information available. This has been relied upon by the auditors.
19. Particulars in terms of disclosure required as per Clause 32 of the Listing Agreement:
Amount of loans and advances in nature of loan to subsidiaries and associates as at 30th September, 2010.
(Rs.in Lacs)
Party Name Maximum Outstanding Closing Balance
Dunlop India Limited 2299.21 2299.21
20. The Company's operations predominantly of only one product segment, Tyres and Tubes. The export sales of theCompany are insignificant as compared to total sales during the year so as to constitute a geographical segment.Therefore,seperate segment information as required in terms of Accounting Standard (AS 17) on Segment Reportinghas not been considered. Further as income from Co-Gen is less than 10% of the total segment the same has not beenconsidered to be a separate segment.
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21. Quantitative & Other Information :
TYRES TUBES Flaps TOTAL
Qty Value Qty Value Qty Value Value
Nos Rs. in lacs Nos Rs. in lacs Nos Rs. in lacs Rs. in lacs
Installed Capacity ( Per annum ) * 14400000 10400000 -
Production** 11055091 8506966 -
Purchases-Factored Goods 565632 4395.25 6186489 7997.65 1237 1.87 12,394.77
Opening Stock 247027 880.62 681909 635.64 2211 2.24 1,518.50
Sales 11405192 72431.15 14223972 19240.66 866 1.21 91,673.02
Closing Stock 462558 2318.08 1151392 1219.63 2582 3.15 3,540.86
* The installed capacity is as certified by the management, and being a technical matter reliance has been placed by theauditors.
** Production includes, Production on Job Work basis.
NOTES FORMING PART OF CONSOLIDATED ACCOUNTS (CONTD.)
22. Raw materials, stores and spares consumed:
Particulars 30.09.2010
QTY. VALUE
In M.T. Rs. in lacs
Rubber and Rubber products 22273 26473.20
Fabric 2555 6059.48
Carbon Black 11507 6396.07
Chemicals 5534 4040.23
Others 2109 3190.08
Total - Raw Materials 43978 46159.06
Stores and Spares 233.38
Total 46392.44
Note: Consumption of Raw Materials includes sale of Raw Materials
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26. CIF Value of imports during the year
Particulars 30.09.2010
QTY. VALUE
In M.T. Rs. in Lacs
Raw Materials 6242.50 7215.19
Capital Goods -- 2.48
Stores & Spares --
Total 7217.67
23. Expenditure in foreign currency
- Travelling - Rs. 26.75 lacs
- Royalty - Rs.141.44 lacs
- Others -Rs.1.49 lacs
24. Remittances in foreign currency for Dividends
The Company has remitted the Dividend in foreign currency for the year ended 30.09.2009 is as follows:
(Rs.in Lacs)
Particulars No.of Non-Resident No. of Equity Gross amount
Shareholders Shares held of Dividend
Final Dividend for the year ended 30.09.2010 1 23513100 214.93
25. Research and Development Expenditure (Charged to Profit & Loss Account) Rs. 17.58 lacs
27. Value of Raw Materials, Spares and Components consumed
Particulars 30.09.2010
VALUE % of Total
Rs. in Lacs consumption
Raw materials
a) Imported 6917.56 14.99%
b) Indigenous 39241.50 85.01%
Total 46159.06 100.00%
Stores & Spares
a) Imported - -
b) Indigenous 233.38 100.00%
Total 233.38 100.00%
28. Earnings in Foreign Exchange on account of export of goods calculated on FOB basis Rs. 1775.77 lacs
29. a) The Financial Statements of the Company and its Subsidiary have been combined on a line - by - line bassis by addingtogether the book value of like items of Assets, Liabilities, Income and Expendutre, after fully eliminating intra - groupbalances and - intra group transactions resulting in unrealised profits and losses.
b) Previous Year Consolidated figures are not applicable since MTL has become subsidiary in the Current Year i.e. w.e.f. 21stMay'2010
c) Figures pertaining to the subsidiary company have been re-classified where ever necessary to bring them in line with thecompany’s financial statements.
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CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30TH SEPTEMBER, 2010(Rs. in Lacs)Year ended
Particulars 30.09.2010
(A) CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax 6268.80Adjustment for: Depreciation 1363.75Interest Income (39.79)Interest Expense 2128.24Sundry Balance Adjustment (Net) 0.00Dividend Received (35.36)Miscellaneous Expenditure written off 0.35Income from CO-GEN 0.00(Profit) /Loss from Sale of Fixed Assets 0.01Operating profit before working capital change 9686.00Adjustment for Change in Working Capital:(Increase)/ Decrease in Sundry debtors 1630.25(Increase)/ Decrease in Inventories (3550.99)(Increase)/ Decrease in Loans & Advances 2161.00Increase/ (Decrease) in Current Liabilities 2882.71Increase/ (Decrease) in Provisions (304.52)Cash Generated from Operations 12504.45Direct taxes paid (1067.15)NET CASH FROM OPERATING ACTIVITIES 11437.30
(B) CASH FLOW FROM INVESTING ACTIVITIESAdditions to Fixed assets (Including capital work - in - progress) (2694.60)Sale of Fixed Assets (7768.53)Purchase of investment (8857.03)Advance given for purchase of Investment 8857.03Income from CO-GEN 100.00Interest Received 45.14Dividend Received 35.36NET CASH USED IN INVESTING ACTIVITIES (10282.63)
(C) CASH FLOW FROM FINANCING ACTIVITIESUn-secured loans received 303.35Un-secured loans received 917.05Borrowings from Banks 1277.82Interest / Finance Charges paid (2182.08)Dividend paid (255.56)Corporate Dividend Tax Paid (43.45)NET CASH USED IN FINANCIAL ACTIVITIES 17.13NET CASH FLOWS DURING THE YEAR (A+B+C) 1171.80CASH AND CASH EQUIVALENTS (OPENING BALANCE) 2158.12CASH AND CASH EQUIVALENTS (CLOSING BALANCE) 3329.92
Previous Year Consolidated figures are not applicable since MTL has become subsidiary in the Current Year i.e. w.e.f. 21st May'2010
As per our report of even date attached
For and on behalf of For and on behalf of the Board
K.N.Gutgutia & Co.
Chartered Accountants
Subhasish Pore M. C. Bhansali Sunil Bhansali S. Ravi
Partner Company Secretary Executive Director Director
Membership No.: 055862
Kolkata, 12th November, 2010