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Notes to Accounts of Baba Arts Ltd.

Mar 31, 2015

1. Term Loan facility is secured by

a. exclusive first charge on all tangible and intangible assests, including film negative rights, IPR, and film exploitation rights present and future of the film "Action Jackson".(The Film)

b. Exclusive First Charge on all revenues / receivables of the film.

c. First Charge on IPR of various films.

2. Cash Credit facility is secured by way of hypothecation of book debts and receivables, satellite rights/ IPR of various films and TV Serials.

3. Term Loan and Cash Credit both facilities are further secured by:

a. Equitable Mortgage of Immovable Property belonging to the Company situated at Mumbai.

b. Pledge of Three Crore Shares of the Company held by the Managing Director of the Company constituting 49.85% of his shareholding in the Company.

c. Hypothecation of Plant & Machinery of the Company

d. Personal Guarantee of the Managing Director of the Company

4. Contingent Liability -

A. Income Tax:

i) Penalty of Rs. 542,540/- levied U/s 271(1 )(c) of the Income Tax Act, 1961 by Dy. Commissioner of Income Tax - 8(1) in respect of alleged concealment of income for the A.Y 2011-12.

The Company has preferred an appeal against the said demand before the Commissioner of Income Tax and the Company is confident that the said demand will be dropped and no liability will arise against the Company.

ii) Demand of Rs. 1,754,329/- (which includes Tax of Rs. 212,437/- and interest of Rs. 1,541,982) in respect of alleged bogus purchase raised by Asstt. Commissioner of Income Tax -9(2)(1) for the A.Y 2009-10.

The Company has filed a letter for rectification of the said order as the Asstt. Commissioner of Income Tax has not given credit towards TDS for an amount of Rs.1,101,082/-.The Company has already provided for the tax demand of Rs. 212,437/- and does not expect any further liability.

B. Maharashtra Value Added Tax:

i) Demand of Rs. 16,781,560/- towards MVAT and Rs. 61,256/- towards CST for the year 2010-11 raised by Dy. Commissioner of Sales Tax, Mumbai towards alleged excess Set Off Claimed by the Company.

The Company has filed an appeal against the said order before the Joint Commissioner of Sales Tax (Appeals), Mumbai and is confident that the said demand will be withdrawn as such the Company does not expect any liability on this account.

5. Related Party Disclosure as per Accounting Standard (AS) 18 A. List of related parties.

a. Key Management Personnel

(i) Shri Gordhan P. Tanwani - Chairman & Managing Director.

b. Relatives of Key Management Personnel:

(i) Smt. Jyoti G. Tanwani - Wife

(ii) Shri Nikhil G. Tanwani - Son

(iii) Shri Rahul G. Tanwani - Son

(iv) Gordhan P Tanwani (HUF)

(v) Shri Raju P Tanwani - Brother

c. Other related parties (Companies in which director or their relatives have significant influence)

(i) Bhagwati Media Pvt. Ltd.

(ii) Larry's Electronics Pvt Ltd.

(iii) Bhagwati Holdings Pvt. Ltd.

(iv) M/s. Baba Developers

(v) M/s. Super Plast

(vi) M/s. Baba Digital

(vii) M/s. Om Enterprises

6. Disclosure as per clause 32 of The Listing Agreement

a) Loans and Advances to subsidiary companies: Rs. Nil

b) Loans and Advances to associate companies: Rs. Nil

c) Loans and Advances to associate companies/ firms in which directors are interested (excluding subsidiary and associate companies): Rs. Nil

7. Previous year's figures have been regrouped/ rearranged wherever considered necessary.

8. The Notes referred to above form an integral part of Balance Sheet and Profit & Loss Account.


Mar 31, 2014

1. CASH FLOW FROM FINANCIAL ACTIVITIES:

1 The above cash flow statement has been prepared under the indirect method as set out in Accounting Standard - 3 issued by the Institute of Chartered Accountants of India.

2 Cash and cash equivalents consists of Cash on hand and Balance with banks including Fixed Deposits with Bank.

3 Previous year''s figures have been regrouped/rearranged wherever necessary.

2.SHARE CAPITAL

(a) Authorised Share Capital

Notes:

1) 5,16,00,000 equity shares of Re. 1/- each fully paid issued by way of Bonus Shares by utilisation of Securities Premium and Reserves.

2) 1,29,00,000 equity shares of Rs. 4/- each were subdivided into 5,16,00,000 equity shares of Re. 1/- each pursuant to the special resolution passed at the AGM held on 29th September, 2009.

3) 28,49,530 equity shares issued on conversion of Optionally Fully Convertible Warrants.

3. SHORT TERM BORROWINGS

Notes:

1. Term Loan facility is secured by

a. exclusive first charge on all tangible and intangible assests, including film negative rights, IPR, and film exploitation rights present and future of the film"Action Jackson".(The Film)

b. Exclusive First Charge on all revenues / receivables of the film.

c. First Charge on IPR of various films.

2. Cash Credit facility is secured by way of hypothecation of book debts and receivables, satellite rights/ IPRs of various films and TV Serials.

3. Term Loan and Cash Credit both facilities are further secured by:

a. Equitable Mortgage of Immovable Property belonging to the Company situated at Mumbai.

b. Pledge of Three Crore Shares of the Company hled by the Managing Director of the Company constituting 46.55% of his shareholding in the Company.

c. Hypothecation of Plant & Machinery of the Company

d. Personal Guarantee of the Managing Director of the Company

4. TRADE PAYABLES

Note: Based on information of status of suppliers to the extent received by the Company,there are no micro and small enterprises included in trade payables to whom the payments are outstanding for a period of more than 45 days.Further, the Company has not received any Memorandum (as required to be filed by the suppliers with the suppliers with notified authority under Micro,Small and Medium Enterprises Development Act,2006) claiming thier status. Consequently, the amount paid/payable to these during the year is Rs. Nil,(Previous Year Rs. Nil)

6. Contingent Liability -

A. Service Tax:

i) Penalty for Non Filing of Service Tax Return for the period from October, 2008 to March, 2011 - Rs. 25,000/- The Company has filed appeal against the levy of penalty before the Dy. Commissioner of Service Tax, Div IV, Mumbai II. The Company is confident that no liability will arise against the demand.

ii) Show Cause cum Demand Notice issued by Assistant Commissioner (Audit) Service Tax, Mumbai - II for Rs. 497,409/- towards alleged wrong Cenvat Credit taken and utilized including Education Cess and Higher Secondary Education Cess, plus Interest and Penalty (amount unascertainable at present).

The Company has filed its reply to the said show cause cum demand notice and the matter is currently pending with Assistant Commissioner (Audit), Service Tax, Mumbai - II for further hearing. Based on the documents and other information furnished, the Company is confident that the said demand will be dropped.

B. Income Tax:

iii) Demand of Rs. 18,625,199/- (including interest of Rs. 4,930,200) towards short payment of Tax Deducted at Source under Section 194J of the Income Tax Act for A.Y. 2012-13 raised by Dy. Commissioner of Income Tax (TDS) - 1 (1), Mumbai.

Actual liability towards payment of TDS under Section 194J for the A.Y. 2012-13 for the year was Rs. 6,406,683/- and not Rs. 13,694,999/- as assessed by the Dy. Commissioner of Income Tax - TDS. The Company had already paid the said amount of TDS of Rs. 6,406,683/- within the stipulated time and as such the above demand for Rs. 18,625,199/- (including interest of Rs. 4,930,200/-) is wrongly raised against the Company.

The Company has filed an application for rectification of the said order Under Section 154 of the Income Tax Act, 1961. Further by way of abundant caution the Company has also filed an appeal against the said order before Commissioner of Income Tax (Appeals), Mumbai and the company is confident that the said wrongful demand will be withdrawn and no liability will arise in respect of the said demand.

C. Maharashtra Value Added Tax:

iv) Demand of Rs. 28,114,579/- (including interest of Rs. 6,383,503 and Penalty of Rs. 10,865,538/-) in respect of short payment of Maharashtra Value Added Tax (MVAT) for the Financial Year 2009-10 raised by the Dy. Commissioner of Sales Tax, Mumbai.

The Company has field an appeal against the said demand before the Joint Commissioner of Sales Tax (Appeal) -I and the Company is confident that the said demand will be dropped and no liability will arise against the company.

8. In the opinion of the Board and to the best of their knowledge and belief, the value on realization of the Current Assets, Loans & Advances in the ordinary course of the business will not be less than the value stated in the Balance Sheet and provision for all known liabilities are adequate and not in excess of the amount reasonably required to be provided.

9. Related Party Disclosure as per Accounting Standard (AS) 18

A. List of related parties.

a. Key Management Personnel

(i) Shri Gordhan P. Tanwani - Chairman & Managing Director.

b. Relatives of Key Management Personnel:

(i) Smt Jyoti G. Tanwani - Wife

(ii) Shri Nikhil G. Tanwani - Son

(iii) Shri Rahul G. Tanwani - Son

(iv) Gordhan P. Tanwani (HUF)

(v) Shri Raju P. Tanwani - Brother

c. Other related parties (Companies in which director or their relatives have significant influence)

a. Bhagwati Media Pvt. Ltd.

b. Larry''s Electronics Pvt Ltd.

c. Bhagwati Holdings Pvt. Ltd.

d. M/s. Baba Developers

e. M/s. Super Plast

f. M/s. Baba Digital

g. M/s. Om Enterprises

10. Disclosure as per clause 32 of The Listing Agreement

a) Loans and Advances to Subsidiary Companies: Rs Nil

b) Loans and Advances to Associate Companies: Rs Nil

c) Loans and Advances to Associate Companies/ firms in which directors are interested (excluding Subsidiary and Associate Companies): Rs Nil

11. Segment Information

The Company is at present engaged in main business segments of Trading in IPR of Films & Film and TV Serial Production.

These Business Segments have been identified in line with Accounting Standard (AS) - 17"Segment Reporting"

Segment revenue results include amounts identifiable to each segment. Other unallocable expenditure includes revenues and expenditure, which are not directly identifiable to the individual segment as well as expenses, which relate to the Company as a whole.

12. Previous year''s figures have been regrouped/ rearranged wherever considered necessary.

13. The Notes referred to above form an integral part of Balance Sheet and Profit & Loss Account.


Mar 31, 2013

1 Contingent Liability-

a. Show Cause cum Demand notice for Short Payment of Service Tax for the year 2007-08 - Rs. 67158/- plus interest.

b. Show Cause cum Demand notice towards Penalty for Non Filing of Service Tax Return for the period from October, 2008 to March, 2011 - Rs. 100,000/-

The Company has contested both the demands before the Dy Commissioner of Service Tax, Div IV, Mumbai II. The Company is confident that no liability will arise against both the demands except for Rs. 3541/- which has already been paid by the company.

2. Remuneration to Directors:

Remuneration paid during the year ended 31st March, 2013 to Chairman & Managing Director Rs. Nil (P.Y. Nil). Sitting Fees paid to Non- Executive/ Independent Directors -

3. In the opinion of the Board and to the best of their knowledge and belief, the value on realization of the Current Assets, Loans & Advances in the ordinary course of the business will not be less than the value stated in the Balance Sheet and provision for all known liabilities are adequate and not in excess of the amount reasonably required to be provided.

4. Balances in respect of the Debtors, Creditors, Advances and Deposits are subject to confirmation.

5. Related Party Disclosure as per Accounting Standard (AS) 18 A List of related parties.

a. Key Management Personnel

(i) Shri Gordhan P. Tanwani - Chairman & Managing Director.

b. Other related parties (companies in which director or their relatives have significant influence)

a. Bhagwati Media Pvt. Ltd. (Formerly-Baba Entertainments Pvt. Ltd.)

b. Larry''s Electronics Pvt Ltd.

c. Silgate Solutions Ltd.

d. Bhagwati Holdings Pvt. Ltd.

e. M/s. Baba Developers

f. M/s. Super Plast

g. M/s. Baba Digital

h. M/s. Om Enterprises

6. Disclosure as per clause 32 of The Lisiting Agreement

a) Loans and Advances to subsidiary companies: Rs Nil

b) Loans and Advances to associate companies: Rs Nil

c) Loans and Advances to associate companies/ firms in which directors are interested (excluding subsidiary and associate companies): Rs Nil

7. Segment Information

The Company is at present engaged in main business segments of Trading in IPR of Films & Film Production in Hindi

These Business Segments have been identified in line with Accounting Standard (AS) - 17 "Segment Reporting"

Segment revenue results include amounts identifiable to each segment. Other unallocable expenditure includes revenues and expenditure, which are not directly identifiable to the individual segment as well as expenses, which relate to the Company as a whole.

8. Previous year''s figures have been regrouped/ rearranged wherever considered necessary.

9. The Notes referred to above form an integral part of Balance Sheet and Profit & Loss Account.


Mar 31, 2012

Notes:

1. 5,16,00,000 equity shares of Re. 1/- each fully paid issued by way of Bonus Shares by utilisation of Securities Premium and Reserves

2. 1,29,00,000 equity shares of Rs. 4/- each were subdivided into 5,16,00,000 equity shares of Re. 1/- each pursuant to the special resolution passed at the AGM held on 29th September, 2009.

3. 28,49,530 equity shares issued on conversion of Optionally Fully Convertible Warrants

Note: 1. The Cash Credit Facility is secured by Hypothecation of Book Debts / Receivables arising out of trading in Satellite Rights / IPR, Ownership Rights of various Films and T.V. Serials, Hypothecation of Plant & Machinery, Equitable Mortgage of Office Premises at Mumbai, Pledge of Three Crore Equity Shares of Re. 1/- each of Promoters constituting 51.18% of their holding and Personal Guarantee of the Managing Director of the Company.

1 Contingent Liability - Nil

2. Remuneration to Directors:

Remuneration paid during the year ended 31st March, 2012 to Chairman & Managing Director Rs. Nil (P.Y. Rs.26,99,970).

3. The Company has sent memorandum to suppliers covered under The Micro, Small and Medium Enterprises Development Act, 2006; no replies have been received from them till date.

4. In the opinion of the Board and to the best of their knowledge and belief, the value on realization of the Current Assets, Loans & Advances in the ordinary course of the business will not be less than the value stated in the Balance Sheet and provision for all known liabilities are adequate and not in excess of the amount reasonably required to be provided.

5. Balances in respect of the Debtors, Creditors, Advances and Deposits are subject to confirmation.

6. Related Party Disclosure as per Accounting Standard (AS) 18 A List of related parties.

a. Key Management Personnel

(i) Shri Gordhan P. Tanwani - Chairman & Managing Director.

b. Other related parties (companies in which director or their relatives have significant influence)

a. Bhagwati Media Pvt. Ltd. (Formerly-Baba Entertainments Pvt. Ltd.)

b. Larry's Electronics Pvt Ltd.

c. Silgate Solutions Ltd.

d. Bhagwati Holdings Pvt. Ltd.

e. M/s. Baba Developers

f. M/s. Super Plast

g. M/s. Baba Digital

h. M/s. Om Enterprises

7. Segment Information

The Company is at present engaged in main business segments of Trading in IPR of Films & Film Production in Hindi

These Business Segments have been identified in line with Accounting Standard (AS) - 17 "Segment Reporting"

Segment revenue results include amounts identifiable to each segment. Other unallocable expenditure includes revenues and expenditure, which are not directly identifiable to the individual segment as well as expenses, which relate to the Company as a whole.

8. Previous year's figures have been regrouped/ rearranged wherever considered necessary.

9. The Schedules and the notes referred to above form an integral part of Balance Sheet and Profit & Loss Account.


Mar 31, 2010

1. Contingent Liability - Rs. Nil

2. Remuneration to Chairman, Managing Director & Executive Director:

No remuneration was paid during the year ended 31st March,2010 ( Rs. Nil paid during FY 2008-09).

3. The Company has sent memorandum to suppliers covered under The Micro, Small and Medium Enterprises Development Act,2006, no replies have been received from them till date.

4. In the opinion of the Board and to the best of their knowledge and belief, the value on realization of the Current Assets, Loans & Advances in the ordinary course of the business will not be less than the value stated in the Balance Sheet and provision for all known liabilities are adequate and not in excess of the amount reasonably required to be provided.

5. Balances in respect of the Debtors, Creditors, Advances and Deposits are subject to confirmation.

6. Other requirements of Para 3 & 4 of Part II of Schedule VI to the Companies Act, 1956 are not applicable to the Company.

7. The company does not have policy of leave encashment. The provision for gratuity has been made on the basis of acturial report received.

8 Related Party Disclosure as per Accounting Standard (AS) 18 A List of related parties.

a. Key Management Personnel

(i) Shri. Gordhan P. Tanwani - Chairman & Managing Director.

b. Subsidiary Companies :

(i) Mahadev Production Pvt. Ltd.

c. Other related parties (companies in which director or their relatives have significant influence)

(i) Bhagwati Media Pvt. Ltd. (Formerly - Baba Entertainments Pvt. Ltd.)

(ii) Larrys Electronics Pvt Ltd.

(iii) Silgate Solutions Ltd.

(iv) Bhagwati Holdings Pvt. Ltd.

(v) M/s. Baba Developers

(vi) M/s. Super Plast

(vii) M/s. Baba Digital

(viii) M/s. Om Enterprises

9. Segment Information

The Company is at present engaged in main business segments of Post Production, Trading in IPR of Films & Film Production.

These Business Segments have been identified in line with Accounting Standard (AS) - 17 "Segment Reporting"

Segment revenue results include amounts identifiable to each segment. Other unallocable expenditure includes revenues and expenditure, which are not directly identifiable to the individual segment as well as expenses, which relate to the Company as a whole.

10. Previous years figures have been regrouped/ rearranged wherever considered necessary.

11. The Schedules and the notes referred to above form an integral part of Balance Sheet and Profit & Loss Account.

 
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