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Notes to Accounts of Bhartiya International Ltd.

Mar 31, 2015

1. The Company has only one class of equity shares having a par values of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General meeting. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion of the number of equity share held by the shareholders.

2. 100,000 Equity shares of Rs. 10/- each at a premium of Rs. 77/- each issued to non-promotors on conversion of preferential Share Warrants.

3. The Company allotted 50,000 Equity shares of Rs. 10/- each at a premium of Rs. 146/- each in terms of the Employee Stock Option scheme upon exercise of right of conversion of 50,000 options into equity shares by the employee.

4. The Company has alloted 500,000 warrants to promoter company on 18th June, 2014 on preferential basis, convertible into equity shares of Rs. 10/- each fully paid up. The holders of warrants have a right to apply one equity share of Rs. 10/- each at a premium of Rs. 230/- with in a period of 18 months from the date of allotment. Against this the company has received Rs. 60/- per warrant.

5. Term Loan from Allahabad Bank, balance outstanding amounting to Rs. 418.95 lacs (31st March, 2014 Rs. 768.03 lacs) is secured by first parri passu charge (with Axis Bank) on specific land, building and machinery of the project created out of the Term loan and personal guarantee of one of the Director.

The loan is repayable in fifteen equal quarterly instalments starting from April 2013. Last installment due in January 2017. Rate of interest 13.75 p.a. as at year end (Previous Year 13.70 % p.a.)

6. Term Loans from IDBI Bank, balance outstanding amounting to Rs 728.83 lacs (31st March, 2014 Rs. 750.00 lacs) is secured by First Charge on the commercial property situated at Institutional Plot No 38, Sector 44, Gurgaon and personal guarantee of one of the Director.

The loan is repayable in 180 monthly Installment starting from February, 2013. Last installment due in February, 2028. Rate of Interest 12.25 % p.a. as at year end (Previous Year 12.25% p.a.)

7. Term Loans from IDBI Bank, balance outstanding amounting to Rs 1873.71 lacs (31st March, 2014 Rs. 1935.69 lacs) is secured by First Charge on the commercial property situated at Institutional Plot No 38, Sector 44, Gurgaon and personal guarantee of one of the Director.

Repayable in 161 monthly Installment starting from June, 2014. Last installment due in November, 2027. Rate of Interest 12.5 % p.a. as at year end (Previous Year 12.25% p.a.)

8. Term Loan from Axis Bank, balance outstanding amounting to Rs. 585 Lacs (31st March, 2014 Rs. Nil) is secured by exclusive charge over the fixed assets funded out of it. Exclusive charge by way of Equitable Mortgage over the immovable property situated at plot No 69, 3rd Road, 1st Phase, Jigani industrial Area, Part of Sy No 588 & 590 Jigani, Anekai Taluk, Banglore, 562106 and personal guarantee of one of the Director

The Loan is repayble in 15 Quarterly Installment starting from September, 2015. Last installment due in June, 2019. Rate of interest 12.25% p.a. as at year end (previous year - N/A)

9. Vehicle Loans are secured by way of hypothecation of vehicles financed by the Bank.

10. Working Capital facilities are secured against hypothecation of stocks of raw - materials, stock in process, finished goods, Other Current assets, specified immovable property, movable fixed assets, lien on fixed deposits, exports bills and personal guarantee of Director.

11. Foreign documentary bills discounted with Banks have been shown as a contingent liability. The same are secured against the export bills and the personal guarantee of Director.

12. The Company has not received information from vendors regarding their status under the Micro,Small and Medium enterprises Devlopment Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act have not been given.

13. As per the incorporation documents of BIL Group LLC, Bhartiya international Ltd is the sole member having 100% membership interest and the entire investment has been represented as members capital contribution. An LLC for income tax purposes in USA under the IRS can elect to be taxed as either a partnership or as a separate corporate entity. In the selection of being taxed as a partnership, the LLC is a pass through entity and the members get taxed on their share of the profit/loss. BIL Group LLC has, adopted to be taxed as a partnership and hence Bhartiya International Ltd being the sole member, shall be taxed for the full profit or loss in USA. The financial year closure of this LLC is 31st December and it has reported a loss of USD 3257/- (Rs. 203,302/-) in its financial year ended 31st December, 2014. Accordingly the company has accounted for the loss in the books of accounts.

14. Investment in the subsidiary Bhartiya International SEZ Ltd. include 6 equity shares of (Rs. 60/-) held in the name of a Director/nominees in fiduciary capacity for the company.

15. Investment in the wholly owned subsidiaries Ultima S.A, Switzerland, Bhartiya Global Marketing Ltd.and Bhartiya Fashion Retail Ltd, include 1 equity share of the nominal value of SFR 1,000 (Rs. 33,785/-) and 6 equity shares (Rs. 60/-) respectively held in the name of Directors/nominees in fiduciary capicity for the company.

16. The Company has filed legal Suit for recovery of Rs. 6,162,337/- against one of its overseas customer. Management is confident of recovery of the same and hence has not made any provision for bad & doubtful debts against this.

17. Balances with banks Includes Unclaimed Dividend of Rs. 968,223/- (Previous year Rs. 1,071,138/-)

18. Fixed deposits of Rs. 53,375,585/- (Previous year Rs. 1 18,422,933/-) are pledged with the banks for various limits and facilities granted.

19. The previous period figure has been regrouped/reclassified, wherever necessary to conform to the current period presentation.

20. CONTINGENT LIABILITES AND COMMITMENTS

As at As at 31st March, 31st March, 2015 2014

(a) Estimated value of contract remaining to be executed on capital account and not 7,899,425 9,879,947 provided for

(b) Contingent liabilities not provided for :

i) Letter of Credit/Import Bills outstanding - 60,333,1 172,523,135

ii) Standby Letter of credit (SBLC) issued by company bankers in favour of the bankers of its subsidiaries

- Ultima S A 668,694,300 247,260,000

- WFT Ltd 21,959,000 29,085,000

iii) Bills discounted with banks - 21,052,626 23,219,179

iv) Other Guarantee given by bank -with corporation Bank 2,113,580 4,545,000

v) Corporate Guarantee given by the company to a bank against facilities granted by that bank to its wholly owned subsidiaries Ultima SA and its subsidiary Ultima Italia SRL 943,050,000 53,300,000

vi) Income Tax Demand under dispute 12,225,782 12,225,782

vii) Karnataka VAT Demand under dispute - 2,876,543 -

viii) Forward Contracts outstanding

In GBP 1.85 Millio 0.50 Million (Rs. 1722.30 Lacs (Rs. 530 Lacs) IN USD 9 Millio 1.75 Million (Rs. 5658 Lacs (Rs. 1124.9 IN EURO Lacs) 0.45 Millio - (Rs. 306.4 Lacs)

21. Related party disclosure

Related party disclosure as required under Accounting Standard on "Related Party Disclosures" issued by the Institute Of Chartered Accountants of India are given below :

a) Names of Related Parties & description of relationship:

i) Subsidiaries :

Domestic Overseas

Bhartiya Global Marketing Ltd. World Fashion Trade Ltd., Mauritius

J&J Leather Enterprises Ltd. Ultima S.A, Switzerland

Bhartiya International SEZ Ltd. Ultima Italia SRL, Italy

Bhartiya Fashion Retail Ltd. BIL Group LLC, USA

Design Industry Ltd., Hongkong

ii) Associates :

Bhartiya Prakash Leather

Bhartiya Urban Infrastructure & Land Development Co Pvt. Ltd.

Bhartiya City Developers Pvt. Ltd.

Tada Mega Leather Cluster Pvt. Ltd.

iii) Key Management Personnel:

Snehdeep Aggarwal

Jaspal Sethi

A.K. Gadhok

iv) Enterprises owned or significantly influenced by key management personnel or their relatives :

Itopia Management Services (India) Pvt. Ltd.

v) Relatives of Key Management Personnel :

Kanwal Aggarwal

Arjun Aggarwal

a) Business Segments:

Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into more than one segment during the year.

b) Geographic Segments

Operation of the Company do not qualify, for reporting as geographic segments, as per the criteria set out under Accounting Standard 17 on segment reporting issued by the Institute of Chartered Accountants of India.

22. Previous year expenses debited to profit & loss account Rs. 2,736,195/- (Previous Year Rs. 3,597,331/-)

23. In the opinion of the Directors, the Current Assets, Loans and Advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.


Mar 31, 2014

1.1 The Company has only one class of equity shares having a par values of Rs. 10 per share. The Board of Directors , in their meeting on 27th May, 2014 declared a dividend of Rs. 1/- per equity share. The proposal is subject to the approval of shareholders at the Annual General Meeting. Each holder of equity share is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company in proportion of the number of equity share held by the shareholders.

1.2 50000 options issued on 28/01/2014 under Employee Stock Option Scheme 2013 excercisable over a period upto 31st March, 2015 after vesting on 1st February 2015 (25000 options) and 1st March, 2015 (Balance 25000 options) at an exercise price of Rs. 156/- (including premium of Rs. 146/-) per option are outstanding as at year end. Each option entitles the holder therof to apply for and be allotted one equity share of the face value of Rs. 10/- each.

1.3 The Company had alloted 100,000 warrants to non-promoter on 7th Dec 2012 on preferential basis, convertible into equity shares of Rs. 10/- each fully paid up. The holders of warrants have a right to apply one equity share of Rs. 10 each at a premium of Rs. 77/- with in a period of 18 months from the date of allotment. Against this the company has received Rs. 21.75/- per warrant.

1.4 Term Loan from Allahabad Bank is secured by exclusive charge on specific land , building and machinery of the project created out of the Term loan and personal guarantee of one of the Director. The loan is repayble in fifteen equal quarterly instalments starting from April 2013 quarter.

1.5 Term Loans of Rs. 20 Crores & Rs. 7.5 Crores from IDBI Bank is secured by First Charge on the commercial property situated at Institutional Plot No 38, Sector 44, Gurgaon and personal guarantee of one of the Director. The Term Loan of Rs. 20 Crores is repayble in 180 monthly Installment starting from February, 2013 and Term Loan of Rs. 7.5 Crores is repayble in 161 monthly installment starting from June, 2014.

1.6 Vehicle Loans are secured by way of hypothecation of vehicles financed by the Bank.

1.7 Working Capital facilities are secured against hypothecation of stocks of raw - materials, stock in process, finished goods, Other Current assets , specified immovable property, movable fixed assets, lien on fixed deposits, exports bills and personal guarantees of Directors.

1.8 Foreign documentary bills discounted with Banks have been shown as a contingent liability.The same are secured against the export bills and the personal guarantees of Directors.

1.9 The Company has not received information from vendors regarding their status under the Micro,Small and Medium enterprises Devlopment Act , 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

1.10 The Company has provided for the diminution in the value of investments in two of its overseas subsidiary companies due to accumulated losses in these subsidiary companies.

1.11 As per the incorporation documents of BIL Group LLC, Bhartiya International Ltd, is the sole member having 100% membership interest and the entire investment has been represented as members contribution. An LLC for income tax purposes in USA under the IRS can elect to be taxed as either a partnership or as a separate corporate entity. In the selection of being taxed as a partnership , the LLC is a pass through entity and the members get taxed on their share of the profit/loss. BIL Group LLC has , adopted to be taxed as a partnership and hence Bhartiya International Ltd being the sole member , shall be taxed for the full profit or loss in USA .The financial year closure of this LLC is 31st December and it has reported a loss of USD 2937 /- ( Rs. 175,251/-) in its financial year ended 31st December, 2013. Accordingly the company has provided the loss in books of accounts .

1.12 Investment in the subsidiary Bhartiya International SEZ Ltd. include 6 equity shares of (Rs.60/-) held in the name of a Director / nominees in fiduciary capacity for the company.

1.13 Investment in the wholly owned subsidiaries Ultima S.A, Switzerland, Bhartiya Global Marketing Ltd.and Bhartiya Fashion Retail Ltd, include 1 equity share of the nominal value of SFR 1000 (Rs.33,785/- ) and 6 equity shares ( Rs. 60/-) respectively held in the name of Directors/nominees in fiduciary capicity for the company.

1.14 The Company has filed legal Suit for recovery of Rs. 61,62,337/- against one of its overseas customer. Management is confident of recovery of the same and hence has not made any provision for bad & doubtful debts against this.

1.15 The company has filed a writ Petiton before the Hon''ble Madras High Court for the recovery of Duty Drawback amounting to Rs. 33,63,721/- against the Chief Commissioner of Customs, Chennai. The management is confident for the recovery of the said amount and hence has not made any provision for bad & doubtful debts against this.

1.16 The previous period figure has been re grouped/reclassified, wherever necessary to conform to the current period presentation.

02.01 CONTINGENT LIABILITES AND COMMITMENTS

As at As at 31ST March, 2014 31ST March, 2013

(a) Estimated value of contract remaining to be executed on capital Account net of Advances and not provided for 9,879,947 24,784,958

(b) Contingent liabilities not provided for

i) Letter of Credit/Import Bills outstanding – 172,523,135 228,251,468

ii) Standby Letter of credit (SBLC) issued by company bankers in favour of the bankers of its subsidiaries

– Ultima Italia SRL - 41,982,000

– Ultima S A 247,260,000 83,964,000

– WFT Ltd 29,085,000 19,096,000

iii) Bills discounted with banks- 23,219,179 37,533,923

iv) Other Guarantee given by bank -with corporation Bank 4,545,000 3,105,000

v) Corporate Guarantee given by the company to a bank against facilities granted by that bank to its wholly owned subsidiaries

– Ultima Italia Srl 53,300,000 69,970,000

vi) Income Tax Demand under dispute 12,225,782 12,225,782

vii) DVAT Demand under dispute – 284,507

vi) Forward contracts outstanding

In GBP .50 million (53 Million INR)

In USD 1.75 million (112.49 Million INR)

3.0 Previous year expenses debited to profit & loss account Rs. 3,597,331/- (Previous Year Rs. 1,793,602/-)

3.1 SEGMENT INFORMATION

a) BUSINESS SEGMENTS:

Based on similarity of activities/products, risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into more than one segment during the year.

b) Geographic segments

Operation of the Company do not qualify, for reporting as geographic segments, as per the criteria set out under Accounting Standard 17 on segment reporting issued by the Institute of Chartered Accountant of India.

3.2 In the opinion of the Directors, the Current Assets, Loans and Advances have the value at which they are stated in the Balance Sheet, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.


Mar 31, 2013

1.1 Related party disclosures

Related party disclosure as required under Accounting Standard on "Related Party Disclosures" issued by the Institute Of Chartered Accountants of India are given below :

a) Name of Related Parties & Nature of Relationship: i) Subsidiary Companies

Domestic Overseas

Bhartiya Global Marketing Ltd World Fashion Trade Ltd, Mauritius

J&J Leather Enterprises Ltd Ultima S.A., Switzerland

Bhartiya International SEZ Ltd Ultima Italia SRL, Italy

Bhartiya Fashion Retail Ltd BIL Group LLC, USA

ii) Associate Parties :

Bhartiya Prakash Leather

Bhartiya Urban Infrastructure & Land Development Co Pvt. Ltd

Itopia Management Services (India) Pvt. Ltd

Bhartiya City Developers Pvt. Ltd

Tada Mega Leather Cluster Pvt. Ltd

iii) Key Management Personnel: Board of Directors Snehdeep Aggarwal C.L. Handa Shashank A. Sahasranaman Jaspal Sethi Ramesh Bhatia A.K.Gadhok Sandeep Seth Nikhil Agarwal V.K. Chopra

iv) Relatives Of Key Management Personnel : Kanwal Aggarwal Arjun Aggarwal

1.2 SEGMENT INFORMATION

a) Business Segments:

Based on similarity of activities/products , risk and reward structure, organisation structure and internal reporting systems , the Company has structured its operations into more than one segment during the year.

b) Geographic segments

Operation of the Company do not qualify , for reporting as geographic segments, as per the criteria set out under Accounting Standard 17 on segment reporting issued by the Institute of Chartered Accountants of India.

1.3 In the opinion of the Directors, the Current Assets, Loans and Advances have the value at which they are stated in the Balance Sheet, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.


Mar 31, 2012

1.1 20,89,308 equity shares of Rs. 10/- each were allotted as bonus shares by capitalization the General Reserve.

1.2 2,00,000 equity shares of Rs. 10/- each at a premium of Rs. 33/- each and 3,00,000 Equity Shares of Rs. 10/- each at a premium of Rs. 50/- to promoters associate companies on conversion of Preferential Share Warrants.

1.3 4,00,000 equity shares of Rs. 10/- each at a premium of Rs. 33/- each and 1,00,000 Equity shares of Rs. 10/- each at a premium of Rs. 50/- each issued to non- promoters associate companies on conversion of preferential Share Warrants.

2.1 The Company has allotted 800,000 warrants to promoters associate company & 200,000 warrants to non-promoter on 14th Feb 2012 on preferential basis, convertible into equity shares of Rs. 10/- each fully paid up. The holders of warrants have a right to apply one equity share of Rs. 10/- each at a premium of Rs 50/- within a period of 18 months from the date of allotment. Against this the company has received Rs 15/- per warrant.

3.1 Term Loan from Allahabad Bank is secured by exclusive charge on specific land , building and machinery of the project created out of the Term loan and personal guarantee of one of the Director. The loan is repayble in fifteen equal quarterly installments starting from June 2013 quarter.

3.2 Term Loans from IDBI Bank is secured by exclusive charge on specific movable and immovable properties & second parri passu charge on the entire Current Assets of the Company and personal guarantee of one Director. This loan is repayable in twenty equal quarterly installment beginning from April, 2010.

3.3 Vehicle Loans are secured by way of hypothecation of vehicles financed by the Bank.

4.1 Working Capital facilities are secured against hypothecation of stocks of raw - materials, stock in process, finished goods, Other Current Assets specified immovable property, movable Fixed Assets, lien on Fixed Deposits, Exports Bills and personal Guarantees of Directors.

4.2 Foreign documentary bills discounted with Banks have been shown as a contingent liability. The same are secured against the Export Bills and the personal Guarantees of Directors.

5.1 The Company has not received information from vendors regarding their status under the Micro, Small and Medium enterprises Development Act , 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

6.1 The Company has not provided for the diminution in the value of long term investments in its subsidiary Companies since in the opinion of the Board such diminution in their value is only temporary in nature considering the inherent value, nature of investments, the investee's assets and expected future cash flow from such investments.

6.2 As per the incorporation documents of BIL Group LLC, Bhatia international Ltd is the sole member having 100% membership interest and the entire investment has been represented as members capital contribution. An LLC for Income Tax purposes in USA under the IRS can elect to be taxed as either a partnership or as a separate corporate entity. In the selection of being taxed as a partnership , the LLC is a pass through entity and the members get taxed on their share of the profit/loss. BIL Group LLC , has adopted to be taxed as a partnership and hence Bhartiya International Ltd, being the sole member taxed for the full profit or loss in USA. The financial year closure of this LLC is 31st December, 2011 and it has reported a loss of US$ 2465 (Rs. 126,072/-) in its financial year ended 31st December, 2011. Accordingly Bhartiya International Ltd shall be filing a tax return in the USA showing its loss of US$ 2465 (Rs. 126,072/-) in BIL Group LLC and shall claim deduction of this loss against its Income Tax liability in India.

6.3 Investment in the subsidiary Bhatia International SEZ Ltd. include 6 equity shares of (Rs.60/-) held in the name of a Director / nominees in fiduciary capacity for the company.

6.4 Investment in the wholly owned subsidiaries Ultima S.A, Switzerland, Bhartiya Global Marketing Ltd. and Bhartiya Fashion Retail Ltd, include 1 equity share of the nominal value of SFR 1000 (Rs.33,785/-) and 6 equity shares (Rs. 60/-) respectively held in the name of Directors/nominees in fiduciary capicity for the company.

7.1 Balances with banks Includes Unclaimed Dividend of Rs. 1,369,348/- (Previous year Rs. 1,394,261/-)

7.2 Fixed deposits of Rs.29,070,242/- (Previous year Rs. 27,001,778/-) are pledged with the banks for various limits and facilities granted.

8.01 The previous period figure has been re grouped/reclassified, wherever necessary to conform to the current period presentation.

PARTICULARS As at As at 31st March, 2012 31st March, 2011

8.02 CONTINGENT LIABILITES AND COMMITMENTS

(a) Estimated value of contract remaining to be executed on Capital Account and not provided for 64,362,470 1,784,924

(b) Contingent liabilities not provided for

i) Letter of Credit / Import Bills outstanding - 23,956,771 28,193,894

ii) Standby Letter of Credit (SBLC) issued by companies bankers in favour of the bankers of its subsidiaries - Ultima Italia Srl 41,304,000 44,611,000

- Ultima S.A. 55,072,000 50,984,000

- WFT Ltd 17,986,500 15,655,500

iii) Bills discounted with banks - 16,605,219 12,025,386

iv) Other Guarantee given by bank -with Corporation Bank 550,000 1,699,717

v) Corporate Guarantee given by the company to a bank against facilities granted by that bank to its Wholly Owned Subsidiaries

- J & J Leather Enterprises ltd - 35,200,000

- Ultima Italia Srl 41,424,500 41,424,500

vi) Income Tax Demand under dispute 12,225,782 11,639,722

8.03 Previous year expenses debited to profit & loss account Rs. 3,303,455 /- (Previous Year Rs. 1,457,035/-)

8.04 SEGMENT INFORMATION a) Business Segments:

Based on similarity of activities/ products, risk and reward structure, organization structure and internal reporting systems, the Company has structured its operations into more than one segment during the year.

b) Geographic Segments

Operation of the Company do not qualify, for reporting as geographic segments, as per the criteria set out under Accounting Standard 17 on segment reporting Issued by the Institute of Chartered Accountants of India.

Computation of net profit for calculation of managerial remuneration u/s 349 of the Companies Act, 1956, has not been enumerated since no commission is paid / payable to the managing and Whole Time Director.

8.05 In the opinion of the Directors, the Current Assets, Loans and Advances have the value at which they are stated in the Balance Sheet, if realized in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.


Mar 31, 2010

Current Year Previous Year

Rs. Rs.

1. (a) Estimated value of contract remaining to be executed on capital Account and not provided for 9,604,132 10,304,269

(b) Contingent liabilities not provided for

i) Letter of Credit outstanding - 43,732,228 71,318,298

ii) Standby Letter of credit (SBLC) issued by companies bankers in favour of the bankers of its subsidiaries

- Ultima Italia SH 42,287,000 47,593,000

- Ultima S.A. 48,328,000 54,392,000

-WFTLtd 15, 778,000 17,913,000

iii) Bills discounted with banks - 30,348,225 60,290,443

iv) Other Guarantee given by bank -with Corporation Bank 100,000 155,000

v) Corporate Guarantee given by the Company to a bank against facilities granted by that bank to its Wholly Owned Subsidiaries

J & J Leather Enterprises Ltd. 35,200,000 35,200,000

Ultima Italia Sri 39,266,500 44,193,500

vi) Income Tax Demand under dispute 12,269,295 12,269,295

2. Investment in the wholly owned subsidiaries Ultima S.A, Switzerland, Bhartiya Global Marketing Ltd.and Santorini Fashion Ltd. include 1 equity share of the nominal value of SFR 1000 (Rs.33,785/-) and 6 equity shares (Rs. 60/-) respectively held in the name of a Director / nominees in fiduciary capacity for the company.

3. Investment in the subsidiary Bhartiya International SEZ Ltd. include 6 equity shares of (Rs.60/-) held in the name of a Director / nominees in fiduciary capacity for the company.

4. Fixed deposits of Rs.25,321,820/- (previous year Rs. 23,362,363/-) are pledged with the banks for various limits and facilities granted. Indira Vikas Patra totaling to Rs.6,500/- each are given as security both to Sales Tax Department and RTO.

5. Registration formalities in respect of properties purchased for Rs. 1,850,000/- (Previous year Rs. 1,850,000/-) are pending.

6. In the opinion of the Directors, the Current Assets, Loans and Advances have the value at which they are stated in the balance sheet, if realised in the ordinary course of business and provision for all known liabilities has been adequately made in the accounts.

7. SEGMENT INFORMATION

a) BUSINESS SEGMENTS

Based on similarity of activities/ products , risk and reward structure, organisation structure and internal reporting systems, the Company has structured its operations into more than one segment during the year.

8. Debit and Credit balances of parties are subject to their confirmation.

9. The Company has not received information from vendors regarding their status under the Micro, Small and Medium enterprises Devlopment Act, 2006, and hence disclosure relating to amounts unpaid as at the year end together with interest paid / payable under this Act have not been given.

10. Previous year expenses debited to profit & loss account Rs- 1,775,186/- (Previous Year Rs. 937,613/-)

11. The Company has not provided for the diminution in the value of long term investments in its subsidiary companies and loans / advances given to them ,since in the opinion of the Board such diminution in their value is only temporary in nature considering the inherent value, nature of investments, the investees assets and expected future cash flow from such investments.

12. The company has a wholly owned subsidiary by the name of BIL Group LLC in USA . As per the incorporation documents of this Limited liability company, Bhartiya International Ltd is the sole member having 100% membership interest and the entire investment has been represented as members capital contribution. An LLC for income tax purposes in USA under the IRS can elect to be taxed as either a partnership or as a separate corporate entity. In the selection of being taxed as a partnership the LLC is a pass through entity and the members get taxed on their share of the profit/loss. BIL Group LLC has adopted io be taxed as a partnership and hence Bhartiya International Ltd being the sole member, shall be taxed for the full profit or loss in USA. The financial year closure of this LLC is 31st December, and it has reported a loss of USD 436/- (Rs 19,657/-) in its financial year ended 31st December, 2009. Accordingly Bhartiya International Ltd shall be filing a tax return in the USA showing its loss of USD 436/- (Rs 19,657/-) in BIL Group LLC and shall claim deduction of this loss against its Income Tax liability in India.

13. The Company has filed legal Suit for recovery of Rs. 6,162,337/- against one of its overseas customer. Management is confident of recovery of the same and hence has not made any provision for bad & doubtful debts against this.

14. a) Provisions for Income tax / Wealth Tax includes Rs 353,889/- (Previous Year Rs.Nil )being taxes paid for earlier years

15. Related party disclosures

Related party disclosure as required under Accounting Standard on "Related Party Disclosures" issued by the Institute of

Chartered Accountants of India are given below :

a) Relationship:

i) Subsidiary Companies

Domestic Overseas

Bhartiya Global Marketing Ltd. World Fashion Trade Ltd, Mauritius

J&J Leather Enterprises Ltd. Ultima S.A, Switzerland

Bhartiya International SEZ Ltd. Ultima Italia SRL, Italy

Santorini Fashions Ltd. BIL Group LLC, USA

ii Associate Parties

Bhartiya Prakash Leather

Bhartiya Urban Infrastructure Land Development Co. Pvt. Ltd.

Itopia Management Services (India) Pvt. Ltd.

iii) Key Management Personnel: Board of Directors

Snehdeep Aggarwal

C.L. Handa

Jaspal Sethi

Ramesh Bhatia A.K. Gadhok

Sandeep Seth

Nikhil Aggarwal

Shashank

A. Sahasranaman

iv) Relatives of Key Management Personnel

Kanwal Aggarwal

Arjun Aggarwal

16. The Company has received Grant of Rs. 9,567,128/- under the IDLS Scheme of Ministry of Commerce and Industries, Department of industrial policy and promotion (leather Section), towards purchase of specific machines. The same has been adjsuted with the cost of the machines.

17. Additional information (Pursuant to the provision of paragraph 3, 4C and para II of schedule VI) to the Companies Act, 1956.

A. LICENCE CAPACITIES AND PRODUCTION

The company has been issued a letter of intent by secretariat of industrial approvals, Department of Industrial development, Ministry of Industry for manufacture of Leather Garments with capacity of 54,000 Nos. per annum at their current factory in Bangalore. In view of the nature of the garments industry the installed capacity with specific reference to numbers of garments pieces is not ascertainable.

18. Previous year figures are shown in brackets and have been regrouped wherever necessary so as to make them comparable with current year figures.

19. Figures have been rounded off to the nearest rupee. Schedule referred to above form an integral part of the balance sheefft

 
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