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Notes to Accounts of Choksi Laboratories Ltd.

Mar 31, 2015

BACKGROUND :

Choksi Laboratories Limited ("the Company") was incorporated on 29/01/1993 under the Companies Act, 1956.The Company is engaged in the business of Testing & Analytical Services.The Company's equity shares are listed at BSE.

1. The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share.Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

2. The Term Loans from Axis Bank is secured by hypothecation of Indore & Goa fixed assets. The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr. Vyangesh Choksi. Loan from Bank of India is secured by Freehold Land at Kumedi in Indore.

3. All unsecured Loans are also personally guaranteed by the director Mr. Vyangesh Choksi.

4. There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon.

5. Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts, both present and future alongwith Indore and Goa Fixed Assets.

*The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr.Vyangesh Choksi.

6. Segmental Reporting :

The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

7. Related Party Disclosures :

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

8. Related Parties

(a) Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director (up to 01/09/2014)

Mrs. Stela Choksi Whole Time Director

Mr.Vyangesh Choksi Whole Time Director &CFO

(b) Relatives of KMP Mrs.Neeta Shah D. G Choksi HUF Mrs. Khyati Choksi

9. Contingent liabilities not provided for in respect of :

a) Guarantees issued by Bank on behalf of the Company Rs.1478612/-(Previous year Rs. 1,34,264).

b) An amount of Rs.32,04,212/- has been shown as recoverable from Commissioner of Customs (EPCG) under current assets.This amount was forfieted by the said authority during FY 2012-13 . The Company has timely fulfilled all export obligations & is under the process of recovering the same from the said authority.

10. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. Nil (Previous year Rs. Nil).

11. The previous year figures have been regrouped/ reclassified, wherever necessary to confirm to current year presentation.


Mar 31, 2014

1) i. The Company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share.Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

ii. The Term Loan from Axis Bank is secured by hypothecation of entire movable fixed assets of the Company (present & future) & Equitable mortgage of property at Goa & Indore.

Term Loan from Bank of India is secured by Diverted Plot No. 11, & 12 at Vyaapaar Vikas Parishad, Village Devguradiya & Freehold Land at Kumedi in Indore.

The above loans are also personally guaranteed by the directors Mr. Sunil Choksi & Mr.Vyangesh Choksi.

iii. All unsecured Term Loans are personally guaranteed by the director Mr. Vyangesh Choksi.

iv. There are no defaults as on the Balance Sheet date in repayment of the above loans and interest thereon.

v. Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts both present and future alongwith Indore and Goa Fixed Assets *The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi

2) Defined Benefit Plan

The employees'' gratuity Fund Scheme managed by a Trust (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 Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

3. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

4. Contingent liabilities not provided for in respect of:

a) Guarantees issued by Bank on behalf of the Company Rs.1,34,264/-(Previous year Rs.3,68,396).

b) Income Tax Demand AY 2009-10 Rs.576960/- (the Company has undergone for Appeal before CIT (Appeals)) (Previous Year- Rs. 576,960/-).

c) An amount of Rs.32,04,212/- has been shown as recoverable from Commissioner of Customs (EPCG) under current assets.This amount was forfieted by the said authority during FY 2012-13 . The Company has timely fulfilled all export obligations & is under the process of recovering the same from the said authority.

5. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) Rs. Nil (Previous year Rs. 1.96 Crores).

6. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.


Mar 31, 2013

1) Defined Benefit Plan

The employees'' gratuity Fund Scheme managed by a Trust (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 Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

2. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing, There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting ) issued by the ICAI.

3. Contingent liabilities not provided for in respect of:

a) Guarantees issued by Bank on behalf of the Company Rs.3,68,396/-(Previous year 7 .8,772,608)

b) Income Tax Demand AY 2009-10 Rs.576960/- (the Company has undergone for Appeal before CIT (Appeals)) (Previous Year- 7 576,960/-)

c) During the year, a Bank Guarantee of 7 32,04,212/- has been encashed by Commissioner of Customs (EPCG) towards their charge against non-fulfillment of EPCG Commitments which were supposed to be fulfilled upto 27-4-2014. The Company is under the process of recovering the same amount from this department and is sure regarding the recovery of 7 32,04,212/-The same amount is therefore, shown as recoverable from the said authority in the financial statements.

d) During the year the company has discharged two other EPCG licences after fulfilmentof export obligation worth rupees 3.84 crores during the period 2005 to 2012 resulting into release of Bank Guaranty worth 1 52,20,000/- from customs.

4. Estimated amount of Contracts remaining to be executed on Capital Account and not provided for (net of advances) 7 1.96 Crores (Previous year 7 4.21 Crores)

5. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to current year presentation.


Mar 31, 2012

1.1 The company has only one class of shares i.e. equity shares with equal rights for dividend and repayment. Each holder of the shares is entitled to one vote per share. Dividend on equity shares whenever proposed by the Board of Directors is subject to the approval of the shareholders in the Annual General Meeting.

1.2 The Company has converted 301263 warrants allotted in FY 2009-10 into equal number of equity shares during the year. Further, out of 800000 warrants, allotted in FY 2010-11, 500000 warrants were convereted into equal number of fully paid up equity shares of Rs. 10/- each after receiving balance payment due thereon and another 300000 warrants out of total 800000 Warrants in which balance payment not received in stipulated time period, consequenlty the amount already paid towards allotment of 300000 warrants were forfeited by the Company and the said warrants were cancelled.

2.1 The Term Loan from Axis Bank is secured by hypothecation of Indore & Goa fixed assets

The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi.

2.2 Term Loans from Religare & Magma are personally guaranteed by the director Mr. Vyangesh Choksi.

3.1 Working Capital Loans are secured by joint hypothecation of running stocks of consumable and all Book debts both present and future alongwith Indore and Goa Fixed Assets

*The above loans are also personally guaranteed by the directors Mr. Sunil Choksi, Mr.Vyangesh Choksi

4. Segmental Reporting : The Company is engaged in the sole segment of Analysis and Testing. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

5. Related Party Disclosures :

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

1. Related Parties

(a) Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director

Mrs. Stela Choksi Whole Time Director

Mr.Vyangesh Choksi Whole Time Director

(b) Relatives of KMP

Mrs.Neeta Shah

D. G Choksi HUF

Mrs. Khyati Choksi

6. Contngent liability not provided for in respect of :

(a) Guarantees issued by Bank of behalf of the Company Rs. 8,772,608/- (Previous year Rs. 8,433,912)

(b) Service Tax Rs. Nil (Previous year Rs 708,349/-)

(c) Income Tax Demand A.Y. 2009-10 Rs. 576960/- (the Company has undergone for Appel before CIT (Appeals) (Previous year - Nil).

7. Estimated amount of Contracts remaining to be exected on Capital Account and not provided for (net of advances) Rs. 4.21 Crores (Previous year Rs. 0.22 Crores)


Mar 31, 2010

01. Contingent liability for Bank Guarantee issued by Bank on behalf of the Company Rs.84339121- (Previous year -8459212/-)

02. In the opinion of the Board of Directors of the Company, the Current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and the provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary.

03. The balances appearing under the heads Debtors, Loans and Advances and Current Liabilities are subject to confirmation from respective parties and reconciliation, if any.

04. The Company has purchased Land for its building which is yet to be registered in the name of the Company.

05. The Company has received application money of Rs.45,73,852/- for issue of Convertible equity Warrants during the financial year. These Warrants are being issued subject to confirmation of shareholders of the Company and in-principal approval from Bombay Stock Exchange in terms of "Securities and Exchange Board of India (Issue of Capital And Disclosure Requirements) Regulations, 2009". Both the approvals i.e. shareholders and Bombay Stock Exchange, have been received by Company after current balance sheet date (31.03.2010) and accordingly allotment of 12,35,663 Convertible Warrants (partly paid) has been made in the month of April 2010.

06. Since its inception, the Company follows the practice of charging to revenue the purchase of chemicals and glassware during the year of purchase itself.

07. As per the accounting standard 22 issued by the ICAI, the Deferred Tax Liability is accounted for in respect of timing differences. The accumulated Deferred Tax Liability comprise of the following:

08. Segmental Reporting : The Company treats Analytical Charges & Consultancy.Receipts as a single segment and therefore details of segments are not separately shown. The Company is a Commercial Testing House engaged in testing of various products and also offers services in the field of pollution control as allied activity.The company is managed organisationally as a unified entity with various functional heads reporting to the top management and is not organised along segments. There are, therefore, no separate segments within the Company as defined by AS-17 (Segmental Reporting) issued by the ICAI.

09. Related Party Disclosures:

Relationships (Related party relationships are as identified by the Company and relied upon by the Auditors)

I. Related Parties

Individual having control & Key Management Personnel

Mr. Sunil Choksi Managing Director

Mrs. Himika Varma Jt. Managing Director

Mrs. Stela Choksi Whole Time Director

Mr. Vyangesh Choksi Whole Time Director

Relatives of KMP

Mrs.Neeta Shah

D. G Choksi HUF

Mrs. Khyati Choksi

II. Disclosure of transactions between the Company and Related Parties and the Status of outstanding balances as on March 31, 2010:

10. There are no amounts payable to any Small Scale Industrial Undertaking in excess of Rs. One lakh which is outstanding for more than thirty days.

11. Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the Company): The management is continuously in the process of identifying enterprises which have provided goods and services to the Company and which qualify under the definition of Micro, Small & Medium enterprise, as defined under Micro, Small & Medium Enterprises Development Act, 2006. Based on information received and available with the Company, no amount is payable to such enterprises as at 31" March 2010. The Company has not received any claim for interest from any supplier under the said Act.

12. Disclosure in terms of Accounting Standard "Impairment Losses":

13. Prior Period Expenses include Rent for Rs. 4000/-for FY 08-09 & Memberships Subscription Fees Rs. lOOOOforFY 07-08 & 08-09 not provided for earlier. (Previous Year Rs.24626/-).

14. Capacities and Production

a. Licensed Capacity NotApplicable

b. Installed Capacity NotApplicable

c. Actual Production NotApplicable

15. The Company is not carrying out any manufacturing activities but engaged in the business of testing of various products. The Companys business requires variety of chemicals and consumables in small quantities and does not require any raw materials. It is not practicable to furnish the quantitative details of these chemicals & consumables as number of small quantities are consumed. Hence, aggregate value of all imported & indigenous chemicals & consumables and spares & components consumed and the percentage of each to total consumption are furnished below:

16. Computation of net profit in accordance with section 349 of the Companies Act, 1956 has not been given, as commission by way of percentage of profit is not payable for the year to any of the director of the Company.

17. Figures have been rounded off to the nearest Rupee.

18. Figures of previous year have been regrouped / rearranged / recast wherever necessary to confirm to this years classification.

 
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