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Notes to Accounts of Deepak Spinners Ltd.

Mar 31, 2015

1.1 Nature of Operations

The Company is a manufacturer of Synthetic Man Made Yarn. It has two spinning units at Baddi (H.P) and Guna (M.P). The company is generating electricity from it's Solar Power Plant at Rajgarh (M.P)

2 Contingent Liabilities and Commitments

A. Contingent Liabilities not provided for in respect of

i) Demand for Excise duty, being contested by the Company 43.73 43.73 (Amount deposited 9.00 lakhs, Previous year 9.00 lakhs)

ii) Demand for Income Tax, being contested by the Company 48.16 67.97 (Amount deposited Rs. 23.56 lakhs, Previous year 64.42 lakhs)

iii) Legal Cases (Employees) 3.68 3.00

iv) Demand for Cess on own generation of electricity 44.89 44.89 The management believes that the Company has a strong chance of favourable decision in above cases, hence no provision has been considered necessary.

B. Capital Commitments (Net of Advance paid) 16.83 85.91

*Power & Fuel includes Rs. 180.30 lakhs, Miscellaneous expenses includes Rs. 21.70 lakhs, Contribution to Provident and other Funds Rs. 28.41 lakhs and interest expenses includes Rs. 59.09 lakhs related to prior period but demand received during the year.

3. Related Party Disclosures as per AS-18 :

a) List of related parties and relationship

Key Management personnel & his relatives

i) Shri P. K. Daga, Chairman and Managing Director.

ii) Shri Yashwant Kumar Daga, Director (Son of Shri P. K. Daga).

iii) Shri Shantanu Daga, Senior Management Executive (Son of Shri Yashwant Kumar Daga).

b) Enterprises over which Key Management Personnel or his relatives are able to exercise significant influence

M/s. Deepak Industries Ltd.

M/s. Contransys Pvt Ltd.


Mar 31, 2014

1. Nature of Operations

The Company is a manufacturer of Synthetic Man Made Yarn. It has two spinning units at Baddi (H.P) and Guna (M.P) having capicity of 76752 Spindles. The company is generating electricity from it''s Solar Power Plant at Rajgarh (M.P)

2. Terms / Rights attached to Equity Shares

Each holder of equity shares 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. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no restriction on distribution of dividend. However same other than interim dividend, is subject to the approval of the shareholders in the Annual General Meeting.

3. a Term Loan from a bank is secured by first charge on the Plant & Machineries, other movable fixed assets and extension of equitable mortgage on all immovable fixed assets and second charge on current assets of the textile business. These Loans are further secured by personal guarantee of the Chairman and Managing Director and a Director.

b Term Loan from a bank is secured by Plant & Machinery and other fixed assets and extension of equitable mortgage of the immovable fixed assets of the Solar Power Plant and second charge on current assets of the company. This Loan is further secured by personal guarantee of the Chairman and Managing Director and a Director.

c Secured by hypothecation of vehicle financed.

4. Contingent Liabilities and Commitments

As at As at A. Contingent Liabilities not 31st March, 2014 31st March, 2013 provided for in respect of (Rs. In lakhs) (Rs. In lakhs)

i) Bank Guarantee - 1.00

ii) Demand for Excise duty, being contested by the Company * 43.73 43.73 (Amount deposited Rs. 9.00 lakhs, Previous year Rs. 9.00 lakhs)

iii) Demand for Income Tax, being contested by the Company * 67.97 114.81 (Amount deposited Rs. 64.42 lakhs, Previous year Rs. 98.49 lakhs)

iv) Legal Cases (Employees) * 3.00 6.77

*The management believes that the Company has a strong chance of success in these cases, hence no provision considered necessary.

v) Demand for Cess on own generation of electricity . 62.63 40.52

B. Capital Commitments 85.91 326.49 (Net of Advance paid)

5. Segment reporting :

I) As per guidelines contain in AS 17 (Segment reporting), the company is operating in a single segment mainly in manufacture and sale of yarn.

ii) Secondary Segment is geographical Segment which includes export sales (including export incentive) Rs. 3487.00 lakhs (Previous year Rs. 3401.31 lakhs) and domestic sales Rs. 35749.61 lakhs (Previous year Rs. 27490.16 lakhs) All assets of the Company are Located in India except export debtors Rs. 201.25 lakhs (Previous year Rs. 298.94 lakhs).

6. Related Party Disclosure :

a) List of related parties and relationship

Key Management personnel & their relatives :-

i) Sh. P. K. Daga, Chairman and Managing Director

ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri P. K. Daga)

iii) Sh. Yashwant Daga, Director (Son of Shri P. K. Daga)

b) Enterprises over which Key Management Personnel are able to exercise significant influence M/s. Deepak Industries Ltd.

7. Previous Year''s figures have been reclassified/regrouped to conforms current year figure.


Mar 31, 2013

1.1 Nature of Operations

The Company is a manufacturer of Synthetic Man Made Yarn, It has two spinning units at Baddi (H.P) and Guna (M.P) having capicity of 63552 Spindles. The company has started generating electricity from it''s Solar Power Plant at Rajgarh (M.P) with effect from 08th November, 2012.

1.2 Balances of debtors, creditors and others loans & advances are subject to confirmation.

1.3 Borrowing cost capitalised during the year Rs. 178.36 lakhs (Previous year Rs. 49.57 lakhs).

1.4 Segment reporting :

I) As per guidelines contain in AS 17 (Segment reporting), the company is operating in a single segment mainly in manufacture and sale of yarn.

ii) Secondary Segment is geographical Segment which includes export sales (including export incentive) Rs. 3401.31 lakhs (Previous year Rs. 4786.23 lakhs) and domestic sales Rs. 27490.16 lakhs (Previous year Rs.23282.56 lakhs ) All assets of the Company are Located in India except export debtors Rs. 298.94 lakhs (Previous year Rs.305.88 lakhs).

1.5 Related Party Disclosure :

a) List of related parties and relationship

Key Management personnel & their relatives :

i) Sh. P.K. Daga, Chairman and Managing Director

ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri P. K. Daga)

iii) Sh. Yashwant Daga, Director (Son of Shri P. K. Daga)

1.6 Previous Year''s figures have been reclassified/regrouped to conforms current year figure.


Mar 31, 2012

Terms / Rights attached to Equity Shares

Each holders of equity shares 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. The distribution will be in proportion to the number of equity shares held by the shareholders. There is no resctriction on distribution of dividend. However same is subject to the approval of the share holders in the Annual General Meeting.

a. Term loans from a bank are secured by first charge on present and future movable plant and machinery purchased under TUFS subject to prior charges in favour of bankers for securing working capital borrowings. These loans are further secured by personal gurantees of two directors of the company.

b. Corporate loans from Banks is secured by way of first charge on fixed assets of the Company on pari-passu basis except assets charged exclusively for term loan under TUFS. These loans are further secured by personal guarantee of two directors of the company.

c. Secured by hypothecation of vehicle financed and carries interest rate of 10.97% per annum. Payable in 48 equal monthly instalment beginning with April, 2012.

*The company has not received any information from its suppliers regarding registered under the Micro, Small and Medium Enterprises Development Act,2006. Hence, the information required to be given in accordence with section 22 of the said Act, is not ascertainable and not disclosed.

(a) The Excise duty on Finished Goods (i.e. man made synthetic yarn) was lower than on its input which has resulted in accumulation of unutilised balance in Cenvat account. From 1st March,2006 excise duty on input i.e.men made fibre has been reduced to be at par with finished goods. As on 31.03.2012 the accumulated cenvat credit balance was Rs.856.60 lakhs (Previous Year Rs. 1005.28 lakhs). Based on sale projections, the management is quite hopeful to utilise the above accumulated cenvat credit by paying duty on export goods under claim for rebate/ refund and on value addition of the yarn.

Hence in the opinion of the management at this stage, no provision is required for non usable excess cenvat credit.

1.1 Nature of Operations

The Company is a manufacturer of Synthetic Man Made Yarn. It has two spinning units at Baddi (H.P.) and Guna (M.P.).

1.2 Balances of debtors, creditors and others are subject to confirmation.

1.3 Exceptional items represents interest paid Rs.Nil (Previous Year Rs. 70.80 lakhs)

1.4 Borrowing cost capitalised during the year Rs. 49.57 lakhs (Previous year Rs. Nil)

1.5 Segment reporting :

I) As per guidelines contain in AS 17 (Segment reporting), the company is operating in a single segment mainly in manufacture and sale of yarn.

ii) Secondary Segment is geographical Segment which includes export sales (including export incentive) Rs. 4786.23 lakhs (Previous year Rs. 2450.75 lakhs) and domestic sales Rs. 23282.56 lakhs (Previous year Rs.23081.50 lakhs ) All assets of the Company are Located in India except export debtors Rs. 305.88 lakhs (Previous year Rs.248.08 lakhs).

1.6 Related Party Disclosure :

a) List of related parties and relationship

A) Subsidiary : DSL Hydrowatt Ltd.

B) Key Management personnel & their relatives :

i) Sh. P.K. Daga, Chairman and Managing Director

ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri P. K. Daga)

1.7 The Company has prepared current year account as per presentation and disclosure requirement of Revised Schedule Vi to the Companies Act, 1956 applicable with effect from 1st April 2011. Previous Year's figures have been reclassified/regrouped to conforms current year figure.

Signature to notes 1 to 27.17


Mar 31, 2010

(Rs. in 000s) As at As at 31st March, 2010 31st March, 2009

1. Contingent Liability not provided for in respect of

i) Bank Guarantee 2,00 2,00

ii) Demand for Excise duty, being contested by the Company* 57,08 40,86

iii) Demand for Income Tax, being contested by the Company

(Amount deposited Rs.75,57 1,13,31 1,10,60

Previous year Amount Rs 69,04)*

iv) Legal Cases (Employees)* 21,00 -

*The management belives that The Company has a strong

chance of success in these cases,here no

provision considered necessary.

2. Capital Commitments (Net of Advance paid) 8,42,32 8,54,78



3. Due to non-viablity of one of the power generating unit,the management has decided to conduct impairment test as on 31.03.2010 and based on net selling price estimated by the management, the company has recognised impairment loss of Rs. 85000 in Profit & Loss A/c.

4. Deferred tax assets on unabsorbed depreciation has been recognized only to the extent of timing diffrence on depreciation, the reversal of which will result in sufficient income in future.

5. Prior Period Expenses (Net) Rs. 2 (Previous year Rs. 2,93) has been adjusted in respective heads.

6. Sales includes export incentives/benefits Rs.2,69,87 .(Previous year Rs.2,29,59) and are net of returns/claims relating to earlier years amounting to Rs.1,27,42 (Previous year Rs.29,54).

7. Balances of debtors, creditors and others are subject to confirmation.

8. The Excise duty on Finished Goods (i.e. man made synthetic yarn) was lower than on its input which has resulted in accumulation of unutilised balance in Cenvat account. From 1st March, 2006 excise duty on input i.e.men made fibre has been reduced to be at par with finished goods. As on 31.03.2010 the accumulated cenvat credit balance is Rs.11,19,27 (Previous year Rs.11,93,89).Based on export sale projections and additional duty due to value addition of yarn,the management is quite hopeful to utilise the above accumulated Cenvat credit by paying duty on export goods under claim for rebate/ refund. Hence in the opinion of the management at this stage, no provision is required for non usable excess cenvat credit, if any.

* Net of amount deposited of Rs. 75,57 against above disputed cases In case of Income Ta x dispute, related year means assessment year.

9. The Company has not received any information from its suppliers regarding registred under" The Micro, Small and Medium Enterprises Development Act,2006." Hence, the information required to be given in accordence with Section 22 of the said Act, is not ascertainable and not disclosed.

10. Auditors Remuneration represents : Audit Fee Rs. 3,05 (Rs. 2,05), for Certification & other matters Rs. 2,02 (Rs. 2,16), for Service Tax Rs. 52 (Rs. 48).

Reimbursement of Expenses Rs. 84 (Rs. 51) (Figures in brackets related to previous year).

11. In the previous year power and fuel was after taking credit of Rs.1,12,15 for estimated sale value determined on the basis of previling rate of carbon credit emission reduction units for the period January, 2008 to December, 2008.Credit for the period January, 2009 to December, 2009 estimated to be Rs. 92,50 will be taken as and when same shall be sold in the market after approval for CER units by UNFCC.

12. Interest on term loan is net off Tuff subsidy received Rs. 2,16,93 (Previous year Rs.1,69,38).

13. Exceptional iitems represents loss on sale of cotton spinning machines.

14. Sundry balances written off includes Rs. 9,20 (Previous year Rs.86,70) on account of value declined/ lower realisation on sale of carbon credit.

15. a) Managerial Remuneration paid/provided to the Executive Director of the Company for the Year include:Salary Rs. 5,00 (Rs. 9,00) Provident Fund Rs. 60 (Rs. 1,08) Rent Rs. 75 (Rs. 1,35) Other perquisites Rs. 79 (Rs. 2,22) (Figures in brackets related to previous year).

b) Due to loss, Commission is not payable to Executive Director and therefore computation of Net Profit under Section 349 of the Companies Act,1956, has not been given.

16. Segment reporting :

i) As per guidelines contain in AS 17 (Segment reporting), the Company is operating in a single segment mainly in manufacture and sale of yarn.

ii) Secondary Segment is geographical Segment which includes export sales (including export incentive) Rs. 33,99,16 (Previous year Rs. 22,96,35) and domestic sales Rs. 1,76,27,82 (Previous year Rs.1,17,94,24) All assets of the Company are Located in India except export debtors Rs. 1,75,46 (Previous year Rs.2,48,20).

17. Related Party Disclosure :

a) List of related parties and relationship

A) Subsidiary : DSL Hydrowatt Ltd.

B) Key Management personnel : Sh. V.N. Khemka, Executive Director & CEO (upto 31st Aug, 2009)

C) Relative of key management personnel : Smt. Sulochana Khemka (31st Aug, 2009)

18. Previous Year the Company has changed its accounting year ending on 30th June to 31st March and therefore figures for 2008-09 being for the period of nine months are not comparable with the Current year ended on 31st March, 2010.

19. Previous Years figures have been regrouped and re-arranged wherever found necessary to confirm with current period’s classification.