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Notes to Accounts of Emmbi Industries Ltd.

Mar 31, 2015

1. Corporate Information

EMMBI INDUSTRIES LIMITED ('the Company') is a public limited company and is listed on BSE Limited and National Stock Exchange of India Limited (NSE). The Company is engaged in the business of Manufacturing and Trading of HDPE & PP - Woven Polymer Based Products.

2. Term Loans are secured by way of deposit of the title deed in respect of immovable properties of the Company including Land & Building situated at Plot no. 191/2/4, Massat Village, Meghwad Road, UT of Dadra & Nagar Haveli, Silvassa - 396230 & at Plot no. 99/2/1&9, Madhuban Industrial Estate, Madhuban Dam Road, Rakholi Village, UT of Dadra & Nagar Haveli, Silvassa - 396230 and by hypothecation of Plant & Machinery and Furniture & Fixtures. The term loan are secured by way of first charge.

3. Other Loans and Advances are secured by way of hypothecation of Cars and Transport Vehicles purchased under Hire Purchase Scheme.

4. There is no default in repayment of principal loan or interest thereon.

5. Working Capital Loans :

i) Cash Credit & Packing Credit loans from Punjab National Bank are secured by first pari passu charge on hypothecation of entire current assets, both present and future, of the Company including stocks and book debts, stock in transits and stock for ob work. Second pari passu charge on immovable properties of the Company including Land & Building situated at Plot no. 191/2/4, Massat Village, Meghwad Road, UT of Dadra & Nagar Haveli, Silvassa - 396230 and at Plot no. 99/2/1&9, and Survey no. 87 Madhuban Industrial Estate, Madhuban Dam Road, Rakholi Village, UT of Dadra & Nagar Haveli, Silvassa 396230.

ii) Working Capital and Pre-Cum-Post Shipment Loan from Exim Bank is secured by first Pari-Passu charge on entire current assets both present & future; Second Pari-Passu charge on the entire movable fixed assets both present and future; second Pari-Pasu charge on the entire Land and other Immovable properties both present and future.

iii) Working Capital and Pre-Cum-Post Shipment Loan from Axis Bank is secured by first Pari-Passu charge on entire current assets both present & future; Second Pari-Passu charge on the entire movable fixed assets both present and future; second Pari-Passu charge on the entire Land and other Immovable properties both present and future.

6.CONTINGENT LIABILITIES AND COMMITMENTS (Rs. in Millions)

2014-15 2013-14

(a) Contingent Liabilities GUARANTEES

* Guarantee by Banks to Electricity Department (Silvassa) 6.80 4.45

* Guarantee furnished to Banks in respect of Letter of Credit - -

(b) Commitments

Estimated amount of contracts remaining to be executed on - 5.70 capital account (Net of Advances ) and not provided for.

(c) The Income tax demand as per CIT Appeal order for the A. Y. 2011-12 of Rs. 58,50,760/- is disputed for which appeal will be made to Tribunal in due course. Based on the decisions of the appellate authorities and the interpretation of other relevant provisions, the Company has been legally advised that the additional demand raised is likely to be either deleted or substantially reduced and accordingly no provsion is considered necessary.

7. Post employment benefits

Company has taken a Group Gratuity Policy of LIC of India to cover the employer's obligation towards Gratuity under the payment of Gratuity Act and the fund required to be maintained to cover the Present Value of past service benefit and current service cost is fully funded by the company as per the valuation made. The Company has Funded Scheme of Gratuity with LIC.

8. Disclosures as required by AS 19,"Leases", notified

(i) The Company has taken Office and Warehouse premises under operating lease or leave and license agreements. These are non cancellable and range between 11 months and 3 Years under Leave and License arrangement, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable Interest Free Security Deposits under certain agreements.

(ii) Lease Payments are recognised in the Statement of Profit and Loss under Rent in Note 27.

9. Since Company operates in only one segment i.e. manufacture of HDPE/ PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS - 17 issued by ICAI.

10. Figures of Previous year have been rearranged / regrouped as and when necessary in terms of Current year's grouping.


Mar 31, 2014

GENERAL INFORMATION

EMMBI INDUSTRIES LIMITED (Formerly known as Emmbi Polyarns Limited) (''the Company'') is a public limited company and is listed on Bombay Stock Exchange Limited (BSE) and National Stock Exchange (India) Limited (NSE). The Company is engaged in the business of manufacturing and trading of HDPE & PP - Woven Polymer Based Products.

1.1 Term Loans are secured by way of deposit of the title deed in respect of immovable properties of the Company including Land & Building situated at Plot no. 191/2/4, Massat Village, Meghwad Road, UT of Dadra & Nagar Haveli, Silvassa-396230 & at Plot no. 99/2/1&9, Madhuban Industrial Estate, Madhuban Dam Road, Rakholi Village, UT of Dadra & Nagar Haveli, Silvassa - 396230 and by hypothecation of Plant & Machinery and Furniture & Fixtures The term loan are secured by way of first charge.

1.2 Other Loans and Advances are secured by way of hypothecation of Cars and Transport Vehicles purchased under Hire Purchase Scheme.

1.3 There is no default in repayment of principal loan or interest thereon.

2.1 Working Capital Loans :

i) Cash Credit & Packing Credit loans from Punjab National Bank are secured by first pari passu charge on hypothecation of entire current assets, both present and future, of the Company including stocks and book debts, stock in transits and stock for job work. Second pari passu charge on immovable properties of the Company including Land & Building situated at Plot no. 191/2/4, Massat Village, Meghwad Road, UT of Dadra & Nagar Haveli, Silvassa - 396230 and at Plot no. 99/2/1&9, Madhuban Industrial Estate, Madhuban Dam Road, Rakholi Village, UT of Dadra & Nagar Haveli, Silvassa 396230.

ii) Working Capital and Pre-Cum-Post Shipment Loan from Exim Bank is secured by first Pari-Passu charge on entire current assets both present & future; Second Pari-Passu charge on the entire movable fixed assets both present and future; second Pari-Pasu charge on the entire Land and other Immovable properties both present and future.

iii) Working Capital and Pre-Cum-Post Shipment Loan from Axis Bank is secured by first Pari-Passu charge on entire current assets both present & future; Second Pari-Passu charge on the entire movable fixed assets both present and future; second Pari-Pasu charge on the entire Land and other Immovable properties both present and future.

(Rs. In Millions)

Note 3 CONTINGENT LIABILITIES AND COMMITMENTS

As At 31st As At 31st March, 2014 March, 2013

a) Contingent liabilities Guarantees''

- Guarantee by Banks to 4.45 4.45 Electricity Department (Silvassa)

- Guarantee furnished to - - Banks in respect of Letter of Credit

b) Commitments

Estimated amount of contracts 5.70 1.05 unexecuted on capital account

c) The Income tax demand for the A. Y. 2010-11 of Rs. 90.22 lakhs is disputed for which appeal has been made with CIT (Appeal).

4.1 Post employment benefits

Company has taken a Group Gratuity Policy of LIC of India to cover the employer''s obligation towards Gratuity under the payment of Gratuity Act and the fund required to be maintained to cover the Present Value of past service benefit and current service cost is fully funded by the company as per the valuation made The Company has shifted to Funded Scheme of Gratuity with LIC. Previously the company had Non - Funded Gratuity Scheme.

The Actuarial Liability worked out by LIC Funded Scheme as on 1st April 2013 is Rs. 0.86 millions as against Non Funded Liability worked out to Rs. 2.94 millions as on 31st March 2013 and hence the figures of previous year is not comparable.

4.1 Disclosures as required by AS 19,"Leases", notified under sub-section (3C) of Section 211 of Companies Act,1956

(i) The Company has taken Office and Warehouse premises under operating lease or leave and license agreements. These are non cancellable and range between 11 months and 3 Years under Leave and License arrangement, or longer for other leases and are renewable by mutual consent on mutually agreeable terms. The Company has given refundable Interest Free Security Deposits under certain agreements.

(ii) Lease Payments are recognised in the Statement of Profit and Loss under Rent in Note 28.

Note 5 Since Company operates in only one segment i.e. manufacture of HDPE/ PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS - 17 issued by ICAI.

Note 6 Figures of Previous year have been rearranged / regrouped as and when necessary in terms of Current year''s grouping.


Mar 31, 2013

1.1 Post employment benefits

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, The obligation for leave encashment is recognised in the same manner as gratuity.

Since the Defined Gratuity Benefit Obligation and Leave Encashment Benefit obligation are unfunded, there are no plan assets which are maintained exclusively therefore.

Note 2 Since Company operates in only one segment i.e. manufacture of HDPE/ PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS -17 issued by ICAI.

Note 3 Figures of Previous year have been rearranged / regrouped as and when necessary in terms of Current year''s grouping.


Mar 31, 2012

1.1 46,99,530 Equity Shares out of Shares Issued, Subscribed and Paid up were allotted as Bonus Shares in the last five years (Dt: 20.Q8.2009) by way of capitalisation of free reserves of the company

1.2 50,000 Equity Shares out of Shares Issued, Subscribed and Paid up were allotted against conversion of Preference Shares in the last five years which were converted during the year ended 31st March, 2007.

1.3 86,57,700 Equity Shares out of Shares Issued, Subscribed and Paid up were issued during the year ended 31st March, 2010 for cash as initial public offer in February,2010 -

2.1 Term Loans are secured by way of deposit of the title deed in respect of all the immovable properties of the Company including Land & Building situated at Plot no. 191/2/4, Massat Village, Meghwad Road, UT of Dadra & Nagar Haveli, Silvassa - 396230 and at Plot no. 99/2/1 &9, Madhuban Industrial Estate, Madhuban Dam Road, Rakholi Village, UT of Dadra & Nagar Haveli, Silvassa - 396230 and by way of hypothecation of Plant & Machinery and Personal Gurantee of directors.

2.2 Other Loans and Advances are secured by way of hypothecation of Cars and Transport Vehicles purchased under Hire Purchase Scheme

3.1 Working Capital Loans :

i) Cash Credit loans are secured by hypothecation of present and future stock of raw materials, stock-in process, finished goods, stores and spares (not relating to plant and machinery), book debts and materials in transit;

ii) Packing Credit loans are secured by hypothecation of present and future stock of raw materials, stock-in process, finished goods and book debts

iii) Working Capital and Pre-Cum-Post Shipment Loan from Exim Bank is secured by Pari Passu first charge on entire current assets both present & future; Pari Passu second charge on the entire movable fixed assets both present and future; Pari Pasu second charge on the entire Land and other Immovable properties both present and future.

Note 4 CONTINGENT LIABILITIES AND COMMITMENTS

As At 31st As At 31st March, 2012 March, 2011 (Rs in Lacs) (Rs in Lacs)

Contingent liabilities

Claims against the company not acknowledged as debt Guarantees - -

- Guarantee by Banks to Electricity Department (Silvassa) 44.50 28.50

- Guarantee furnished to Banks in respect of Letter of Credit 65.51 97.91

Other money for which the company is contingently liable - - Commitments

Estimated amount of contracts unexecuted on capital account 18.13 3.27

Uncalled liability on shares and other investments partly paid - -

Other commitments - -

4.1 Post employment benefits

The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, The obligation for leave encashment is recognised in the same manner as gratuity.

Since the Defined Gratuity Benefit Obligation and Leave Encashment Benefit obligation are unfunded, there are no plan assets which are maintained exclusively therefore.

The estimates to rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

Note 5 Since Company operates in only one segment i.e. manufacture of HDPE/

PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS - 17 issued by ICAi.

Note 6 The balance of Sundry Debtors and Sundry Creditors are subject to confirmation Travelling Expenses Includes Rs 6,85,507/- which pertains to earlier year


Mar 31, 2010

A. NATURE OF OPERATIONS :

The Company is a manufacturer of various woven polymer based products. The products manufactured by the Company are used in packaging , automobiles, infrastructure and various other sectors.

1. Corresponding figures of the previous year have been regrouped wherever necessary to confirm to current periods figures.

2009-10 2008-09

RS. / Lacs Rs. / Lacs

2. Contingent Liabilities not provided for :-

Guarantee given by the Company to Electricity Department 28.50 25.00

Income tax Penalty demanded for A.Y. 2001-02 - 10.52

LC. 104.16 38.00



3 Expenditure in foreign currency :

Foreign Travelling Expenses :-

New Product Development 09-10 For Conference

Market Development 09-10 For Business Development

Travelling Expenses - Miscellaneous EFIBCA Membership Fees

4 Since Company operates in only one segment i.e. manufacture of HDPE/ PP/ raffia products and trading in similar items hence no need for separate disclosure of segment information as per AS - 17 issued by ICAI.

5 Expenditure on employees in respect of Remuneration of not less than Rs. 24,00,000/- per year where employed throughout the year or Rs. 2,00,000/- per month where employed for a part of the year.

6 Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the company) The Company has sought confirmation from all the creditors regarding their registration as Micro, Small and Medium Enterprises, however till date of the Balance Sheet, no confirmation has been received and hence none of the creditors have been categorised as pertaining to Micro, Small and Medium Enterprises.

7 Post employment benefits

In the previous year, the provision for Gratuity and Leave encashment benefits are made as per Actuarial certificate.

For the current period, Provision for Gratuity and Leave encashment benefits are made on estimated basis, based on previous years provisions, which in the opinion of the management is sufficient.

8 During the year the Company has alloted on date 20.08.2009, 46,99,530 Bonus Equity shares of Rs. 10/- each fully paid up in the ratio of 3:2

9 The Company has made initial public offer during the year at a premium of Rs. 35/- per share on the face value of Rs. 10/- per share, aggregating to 86,57,700 shares allotted on date 16.02.2010 Out of Securities Premium Account amounting to Rs. 30,30,19,500/- expenses relating to IPO of Rs.3,87,74,552/- has been deducted.

10 Research and development expenditure debited to the Profit and Loss account by charge to relevant heads of account amount to Rs. 275,479 (Previous year Rs. Nil)

NOTES

1 Cash flow statement has been prepared under the indirect method as set out in the Accounting Standard (AS) 3 "Cash Flow Statement" issued by the ICAI.

2 Cash and cash equivalents at the end of the year represent cash and bank balances .


Mar 31, 2009

A. NATURE OF OPERATIONS :

The Company is a manufacturer of various woven polymer based products. The products manufactured by the Company are used in packaging, automobiles, infrastructure and various other sectors.

1 Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the company)

The Company has sought confirmation from all the creditors regarding their registration as Micro, Small and Medium Enterprises, however till date of the Balance Sheet, no confirmation has ben received and hence none of the creditors have been categorised as pertaining to Micro, Small and Medium Enterprises.

2 The Company has not paid dividend since inception.


Mar 31, 2008

1. Corresponding figures of the previous year have been regrouped wherever necessary to conform to current years figures.

2007-2008 2006-2007 RS. / Lacs Rs. / Lacs

2. Contingent Liabilities not provided for :-

Guarantee given by the Company to Electricity Department 25.00 25.00

Guarantee given by the Company to B.G., Nhavasheva JNPT 1.40 -

3 Additional information pursuant to the provisions of Paragraph 3 & 4 of Part II of Schedule VI of the Companies Act, 1956 :-

4 Since Company operates in only one segment i.e.manufacture of HDPE/ PP/ raffia products and hence no need for separate disclosure of segment information as per AS - 17 issued by 1CAI.

5 Disclosure pertaining to Micro, Small and Medium Enterprises (as per information available with the company)

The Company has sought confirmation from all the creditors regarding their registration as Micro, Small and Medium Enterprises, however till date of the Balance Sheet, no confirmation has ben received and hence none of the creditors have been categorised as pertaining to Micro, Small and Medium Enterprises.

6 Disclosures required by AS 18 relating to related parties / related party transactions.

7 Exchange gain works outtoRs.24881.06 (Previous Year 61,195.86) net of loss Rs.-(Previous Year Nil) which has beeu credited to Profit & Loss A/c

8 Post employment benefits

Consequent upon the adoption of the Companies (Accounting Standards) Rules 2006, with effect from 1st April, 2007, Accounting Standard 15 (Revised ) has been made applicable to the Company from the current year and accordingly provision of the Post employment benefits has become compulsory. The Company is in process of quantifying total liability and would be reviewing its policy and would be commencing charging the same to Profit and Loss account in the coming year.


Mar 31, 2007

1. Corresponding figures of the previous year have been regrouped wherever necessary to conform to current years figures.

2006-2007 2005-2006 RS. / Lacs Rs. / Lacs

2. Contingent Liabilities not provided for :-

(a) Guarantee given by the Company to Electricity Department 25.00 25.00

3 Additional information pursuant to the provisions of Paragraph 3 & 4 of Part II of Schedule VI of the Companies Act, 1956 :-

4 Since Company operates in only one segment i.e.manufacture of HDPE/ PP/ raffia products so no need for separate disclosure of segment information as per AS - 17 issued by ICA1.

5 Particular on small scale industries have been furnished to the extent such parties have been identified on the basis of information available with company. The small scale industries to whom the company owes any sum which is outstanding as on 31 st March 2007 for more than 30 days are:

ARIHANT INDUSTRIES ARIHANT POLY SACKS JINESHWAR INDUSTRIES KAWASAI LUBES (I) PVT. LTD. LOTUS POLYIWIST (P) LTD. SHAH PACKAGING PVT. LTD. UNI-GLOBE PACKAGING PVT.LTD.[CREDI] VARSHA PRINTING INKS MFG.CO.

6 Disclosures required by AS 18 relating to related parties / related party transactions.

7 Exchange gain works out to Rs. 61,195.86 (Previous Year Nil) net of loss Rs. Nil (Previous Year Nil) which has been credited to Profit & Loss A/c.


Mar 31, 2006

1. Corresponding figures of the previous year have been regrouped wherever necessary to conform to current years figures.

2005-2006 2004-2005 RS. / Lacs Rs. / Lacs

2. Contingent Liabilities not provided for :-

(a) Guarantee given by the Company to Electricity Department 25.00 10.00

5 Additional information pursuant to the provisions of Paragraph 3 & 4 of Part II of Schedule VI of the Companies Act, 1956 :-

13 The Company has a single Business Segment namely manufacture of HDPE/ PP/ raffia products .

b) Nature of Provisions:

i. Provision for Excise duty of Rs. 201,165 on Finished stock at the end of the year.

It is expected that the majority of this expenditure will be incurred in the next Financial Year.

ii. Other provision includes Provision for Sales tax. Provision for Profession tax and Provision for Contribution to PP.

17 Particular on small scale industries have been furnished to the extent such parties have been identified on the basis of information available with company. The small scale industries to whom the company owes any sum which is outstanding as on 31st March 2006 for more than 30 days are:

ARIHANT INDUSTRIES ARIHANT POLY SACKS GOODWEEK INDUSTRIES JINESHWAR INDUSTRIES KALPANA INDUSTRIES LTD. KAWASAI LUBES (1) PVT. LTD. LANTEC TECHNOLOGIES LOTUS POLYIWIST (P) LTD. PRINCE ADHESIVE TAPES PVT.LTD. SANBROS PLASTICS PVT.LTD.

SHAH PACKAGING PVT. LTD.

SHREYA INDIA PVT. LTD.

SHRI KHEM1SATI PLASTIC PVT.LTD.

SPECTRAMIX PLASTICS

UNI-GLOBE PACKAGING PVT.LTD.[CRED1]

VARSHA PRINTING INKS MFG.CO.

WELSET PLAST EXTRUSION LTD.

PETROLEUM ENGINEERS

SAURAB ENTERPRISES

 
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