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Notes to Accounts of Filatex India Ltd.

Mar 31, 2015

1. Nature of Operation

Filatex India Limited (hereinafter referred to as "the Company") is a manufacturer of Polyester Chips, Polyester/ Nylon/Polypropylene Multi & Mono Filament Yarn and Narrow fabrics.

2. In respect of fire at companies POY manufacturing unit at Dadra in Financial Year 2012-13, the company has received claim under fire policy during FY 2013-14 and claim under loss of profit policy amounting to Rs. 536.59 lacs is under consideration of insurer.

3. In terms of the Notification No.G.S.R. 225(E) dated March 31, 2009 as amended till date by the Ministry of Corporate Affairs (MCA) on Accounting Standard (AS-11), the Company had exercised option to adjust the foreign exchange difference on long term foreign currency loans including Foreign Currency Loan obtained under buyers credit with maturity of less than one year and considered as long term liabilities, as the same are to be rolled over for a period of three years from the date of origination) to the cost of qualifying capital assets. Accordingly during the year, the company has added Rs. 17.82 lacs on account of foreign exchange difference to the cost of qualifying assets which are being amortized over the remaining life of such assets upon capitalization.

The company has received letter dated 26th December, 2014 from National Stock Exchange (NSE) advising the company to restate its Financial Statements for the financial year 2012-13 subsequent to the auditors qualification relating to treatment of foreign exchange difference during FY 2012-13. The company has taken up the matter with NSE/SEBI to explain and substantiate the accounting treatment by the company is justified. Considering the companies request the Securities & exchange board of India (SEBI) has informed the company for providing an opportunity of being heard and make submissions/representations before Qualified Audit Review Committee (QARC). As the matter is under consideration of SEBI/QARC, any effect with respect to restated of financial statement for FY 2012-13 will be accounted for on receipt of final decision in the matter.

4. The company has incurred an expenditure of Rs. 4.68 lacs on Education, toilets and providing medical facilities under Corporate Social responsibility during FY 2014-15 & the same has been shown in Other Expenses Schedule No. 28.

5. Related Party Disclosure:

(i) Names of related parties and nature of relationships:

a) Key managerial personnel:

i) Shri Madhu Sudhan Bhageria

ii) Shri Purrshottam Bhaggeria

iii) Shri Madhav Bhageria

iv) Shri Ashok Chauhan

v) Shri Rajendra Prasad Gupta

vi) Shri Raman Jha

b) Relative of key managerial personnel:

i) Shri Ram Avtar Bhageria (Father of related parties mentioned at [a)(i) to a)(iii) above].

ii) Ms. Vrinda Bhageria (Daughter of related party mentioned at a(i) above).

iii) Mr Yaduraj Bhageria (Son of related party mentioned at a(ii) above).

iv) Mr. Vedansh Bhageria (Son of related party mentioned at a(iii) above).

c) Enterprises owned or significantly influenced by key managerial personnel:

i) Madhu Sudhan Bhageria (HUF)

ii) Purrshottam Bhaggeria (HUF)

iii) Madhav Bhageria (HUF)

iv) Nouvelle Securities Pvt Ltd v) SMC Yarns Pvt Ltd

vi) Vrinda Farms Pvt. Ltd.

vii) Dahej Energy Pvt. Ltd.

viii) Hill Estate Pvt. Ltd.

6. Employee Benefits

a) Provident Fund

Contribution to recognized provident fund

The Company contributed Rs. 99.71 Lacs towards provident fund during the year ended March 31, 2015 (previous year Rs. 81.02 Lacs)

b) Gratuity Plan

The Company has a defined benefit gratuity plan. Gratuity is computed at 15 days salary for every completed year of service or part thereof in excess of six months and is payable on retirement/ termination/ resignation. The benefit vests on the employees after completion of five years of service. The company makes provisions of such gratuity liability in the books of account on the basis of actuarial valuation as per projected unit credit method (PUCM).

The following table summarizes the components of net benefit expenses recognized in the profit and loss account and amount recognized in the balance sheet for gratuity.

7. The company has taken various residential, office and warehouse premises under operating lease agreements. These are generally cancelable and are renewable by mutual agreed terms. There are no restrictions imposed under the lease agreement and there are no subleases. The company has paid Rs. 119.01 lacs (previous year Rs. 123.84 lacs) towards operating lease rentals.

8. Figures have been rounded off to rupees in lacs and previous year figures have been regrouped / rearranged to the extent necessary to correspond with the figures for the current year.


Mar 31, 2014

1. Nature of Operation

Filatex India Limited (hereinafter referred to as "the Company") is a manufacturer of Polyester Chips, Polyester/ Nylon/Polypropylene Multi & Mono Filament Yarn and Narrow fabrics.

a. Terms / rights attached to equity shares

1. The company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity shares is entitled to one vote per share. The company declares and pays dividend in Indian rupees.

2. In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

b. Issue of convertiable warrants and conversion into equity shares

1. During the year the company had alloted 8,000,000 convertiable warrants on preferential basis to the promoters/ others to be converted at the option of warrant holders in one or more tranches, within 18 months from the date of allotment (September 20,2013) of warrants into equivalent num- ber of fully paid equity shares of the company of the face value of Rs. 10/- each at an exercise prce of Rs. 25/- per share (including premium of Rs. 15/- per share).

2. The company received Rs. 500/- lacs as application money being 25% of the issue price from 8,000,000 warrant holders. it has further received Rs. 795/- Lacs towards balance amount of 75% of the issue price from the holders of 4,240,000 warrants for which the warrant holders exercised the option to convert them into equity shares. The company issued 4,240,000 equity shares of Rs. 10/- each at a premium of Rs. 15 per share on preferential basis upon conversion on February 12, 2014. (Previous Year NIL)

3. If the warrant holders fails to exercise the option as metioned in (1) above, the right attached to the warrants shall expire and any amount paid on such warrants shall stand forfeited in accordance with chapter VII of SEBI (issue of capital and Disclosure Requirements), 2009

The proceeds of the same have been utilised for the intended purpose of meeting part project cost including over run.

* During the previous year dividend was partly written back as the share holders in their meeting approved 5% dividend as against 10% recommended by the Board of Directors

I. Term loans

a) From banks under consortium arrangement Rs.14184.80 lacs (previous Year Rs. 3,809.73 lacs), are secured by first equitable mortgage created by way of deposit of title deeds on pari passu basis in respect of immovable properties, both present and future, and first charge by way of hypothecation of company''s all movable assets (save & except inventories, book debts, vehicles, plant & machinery acquired through specific loans). These loans are further secured by second charge by way of hypothecation of inventory of raw material, finished goods, semi-finished goods, stores & spares, book debts and other receivables (both present and future), pledge of 30 lacs equity shares of the face value of Rs.10/- each of the company held by the promoter directors and mortgage of an immovable property owned by SMC Yarns Pvt Ltd (related party), personal guarantees of the promoter directors alongwith corporate guarantee of SMC Yarns Pvt Ltd (related party). These loans bear floating interest rate ranging from Base Rate plus 2.00% - 4.25% p.a. and are repayable in quarterly installments upto March, 2022.

b) From State Bank of India Rs.1579.28 lacs (Previous year Rs.1,812.99 lacs) is collateraly secured by mortgage created by way of deposit of title deeds in respect of the immoveable property situated at (i) Ground floor and Third floor of Plot no. 43, New Friends Colony, New Delhi 110025, belonging to promoters group, (ii) pledge of 35 lacs equity shares of the Company having face value of Rs.10/- each held by the promoters directors and are further secured by personal guarantee of Promoter Directors and the property owners. The loan bears floating interest at base rate plus 6.85% p.a. and is repayable in 8 structured quarterly installments starting from December, 2014 upto September, 2016.

II. Vehicle loans are secured by hypothecation of specific vehicles acquired out of proceeds of the Loans. The said loans carry interest rate which varies 7.79% to 10.86% repayables in 36 - 60 monthly instalments.

III. Buyers'' Credit for capital goods

a) Buyers'' credit amounting to Rs. 6300.58 lacs (Previous Year Rs.14,705.23 lacs) secured by Letters of Undertaking (LOUs) / Letter of Comfort (LOCs) issued by consortium of banks. LOUs / LOCs facility is secured by first mortgage created by way of deposit of title deeds on pari passu basis in respect of immovable properties, both present and future, and first charge by way of hypothecation of company''s all movable assets (save & except inventories, book debts, vehicles, plant & machinery acquired through specific loans). These loans are further securied by second charge by way of hypothecation of inventory of raw material, finished goods, semi-finished goods, stores & spares, book debts and other receivables (both present and future), pledge of 30 Lac equity shares of the face value of Rs.10/- each of the company held by the promoter directors, mortgage of an immovable property owned by SMC Yarns Pvt Ltd (related party). and personal guarantees of the promoter directors alongwith corporate guarantee of SMC Yarns Pvt Ltd (related party). The loan bears floating interest @ US Libor / Euribor plus 0.40% - 0.57% p.a.

b) LOCs / LOUs facilities are sanctioned to the company as a sub limit of term loan. Liability towards Buyers'' Credit under LOCs/ LOUs will be liquidated out of the proceeds of term loans that are repayable over a period upto March, 2022.

IV. From a non banking financial institution of Rs. 214.54 lacs (previous year Rs. 342.43 lacs) and is secured by way of first and

exclusive charge over specific plant & machinery acquired from the loan and personel guarantees of two promotor directors. The loan carries interest rate of 14% p.a. and repayble in 36 monthly installments from October, 2012.

V. Unsecured Loans - From body corporates carry interest @ 9% p.a. and are payable after three years from the date of receipt.

I. Working Capital :

a) Working capital loans from consortium member banks are secured by first charge by way of hypothecation of inventory of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) and are futher secured by way of second charge on block of fixed assets of the company except vehicles and plant & machinery acquired out of specfic loans(s). These are further secured by pledge of 30 lacs equity shares of the face value of Rs.10/- each of the company held by promoter directors, mortgage of an immovable property owned by SMC Yarns Pvt Ltd (related party) and personal guarantees of promoter directors alongwith corporate guarantee of SMC Yarns Pvt Ltd (related party) on pari passu basis.

b) The working capital loans from banks are repayable on demand and carry interest at Base Rate plus 2.00% to 3.75% p.a.

II. Buyers'' Credit for raw material are secured by LOUs / LOCs issued by consortium of banks. The LOUs / LOCs facility is sanctioned to the Company as a sub limit of Non Fund (LCs) based facility. The facility is secured by first charge by way of hypothecation of inventory of raw materials, finished goods, semi finished goods, stores and spares, book debts and other receivables (both present and future) further secured by way of second charge in respect of entire block of fixed assets of the company except vehicles and specific plant & machinery acquired out of specfic loans(s). These are further secured by pledge of 30 lacs equity shares of the face value of Rs.10/- each of the company held by promoter directors, mortgage of an immovable property owned by SMC Yarns Pvt Ltd (related party) and personal guarantees of promoter directors alongwith corporate guarantee of SMC Yarns Pvt Ltd (related party) on pari passu basis. The loan bears floating interest @ US Libor / Euribor plus 0.43% - 0.47% p.a.

* # Includes vehicles taken on hire purchase amounting to Rs. 196.60 lacs (previous year Rs.213.99 lacs) and plant & machinery taken on hire purchase amounting to Rs. 102.73 lacs (previous year Rs.102.73 lacs)

** Plant & Machinery i) Includes cost of Rs.342.93 lacs (previous year Rs.342.93 lacs) of water supply connection from GIDC and Rs. 101.00 lacs (Previous Year Rs. Nil) being cost of electricity transmission lines not owned by the company.

i) Amount of borrowing cost aggregating Rs. Nil (previous year 1,121.16 lacs) have been capitalised to:

Building Rs. Nil (previous Year Rs. 125.06 lacs) Plant & Machinery Rs. Nil (previous year Rs. 996.10 lacs)

ii) Sale/deletion of plant & machinery of Dadra unit include Rs. 360.70 lacs (previous year Rs. 298.85 lacs) net of accumulated depreciation, damaged under fire and Rs. 916.31 lacs (previous year Nil) net of accumulated depreciation for Gas based Gensets being assets held for sale. It also includes liability written back against plant & machinery at Dahej unit for Rs. 462.15 lacs (previous year Rs. Nil).

iii) In terms of the Notification No.G.S.R. 225(E) dated March 31, 2009 as amended till date by the Ministry of Corporate Affairs (MCA) on Accounting Standard (AS-11), the Company had exercised option to adjust the foreign exchange difference on long term foreign currency loans (including foreign currency loans obtained under buyers credit with maturity of less than one year and considered as long term liabilities, as the same are to be rolled over for a period of three years from the date of origination) to the cost of qualifying capital assets (plant & machinery). Accordingly, the company has added Rs.1996.66 lacs for the year ended March 31, 2014 (previous year Rs. 852.02 lacs) on account of foreign exchange difference to the cost of qualifying assets (plant & machinery).

* These balance are not available for the use by the Company as they represent corresponding unpaid dividend liabilities.

** Deposits are in the nature of Margin Money pledged with bank against Bank Guarantee given/Letter of Credit established by the bank

1. Contingent liabilities and commitments (to the extent not provided for)

i) Contingent Liabilities

(Rs. In lacs)

PARTICULARS For the year ended For the year ended March 31, 2014 March 31, 2013

a) Letters of Credits 2,779.95 2,853.80

b) Unexpired Bank Guarantees 645.40 999.74

c) Excise / Custom duty 1,404.67 1,469.87 (Mainly relating to reversal of cenvat credit of NCCD & valuation of texturised yarns)

d) Sales Tax demand 0.80 0.80

e) Income Tax demand on account of :

* Penalty for the period AY 2001-02 to 2005-06 33.37 33.37

* Additions for AY 2008-09 2.20 2.20

f) Claims against the company not acknowledged as debts 251.95 55.87

g) Amount of duty saved on import of plant & machinery 1,666.58 2869.83 under EPCG scheme - corresponding export

obligation pending Rs. 13,497.21 lacs, previous year Rs. 20,168.00 lacs

ii) Commitments

Capital contracts remaining to be executed (net of payments) and not provided for Rs. 264.40 lacs (previous year Rs. 427.28 lacs).

2. During the previous financial Year a fire broke at company''s POY manufacturing unit at Dadra which affected functioning of some of the POY lines. Some lines which suffered partial damages were repaired and put to use again by March 2013. In respect of the lines which had major damages, in view of the substantial amount of expenditure required to be incurred to restore such machines, it is thought prudent to take the insurance claim on depreciated value without reinstating such assets. The company has accounted for claim amount of Rs. 1830.46 lacs (which includes interim claim of Rs. 500.00 Lacs, already received by the company and is net off Rs. 146.82 lacs by disposal of the salvage).

The company has also accounted for the claim recoverable under loss of profit policy amounting to Rs. 536.59 Lacs (Rs. 411.55 Lacs upto 31st Mar, 2013), computed on the basis of the best estimate of the management and the same has been shown under other operating revenue.

3. Segment reporting as defined in Accounting Standard 17 is not applicable as the Company is primarily engaged in manufacture of Synthetic Yarn & Textiles.

4. Forward Exchange Contracts and Unhedged Foreign Currency Exposure:

5. Subsidiary and consolidation of financial statement.

The Company namely ''Filatex Synthetics Private Limited'' was incorporated on 9th March, 2012 as a subsidiary company and no transaction / business has taken place since its incorporation. During the year ended 31st March, 2013, the company sold its shares in the said company and consequently it is no more a subsidiary company.

6. Employee Benefits

a) Provident Fund

Contribution to recognized provident fund

The Company contributed Rs.81.02 Lacs (previous year Rs. 78.29 Lacs) towards provident fund during the year ended March 31, 2014.

b) Gratuity Plan

The Company has a defined benefit gratuity plan. Gratuity is computed at 15 days salary, for every completed year of service or part thereof in excess of six months and is payable on retirement/ termination/ resignation. The benefit vests on the employees after completion of five years of service. The company makes provisions of such gratuity liability in the books of account on the basis of actuarial valuation as per projected unit credit method (PUCM)

The following table summarizes the components of net benefit expenses recognized in the profit and loss account and amount recognized in the balance sheet for gratuity.


Mar 31, 2013

1. Nature of Operation

Filatex India Limited (hereinafter referred to as "the Company") is a manufacturer of Polyester Chips, Polyester/ Nylon/Polypropylene Multi & Mono Filament Yarn and Narrow fabrics.

2. Contingent liabilities and Commitments (to the extent not provided for)

i) Contingent Liabilities

(Rs. In lacs)

PARTICULARS For the year ended For the year ended March 31, 2013 March 31, 2012

a) Letters of Credit 2853.80 384.77

b) Unexpired Bank Guarantees 999.74 234.87

c) Excise / Customs (Mainly relating to reversal of 1469.87 1,426.61 cenvat credit of NCCD & valuation of texturised yarns).

d) Sales Tax demand 0.80 18.48

e) Income Tax demand on account of :

- Additions for the period AY 2001-02 to 2005-06 33.37 33.37

- Penalty for the period AY 2001-02 to 2005-06 33.37 33.37

- Additions for AY 2008-09 2.20 2.20

f) Claims against the company not acknowledged as debts 55.87 55.87

ii) Commitments

a) The company carries an export obligation of Rs.20,168.00 lacs (previous year Rs.22,129.83 lacs) under EPCG Scheme against duty free import of plant and machinery.

b) Capital contracts remaining to be executed (net of payments) and not provided for - Rs.427.28 lacs (previous year Rs.765.37 lacs).

3. The Company''s project for Polyester Poly-Condensation cum POY at GIDC Dahej, Gujarat which had started on 20th March, 2012 has been completed and become fully operational. Pre-operative expenses related to buildings and plant & machinery put to use, as detailed below, have been capitalized (refer note 13):-

4. During the financial year, a fire broke at company''s POY manufacturing unit at Dadra which affected functioning of some of the POY lines. The company is adequately insured and the insurers are in the process of assessing the quantum of loss. Some lines having partial damages have been repaired and were put to use again by March, 2013. Some lines which have major damages are expected to be replaced / restored by December, 2013. The loss caused by the fire is under determination, however, the Management is of the opinion that the company would be able to recover the loss as it has obtained insurance covers on reinstatement basis. However, the loss on repair / replacement, if any, would be accounted for upon settlement of the claim.

The company has lodged claim under Loss of Profit policy and has accounted for partial claim of Rs.411.55 lacs for the period upto March 31, 2013 calculated on the basis of best estimate by the management which has been separately shown as "Revenue from operations".

5. Segment reporting as defined in Accounting Standard 17 is not applicable as the Company is primarily engaged in manufacture of Synthetic Yarn & Textiles.

6. Subsidiary and consolidation of financial statement.

The Company namely ''Filatex Synthetics Private Limited'' was incorporated on 9th March, 2012 as a subsidiary company and no transaction / business has taken place since its incorporation. During the year, the company has sold its shares in the said company and consequently it is no more a subsidiary company.

7. Related Party Disclosure:

(i) Names of related parties and nature of relationships:

a) Key managerial personnel:

i) Shri Madhu Sudhan Bhageria

ii) Shri Purrshottam Bhaggeria

iii) Shri Madhav Bhageria

b) Relative of key managerial personnel:

i) Shri Ram Avtar Bhageria (Father of related parties mentioned at (a) above).

ii) Smt. Satyabhama Bhageria (Mother of related parties mentioned at (a) above).

iii) Ms. Vrinda Bhageria (Daughter of related party mentioned at a(i) above).

iv) Mr Yaduraj Bhageria (Son of related party mentioned at a(ii) above).

v) Mr. Vedansh Bhageria (Son of related party mentioned at a(iii) above).

c) Subsidiary Company:

Filatex Synthetics (P) Ltd. (Upto 16.12.2012, refer note 37)

d) Enterprises owned or significantly influenced by key managerial personnel:

i) M/s Ram Avtar Bhageria (hUf)

ii) M/s Madhu Sudhan Bhageria (HUF)

iii) M/s Purrshottam Bhaggeria (HUF)

iv) M/s Madhav Bhageria (HUF)

v) M/s Nouvelle Securities Pvt Ltd

vi) M/s SMC Yarns Pvt Ltd

vii) M/s Azimuth Investments Ltd

viii) M/s Hill Estate Pvt. Ltd.

8. Employee Benefits

a) Provident Fund

Contribution to recognized provident fund

The Company contributed Rs.78.29 lacs (previous year Rs. 46.50 lacs) towards provident fund during the year ended March 31, 2013.

b) Gratuity Plan

The Company has a defined benefit gratuity plan. Gratuity is computed at 15 days salary, for every completed year of service or part thereof in excess of six months and is payable on retirement/ termination/ resignation. The benefit vests on the employees after completion of five years of service. The company makes provisions of such gratuity liability in the books of account on the basis of actuarial valuation as per projected unit credit method (PUCM).

The following table summarizes the components of net benefit expenses recognized in the profit and loss account and amount recognized in the balance sheet for gratuity.

9. Figures have been rounded off to rupees in lacs and previous year figures have been regrouped / rearranged to the extent necessary to correspond with the figures for the current year.


Mar 31, 2012

1. Nature of Operation

Filatex India Limited (hereinafter referred to as "the Company") is a manufacturer of Polyester, Nylon, Polypropylene Multi & Mono Filament Yarns and Narrow fabrics.

2. Contingent liabilities and Commitments (to the extent not provided for)

i) Contingent Liabilities

(Rs. In lacs)

PARTICULARS For the year ended For the year ended March 31, 2012 March 31, 2011

a) Letters of Credit 384.77 9,593.03

b) Unexpired Bank Guarantees 234.87 353.86

c) Excise / Customs (Mainly relating to reversal of 1,426.61 809.50 cenvat credit of NCCD & valuation of texturised yarns).

d) Sales Tax demand (Emerging from rejection of 18.48 18.48 consignment sales due to different interpretation)

e) Income Tax demand on account of :

- Additions for the period AY 2001-02 to 2005-06 33.37 33.37

- Penalty for the period AY 2001-02 to 2005-06 33.37 33.37

- Additions for AY 2008-09 2.20 2.20

f) Claims against the company not acknowledged as debts 55.87 55.87

ii) Commitments

a) The company carries an export obligation of Rs.22,129.83 lacs (previous year Rs.5,192.85 lacs) under EPCG Scheme against duty free import of plant and machinery.

b) Capital contracts remaining to be executed (net of payments) and not provided for - Rs.765.37 lacs (previous year Rs.2,510.43 lacs).

3. The Company's project for Polyester Poly-Condensation cum POY at GIDC Dahej, Gujarat has been partly commissioned and production of POY has started on 20th March, 2012 and accordingly pre-operative expenses related to plant & machinery and buildings put to use, have been capitalized.

4. The Company has received an amount of Rs.3,029.30 lacs towards issuance of fresh Equity and conversion of Warrants and the same has been utilized towards part financing of acquisition of land, construction of building, procurement of plant & machinery for the project of Polyester Poly-Condensation cum POY.

5. Segment reporting as defined in Accounting Standard 17 is not applicable as the Company is primarily engaged in manufacture of Synthetic Yarn & Textiles.

iii) Premium for forward contracts for unexpired period of Rs.82.59 lacs has been carried over to next year (Previous year Rs.20.52 lacs) and will be charged to Profit & Loss Account as and when the underlying transaction will mature.

6. Subsidiary and consolidation of financial statement.

The Company namely 'Filatex Synthetics Private Limited' was incorporated on 9th March, 2012 as its subsidiary Company and no transaction / business has taken place during the financial year 2011-12. Therefore, the subsidiary's financial statement has not been prepared and consolidated with the annual accounts of the Company.

7. Related Party Disclosure:

(i) Names of related parties and nature of relationships:

a) Key managerial personnel:

- Shri Madhu Sudhan Bhageria

- Shri Purrshottam Bhaggeria

- Shri Madhav Bhageria

b) Relative of key managerial personnel:

- Shri Ram Avtar Bhageria (Father of related parties mentioned at (a) above.

- Smt. Satyabhama Bhageria (Mother of related parties mentioned at (a) above.

c) Subsidiary Company:

- Filatex Synthetics (P) Ltd.

d) Enterprises owned or significantly influenced by key managerial personnel:

- M/s Ram Avtar Bhageria (HUF)

- M/s Madhu Sudhan Bhageria (HUF)

- M/s Purrshottam Bhaggeria (HUF)

- M/s Madhav Bhageria (HUF)

- M/s Nouvelle Securities Pvt Ltd

- M/s SMC Yarns Pvt Ltd

- M/s Azimuth Investments Ltd

8. Employee Benefits

a) Provident Fund

Contribution to recognized provident fund

The Company contributed Rs.46.50 lacs (previous year Rs.39.08 lacs) towards provident fund during the year ended March 31, 2012

b) Gratuity Plan

The Company has a defined benefit gratuity plan. Gratuity is computed at 15 days salary, for every completed year of service or part thereof in excess of six months and is payable on retirement/ termination/ resignation. The benefit vests on the employees after completion of five years of service. The company makes provisions of such gratuity liability in the books of account on the basis of actuarial valuation as per projected unit credit method (PUCM)

The following table summarize the component of net benefit expenses recognized in the profit and loss account and amount recognized in the balance sheet for gratuity.

9. Figures have been rounded off to rupees in lacs.


Mar 31, 2011

I. NATURE OF OPERATION

Filatex India Ltd. is a manufacturer of Polyester, Nylon, Polypropylene Multi & Mono Filament Yarns and Narrow fabrics.

1. (i) Contingent liabilities not provided for in respect of: (Rs. in Lacs)

PARTICULARS Year Ended Year Ended March 31, 2011 March 31, 2010

a) Letters of Credit 9593.03 4473.99

b) Unexpired Bank Guarantees 353.86 234.87

c) Excise / Customs (mainly relating to reversal of 809.50 879.68 cenvat credit of NCCD & valuation of texturised yarns).

d) Sales Tax demand (emerging from rejection of 19.13 19.13 consignment sales due to different interpretation)

e) Income Tax demand on account of :

- MAT for AY 2004-05 due to different interpretation 34.94 34.94 of brought forward losses

- Additions for the period AY 2001-02 to 2005-06 33.37 33.37

- Penalty for the period AY 2001-02 to 2005-06 33.37 -

- Additions for AY 2008-09 2.20 -

f) Claims against the company not acknowledged as debts 55.87 55.87

(ii) The company carries an export obligation of Rs.5192.85 lacs (Previous year Rs.2836.39 lacs) under EPCG against duty free import of plant & machinery.

2. Capital contracts remaining to be executed (net of payments) and not provided for :-Rs. 2510.43 lacs (Previous year- Rs.9712.19 lacs).

3. The company had initiated implementation of a project for Continuous Poly-condensation cum POY capacity at Village Nani Tambadi, Valsad, Gujarat and has incurred an amount of Rs.810.00 lacs for acquisition of land and construction of building thereon, which had to be suspended due to unavoidable circumstances. The expenditure incurred on construction of building has been shown under CWIP. The management intends to sell / use the same for an alternative purpose. Subsequently, the project has been shifted to a new land which has been allotted by GIDC at Dahej, Gujarat on deferred payment basis. The Lease Deed for the same is pending execution. However, the company has been given possession of the land and has started construction activities thereon.

4. The company had issued 40,00,000 Convertible Warrants to be converted at the option of warrant holders in one or more tranches within 18 months from March 04, 2010 i.e. the date of allotment of warrants into equivalent number of fully paid up equity shares of the company of the face value of Rs.10/- each at an exercise price of Rs.40.00 per share (including premium of Rs.30.00 per share) to the Promoters / persons belong to Promoters Group on preferential basis.

The company has received an amount of Rs.1320.00 lacs (including Rs.800.00 lacs received during 2009-10) and the same has been utilized towards part financing of acquisition of land, construction of building and payment of advances to suppliers of plant & machinery for the companys proposed project for setting up a unit for continuous poly-condensation facility and expansion of POY capacity.

5. Managerial Remuneration:

Vice Chairman & Managing Director & the Joint Managing Directors are covered under the companys Gratuity and Leave encashment rules with the other employees of the company. Combined gratuity and leave encashment liabilities have been determined for all the employees on an independent actuarial valuation. Such liabilities for these Directors cannot be ascertained separately and therefore the same has not been included in the above.

6. Segment reporting as defined in Accounting Standard 17 is not applicable as the Company is primarily engaged in manufacture of Synthetic Yarn & Textiles.

7. Derivative Instruments and Unhedged Foreign Currency Exposure:

iii) Premium for forward contracts for unexpired period of Rs.20.52 lacs has been carried over to next year (Previous year Rs.27.52 lacs) and will be charged to Profit & Loss Account as and when the underlying transaction will mature.

8. Related Party Disclosure:

(i) Names of related parties and nature of relationships:

a) Key managerial personnel:

- Shri Madhu Sudhan Bhageria

- Shri Purrshottam Bhaggeria

- Shri Madhav Bhageria

b) Relative of key managerial personnel:

- Shri Ram Avtar Bhageria (Father of related parties mentioned at (a)above.

c) Enterprises owned or significantly influenced by key managerial personnel:

- M/s Ram Avtar Bhageria (HUF)

- M/s Madhu Sudhan Bhageria (HUF)

- M/s Purrshottam Bhaggeria (HUF)

- M/s Madhav Bhageria (HUF)

- M/s Nouvelle Securities Pvt. Ltd.

- M/s SMC Yarns Pvt. Ltd.

- M/s Azimuth Investments Ltd.

95. The company has adopted Accounting Standard 15 (Revised 2005) Employee Benefits. Accordingly, the company has provided long term employee benefits on the basis of actuarial valuation done as per "Projected Unit Credit Method".

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors such as demand and supply in the employment market.

10. The company has taken various residential, office and warehouse premises under operating lease agreements. These are generally not non- cancelable and are renewable by mutual consent. There is no restriction imposed by lease agreements. There are no sub leases.

11. Figures have been rounded off to rupees in lacs.

12. Previous year figures have been re-grouped and/or rearranged wherever considered necessary.






Mar 31, 2010

I.NATURE OF OPERATION

Filatex India Ltd. is a manufacturer of Polyester, Nylon, Poly propylene Multi & Mono Filament Yarn and Narrow fabrics.

1. (i) Contingent liabilities not provided for in respect of: (Rs/Lacs)

PARTICULARS Year Ended Year Ended

March 31, 2010 March 31, 2009

a) Letters of Credit 4473.99 195.88

b) Unexpired Letter of Guarantees 234.87 188.00

c) Excise / Customs (mainly relating to reversal of 879.68 874.93 cenvat credit of NCCD & valuation of texturised yarns).

d) Sales Tax demand (emerging from rejection of consignment 19.13 18.67 sales due to different interpretation)

e) Income Tax demand (Demand of MAT for AY 2004-05 due to 34.94 49.81 different interpretation of brought forward losses)

f) Claims not acknowledged as debts 55.87 55.87

(ii) The company carries an export obligation of Rs.2836.39 lacs (Previous year - Rs.2219.80 lacs) under EPCG against duty free import of plant & machinery.

2. Capital contracts remaining to be executed (net of payments) and not provided for:-Rs. 9712,19 lacs (Previous year- Rs.Nil)

3. There was a fire at companys Monofilament Yarn unit at Noida (UP) on April 18, 2009 which affected some of its production lines and factory buildings. The affected production lines and factory building have been repaired and production has been restored. The company has lodged its claim with the insurers and has decided to carry forward Rs.128.68 lacs, net of Rs.25.00 lacs on account of non-recoverables, which accordingly have been charged to Profit & Loss Account.

4. During the year, the company has issued 40,00,000 Convertible Warrants to be converted at the option of warrant holders in one or more tranches within 18 months from March 04, 2010 i.e. the date of allotment of warrants into equivalent number of fully paid up equity shares of the company of the face value of Rs.10/- each at an exercise price of Rs.40.00 per share (including premium of Rs.30.00 per share) to the Promoters / persons belong to Promoters Group on preferential basis.

The said amount has been utilized towards procurement of land and payment of advances to suppliers of plant & machinery for the companys proposed project for setting up a unit for continuous poly-condensation facility and expansion of POY capacity.

5. Segment reporting as defined in Accounting Standard 17 is not applicable as the Company is primarily engaged in manufacture of Synthetic Yarn & Textiles.

6. Related Party Disclosure:

(i) List of related parties with whom transactions have taken place and relationships:

a) Key managerial personnel:

- Shri Madhu Sudhan Bhageria

- Shri Purrshottam Bhaggeria

- Shri Madhav Bhaggeria

b) Relative of key managerial personnel:

- Shri Ram Avtar Bhageria (Father of related parties mentioned at (a) above.

c) Enterprises owned or significantly influenced by key managerial personnel:

- M/s Ram Avtar Bhageria (HUF)

- M/s Madhu Sudhan Bhageria (HUF)

- M/s Purrshottam Bhaggeria (HUF)

- M/s Madhav Bhageria (HUF)

- M/s Azimuth Investments Limited

- M/s Fargo Estates Pvt. Ltd.

- M/s Elevate Developers Pvt. Ltd.

- Nouvelle Securities Pvt. Ltd.

7. An amount of Rs.334.91 lacs representing unabsorbed cenvat and service tax credits generated in the previous years due to excess of excise /service tax suffered on purchases is lying to the credit of the company in excise records, though the same had been charged to Profit & Loss Account of the relevant year as per prudent account- ing norms. The same is recognized to the extent utilized during the relevant year.

8. Figures have been rounded off to rupees in lacs.

9. Previous year figures have been re-grouped and/or rearranged wherever considered necessary.

 
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