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Notes to Accounts of Haria Exports Ltd.

Mar 31, 2015

1. GENERAL INFORMATION :

Haria Exports Limited ('the Company') was incorporated on 28th August, 1970 under The Companies Act, 1956. The company is in the Business of manufacturing of Notebooks and Plastic Preform and also trading of goods.

2. Details of Shareholding as at March 31, 2015

i. Equity / Preference Shares held by various entities:

5,87,952 (5.09%) (PY: 5,87,952 (5.09%)) Eq. Shares of Rs. 10/- each held by Vilco Pharma Pvt. Ltd.

ii. Shareholders holding more than 5% of Equity / Preference Shares:

24,82,530 (21.49%) {(PY: 24,82,530 (21.49%)) Equity Shares of Rs. 10/- each held by Manish K. Haria (HUF) 11,83,842{(10.25%)} {(PY: 11,83,842 (10.25%)) Equity Shares of Rs.10/- each held by Mr. Ketan Keshvaji Shah 10,41,650 (9.02%) {(PY: 10,41,650(9.02%)) Equity Shares of Rs.10/- each held by Mr. Ramesh Keshvaji Shah

3. Each Equity Share is entitled to one voting right only.

4. In the event of liquidation of the company, the holders of equity shares will be entitled to receive assets remaining, after remittance to the Preference Shareholders and distribution of all preferential amounts.

5. Additional Information to Secured / Unsecured Long Term Borrowings:

6. Unsecured Long terms loans and advances from Related Parties :

a. Long Term loans from related parties are not going to be recalled before the end of 2 years.

b. There was no default in repayment of the loans.

7. Unsecured Inter Corporate Deposits

a. Unsecured Inter Corporate Deposits from others are not going to be recalled before the end of 2 years.

b. There was no default in repayment of the loans.

8. CONTINGENT LIABILITIES AND COMMITMENTS

PARTICULARS 2014-2015 2013-2014

(I) Contingent Liabilities

(A) Claims against the company/ disputed liabilities not acknowledged as debts.

(i) Income Tax 27,030 27,030

(ii) FEMA 27,19,901 27,19,901

(B) Guarantees NIL NIL

(i) Guarantees to Banks and Financial Institutions against credit facility extended to third parties. NIL NIL

(II) Capital Commitments

9. EMPLOYEE BENEFITS :

The directors have waived off the claim in respect of gratuity as per the Payment of Gratuity Act,1972 in the year under consideration,hence no provision for the same is made.

10. Foreign exchange gain/loss (net) of Rs. NIL/- (Previous year Rs. 44,470/-) has been included in respective heads of the Statement of Profit and Loss

11. SEGMENT REPORTING :

1) Information about Primary segment (by business segment)

a) Note books.

b) Engineering Goods - Trading

c) Notebooks - Trading

The Company's business segments are organised around product lines which have been identified taking into account the nature of products, the different risks and returns the organisational structure and internal reporting systems.

i) Segment revenue segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

12. RELATED PARTY DISCLOSURE :

LIST OF RELATED PARTIES PARTICULARS

Subsidiaries / Associates NIL

Key Management Personnel 1] Kantilal Haria

2] Manish Haria

Enterprise in which key management personnel, and their relatives have 1] Plastex Products Pvt Ltd significant influence 2] Haria Apparel Limited

Relative of Key Management Personnel NIL

13. The Trade Receivables of Rs. 2,55,81,723/- are overdue and outstanding since three years. The management has made the provision for doubtful debts of on the overdue amount.

14. The balance confirmations have been sent to Sundry Debtors, Creditors, Deposits and Loans & Advances Parties, due adjustment if any shall be done on receipt of the confirmation. Management is confident of receiving all the sums due. The provisions for all known liabilities and for depreciation is adequate and not in excess of the amounts reasonably necessary.

15. In the opinion of the board the current assets, loans and advances are approximately of the values stated in the Balance Sheet, realized in the ordinary course of business.

16. In the absence of declaration from sundry creditors / suppliers with regard to their status as SSI Undertaking wherever appropriate, it is not possible to determine the amount, payable to sundry creditors falling within the meaning of SSI Undertaking.

17. Disclosure under Micro, Small and Medium Enterprises development Act, 2006. The Company has not received any memorandum ( as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprises development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently the amount paid/payable to these parties during the period under review is NIL

18. Sundry balances are written off amounting to net Rs. 53,747/- as per the resolution passed by the Board of Directors at their meeting held on 6th April, 2015

19. Previous Year Figures have been regrouped & reclassified/rearranged wherever necessary.

As per Report of the even date attached.


Mar 31, 2014

1. a. Details of Shareholding as at March 31, 2014

i. Equity / Preference Shares held by various entities:

587,952 (5.09%) (PY: 587,952 (5.09%)) Eq. Shares of Rs.10/- each held by Vilco Pharma Pvt. Ltd.

ii. Shareholders holding more than 5% of Equity / Preference Shares:

2,482,530 (21.49%) {(PY: 2,482,530 (21.49%)) Equity Shares of Rs.10/- each held by Manish K. Haria (HUF) 1183842{(10.25%)} {(PY: 1183842 (10.25%)) Equity Shares of Rs.10/- each held by Mr. Ketan Keshvaji Shah 1041650 (9.02%) {(PY: 1,041,650(9.02%)) Equity Shares of Rs.10/- each held by Mr. Ramesh Keshvaji Shah

2. Additional Information:

I) Unsecured Long terms loans and advances from Related Parties :

a. Long Term loans from related parties are not going to be recalled before the end of 2 years.

b. There was no default in repayment of the loans.

II) Unsecured Inter Corporate Deposits

a. Unsecured Inter Corporate Deposits from others are not going to be recalled before the end of 2 years.

b. There was no default in repayment of the loans.

3. CONTINGENT LIABILITIES & COMMITMENTS:

PARTICULARS 2013-2014 2012-2013 (Rupees) (Rupees)

(I) Contingent Liabilities

(a) Claims against the company/ disputed liabilities not acknowledged as debts. NIL NIL

(b) Guarantees

(i) (i) Guarantees to Banks and Financial Institutions against credit facility extended to third parties. NIL 100,000,000



(II) Capital Commitments NIL NIL

4. EMPLOYEE BENEFITS:

The directors have waived off the claim in respect of gratuity as per the Payment of Gratuity Act,1972 in the year under consideration,hence no provision for the same is made.

6. Foreign exchange gain (net) of Rs. 44,470/- (Previous year Rs. NIL/-) has been included in respective heads of the Statement of Profit and Loss.

7. SEGMENT REPORTING :

1 Information about Primary segment (by business segment)

a. Note books.

b. Engineering Goods

c. Plastics

The Company''s business segments are organised around product lines which have been identified taking into account the nature of products, the different risks and returns the organisational structure and internal reporting systems.

i) Segment revenue segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

8. The company in the last quarter of the year under consideration was only engaged in trading of goods.

9. The Trade Receivables of Rs. 42,96,248/- are overdue and outstanding since three years. The management has made the provision for doubtful debts of on the overdue amount.

10. The balance confirmations have been sent to Sundry Debtors, Creditors, Deposits and Loans & Advances Parties, due adjustment if any shall be done on receipt of the confirmation. Management is confident of receiving all the sums due. The provisions for all known liabilities and for depreciation is adequate and not in excess of the amounts reasonably necessary.

11. In the opinion of the board the current assets, loans and advances are approximately of the values stated in the Balance Sheet, realized in the ordinary course of business.

12. In the absence of declaration from sundry creditors / suppliers with regard to their status as SSI Undertaking wherever appropriate, it is not possible to determine the amount, payable to sundry creditors falling within the meaning of SSI Undertaking.

13. Disclosure under Micro, Small and Medium Enterprises development Act, 2006. The Company has not received any memorandum ( as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprises development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently the amount paid/payable to these parties during the period under review is NIL

14. Sundry balances are written off amounting to net Rs. 91,593/(Cr Balance) - as per the resolution passed by the Board of Directors at their meeting held on 15 th April, 2014

15 Previous Year Figures have been regrouped & reclassified/rearranged wherever necessary.

As per Report of the even date attached.


Mar 31, 2013

1. EMPLOYEE BENEFITS :

This clause is not applicable to the company as the gratuity is waived off by the directors.

* The stock represents transfer on account of merger/demerger. Plastic division has merged and garment division has demerged.

2. Foreign exchange gain/loss (net) of Rs. NIL/- (Previous year Rs. NIL/-) has been included in respective heads of the Statement of Profit and Loss

3. SEGMENT REPORTING 1) Information about Primary segment (by business segment)

a) Plastics.

b) Note books.

The Company''s business segments are organized around product lines which have been identified taking into account the nature of products, the different risks and returns the organizational structure and internal reporting systems.

i) Segment revenue segment results, segment assets and segment liabilities include the respective amount

identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

Note: Related Parties Relationship is as identified by the company and relied upon by the auditors.

Figures in the brackets represent previous year figures.

4. LEASES

Operating Lease Payment in respect of certain office premises and factory premises on cancellable operating lease which are recognized into the Statement of Profit and Loss:

5. During the year under consideration, the deferred tax asset of Rs. 14,56,072/- has been further Debited to rectify the effect of demerger of garment division by Rs.41,93,251/- and further credited to give effect of Current year by Rs.19,78,943/-, resulting in net Deferred Tax Asset of Rs.76,28,266/- at the year end.

6. As informed to us by the management, the term loan was sanctioned by Punjab National Bank of Rs.3,48,00,000/- in the name of Haria Exports Limited for garment division which has been secured against the plots numbers 278/279/ 345-358 at GIDC Vapi Industrial Estate, Vapi, Taluka: PARDI, District- Valsad, Gujarat which is demerged to Haria

Apparels Limited, the term loan was disbursed to Haria Apparels Limited which is the demerged company from Haria Exports Limited. The documentation was done in the name of Haria Exports Limited since the change of name process for land was not complete then. However the repayment for the same is done from Haria Apparels Limited only. The Company is however in the process of changing the name in GIDC records and consequently with Punjab National Bank from Haria Exports Limited to Haria Apparels Limited.

7. The Balance confirmations have been sent to Sundry Debtors, Creditors, Deposits and Loans & Advances parties, due adjustments, if any shall be done on receipt of confirmation. Management is confident of receiving all the sums due. The provisions for all known liabilities and for depreciation is adequate and not in excess of the amounts reasonably necessary.

8. In the opinion of the board the current assets, loans and advances are approximately of the values stated in the Balance Sheet, realized in the ordinary course of business.

9. In the absence of declaration from sundry creditors / suppliers with regard to their status as SSI Undertaking wherever appropriate, it is not possible to determine the amount, payable to sundry creditors falling within the meaning of SSI Undertaking.

10. Disclosure under Micro, Small and Medium Enterprises development Act, 2006. The Company has not received any memorandum ( as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprises development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently the amount paid/payable to these parties during the period under review is NIL.

11. Sundry balances are written off amounting to net Rs.1,22,460/- as per the resolution passed by the Board of Directors at their meeting held on 15th April, 2013.

12. Previous Year Figures have been regrouped & reclassified/rearranged wherever necessary.


Mar 31, 2012

A. Details of Shareholding as at March 31, 2012

i. Equity / Preference Shares held by various entities:

587952 Eq. Shares of Rs.10/- each held by Associate Company Vilco Pharma Pvt. Ltd.

ii. Shareholders holding more than 5% of Equity / Preference Shares:

2482530 Equity Shares of Rs.10/- each held by Manish K. Haria (HUF)

620633 Equity Shares of Rs.10/- each held by Mr. Manish K. Haria

1070300 Equity Shares of Rs.10/- each held by Mr. Ketan Keshvaji Shah

1041650 Equity Shares of Rs.10/- each held by Mr. Ramesh Keshvaji Shah

Secured Long Term Borrowings

a. Term Loan from Banks

Loan from Bank is secured by way of hypothecation of Car as at March 31, 2011 which has been transferred to the Demerged Company.

b. Unsecured Long terms borrowings :

Long Term loans are received on personal guarantee of some of the directors.

1. GENERAL INFORMATION

Haria Exports Limited (''the Company'') was incorporated on 28/08/1970 under The Companies Act, 1956.The company is in the Business of Manufacturing Industry - Textiles, handloom, Power and Note Books.

During the year company has demerged its textile business into Haria Apparels Ltd. and also amalgamated within it Best Plastex Pvt. Ltd. The said scheme of arrangement was sanctioned by the Hon''ble High Court Judicature at Bombay vide Order dated 22nd March, 2012.

1) The Balances of Sundry Debtors, Creditors, Deposits and Loans & Advances are accepted as appearing in the Ledger Accounts & subject to confirmation from individual parties concerned, due adjustments, if any will be made thereon. Management is confident of receiving all the sums due. The provision for all known liabilities & for depreciation is adequate and not in excess of the amount reasonably necessary.

2011-2012 2010-2011 (Rs.in Lacs) (Rs.in Lacs)

2) Contingent Liabilities not provided for

i) Income Tax Demand 154.00 182.00

ii) Bank Guarantee 726.00 369.00

A. Advances Recoverable in Cash or in kind include amount due from Companies under the same management, of Rs. Nil (Previous Year Rs. Nil)

B. There are no Sundry debtor''s dues from the Companies/firms under the same Management.

C. SEGMENT REPORTING

1) Information about Primary segment (by business segment)

a) Garments.

b) Note books.

The Company''s business segments are organised around product lines which have been identified taking into account the nature of products, the different risks and returns the organisational structure and internal reporting systems.

2) Segment revenue segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

D. In the absence of declarations from Sundry Creditors / Suppliers with regard to their status as Small Scale Industrial undertaking wherever appropriate, it is not possible to determine the amount, payable to sundry creditors falling within the meaning of Small Scale Industrial undertaking.

E. Disclosure under Micro, Small and Medium Enterprises development Act, 2006. The Company has not received any memorandum ( as required to be filed by the suppliers with notified authority under the Micro, Small and Medium Enterprises development Act, 2006) claiming their status as micro, small and medium enterprises. Consequently the amount paid/payable to these parties during the period under review is NIL

F. Sundry balances are written off amounting to net Rs. 0.41 Lacs as per the Resolution passed by the Board of Directors at their meeting held on 15 th April 2012.

G. The Company has not made provision for doubtful debts amounting Rs. 40 lacs as the management is confident of realisatio. The Company has filed cases against these for recovery of dues.

H. Previous Year figures have been regrouped & reclassified/rearranged wherever necessary.


Mar 31, 2010

1) The Balances of Sundry Debtors, Creditors, Deposits and Loans & Advances are accepted as appearing in the Ledger Accounts & subject to confirmation from individual parties concerned, due adjustments, if any will be made thereon. Management is confident of receiving all the sums due. The provision for all known liabilities & for depreciation is adequate and not in excess of the amount reasonably necessary.

2009-2010 2008-2009

(Rs. in Lacs) (Rs. in Lacs)

2) Contingent Liabilities not provided for

i) Income Tax Demand 66.22 373.60

ii) Bank Guarantee 219.00 -

I. Advances Recoverable in Cash or in kind include amount due from Companies under the same management, of Rs. Nil (Previous Year Rs.Nil)

J. There are no Sundry debtors dues from the Companies/firms under the same Management.

L SEGMENTREPORTEVG

1) Information about Primary segment (by business segment)

a) Garments.

b) Note books.

The Companys business segments are organised around product lines which have been identified taking into account the nature of products, the different risks and returns the organisational structure and internal reporting systems.

2) Segment revenue segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

M. RELATEDPARTYDISCLOSURE

Related Party and their Relationship

a) ASSOCIATES

1) Vilco Pharma Pvt. Ltd.

b) ENTERPRISE IN WHICH MANAGEMENT PERSONNEL AND RELATIVES HAVE SIGNIFICANT INFLUENCE

1) Kumar International

2) Mars International

c) KFA MANAGEMENTPERSONNFX

1) Kantilal L.Haria

2)Mamsh K. Haria

3) Jaysukh Maru

N. In the absence of declarations from Sundry Creditors / Suppliers with regard to their status as small scale Industrial undertaking wherever appropriate, it is not possible to determine the amount, payable to sundry creditors falling within the meaning of small scale Industrial undertaking.

O. Sundry balances are written off amounting to net Rs. 1.21lacs [P.YRs0.71 Lacs] as per the Resolution passed by the Board of Directors at their meeting held on 15th April 2010.

P. The Company had advanced to three parties a sum of Rs.20.67 crores for purchase of material for their export orders. Subsequently the orders were cancelled and the materials were also not received by the company. The Company is in the process of the recovery of these trade advances and has lodged suit against parties.

Q. Previous Year figures have been regrouped & reclassified/rearranged wherever necessary.


Mar 31, 2004

2003-2004 2002-2003 (Rs. in Lacs) (Rs. in Lacs)

1) Contingent Liabilities not provide for

i) Letter of Credit and Bank Guarantees issued by banker 211.63 278.17

ii) I.T. Demand 249.61 103.20

iii) Corporate guarantee issued to the bankers 3067.00 965.00

iv) claims against the debt not provided for NIL NIL

k. Advances Recoverable in Cash or in kind include amount due from Companies under the same management, of RS. Nil (Previous Year Rs.Nil) Maximum amount outstanding during the year Rs.50.08 Lacs (Previous Year Rs.94.43 Lacs). Loan & advances includes Rs. 0.00 (Previous Year 0.50 Lacs) due from a company in which the directors are interested.

l. Sundry debtors include Rs.Nil (Previous Year Rs.Nil) being the dues from the Companies/firms under the same Management. Maximum amount outstanding during the year Rs.nil Lacs (Previous Year nil)

m. a) The Company has lodged various suits against State Bank of India (Overseas Branch) for Credit of CCS. claim, wrong debits, cancellation of forward contract etc., together with compound interest and damages all aggregating to Rs. 83.18 crores.

b) In the past the company has lodged a Claim (suit No. 110/98) against the State Bank of India (Overseas Branch) for Rs. 1,518,50,000/- as the bank has given a wrong XOS Statement to the Reserve Bank of India, due to this the RBI kept Companys name under Caution List for approx. 2 months, due to which the Company could not honour its commitments and one of the buyer M/s. Tropical International Gen. Trdg. LLc has filed a claim Suit No. 1376/ 98 dtd 31.3.98 for a sum of Rs.8,59,12,500/-. The Honourable Court has passed a decree in favour of this buyer on 15/7/98, and the money to be paid to the party in equal quarterly installments of Rs. 47,50,000/-. In the prior years the whole amount of claim i.e. Rs.8.59 crores with interest up to 31.3.2004 of Rs.4.52 crores was debited to S.B.I and credited to the parties a/c by a book entry of Rs. 13.11 crore. During the year Company has provided further interest of Rs.77.32 lacs on claimed amount by debiting to the bank A/c and crediting to the party account. The liabilities to the bank is understated by 13.11 crores as the amount debited to the bank is disputed and unagreed consequently the reserves are affected downward to this extent, as the court decree against the company is neither compensated nor challenged.

c) In view of the above facts the Company has not provided for interest for the year amounting to approximately Rs. 4.70 Lacs (Previous year 12Lacs) on Secured Loans availed from State Bank of India as the Bank has neither charged the same nor intimated to the Company. However accumulated liability till year end not provided for Rs.265.70 lacs.

n. The I.T. dept has raised demands aggregating to Rs 249.61 Lacs against the Company for past Assessments. The Company has disputed the said demands and preferred appeal against such orders which are pending before the appellate Authorities. The Company is confident of succeeding in appeal and accordingly no provision has been made in accounts for the said Demands.

r. RELATED PARTY DISCLOSURE

Related Party and their Relationship

a) ASSOCIATES

1) Haria Travels Pvt. Ltd. 7) Haria Investment Pvt Ltd.

2) Employment Managments (India) Ltd. 8) Haria Property Pvt. Ltd

3) Vilco Pharma Pvt. Ltd. 9) Kumar International

4) April Exports 10) Best packaging Pvt Ltd

5) Ginza Industries Pvt. Ltd 11) Haria Textiles Pvt. Ltd.

6) Ginza Finance Pvt. Ltd. 12) Haria Garments Pvt. Ltd

b) KEY MANAGEMENT PERSONNEL

1) Kantilal L Haria

2) Manish K. Haria

3) K. L. Maru

4) Nitin P. Shah

Note: related parties relationship is as identified by the company and relied upon by the auditors.

s) SEGMENT REPORTING

1) Information about primary segment (by business segment)

a) Home furnishing

b) Garments

The companys business segments are organised around product lines which have been identified taking into account the nature of products, the differing risks and returns, the organisational structure and internal reporting systems.

2) Segment revenue, segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

3) Segment Revenue

t) In the absence of declarations from Sundry Creditors / Suppliers with regard to their status as small scale Industrial undertaking wherever appropriate, it is not possible to determine the amount, any, payable to sundry creditors falling within the meaning of small scale Industrial undertaking.

u) Sundry balances are written off amounting to Rs. 10.52 lacs [ P.Y Rs 128.63 Lacs ] as per the Resolution passed by the Board of Directors at their meeting held on 20 March 2004.

v) Previous Year figures have been regrouped & reclassified wherever necessary.

w) Depreciation on building includes write off of Rs.52,15,562/- being the W.D.V. of building erected on leasehold land taken on lease for a period of 11 years.

x) The Company has not made provision for doubtful debts amounting to Rs.83.79 lacs as the management is confident of realization. The company has filed cases against these for recovery of dues.


Mar 31, 2003

1) The Balances of Sundry Debtors, Creditors State Bank of India (Overseas Branch) and Loan & Advances are accepted as appearing in the Ledger Accounts & subject to confirmation from individual Parties concerned. Due adjustments, if any will be made thereon. Management is confident of receiving all the sums due from debtors.

2) In view of inadequacy of profit the directors have voluntarily forgone the right of remuneration amounting to Rs 10.40/- (p y Rs 10.12 lakhs) .The remuneration does not include gratuity and other benefits except salary.medical expenses P F as per the terms of appointment.

3) Quantitative & Other information:-

a. Advances Recoverable in Cash or in kind include amount due from Companies under the same management, of RS. Nil (Previous Year Rs.Nil) Maximum amount outstanding during the year Rs94.43 Lacs (Previous Year Rs.69.79 Lacs). Loan & advances includes Rs. 0.50 (Previous Year 42.19 Lacs) due from a company in which the directors are interested.

b. Sundry debtors include Rs.Nil (Previous Year Rs.Nil) being the dues from the Companies/firms under the same Management. Maximum amount outstanding during the year Rs.nil Lacs (Previous Year nil)

c. a) The Company has lodged various suits against State Bank of India (Overseas Branch) for Credit of CCS. claim, wrong debits, cancellation of forward contract etc., together with compound interest and damages all aggregating to Rs. 83.-18 crores. b) In the past the company has lodged a Claim (suit No. 110/98) against the State Bank of India (Overseas Branch) for Rs. 1,518,50,000/-as the bank has given a wrong XOS Statement to the Reserve Bank of India, due to this the RBI kept Companys name under Caution List for approx. 2 months, due to which the Company could not honour its commitments and one of the buyer M/s. Tropical International Gen. Trdg. LLc has filed a claim Suit No. 1376/ 98 dtd 31.3.98 for a sum of Rs. 8,59,12,500/-. The Honourable Court has passed a decree in favour of this buyer on 15/7/98, and the money to be paid to the party in equal quarterly installments of Rs. 47,50,000/-. In the prior years the whole amount of claim i.e. Rs.8.59 crores with interest up to 31.3.2003 of Rs. 2.2 crores was debited to S.B.I and credited to the parties a/c by a book entry of Rs. 11.56 crore. During the year Company has provided further interest of Rs. 77.32 lacs on claimed amount by debiting to the bank A/c and crediting to the party account. The liabilities to the bank is understated by 12.33 crores as the amount debited to the bank is disputed and unagreed consequently the reserves are affected downward to this extent, as the court decree against the company is neither compensated nor challenged.

c) In view of the above facts the Company has not provided for interest for the year amounting to approximately Rs. 12 Lacs (Previous year 19 Lacs) on Secured Loans availed from State Bank of India as the Bank has neither charged the same nor intimated to the Company. However accumulated liability till year end not provided for Rs. 261 lacs.

d. The I.T. dept has raised demands aggregating to Rs 103.20 Lacs against the Company for past Assessments. The Company has disputed the said demands and preferred appeal against such orders which are pending before the appellate Authorities. The Company is confident of succeeding in appeal and accordingly no provision has been made in accounts for the said Demands.

e. RELATED PARTY DISCLOSURE

Related Party and their Relationship

a) ASSOCIATES

i) Haria Travels Pvt. Ltd.

ii) Haria Engineering Ltd.

iii) Employment Managments (India) Ltd.

iv) Vilco Pharma Pvt. Ltd.

v) April Exports

vi) Ginza Industries Pvt. Ltd

vii) Ginza Finance Pvt. Ltd.

viii) Manhattan Exports Pvt. Ltd.

ix) Haria Investment Pvt Ltd.

xi) Haria Property Pvt. Ltd

xi) Kumar International

xii) Vapi Garments Process Pvt. Ltd.

xiii) Best packaging Pvt Ltd

xiv) Haria paper Industries Ltd

xv) Haria business Links Pvt. Ltd

xvi) Haria Textiles Pvt. Ltd.

xvii) Haria Garments Pvt. Ltd

b) KEY MANAGEMENT PERSONNEL

i) Kantilal L Haria

ii) Manish K. Haria

iii) A. K. Shah

iv) K. L. Maru

v) Nitin P. Shah

Note: related parties relationship is as identified by the company and relied upon by the auditors. s) SEGMENT REPORTING

1) Information about primary segment (by business segment)

a) Home furnishing

b) Garments

The company"s business segments are organised around product lines which have been identified taking into account the nature of products, the differing risks and returns, the organisational structure and internal reporting systems.

2) Segment revenue, segment results, segment assets and segment liabilities include the respective amount identifiable to each of the segment as also the amount allocated on reasonable basis. The expenses which are not directly relatable to the business segment are shown as unallocated corporate cost.

3) Segment Revenue

a) In the absence of declarations from Sundry Creditors / Suppliers with regard to their status as small scale Industrial undertaking wherever appropriate, it is not possible to determine the amount, any, payable to sundry creditors falling within the meaning of small scale Industrial undertaking.

b). Net Sundry balances are written off amounting to Rs. 128.63 lacs [P.Y Rs 2.62 Lacs (net) ] as per the Resolution passed by the Board of Directors at their meeting held on 30 April 2003. The company has written old outstanding liabilities amounting to Rs 1.06 crore due to various parties The subject matter is under dispute, the management is advised that it is no longer payable.

c) Depreciation on building includes depreciation of Rs 3286336/- being the depreciation on building erected on leasehold land taken on lease for a period of 10 years.

d) The capital subsidy of Rs 63 lacs received by the company for re establishment of kandla unit has been considered as other income, which is contrary to the accounting standards AS-10 issued by ICAI and to that extent profit is overstated and consequently the reserve.

e) As per Accounting Standard AS-16 interest amounting to rs 143407/- has been capitalized

f) Previous Year figures have been regrouped & reclassified wherever necessary.

g) The company has not made provision for doubtful debts amounting to Rs 44.50 lacs as the management is confident of realization of such debtors of which, the company has filed a case against a debtor for recovery of Rs 30 lacs

 
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