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Notes to Accounts of Indian Terrain Fashions Ltd.

Mar 31, 2015

1. RELATED PARTY TRANSACTIONS

Related Parties with whom transactions have taken place during the year:

a Key Managerial Personnel:

Mr. V.Rajagopal

Mrs. Rama Rajagopal

b Relatives of Key Managerial Personnel

Ms. Anjali Rajagopal

c Enterprises under Control or Significant Influence of Key Managerial Personnel / Relatives of Key Managerial Personnel

M/s Celebrity Fashions Limited

M/s Celebrity Clothing Limited

M/s Celebrity Connections

M/s Touche PR

2. EMPLOYEE STOCK OPTION SCHEME DETAILS (ESOP)

The Shareholders in the Annual General Meeting held on 30th September 2011, have approved the issue of 11,16,000 Options under the Scheme titled "Employee Stock Option Scheme (ESOP) 2011" to Key Managerial Executives of the Company. Each Option comprises one underlying Equity Share. The Details of the Scheme is provided in the Annexure to the Directors' Report.

The difference between the Fair Price of the Share underlying the Options on the date of grant and the exercise price of the Options (being the intrinsic value of the option) representing Stock Compensation expense is expensed over the Vesting Period.

3. OTHER DISCLOSURES

a Previous year figures have been regrouped, reworked and reclassified wherever necessary to confirm to current year classification.

b In the opinion of the Board of Directors, long term loans and advances, other non current assets and current assets of the Company, are expected to have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Provision for bad or doubtful amounts has been made in the accounts, wherever warranted..


Mar 31, 2014

Particulars As at As at 31-Mar-14 31-Mar-13

1 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

a Gurantees given by Banks and Counter Guaranteed by the Company - -

b On account of Letters of Credit issued by Bankers on behalf of the Company 1.94 2.57

c Claims against Company not acknowledged as Debts, being demands from Commissionerate of Central Excise on availing Input Credit of Service Tax.

Based on the advise of its legal counsels and interpretation ofthe relevant regulations governing the levy of Excise Duty, the Company is of the opinion that the issues raised in the demand notice are unlikely to be sustained.

Accordingly no provision has been made for such demands. 1.78 0.47

d The Banks have extended concessional rate of interest for the Credit facilities sanctioned to the Company for the period upto 31st March 2014. As per the terms of the Sanction letter, banks have the right of recompense in future for the sacrifice extended.

2 RELATED PARTY TRANSACTIONS

Related Parties with whom transactions have taken place during the year: a Key Managerial Personnel:

Mr. V.Rajagopal Mrs. Rama Rajagopal

b Relatives of Key Managerial Personnel

Ms. Anjali Rajagopal

c Enterprises under Control or Significant Influence of Key Managerial Personnel /

Relatives of Key Managerial Personnel

M/s Celebrity Fashions Limited M/s Celebrity Clothing Limited M/s Celebrity Connections M/s Touche PR

3 In the opinion of the Board of Directors, long term loans and advances, other non current assets and current assets of the Company, are expected to have a value on realization in the ordinary course of business at least equal to the amount at which they are stated Provision for bad or doubtful amounts has been made in the accounts, wherever warranted.

4 EMPLOYEE STOCK OPTION SCHEME DETAILS (ESOP)

The Shareholders in the Annual General Meeting held on 30th September 2011, have approved the issue of 11,16,000 Options under the Scheme titled "Employee Stock Option Scheme (ESOP) 2011" to Key Managerial Executives of the Company.

Each Option comprises one underlying Equity Share. The Details ofthe Scheme is provided in theAnnexure to the Directors'' Report.

The difference between the Fair Price of the Share underlying the Options on the date of grant and the exercise price of the Options (being the intrinsic value of the option) representing Stock Compensation expense is expensed over the Vesting Period.

5 OTHER DISCLOSURES

Previous yearfigures have been regrouped, reworked and reclassified wherever necessary to conform to current year classification.


Mar 31, 2013

1 RELATED PARTY TRANSACTIONS

a Key Managerial Personnel:

Mr. V.Rajagopal

Mrs. Rama Rajagopal

Mr. S. Surya Narayanan

Mr. Vidyuth Rajagopal

Ms. Anjali Rajagopal

b Enterprises under Control or Signifcant Infuence of Key

Managerial Personnel:

M/s Celebrity Fashions Limited

M/s Celebrity Clothing Limited

M/s Celebrity Connections

2 EMPLOYEE BENEFIT PLAN - GRATUITY

The employees'' gratuity fund scheme managed by a Trust is a defned beneft plan. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee beneft entitlement and measures each unit separately to build up the fnal obligation.

3 EMPLOYEE STOCK OPTION SCHEME DETAILS (ESOP)

The Shareholders in the Annual General Meeting held on 30th September 2011, have approved the issue of 11,16,000 Options under the Scheme titled "Employee Stock Option Scheme (ESOP) 2011" to Key Managerial Executives of the Company. Each Option comprises one underlying Equity Share. The Details of the Scheme is provided in the Annexure to the Directors'' Report.

The difference between the Fair Price of the Share underlying the Options on the date of grant and the exercise price of the Options (being the intrinsic value of the option) representing Stock Compensation expense is expensed over the Vesting Period.

4 OTHER DISCLOSURES

Previous year fgures have been regrouped, reworked and reclassifed wherever necessary to conform to current year classifcation.


Mar 31, 2012

1.a Rights, Preferences and Restrictions attached to Equity Shares

The Company has only one class of shares referred to as Equity Shares having a par value of Rs.10/- Each holder of equity shares is entitled to one vote per share

1) The Company was incorporated on 29th September 2009 with an Authorised Share Capital of Rs.50 lakhs (5,00,000 Shares of Rs.10 each)

2) In terms of the Scheme of Arrangement between Celebrity Fashions Limited, Indian Terrain Fashions Limited and its respective Shareholders and Creditors sanctioned by the Honorable High Court of Madras, which became effective on 3rd September 2010 with retrospective effect from 1st April 2010, the following effects were given:

a) Authorised Shared Capital increased to Rs.12,00,00,000 (1,20,00,000 shares of Rs.10 each)

b) The Pre-demerger paid up share capital of Rs.5,00,000 stands cancelled

c) 55,81,331 shares of the Company were issued to the Share holders of Celebrity Fashions Limited pursuant to demerger in the ratio of 2:7 (Two Shares for every Seven shares held in Celebrity Fashions Limited)

First Charge on pari-passu basis by way of hypothecation of Company's current assets including stock and book debts against the Termloans extended by State Bank of India and HDFC Bank.

Collateral Securities:

First Charge to State Bank of India and Second Charge on to HDFC Bank for Termloans on the following:

1 .Hypothecation of entire plant & machinery of Indian Terrain Fashions Limited.

Loans from State Bank of India is further secured by Pledge of Promoters Shares in the Company to an extent of 15,29,290 Equity Shares, Personal Guarantee by Promoters and Assignment of Indian Terrain Brand. Brand Assignment documentation with State Bank of India is pending as on date. Loans from HDFC Bank is further secured by Pledge of Promoters Shares in the Company to an extent of 2,28,571 Equity Shares.

Personal Guarantee of Promoters to the extent of value of shares pledged exclusively to HDFC Bank.

The Termloans were transferred to the Company as part of the Scheme of Arrangment of Demerger

Clean Termloans are repayable in monthly installments as fixed by the Bankers upto September 2018

Funded Interest Termloans are repayable in monthly installments as fixed by the Bankers upto September 2014

The loans have been secured as under:

First Charge on Inventories in the form of Raw Materials, Stock In Process and Finished Goods, Receivables and other current assets of the Company both present and future for the loans in the form of Cash Credit, Export Packing Credit, Export Bills Discounting facility extended by State Bank of India.

Loans from State Bank of India is further secured by Pledge of Promoters Shares in the Company to an extent of 15,29,290 Equity Shares, Personal Guarantee by Promoters and Assignment of Indian Terrain Brand. Brand Assignment documentation with State Bank of India is pending as on date.

The Company has not received any Memorandum (as required to be filed by the Supplier with the notified authority under the Micro, Small and Medium Enterprises Development Act, 2006) claiming their status as on 31st March 2012 as Micro, Small or Medium Enterprises (MSME), Consequently the amount payable to these enterprises during the year is NIL.

Other Trade Payables include Rs.6.22 crs payable to Company under Significant Influence or Control of Key Managerial Personnel as specified in Note 27 (d)(ii)

The Company is one among the Petitioners challenging the levy of Service Tax on Rent of Immovable Properties. The total Service Tax Liability on Renting of Immovable Properties is at Rs.71,17,503/- upto September 30, 2011.

The Supreme Court vide its Order dated 4th August 2011 has directed the petitioners to remit 50% of the disputed liability upto September 30, 2011 in three installments and to furnish a Bank Guarantee / Solvency Certificate for the balance 50%. Further it ordered for payment of Service Tax on Rentals commencing 1st October 2011.

The Company has accordingly paid 50% of the Disputed Service Tax of Rs.35.58 lakhs and has given a Solvency Certificate for the balance amount.

The Company has provided for the Service Tax Amounts in the books as a matter of prudence and has started remitting Service Tax on lease rentals from 1st October 2011

Auditors' Remuneration includes Rs.4,00,000/- (PY-Rs.4,00,000/-) for Statutory Audit, Rs.60,000/- (PY-Rs.60,000/-) for Tax Audit. An amount of Rs.41,365 (PY - NIL) was paid to the Auditors towards Certification and Out-of-Pocket Expenses and the same is grouped under Consultancy Charges

Directors Sitting Fee of Rs.47,000 (PY - Rs.37,500/-) is grouped under Other Miscellaneous Expenses

2 CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR)

Particulars As at As at 31-Mar-12 31-Mar-11 a Gurantees given by Banks and Counter Guaranteed by the Company 0.43 -

b On account of Letters of Credit issued by Bankers on behalf of the Company 1.24 2.39

c The Banks have extended concessional interest rate for the Credit facilities sanctioned to the Company for the period upto 31st March 2011.

As per the terms of the Sanction letter, Banks have the right of recompense in future for the sacrifice extended.

3 RELATED PARTY TRANSACTIONS a Key Managerial Personnel:

Mr. V.Rajagopal Mrs. Rama Rajagopal Mr.S.Suryanarayanan Mr. Vidyuth Rajagopal

b Enterprises under Control or Significant Influence of Key Managerial Personnel:

M/s Celebrity Fashions Limited M/s Celebrity Clothing Limited M/s Celebrity Connections

4 DISCLOSURE AS PER CLAUSE 32 OF THE LISTING AGREEMENTS WITH THE STOCK EXCHANGES

Loans and advances in the nature of Loans given to Subsidiaries,

Associates and Others

5 EMPLOYEE BENEFIT PLAN - GRATUITY

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on the actuarial valuation using the Projected Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The Company did not have an independent Gratuity Policy as on 31 st March 2011. The employees of the Company were covered by the Policy taken by Celebrity Fashions Limited. Gratuity Liability pertaining to the Company's employees were determined specifically by the Actuaries and accordingly the same was provided in the Books.

6 EMPLOYEE STOCK OPTION SCHEME DETAILS (ESOP)

The Shareholders in the Annual General Meeting held on 30th September 2011, have approved the issue of 11,16,000 Options under the Scheme titled "Employee Stock Option Scheme (ESOP) 2011" to Key Managerial Executives of the Company. Each Option comprises one underlying Equity Share. The Details of the Scheme is provided in the Annexure to the Directors' Report. The difference between the Fair Price of the Share underlying the Options on the date of grant and the exercise price of the Options (being the intrinsic value of the option) representing Stock Compensation expense is expensed over the Vesting Period.

7 OTHER DISCLOSURES

a During the Year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956 has become applicable to the Company for the preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the Current Year.

 
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