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Notes to Accounts of Jindal Cotex Ltd.

Mar 31, 2015

1. With reference to Secured Term Loans and the amount of Current Maturities of such Secured Loans.

2. Term Loan of Rs 804788483 (Prev. Year Rs 698378884) from OBC, Rs 180611575 (Prev. Year Rs 192930794) from Allahabad Bank, Rs 88644253 (Prev. Year Rs. 85878063) from Corporation Bank, Rs 122873205 (Prrev. Year 121987067) from State Bank of India are secured by way of Ist Pari Passu charge on the Fixed Assets of the Company and 2nd charge on the Current Assets of the Company. Further these Loans are Secured by way of equitable mortgage of Factory Land and Building of the company situated at VPO Jugiana, G.T. Road , Ludhiana and at Village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana. However Corporate Loan & FITL pertaining to Oriental bank of commerce Corporate Loan have exclusive charge on Residential Land & Building in the name of Mr. Sandeep Jindal Msg 8061 sq yard situated at golf link ludhiana.

3. Term Loan of Rs-25595440 (Prev. Year. Rs. 23005589) From Punjab and Sind Bank is secured by way of exclusive charge on Windmill purchased out of the Term Loan.

4. Term Loan of Rs 32173679 (Prev. Year Rs. 32510096) from Central Bank Of India is secured by way of equitable mortgage of Land in the name of the Company situated at village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana

5. The slowing industrial activity and depressed market conditions had seriously affected the operations of the company. The Company made request to Corporate Debt Resturctuirng Cell through Oriental Bank of Commerce (Lead Bank) to restructure the credit facilities. The Empowered Group of CDR-Cell has appoved the restructuring package in CDR-Cell meetings held on 24/12/2013 vide order no. 857/2013-14 Dt. 27/12/2013. e Loans of Rs 7325553 (Prev. Year Rs. 13771845) are secured by way of hypothecation of respective vehicles. f Term borrowing from The Catholic Syrian Bank Limited of Rs. 196788313 ( Pre. Year 196788313) has transfer to Phoenix ARC Ltd due to non servicing of Interest. The above said term loan is secured by equitable mortgage of commercial plot in name of M/s Jindal Cycles Pvt. ltd. and Personal Gurantee of Promoter Director. g** The company has received/accepted the deposits from General Publlic in shape of FDR for different time frames for maturity. Due to financial constraints, the company has not able to repay the deposits within the schedule time period. The Company applied to the Company Law Board for deferment of repayment of deposits vide its order no. C.P NO. 25/5/2013-CLB Dt. 23.12.2013 and has defered the repayments of deposits by one year . The repayment of Deposits are paid accordingly with the compnay law board order from March. 2015. In case of geniune hardship the company will also repay Rs. 5 lacs quarterly basis.

All Secured Loans except car loans have also been guaranteed by following directors of the Company.

i Sh. Sandeep Jindal

ii Sh. Yash Paul Jindal

iii Sh. Rajinder jindal

iv Sh. Ramesh Jindal

6. Maturity profile and repayment schedule of principal/interest on secured loan is not possible to determine by the company as accounts with banks slipped into sub standard category after restructuring , Hence banks has recalled the entire outstanding and started recovery action under SARFESI Act.

7. With reference to loans and advances from related parties

All the Loans are repayable after 12 months from the date of squaring up bank dues. However the company reserve the right to prepay it.(Prev. yr. also all the Loans are repayable after 12 months from the date of squaring up bank dues.

However the company reserve the right to prepay it.

Amt of default in repayment of Principal Nil(Prev. Year NIL),Amt. of default in repayment of interest NIL(Prev.Year NIL)

8. Disclosure related to Fixed Assests

a) Pursuant to the enactment of the companies Act 2013, the company has applied the estimated useful lives as in schedule II. Accordingly the unamortized caring value is being depreciated/amortized over the revised/remaining useful lives. The written down value of the Fixed Assets whose lives have expired as at 1st April, 2014 have been adjusted net of taxes in the Profit & Loss by Rs.90.26 Lacs

b) Depreciation on Part of the assets was charged on WDV up to FY 2013-14 and now in FY 14-15, Depreciation is calculated with straight line method with effect from the capitalization date.

9. RELATED PARTY DISCLOSURES

Information Related to Relating Party Transaction As Per Accounting Standard - 18, issued by Institute of Chartered Accountants of India is given below:

A) Associate Concerns

Himachal Textile Park Limited

B) Subsidiary Companies Jindal Medicot Limited

Jindal Specialty Textiles Limited

Jindal International FZE(foreign subsidary)

Jindal Metalex Limited (Closed)

Jindal Infrabiz Limited (Closed)

C) Other Related Parties

Mr. Yash Paul Jindal (Director)

Mr. Ramesh Jindal (Director)

Mr. Rajinder Jindal (Director)

Mr. Aman Jindal (Director)

Mr. Sahil Jindal (Director)

D) Key Management Personnel

Mr. Sandeep Jindal (MD)

Mr. Balwinder Singh (CFO)

Mr. Anil Malhan (CS)

E) KMP or their relatives are influence or control the enterprises

Jindal Cycles Pvt Ltd

Jindal Fine Industries

Leader Cycles Ltd

Jindal Infomedia Pvt Ltd

Jindal Holdings & Investment Limited

Poonam Enterprises

F) Relatives of Key Management Personnel

Mrs. Manu Jindal

(I) Management has identified two reportable business segments, namely:

Textile: - Production of Acrylic Yarn, Polyester Yarn, Poly/cotton Blended Yarn, Cotton Yarn and other Blended Yarns.

* Energy Generation: - Generation of Energy from Wind Mill.

Segments have been identified and reported taking into account the nature of products.

(ii) The segment in the geographical segments considered for the disclosure are as follows:- - India: comprising of sales to customers located within India and earnings in India

* Outside India : comprising of sales to customers located outside India.

(iii) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

10. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the balance sheet and adequate provisions have been made for all known liabilities and depreciation in the books of accounts.

11. All figures have been rounded off to nearest rupees.

12. Debit or Credit Balance on what so ever accounts are subject to confirmation from parties.

13. CONTIGENT LIABILITIES AND COMMITMENTS (Amount in Rs.)

PARTICULARS 31.03.2015 31.03.2014

( To the extent not provided for) a Contigent Liabilities

i) Cliams against company not Acknowledged as Debt - -

ii) Other Money for which the Company is Contigently liable - -

iii) Duty saved upon procurement of machinery pending fulfillment of export obligation 506,451 506,451

iv) Vat Exemption which is available on the basis of eligibility certificate issued by District Industries Centre, Ludhiana but the same is disputed by concerned sales tax authorities. - -

v) Demand raised by sales tax authorities and the same is - - disputed by the company.

vi) Corporate Guarantee given to Banks for grant of Term Loan and CC 2,918,710,561 2,520,000,000 Limits to Subsidiaries

b Commitments

i) Estimated amount of contracts remaining to be executed 886,345,242 886,345,242 on capital and not provided for

ii) Uncalled liability on Shares and other investments partly paid - -

iii) Other Commitments - -

Total 3,805,562,254 3,406,851,693

14. Pending Legal Cases

1. The suppliers has filed the cases against the company at various levels of Distt. & Session Courts. Total amount of exposure involved in the petitions filed in the court amounts to Rs.1156.83 lacs .

2. The PSPCL has also filed the case against the company in Distt. & Session Court amounting Rs.270 lacs for their dues.

3. The company has filled the cases in Distt. & Session Court against the debitors namely Kuar Sain Mittal Synthetics Ltd for amount of Rs.144.50 Lacs

4. There are various suits filed against the company u/s 138.

5. One of the creditor being 'vinod cotton corporation' has even filed petition application for winding up of the company. NOTE NO. 40

The Institute of Chartered Accountants of India has issued an Accounting Standard - 28 on Impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004. In accordance with the said standards, the company has assessed as on date of applicability of the aforesaid standard and as well as on balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

15. INVESTMENTS

The Investments are stated at cost. Diminution in value of investments on account of market fluctuations which are of permanent nature are provided for. Temporary diminution in the value of investments has also been provided for.

16. "The Company has accumulated losses of Rs. 175.71 Crores which has eroded its peak level net worth by more than 50% and as such has become potentially sick company. Based on the detailed evaluation of the current situation, plans formulated management is confident of raising adequate finance and rescheduling its debt. Therefore, the management is of the view that the company will realize its assets and discharge the liabilities in the normal course of business. Taking into account the above facts, the financial statements have been prepared on the basis that the company is a going concern."

17. The company has outstanding deposits received/accepted from General Public in shape of FDR for different time frames for maturity. Due to financial constraints, the company was not able to repay the deposits within the scheduled time period. The Company applied to the Company Law Board for the deferment of repayments of deposits. The Company Law Board vide its Order No. C.P. NO 25/2013-CLB Dt.23/12/2013 has deferred the repayments of deposits by one year. The repayment of Deposits started from March, 2015. In case of genuine hardship, the company has been repaying Rs. 5 Lacs on quarterly basis as per the hardship committee meeting.


Mar 31, 2014

NOTE NO. 1

SHORT TERM BORROWINGS

a Short Term Borrowings of Rs 431848699 (Prev. Year Rs. 622258954) are Secured by way of 1st charge on Current Assets (Stock & Book debts) of the Company and 2nd charge on the fixed assets of the Company. Further these Limits are secured by way of equitable mortgage of Factory Land and Building of the company situated at VPO Jugiana, G.T. Road , Ludhiana and at Village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana and Personal guarantees of the following promoter directors:-

i Sh. Sandeep Jindal

ii Sh. Yash Paul Jindal

iii Sh. Rajinder jindal

iv Sh. Ramesh Jindal

b Amt of default in repayment of loan - Rs. Nil (Prev. Year 22258953.73) Default in repayment of Interest 10384762 (Prev. year.- Nil)

NOTE NO. 2

Lease Payments in respect of Assets taken on Operating Lease.

The Company has taken Godown on Lease from M/s Jindal Cycles Pvt, Ltd, At a monthly rental of Rs 5000,The Lease will expire on July 29, 2014. The company recognises the expense on due basis,

The Company has taken land on lease from Mr. Yash Paul Jindal, Mr. Rajinder Kumar Jindal & Mr. Ramesh Jindal at a monthly rental of Rs 12000.The Lease will expire on June 21,2028. The company recognises the expense on due basis.

The Lease Agreements generally have a lock in period of 1 to 3 years at the option of lessee thereafter.

Lease payments under operating Lease are recognised as an expenses in the Statement of Profil & Loss Account.

The classification of Future Lease obligations towards Lease Rentals is as follows:-

NOTE NO. 3

The estimates of 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.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

NOTE NO. 4

in the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the balance sheet and adequate provisions have been made for all known liabilities and depreciation in the books of accounts.

NOTE NO. 5

Previous year''s figures have been recast/ regrouped wherever necessary to make these comparable with current year''s figures. NOTE NO. 37

All figures have been rounded off to nearest rupees.

NOTE NO. 6

Parties Balances are Subject to Confirmation.

NOTE NO. 7

Figures in brackets indicate deductions,

NOTE NO. 8

CONTIGENT LIABILITIES AND COMMITMENTS (Amount in Rs.)

( To the extent not provided for) 31.03.2014 31.03.2013

a Contigent Liabilities

i) Cliams against company not Acknowledged as Debt - -

ii) Other Money for which the Company is Contigently liable - -

iii) Duty saved upon procurement of machinery pending fulfillment of export 506,451 972,980 obligation

iv) Vat Exemption which is available on the basis of eligibility certificate - - issued by District Industries Centre, Ludhiana but the same is disputed by concerned sales tax authorities.

v) Demand raised by sales tax authorities and the same is disputed by - - the company,

vi) Corporate Guarantee given to Banks for grant of Term Loan and CC 2,520,000,000 2,425,000,000 Limits to Subsidiaries

b Commitments

i) Estimated amount of contracts remaining to be executed 886,345,242 886,345,242 on capital and not provided for

ii) Uncalled liability on Shares and other investments partly paid - -

iii) Other Commitments - -

TOTAL 3,406,851,693 3,312,318,222

NOTE NO. 9

In Terms of The Accounting Standard -28, "Impairement of Assets" issued by ICAI an exercise was untertaken to determine whether there are any indications with regard to the impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss, Accordingly no impairment loss has been provided in the books of accounts,


Mar 31, 2013

"Equity Shares: The company has only one class of equity shares having par value of Rs. 10/- per share. Each holders of equity shares present is entitled to have one vote upon show of hands and upon a poll every member entitled to vote and present in person or by proxy shall have one vote, for every share held by him. "

The Company in general meeting may declare a dividend to be paid to the members according to their respective rights and interests in the profits and may fix the time for payment

Dividend shall be paid by the Company in respect of any share only to the registered holder of such share or to his order or to his banker.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the realized value of the assets of the Company, remaining after payment of all preferential dues. The distribution will be in proportion to the number of equity shares held by the shareholders.

With reference to Secured Term Loans and the amount Current Maturities of such Secured Loans.

a Term Loan of Rs 532833127 (Prev. Year Rs 381098000) from OBC, Rs 162698455 (Prev. Year Rs 162994899 )from Allahabad Bank Rs 49387546 (Prev. Year Rs.

12121302) from Corporation Bank are secured by way of Ist Pari Passu charge on the Fixed Assets of the Company and 2nd charge on the Current Assets of the Company. Further these Loans are Secured by way of equitable mortgage of Factory Land and Building of the company situated at VPO Jugiana, G.T. Road , Ludhiana and at Village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana

b Term Loan of Rs 23277660 (Prev. Year. Rs. 28593441) From Punjab and Sind Bank is secured by way of exclusive charge on Windmill purchased out of the Term Loan.

c Term Loan of Rs 34654052 (Prev. Year Rs. 38676579) from Central Bank Of India is secured by way of equitable mortgage of Land in the name of the Company situated at village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana

d Loans of Rs 20880580 (Prev. Year Rs. 19622102) are secured by way of hypothecation of respective vehicles.

e Term borrowings from The Catholic Syrian Bank Limited of Rs 180630582 (Prev. Year Rs. 151697269) are Secured by equitable Mortgage of Commercial Plot in the name of M/s Jindal Cycles Pvt. Ltd and Personal guarantees of promoter directors (Subject to approval by bank) Amt. Of default in repayment of Loan - Rs. 40841861 (Prev. Year Rs. 22436000) Default in payment of Interest- Rs. 30808694 (Prev. Year Rs. 9854674)

Period of continuing default in repayment of Loan - 1 month (Prev.yr. - 1 month) In payment of Interest-1-3 months (Prev. yr.- 1-3 Months) All Secured Loans except car loans have also been guaranteed by following directors of the Company.

i Sh. Sandeep Jindal

ii Sh. Yash Paul Jindal

iii Sh. Rajinder jindal

iv Sh. Ramesh Jindal

# With reference to loans and advances from related parties

All the Loans are repayable after 12 months from the date of squaring up bank dues. However the company reserve the right to prepay it.(Prev. yr. also all the Loans are repayable after 12 months from the date of squaring up bank dues. However the company reserve the right to prepay it.)

Amt. Of default in repayment of Loan - Nil (Prev. yr. - Nil) Default in payment of Interest-NIL (Prev. yr.-NIL)

Period of continuing default in repayment of Loan - Nil (Prev.yr. - Nil) In payment of Interest-NIL (Prev. yr.-NIL)

(a) Short Term Borrowings of Rs 622258954 (Prev. Year Rs. 645475710) are Secured by way of 1st charge on Current Assets of the Company and 2nd charge on the fixed assets of the Company. Further these Limits are secured by way of equitable mortgage of Factory Land and Building of the company situated at VPO Jugiana, G.T. Road , Ludhiana and at Village Mandiala Kalan, Tehsil Khanna, Distt. Ludhiana and Personal guarantees of promoter directors.

(b) Amt. Of default in repayment of Loan - Rs. 22258953.73 (Prev. yr. - Nil) Default in payment of Interest-NIL (Prev. yr.-NIL)

NOTE NO. 1

The Company has taken Godown on Lease from M/s Jindal Cycles Pvt. Ltd. At a monthly rental of Rs 5000.The Lease will expire on July 29, 2014. The company recognises the expense on due basis.

The Company has taken land on lease from Mr. Yash Paul Jindal, Mr. Rajinder Kumar Jindal & Mr. Ramesh Jindal at a monthly rental of Rs 12000.The Lease will expire on June 21, 2028. The company recognises the expense on due basis.

The classification of Future Lease obligations towards Lease Rentals is as follows:-

The estimates of 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.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of Plan assets held, assessed risks, historical results of return on plan assets and the Company''s policy for plan assets management.

(c) Notes:

(i) Management has identified two reportable business segments, namely:

- Textile: – Production of Acrylic Yarn, Polyester Yarn, Poly/cotton Blended Yarn, Cotton Yarn and other Blended Yarns.

- Energy Generation: - Generation of Energy from Wind Mill.

Segments have been identified and reported taking into account the nature of products. (ii) The segment in the geographical segments considered for the disclosure are as follows:-

- India: comprising of sales to customers located within India and earnings in India

- Outside India : comprising of sales to customers located outside India.

(iii) Segment Revenue, Results, Assets and Liabilities include the respective amounts identifiable to each of the segments and amounts allocated on a reasonable basis.

NOTE NO. 2

The Institute of Chartered Accountants of India has issued an Accounting Standard – 28 on Impairment of Assets, which is mandatory for the accounting periods commencing on or after 1st April, 2004. In accordance with the said standards, the company has assessed as on date of applicability of the aforesaid standard and as well as on balance sheet date, whether there are any indications with regard to the impairment of any of the assets. Based on such assessment, it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of accounts.

 
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