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Notes to Accounts of Kamadgiri Fashion Ltd.

Mar 31, 2015

A. Company overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at BSE Limited in India. The Company is engaged in the manufacturing and job work in Textile Industries.

B) Terms/rights attached to equity shares :

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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.

i) Additional Term loan from bank amounting to Rs. 274.38 lacs sanctioned during the financial year 2014-2015. The same is repayable in 41 Monthly instalments of Rs. 6.67 Lacs each along with interest. The loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries.

Term Loan of Rs. 420 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 42 equal monthly instalments of Rs. 10 Lacs each along with interest.

Term Loan of Rs. 45 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 9 equal monthly instalments of Rs. 5 Lacs each along with interest.

Term Loan of Rs. 1.06 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 1 equal monthly instalments of Rs. 1.06 Lacs each along with interest.

The rate of interest on the above mentioned Term Loans ranges between 12.00 % p.a to 14.00 % p.a.

ii) Vehicle loans taken from bank was carried interest @ 10.50%. The loan is repayable in 26 instalments of Rs. 45341 along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii) The Company has given premises on operating lease for a 99 year commencing from the 1st January 2007 which is non cancellable for 99 years. Interest free refundable deposit Rs. 63 lacs received by the Company, has been disclosed under unsecured loan as deposits.

*Cash credit from banks is secured by hypothecation of present and future stock of raw materials, stock in process, finished goods, stores and spares, book debts, outstanding monies, receivable and carries interest @ 11.25% p.a to 14.00% p.a and the same is epayable on demand

No Interest is paid / payable during the year to any enterprise registered under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED). The above information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSMED.

(a) In accordance with the provisions of Schdule II of the Act, In case of fixed assets which have completed their useful life as at 1st April, 2014, the carrying value (net of residual value) amounting to Rs. 40.05 lacs (net of deferred tax of Rs. 19.24 lacs) as a transitional provision has been recognised in the Retained Earnings.

Defined Benefit Plan

The employees ' gratuity fund scheme is unfunded. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

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 details of the same is not received from actuary.

2 The company is engaged in manufacturing (in-house and outsourced) fabrics, ready to wear garments, Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e.Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Accounting Standard - 17 segment reporting.

3 CONTINGENT LIABILITIES AND OTHER COMMITMENTS (Rs. in Lacs)

Particulars 31st March 2015 31st March 2014

Contingent Liabilities

a) Claims against the company not acknowledged as debt 130.30 241.34

b) Guarantees 41.36 79.48

171.66 320.82

Commitments

a) Estimated amount of contracts remaining to be executed on capital account and not provided for _ _

b) Other commitments - pending obligation under EPCG scheme 373.47 318.00

373.47 318.00

TOTAL 545.13 638.82

* Dividend for the F.Y. 2013-2014 was declared in AGM held on 26th September 2014 and paid on 30th September 2014 31 Previous year's figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year's figure.


Mar 31, 2014

Company Overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock Exchange in India. The Company is engaged in the manufacturing and job work in textile industries.

Terms/rights attached to equity shares:

The Company has only one class of equity shares having a par value of $ 10 per share. Each holder of equity share is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

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.

i. Additional Term loan from bank amounting to $ 328.39 lacs sanctioned during the financial year 2013-2014. The same is repayable in 54 Monthly instalments of $ 10 Lacs each along with interest. The loan is secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries.

Term Loan of $ 105 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 21 equal monthly instalments of $ 5 Lacs each along with interest.

Term Loan of $ 14.26 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of Plant and Machineries. The loan is repayable in 13 equal monthly instalments of $ 1.10 Lacs each along with interest.

The rate of interest on the above mentioned Term Loans ranges between 12.50% p.a to 14.50% p.a.

ii. Vehicle loans taken from bank was carried interest @ 10.35% . The loan is repayable in 35 instalments of $ 39,857 along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii. The Company has given premises on operating lease for a 99 year commencing from the 1st January 2007 which is non cancellable for 99 years. Interest free refundable deposit $63 lacs received by the Company, has been disclosed under unsecured loan as deposits.

The company is engaged in manufacturing (in-house and outsourced) fabrics, ready to wear garments, Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e.Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under

Previous year''s figures have been regrouped wherever considered necessary to make them comparable with current year''s figure.


Mar 31, 2013

A. Company Overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock Exchange in India. The Company is engaged in the manufacturing and job work in textile industries.

1 The Company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments, considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such there is no separate reportable segment for the purpose of disclosure as required under Accounting Standard - 17 segment reporting.

''Dividend for the F.Y 2011-2012 was declared in AGM held on 18th September 2012 and paid on 22nd September 2012

2 CONTINGENT LIABILITIES AND OTHER COMMITMENTS (Rs. in lacs)

Particulars 31st March 2013 31st March 2012

Contingent Liabilities

a) Claims against the company not acknowledged as debt 454.70 378.34

b) Guarantees 79.48 79.48

534.18 457.82

Commitments

a) Estimated amount of contracts remaining to be executed on - Capital account and not provided for

b) Other commitments - pending obligation under EPCG scheme 33445 334.45

334.45 334.45

TOTAL 868.63 792.27

3 Previous year''s figures have been regrouped/rearranged wherever considered necessary to make them comparable with current year''s figure.


Mar 31, 2012

A. Company overview:-

Kamadgiri Fashion Limited is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed at Bombay Stock exchange in India. The Company is engaged in the manufacturing and job in textile industries.

a) Terms / rights attached to equity shares

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 dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the year ended 31st March 2012, the amount of per share divided recognized as distribution to equity shareholders was Rs. 0.50(31 st March 2011 :Rs.1.50).

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.

i) Term loan from bank was sanctioned during the financial year 2010-2011 and carries interest rate @13.75% . The loan is repayable in 66 months with 6 months moratorium repayable in 60 equal monthly installments of Rs. 18.60 Lacs each along with interest, from the last disbursement date. The loan is secured by equitable mortgage of Factory Land and Building hypothecation of Plant and Machineries and secured .

ii) Vehicle loan from bank was taken during the current financial year and carries interest @ 10.35%. The loan is repayable in 35 installments of Rs. 0.40 Lacs along with the interest, from the proceeding month of the approval letter, the loan is secured by hypothecation of specific vehicle.

iii) The Company has given premises on operating lease for a period of 99 years commencing from the 1 st January 2007 which is non cancellable for 99 years. Interest free refundable deposits Rs. 63 lacs received by the Company, has been disclosed under unsecured loans as deposits.

*Cash credit from banks is secured by hypothecation of present and future stock of raw materials, stock in process, finished goods, stores and spares, book debts, outstanding monies, receivable and carries interest @ 11.25% to 15.25 % and the same is repayable on demand

No interest is paid / payable during the year to any enterprise registered under Micro Small and Medium Enterprises Development Act, 2006 ( MSME) The above information has been determined to the extent such parties could be identified on the basis of the status of suppliers under MSME.

* Includes statutory dues, advances / deposits from customers and provisions for expenses

* Investment held in the shares of Jagruti Synthetics Limited, being of long term nature, is stated at cost of acquisition and no adjustment has been made in respect of diminution in the value of such investment.

** Includes advance to employees , advances to suppliers and right issue expenses.

* Pledged with bankers against margin money of Rs. 12.13 Lacs and against bank guarantee of Rs. 0.70 Lacs (31st March 2011 Margin money Rs. 9.21 Lacs and bank guarantee Rs. 20.80 Lacs)

* other non operating income includes Insurance claim received Rs. 9.43 Lacs (31st March 2011 Rs. 7.51 Lacs)

Defined Benefit Plan

The employees' gratuity fund scheme is unfunded . The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employees benefit entitlement and measures each unit separately to build up the final obligation.

The obligation for leave encashment is recognized in the same manner as gratuity.

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.

Experience adjustments have not been disclosed as details information was not received from the actuary.

1 RELATED PARTY DISCLOSURES:

As per Accounting Standard 18, the disclosures of transactions with the related parties are given below

2 The company is engaged in manufacturing (in house and outsourced) fabrics, ready to wear garments. Considering the overall nature, the management is of the opinion that the entire operation of the company falls under one segment i.e. Textiles and as such there is no separate reportable segment for the purpose of disclosures as required under Accounting Standard -17 Segment Reporting.

3 CONTINGENT LIABILITIES AND OTHER COMMITMENTS

(Rs. in Lacs)

31st March 2012 31st March 2011

(I) Contingent Liabilities

(a) Claims against the company not acknowledged as debt 378.34 145.55

(b) Guarantees 79.48 20.80

457.82 166.35

(ii) Commitments

(a) Estimated amount of contracts remaining to be executed on capital account and not provided for - 107.55

(b) Other commitments - Pending obligation under EPCG Scheme 334.45 334.45

334.45 442.00

792.27 608.35

4 As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April 2011. Accordingly, the financial statements for the year ended 31st March 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

* Dividend for the F.Y. 2010-11 was declared in AGM held on 23rd August 2011 and paid on 27th August 2011


Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 12.75 lacs (Previous year Rs. 56.34 lacs).

2. Contingent Liabilities not provided for: (i) Tax matters in appeals-

For 2009-10 (Rs. in lacs) For 2008-09 (Rs. in lacs)

Income Tax 111.51 117.40

Sales Tax 31.04 31.80

(ii) Guarantees given by the bankers of the company amounting to Rs. 11.55 lacs against the fixed deposit of Rs. 8.28 lacs kept as margin money.

(iii) Liability, if any, arising on account of undertakings given by the company under EPCG scheme, pending fulfillment of export obligation approximately Rs. 334.45. lacs.

3. As per the information available with the company in response to the enquiries from all existing suppliers with whom Company deals, none of the suppliers are registered with The Micro, Small and Medium Enterprises Development Act, 2006.

4. Employee Benefits:

a) Defined Contribution Plan

b) Defined Benefit Plan

Leave Encashment: Provision for leave encashment has been made on actuarial valuation method which was, till earlier year, charged off at the undiscounted amount in the year in which the related service provided. Had the Company followed same policy for provision for Leave Encashment for employees, the provision for leave encashment would have been higher by Rs. 20.18 lacs including Rs. 14.21 Iacsfortheyear2009-2010.

Gratuity: The employees gratuity scheme is non - fund based. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes 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 estimates of rates 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.

5. Related Party Disclosure :

1. Names of related parties and description of relationships:

a) Parties having interest in voting power of the company that gives them significance influence over the Company:

i) Shri Pradip Kumar Goenka ii) Pantaloon Industries Limited

b) Key Management Personnel:

Shri Pradip Kumar Goenka - Chairman & Managing Director

Shri Lalit Kumar Goenka - Whole Time Director

Shri Abhay Kumar Kumat- Chief Executive Officer (w.e.f. 30.10.2009)

Relative of key Management Personnel:

Shri Tilak Goenka (Whole Time Director till 30.06.2009 and Director till 30.10.2009)

Smt. Jyoti Kumat

c) Enterprises over which parties mentioned in (a) and (b) above are exercising significant influence: i) Jagruti Synthetics Limited ii) Ananddeep Consultancy Services Private Limited iii) Spindraw Fibres Private Limited iv) Tritoma Hotels Private Limited

6. Natures of securities given for secured loans are as under:

(i) Term loans of Rs. 143.90 lacs are secured by equitable mortgage of Factory Land and Building and hypothecation of plant and machineries.

(ii) Motor car loan of Rs. 4.81 lacs is secured by hypothecation of specific vehicle.

(iii) Cash Credit of Rs. 1630.55 lacs and Letters of Credit of Rs. 22.32 lacs is secured by first pari passu charge on the entire current assets of the company underthe consortium arrangement.

(iv) Loans repayable within one year:

Term Loan Form Banks Rs. 133.72 lacs (RY. Rs. 171.14 lacs)

(v) The above loans are further secured by personal guarantee / collaterally as under:

- Term Loans and Cash Credit facilities mentioned in (i) and (iii) above - Chairman & Managing

Director and Chief Executive Officer and first charge over the fixed assets of the Company.

7. Amalgamation expenses were written off to General Reserve of the Transferee Company. This accounting treatment of the reserve has been prescribed in the Scheme. Had the Scheme not prescribed this treatment, this amount would have been debited to the profit and loss account for the year instead of General Reserve, having corresponding impact on the net profit for the year.

8. The Company operates in a single segment i.e. textile having same risk and return. Hence reporting as per AS-17 "Segment Reporting" is not applicable to the company.

9. Figures of the previous year have been regrouped, rearranged and recasted to make them comparable with the figures of the current year.

10. The Company has, on 1 st August 2009, made preferential allotment of 325000 warrants of Rs. 32/- each convertible, on exercising the conversion right within 18 months from the date of allotment, into one fully paid equity share of Rs. 10/-, on which the application money has been received @ Rs. 8/- per warrant.

11. Bank balance does not include Rs. 2.64 lacs (Rs. 2.49 lacs) lying in Dividend Accounts pertaining to financial year 2002-2003 to financial year 2008-2009 with Scheduled Banks in the current accounts.

12. In the financial statements, any discrepancies in any total and the sum of the amounts listed are due to rounding off.

13. Disclosure Under AS-19:

a) The Company has given premises on operating lease for a period of 99 years commencing from 1 st January, 2007 which is non cancellable for 99 years. Interest free refundable deposit Rs. 63.00 lacs received by the Company, has been taken under unsecured loans as security deposits. Other

b) The Company has taken various factory galas /machineries/shops under operating lease. These are not non-cancellable and for a period ranging between 11 months and/or above and are also renewable at the mutual consent at mutually agreeable terms. The Company has given refundable interest free security deposits in accordance with agreed terms. The rent paid for the year as per agreements has been debited to profit and loss account.

14. Additional information pursuant to the provisions of paragraph 3,4C and 4D of part II of schedule VI of the Companies Act 1956, (Figures in the brackets indicate previous yearfigures).

 
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