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Notes to Accounts of Kunststoffe Industries Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Kunststoffe Industries Limited is a listed public limited Company, incorporated under The Companies Act, 1956. The Company is engaged in the business of "Job Works for Processing of HDPE/PP Pipes, etc."

2. Terms / rights attached to Equity Shares :

The Company has a single 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.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held by each shareholder, after settlement of all preferential obligations.

3. Footnote:

(i) Secured Term Loan from Related Parties consists of loan bearing no interest from Gayatri Pipes & Fittings Pvt Ltd. for a period as may be agreed upon between the parties having first charge on all immovable properties both present & future AND first charge on all movables including Plant & Machinery, Spares, Tools, etc. present & future and plot & land at Kadaiya village, Daman, Bearing S.No. 107/1 admeasuring 6,000 sq mtrs with Building theron and Plant & machinery, etc.

(ii) Unsecured Loans and advances from Related Party consists of loan bearing no interest from Pravin V. Sheth for a period as may be agreed upon between the parties.

(ii) Unsecured Loans and advances from other party consists of loan bearing no interest from A.M. Reality Pvt. Ltd. for a period as may be agreed upon between the parties.

4. Disclosures under AS 18

Related party transactions

Details of related parties:

Description of relationship Names of related parties

Key Management Personnel (KMP) Soniya Sheth

Relatives of KMP

Daughter Dhwani Sheth

Common Director - Soniya Sheth Stallion Breweries Ltd.

Common Director - Soniya Sheth Gayatri Pipes & Fittings Pvt. Ltd.

Note: Related parties have been identified by the management and relied upon by the auditors.

5. Disclosure under AS 15

Employee benefit plans ( Defined contribution plans)

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 3,70,546/- (Year ended 31 March, 2014 Rs. 2,95,490/-) for Provident Fund contributions and N.A. (Year ended 31 March, 2015 N.A.) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

6. Pursuant to reference made by the company, The Hon. Bench of BIFR, New Delhi by their order dated 18.01.2007 declared the Company as Sick Industry. Rehabilitation Scheme has been approved by BIFR during the year.

7. The Company has revalued Fixed Assets, Investments and Loans & Advances for the year ended 31.12.2007; Fixed Assets & Investments for the year ended 31.03.2009 and Fixed Assets for the year ended 31.03.2012. The Revaluation of the year ended 31.012.2007 has resulted into a loss of Rs. 14,79,06,784/- and the same has been debited to Profit & Loss Account and shown below the line as "Extra Ordinary Items". Similarly, the Revaluation of the year ended 31.003.2009 has resulted into a Profit of Rs. 2,89,66,113/- and the same has been credited to Profit & Loss Account as "Profit on Revaluation of Assets" and shown below the line. So also, the Revaluation of the year ended 31.03.2012 has resulted into a Profit of Rs. 12,15,19,764/- and the same has been credited to the Revaluation Reserve Account and shown in the Balance Sheet as at 31.03.2012 under the head, Reserves & Surplus. At the time of earlier revaluations carried out as on 31.12.2007 & 31.03.2009, the Gross Block was shown at Revalued Figures instead of Cost. Hence the same has been rectified in the year under consideration i.e. as at 31.03.2012 by replacing the Gross Cost of the Assets deducting the loss on revaluation and adding the profit on revaluation carried out as at 31.12.2007 & 31.03.2009 respectively. The difference of Rs. 4,48,55,306/- between the under depreciation provided on reduced value of the said assets for the year commencing from 01.01.2008 to 31.03.2009 (i.e. for a period of 15 months) and the over depreciation provided on the increased value of the said assets has been debited to the Revaluation Reserve Account of the year under consideration viz. 31.03.2012.

8. "The liability of Rs. 46,98,30,496.00/- was created in favour of Gayatri Pipes & Fittings Pvt. Ltd. As under:

1) Rs. 26,70,72,939.00/- by debiting IDBI A/c for taking over it's liability on 31.03.2008.

2) Rs. 20,27,57,557.00/- by debiting P/L A/c as Prior year adjustment on 20.03.2011.

In the year 2012-13, the Company has transferred Rs. 26,70,72,939.00/- to General reserve as the said liability is waived by Gayatri Pipes & Fittings Pvt. Ltd. as per their undertaking given to BIFR. Also, the Company has transferred Rs. 20,27,57,557/- to P/L A/c and shown under the head "Prior year Adjustment" as Gayatri Gayatri Pipes & Fittings Pvt. Ltd. as per the same undertakings given to BIFR."

9. No Provision for Income Tax liability has been made in terms of BIFR Order dated 08.03.2013 under which vide clause 10.3(iii) the company is exempt form the applicability of minimum Alternate tax (MAT) under section 115JB of the income Tax Act, 1961.

10 Debtors and Creditors balances are subject to confirmations from the parties.

11. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

12. Figures of the previous year have been re-grouped / rearranged /reclassified wherever necessary.


Mar 31, 2014

Note 1: Share Capital

(i) Capital reduction has taken place during the year as per BIFR order dtd. 08.03.2013, details provided are as under:

As on 01.04.2013, 14,960 Equity Share holders were holding 1,18,50,000 shares. During the year, number of shares are reduced by 60% i.e. 71,10,000 shares wide BIFR Order dtd. 08.03.2013. Also during the year further allotment of 21,50,000 shares were made. Hence, Balance as at the end of the year is 14,965 share holders holding 68,90,000 shares at Rs. 10/- per share.

(ii) Terms/rights attached to Equity Shares:

The Company has a single 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. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive the remaining assets of the Company in proportion to the number of equity shares held by each

Note 2: Long-term borrowings

Footnote:

(i) Secured Term Loan from Related Parties consists of loan bearing no interest from Gayatri Pipes & Fittings Pvt Ltd. for a period as may be agreed upon between the parties having first charge on all immovable properties both present & future AND first charge on all movables including Plant & Machinery, Spares, Tools, etc. present & future and plot & land at Kadaiya village, Daman, Bearing S.No. 107/1 admeasuring 6,000 sq mtrs with Building theron and Plant & machinery, etc.

(ii) Unsecured Loans and advances from Related Party consists of loan bearing no interest from Pravin V. Sheth for a period as may be agreed upon between the parties.

(ii) Unsecured Loans and advances from other party consists of loan bearing no interest from A.M. Reality Pvt. Ltd. for a period as may be agreed upon between the parties.

** Trade payables in above Note includes Rs. NIL (P.Y. Rs. NIL) due to micro, small and medium enterprises registered under the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED).

Note 3: Fixed Assets

** Plant and equipment wrongly added last year now rectified, also depreciation charged thereon reversed during the year.

Note 4: Other Income

Disclosure under AS 15

Employee benefit plans( Defined contribution plans)

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 2,95,490/- (Year ended 31 March, 2013 Rs. 2,75,700/-) for Provident Fund contributions and N.A. (Year ended 31 March, 2011 N.A.) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

NOTE ''5'': CORPORATE INFORMATION

Kunststoffe Industries Limited is a listed public limited Company, incorporated under The Companies Act, 1956. The Company is engaged in the business of "Job Works for Processing of HDPE/PP Pipes, etc."

NOTE ''6'': OTHER NOTES ON ACCOUNTS

I. Pursuant to reference made by the company, The Hon. Bench of BIFR, New Delhi by their order dated 18.01.2007 declared the Company as Sick Industry. Rehabilitation Scheme has been approved by BIFR during the year.

II. The Company has revalued Fixed Assets, Investments and Loans & Advances for the year ended 31.12.2007; Fixed Assets & Investments for the year ended 31.03.2009 and Fixed Assets for the year ended 31.03.2012. The Revaluation of the year ended 31.12.2007 has resulted into a loss of Rs. 14,79,06,784/- and the same has been debited to Profit & Loss Account and shown below the line as "Extra Ordinary Items". Similarly, the Revaluation of the year ended 31.03.2009 has resulted into a Profit of Rs. 2,89,66,113/- and the same has been credited to Profit & Loss Account as "Profit on Revaluation of Assets" and shown below the line. So also, the Revaluation of the year ended 31.03.2012 has resulted into a Profit of Rs. 12,15,19,764/- and the same has been credited to the Revaluation Reserve Account and shown in the Balance Sheet as at 31.03.2012 under the head, Reserves & Surplus. At the time of earlier revaluations carried out as on 31.12.2007 & 31.03.2009, the Gross Block was shown at Revalued Figures instead of Cost. Hence the same has been rectified in the year under consideration i.e. as at 31.03.2012 by replacing the Gross Cost of the Assets deducting the loss on revaluation and adding the profit on revaluation carried out as at 31.12.2007 & 31.03.2009 respectively. The difference of Rs. 4,48,55,306/- between the under depreciation provided on reduced value of the said assets for the year commencing from 01.01.2008 to 31.03.2009 (i.e. for a period of 15 months) and the over depreciation provided on the increased value of the said assets has been debited to the Revaluation Reserve Account of the year under consideration viz. 31.03.2012.

III. "The liability of Rs. 46,98,30,496.00/- was created in favour of Gayatri Pipes & Fittings Pvt. Ltd. As under:

1) Rs. 26,70,72,939.00/- by debiting IDBI A/c for taking over it''s liability on 31.03.2008.

2) Rs. 20,27,57,557.00/- by debiting P/L A/c as Prior year adjustment on 20.03.2011.

In the year 2012-13, the Company has transferred Rs. 26,70,72,939.00/- to General reserve as the said liability is waived by Gayatri Pipes & Fittings Pvt. Ltd. as per their undertaking given to BIFR. Also, the Company has transferred Rs. 20,27,57,557/- to P/L A/c and shown under the head "Prior year Adjustment" as Gayatri Gayatri Pipes & Fittings Pvt. Ltd. as per the same undertakings given to BIFR."

IV. No Provision for Income Tax liability has been made in terms of BIFR Order dated 08.03.2013 under which vide clause 10.3(iii) the company is exempt form the applicability of minimum Alternate tax (MAT) under section 115JB of the income Tax Act, 1961.

V. Debtors and Creditors balances are subject to confirmations from the parties.

VI. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realization in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

VII. Figures of the previous year have been re-grouped/rearranged/reclassified wherever necessary.


Mar 31, 2013

1. Pursuant to reference made by the company, The Hon. Bench of BIFR, New Delhi by their order dated 18.01.2007 declared your Company as Sick Industry. Rehabilitation Scheme is under fnal stage of acceptance and it is hoped to be approved soon.

2. The Company has revalued Fixed Assets, Investments and Loans & Advances for the year ended 31.12.2007; Fixed Assets & Investments for the year ended 31.03.2009 and Fixed Assets for the year ended 31.03.2012. The Revaluation of the year ended 31.012.2007 has resulted into a loss of Rs. 14,79,06,784/- and the same has been debited to Proft & Loss Account and shown below the line as "Extra Ordinary Items". Similarly, the Revaluation of the year ended 31.03.2009 has resulted into a Proft of Rs.2,89,66,113/- and the same has been credited to Proft & Loss Account as "Proft on Revaluation of Assets" and shown below the line. So also, the Revaluation of the year ended 31.03.2012 has resulted into a Proft of Rs.12,15,19,764/- and the same has been credited to the Revaluation Reserve Account and shown in the Balance Sheet as at 31.03.2012 under the head, Reserves & Surplus. At the time of earlier revaluations carried out as on 31.12.2007 & 31.03.2009, the Gross Block was shown at Revalued Figures instead of Cost. Hence the same has been rectifed in the year under consideration i.e. as at 31.03.2012 by replacing the Gross Cost of the Assets deducting the loss on revaluation and adding the proft on revaluation carried out as at 31.12.2007 & 31.03.2009 respectively. The difference of Rs.4,48,55,306/- between the under depreciation provided on reduced value of the said assets for the year commencing from 01.01.2008 to 31.03.2009 (i.e. for a period of 15 months) and the over depreciation provided on the increased value of the said assets has been debited to the Revaluation Reserve Account of the year under consideration viz. 31.03.2012.

3. The company has not ascertained liability towards payment of gratuity and hence no provision has been made in the accounts.

4. Debtors and Creditors balances are subject to confrmations from the parties.

5. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realisation in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

6. The liability of Rs. 46,98,30,496.00/- was created in favour of Gayatri Pipes & Fittings Pvt. Ltd. As under:

1). Rs. 26,70,72,939.00/- by debiting IDBI A/c for taking over it’s liability on 31.03.2008.

2). Rs. 20,27,57,557.00/- by debiting P/L A/c as Prior year adjustment on 20.03.2011.

During the Current year, the Company has transferred Rs. 26,70,72,939.00/- to General reserve as the said liability is waived by Gayatri Pipes & Fittings Pvt. Ltd. As per their Undertaking given to BIFR.

During the year, the Company has transferred Rs. 20,27,57,557/- to P/L A/c and shown under the head "Prior year Adjustment" as Gayatri Gayatri Pipes & Fittings Pvt. Ltd. Has waived it as per their Undertakings given to BIFR.

7. Modvat credit of Excise duty taken on purchase of Raw Materials is not included in the value of inventory of Raw Material. Also value of inventory of fnished goods does not include excise duty payable on manufacture. This has no effect on the proft of the Company.

8. Figures of the previous year have been re-grouped / rearranged /reclassifed wherever necessary.


Mar 31, 2012

At the time of earlier revaluations carried out as on 31.12.2007 & 31.03.2009, the Gross Block was shown at Revalued Figures instead of Cost. Hence the same has been rectified in the year under consideration i.e. as at 31.03.2012 by replacing the Gross Cost of the Assets deducting the loss on revaluation and adding the profit on revaluation carried out as at 31.12.2007 & 31.03.2009 respectively. The difference of Rs.4,48,55,306/- between the under depreciation provided on reduced value of the said assets for the year commencing from 01.01.2008 to 31.03.2009 (i.e. for a period of 15 months) and the over depreciation provided on the increased value of the said assets has been debited to the Revaluation Reserve Account of the year under consideration viz. 31.03.2012.

1. The company has not ascertained liability towards payment of gratuity and hence no provision has been made in the accounts.

2. Debtors and Creditors balances are subject to confirmations from the parties.

3. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realisation in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

4. Modvat credit of Excise duty taken on purchase of Raw Materials is not included in the value of inventory of Raw Material. Also value of inventory of finished goods does not include excise duty payable on manufacture. This has no effect on the profit of the Company.

5. Figures of the previous year have been re-grouped / rearranged /reclassified wherever necessary.

6.1 Share application money pending allotment

As at 31 March 2012, the Company has received an amount of Rs. 13,800,000 towards share application money towards 1,380,000 equity shares of the Company. (As at 31 March, 2011 Rs. 4,800,000 towards 480,000 equity shares) at a premium of Rs. 0 (As at 31 March, 2011 Rs. 0). The share application money was received pursuant to the B1FR direction in its hearing dated 15/10/2010. The Company has sufficient authorised capital to cover the allotment of these shares.

7.1 Employee benefit plans

7.1.a Defined contribution plans

The Company makes Provident Fund and Superannuation Fund contributions to defined contribution plans for qualifying employees. Under the Schemes, the Company is required to contribute a specified percentage of the payroll costs to fund the benefits. The Company recognised Rs. 266,885 (Year ended 31 March, 2011 Rs. 175,597) for Provident Fund contributions and N.A. (Year . ended 31 March, 2011 N.A.) for Superannuation Fund contributions in the Statement of Profit and Loss. The contributions payable to these plans by the Company are at rates specified in the rules of the schemes.

7.1.b Defined benefit plans

The Company offers the following employee benefit schemes to its employees: i. Gratuity Refer accounting note A 5 of Auditors report.


Mar 31, 2010

1. Bank of Baroda had agreed with other creditors for settlement under OTS, however it transferred the Debt to International Asset Reconstruction Co.(India) Pvt.Ltd. without any reference or prior intimation. The matter is taken up with B.I.F.R while finalizing the rehabilitation scheme. No adjustments are made in accounts pending decision of B.I.F.R.

2. The company has not ascertained liability towards payment of gratuity and hence no provision has been made in the accounts.

3. Debtors and Creditors balances are subject to confirmations from the parties.

4. In the opinion of the Board of Directors the Current Assets, Loans & Advances except those shown as doubtful have a value on realisation in the ordinary course of business at least equal to the amount at which items are stated in the Balance Sheet.

5. Modvat credit of Excise duty taken on purchase of Raw Materials is not included in the value of inventory of Raw Material. Also value of inventory of finished goods does not include excise duty payable on manufacture. This has no effect on the profit of the Company.

6. Figures of the previous year have been re-grouped / rearranged /reclassified wherever necessary.

 
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