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Notes to Accounts of LN Industries India Ltd.

Mar 31, 2015

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following: a. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.1,400 Lacs - (previous Year Rs.1,400 Lacs).

2. Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint – Equitable mortgage of tile deeds relating to the Company's immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work – in – process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire – Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commiserate of Industries, has vide its letter no. 20 / 2 / 6 / 01826, dated 16th February ' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July ' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March ' 2015 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2015 is shown under the head of account Unsecured Loans.

4. The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard – 17 is not furnished.

5. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard – 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

6. Figures have been rounded off to the nearest rupee.

7. Previous year figures have been regrouped where necessary. The previous year figures and current year figures are not comparable since financial year 2010-11 data represents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.


Mar 31, 2014

1.1 CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs.1,400 Lacs - (previous Year Rs.1,400 Lacs).

1.2 Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company''s immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

1.3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20 / 2 / 6 / 01826, dated 16th February '' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July '' 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31st March '' 2014 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2014 is shown under the head of account Unsecured Loans.

1.4 Balances appearing under Unsecured Loans, Investments, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and / or Reconciliation, if any.

1.5 The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

1.6 The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

2.01 Quantitative Information

(Pursuant to the provisions of paragraphs 3, 4C & 4D of part II of Schedule VI of the Companies Act, 1956) CLASS OF GOODS, CAPACITY & PRODUCTION Class of Goods manufactured: Polyester / Nylon Texturised, Twisted Dyed Yarn.

2.02 Figures have been rounded off to the nearest rupee.

2.03 Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2010-11 data repesents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.

2.03 Notes 2 to 23 form an integral part of the Balance Sheet and Profit & Loss account.


Mar 31, 2012

1 CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs. 22.11 Lacs (Previous Year-Rs.-nil-Lacs)

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs. 1,400 Lacs - (previous Year Rs.1,400 Lacs).

1.2 Secured Loans:

a. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to the Company's immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

b. The Credit facilities from State Bank of Hyderabad are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facilities are further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

c. Vehicles acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

1.3 Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/6/01826, dated 16th February' 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July'28,1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 31 st March '2012 out of the total Rs.502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at March, 31st 2012 is shown under the head of account Unsecured Loans.

1.4 Balances appearing under Unsecured Loans, Investments, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and/or Reconciliation, if any.

1.5 The Convertible Warrants Monies represents Monies Received against Fully convertible Warrants to be issued.

1.6 The Company has only one segment of activity of dealing in textile products during the period, hence segment wise reporting as defined in Accounting Standard -17 is not furnished.

1.7 The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

1.8 Figures have been rounded off to the nearest rupee.

1.9 Previous year figures have been regrouped where necessary. The previous year figures and current year figures are not comparable since financial year 2010-11 data repesents operations for 6 (Six) Months, whereas current year data is for a period of 12 (Twelve) Months.

1.10 Notes 2 to 25 form an integral part of the Balance Sheet and Profit & Loss account.


Sep 30, 2010

1. CONTINGENT LIABILITIES:

All known and undisputed liabilities have been duly provided for, except the following:

a. The Unexecuted portion of Letter of Credit opened by Bank is Rs. -nil- ( Previous Year -Rs.-nil- Lacs)

b. Capital Commitments: Estimated amount of contacts remaining to be executed on capital account (net of advances) not provide for, amounts to Rs. 1,000 Lacs - (previous Year Rs.75 Lacs).

c. The total dues of IDBI Bank are assigned to JM Financial Asset Reconstruction Company Pvt. Ltd. (JMF ARC). As per the Terms of Restructuring with JMF ARC Pvt. Ltd., the liability is to be settled at Rs.1,000 Lacs along with Interest. In case the Company fails to meet the terms of Restructuring as stipulated by JMF ARC Pvt. Ltd., they have a right to revoke the full liability of the amount to the extent of Rs.2,852 Lacs along with interest, penal interest and other applicable charges.

2. Secured Loans:

a. The Company has paid the Term Loan dues of Industrial Investment Bank of India Limited (IIBI) under One Time Settlement (OTS) in terms of the said OTS, the Company settled the liability of IIBI by paying Rs.250 Lakhs.

b. Dues to IDBI Lank Ltd. of Rs.2,852 Lakhs have been assigned to JMF ARC Pvt. Ltd.

As per the Terms of Restructuring, Company has to pay Rs.1,000 Lakhs over a period of time along with interest. Apart from the dues, Company has to issue 2,50,000 full paid up Equity Shares at Face Value of Rs.10/- each to JMF ARC Pvt. Ltd., in lieu of conversion of part of the total dues. Dues to JMF ARC Pvt. Ltd., are secured by Joint - Equitable mortgage of tile deeds relating to he Companys immovable properties and are further secured by the personal guarantees of the Directors of the Company, and pledge of Shares of the Promoters.

c. The Credit facilities from the Bank on Cash Credit Account are secured by way of hypothecation of present and future stock of raw materials, work - in - process, all finished and manufactured goods, stores, component and spares (not relating to Plant and Machinery) and book debts of the Company. The Working Capital facility from State Bank of Hyderabad is further secured by Second charge on the fixed assets of the Company to the extent of Rs.840 Lakhs and the personal guarantees of the Directors of the Company.

d. Vehicle acquired under Hire - Purchase agreement from, ICICI Bank Limited are secured by hypothecation of the respective vehicles. The Loans are further secured by the personal guarantee of the Directors.

3. Unsecured Loans:

a. The Government of Andhra Pradesh, Commissiorate of Industries, has vide its letter no. 20/2/ 6 / 01826, dated 16!h February 1996, fixed eligibility towards Sales Tax Deferment on the Sales Tax Payable by the Company for a period of 10 years with effect from July 28, 1995. As the Company has shifted its Manufacturing Facilities from Andhra Pradesh, the Company has to repay the said Sales Tax Deferrement unsecured loan in full. As at 30,th September 2010 out of the total 502.84 Lacs availed an amount of Rs. 384.21 is paid back. The Sales Tax amount due as at September, 30" 2010 is shown under the head of account Unsecured Loans.

4. Balances appearing under Unsecured Loans, Sundry Debtors, Loans and Advances, Capital Work - in - Progress are subject to Confirmation and / or Reconciliation, if any.

5. The amount of difference between amount outstanding in the books of the company and the amounts paid under OTS to Industrial Investment Bank of India Ltd. (IIBI), the difference on account of restructured dues to JMF ARC Pvt. Ltd. (after assignment of dues from IDBI) and the total amount due to IDBI is credited to Profit and Loss Account.

6. The Preference Shares Capital represents the Interest payable by the Company to Industrial Development Bank of India Limited (IDBI) converted into Preference Equity During the year December 2004 stands cancelled, as part of the settlement / restructuring.

7. The Company has only one segment of activity i.e., Manufacturing of Texturized Twisted Polyesters Dyed Yarn. Hence segment wise reporting as defined in Accounting Standard - 17 is not furnished.

8. The benefit of tax losses has not been brought to account, as the related benefits are not considered virtually certain. Hence the value of Deferred Tax is not determined and accounted as per the Provisions of Accounting Standard - 22 on Accounting for Taxes on Income, issued by the Institute of Chartered Accountants of India.

9. Related Party:

As per Accounting Standard 18, issued by the Institute of Chartered Accountants of India, the disclosures of transaction with the related parties as defined in Accounting Standard are given below: (i) List of related parties with whom transactions have taken place and relationships:

Sr.No. Name of the Related Party Relationship

1 Capricorn Systems Global Solutions Limited. Associate Concern

2 Sri. S.Man Mohan Rao . Key Management Personnel

3 Sri.G.Surender Reddy Key Management Personnel

10. Figures have been rounded off to the nearest rupee.

11. Previous year figures have been regrouped where necessary. The previous year fiqures and current year figures are not comparable since financial year 2008-09 data repesents opera- tions for 9 (Nine) Months, whereas current year data is for a period of 18 (Eighteen) Months.

12. Schedules A to O form an integral part of the Balance Sheet and Profit & Loss account.

 
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