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Notes to Accounts of Patspin India Ltd.

Mar 31, 2015

(A) Rights, preferences and restrictions attached to shares

1) Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each shareholder is eligible for one vote per share. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion of their shareholding.

2) Preference Shares:

i 700000, 5% Non Cumulative preference shares of Rs 100 each were issued to promotors and their associates. The issue details are as follows.

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs 2000 lacs (security for which is explained in Para 1(iii) below) , are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5 ,Para (i) and (ii)),and further secured by personal guarantee of two Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future,and further secured by personal guarantee of two directors of the Company.

(iii) Term Loan from a financial institution of Rs 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vechicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 5,Para (i) and (ii) below),and further secured by Corporate Guarantee from two associates, GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles.

II The Maturity Profile of Secured Loans are as set out below:

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs.5242.00 lacs (Previous year Rs.6121.73 lacs).

2. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year. i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iii. Enterprises/Entities having "Common Key Management Personnel" :

1 Perfect Cotton Co.

2 Patcot & Co.

3 Purav Trading limited

4 Standard Cotton Corporation

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri. Umang Patodia

2 Shri Ankur Patodia - Brother of Shri. Umang Patodia

3 Smt. Prabha Patodia - Mother of Shri. Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri. Umang Patodia

3 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

2. Outstanding Export Forward Contracts (not in the nature of derivatives ) as on 31 st March '15 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 41.81 lacs and Euro 3.00 lacs ( Previous Year US$ 19.89 lacs and Euro 5.89 lacs ) at average Exchange Rate of Rs 63.70 /US$ and Rs 70.22/Euro (Previous year Rs 62.54/US$ and Rs 88.78/Euro). The period covered under these contracts spreads over April 2015 to February 2016 (Previous Year April 2014 to September 2014). The average Exchange Rate applicable for the above period based on

exchange rate on 31.03.2014 works out to Rs 63.84 /US$ and Rs 69.09/Euro (Previous year Rs 55.32/US$ and Rs 70.62/Euro ), resulting in notional loss of Rs 2.28 lacs (Previous year notional gain of Rs 46.75 lacs)

3. Outstanding Import Forward Contracts ( not in the nature of derivatives) as on 31st March 2015 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amounting to US$ 4.61 Lacs (Previous year US$ 9.76 Lacs) at average exchange rate of Rs.62.54/US$ (Previous year Rs.63.34/US$) . The period covered under these contracts spreads over April 2015 to October 2015 (Previous year April 2014 to June 2014). The average exchange rate applicable for above period based on exchange rate on 31.03.2014 works out to Rs.62.96/US$ (Previous year Rs.54.88/ US$), resulting a notional gain of Rs.1.95 lacs (Previous year notional loss of Rs.23.39 Lacs)

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. Nil lacs (Previous year Rs. 254.14 lacs)

b) Sales Tax (VAT) : Rs 147.56 lacs (Previous year Rs.150.22 lacs)

c) Market Committee Cess: Rs. 49.23 lacs (Previous year Rs.41.90 lacs)

d) Disputed Income Tax demands Rs 353.78 lacs (Previous year 353.78 lacs ) and interest there on Rs 308.65 lacs (Previous year Rs 308.65 lacs ), matter having been decided by the Hon'ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 546.58 lacs (Previous year 408.58 lacs ) is included in the loans and advances,with further commitment to pay Rs 34.40 lacs in three monthly equal instalments effective from 01.04.2015 (Previous Year Rs 174.40 lacs in fifteen equal instalments effective from 01.04.2014)

e) Disputed amount of fiscal penalty imposed by Joint Director General of Foreign Trade Charging for violation of condition of EPCG authorization Rs 288.89 lacs (Previous Year-Nil) .The Company has appealed to the Appellate Authority. Meanwhile, Hon'ble High Court of Kerala has ordered to maintain status quo till the matter is decided by the appellate authority. The company is hopeful of outcome in its favour.

The Company's pending litigation comprise mainly of above taxes and duties.The Company has reviewed all its pending litigations and proceedings and has made adequate provision,whereever required and disclosed the contingent liabilities, whereever applicable in its financial statements. The Company doesn't reasonably expect these proceedings to have material impact on its financial statements.

4. Corporate Guarantee :

4.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs ( Previous year Rs.2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1226 lacs as on 31st March 2015 ( Previous Year - Rs. 1538 lacs ).

4.2 The company has given Corporate Guarantee amounting to Rs.175 lacs ( Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.263 lacs as on 31st March 2015 ( Previous Year - Rs. 295 lacs ). All the investments made, loans and advances given and gurantees provided are for business purposes.

5. Net loss / Gain on Foreign currency transaction and translation

The amount of net gain on foreign currency transaction and translation included in the other expenses amounts to Rs 314.73 lacs (Previous year Rs 365.77 lacs loss ).This includes gain on account of export Rs 528.96 lacs (Previous Year Rs 129.90 lacs gain), Loss on account of Import Rs.220.16 lacs (Previous year Rs 457.86 lacs loss) and GAIN on account of cancellation of forward contracts Rs.5.93 lacs (Previous Year Rs 37.81 lacs loss).

6. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. b) The accounts of certain Trade Receivables ,Trade payables, Loans and advances and Banks are however,are subject to formal confirmations /reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period's financial statements on such reconciliation/ adjustments.

7. In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.31590.11 Lacs ( Previous year Rs.36459.37 lacs) and within India sale of Rs. 22540.56 lacs ( Previous year Rs. 23270.98 Lacs)

8. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions,which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principal

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs.22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

- The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares.The said amount was brought into two phases of Rs 1.35 Crores each on 7th November,2012 and 28th November ,2013 respectively in line with CDR Scheme.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines


Mar 31, 2014

1. LONG TERM BORROWINGS

Term Loan are secured by :

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs. 2000 lacs (security for which is explained in Para 1(iii) below), are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5, Para (i) and (ii) and further secured by personal guarantee of two Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future, and further secured by personal guarantee of two directors of the Company.

(iii) Term Loan from a financial institution of Rs. 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company, subject to prior charges in favour of banks for working capital ranking pari passu, inter se (as mentioned in Note No 5, Para (i) and (ii) below), and further secured by Corporate Guarantee from GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs. 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles costing Rs 40.53 lacs (Previous year Rs 40.53 lacs).

2. SHORT TERM BORROWINGS

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured / to be secured by first charge by way of hypothecation on current assets of the company and further secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of two directors of the Company.

ii Non Fund based limits from Banks are secured by:

Non-fund based limits sanctioned by the bankers are secured / to be secured by extension of first charge on the current assets of the Company and further secured by second charge on the immovable properties of the company and personal guarantee of two directors of the company; Total amount outstanding at the end of the year is Rs 6121.73 lacs (Previous year Rs 5026.08 lacs).

3. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD-18

(a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year.

i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iii. Enterprises/Entities having "Common Key Management Personnel" :

1 Perfect Cotton Co.

2 Patcot Co

3 Purav Trading limited

4 Standard Cotton Corporation

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri. Umang Patodia

2 Shri Ankur Patodia - Brother of Shri. Umang Patodia

3 Smt. Prabha Patodia - Mother of Shri. Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri. Umang Patodia

4 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

2. Outstanding Export Forward Contracts (not in the nature of derivatives) as on 31st March ''14 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 19.89 lacs and Euro 5.89 lacs (Previous Year US$ 33.53 lacs and Euro 3.49 lacs) at average Exchange Rate of Rs 62.54 /US$ and Rs 88.78/Euro (Previous year Rs. 55.86/US$ and Rs. 73.41/Euro). The period covered under these contracts spreads over April 2014 to September 2014 (Previous Year April 2013 to September 2013). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2014 works out to Rs. 61.47/US$ and Rs. 84.46/Euro (Previous year Rs. 55.32/US$ and Rs. 70.62/Euro), resulting in notional gain of Rs. 46.75 lacs (Previous year notional gain of Rs. 28.00 lacs).

3. Outstanding Import Forward Contracts (not in the nature of derivatives) as on 31st March 2014 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amounting to US$ 9.76 Lacs (Previous year US$ 12.86 Lacs) at average exchange rate of Rs. 63.34/US$ (Previous year Rs. 54.74/US$). The period covered under these contracts spreads over April 2014 to June 2014 (Previous year April 2013 to June 2013). The average exchange rate applicable for above period based on exchange rate on 31.03.2014 works out to Rs.60.95/US$ (Previous year Rs. 54.88/US$), resulting a notional loss of Rs. 23.39 lacs (Previous year notional gain of Rs.1.85 Lacs).

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 254.14 lacs (Previous year Rs. 257.88 lacs)

b) Sales Tax (VAT) : Rs 150.22 lacs (Previous year Rs. 61.07 lacs)

c) Market Committee Cess: Rs. 41.90 lacs (Previous year Rs. 27.07 lacs)

d) Disputed Income Tax demands Rs. 353.78 lacs (Previous year 364.92 lacs ) and interest there on Rs. 308.65 lacs (Previous Year Nil), matter having been decided by the Hon''ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour. Payment there against Rs. 408.58 lacs (Previous Year Rs. 348.58 lacs) is included in the loans and advances, with a further commitment to pay Rs. 172.40 lacs in fifteen equal monthly instalments effective from 01.04.2014.

e) Disputed amount of fiscal penalty imposed by Joint Director General of Foreign Trade Charging violation of condition of EPCG authorization Rs. 288.89 lacs (Previous Year-Nil). The Company has appealed to the Appellate Authority and it is pending for hearing.Meanwhile, Hon''ble High Court of Kerala has ordered to maintain status quo till the matter is decided by the appellate authority. The company is hopful of outcome in its favour.

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs. 2113 lacs (Previous year Rs. 2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1538 lacs as on 31st March 2014 ( Previous Year - Rs. 1785 lacs).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs (Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs. 295 lacs as on 31st March 2014 (Previous Year - Rs. 225 lacs).

5. Net loss / Gain on Foreign currency transaction and translation

The amount of net loss on foreign currency transaction and translation included in the other expenses amounts to Rs. 365.77 lacs (Previous year Rs. 484.14 lacs ).This includes gain on account of export Rs. 129.90 lacs (Previous Year Rs. 278.44 lacs loss), Loss on account of Import Rs. 457.86 lacs (Previous year Rs. 182.18 lacs ) and loss on account of cancellation of forward contracts Rs. 37.81 lacs (Previous Year Rs. 23.51 lacs)

6. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b) The accounts of certain Trade Receivables,Trade payables, Loans and advances and Banks are however, are subject to formal confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current period''s financial statements on such reconciliation/ adjustments.

7. In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.36459.37 Lacs (Previous year Rs. 28094.70 lacs) and within India sale of Rs. 23270.98 lacs (Previous year Rs. 17133.05 Lacs)

8. The Company was sanctioned a Debt Restructuring Package under Corporate Debt Restructuring (CDR) Scheme on 12.10.2012 effective from 01.04.2012 for the loans availed from Banks/Financial Institutions, which was approved by CDR-EG and all the lenders.

The restructuring inter-alia envisages:

* Deferment / Rescheduling in payment of principal

* Refixation of interest rates on term loans

* Sanction of additional long term working capital term loan of Rs. 22.16 crores

* In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

* The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares. The said amount was brought into two phases of Rs 1.35 Crores each on 7th November, 2012 and 28th November, 2013 respectively in line with CDR Scheme.

* GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

* The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/sacrifices/waivers extended by respective CDR lenders as per CDR guidelines.


Mar 31, 2013

1. Related Party Disclosures

DISCLOSURE IN RESPECT OF RELATED PARTIES PURSUANT TO ACCOUNTING STANDARD -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year.

i. Associates

1. GTN Textiles Limited

2. GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia - Managing Director

iv. Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri.Umang Patodia

2 Shri Ankur Patodia - Brother of Shri.Umang Patodia

3 Smt.Prabha Patodia - Mother of Shri.Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri.Umang Patodia

2 CONTINGENT LIABILITY AND COMMITMENTS: A COMMITMENTS

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

2. Outstanding Forward Contracts (not in the nature of derivatives ) as on 31st March ''13 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 33.53 lacs ( Previous Year US$ 63.45 lacs) at average Exchange Rate of Rs 55.86 /US$ (Previous year Rs 50.43/US$). The period covered under these contracts spreads over April 2013 to September 2013 (Previous Year April 2012 to March 2013). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2013 works out to Rs 54.29 /US$ (Previous year Rs 51.21/US$), resulting in notional gain of Rs 52.76 lacs (Previous year notional loss of Rs 49.53 lacs)

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 257.88 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs 61.07 lacs (Previous year Rs.61.07 lacs)

c) Market Committee Cess: Rs. 27.07 lacs (Previous year Rs.17.68 lacs)

d) Disputed Income Tax demands Rs 364.92 lacs (Previous year 364.92 lacs ), matter having been decided by the Hon''ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 348.58 lacs is included in the loans and advances (Previous Year Rs 348.58 lacs)

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs (Previous year Rs.2113 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1785 lacs as on 31st March 2013 (Previous Year – Rs. 1799 lacs ).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs ( Previous year Rs.175 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.225 lacs as on 31st March 2013 ( Previous Year – Rs. 225 lacs ).

3. a) In the opinion of the management, assets other than fixed assets and non current investments have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated. b) The accounts of certain Trade Receivables,Trade Payables, Loans and Advances and Banks are however,subject to formal confirmations /reconciliations and consequent adjustments ,if any.The management does not expect any material difference affecting the current period''s financial statements on such reconciliation /adjustments.

4 In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.28094.70 Lacs (Previous year Rs.20806.67 lacs) and within India sale of Rs. 17133.05 lacs ( Previous year Rs. 20652.97 Lacs)

5 During the year, the Company has implemented the Corporate Debt Restructuring (CDR) Package for the loans availed from Banks/Financial Institution, which was approved by CDR EG and all the lenders. The same is effective from the cutoff date of 01.04.2012.

The restructuring inter-alia envisages:

- Deferment / Rescheduling in payment of principal

- Refixation of interest rates on term loans

- Sanction of additional long term working capital term loan of Rs.22.16 crores

- In lieu of sacrifice by the lenders, Preference Shares of Rs.10.81 crores were allotted on 29.01.2013 to the banks/ financial institutions. The amount represents difference between the net present value (NPV) of the future cash flows towards repayment of principal and interest thereon as per the revised term and those payable as per the original terms. The said sacrifice will be amortized equally over a period of 9 years beginning from the FY 2013-14 and ending in the financial year 2021-22 being the last year of repayment of entire loans.

- The Promoters to bring in contribution of Rs.2.70 crores by way of Preference Shares, out of which Rs.1.35 crores has already been brought in and the balance is required to be brought in by December, 2013.

- GTN Textiles Limited (GTN), the main Promoter to pledge 72,86,405 Equity Shares of Rs.10 each (51% of the shareholding in Patspin India Limited) in favour of Central Bank of India, the Monitoring Institution. GTN has since pledged the shares on 14.05.2013.

- The CDR lenders, with the approval of CDR EG, shall have the right to recompense the reliefs/ sacrifices/waivers extended by respective CDR lenders as per CDR guidelines.

6 PREVIOUS YEAR''S FIGURES

Previous year''s figures have been regrouped/reclassified wherever necessary to conform to the current year''s presentation.


Mar 31, 2012

(a) Rights, preferences and restrictions attached to shares

Preference Shares:

700000, 5% Non Cumulative preference shares of Rs 100 each were issued to promotors and their associates .The issue details are as follows.

I Term Loan are secured by :

(i) Term loans from banks and financial institution, excluding corporate term loan from a bank of Rs. 1500 lacs (security for which is explained in Para 1(ii) below) and Term Loan from a financial institution of Rs 2000 lacs (security for which is explained in Para 1(iii) below) , are secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all moveable assets (excluding vechicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 6 ,Para (i) and (ii) below),and further secured by personal guarantee of 2 Directors of the Company.

(ii) Corporate term loan from a bank of Rs. 1500 lacs mentioned in para 1 (i) above is secured by way of hypothecation of moveable assets (excluding vehicle purchased on Finance lease basis) of the company, both present and future, has been secured by second charge by way of equitable mortgage on the immovable assets of the company, both present and future,and further secured by personal guarantee of two directors of the Company

(iii) Term Loan from a financial institution of Rs 2000 lacs is secured by first charge by way of equitable mortgage on all the immovable assets of the company, both present and future, and by way of hypothecation on all movable assets (excluding vehicle purchased on Finance lease basis) of the company, and further secured by second charge on current assets of the company,subject to prior charges in favour of banks for working capital ranking pari passu,inter se (as mentioned in Note No 6, Para (i) and (ii) below),and further secured by Corporate Guarantee from GTN Textiles Limited (Rs 300 lacs) and GTN Enterprises Limited (Rs 1700 lacs).

(iv) Finance lease obligations are relating to vehicles and are secured by hypothecation of respective vehicles costing Rs.40.53 lacs (Previous year Rs.40.53 lacs)

i Working Capital limits from Banks are secured by:

Working Capital loans from banks are secured by first charge by way of hypothecation on current assets of the company and further secured/to be secured by way of second charge over the immovable assets of the company both present and future and further secured by personal guarantee of 2 directors of the Company.

ii Non Fund based limits from Banks are secured by:

Non-fund based limits sanctioned by the bankers are secured by extension of first charge on the current assets of the Company and further secured/to be secured by second charge on the immovable properties of the company and personal guarantee of 2 directors of the company; Total amount outstanding at the end of the year is Rs.3817.09 lacs (Previous year Rs.3918.17 lacs).

1 RELATED PARTY DISCLOSURE

Disclosure in respect of Related Parties pursuant to Accounting Standard -18 (a) List of Related Parties

(As identified by the Management)

Related parties with whom company entered in to transactions during the year

i Associates:

1 GTN Textiles Limited

2 GTN Enterprises Limited

ii Key Management Personnel:

Shri Umang Patodia -Managing Director

iii Enterprises/Entities having "Common Key Management Personnel":

1 Perfect Cotton Co.

2 Patcot & Co

3 Purav Trading Limited

4 Standard Cotton Corporation

5 Patodia Export and Investments (P) Limited

6 Beekaypee Credit (P) Limited

7 Umang Finance (P) Limited

8 B.K. Patodia (HUF)

9 Umang Patodia (HUF)

10 Ankur Patodia (HUF)

iv Relatives of Key Management Personnel:

1 Shri Binod Kumar Patodia - Father of Shri.Umang Patodia

2 Shri Ankur Patodia - Brother of Shri.Umang Patodia

3 Smt.Prabha Patodia - Mother of Shri.Umang Patodia

4 Smt.Swati Patodia - Sister-in-law of Shri.Umang Patodia

2 CONTINGENT LIABILITY AND COMMITMENTS:

A COMMITMENTS

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

B CONTINGENT LIABILITIES

1. Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs 61.07 lacs (Previous year Rs.1.11 lacs)

c) Market Committee Cess: Rs. 17.68 lacs (Previous year Rs.13.39 lacs)

d) Disputed Income Tax demands Rs 364.92 lacs (Previous year Nil), matter having been decided by the Hon'ble High Court of Kerala against the Company. The Company has gone for appeal before the Supreme Court of India and is hopeful of outcome in its favour.Payment there against Rs 348.58 lacs is included in the loans and advances (Previous Year Rs 401.89 lacs)

2. Corporate Guarantee :

2.1 The company has given Corporate Guarantee amounting to Rs.2113 lacs (Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1799 lacs as on 31st March 2012 ( Previous Year - Rs. 1426 lacs ).

2.2 The company has given Corporate Guarantee amounting to Rs.175 lacs (Previous year Rs.Nil) to a Financial Institution in respect of financial assistance provided by them to GTN Textiles Ltd and the outstanding amount thereof is Rs.275 lacs as on 31st March 2012 (Previous Year - Rs. Nil lacs ).

3. Forward Cover :

3.1 Oustanding Forward Contracts (not in the nature of derivatives) as on 31 st March '12 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US$ 63.45 lacs (Previous Year US$ 84.77 lacs) at average Exchange Rate of Rs 50.43 /US$ (Previous year Rs 47.32/US$). The period covered under these contracts spreads over April 2012 to March 2013 (Previous Year April 2011 to May 2012). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2012 works out to Rs 51.21 /US$ (Previous year Rs 44.70/US$), resulting in notional loss of Rs 49.53 lacs (Previous year notional gain of Rs 222.09 lacs)

3 In the opinion of the Board, all assets other than fixed assets and non current investments have a realisable value in the ordinary course of business which is not less than the amount at which it is stated.

4 In term of Accounting Standard -17, the company operates materially only in one business segment viz., Textile industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs.21931.90 Lacs (Previous year Rs.22155.67 lacs) and within India sale of Rs.19527.74 lacs (Previous year Rs.20497.04 Lacs).

5 PREVIOUS YEAR'S FIGURES

During the year ended 31st March 2012 the Revised Schedule VI notified under the Companies Act ,1956, has become applicable to the Company. The Company has reclassified/regrouped previous year's figures to conform to this year's classification.


Mar 31, 2011

1. Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) Rs. 855 lacs (Previous year Rs. Nil).

2 Contingent Liabilities not provided for in respect of :

2.1 Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 132.37 lacs)

b) Sales Tax (VAT) : Rs. 1.11 lacs (Previous year Rs.1.11 lacs )

c) Market Committee Cess: Rs.13.39 lacs (Previous year Rs. 9.17 lacs)

d) Disputed Income tax demands - Rs. Nil (Previous year Rs. 590.69 lacs), matter having been decided by the Tribunal (ITAT) in favour of the Company. Though the Income Tax Department has gone in for appeal before the Hon ble High Court of Kerala against the order of the ITAT, the company is hopeful of outcome in its favour. Payment there against Rs.401.89 lacs included in Loans & Advances in Schedule No. 7 (Previous year Rs. 401.89 lacs)

2.2 The company has given Corporate Guarantee amounting to Rs.1724 lacs (Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Limited and the outstanding amount thereof is Rs.1426 lacs (Previous Year - Rs. 1536 lacs).

3. (i) The amount of foreign exchange difference (net) included in the Net Profit for the year amounts to Rs. 276.23 lacs gain. (Previous year Rs. 30.13 lacs gain). This comprises foreign exchange difference in respect of export Rs.230.59 lacs gain (previous year 3.32 lacs gain) and in respect of imports Rs. 45.64 lacs gain (previous year Rs. 26.81 lacs gain) as shown in Schedule 18.

(ii) Outstanding Forward Contracts (not in the nature of derivatives) as on 31st March, 2011 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US $ 84.77 lacs (Previous year US$ 81.76 lacs) at average Exchange Rate of Rs. 47.32 / US$ (previous year Rs.46.99/US$). The period covered under these contracts spreads over April 2011 to May 2012. (Previous year April, 2010 to March, 2011). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2011 works out to Rs. 44.70 / US$ (Previous year Rs.45.77/US$), resulting in notional gain of Rs. 222.09 lacs (Previous year loss Rs.100.24 lacs).

4. a) In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b) Balance of certain creditors, debtors, loans and advances given are subject to confirmation and reconciliation, if any. However in the opinion of management, there would not be any material impact on financial statements.

5. Interest on others in Schedule - 17 is net of interest income of Rs. 55.60 lacs (Previous Year Rs. 30.10 lacs); tax deducted at source thereon Rs. 6.67 lacs (Previous Year Rs. 2.53 lacs).

6. In terms of Accounting Standard - 17, the Company operates materially only in one business Segment viz., Textile Industry and have its production facilities and all other assets located within India. Sales to external customers comprise outside India sales of Rs. 21741.49 lacs (Previous year Rs. 14142.73 lacs) and within India sale of Rs.20523.81 lacs (Previous year Rs. 15237.35 lacs).

7. Disclosure in respect of Related Parties pursuant to Accounting Standard -18:

(a) List of Related Parties:

(As identified by the Management)

Related parties with whom company entered into transactions during the year:

i) Associates

1) GTN Textiles Limited

2) GTN Enterprises Limited

ii) Key Management personnel and Enterprises (having common key Management personnel or their Relatives)

Key Management Personnel

Shri Umang Patodia - Managing Director

Enterprises/Entities having common Key Management Personnel

1) Perfect Cotton Co.

2) Patcot & Co

3) Purav Trading Limited

4) Standard Cotton Corporation

5) Patodia Exports and Investments (P) Limited

6) Beekaypee Credit (P) Limited

7) Umang Finance (P) Limited

8) B. K. Patodia (HUF)

9) Umang Patodia (HUF)

10) Ankur Patodia (HUF)

Relatives of Key Management Personnel

Shri. Binod Kumar Patodia - Father of Shri. Umang Patodia

Shri. Ankur Patodia - Brother of Shri. Umang Patodia

Smt. Prabha Patodia - Mother of Shri. Umang Patodia

Smt. Swati Patodia - Sister-in-law of Shri. Umang Patodia

(d) Details of Material transactions with Related Party

(a) Sales of cotton to GTN Textiles Limited Rs. 102.98 lacs (Previous Year Rs.1582.21 lacs), Sales of yarn to GTN Textiles Limited Rs. 383.86 lacs (Previous year Rs. 668.55 lacs), Processing Charges received from GTN Textiles Limited Rs. 80.36 Lacs(Previous year Rs. 4.47 lacs), Rent received from GTN Textiles Limited Rs 2.15 lacs (Previous Year Rs Nil) Sale of cotton to GTN Enterprise Limited Rs. Nil (Previous year Rs.823.15 lacs), Sales of yarn to GTN Enterprise Limited Rs. 371.51 lacs (Previous year Rs. 413.41 lacs), Sale of Machinery to GTN Enterprises Limited Rs 9.10 lacs (Previous Year Nil ), Rent received from GTN Enterprise Limited Rs. Rs. 1.08 lacs (Previous year Rs.1.08 lacs), Processing Charges received from GTN Enterprise Limited Rs. 73.09 lacs (Previous year Rs. 102.14 lacs), Fixed Deposits from Shri Binod Kumar Patodia Rs 154.00 lacs,Fixed Deposit from Patodia Exports and Investments (P) Limited Rs 13.00 lacs, Fixed Deposit from Beekaypee Credit (P) Limited Rs 5.00 lacs, Fixed Deposit from Umang Finance (P) Limited Rs 8.50 lacs, Fixed Deposit from Smt Prabha Patodia Rs 65.00 lacs Fixed Deposit from Smt Swati Patodia Rs 3.00 lacs, Fixed Deposit from Binod Kumar Patodia (HUF) Rs 6.00 lacs,Fixed Deposit from Umang Patodia (HUF ) Rs 13.00 lacs, and Fixed Deposit from Ankur Patodia (HUF ) Rs 12.00 lacs

(b) Purchase of cotton from GTN Textiles Limited Rs. 1104.61 lacs (Previous Year Rs. 1932.16 lacs), Purchase of yarn from GTN Textiles Limited Rs 352.69 lacs (Previous year Rs. 404.82 lacs), Purchase of store items from GTN Textiles Limited Rs. Nil (Previous Year Rs.0.76 lacs), Purchase of Focus Market License from GTN Textiles Limited Rs 7.26 lacs (Previous Year Rs Nil) Processing Charges paid to GTN Textiles Limited Rs. 32.64 Lacs (Previous Year Rs. 28.09 lacs) Rent Paid to GTN Textiles Limited Rs 1.32 lacs (Previous Year Rs Nil ). Purchase of Cotton from Standard Cotton Corporation Rs 1443.68 lacs ( Previous year Rs 185.58 lacs),Purchase of Cotton from Patcot & Co Rs 1310.92 lacs ( Previous year Rs 165.45 lacs), Purchase of Cotton from Perfect Cotton Co Rs 1494.71 lacs(Previous year Rs1590.92 lacs) Purchase of Cotton from Purav Trading Ltd Rs 1205.60 lacs ( Previous Year Rs 1679.69 lacs), Purchasing of cotton from GTN Enterprise Limited Rs. 1015.33 lacs (Previous year Rs.1308.39 lacs), Purchase of yarn from GTN Enterprise Limited Rs. 190.49 lacs (Previous year Rs.297.64 lacs), Purchase of Machinery from GTN Enterprises Limited Rs 3.22 lacs (Previous year Rs Nil), Purchase of Focus Market License from GTN Enterprises Ltd Rs 2.99 lacs (Previous year Rs Nil ), Processing Charges paid to GTN Enterprise Limited Rs. 279.84 lacs (Previous year Rs.154.91 lacs), and Purchase of store items from GTN Enterprise Limited Rs. Nil (Previous year Rs. 0.12 lacs).Sitting fee paid to Shri Binod Kumar Patodia Rs 0.30 lacs ,Interest on Fixed Deposits paid to Shri Binod Kumar Patodia Rs 2.09 lacs, Interest on Fixed Deposit paid to Patodia Exports and Investments (P) Limited Rs 0.09 lacs, Interest on Fixed Deposit paid to Beekaypee Credit (P) Limited Rs 0.04 lacs, Interest on Fixed Deposit paid to Umang Finance (P) Limited Rs 0.07 lacs, Interest on Fixed Deposit paid to Smt Prabha Patodia Rs 0.75 lacs. Interest on Fixed Deposit paid to Smt Swati Patodia Rs 0.02 lacs, Interest on Fixed Deposit paid to Binod Kumar Patodia (HUF) Rs 0.03 lacs , Interest on Fixed Deposit paid to Umang Patodia (HUF) Rs 0.04 lacs, and Interest on Fixed Deposit paid to Ankur Patodia (HUF) Rs 0.04 lacs

8. Previous years figures have been regrouped and rearranged wherever necessary so as to make them comparable with those of the current year.


Mar 31, 2010

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

2 Contingent Liabilities not provided for in respect of:

2.1 Disputed amounts of Taxes and duties and other claims not acknowledged as debts :

a) Excise duty : Rs. 132.37 lacs (Previous year Rs. 130.68 lacs)

b) Service Tax : Rs Nillacs (Previous year: Rs. 1.89 lacs) c) Sales Tax (VAT) : Rs 1.11 lacs (Previous year Rs. Nil)

d) Market Committee Cess: Rs. 9.17 lacs (Previous year Rs. NIL)

e) Disputed Income tax demands consequent to reopening the completed assessments of certain prior years and restricting the claim for deduction u/s 10B of the Income Tax Act, which was appealed against before the Hon. Income Tax Appellate Tribunal, Cochin Bench which is now pending on appeals before the Hon. Income Tax Appellate Tribunal, Cochin Bench, and on which the company is hopeful of full relief- Rs.590.69 lacs (Previous year: Rs. 1803.30 lacs). {Payment there against Rs.401.89 lacs included in Loans & Advances in Schedule No. 5 (Previous year Rs. 401.89 lacs)

2.2 The company has given Corporate Guarantee amounting to Rs.1724 lacs ( Previous year Rs.1724 lacs) to a Financial Institution in respect of financial assistance provided by them to GTN Enterprises Ltd and the outstanding amount thereof is Rs.1536 Lacs as on 31st March 2010 ( Previous Year - Rs. 1567 Lacs ).

3. (i) The amount of foreign exchange difference (net) included in the Net Loss for the year amounts to Rs.30.13 lacs credit. (Previous year Rs. 893.84 lacs debit). This comprises foreign exchange difference in respect of exports Rs 3.32 lacs credit (previous year Rs. 1035.94 lacs debit) and in respect of imports Rs. 26.81 lacs credit (previous year Rs. 142:10 lacs credit) as shown in Schedule 18.

(ii) Foreign exchange difference (Net) adjusted to the cost of respective fixed assets Rs. NIL (Previous year Rs. NIL)

(iii) Outstanding Forward Contracts (not in the nature of derivatives) as on 31 st March 2010 which were entered into for hedging exchange risk arising from foreign currency fluctuations related to highly probable future transactions amount to US $ 81.76 lacs (Previous year 0S$ 79.26 lacs) at average Exchange Rate of Rs. 46.99 / US$ (previous year Rs.46.26/US$). The period covered underthese contracts spreads over April 2010 to March 2011. (Previous year April 2009 to January 2010). The average Exchange Rate applicable for the above period based on exchange rate on 31.03.2010 works out to Rs. 45.77 / US$ (Previous year Rs.51 60/USS), resulting in notional gain of Rs. 100.24 lacs (Previous year loss Rs.423.25 lacs).

4. , Stock of Raw Materials costing Rs 74.33 Lacs as referred to in Schedule 13 and Goods - In - Progress valued at Rs. 25.47 Lacs as referred to in Schedule 12 represents the Cost Of Inventory damaged on account of Fire. Damaged Inventory is covered under Insurance and the Management is certain that the insurance claim will realize the value of such Raw Materials and Goods-ln-Progress at Replacement Cost. Considering prudence and certainty of realization, the Insurance Claim is measured and recognized only to the extent of Cost Of Goods Damaged and shown as "Other Operating Income", Schedule 1Q forming part of Profit & Loss Account. The amount of such damaged stock totalling to Rs 99.80 Lacs is shown under "Other Expenses" in Schedule 18 forming part of Profit & Loss Account.

5. a In the opinion of the Board, the current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

b Balance of certain creditors, debtors, loans and advances given are subject to confirmation and reconciliation, if any. However in the opinion of management, there would not be any material impact on financial statements.

6. Interest on others in Schedule -15 is net of interest income of Rs 30.10 lacs (Previous Year Rs. 25.90 lacs); tax deducted at source thereon Rs:2.53 lacs (Previous Year Rs. 4.75 lacs).

7. In terms of Accounting Standard -17, the Company operates materially only in one business Segment viz., cotton yam and has its production facilities and all other assets located in India. Sales to external customers comprise exports sales of Rs. 14142.73 lacs (Previous year Rs. 15936.61 lacs) and local sale of Rs. 15237.35 lacs (Previous year Rs. 5632.20 lacs).

8. Disclosure in respect of Related Parties pursuant to Accounting Standard-18: (a) List of Related Parties:

(As identified by the Management)

Related parties with whom company entered into transactions during the year:

i) Associates

GTN Textiles Limited

Purav Trading Limited

GTN Enterprises Limited

ii) Key Management personnel and Enterprises (having common key Management personnel or their Relatives)

Key Management Personnel

Shri Umang Patodia - Managing Director

Enterprises/Entities having common Key Management Personnel

Perfect Cotton Co.

Patcot & Co

Standard Cotton Corporation

Relatives of Key Management Personnel

Shri B.K. Patodia - Father of Shri Umang Patodia

Shri Ankur Patodia - Brother of Shri Umang Patodia

9. Previous years figures have been regrouped and rearranged wherever necessary so as to make them comparable with those of the current year.

 
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