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Notes to Accounts of Prag Bosimi Synthetics Ltd.

Mar 31, 2015

I) Contingent liabilities not provided for:

Sr. Particulars As At As At No. 31st March, 30th September, 2015 2013

a) Counter Guarantees for Sales tax 5,000 5,000

b) Claims against the Group not acknowledged as debts 321,594,000 64,243,000

c) Letter of undertaking executed in favour of Joint Director General of foreign trade under Duty Exemption Entitlement Scheme (Advance License Scheme) for custom duty 13,040,682 13,040,682

d) Letters of credit and Bank Guarantees given by bankers on behalf of the Company. 5,250,000 5,250,000

Contingent liabilities are considered only when converted into demands.

ii. The Board is contemplating taking steps for recovering the calls-in-arrears from defaulting applicants, including forfeiture of the shares as a last resort after exhausting all other avenues for recovery in a spirit of maintaining shareholder friendly environment. The Board therefore considers it prudent not to provide for the interest on calls-in-arrears.

iii. Estimated amount of contracts remaining to be executed on capital account net of advances is Rs. Nil (Previous Year Rs. Nil).

iv. During the period the company has paid 10% share application money of Rs. 49,906 to Prag Jyoti Tetile Park Pvt Ltd which is grouped under Current Assets.

v. Loans and Advances include Rs. 77,66,880 (Previous Year Rs. 77,28,700/- ) overdue from various parties on account of accommodation deposits, security deposits, advances given to suppliers, ex-employees, etc. Compensation for delayed payment, if any, will be accounted in the books of account, if and when realized. No provision is made since the Company has recovered part of the amount and is hopeful of recovering the balance amount.

vi. There is no amount overdue and remaining unpaid to small scale/or ancillary Industrial Suppliers on principal and/or interest as at the close of the period.

vii. Previous Period's figures have been regrouped/ reclassified/rearranged wherever necessary.

viii. In the opinion of the Board of Directors, in the ordinary course of business the value on realization of current assets, loans and advances, including security Deposits are at least equal to the amount at which they are stated in the Balance Sheet.

ix. Amounts appearing in Trade Receivables & Payables are realized and paid as on date of signing. Balances of Banks, Sundry Debtors, Sundry Creditors, Loans & Advance, and Deposits are subject to confirmation.

xi. The AS-17 "Segment Reporting" is not applicable as the Company has operated only in one segment i.e. manufacturing of Yarn.

xii. AS-18 Related Party Information:

Pursuant to AS-18 information on remuneration paid to Key Management Personnel is given in the report on Corporate Governance under the heading " Remuneration to Directors" for Shri. Hemant B.Vyas - Managing Director and Shri S. K. Saha - Finance Director.

xiii. During the period, the company has entered into One Time Settlement (OTS) with Standard Chartered Bank (SCB) in respect of their dues of holding 8% Optionally Cumulative Convertible Debentures (OCCD) worth Rs. 11.34 Crores, Unsecured Loan of Rs. 2.9 Crores and Interest Accrued, due and provided of Rs. 3.41 Crores upto 31.03.2015. As per the terms of OTS; Standard Chartered Bank is paid Rs. 2.26 Crores towards total dues of 8% OCCD holding, Rs. 0.25 crores towards Unsecured Loans and Interest Accrued and Due is totally waived. Therefore, the remaining balance in OCCD of Rs. 9.08 Crores, Rs. 1.84 Crores in Unsecured Loans of SCB and Interest Accrued and Due of Rs. 3.41 Crores being non payable to SCB are transferred to General Reserve as per legal advice.

xiv. Salary, Wages and other dues in respect of workers at Guwahati factory who had not attended to the work and for such workers total Salary, Wages of Rs. 81,16,327 and other dues of Rs. 4,23,678 for the period October, 2013 to March 2014 were provided in the accounts. As per legal and experts opinion, provision is not required and hence the same is written back as per the legal advice and expert's opinion.

xv. Prag Bosimi Synthetics Ltd (Holding Company) has two subsidiaries viz Prag Bosimi Texturising Pvt. Ltd. and Prag Bosimi Packaging Pvt. Ltd. Both these companies are non operating and non revenue generating. Therefore certain operating expenditure incurred by the company are absorbed by the holding Company. Accordingly such expenses incurred during the period are absorbed.


Sep 30, 2013

(A) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956.

The Company follows the accrual system of accounting and recognizes Income and Expenditure on accrual basis.

Accounting policies not referred to otherwise are consistent with the Generally Accepted Accounting Principles.

(i) Contingent liabilities not provided for:

Sr. Particulars As At As At No. 30th September, 31st March, 2013 2012

a) Counter Guarantees for Sales tax 5,000 5,000

b) Dividend payable on Cumulative

Convertible Preference Shares (Refer Note (ii) below)

c) Claims against the company not acknowledged as debts 6,42,43,000 6,14,00,000

d) Letter of undertaking executed in favour of Joint Director General of foreign trade under Duty Exemption Entitlement Scheme (Advance License Scheme) for custom duty 1,30,40,682 1,30,40,682

e) Letters of credit and Bank Guarantees given by bankers on behalf of the Company. 52,50,000 52,50,000

(ii) The Cumulative Convertible Preference Shares (CCPS) and Redeemable Convertible Cumulative Preference Shares (RCCPS) were also part of approved Corporate Debt Restructuring Scheme. In terms of Corporate Debt Restructuring Scheme, these CCPS and RCCPS have to be cancelled from the books of accounts. However such cancellation has the effect of reduction in capital as per the provisions of The Companies Act, 1956 which requires prior approval of High Court. The proposal was formally approved by the shareholders. Subsequently, approval of Guwahati High Court was received vide order dated 21st December, 2012. Therefore, CCPS of Rs. 10,00,00,000/- (1,00,000 shares of Rs. 100/ - each) & RCCPS of Rs. 71,46,25,000/-(71,46,250 shares of Rs. 100/- each) both totaling Rs. 81,46,25,000/- were cancelled on 16th February, 2013 from the accounts.

(iii) The board is contemplating taking steps for recovering the calls-in-arrears from defaulting applicants, including forfeiture of the shares as a last resort after exhausting all other avenues for recovery in a spirit of maintaining shareholder friendly environment. The Board therefore considers it prudent not to provide for the interest on calls-in-arrears.

(iv) Estimated amount of contracts remaining to be executed on capital account net of advances is Rs. Nil (Previous Period Rs. Nil/-)

(v) Loans and Advances include Rs. 77,28,700/-(Previous Period Rs. 3,83,27,274/-) overdue from various parties on account of accommodation deposits, security deposits, advances given to suppliers, ex-employees, etc. Compensation for delayed payment, if any, will be accounted in the books of account, if and when realized. No provision is made since the Company has recovered part of the amount and is hopeful of recovering the balance amount.

(vi) There is no amount overdue and remaining unpaid to small scale/or ancillary Industrial Suppliers on principal and/or interest as at the close of the period.

(vii) Previous period''s figures have been regrouped/ reclassified/rearranged wherever necessary.

(viii) In the opinion of the Board of Directors, in the ordinary course of business the value on realization of current assets, loans and advances, including security Deposits are at least equal to the amount at which they are stated in the Balance Sheet.

(ix) Amounts appearing in Trade Receivables & Payables are realized and paid as on date of signing. Balances of Banks, Sundry Debtors, Sundry Creditors, Loans & Advance, and Deposits are subject to confirmation.

(x) The AS-17 "Segment Reporting" is not applicable as the Company has operated only in one segment i.e. Manufacturing of Yarn.

(xi) AS-18 Related Party Information:

Pursuant to AS-18 information on remuneration paid to Key Management Personnel is given in the report on Corporate Governance under the heading "Remuneration to Directors" for Shri. Hemant B.Vyas - Managing Director and Shri S. K. Saha - Finance Director.

(xii) Additional information as far as applicable pursuant to the provision of paragraph 3, 4C, 4D of part II of the Schedule VI of the Companies Act, 1956 is as per Annexure I.

(xiii) Additional information pursuant to part IV of the Schedule VI of the Companies Act, 1956 is as per Annexure II.

(xiv) Cash flow Statement is annexed to this Schedule as Annexure III.


Mar 31, 2012

(1) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:

The financial statements have been prepared under the historical cost convention in accordance with the generally accepted accounting principles and the provisions of the Companies Act, 1956.

The Company follows the accrual system of accounting and recognizes Income and expenditure on accrual basis.

Accounting policies not referred to otherwise are consistent with the Generally Accepted Accounting Principles.

(1) Contingent liabilities not provided for:

Sr. Particulars As At As At No. 31 March, 2012 30th September, 2010 Rs Rs

i. Counter Guarantees for Sales tax 5,000 5,000

ii. Dividend payable on Cumulative Convertible Preference Shares ( Refer Note 2 below) - -

iii. Claims against the company not acknowledged as debts 61,400,000 34,242,000

iv. Letter of undertaking executed in favour of Joint Director General of foreign trade under Duty Exemption Entitlement Scheme (Advance License Scheme) for custom duty 13,040,682 13,040,682

v. Letters of credit and Bank Guarantees given by bankers on behalf of the Company. 5,250,000 5,250,000

(2) The Cumulative Convertible Preference Shares (CCPS) and Redeemable Convertible Cumulative Preference Shares (RCCPS) have also been part of approved Corporate Debt Restructuring Scheme. In terms of Corporate Debt

Restructuring Scheme, these CCPS and RCCPS have to be cancelled from the books of accounts. However such cancellation has the effect of reduction in capital as per the provisions of The Companies Act, 1956 which requires prior approval of High Court after this proposal has formally been approved by the shareholders. CCPS & RCCPS therefore will remain in the books of accounts till the cancellation thereof is approved by High Court. However, in accordance with Corporate Debt Restructuring Scheme, dividend liability in respect of the preference shares has been shown as nil in the current year in Note 1 (ii) above.

(3) As per the approved Corporate Debt Restructuring Scheme, the Company has issued 8% Optionally Cumulative Convertible Debentures against the balance amount payable to the Financial Institutions, Banks and Insurance Companies.

(4) The board is contemplating taking steps for recovering the calls-in-arrears from defaulting applicants, including forfeiture of the shares as a last resort after exhausting all other avenues for recovery in a spirit of maintaining shareholder friendly environment. The Board therefore considers it prudent not to provide for the interest on calls-in-arrears.

(5) Estimated amount of contracts remaining to be executed on capital account net of advances is Rs. Nil (Previous Year Rs. Nil/-)

(6) Loans and Advances include Rs.38,327,274/- (Previous Year Rs.38,476,664/-) overdue from various parties on account of accommodation deposits, security deposits, advances given to suppliers, ex-employees, etc. Compensation for delayed payment, if any, will be accounted in the books of account, if and when realized. No provision is made since the Company has recovered part of the amount and is hopeful of recovering the balance amount.

(7) There is no amount overdue and remaining unpaid to small scale/or ancillary Industrial Suppliers on principal and/or interest as at the close of the period

(8) Previous Period's figures have been regrouped / reclassified / rearranged wherever necessary.

(9) In the opinion of the Board of Directors, in the ordinary course of business the value on realization of current assets, loans and advances, including security Deposits are at least equal to the amount at which they are stated in the Balance Sheet.

(10) Balance of Sundry Debtors, Sundry Creditors, Loans & Advance and Deposits are subjecjt to confirmation.

(11) Profit and Loss Account of the curreht period includes following remuneration paid/creqited/accrued to managerial personnel.

(12) The AS-17 "Segment Reporting" is not applicable as the Company has operated only in one segment i.e. manufacturing of Yarn.

(13)AS-18 Related Party Information:

Pursuant to AS-18 information on remuneration paid to Key Management Personnel is given in the report on Corporate Governance under the heading "Remuneration to Directors" for Shr Hemant B.Vyas - Managing Director and Shri S. K. Saha - Wholetime cum Finance Director.

(14) Additional information as far as applicable pursuant to the provision of paragraph 3, 4C, 4D of part II of the Schedule VI of the Companies Act, 1956 is as per Annexure I.

(15)Additional information pursuant to part IV of the Schedule VI of the Companies Act, 1956 is as per annexure II.

(16)Cash flow Statement is annexed to this Schedule as Annexure III.


Sep 30, 2010

(1) Contingent liabilities not provided for:

Sr. Particulars As At As At No. 30/09/2010 31/09/2009 Rs. Rs.

1. Counter Guarantees for Sales tax 5,000 5,000

ii. Dividend payable on Cumulative Convertible Preference Shares (Refer Note 2 below) - -

iii. Claims against the company not acknowledged as debts 34,242,000 34,242,000

iv. Letter of undertaking executed in favour of Joint Director General of foreign trade under Duty Exemption Entitlement Scheme (Advance License Scheme) for custom duty 13,040,682 13.040.682

v. Letters of credit and Bank Guarantees given by bankers on behalf of the Company. 5,250.000 5,250,000

(2) The Cumulative Convertible Preference Shares (CCPS) and Redeemable Convertible Cumulative Preference Shares (RCCPS) have also been part of approved Corporate Debt Restructuring Scheme. In terms of Corporate Debt Restructuring Scheme, these CCPS and RCCPS have to be cancelled from the books of accounts. However such cancellation has the effect of reduction in capital as per the provisions of The Companies Act, 1956 which requires prior approval of High Court after this proposal has formally been approved by the shareholders. CCPS & RCCPS therefore will remain in the books of accounts till the cancellation thereof is approved by High Court. However, in accordance with Corporate Debt Restructuring Scheme, dividend liability in respect of the preference shares has been shown as nil in the current year in Note 1(ii) above.

(3) No provision for deferred taxation is made in accounts as the company has been incurring losses year after year and Companys business income is also exempt u/s 80IC of Income Tax Act of 1961.

(4) As per the approved Corporate Debt Restructuring Scheme, the Company has issued 8% Optionally Cumulative Convertible Debentures against the balance amount payable to the Financial Institutions, Banks and Insurance Companies.

(5) The board is contemplating taking steps for recovering the calls-in-arrears from defaulting applicants, including forfeiture of the shares as a last resort after exhausting all other avenues for recovery in a spirit of maintaining shareholder friendly environment. The Board therefore considers it prudent not to provide for the interest

on calls-in-arrears.

(6) Estimated amount of contracts remaining to be executed on capital account net of advances is Rs. Nil (Previous Year Rs. Nil/-)

(7) Loans and Advances include Rs. 38,476,664/- (Previous Year Rs. 7,943,550/-) overdue from various parties on account of accommodation deposits, security deposits, advances given to suppliers, ex-employees, etc. Compensation for delayed payment, if any, will be accounted in the books of account, if and when realized. No provision is made since the Company has recovered part of the amount and is hopeful of recovering the balance amount.

(8) The amount overdue and remaining unpaid to small scale/or ancillary Industrial Suppliers on principal and/or interest as at the close of the period could not be ascertained, since the suppliers/ service providers covered under Micro, Small Medium Enterprises Act, 2006 have not furnished the information regarding filing necessary memorandum with the appropriate authority. In absence of the said information, the Company is unable to identify units as well as furnish details required.

(9) Previous Periods figures have been regrouped / reclassified / rearranged wherever necessary.

(10) In the opinion of the Board of Directors, in the ordinary course of business the value on realization of current assets, loans and advances, including security Deposits are at least equal to the amount at which they are stated in the Balance Sheet.

(11) Balance of Sundry Debtors, Sundry Creditors, Loans & Advance and Deposits are subject to confirmation.

(12) Profit and Loss Account of the current year includes following remuneration paid/credited/ accrued to managerial personnel.

(13) The AS-17 "Segment Reporting" is not applicable as the Company has operated only in one segment i.e. Manufacturing of Yarn.

(14) AS-18 Related Party Information:

Pursuant to AS-18 information on remuneration paid to Key Management Personnel is given in the report on Corporate Governance under the heading "Remuneration to Directors" for Shri Hemant B.Vyas - Managing Director and Shri S. K. Saha - Finance Director.

There are no other related parties.

(15) Additional information as far as applicable pursuant to the provision of paragraph 3, 4C, 4D of part II of the Schedule VI of the Companies Act, 1956 is as per Annexure I.

(16) Additional information pursuant to part IV of the Schedule VI of the Companies Act, 1956 is as per Annexure II.

(17) Cash flow Statement is annexed to this Schedule as Annexure III.


Sep 30, 2009

(1) Contingent liabilities not provided for:

Sr. Particulars As At As At No. 30/09/2009 31/03/2008 Rs. Rs.

i. Counter Guarantees for Sales tax 5,000 5,000

ii. Dividend payable on Cumulative Convertible Preference Shares (Refer Note 3 below) - 153,330,963

iii. Claims against the company not acknowledged as debts 34,242,000 13,323,801

iv. Letter of undertaking executed in favour of Joint Director General of foreign trade under Duty Exemption Entitlement Scheme (Advance License Scheme) for custom duty 13,040,682 13,040,682

v. Letters of credit and Bank Guarantees given by bankers on behalf of the Company. 5,250,000 5,250,000

(2) No provision for deferred taxation is made in accounts as the company has been incurring losses year after year and there is uncertainty of making profits in near future. More over Companys business income is exempt u/s 80IC of Income Tax Act of 1961.

(3) The Cumulative Convertible Preference Shares (CCPS) and Redeemable Convertible Cumulative Preference Shares (RCCPS) have also been part of CDR package approved on 17/03/2009. In terms of CDR Package, these CCPS and RCCPS have to be cancelled from the books of accounts. However such cancellation has the effect of reduction in capital as per the provisions of The Companies Act, 1956 which requires prior approval of High Court after this proposal has formally been approved by the shareholders. CCPS & RCCPS therefore will remain in the books of accounts till the cancellation thereof is approved by High Court. However, in accordance with CDR Package, dividend liability in respect of the preference shares has been shown as nil in the current period in Note 1 under contingent liability provided for.

(4) Interest on loans, related preoperative expenses, custom duty, excise duty, etc. relating to the machineries and equipments not yet installed have been kept under Capital Work In Progress (CWIP).

(5) The approved CDR Package has resulted in the following benefits to the company:

(a) For Financial Institutions:-

i) 75% of the principal amount of term loans has been waived

ii) Entire accrued interest has been waived

iii) Settlement has been arrived at for the repayment of 25% of principal amount of term loans. The settled amount has to be paid as follows: -

a) 25% to be paid upfront

b) For balance 75%, Optionally Cumulative Convertible Debentures (OCCD) have to be issued.

(b) For Working Capital from Bankers

i) 80% of the amount outstanding Working Capital Loans as on 31.12.2005 has been waived.

ii) Settlement has been arrived at for the remaining 20% of the amount outstanding of working capital loans as on 31.12.2005. The settled amount to be paid as follows: -

a) 25% to be paid upfront

b) For balance 75% Optionally Cumulative Convertible Debentures (OCCD) have to be issued.

Accordingly Secured Loans has reduced by Rs. 688.19 Crore from Rs. 770.48 Crore.

Total amount Rs. 19.18 Crore towards 25% upfront payment as per the approved CDR Package have been paid to various Financial Institutions and Banks during the period 29.09.2010 to 08.10.2010. Balance amount of Rs. 57.54 Crore will be issued in the form of OCCD after the approval from Shareholders.

(6) Capital Work In Progress (CWIP) as on 30/09/2009 has been capitalized after giving effect of the approved CDR Package.

(7) The board is contemplating taking steps for recovering the calls-in-arrears from defaulting applicants, including forfeiture of the shares as a last resort after exhausting all other avenues for recovery in a spirit of maintaining shareholder friendly environment. The Board therefore considers it prudent not to provide for the interest on calls- in-arrears.

(8) Estimated amount of contracts remaining to be executed on capital account net of advances is Rs. Nil (Previous Year Rs. 26,685,369/-)

(9) During the current period, full provision has been made for doubtful overdue bills of exchange of Rs. Nil (Previous year Rs. 24,226,893/-) because the major drawee of Bills of exchange is under liquidation. Though the balance outstanding amount of Rs. Nil is considered fully doubtful of recovery, since the Company has obtained order from the Special Court appointed under the Special Court (Trial of Offences relating to Transactions & Securities) Act, 1992 the board considers it prudent not to write off the same as already explained last year. Writing off the Bills receivables from the books could be considered by appropriate authority as a unilateral waiver by the company of its claim thus negating the recovery suit filed by your company against the major drawee in liquidation.

(10) Loans and Advances include Rs. 7,943,550/- (Previous Year Rs. 1,13,369,041/-) overdue from various parties on account of accommodation deposits, security deposits, advances given to suppliers, ex-employees, etc. Compensation for delayed payment, if any, will be accounted in the books of account, if and when realized. No provision is made since the Company has recovered part of the amount and is hopeful of recovering the balance amount.

(11) During the period provision has been made in accounts for custom duty payable amounting to Rs. Nil (Previous Year Rs. 4,804,471/-) on imported capital equipments/goods received but not cleared from the customs. This has no impact on the Profit for the period. Interest accrued thereon till September 30, 2009 is Rs. 4,204,956/-

(12) The amount overdue and remaining unpaid to small scale/ or ancillary Industrial Suppliers on principal and/or interest as at the close of the period could not be ascertained, sinctf the suppliers/ service providers covered under Micro, Small Medium Enterprises Act, 2006 have not furnished the information regarding filing necessary memorandum with the appropriate authority. In absence of the said information, - the Company is unable to identify units as well as furnish details required.

(13) Previous Years figures have been regrouped/reclassified/ rearranged wherever necessary.

(14) In the opinion of the Board of Directors, in the ordinary course of business the value on realization of current assets, loans and advances, including security Deposits are at least equal to the amount at which they are stated in the Balance Sheet.

(15) Balance of Sundry Debtors, Sundry Creditors, Loans & Advance and Deposits are subject to confirmation.

(16) The AS-17 "Segment Reporting" is not applicable as the Company has operated only in one segment i.e. Manufacturing of Yam.

(17) AS-18 Related Party Information:

Pursuant to AS-18 information on remuneration paid to Key Management Personnel is given in the report on Corporate Governance under the heading "Remuneration to Directors" for Shri Hemant B. Vyas - Managing Director and Shri S. K. Saha - Finance Director.

There are no other related parties.

(18) Additional information as far as applicable pursuant to the provision of paragraph 3, 4C, 4D of part II of the Schedule VI of the Companies Act, 1956 is as per Annexure I.

(19) Additional information pursuant to part IV of the Schedule VI of the Companies Act, 1956 is as per Annexure II.

 
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