Mar 31, 2023
Rights, preferences and restrictions
The Company has only one class of equity shares having a par value of Re. 1 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 remaining assets of the company, after distribution of all preferential amounts, the distribution will be in proportion to the no. of equity shares held by shareholder.
No class of shares have been issued as bonus shares or for consideration other than cash by the Company during the period of five years immediately preceding the current period/ year end.No class of shares have been bought back by the Company during the period of five years immediately preceding the current year end.
The Company has Rs. NIL contingent liabilities for the period ending March 31, 2023 (Rs. Nil for the period ending March 31, 2022)
Capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is as follows:
(Rs. In Lakhs) |
|||
Year ended |
|||
Particulars |
Year ended March 31, 2023 |
March 31, |
|
2022 |
|||
Property, Plant and Equipments |
7,931.50 |
- |
|
Less: Capital advances and CWIP |
3,581.55 |
- |
|
Net Capital commitments |
4,349.95 |
- |
See accounting policy in Note 1.(h)
For details about the related employee benefit expenses, see Note 28 A. Defined Contribution Plan:
The Company''s defined contribution plans are superannuation, employees state insurance scheme and provident fund administered by Government since the Company has no further obligation beyond making the contributions.
B. Defined Benefit Obligation:
The Company provides for gratuity for employees as per the Payment of Gratuity Act, 1972/ Company policy. Employees who are in continuous service for a period of 5 years or more are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employeeâs last drawn salary per month computed proportionately as per the Payment of Gratuity Act, 1972/ Company policy multiplied for the number of years of service.
The results of the actuarial study for the obligation for employee benefits as computed by the actuary are shown below:
3 Terms and conditions of transactions with related parties
The transactions with related parties are made on terms equivalent to those that prevail in armâs length transactions. There have been no guarantees provided or received for any related party receivables or payables. No balances in respect of the related parties has been provided for written off / written back, except what is stated above.
Related party relationship is as identified by the management and relied upon by the auditors.
The Managing Director & CEO, and Executive Director & CFO are identified as Chief Operating Decision Maker of the Company. They are responsible for allocating resources and assessing the performance of the operating segments. Accordingly, they have determined âTextilesâ as its operating Segment.
Thus the segment revenue, interest revenue, interest expense, depreciation and amortisation, segment assets and segment liabilities are all as reflected in the Financial Statement as at and for the year ended March 31, 2023.
Basic EPS amounts are calculated by dividing the profit for the year attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
Diluted EPS amounts are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of Equity shares outstanding during the year.
38 Fair Value Measurement
Financial instruments
The details of significant accounting policies, including criteria for recognition, the basis of measurement and the basis on which income and expenditure are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1.
A Calculation of fair values
The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The following methods and assumptions were used to estimate the fair values of financial instruments:
i. The fair value of the long-term borrowings carrying floating-rate of interest is not impacted due to interest rate changes and will not be significantly different from their carrying amounts as there is no significant change in the under-lying credit risk of the Company (since the date of inception of the loans).
ii. Cash and cash equivalents, trade receivables, other financial assets, trade payables, and other financial liabilities have fair values that approximate to their carrying amounts due to their shortterm nature.
c. Fair value hierarchy
The Company uses the following hirerarchy for determining and/or disclosing the fair value of financial instruments by valuation techniques:
The categories used are as follows:
⢠Level 1: It includes financial instruments measured using quoted prices and the mutual funds are measured using the closing Net Asset Value (NAV).
⢠Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
⢠Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(A) Credit risk
Credit risk arises from the possibility that the value of receivables or other financial assets of the Company may be impaired because counterparties cannot meet their payment or other performance obligations.
To manage credit risks from trade receivables other than Related Party, the credit managers from Order to Cash department of the Company regularly analyse customerâs receivables, overdue and payment behaviours. Some of these receivables are collateralised and the same is used according to conditions. These could include advance payments, security deposits, post-dated cheques etc. Credit limits for this trade receivables are evaluated and set in line with Companyâs internal guidelines. There is no significant concentration of default risk."
Credit risks from financial transactions are managed independently by Finance department. For banks and financial institutions, the Company has policies and operating guidelines in place to ensure that financial instrument transactions are only entered into with high quality banks and financial institutions. The Company had no other financial instrument that represents a significant concentration of credit risk.
The Company considers the probability of default upon initial recognition of asset and whether there has been a significant increase in credit risk on an ongoing basis through out each reporting period. To assess whether there is a significant increase in credit risk the Company compares the risk of default occurring on asset as at the reporting date with the risk of default as at the date of initial recognition. It considers reasonable and supportive forwarding-looking information such as:
i) Actual or expected significant adverse changes in business,
ii) Actual or expected significant changes in the operating results of the counterparty,
iii) Financial or economic conditions that are expected to cause a significant change to the counterpartyâs ability to meet its obligations,
iv) Significant changes in the value of the collateral supporting the obligation or in the quality of the third-party guarantees or credit enhancements.
Financial assets are written off when there is no reasonable expectations of recovery. Where loans or receivables have been written off, the Company continues engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognized in statement of profit & loss.
Credit risk is managed at Company level.
For other financial assets, the Company assesses and manages credit risk based on internal control and credit management system. The finance function consists of a separate team who assess and maintain an internal credit management system. Internal credit control and management is performed on a Company basis for each class of financial instruments with different characteristics.
The Company considers whether there has been a significant increase in credit risk on an ongoing basis throughout each reporting period. It considers available reasonable and supportive forward-looking information.
Macroeconomic information (such as regulatory changes, market interest rate or growth rates) are also considered as part of the internal credit management system.
A default on a financial asset is when the counterparty fails to make payments as per contract. This definition of default is determined by considering the business environment in which entity operates and other macro-economic factors.
The Company measures the expected credit loss of trade receivables from individual customers based on historical trend, industry practices and the business environment in which the entity operates. Loss rates are based on actual credit loss experience and past trends. Based on the historical data, no additional provision has been considered necessary in respect of trade receivables more than 90 days for the 31st March 2023, since the management has taken suitable measures to recover the said dues and is hopeful of recovery in due course of time.
"The Company maintains exposure in cash and cash equivalents, deposits with banks, investments, and other financial assets. Individual risk limits are set for each counterparty based on financial position, credit rating and past experience. Credit limits and concentration of exposures are actively monitored by the Management of the Company. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company believes that the current value of trade receivables reflects the fair value/ recoverable values.
(B) Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation. Due to the dynamic nature of underlying businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecast of Companyâs liquidity position (comprising the undrawn borrowing facilities below) and cash and cash equivalents on the basis of expected cash flows. In addition, the companyâs liquidity management policy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans. "
Maturities of financial liabilities
The tables below analyse the companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for:
all non-derivative financial liabilities, and the amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant.
(C) Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates, interest rates and equity prices - will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters while optimising the return.
The Company is exposed to market risk primarily related to foreign exchange rate risk (currency risk), interest rate risk and market value of its investments. Thus the Companyâs exposure to market risk is a function of investing and borrowing activities and revenue generating and operating activities in foreign currencies. "
(i) Foreign Currency Risk
Foreign currency opportunities and risks for the Company result from changes in exchange rates and the related changes in the value of financial instruments (including receivables and payables) in the functional currency (INR). The Company is exposed to foreign exchange risk arising from foreign currency transactions primarily with respect to US Dollar(USD).
The USD exchange rate has changed substantially in recent periods and may continue to fluctuate substantially in the future. The Company has put in place a Financial Risk Management Policy to Identify the most effective and efficient ways of managing the currency risks. "
The following table details the Companyâs sensitivity to a 25 basis points increase and decrease in the Rupee against the relevant foreign currencies is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and represents managementâs assessment of the reasonably possible change in foreign exchange rates. This is mainly attributable to the net exposure outstanding on receivables or payables in the Company at the end of the reporting period. The sensitivity analysis includes only outstanding foreign currency denominated monetary items and adjusts their translation at the period end for a 0.25% change in foreign currency rate. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. In cases where the related foreign exchange fluctuation is capitalised to fixed assets or recognised directly in reserves, the impact indicated below may affect the Company''s income statement over the remaining life of the related fixed assets or the remaining tenure of the borrowing respectively.
(D) Cash flow and fair value interest rate risk - Interest rate risk management:
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market rates. The Companyâs exposure to the risk of changes in market rates relates primarily to the Companyâs long-term debt obligations with floating interest rates.
The Companyâs approach to managing interest rate risk is to have a judicious mix of borrowed funds with fixed and floating interest rate obligation. Moreover, the short-term borrowings of the Company do not have a significant fair value or cash flow interest rate risk due to their short tenure.
The Company is also exposed to interest rate risk on its financial assets that includes fixed deposits, since the same are generally for short duration, the Company believes it has manageable risk and achieving satisfactory returns. The Company also has long - term fixed interest bearing assets. However the Company has in place an effective system to manage risk and maximise return.
A reasonably possible change of 25 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables remain constant. In cases where the related interest rate risk is capitalised to fixed assets, the impact indicated below may affect the Company''s income statement over the remaining life of the related fixed assets.
The Companyâs exposure to price risk arises from investment in mutual funds and classified in the balance sheet as fair value through profit and loss. Mutual fund investments are susceptible to market price risk, mainly arising from changes in the interest rates or market yields which may impact the return and value of such investments. However, due to very short tenor of the underlying portfolio in the liquid schemes, these do not pose any significant price risk.
(a) Risk management
Additional Regulatory Information pursuant to Clause 6L of General Instructions for preparation of Balance Sheet as given in Part I of Division II of Schedule III to the Companies Act, 2013, are given hereunder to the extent relevant and other than those given elsewhere in any other notes to the Financial Statements.
a. The Company does not have any benami property, where any proceeding has been initiated or pending against the Company for holding any benami property.
b. The Company does not have any transactions with companies which are struck off
c. The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
d. The Company has not traded or invested in crypto currency or virtual currency during the financial year.
e. The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall)
i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (ultimate beneficiaries) or
ii. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries"
f. The Company has not received any fund from any person(s) or entity(ies), including foreign entities (funding party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
i. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the funding party (ultimate beneficiaries) or
ii. provide any guarantee, security or the like on behalf of the ultimate beneficiaries."
g. The Company does not have any transaction which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (such as, search or survey or any other relevant provisions of the Income Tax Act, 1961.
h. The Company is not declared wilful defaulter by any bank or financial institution or lender during the year.
i. The Company has Fund-based and Non-fund-based limits of Working Capital from a Bank. For the said facility, the revised submissions made by the Company to its banker based on closure of books of account at the year end, the revised quarterly returns or statements comprising stock statements, book debt statements, credit monitoring arrangement reports, statements on ageing analysis of the debtors/other receivables, and other stipulated financial information filed by the Company with such bank are in agreement with the unaudited books of account of the Company of the respective quarters and no material discrepancies have been observed.
j. The Company has used the borrowings from banks and financial institutions for the specific purpose for which it was taken as at Balance sheet date.
The Code on Social Security, 2020 (âCodeâ) relating to employee benefits during employment and post-employment benefits received Indian Parliament approval and Presidential assent in September 2020. The Code has been published in the Gazette of India. However, the date on which the Code will come into effect has not been notified. The Company will assess the impact of the Code when it comes into effect and will record any related impact in the period the Code becomes effective.
Ministry of Corporate Affairs (âMCAâ) notifies new standard or amendments to the existing standards under Companies (Indian Accounting Standards) Rules as issued from time to time. On March 31, 2023, MCA amended the Companies (Indian Accounting Standards) Rules, 2015 by issuing the Companies (Indian Accounting Standards) Amendment Rules, 2023, applicable from April 1, 2023, as below:
a) Ind AS 1 | Presentation of Financial Statements - The amendments require companies to disclose their material accounting policies rather than their significant accounting policies. Accounting policy information, together with other information, is material when it can reasonably be expected to influence decisions of primary users of general purpose financial statements.
b) Ind AS 12 | Income Taxes - The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The amendments narrowed the scope of the Initial recognition exemption of Ind AS 12 so that it no longer applies to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. Accordingly, companies will need to recognise a deferred tax asset and a deferred tax liability for temporary differences arising on transactions such as initial recognition of a lease and a decommissioning provision.
c) Ind AS 8 | Accounting Policies, Changes in Accounting Estimates and Errors - The definition of a âchange in accounting estimatesâ has been replaced with a definition of âaccounting estimatesâ. Accounting estimates are defined as âmonetary amounts in financial statements that are subject to measurement uncertaintyâ. Entities develop accounting estimates if accounting policies require items in financial statements to be measured in a way that involves measurement uncertainty.
The Company is in the process of evaluating the impact of these amendments.
The Company evaluates events and transactions that occur subsequent to the balance sheet date but prior to the approval of financial statements to determine the necessity for recognition and/or reporting of subsequent events and transactions in the financial statements.
46 Certain financial assets and financial liabilities are subject to formal confirmations and reconciliations, if any. The management, however, is confident that the impact whereof for the year on the financial statements will not be material.
47 Previous year figures have been re-grouped /re-classified wherever necessary to conform current years'' classification.
Mar 31, 2015
1. Corporate Debt Restructuring
Raj Rayon Industries Limited hereinafter referred to as the 'Borrower',
who have availed various financial facilities from the secured lenders.
At the request of the Borrower, the Corporate Debt Restructuring
Proposal ('QDR Proposal') of the Borrower was referred to Corporate
Debt Restructuring Cell ("CDR Cell") by the consortium of lenders led
by the State Bank of India. The CDR Proposal as recommended by State
Bank of India, the lead lender and approved by lenders who are members
of CDR Cell hereinafter referred to as the 'CDR Lenders' was approved
by CDR Empowered Group ('CDR EG') on March 24, 2014 and communicated
vide Letter of Approval dated March 27,2014. The cutoff date for CDR
Proposal was August 01, 2013. The Master Restructuring Agreement
('MRA') between the Borrowers, guarantors and the CDR Lenders has been
executed, by virtue of which the restructured facilities are governed
by the provisions specified in the MRA having cutoff date ('COD') of
August 01, 2013. The key features of the CDR Proposal are as follow:
1. Restructuring of repayment Schedule of Restructured Term Loan - 1 &
2 (RTL - 1 & 2)
2. Repayment of Restructured Term Loan - 3 ('RTL - 3') after
moratorium of 2 year from COD in 24 structured quarterly installments
commencing from October, 2015 to July, 2021.
3. Conversion of various irregular/outstanding/devolved financial
facilities into Working Capital Term Loan ('WCTL'). Repayment of WCTL
after moratorium of 2 year from COD in 24 structured quarterly
installments commencing from October, 2015 to July, 2021.
4. Restructuring of existing fund based and non fund based financial
facilities, subject to renewal and reassessment every year.
5. Interest accrued on certain financial facilities from COD till the
facility wise specified period shall be converted into Funded Interest
Term Loan ('FITL'). The interest payable on RTL 1 & RTL - 2 for a
period of 18 months from COD till January 31, 2015 shall be converted
to FITL - I. The Interest payable on RTL -3 and WCTLI, WCTL II & WCTL
III during moratorium period of 2 years from COD shall also be
converted to FITL - II. The Interest paid on Unhedged Foreign Currency
Facilities (LC, BC and FCNR) post Dec 31, 2013 shall also be converted
into FITL - 3.
6. The rate of interest on RTL 1 & RTL - 2 remains unchanged whereas
rate of Interest on RTL - 3, WCTL, FITL shall be 12.70% and fund based
working capital facilities shall be 11% with reset option in accordance
with MRA.
7. Waiver of all liquidated damages / penal charges / processing fees
/ penal interest or excess interest (in excess of documented rate) on
any of the facilities till the implementation of Restructuring Scheme.
8. Right of Recompense to CDR Lenders for the relief and sacrifice
extended, subject to provisions of CDR Guidelines and MRA.
9. Contribution of Rs. 10.98 Crores in the Company by promoters in
lieu of lenders sacrifice in the form of introduction of funds by way
of Unsecured Loans.
In case of financial facilities availed from the Non-CDR Lenders, the
terms and conditions shall continue to be governed by the provisions of
the existing financing documents.
Expenditure on restructuring and refinancing of earlier financial
facilities has been charged off over a period of 9 years.
The Borrowers and the CDR Lenders executed a MRA during the year. The
MRA as well as the provisions of the Master Circular on Corporate Debt
Restructuring issued by the Reserve Bank of India, give a right to the
CDR Lenders to get a recompense of their waivers and sacrifices made as
part of the CDR Proposal. The recompense payable by the borrowers is
contingent on various factors including improved performance of the
borrowers and many other conditions, the outcome of which currently is
materially uncertain and hence the proportionate amount payable as
recompense has been treated as a contingent liability. The aggregate
present value of the outstanding sacrifice made/ to be made by CDR
Lenders as per the MRA is approximately Rs. 37.06 crore for the
Company.
2. SHARE CAPITAL
2.a The principle rights, powers, preferences and restrictions relating
to each class of share capital are as follows:
(i) Equity Shares - The Company has issued only one class of Equity
Shares having a par value of Rs. 1/- per share. Each Holder of Equity
Shares is entitled to one vote per share. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in
the ensuring Annual General Meeting. In the event of Liquidation of the
Company, the holders of equity shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of Equity
Shares held by the Shareholders.
(ii) Preference Shares - The preference shareholders shall have the
right to receive all notices of General Meetings of the Company but
shall not confer thereon the right to vote at any meeting. The
Preference Shareholders shall be entitled to receive dividend @ 15% per
annum from the date of allotment till the date of redemption on
proportionate basis. The Preference Shareholders shall rank in priority
to the Equity Shares for repayment of capital and payment of dividend.
The Company shall redeem starting from the end of thirteenth year on
yearly basis 1/3rd Preference Shares from the date of allotment at the
rate of Rs. 10/- each at a premium of Rs. 20/- each till the end of
fifteenth year. The Company shall have the option to prematurely
redeem in part or in full the outstanding amount on preference shares
at a price of Rs. 10/- each at a premium of Rs. 20/- each at any point
of time after the end of three years from the date of allotment by
giving three month notice in writing to the Preference Shareholders.
2.b Information regarding issue of shares in the last five years:
a) The Company has not issued any shares without payment being received
in cash.
b) The Company has not issued any bonus shares.
c) The Company has not undertaken any buy-back of shares.
3. CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT PROVIDED
FOR)
(Rs. in Lacs)
PARTICULARS As at As at
31.03.2015 31.03.2014
(i) Contingent liabilities:
(a) Notices or show cause which received
from Excise department (excluding a 1093.00 1093.00
show cause notice received from
Additional Director General, DGCEI, MZU,
Mumbai since amount is unascertainable).
(b) Show cause notices for levy of cess. 7.82 7.82
(c) Notice received from SEBI, for delay in
submission of certain information to BSE. 1.75 1.75
(d) Show cause notices received from
Commercial Tax Officer, Ahmedabad 558.83 558.83
(ii) Contingent commitments
Estimated amount of contracts, net of
advances, remaining to be executed on 41.37 119.73
capital account.
Other commitments (Raw Materials) 367.43 -
4. SEGMENT REPORTING
The company operates in a single segment i.e. textile having same risk
and return. Hence reporting as per Accounting Standard (AS-17) 'Segment
Reporting' is not applicable to the company.
5. RELATED PARTY DISCLOSURES (AS PER AS 18 ISSUED BY ICAI) :
I) Names of related parties and description of relationships
a) Party owning an interest in voting power of the company that gives
it significance influence over the company:
Raj Money Market Limited
b) Key management personnel:
i) Mr. Naval Babulal Kanodia - Whole-time Director (Appointed w.e.f
28/03/2014)
ii) Mr. Gourishankar Poddar - Chairman & Managing Director (Resigned
w.e.f. 18/03/2014)
iii) Mr. Sushil Kumar Kanodia - Chief Executive Officer (C.E.O.) &
Chief Financial Officer (C.F.O.)
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence:
i) Gourishankar Poddar HUF
ii) Sangam Spinfab Limited
6. EMPLOYEE BENEFIT EXPENDITURE
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006,
are given below:
a) Defined Benefit Plan:
Leave Encashment : During the year 2014-15, the amount paid to
employees as leave encashment is Rs. 5.93 Lacs (Rs. 6.68 Lacs).
Gratuity : The employee's gratuity scheme is non -fund based. The
present value of obligation is determined based on actuarial valuation
using the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation.
7. As informed by the management, the Company's Continuous
Polymerization Plant (CP Plant), Direct Polymer Melt POY Plant (DPM POY
Plant) and other Plants (POY, FDY & PTY) are operational.
8. In the Opinion of the Board, the Current Assets / Non Current
Assets, Loans & Advances (including Export benefits/ incentive /
interest subsidy under TUF) and Trade Payables are subject to
confirmation / reconciliation.
9. Figures for the previous year have been reworked, regrouped,
rearranged and reclassified wherever necessary.
Amounts and other disclosures for the preceding year are included as an
integral part of the current year financial statements and are to be
read in relation to the amounts and other disclosures relating to the
current year.
Mar 31, 2014
Note 1. Corporate Debt Restructuring:
Raj Rayon Industries Limited hereinafter referred to as the ''Borrower'',
who have availed various financial facilities from the secured lenders.
At the request of the Borrower, the Corporate Debt Restructuring
Proposal (''£DR Proposal'') of the Borrower was referred to Corporate
Debt Restructuring Cell ("CDR Cell") by the consortium of lenders led
by the State Bank of India. The CDR Proposal as recommended by State
Bank of India, the lead lender and approved by lenders who are members
of CDR Cell hereinafter referred to as the ''CDR Lenders'' was approved
by CDR Empowered Group (''CDR EG'') on March 24, 2014 and communicated
vide Letter of Approval dated March 27,2014. The cutoff date for CDR
Proposal was August 01, 2013. The Master Restructuring Agreement
(''MRA'') between the Borrowers, guarantors and the CDR Lenders has been
executed, by virtue of which the restructured facilities are governed
by the provisions specified in the MRA having cutoff date (''COD'') of
August 01, 2013.
The key features of the CDR Proposal are as follow:
- Restructuring of repayment Schedule of Restructured Term Loan - 1 & 2
(''RTL - 1 & 2)
- Repayment of Restructured Term Loan - 3 (''RTL - 3'') after moratorium
of 2 year from COD in 24 structured quarterly installments commencing
from October 2015 to July 2021
- Conversion of various irregular/outstanding/devolved financial
facilities into Working Capital Term Loan (''WCTL''). Repayment of WCTL
after moratorium of 2 year from COD in 24 structured quarterly
installments commencing from October 2015 to July 2021.
- Restructuring of existing fund based and non fund based financial
facilities, subject to renewal and reassessment every year.
- Interest accrued on certain financial facilities from COD till the
facility wise specified period shall be converted into Funded Interest
Term Loan (''FITL''). The interest payable on RTL - 1 & RTL - 2 for a
period of 18 months from COD till January 31, 2015 shall be converted
to FITL - I. The Interest payable on RTL -3 and WCTL I, WCTL II & WCTL
III during moratorium period of 2 years from COD shall also be
converted to FITL - II. The Interest paid on Unhedged Foreign Currency
Facilities (LC, BC and FCNR) post Dec 31, 2013 shall also be converted
into FITL - 3.
- The rate of interest on RTL - 1 & RTL - 2 remains unchanged whereas
rate of Interest on RTL - 3, WCTL, FITL shall be 12.70% and fund based
working capital facilities shall be 11% with reset option in accordance
with MRA.
- Waiver of all liquidated damages / penal charges / processing fees /
penal interest or excess interest (in excess of documented rate) on any
of the facilities till the implementation of Restructuring Scheme.
- Right of Recompense to CDR Lenders for the relief and sacrifice
extended, subject to provisions of CDR Guidelines and MRA.
- Contribution of '' 10.98 Crores in the Company by promoters in lieu of
lenders sacrifice in the form of introduction of funds by way of
Unsecured Loans.
In case of financial facilities availed from the Non-CDR Lenders, the
terms and conditions shall continue to be governed by the provisions of
the existing financing documents.
Expenditure on restructuring and refinancing of earlier financial
facilities has been charged off over a period of 9 years.
The Borrowers and the CDR Lenders executed a MRA during the year. The
MRA as well as the provisions of the Master Circular on Corporate Debt
Restructuring issued by the Reserve Bank of India, give a right to the
CDR Lenders to get a recompense of their waivers and sacrifices made as
part of the CDR Proposal. The recompense payable by the borrowers is
contingent on various factors including improved performance of the
borrowers and many other conditions, the outcome of which currently is
materially uncertain and hence the proportionate amount payable as
recompense has been treated as a contingent liability. The aggregate
present value of the outstanding sacrifice made/ to be made by CDR
Lenders as per the MRA is approximately Rs. 37.06 crore for the Company.
2.b The principle rights,powers,preferences and restrictions relating
to each class of share capital are as follows;
(i) Equity Shares - The Company has issued only one class of Equity
Shares having a par value of Rs. 1/- per share. Each Holder of Equity
Shares is entitled to one vote per share. The dividend proposed by the
Board of Directors is subject to the approval of the shareholders in
the ensuring Annual General Meeting.In the event of Liquidation of the
Company, the holders of Equity Shares will be entitled to receive
remaining assets of the Company, after distribution of all preferential
amounts. The distribution will be in proportion to the number of Equity
Shares held by the Shareholders."
(ii) Preference Shares - The Preference Shareholders shall have the
right to receive all notices of General Meetings of the Company but
shall not confer thereon the right to vote at any meeting. The
Preference Shareholders shall be entitled to receive dividend @ 15% per
annum from the date of allotment till the date of redemption on
proportionate basis. The preference shareholders shall rank in priority
to the Equity shares for repayment of capital and payment of dividend.
The Company shall redeem starting from the end of thirteenth year on
yearly basis 1/3rd Preference Shares from the date of allotment at the
rate of Rs. 10/- each at a
NOTES ON FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2014
premium of Rs. 20/- each till the end of fifteenth year. The Company
shall have the option to prematurely redeem in part or in full the
outstanding amount on preference shares at a price of Rs. 10/- each at a
premium of Rs. 20/- each at any point of time after the end of three
years from the date of allotment by giving three month notice in
writing to the Preference Shareholders.
2.c Shareholders holding more than 5% share capital at the end of the
year :
(ii) Terms of conversion of share warrants into equity shares:
Each share warrant of Rs. 17/- outstanding at the end of previous
reporting periods was convertible into one equity share at a
premium of Rs. 7/- at the option of warrant holders to be exercised
within a period of 18 months from the date of allotment of
share warrants i.e. 03rd January, 2011. Therefore the share warrants
are optionally convertible into Equity Shares on or before 02nd July,
2012.
(iii) During the year the Company has forfeited the application money
amounting to Rs. Nil /- (Previous Year Rs. 114.30 Lacs being the initial
25% of the warrant price on 2689300 warrants received by the Company
from promoters / non promoters due to non exercising the option to
convert the same into equity and accordingly it has been transferred to
reserves).
2.e Information regarding issue of shares in the last five years :-
a) The Company has not issued any shares without payment being received
in cash.
b) The Company has not issued any bonus shares.
c) The Company has not undertaken any buy-back of shares.
A. Secured Loans:
1) In case of financial facilities from CDR Lenders in accordance with
MRA, Term Loan (TL) of Rs. 25090.23Lacs, Working Capital Term Loan (WCTL)
of Rs. 24286.02 Lacs, Funded Interest Term Loan (FITL) of Rs.2186.92 Lacs
and Fund Based Working Capital of Rs.2856.05 Lacs and Non Fund Based
working Capital facility (Bank Guarantee) of Rs. 425.25 Lacs are secured
by -
- All chargeable present & future tangible / intangible movable assets
of the Company, first charge on all chargeable on all present & future
immovable assets (excluding the identified properties) of the Company,
first charge on all the present & future chargeable current assets of
the Company.
- Extension of equitable mortgage on residential Flat no.T-35/706, 7th
Floor, "Golden Heights" Co-operative Housing Society Limited owned by
Mrs. Rajkumari Kanodia.
- Lien on TDR of Rs. 29.00 Lacs.
- Personal Guarantee of Mr. Gourishankar Poddar and Mrs. Rajkumari
Kanodia.
- Corporate Guarantee of M/s Raj Money Market Limited.
- Pledge of 100735,930 Equity Shares of the Company (held by
promoters).
3) Term Loan from Kotak Mahindra Prime Limited & HDFC Bank Limited are
secured by hypothecation of specific vehicles.
Nature of security:
(i) The rate of Interest under Working Capital Loans ranges between
10.20 % to 14.45 % depending upon the prime lending rate of the banks,
wherever applicable and the interest rate spread agreed with the banks.
With cut off date the rate of interest is fixed as 11%. For details of
security given for short term borrowings, refer Note no. 5 above.
(b) On the basis of information and records available with the company,
there are no Micro and Small Enterprises, which have registered with
the competent authority under the Micro, Small and Medium Enterprises
Development Act, 2006 and relied upon by the Auditors.
NOTE 4: CONTINGENT LIABILITIES AND COMMITMENTS (TO THE EXTENT NOT
PROVIDED FOR)
(RS in Lacs)
As at As at
31.03.2014 31.03.2013
(i) Contingent liabilities:
(a) Guarantees given by the bankers. 425.25 497.25
(b) Notices or show cause which received 1093.00 1093.00
from Excise department
(excluding a show cause notice received from
Additional Director General, DGCEI, MZU,
Mumbai since amount is unascertainable).
(c) Show cause notices for levy of cess. 7.82 7.82
(d) Inland / Foreign letter of credit (Import) - 163.80
issued by the bankers.
(e) Sales bills discounted with State Bank of India. - 1011.61
(f) Notice received from SEBI, for delay in 1.75 1.75
submission of certain information to BSE.
(g) Impairment loss, if any, on realisation of - 88.61
suit filed debts.
(h) Undertakings given by the company under 7448.40 8837.31
EPCG Scheme,Pending fulfilment of export
obligation.
(i) Show cause notices received from Commercial 558.83 -
Tax Officer, Ahmedabad
(ii) Contingent commitments
Estimated amount of contracts, net of advances, 119.73 34.54
remaining to be executed on capital account.
NOTE 5: SEGMENT REPORTING
The company operates in a single segment i.e. textile having same risk
and return. Hence reporting as per Accounting Standard (AS-17) ''Segment
Reporting'' is not applicable to the company.
NOTE 6: RELATED PARTY DISCLOSURES
I) Names of related parties and description of relationships:
a) Party owning an interest in voting power of the company that gives
it significance influence over the company:
Raj Money Market Limited
b) Key management personnel:
i) Shri Gourishankar Poddar - Chairman & Managing Director (Resigned
w.e.f. 18/03/2014)
ii) Shri Sushil Kumar Kanodia - Executive Officer
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence:
i) Gourishankar Poddar HUF
ii) Sangam Spinfab Limited
NOTE 7: EMPLOYEE BENEFIT EXPENDITURE
The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006,
are given below:
b) Defined Benefit Plan:
Leave Encashment : During the year 2013-14, the amount paid to
employees as leave encashment is Rs. 6.68 Lacs (Rs. 2.70 Lacs).
Gratuity : The employee''s gratuity scheme is non -fund based. The
present value of obligation is determined based on actuarial valuation
using the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additional unit of employee benefit
entitlement and measures each unit separately to build up the final
obligation.
The estimates of future salary increases considered takes into account
the inflation, seniority, promotion and other relevant factors. The
above information is certified by the actuary.
Note 8: As informed by the management, the Company''s Continuous
Polymerization Plant (CP Plant), commercial production of which was
commenced from 01st July, 2013 has been temporarily shutdown from
November, 2013 onwards. The CP Plant will restart after successful
commissioning of Direct Polymer Melt POY Plant (DPM POY Plant) which is
scheduled to be operational in July, 2014. The Company''s other Plants
(PTY, POY & FDY) were running partially and temporarily shutdown in the
month of March, 2014 due to negative Margins. The Company has restarted
the PTY plant partially and will be fully operational with other plants
once the margin improves.
Note 9: In the Opinion of the Board, the Current Assets / Non Current
Assets, Loans & Advances (including Export benefits / incentive/
interest subsidy under TUF) and Trade Payables are subject to
confirmation / reconciliation.
Note 10: Figures for the previous year have been reworked, regrouped,
rearranged and reclassified wherever necessary.Amounts and other
disclosures for the preceding year are included as an integral part of
the current year financial statements and are to be read in relation to
the amounts and other disclosures relating to the current year.
Mar 31, 2013
Note 1:CONTINGENT LIABILITIES AND COMMITMENTs (TO THE EXTENT NOT
PROVIDED FOR)
(Rs. in Lacs)
As at 31.03.2013 As at 31.03.2012
(i) Contingent liabilities:
(a) Guarantees given by the bankers. 497.25 425.25
(b) Notices or show cause which
received from Excise department
(excluding a show cause notice
received from Additional Director
General, DGCEI, MZU, Mumbai since
amount is unascertainable). 1093.00 1093.00
(c) Show cause notices for levy of
cess. 7.82 7.82
(d) Inland / Foreign letter of
credit (Import) issued by the
bankers. 163.80 4586.17
(e) Sales bills discounted with SBI
Global Factors Ltd. 0.00 290.11
(f) Sales bills discounted with
State Bank of India. 1011.61 466.87
(g) Notice received from SEBI,
for delay in submission of certain
information to BSE. 1.75 1.75
(h) Impairment loss, if any, on
realisation of suit filed debts. 88.61 88.61
(i) Undertakings given by the
company under EPCG Scheme,
pending fulfilment of export
obligation. 8837.31 Nil
(ii) Contingent commitments
Estimated amount of contracts,
net of advances, remaining to be
executed on capital account. 34.54 9411.50
Note 2: Utili zation of proceeds of securities issued during the
current reporting period
The money received in respect of the conversion of warrants into equity
shares and 15% Non Convertible Non Cumulative Redeemable Preference
Shares are utilised by the company for meeting its capital expenditure,
new growth opportunities and for general corporate purpose.
Note 3: Segment reporting
The company operates in a single segment i.e. textile having same risk
and return. Hence reporting as per Accounting Standard (AS-17) ''Segment
Reporting'' is not applicable to the company.
Note 4: Related Party Disclosures
I) Names of related parties and description of relationships:
a) Party owning an interest in voting power of the company that gives
it significance influence over the company: Raj Money Market Limited
b) Key management personnel:
i) Shri Gourishankar Poddar - Chairman & Managing Director
ii) Shri Sushil Kumar Kanodia - Executive Officer
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence:
i) Gourishankar Poddar HUF
ii) Sangam Spinfab Limited
b) Defned Beneft Plan:
Leave Encashment : During the year 2012-13, the amount paid to
employees as leave encashment is Rs. 2.70 Lac (Rs. 2.89 Lac).
Gratuity : The employee''s gratuity scheme is non -fund based. The
present value of obligaton is determined based on actuarial valuaton
using the Projected Unit Credit Method, which recognizes each period of
service as giving rise to additonal unit of employee beneft enttlement
and measures each unit separately to build up the fnal obligaton.
Note 5: In the Opinion of the Board, the Current Assets / Non Current
Assets, Loans & Advances (including Export benefts / incentve /
interest subsidy under TUF) and Trade Payables are subject to
confrmaton / reconciliaton.
Note 6: Figures for the previous year have been reworked, regrouped,
rearranged and reclassifed wherever necessary.Amounts and other
disclosures for the preceding year are included as an integral part of
the current year fnancial statements and are to be read in relaton to
the amounts and other disclosures relatng to the current year.
Mar 31, 2012
(i) Terms of conversion of share warrants into equity shares:
Each share warrant of Rs. 17/- outstanding at the end of both the periods
is/was convertible into one equity share at a premium of Rs. 7/- at the
option of warrant holders to be exercised within a period of 18 months
from the date of allotment of share warrants i.e. 3rd January, 2011.
Therefore the share warrants are optionally convertible into equity
shares on or before 2nd July, 2012.
A. Secured Loans:
(a) Nature of security:
(i) Term loans are secured by Equitable Mortgage of factory premises of
all the units and Hypothecation of plant and machineries and other
fixed assets and further secured by charge over current assets of the
company in favour of State Bank of India, State Bank of Mysore, State
Bank of Hyderabad, State Bank of Patiala and The South Indian Bank
Limited on pari-passu basis.
(ii) Term loan from Kotak Mahindra Prime Ltd & HDFC Bank are secured by
hypothecation of specific vehicles.
(iii) Loans including non funded facilities from State Bank of India,
State Bank of Hyderbad, State bank of Mysore, State Bank of Patiala and
The South Indian Bank Limited are further secured by corporate
guarantees of Raj Money Market Limited and personal guarantees of Mr.
Gourishankar Poddar, Chairman & Managing Director and Mrs. Raj Kumari
Kanodia a non executive director of the company and lien on FDR of Rs.
2900000.
(i) Working capital loans including non funded facilities are secured
by hypothecation charge (pari-passu) on entire current assets of the
company and further secured by charge on all the fixed assets of the
company on pari-pasu basis between State Bank of India, State Bank of
Hyderabad and State Bank of Mysore.
(ii) Working capital loans including non funded facilities from State
Bank of India, State Bank of Hyderabad and State bank of Mysore are
further secured by corporate guarantees of Raj Money Market Limited and
personal guarantees of Mr. Gourishankar Poddar, Chairman & Managing
Director and Mrs. Raj Kumari Kanodia a non executive director of the
company and lien on FDR of Rs. 2900000.
NOTE 1: UTILISATION OF PROCEEDS OF SECURITIES ISSUED DURING THE
CURRENT REPORTING PERIOD
The money received in respect of the conversion of warrants into equity
shares is utilised by the company for meeting its capital expenditure,
new growth opportunities and for general corporate purpose as stated in
the Notice of Postal Ballot dated 18th October, 2010.
NOTE 2: SEGMENT REPORTING
The company operates in a single segment i.e. textile having same risk
and return. Hence reporting as per Accounting Standard (AS-17) 'Segment
Reporting' not applicable to the company.
NOTE 3: LEASE
The company has taken office premises under-operating lease or on leave
and license basis.This is not non-cancellable and for a period ranging
between 11 months and above and are renewable at mutual consent on
mutually agreeable terms.The company has given refundable interest free
security deposits in accordance with the agreed terms.The rent paid in
accordance with the agreements has been debited to profit and loss
account for the year.
NOTE 4: RELATED PARTY DISCLOSURES:
I) Names of related parties and description of relationships
a) Party owning an interest in voting power of the company that gives
it significance influence over the company: Raj Money Market Limited
b) Key management personnel:
i) Shri Gourishankar Poddar - Chairman & Managing Director
ii) Shri Sushil Kumar Kanodia - Executive Officer
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence:
i) Gourishankar Poddar HUF
ii) Sangam Spinfab Limited
b) Defined Benefit Plan:
Leave Encashment : During the year 2011-12, the amount paid to
employees as leave encashment is Rs. 289293 (Rs. 259332). Gratuity : The
employee's gratuity scheme is non-fund based. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
NOTE 5: INCOME TAX MATTERS
a) Regular assessments of the return of income filed by the company
have been completed upto assessment year ("AY") 2009-2010;
b) Application for giving effect to the order of CIT(A) for AY
2001-2002 is pending before the Assessing Officer. Since the appeal was
partly decided in favour of the company, on giving effect to the order
CIT(A), the income tax demand of Rs. 77434 will become nil.
c) Application for giving effect to the order of CIT(A) for AY
2004-2005 is pending before the Assessing Officer. Since the appeal was
decided in favour of the company, on giving effect to the order of
CIT(A) the income tax demand of Rs. 2546695 will become nil.
d) Application for giving effect to the order of CIT(A) for AY
2007-2008 is pending before the Assessing Officer. Since the appeal was
partly decided in favour of the company and company has already made
full payment of demand, on giving effect to order of CIT(A) there will
not be any tax liability.
e) Rectification application for AY 2009-2010 is pending before the
assessing officer.
Note 6: Figures for the previous year have been reworked, regrouped,
rearranged and reclassified wherever necessary. Amounts and other
disclosures for the preceding year are included as an integral part of
the current year financial statements and are to be read in relation to
the amounts and other disclosures relating to the current year.
Mar 31, 2011
1. In the opinion of the Board, the current assets, loans and advances
are approximately of the value stated if realised in the ordinary
course of business. The provision for all the known liabilities is
adequate. There is no unrecognised impairment loss.
2. Contingent liabilities not provided for:
a) Guarantees given by the bankers of the company amounting to Rs.
328.75 lacs (Rs. 391.25 lacs) against the fixed deposit of Rs. 34.85
lacs (Rs. 40.32lacs) kept as margin money;
b) In respect of Excise matters Rs. 916.78 lacs (Rs. 584.75 lacs)
(excluding a show cause notice received from Additional Director
General, DGCEI, MZU, Mumbai where amount is unascertainable), for
demand and show cause notices received, as per legal opinion taken, the
Board is of the view that the company has a very fair chance of
succeeding in these matters;
c) In respect of levy of Cess Rs. 7.82 lacs (Rs. 7.82 lacs), for demand
and show cause notices received, as per legal opinion taken, the Board
is of the view that the company has fair chances of succeeding in the
matter at higher forum;
d) Inland / Foreign letter of credit (Import) issued by the bank
amounting to Rs. 32.50 lacs (Rs. 60.38 lacs);
e) Sales bills discounted with SBI Global Factors Ltd Rs. 284.17 lacs
(Rs. 283.74 lacs);
f) Sales bills discounted with State Bank of India Rs. 404.34 lacs (Rs.
Nil);
g) Notice received from SEBI, for delay in submission of certain
information to BSE, amounting to Rs. 1.75 lacs (Rs. 1.75 lacs);
h) Liability, if any, arising on account of undertakings given by the
company under EPCG Scheme, pending fulfilment of export obligation
approximately Rs. 818.61 lacs (Rs. 248.86 lacs); and
i) Impairment loss, if any, on realisation of suit filed debts Rs.
88.61 lacs (Rs. 92.68 lacs).
3. Related Party Disclosures:
I. Names of related parties and description of relationships
a) Party owning an interest in voting power of the company that gives
it significance influence over the company:
Raj Money Market Limited
b) Key management personnel:
(i) Shri Gourishankar Poddar - Chairman & Managing Director (ii) Shri
Sushil Kumar Kanodia - Executive Officer
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence:
(i) Gourishankar Poddar HUF
(ii) Sangam Spinfab Limited
4. No commission has been paid to the directors and only the
remuneration by way of salary and perquisites has been paid to the
directors as per the section 198, 309 and Schedule XIII of the
Companies Act, 1956 as under:
Note:
Managerial remuneration does not include gratuity benefits since the
same are computed on the basis of actuarial valuation for all the
employees and the amount attributable to the managerial person cannot
be ascertained separately.
5. Income tax matters:
a) Regular assessments of the return of income filed by the company
have been completed up to assessment year ("AY") 2008-2009;
b) Application for giving effect to the order of CIT(A) for assessment
year 2004-2005 is pending before the Assessing Officer. Since the
appeal was decided in favour of the company, the income tax demand of
Rs. 25.47 lacs will become nil.
c) Application for giving effect to the order of CIT(A) for assessment
year 2007-2008 is pending before the Assessing Officer. Since the
appeal was partly decided in favour of the company and company has
already made full payment of demand, there will not be any tax
liability.
6. The Company operates in a single segment i.e. textile having same
risk and return. Hence reporting as per Accounting Standard (AS- 17)
'Segment Reporting' not applicable to the Company.
7. Dadra unit, Amli Unit and Surangi Unit are also called by the name
Unit-I, Unit-II and Unit-IV respectively.
8. Preferential allotment of share warrants in accordance with the
provisions of SEBI (ICDR) Guidelines, 2009:
a) During the year, 9,46,500 equity share warrants of Rs. 10/- each
were converted into equity share of Rs. 10/- each which were
outstanding at the beginning of the year;
b) During the year, the company has allotted Rs. 1,03,90,000 share
warrants of Rs. 17/-, each share warrant is convertible into one equity
share of Rs. 10/- at a premium of Rs. 7/- at the option of warrant
holders to be exercised within a period of not more than 18 months from
the date of allotment of share warrants.
c) The company received application money of Rs. 4.25 per warrant.
d) As approved by the shareholders, the equity shares issued / to be
issued against the warrants will rank pari passu in all respect
including dividend with the existing equity shares of the Company;
e) The proceeds from the above preferential issue are being used for
meeting the capital expenditure as well as working capital
requirements.
9. Acceptances, other than the acceptances under letter of credit
issued by consortium bankers, from SBI Global Factors Ltd are
personally guaranteed by Chairman & Managing Director and one
non-executive director.
10. Based on the information available with the Company in response to
the enquires from all existing suppliers with whom Company deals, there
are no suppliers who are registered as micro, small or medium
enterprises under 'The Micro, Small and Medium Enterprises Development
Act, 2006', as at 31st March, 2011.
11. Bank balances does not include Rs. 386690.40 (Rs. 305987.00) lying
in dividend accounts pertaining to financial year 2003-2004 to
2009-2010 with a scheduled bank in the current accounts and also Rs.
369500.00 (Rs. 369500.00) lying in refund accounts for refund of
application monies related to public issue of the company in the year
2005-2006.
12. Immovable properties represent residential flats towards which
uncalled money payable by the company to the developers is Rs. Nil (Rs.
8.03 lacs).
13. The disclosures required under Accounting Standard 15 "Employee
Benefits" notified in the Companies (Accounting Standards) Rules 2006,
are given below:
b.) Defined Benefit Plan
Leave Encashment:
During the year 2010-11, the amount paid to employees as leave
encashment is Rs. 2.59 lacs.
Gratuity:
The employee's gratuity scheme is non -fund based. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognises each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
14. Financial and derivative contracts:
b) Premium / discount, (difference between the exchange rate at the
date of the inception of the forward exchange contract and forward rate
specified in the contract), paid to hedge the risk associated with
foreign currency fluctuations relating to certain firm commitment, of
FEC amortised over the life of the contract, pertaining to the year
under review has been accounted for under the head Financial Charges.
15. Miscellaneous income represents dividend Rs. 150/- (Rs. 150/-),
gain/loss on LC Rs. Nil (Rs. 82495/-), rent Rs. Nil (Rs. 35000/-) and
sundry balances written off Rs. 713203.17 (Rs. 42925.90).
16. Figures for the previous year have been regrouped, rearranged and
recasted wherever necessary to make them comparable with the figures of
the current year.
g) Expenditure in Foreign Exchange :
(i) On account of foreign travelling expenses amounting to Rs. 8.51
lacs (Rs. 12.21 lacs).
(ii) On account of interest on FCNRB term loan Rs. 121.80 lacs,
excluding Rs. Nil capitalised (Rs. 59.37 lacs), PCFC Rs. 0.96 lacs (Rs.
Nil) and on cash credit FCNRB Rs. 81.96 lacs (Rs. 246.56 lacs) [Section
195 of the Income Tax Act, 1961 is not applicable as the interest is
not directly remitted by the company to non-resident but recovered by
the bank].
17. In the financial statements, any discrepancies in any total and
the sum of the amounts listed are due to rounding off.
Mar 31, 2010
1. In the opinion of the Board, the current assets, loans and advances
are approximately of the value stated if realised in the ordinary
course of business. The provision for all the known liabilities is
adequate. There is no unrecognised impairment loss.
2. Contingent liabilities not provided for:
a) Guarantees given by the bankers of the Company amounting to Rs.
391.25 lacs (Rs. 391.25 lacs) against the fixed deposit of Rs. 40.32
lacs (Rs.103.25 lacs) kept as margin money;
b) In respect of Excise matters Rs. 584.75 lacs (Rs. 626.44 lacs)
(excluding a show cause notice received from Additional Director
General, DGCEI, MZU, Mumbai where amount is unascertainable), for
demand and show cause notices received, as per legal opinion taken, the
Board is of the view that the Company has a very fair chance of
succeeding in these matters;
c) In respect of levy of Cess Rs. 7.82 lacs (Rs. 7.82 lacs), for demand
and show cause notices received, as per legal opinion taken, the Board
is of the view that the company has fair chances of succeeding in the
matter at higher forum;
d) Inland / Foreign letter of credit issued by the bank amounting to
Rs. 2729.03 lacs (Rs. 2402.48 lacs);
e ) Sales bills discounted with SBI Factors and Commercial Services
Pvt. Ltd Rs. 283.74 lacs (Rs. 250.02 lacs);
f) Notice received from SEBI, for delay in submission of certain
information to BSE, amounting to Rs. 1.75 lacs (Rs. 1.75 lacs);
g) Liability, if any, arising on account of undertakings given by the
company under EPCG Scheme, pending fulfilment of export obligation
approximately Rs. 248.86 lacs (Rs. 172.38 lacs); and
h) Impairment loss, if any, on realisation of suit filed debts Rs.
93.54 lacs (Rs. 93.54 lacs).
3. Estimated amount of contracts, net of advances, remaining to be
executed on capital account Rs. 0.47 lacs (Rs. 660.95 lacs);
4. Related Party Disclosures:
I. Names of related parties and description of relationships a ) Party
owning an interest in voting power of the company that gives it
significance influence over
the company:
Raj Money Market Limited
b) Key management personnel:
(i) Shri Gourishankar Poddar - Chairman &
Managing Director (ii) Shri Sushil Kumar Kanodia à Executive Officer
c) Enterprises over which parties mentioned in (a) and (b) above are
exercising significant influence: (i) Gourishankar Poddar HUF
(ii) Sangam Spinfab Limited
5. No commission has been paid to the directors and only the
remuneration by way of salary and perquisites has been paid to the
directors as per the section 198, 309 and Schedule XIII of the
Companies Act, 1956 as under:
(Rs. in lacs)
2009-2010 2008-2009
a) Salaries 18.00 18.00
b) Contribution to provident fund 2.16 1.68
Note:
Managerial remuneration does not include gratuity benefits since the
same are computed on the basis of actuarial valuation for all the
employees and the amount attributable to the managerial person cannot
be ascertained separately.
6. Income tax matters:
a ) Regular assessments of the return of income filed by the company
have been completed up to assessment year (AY) 2007-2008;
b) The company is in appeal before the CIT(A) for AY 2007- 2008 against
the order under section 143(3) of the Income Tax Act 1961 (the Act
1961) for the disputed issues. However, the company has made full
payment of the demand arisen on the assessment; and
c) During the year income of the company, for AY 2004- 2005, was
reassessed under section 143(3) read with section 147 of the Act 1961.
The assessing officer while reassessing the income, reduced quantum of
deduction under section 80IB of the Act 1961 on the ground that for
computing the quantum of deduction under section 80IB of the Act 1961,
losses of other units are first be reduced. Aggrieved by the order, the
company has filed an appeal before the CIT(A). The assessments of AY
2005-2006 and AY 2006-2007 were also made on the similar lines for
which the ITAT has already decided the Companys appeals in its favour.
Therefore, being fair chances that the addition will be deleted by the
appellate authorities, the demand of Rs. 25.46 lacs, in respect of AY
2004-2005, in the opinion of the board, is not enforceable and no
provision is required to be made at this stage.
7. The Company operates in a single segment i.e. textile having same
risk and return. Hence reporting as per Accounting Standard (AS-17)
Segment Reporting not applicable to the Company.
8. After setting up the first Dadra unit in the name of the company or
Unit-I, the second Amli unit was named as "Raj Rayon" or Unit-II, the
third unit at Dadra was named as "Unit III" or Dadra-II and POY unit at
Surangi was named as "Unit IV". However, during the year under review,
the plant and machineries of Unit-III (Dadra-II), with a view to have
better control and increase in cash flow, were shifted to Unit-IV and
land and building of Unit-III (Dadra-II) were sold.
9. During the earlier year, the Company, after obtaining the
requisite approvals, has, on a preferential basis, allotted the
following securities to Raj Money Market Limited (promoter company), in
accordance with the provisions of SEBI (ICDR) Guidelines, 2009:
a ) 19,27,000 Warrants, where each Warrant shall entitle Raj Money
Market Limited to subscribe to one equity share of the Company against
payment in cash. As per SEBI Guidelines, an amount equivalent to 10% of
the price i.e. Re.1 per Warrant has been received from Raj Money Market
Limited on allotment of the Warrants.
b) As approved by the shareholders, the above equity shares issued will
rank pari passu in all respect including dividend with the existing
equity shares of the Company;
c) 8,99,000 (81,500) equity shares of Rs. 10/- each of the Company has
been allotted during the year;
d) application money received on 9,46,500 (18,45,500) warrants, has
been added to shareholders fund; and
e) the proceeds from the above preferential issue are being used for
meeting the working capital requirements and for general corporate
purpose.
10. Acceptances, other than the acceptances under letter of credit
issued by consortium bankers, from SBI Factors Services Pvt. Ltd are
personally guaranteed by Chairman & Managing Director and one
non-executive director and from Global Trade Finance Pvt Ltd are
personally guaranteed by Chairman & Managing Director of the Company.
11. Based on the information available with the Company in response to
the enquiries from all existing suppliers with whom Company deals,
there are no suppliers who are registered as micro, small or medium
enterprises under ÃThe Micro, Small and Medium Enterprises Development
Act, 2006, as at 31st March, 2010.
12. Bank balances does not include Rs. 3,05,987.00 (Rs. 3,60,629.70)
lying in dividend accounts pertaining to financial year 2002-2003 to
2006-2007 with a scheduled bank in the current accounts and also Rs.
3,69,500/- (Rs. 3,69,500/-) lying in refund accounts for refund of
application monies related to public issue of the company in the year
2005-2006.
13. Immovable properties represent residential flats towards which
uncalled money payable by the company to the developers is Rs. 8.03
lacs (Rs. 334.40 lacs).
14. Declination in the value of long term quoted investment, in the
opinion of the management, is temporary due to market conditions and
other factors; therefore no provision for the same is required to be
made in the financial statements.
b) Defined Benefit Plan Leave Encashment:
During the year 2009-10, the amount paid to employees as leave
encashment is Rs. 2.96 lacs
Gratuity:
The employees gratuity scheme is non-fund based. The present value of
obligation is determined based on actuarial valuation using the
Projected Unit Credit Method, which recognizes each period of service
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation.
The estimates of rates of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary.
15. The outstanding forward contracts for sale of USD against proforma
invoices of foreign buyers amounting to USD 1466095.00 (USD 508000.00)
as on 31st March, 2010, and the outstanding forward contract for
purchase of USD against repayment of FCNR-B (in Term Loans) amounting
to USD 4200000.00 (USD Nil) and against repayment of FCNR-B (in Cash
Credits) amounting to USD 6720000.00 (USD 5570000) as on 31st March,
2010.
16. The company has, during the year, installed new 4 FDY Lines at its
Surangi Unit, the commercial production of these lines commenced from
25th March, 2010. Interest of Rs. 200.16 lacs (including Rs. 59.37 lacs
on term loan in FCNRB) on the loans raised for the expansion project up
to commencement of commercial production was capitalised.
17. Miscellaneous income represents dividend Rs 150/- (Rs.
1,70,150/-), gain/loss on LC Rs. 82,495/- (Rs. 58,510/-), rent Rs.
35,000/- (Rs. 60,000/-) and sundry balances written off Rs. 42,925.90
(Rs. 8,95,059.08).
18. Figures for the previous year have been regrouped, rearranged and
recasted wherever necessary to make them comparable with the figures of
the current year.
19. Additional information pursuant to the provisions of paragraphs 3,
4C and 4D of part II of schedule VI of the Companies Act, 1956.
(Figures in brackets indicate previous years figures.)
a) Licensed and installed capacity:
The company is not required to obtain any license under the Industries
(Development & Regulation) Act; 1951, therefore the details of licensed
and installed capacity are not applicable. However the company has
filed the required Industrial Entrepreneurs Memorandum (IEM) to the
Government of India, Ministry of Industry, and Secretarial for
Industrial Approvals and obtained the acknowledgement for the same.
20. In the financial statements, any discrepancies in any total and
the sum of the amounts listed are due to rounding off.