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Notes to Accounts of Richa Industries Ltd.

Mar 31, 2015

1) Contingent Liabilties and Commitments (to the extent not provided for)

(i) Contingent Liabilties

(a) Claims against the Company not acknowledged as debt - -

(b) Guarantees 126,441,959.50 117,909,090.00

(c) other money for which the company is contingently liable

—Disputed demands in respect of income tax etc 6,495,838.00 3,431,492.00 (interest thereon not ascertainable at present)

—amount of Letter of Credits for which Bills are not accepted under LC 23,664,393.00 -

The Company donot expect any reimbursement in respect of the above contingent liabilities.

The amount shown in (b) above represents bank guarantees given in the normal course of the company operations and are not expected to result in any loss to company on basis of beneficiary fulfilling its ordinary commercial obligations.

The amount shown in (c) above represent the best possible estimates arrived at on the basis of available information. Uncertainties and possible reimbursements are dependent on the outcome of different legal processes which have been invoked by the company or the claimants as the case may be and therefore cannot be estimated accurately .The company engages reputed professional advisor to protect its interests and has been advised that it has strong legal positions against such disputes.

2) the amount of dividends proposed to be distributed to Shareholders for the period - -

—related amount per share - -

The Company do not have any preference shareholders

3) In the opinion of the Board, all of the assets other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated

4) Disclosures pursuant to Accounting Standard-15 - "Employee Benefits"

a) The Company has recognised '' 45,04,229.00 (Previous year '' 39,17,816.80) in the statement of profit and loss account on account of Employers Contribution to Pension / Provident Fund under Defined Contribution Plan

b) Details of Defined Benefit Plan

The provision for gratuity is made as per the Payment of Gratuity Act, 1972 is a defined benefit plan. 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 obligation for leave encashment is recognized in the same manner as gratuity.

5) Disclosures pursuant to Accounting Standard (AS) - 17 "Segment Reporting"

a) Primary Segment Reporting by Business Segment

Company''s primary business segments are

(i) Manufacture in Textiles - The textile business incorporates the product group namely Dyeing & Processing of Knitted Fabrics and Processing / Knitting of Yarn and Manufacture of Knitted Fabric which mainly have similar risks and returns.

(li) Manufacturer of Construction & Engineering Division - The Construction & Engingeering Division (C&E) business incorporates the product group namely: Pre Fabricated Steel Building in CKD Condition, Tabular Steel Poles, Structure and Super Structure for mining, Drop Rods, Angles, Shapes and Section, which mainly have similar risks and returns.

b) Secondary Segment Reporting (By Geographical Segments)

6) Disclosures pursuant to Accounting Standard (AS) - 28 "Impairment of Assets"

The company has reviewed the possibility of impairment of the fixed assets of company in term of the accounting standard AS - 28 "Impairment of assets" as at balance sheet date and is of the opinion that no such provision for impairment is required.

7) Disclosures pursuant to Accounting Standard (AS) - 19 "Leases"

The company has taken various premises under cancelable operating lease. All the lease arrangements are for a period of less than or equal to 11 months. These lease Agreements are normally renewed on expiry of the terms. Lease rental expenses for 2014-15 in respect of above operating leases are Rs.6,46,815.00 (Previous year Rs.56,50,466.00)

8) Insurance Claims

During the year, the company accounted Rs.17,89,758.00 (Previous year Rs. 10,37,283.00) as claims receivable from insurance company towards the expenditure incurred (in excess of deductibles) on damage repairs up to 31st March 2014 to a company''s assets

9) Rs.6,22,63,000.00 (Previous Year Nil) has been included in Gross Revenue of 2014-15 for which material has been supplied to BSWC, for which final bills are pending to be raised, but the collection for the same has been realized.

10) Balances of Trade Receivable, Trade Payable & Advances are subject to confirmation and consequential adjustment, if any.

11) The previous year''s figures have been reworked, 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

12) Significant accounting policies and practices adopted by the Company are disclosed in the statement annexed to these financial statements as Annexure-1


Mar 31, 2014

1) Contingent Liabilities and Commitments (AS -29) 2013-14 2012-13

(a) Bank Guarantees issued by Bank 11,79,09,090.00 7,08,26.295.00

(b) Outstanding Letter of Credit 22,04,92,566.00 7,02,11,629.00

(c) The income tax assessment of the company has been Completed up to A.Y. 2011-12

(d) Disputed demand (Gross) in respect of:

Nature of Dues Assessment Demand Raised Forum where dispute is Year pending

Income Tax 2005-06 Rs. 11,17,737/- The company has filed u/s 143(3)/147 an appeal before ITAT, New Delhi which is pending till date.

Income Tax 2010-11 Rs. 17,14,901/- The company has filed U/s 143(3) an appeal before CIT(Appeal), Faridabad which is pending till date.

Income Tax 2011-12 Rs. 5,98,854/- The company has filed u/s 143(3) an appeal before CIT (Appeal), Faridabad which is pending till date

The amount shown in (a) above represents bank guarantees given in the normal course of the company operations and are not expected to result in any loss to company on basis of beneficiary fulfilling its ordinary commercial obligations.

The amount shown in (c) & (d) above represent the best possible estimates arrived at on the basis of available information. Uncertainties and possible reimbursements are dependent on the outcome of different legal processes which have been invoked by the company or the claimants as the case may be and therefore cannot be estimated accurately .The company engages reputed professional advisor to protect its interests and has been advised that it has strong legal positions against such disputes.

2) The company has reviewed the possibility of impairment of the fixed assets of company in term of the accounting stand- ard AS -28 "Impairment of assets" as at balance sheet date and is of the opinion that no such provision for impairment is required.

3) Balances of Trade Receivable, Trade Payable & Advances are subject to confirmation and consequential adjustment, if any.

4) Remittance in Foreign Currency on Account of Dividend

The Board of Directors of company has not recommended any dividend for the financial year 2013-14 due to economic recession and requirement of more working capital as company is entering into Government projects, final dividend of 5% (Rs. 0.50 per share) for the year ended 31.03.2013 was paid. No foreign remittance has been made on account of dividend

5) Operating Leases as per AS - 19

The company has taken various premises under cancelable operating lease. These lease Agreements are normally re- newed on expiry of the terms. Lease rental expenses for 2013-14 in respect of above operating leases are Rs. 56,50,466.00 (previous year Rs.67,86,459.00)

6) Insurance Claims

During the year, the company accounted Rs. 10,37,283.00 (Previous year Rs. 27,60,345.00) as claims receivable from insurance company towards the expenditure incurred (in excess of deductibles) on damage repairs up to 31st March 2014 to a company''s assets

7) The previous year''s figures have been reworked, 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

1. As per Accounting Standard 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties where control exists and related parties with whom transactions have taken place and relationship:

List of Related Parties and their Relationship

a) Key Managerial Personnel

1. Sh. Sushil Gupta, CMD

2. Sh. Manish Gupta, Director - Whole time Director

3. Dr. Sandeep Gupta, JT. MD

b) Enterprise over which Key Managerial Personnel (KMP) or their Relatives have significant influence

1. Richa Building Systems Limited

2. Richa Holdings Limited

3. Richa Infrastructure Limited

c) Relatives of Key Management Personnel - NIL

32. As per the Accounting Standard (AS) – 17 "Segment Reporting" the information is submitted as below :

a) Primary Segment Reporting by Business Segment

Company''s primary business segments are

(i) Manufacture in Textiles - The textile business incorporates the product group namely: Dyeing & Processing of Knitted Fabrics and Processing / Knitting of Yarn and Manufacture of Knitted Fabric which mainly have similar risks and returns.

(ii) Manufacturer of Pre Engineering Buildings - The PEB business incorporate the product group namely : Pre Fabricated Steel Building in CKD Condition, Tabular Steel Poles, Structure and Super Structure for mining, Drop Rods, Angles, Shapes and Section, which mainly have similar risks and returns.

b) Secondary Segment Reporting (By Geographical Segments)

The following is the distribution of the Company''s consolidated sales by geographical segment, regardless of where the goods were produced

2. Contingent Liabilities not provided in respect of:

(a) Claims against the company did not acknowledged

as debts NIL 1757.91

(b) Uncalled liability on shares partly paid. NIL NIL

(c) Arrears of fixed cumulative dividends NIL NIL

(d) Estimated amount of contracts remaining to be executed NIL 910.26 on capital account and not provided for

(e) Other money for which the company is contingently liable. NIL NIL

(f) Custom duty which may arise if obligation for exports not 306.03 405.25 fulfilled against import of raw material & machinery

(g) Bank Guarantees issued by Bank 708.26 600.97 (h) Outstanding Letter of Credit 702.12 715.71

3) Balances of Trade Receivable, Trade Payable & Advances are subject to confirmation and consequential adjustment, if any.

4) The company has settled & paid derivative losses with the ICICI bank as Rs.6.75 crores.

5) Remittance in Foreign Currency on Account of Dividend

The Board of Directors of company has recommended payment of a final dividend of 5 % (Rs. 0.50 per share) for the year ended 31st March 2013.During the financial year 2012-13, final dividend of 5% (Rs. 0.50 per share) for the year ended 31.03.2012 was paid. No foreign remittance has been made on account of dividend

6) Operating Leases as per AS - 19

The company has taken various premises under cancelable operating lease. These lease Agreements are normally renewed on expiry of the terms. Lease rental expenses for 2012-13 in respect of above operating leases are Rs. 67, 86,459.00/- (previous year Rs.59, 16,169.00)

7) Value of assets taken on lease, future obligations as per AS -19

Lease Rentals Payable

0 to 12 Month - Rs. 53, 38,764.00

12 to 60 Months - Rs. 16, 48,000.00

60 to above - NIL

8) Insurance Claims:

During the year, the company accounted Rs. 27.60 lac (Previous year Rs. NIL/-) as claims receivable from insurance company towards the expenditure incurred (in excess of deductibles) on damage repairs upto 31st March 2013 to a company''s assets

9) Obsoleted Machinery

Machinery worth Rs. 651.11 Lac is not used during the year under consideration, as the same had become obsolete during the Financial Year 2009-10, for which Chartered Engineer Certificate had also been obtained & sold during the financial year.

10) Inventory as on 31.03.2013 includes Rs. 12,10,98,999.00/- declared under income tax survey during the year.

11) The previous year''s figures have been reworked, 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, 2012

1. The previous year's figures have been reworked, 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.

2. The disclosures required under Accounting Standards 15 "Employee Benefits" notified in the Companies (Accounting Standard) Rules 2006, are given below:

Defined Benefit Plan

The provision for gratuity is made as per the Payment of Gratuity Act, 1972. The obligation for leave encashment is recognized on the basis of amounts due for leaves outstanding to the credit of the employees at end of the year.

3. As per Accounting Standard 18, the disclosures of transactions with the related parties as defined in the Accounting Standard are given below:

(i) List of related parties where control exists and with whom transactions have taken place and relationship:

List of Related Parties and their Relationship

a) Key Managerial Personnel

1. Sh. Sushil Gupta, CMD

2. Sh. Manish Gupta, Director

3. Dr. Sandeep Gupta, JT. MD

b) Enterprise over which Key Managerial Personnel (KMP) or their Relatives have significant influence

1. Richa Building Systems Limited

2. Richa Holdings Ltd.

c) Relatives of Key Management Personnel 1. NIL

4. As per the Accounting Standard (AS) - 17 "Segment Reporting" the information is submitted as below :

a) Primary Segment Reporting by Business Segment Company's primary business segments are

(i) Manufacture in Textiles - The textile business incorporates the product group namely: Dyeing & Processing of Knitted Fabrics and Processing / Knitting of Yarn and Manufacture of Knitted Fabric which mainly have similar risks and returns.

(ii) Manufacturer of Pre Engineering Buildings - The PEB business incorporate the product group namely : Pre Fabricated Steel Building in CKD Condition, Tubular Steel Poles, Structure and Super Structure for mining, Drop Rods, Angles, Shapes and Section, which mainly have similar risks and returns.

5. Contingent Liabilities not provided in respect of:

(i) Claims against the company did not acknowledged as debts*. 1757.91 1757.91

(ii) Uncalled liability on shares partly paid. NIL NIL

(iii) Arrears of fixed cumulative dividends. NIL NIL

(iv) Estimated amount of contracts remaining to be executed 910.26 766.75 on capital account and not provided for

(v) Other money for which the company is contingently liable. NIL NIL

(vi) Custom duty liability which may arise if obligation for exports 405.25 425.57 not fulfilled against import of raw material & machinery

(vii) Bank Guarantees issued by Bank 600.97 4.95

(viii) Outstanding Letter of Credit 739.50 202.63

*ICICI Bank has crystalized the liability under derivative transaction during the year 2010-11. However, the matter is still subjudice. Company has denied this liability on the basis of A.V. Rajwade & Co. legal opinion and filed the case at Delhi High Court.

6. The current assets, loans and advances are stated at the value, which in the opinion of the management is not less than the amount of realization of such assets, loans and advances in the ordinary course of business and provision for all known liabilities have been made

7. Sundry Debtors and Sundry Creditors are reconciled by the company. However this is subject to our direct con- formation from the parties.

8. Financial and Derivative Instruments

(a) No Derivatives Contracts are out standing as on 31.03.2012 (Previous Year NIL)

(b) Foreign Currency exposures that are not hedged by derivatives instruments or forward contracts as at 31st March 2012 amount to Rs. NIL (Previous year NIL)

9. Remittance in Foreign Currency on Account of Dividend

The Board of Directors of Company has recommended payment of a final dividend of 5 % (Rs. 0.50 per share) for the year ended 31st March 2012. During the financial year 2010-11, final dividend of 5 % (Rs. 0.50 per share) for the year ended 31.03.2012 was declared & disclosed. No foreign remittance has been made on account of dividend.

10. Operating Leases:

The company has taken various premises under cancelable operating lease. These lease agreements are normally renewed on expiry of their terms.

Lease rental expenses for 2011-12 in respect of above operating leases are Rs. 5916169.00/- (previous year Rs. 3825779/-)

11. Insurance Claims:

During the year, the company accounted Rs. NIL (Previous year Rs. NIL/-) as claims receivable from insurance company towards the expenditure incurred (in excess of deductibles) on damage repairs upto 31st March 2012 to a Company's assets

12. Machinery worth Rs. 651.11 Lac is not used during the year under consideration, as the same had become obsolete during the Financial Year 2009-10, for which Chartered Engineer Certificate had also been obtained.

 
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