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Notes to Accounts of S M Energy Teknik & Electronics Ltd.

Mar 31, 2015

1. Previous Period

Previous period figures have been regrouped and/or rearranged.

2. Amount in the financial statements are presented in Rupees thousands, except as otherwise stated

3. The Operations at the Textile Processing Machinery Division at Baroda have been suspended. The unit has been given on lease. In pursuance of the approval obtained from the shareholders in the Annual General Meeting held on 12.10.2012, the Company after scrutiny of the offers received for sale of undertaking of the textile machinery division at Baroda has entered in to an MOU with a leading machinery manufacturer for sale of Textile Machinery Division.

4.The Company is continuing its endeavors foray into the consent of the Industrial Estate development as well as redevelopment of real estate projects. The company is taking necessary steps including securing the approval from various authorities for commencement of real estate development.

5 Although the net worth of the company has been fully eroded due to losses incurred, the net worth of the company is being effectively improved by infusion of promoter from time to time. Certain surplus capital assets and the suspended unit at Baroda have been sold/or in the process of being sold, the proceeds of the same have been utilized for clearance of residual liabilities with a initiative to make the company totally debt free and liability free. The total liabilities and majority of the current liabilities have been settled. The Promoters are endearing to clear the balance liabilities by taking adequate necessary steps. The Company is hopeful with the proposal to enter into new areas of operations without fructify in the ensuing years. The foray in to new areas of operations is expected to generate adequate additional profits which would wipe out the existing losses.

6.In view of the positive developments as above and special circumstances, the accounts of the company are continued to be prepared on going concern basis and consequently no adjustment have made to the carrying values of modification/classification of Balance sheet account.

7. Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

The management has not yet identified enterprises which have provided goods & services to the Company and which qualify under the definition of medium &small enterprises. as defined under micro,small and medium enterprises Development Act.2006.

8. Segment Reporting

The Company is mainly engaged in the business of manufacturing of Textile Processing Machineries. All other activities of the Company revolve around the main business, and as such, there are no separate reportable segments as required in Accounting standard 17(AS-17)on Segment Reporting"notified by the Companies(Accounting Standards)Rule,2006.

9. Related Party Disclosures

As per Accounting Standard (AS-18) on "Related Party Disclosure" notified by the companies(Accounting Standards)Rules,2006,the disclosure of transaction with the related parties are given below:

a) List of Related Parties with whom transactions have taken place and relationship:

Name of Related Party Relationship

i) Venkatramana Food Specialities Ltd. Associate Company

ii) Mr. Gordhanlal Phalore Key Management Personnel

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

b) Transactions during the period with related parties :

10. Deferred Taxation

In accordance with Accounting Standard 22 (AS-22) on "Accounting for Tax on Income"notified by the companies(Accounting Standards)Rules, 2006,deferred tax assets are constituting mainly of carried forward losses and disallowance of expenses. Deferred Tax Liabilities are constituting mainly of excess depreciation & expenditure claimed in tax computation The Company has substantial unabsorbed depreciation and carry forward losses under the income tax Act 1961. However ,the availability of sufficient future taxable income against which such depreciation and losses can be set off cannot be stated to be virtually certain. Hence deferred tax asset has not been recognised.

11. Contingent Liabilities

a) The Income Tax Demands of earlier years have been nullified / set-aside by the various orders of the Appellate Authorities. The Company is confident in securing complete relief. Hence the Board is of the opinion that there is no liability, contingent or otherwise, in respect of the above.

b) In respect of export obligations, the Company has been advised that the export obligation can be set-off against exports executed by the Company in respect of other products in earlier years. Necessary application have already been filed with the appropriate authorities under the applicable Foreign Trade Regulations. The Board is advised that there would be no liability, contingent or otherwise, in respect of the above transaction.

12. Licensed and Installed Capacity

The Company is Small Scale Industrial undertaking engaged in manufacturing of various types of Textile/Chemical/Food processing machinery produced as per the specification, hence the Licensed/Installed Capacities can not be quantified.

13. i) Balance of Trade Receivables and Trade Payables including advance to suppliers are subject to confirmation.

ii) Except stated otherwise, in the opinion of the Management, the Short-term Loans and Advances, Other Non-current Assets are approximately of the value stated, if realized in the ordinary course of business. Provision for all known liabilities are adequate and neither in excess or nor in short of the amount reasonably necessary.


Mar 31, 2014

1.1 Previous Ptriod

Previous perioed figures have been regrouped and/or rearranged. The results for the current period are of 12 months whereas the results for the previous period were for 9months, hence the figures relating to previous period are not comparable with the current period.

1.2 Amount in the financial statements are presented in Rupees thousands, except as otherwise stated

2.1 The Operations at the Textile Processing Machinery Division at Baroda have been suspended. The unit has been given on lease. In pursuance of the approval obtained from the shareholders in the Annaual General Meeting held on 12.10.2012, the Company after scrutiny of the offers received for sale of undertaking of the textile machinety division at Batoda has entered in to an MOU with a leading machinery manufacturer for sale of Textile Machinery Division.

2.2 The Company is continuing its endeavots foray into the consent of the Industrial Estate development as well as redevelopment of real estate projects. The company is taking necessary steps including securing the approval from various authorities for commencement of real estate development.

2.3 Although the net worth of the company has been fully eroded due to losses incurred, the net worth of the company is being effectively improved by infusion of promoter from time to time. Certain surplus capital assets and the suspended unit at Baroda have been sokUor in the process of being sold, the proceeds of the same have been be utilized for clearance of residual liabilities with a initiative to make the company totally debt free and liability free. The total liabilities and majority of the current liabilities have been settled. The Promoters are endearing to dear the balance liabilities by taking adequate necessary steps. The Company is hopeful with the proposal to enter intonewareasofoperationswithoutfructifyintheensuingyears. The foray intonew areas of operations is expected to generate adequate additional profits which would wipeout the existing losses.

In view of the positive developments as above and special circumstances, the accounts of the company are continued to be prepared on going concern basis and consequently no adjustment have made to the carrying values of modification/dassification of Balance sheet account.

2.4 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

The management has not yet identified enterprises which have provided goods & services to the Company and which qualify under the definition of medium &small enterprises, as defined under micro,small and medium enterprises Development Act.2006.

2.5 Segment Reporting

The Company is mainly engaged in the business of manufacturing of Textile Processing Machineries. All other activities of the Company revolve around the main business, and as such, there are no separate reportable segments as required in Accounting standard 17(AS-17)on Segement Reporting''notified by the CompaniesjAccounting Standards)Rule,2006.

2.6 Related Party Disclosures

As per Accounting Standard (AS-18) on ''Related Party Disclosure'' notified by the companies(Accounting StandardsjRules,2006,the disclosure of transaction with the related parties are given below:

a) List of Related Parties with whom transactions have taken place and relationship:

Name of Related Party Relationship

i) Venkatramana Food Specialities Ltd. Associate Company

iii) Mr. Gordhanlal Phalore Key Management Personnel

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

b) Transactions during the period with related parties:

2.7 Deferred Taxation

In accordance with Accounting Standard22 (AS-22) on ''Accounting for Tax on Income''notified by the companies(Accounting Standards)Rules, 2006,deferred tax assets are constituting mainly of carried forward losses and disallowance of expenses. Deferred Tax Liabilities are constituting mainly of excess depriciation & expenditure claimed in tax computation The Company has substantial unabsorbred depreciation and carry forward losses under the income tax Act 1961 .How ever ,the availability of sufficient future taxable income against which such depreciation and losses can be set off cannot be stated to be virtualycertain.Hence deferred tax asset has not been recognised.

Additional Information:

As per requirement of Para 4 of Part II of Schedule VI to the Companies Act 1956

2.8 a) The Income Tax Demands of the earlier years have been notified by the various orders of the Appellate Authorities. However, in cases relating to a demand or Rs. 10,018 lacs the Income Tax Department has gone on second appeal. The Company is confident in securing complete relief as it has been advised that the appeal filed by the Income Tax department has no subtraction. Hence the Board is of the opinion that there is no liability contingent or otherwise in respect of the above, b) in respect of export obligations the Company has been advised that the export obligation can be set-off against exports executed by the Company in respect of other products in the earlier years. Necessary application have - already been filed with the appropriate authorities under the applicable Foreign Trade Regulations. The Board is advised that there would be no liability contingent or otherwise in respect of the above transactions.

2.9 Licensed and Installed Capacity

The Company is Small Scale Industrial undertaking engaged in manufacturing of various types ofTextile/Chemical/Food processing machinery produced as per the specification, hence the Licensed/Installed Capacities can not be quantified.

2.10 i) Balance of Trade Receivables and Trade Payables including advance to suppliers are subject to confirmation.

ii) Except stated otherwise, in the opinion of the Management, the Short-term Loans and Advances, Other Non-current Assets are approximately of the value stated, if realized in the ordinary course of business. Provision for all known liabilities are adequate and neither in excess or nor in short of the amount reasonably necessary.


Mar 31, 2013

1.1 Previous period

Previous period figures have been regrouped and/or rearranged. The results for the current period are of 9 months whereas the results for the previous period 30.06.2012 were for 15months, hence the figures relating to previous period are not comparable with the current period.

1.2 Amount in the financial statements are presented in Rupees thousands, except as otherwise stated

1.3 In pursuance of the in-principle approval obtained from Bombay Stock Exchange in term of Clause 24(a) of the listing agreement for allotment of 57,32,000 equity shares of Rs. 10/- each to promoters and its associates in terms of the special resolution passed at the Annual General Meeting held on 26th September 2007 and reconfirmed in the Extra ordinary General Meeting held on 1st February 2011 and exemption granted by Securities and Exchange Board of India (SEBI) vide its order dtd. 11.8.2008. Necessary further formalities with regard to corporate action are underprocess.

1.4 In pursuance of the approval obtained from the shareholders in the Annual Genera! Meeting held on 12.10.2012, the Board has received offers with advances in one case for sale of the Textile processing unit at Baroda and the same is under review

1.5 The Company is continuing its endeavors foray into the consent of the Industrial Estate development as well as redevelopment of real estate projects. The company is taking necessary steps including securing the approval from various authorities for commencement of real estate development.

1.6 Although the net worth of the company has been fully eroded due to losses incurred, tne net worth of the company is being effectively improved by infusion of pronator funds from time to time. Certain surplus capital assets and the suspended unit at Baroda have been sold/or in the process of being sold, the proceeds of the tame would be utilized for clearance of residual liabilities with a initiative to make the company totally debt free and liability free. The total liabilities and majority of the cjnent liabilities have been settled. The Promoters are endearing to clear the balance liabilities by taking adequate necessary steps. The Company is hopeful with the proposal to enter into new areas of operations without fructify in the ensuing years. The foray in to new areas of operations is expected to generate adequate additional profits which would wipe out the existing losses.

In view of the positive developments as above and special circumstances, the accounts of the company are continued to be prepared on going concern basis and consequently no adjustment have made to the carrying values of modification/ classification of Balance sheet account.

1.7 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

The management has not yet identified enterprises which have provided goods & services to the Company and which qualify under the definition of medium Ssmall enterprises, as defined under micro, small and medium enterprises DeveiopmentAct.2006.

1.8 Segment Reporting

The Company is mainly engaged in the business of manufacturing of Textile Processing Machineries. All other activities of the Company revolve around the main business, and as such, there are no separate reportable segments as required in Accounting standard 17(AS-17)on Segment Reporting"notified by the Companies(AccountingStandards)Ru!e,2006

1.9 Related Party Disclosures

As perAccounting Standard (AS-18) on "Related Party Disclosure" notified by the companies(Accounting Standards)Rules,2006,the disclosure of transaction with the related parties are given below

a) List of Related Parties with whom transactions have taken place and relationship: Name of Related Party Relation Ship

I) Venkataramana Food Specialities Ltd. Associate Company

ii) Mr. Gordhanlal Phalore Key Management Personnel

Note: Related party relationship is as identifed by the Company and relied upon by the Auditors. b) Transactions during the year with related parties :

1.10 Licensed and Installed Capacity

The Company is Small Scale Industrial undertaking engaged in manufacturing of various types of Textile/Chemical/Food processing machinery produced as per the specification, hence the Licensed/Installed Capacities can not be quantified.

1.11 Balance of Trade Receivables and Trade Payables including advance to suppliers are subject to confirmation ii) Except stated otherwise, in the opinion of the Management, the Short- term Loans and Advances, Other Non-current Assets are approximately of the value stated, if realized in the ordinary course of business. Provision for all known liabilities are adequate and neither in excess or nor in short of the amountreasonably necessary.


Jun 30, 2012

1.1 Previous year

The financial statements for the year ended March 31, 2011 had been prepared as per the then applicable, pre-revised Schedule VI to the Companies Act, 1956. Consequent to the notification of Revised Schedule VI under the Companies Act 1956, the financial statements for the year ended 30 June, 2012 are prepared as per Revised Schedule VI. Accordingly, the previous year figures have also been reclassified to conform to this year's classification. The adoption of Revised Schedule VI for previous year figures does not impact recognition and measurement principles followed for preparation of financial statements. Amount in Financial Statements are presented in Rupees thousand, except as otherwise stated

The results are for fifteen months ended 30th June 2012 and hence figures relating to previous period are not comparable

1.2 Further in. Special Resolution passed at the Annual General Meeting held on 26* September, 2007 and reconfirmed at the Extra Ordinary General Meeting held on 1* February, 2011 ii) the exemption granted by the Securities and Exchange Board of India (SEBI), vide its order dated 11 * August, 2008, the Company's application for "ln- principle" approval for issue of 57,32,000 equity shares of Rs.10/- each to the promoters and its associates. The Company has got the "In-Principle" approval from Bombay Stock Exchange Ltd in terms of clause 24(a) of the Listing Agreement as on 6th September, 2011 and accordingly the Company has filed necessary forms with the Registrar of Companies, Maharashtra, Mumbai for affecting the increase in the Authorized Share Capital from Rs.10 crores to Rs. 20 crores in terms of the Special Resolution passed in the Annual General Meeting held on 29th September, 2006. In further pursuance thereof.the Board in its meeting on 5th September ,2012 has alloted 5732000 equity shares to promoters and their associates. The residual formalities are in the process of being compiled with.

1.3 The company has suspended the manufacturing operations of the Textile Processing Machinery unit at baroda in view of continuing losses and accordingly has also taken steps to effect cessation of the workmen after complying with applicable labour regulations. All the dues of the workmen/staff have been paid/settled.

1.4 In further pursuance thereof, the company has decided to hive off the Textile Processing Manufacturing unit at Baroda after, securing the necessary approvals from regulatory authorities and members in the entering annual general meeting. In this interregnum, the company has leased the unit.

The company is continuing to explore various new areas of operations and one such area which has been identified for immediate entry is the area of Industrial Estate Development and reality ventures. The company is taking necessary steps ncluding securing the required approval for commencement of business of reality development

1.5 Although the net worth of the Company has fully eroded due to losses incurred, the net worth of the Company is being effectively improved by infusion of promoter funds from time to time. Certain surplus capital assets and the suspended unit at Baroda have been sold/or in the process of being sold, the proceeds of the same would be utilized for clearance of liabilities and making the Company totally debt free and liability free. As a part of the restructuring the exercise, the Company has already cleared all the secured loans and also settled all the dues of the workmen and staff. The foray in to new areas of operations is expected to generate adequate profit which would wipe out the existing losses.

In view of the positive development as above and the special circumstances, the accounts of the Company are continued to be prepared on "going concern basis" and consequently no adjustment have made to the carrying values on modification of Balance Sheet account.

1.6 Disclosure under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED)

The management has not yet identified enterprises which have provided goods & services to the Company and which quality under the definition of medium Ssmall enterprises, as defined under micro.small and medium enterprises Development Act.2006.

1.7 Segment Reporting

The Company is mainly engaged in the business of manufacturing of Textile Processing Machineries. All other activities of the Company revolve around the main business, and as such, there are no separate reportable segments as required in Accounting standard 17(AS-17)on segement ReportingHnotified by the Companies(AccountingStandards)Rule,2006.

1.8 Related Party Disclosures

As per Accounting Standerd (As-18) on "Related Party Disclosure" notified by the companies(Accounting Standards)Rules,2006,the disclosure of transaction with the related parties are given below:

a) List of Related Parties with whom transactions have taken place and relationship: Name of Related Party Relation Ship

I) Venkataramana Food Specialities Ltd. Associate Company

ii) Satya SaiAgroiis Pvt Ltd Associate Company

iii) Mr. V.R. Balachandra Key Management Personnel

(Ceases to be Managing Director

(with effect from 30th April, 2012)


Mar 31, 2010

1. The previous year figures have been re-grouped, re-arranged and/or re- classifed wherever necessary.

2. a) In the earlier year Company had received advance against share application money amounting to Rs.57,320 thousands from promoters and their associates. At the Annual General Meeting held on 26th September,2007,the Company had passed a special Resolution for allotment of 5,732,000 equity shares of Rs.10/- each at par to its promoters and associates, ranking pari passu in all respects including as to the devidend, with existing equity shares of the company. Thereafter, the acquirers had made application for exemption from complying with the provision of regulation 11(1) of Securities & Exchange Board of India (Substantial Acquisition of Shares and Takeover) Regulation, 1997 with regard to the proposed preferential allotment of equity shares. The Security Exchange Board of India (SEBI) has granted the said exemption to the acquirers vide its order dated August 11,2008. Proposed transaction of issue & allotment of shares was required to be completed within 30 days of the said order and file a report with SEBI, in the manner specified in regulation 3(4) read with 3(5) of SEBI (Substantial Aquisition of Shares & Takeover) Regulations, 1997 confirming compliance including the conditions specified in the order. The acquirers & the company could not complete the transaction within 30 days due to pedency of other regulatory permissions.

The Company has filed an application with SEBI vide letter dated October 17, 2008 for grant of extension for allotment of shares & awaiting the approval from SEBI. The Company has also made an application with Bombay Stock Exchange (BSE) for in principle approval.

b) The Company has increased its Authorised Share Capital from Rupees Ten crores to Rupees Twenty crores vide special resolution dated 29.09.2006 which has also been filed with the authorities concerned. Accordingly Form No.5 shall be filed after receiving necessary approvals from BSE & other Authorities, if any.

3. The Companys Net Worth is fully eroded due to losses incurred, as a result of which the liabilities are far in excess of its assets. Although the company has been incurring losses, the net worth of the company has been effectively improved by infusion of promoters funds in the form of capital as detailed above. As part of restructuring exercise, the Company has cleared all the secured working capital loans and therefore, the Company is confident of enhancing the performance and wiping out existing losses. Hence, the accounts are prepared on "Going Concem"basis.

4. The management is in the process of identifying the enterprises which have provided goods & services to the Company & which qualify under the definition of medium & small enterprises, as dedined under Micor, Small & Medium Enterprises Development Act, 2006.

5. Balances of sundry Debtors, Loans and Advances and Creditors including advance to suppliers are subject to confirmation.

6. In the opinion of management the Current Assets and Loans & Advances are approximately of the value stated, if realised in the ordinary course of business and the provisions for all known liabilities are adequate and not in excess of the amount reasonably necessary, unless stated otherwise.

7. Segment Reporting

The Company is mainly engaged in the business of manufacturing of Textile Machineries. All other activities of the Company revolve around the main business, and as such, there are no separate reportable segments as required in Accounting Standard 17(AS-17) "Segement Reporting" notified by the Companies (Accounting Standards) Rule, 2006.

8. Related Party Disclosures

As per Accounting Standerd 18(AS-18) on "Related Party Disclosure" notified by the Companies (Accounting Standards) Rule, 2006, the disclosure of transaction with the related parties are given below:

a) List of Related Parties with whom transactions have taken place and relationship:

Name of Related Party Relationship

i) Venkataramana Food Specialities Ltd. Associate Company

ii) Satya Sai Agroils Pvt Ltd Associate Company

(upto 07/03/2010)

iii) Mr. V. R. Balachandra Key Management Personnel

Note: Related party relationship is as identifed by the Company and relied upon by the Auditors.

9. Deferred Taxation

With reference to Accounting Standard 22 (AS-22) on "Accounting for Tax on lncome"issued by the Institute of Chartered Accountants of India, Deferred Tax Assets are constituting mainly of carried forward losses and disallowance of expenses. Deferred Tax Liabilities are constituting mainly of excess depreciation & expenditure claimed in tax computation. The company has substantial unabsorbed depreciation and carry forward losses under the income tax Act, 1961. However the availability of sufficient future taxable income against which such depreciation and losses can be set off cannot be stated to be virtualy certain. Hence.deferred tax asset has not been recognised.

10. Contingent Liabilites

(Rs in Thousands)

2009-10 2008-09

a) Income Tax demands for earlier years pending in appeal before Appellate Authorities

(Net of advance tax) 10,018 8,714

b) Demands raised by Excise authority . 4,425 4,425 (Duty paid under protest Rs. 1,084 thousands)

11. Retirement Benefits

The company has during the year adopted Accounting standard 15 (Revised 2005) regarding "Employee Benefits". The company has classified various employee benefits as under.

A Defind contribution plans

a. Provident fund

b. State defined contribution plans

- Employers Contribution to Employees State Insurance

- Employers Contribution to Employees Pension Scheme 1995

The provident fund and the state defined contribution plan are operated by the Regional Provident Fund Comissioner .Under the schemes.the Company is required to contribute a specific percentage of payroll cost to the reirement benefit schemes to fund the benifits. These Funds are recognised by the income tax authorities.

The Company has recognised the following amounts in the profit and loss Account for the year.

12. Licensed and Installed Capacity

The Company is Small Scale Industrial undertaking engaged in manufacturing of various types of Textile/Chemical/Food processing machinery produced as per the specification, hence the Licensed/Installed Capacities can not be quantified.

 
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