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Notes to Accounts of Shekhawati Poly Yarn Ltd.

Mar 31, 2015

Note 1 : Corporate Information

Shekhawati Poly-Yarn Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India (BSE & NSE). The Company is principally engaged in the manufacturing of Texturising Yarn, Twisting Yarn and Knitted Fabrics. The Company caters to both domestic and international markets.

2 The Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Statement of Profit & Loss for the year.

3 In the opinion of the Board the Current Assets (other than those doubtful & provided for) and Loans and Advances are approximately of the value stated and realizable in the ordinary course of business. The Provisions of all known liabilities is adequate and not in excess of the amount reasonably necessary.

Note: Company has obtained license under Export Promotion Capital Goods Scheme (EPCG) for purchase of capital goods on zero percent custom duty. Under the EPCG the Company needs to fulfill certain export obligations, failing which, it is liable for payment of custom duty . Expor t Ob ligations at the end of current financial year is Rs. 25,438.56 lacs (includes Rs. 21,265.03 lacs towards average maintainable exports) (PY Rs. 7315.10 lacs) which needs to be fulfilled within 6/8 years from the date of purchase of respective license.

4 : Commitments

Estimated amount of contracts remaining to be executed on capital account (net of advances) and not provided for is Rs. 8,189.61 lacs (PY: Rs. Nil/-).

5 The Company has revised depreciation rates on fixed assets w.e.f. April 01, 2014 as per the useful life specified in Schedule II of the Companies Act, 2013. As prescribed in Schedule II, an amount of Rs 5.22 lacs (net of deferred tax) has been charged to the opening balance of retained earnings for the assets in respect of which the remaining useful life is NIL as on April 01, 2014 and in respect of other assets on that date, depreciation has been calculated based on the remaining useful life of those assets. Had the Company continued with the previously applicable rates mentioned in Schedule XIV of the Companies Act, 1956, charge for depreciation for the year would have been higher and net profit would have been lower by Rs. 97.41 lacs respectively.

6 Segment Reporting

In accordance with the requirements of Accounting Standard 17 "Segmental Reporting", the Company's business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

7 Figures of previous year have been re-grouped, reclassified and/or rearranged as and wherever necessary.


Mar 31, 2014

Note 1 : Corporate Information

Shekhawati Poly-Yarn Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India (BSE & NSE). The Company is principally engaged in the manufacturing of Texturising Yarn, Twisting Yarn and Knitted Fabrics. The Company caters to both domestic and international markets.

2 The Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Statement of Profit & Loss for the year.

3 In the opinion of the Board the Current Assets (other than those doubtful & provided for) and Loans and Advances are approximately of the value stated and realizable in the ordinary course of business. The Provisions of all known liabilities is adequate and not in excess of the amount reasonably necessary.

4 Contingent Liabilities

a) Outstanding Bank Guarantee Rs. 232.50 Lakhs (P. Y. Rs. 220.00 Lakhs)

b) Outstanding Letter of Credit Rs. 953.51 Lakhs ( P. Y. Rs. 520.97 Lakhs )

c) The Company has purchased Machinery under the EPCG Scheme whereby it has obligation of exporting goods on FOB basis amounting to 8 times the Import duty saved within a period of 8 years. The amount of duty saved till 31st March, 2014 is Rs. 1749.67 Lakhs (P.Y. Rs. 1749.67 Lakhs). Accordingly, the Company has exported goods amounting to Rs. 10,619.65 Lakhs (P.Y. Rs. 5,637.46 Lakhs) on FOB Basis and export obligations as on 31st March 2013 is Rs. 7,315.11 Lakhs (P.Y. Rs. 8,359.88 Lakhs).

5 Segment Reporting

In accordance with the requirements of Accounting Standard 17 "Segmental Reporting", the Company''s business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

6 Figures of previous year have been re-grouped, reclassified and/or rearranged as and wherever necessary.

7 Figures less than Rs.500/- have been shown at actual wherever statutory required to be disclosed since figures have been rounded off to the nearest thousands.


Mar 31, 2013

1 Corporate Information

Shekhawati Poly-Yarn Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on both the principal stock exchanges in India. The Company is engaged in the manufacturing and selling of Texturising Yarn, Twisting Yarn and knitted Fabrics. The Company caters to both domestic and international markets.

2 Provision for taxation for the accounting year has been computed on the basis of Minimum Alternate Tax (MAT) in accordance with Section 115 JB of the Income Tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the Company has recognized "MAT credit entitlement "of Rs. 141.64 Lacs (P.Y. Rs. 129.10 Lacs) as an asset by crediting to the Statement of Profit and Loss an equivalent amount and included the same under "Long term Loans and Advances "in accordance with the Guidance Note on "Accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India.

* Pursuant to approval of the members dated March 15, 2013 through postal ballots, 1 Equity Share having face value of Rs. 10 each has been subdivided into 10 Equity Shares of Re. 1 each. Hence, Previous year Basic and Diluted earning per share has been restated accordingly.

3 The Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Statement of Profit & Loss for the year

4 In the opinion of the Board the Current Assets (other than those doubtful & provided for) and Loans and Advances are approximately of the value stated and realizable in the ordinary course of business. The Provisions of all known liabilities is adequate and not in excess of the amount reasonably necessary.

5 Few of the balances appearing under the head of Trade receivables, Trade Payables and Loans and Advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment. The management, however, does not expect any material adjustment.

6 Contingent Liabilities

a) Outstanding Bank Guarantee Rs. 220 Lacs (P. Y. Rs. 248.65 Lacs)

b) Outstanding Letter of Credit Rs. 520.97 Lacs (P. Y. Rs. 489.37 Lacs)

c) The Company has purchased Machinery under the EPCG Scheme whereby it has obligation of exporting goods on FOB basis amounting to 8 times the Import duty saved within a period of 8 years. The amount of duty saved till March 31, 2013 is Rs.1749.67 Lacs (P.Y. Rs.1245.82 Lacs ). Accordingly, the Company has exported goods amounting to Rs. 5637.46 Lacs (P.Y. Rs.3947.01 Lacs) on FOB Basis and export obligations as on March 31, 2013 is Rs. 8359.88 Lacs (P.Y. Rs.6019.56 Lacs).

d) Estimated amount of Contracts remaining to be executed on Capital Account Rs. 829.86 Lacs (Net of Advances) (P. Y. Rs. 1252.55 Lacs).

e) Excise Duty refund contested in appeal Rs. Nil (P.Y 159.02 Lacs)

7 Segment Reporting

In accordance with the requirements of Accounting Standard 17 ''''Segmental Reporting", the Company''s business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

8 During the year, the Company has passed Special Resolution through postal ballot on March 15, 2013 for change of registered office from Express Zone,"A" wing, Unit No. 1102/1103, Patel Vatika, Off.Western Express Highway, Malad (East), Mumbai, Maharashtra to Plot No. 185/1, Naroli Village, Near Kanadi Phatak, Dadra & Nagar Haveli (Union Territory). The Company is in the process of complying with the various ROC formalities in this regard.

9 Figures of previous year have been re-grouped, reclassified and/or rearranged as and wherever necessary.

10 Figures less than Rs. 500/- have been shown at actual wherever statutory required to be disclosed since figures have been rounded off to the nearest thousands.


Mar 31, 2012

1. Corporate Information

Shekhawati Poly-Yarn Limited (the Company) is a public company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its shares are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of Texturising Yarn, Twisting Yarn and knitted Fabrics. The Company caters to both domestic and international markets.

a Term loan from banks amounting to Rs. 4,94,00,000 (P.Y. 6,62,00,000) was taken during the financial year 2007- 08 and carries Interest @ Base Rate 5% p.a. The loan is repayable in 81 monthly installments starting from September 2008. The Loan is Secured By 1st equitable mortgage charge on Company's Land admeasuring 3000 sq.mtrs. & Building,Plant & Machinery, Furniture & Fixtures, Office Equipments & all other Fixed assets situated at Plot No 44,Government Industrial Estate Masat Silvassa. 2nd charge on paripassu basis with other Bank on the Land,Building, Plant & Machinery, Office Equipments and all other Fixed Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village Naroli, Silvassa. 1st Charge on office No 1102 & 1103 (carpet area 115.29 sq.mt each)Express Zone, A wing, Western Express Highway, Goregoan (East) and 2nd charge on parripassu basis with other lenders over the entire current assets of the company.

b Term Loan from banks amounting to Rs.5,01,33,073 (P.Y. 6,02,13,067) was taken during the financial year 2009-

10 and carries interest @ Base rate 5% p.a. The loan is repayable in 78 monthly insttallments starting from October 2010. The Loan is Secured By 1st Equitable mortgage on pari-passu basis with other Bank on the Land & Building (Ground Floor),Plant & Machinery, Office Equipment (10 texturising machines) and all other Fixed Assets to be situated on ground floor plot, Survey no 185/P adm 47900 sq mtrs, village Naroli Silvassa.2nd charge on pari passu basis over entire fixed assets land & building at Plot No 44 adm 3000 sqmtrs, Govt Industrial Estate Masat, Silvassa and other location.1st Charge on office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A wing, Western ExpressHighway, Goregoan (East) and 2nd charge on parripassu basis with other lenders over the entire current assets of the company.

c Term Loan from banks amounting to Rs.4,76,00,000 was taken during the current year and carries interest @ Base rate 5.65% p.a. The Loan is repayable in 80 monthly installments starting from April 2012. The Loan is secured by 1st equitable charge on Building (1st & 2nd Floor) constructed on Plot No 185/P adm 47900 sqmtrvillage Naroli, Silvassa owned by the company. 2nd charge on paripassu basis with other Bank on the Land,Building, Plant & Machinery, Office Equipments and all other Fixed Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village Naroli, Silvassa. 2nd parripassu charge with other Bank Ltd on entire fixed assets(other than 1st charge on assets to be created out of TL-IV from SBI) at Plot No 44, Govt Industrial Estate Masat,Silvassa and S.No. 185/P adm 47900 sqmtrs village Naroli Silvassa. 1st Charge on office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A wing, Western Express Highway, Goregoan (East) and 2nd charge on parripassu basis with other lenders over the entire current assets of the company.)

d Term Loan from banks amounting to Rs. 28,18,89,545 was taken during the current year and carries interest @ Base rate 4.50% p.a. The loan is repayable in 76 monthly installments starting from October 2012. However, the Company has approached the bank in May 2012 for the revision of repayment schedule and requested to extend the Commencement of the repayment schedule from April 2013 instead of October 2012.The Loan is secured by 1st hyothecation charge on shed, plant & machinery to be installed on 1st & 2nd Floor, Plot No 185/P, adm 47900 sqmtr,village Naroli, Silvassa owned by the company and extension of 1st charge on Building (1st & 2nd Floor)constructed on Plot No 185/P, Naroli. 2nd charge on paripassu basis with other Bank on the Land,Building, Plant & Machinery, Office Equipments and all other Fixed Assets situated at plot, Suvery No 185/Padm 47900 sq mtrs village Naroli, Silvassa. 2nd parripassu charge with other Bank Ltd on entire fixed assets(other than 1st charge on assets to be created out of TL-IV from SBI) at Plot No 44, Govt Industrial Estate Masat,Silvassa and S.No. 185/P adm 47900 sqmtrs village Naroli Silvassa. 1st Charge on office No 1102 & 1103 (carpet area 115.29 sq.mt each) Express Zone, A wing, Western Express Highway, Goregoan (East) and 2nd charge on parripassu basis with other lenders over the entire current assets of the company.

e Term Loan from banks amounting to Rs. 12,45,98,196 (P.Y. 15,00,90,062) was taken during the financial year 2010-11 and carries interest @ Base rate 3.50% p.a The loan is repayable in 78 monthly installments starting from January 2011. The loan is secured by Secured By Equitable mortgage of land and building & hypothecation of Plant & Machinery(both acquired out of TL and installed at S No 185/1, Near Silavassa ,D&N Haveli (UT) on parripassu with SBI.Second parripassu charge on entire fixed assets of teh company with SBI (for land & building at plot No 44, Govt Industrial Estate Masat,Silvassa to the extent of Rs.10 Crore).Second parripassu charge on entire current assets of the company with SBI.

f All the above term loans are guaranteed by both the Chairman & Managing Director of the Company.

g Vehicle Loan amounting to Rs.22,02,618 (P.Y. Rs 29,87,838) was taken during the fiancial year 2009-10 and carries interest @ 8.67% p.a.The loan is repayable in 60 monthly instalments along with interest starting from Oct 2010.The loan is secured by 1st charge on the vehicle specifically finanaced out of loan

h Loan from Companies includes

I) Rs.25,00,000 (P.Y Rs.25,00,000 ) taken during the financial year 2010-11 and carries interest @15% p.a..The loan is unsecured and is repayable on demand after a period of one year.

ii) Rs.1,00,00,000 taken during the current year and carries interest @ 18% p.a..The loan is unsecured and is repayable on demand after a period of one year.

a Cash credit and letter of credit from banks amounting to Rs. 39,72,02,878 (P.Y. 26,93,50,315) is secured by 1st Hypothecation charge on entire current assets of the company on parripassu basis. 2nd charge on pari passubasis on Land & Building, Plant & Machinery, Office Equipments and all other Fixed Assets situated at plot, Survey No 185/P adm 47900 sq mtrs village Naroli Silvassa. 2nd charge on pari passu basis over entire fixed assets Land & Building at Plot No 44 adm 3000 sqmtrs, Govt Industrial Estate, Masat, Silvassa and othe location(for land and building to the extent of Rs.10 Crores). 2nd charge on building Shed, Plant & Machinery of Proposed Project at Unit-3 situated at Naroli (under New project) 1st charge in office No 1102 & 1103, situated at Express Zone, A wing, Western Express Highway, Goregoan (East).The cash credit is repayable on demand and carries interest @ Base Rate 4% p.a.

b Cash credit from banks amounting to Rs.2,02,14,234 (P.Y. 1,80,00,800) is secured by 1st parripassu charge over entire current assets of the company, present & future. 2nd parripassu charge over the entire fixed assets of the company, present, future (for land & building at Plot No 44, Govt Industrial Estate Masat, Silvassa to the extent of Rs 10 crores. The cash credit is repayable on demand and carries interest @Base Rate 3.5% p.a.

2 INTANGIBLE ASSETS UNDER DEVELOPMENT

The Administration of Dadra and Nagar Haveli (U.T.), Electricity Department, Silvassa has granted permission of 66KV Power supply line with 66KV Multi Circuit Tower Line from 220/66/11 Kharadpada sub station to the factory premises of the Company. They have approved the same on the condition that entire cost in respect of the said arrangement will be incurred by the Company. Till March 2012, the Company has incurred a sum of Rs. 2,07,29,597 and the same has been reflected as Intangible Assets under Development.

3. Provision for taxation for the accounting year has been computed on the basis of Minimum Alternate Tax (MAT) in accordance with Section 115 JB of the Income Tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the Company has recognized "MAT credit entitlement "of Rs.1,29,09,589(P.Y. Rs. 43,68,893) as an asset by crediting to the Profit and Loss Account an equivalent amount and included the same under "Long term Loans and Advances "in accordance with the Guidance Note on "Accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961” issued by the Institute of Chartered Accountants of India.

4 The Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Profit & Loss for the year.

5 In the opinion of the Board the Current Assets (other than those doubtful & provided for) and Loans and Advances are approximately of the value stated and realizable in the ordinary course of business. The Provisions of all known liabilities is adequate and not in excess of the amount reasonably necessary.

6. Few of the balances appearing under the head of Trade receivables, Trade Payables and Loans and Advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment. The management, however, does not expect any material adjustment.

7. Contingent Liabilities not provided for:

a) Outstanding Bank Guarantee Rs. 2,48,65,000 ( P. Y. Rs. 79,15,000)

b) Estimated amount of Contracts remaining to be executed on Capital Account Rs.12,52,55,061 (Net of Advances) ( P. Y. Rs.2,24,05,593).

c) The Company has purchased Machinery under the EPCG Scheme whereby it has obligation of exporting goods on FOB basis amounting to 8 times the Import duty saved within a period of 8 years. The amount of duty saved till 31st March, 2012 is Rs.12,45,82,059(P.Y. Rs.7,05,90,564 ). Accordingly, the Company has exported goods amounting to Rs.39,47,00,691(P.Y. Rs.18,99,55,383) on FOB Basis and export obligations as on 31st March 2012 is Rs.60,19,55,783 (P.Y. Rs.37,47,69,127).

d) Excise Duty refund contested in appeal Rs. 1,59,02,117 (P.Y Nil)

8. Related Party Disclosures

As required under Accounting Standard 18 "Related Party Disclosure” (AS-18), following are details of transactions during the year with the related parties of the Company as defined in AS 18:

9. Segmental Information:

In accordance with the requirements of Accounting Standard 17 ”Segmental Reporting”, the Company's business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

10. Till the year ended 31st March 2011, the Company was using Pre-revised Schedule VI to the Companies Act, 1956 for the preparation and presentation of its financial statements. During the year ended 31st march, 2012 the Revised Schedule VI notified under the Companies Act, 1956 have become applicable to the Company. The Company has reclassified previous year figures to confirm to this year classification. Although the adoption of Revised Schedule VI does not impact recognition and measurement principles, it does significantly impacts the presentation of presentation and disclosures made in financial statements. The summary of effects that Revised Schedule VI had on presentation of Balance Sheet of the Company for the year ended 31st March 2011 is given in Annexure 1.


Mar 31, 2011

1. During the year, in order to comply with Accounting Standard (AS) 15 (Revised 2005) "Employee Benefits" as notified by the Companies Accounts Standard, Rule 2006, the method of accounting of Gratuity and Bonus has been changed from cash basis to accrual basis of accounting and accordingly provision has been made as on 31st March 2011. Gratuity has been provided on the basis of actuarial valuation. Due to change in this accounting policy, the profit for the year is lower by Rs. 13.58 Lacs having consequential effect on the Reserves and Surplus and Current Liabilities.

2. The Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Profit & Loss for the year.

3. Purchases are inclusive of Cenvat after deducting purchase returns, discounts, rebates and incentives, if any.

4. Sales are exclusive of Excise Duty after deducting sales returns and discounts if any.

5. In the opinion of the Board the Current Assets, Loans & Advances (other than those doubtful & provided for) are approximately of the value stated and realizable in the ordinary course of business. The Provisions of all known liabilities is adequate and not in excess of the amount reasonably necessary.

6. Few of the balances appearing under the head Sundry Debtors, Sundry Creditors, Advances to Creditors, Other Loans and Advances, Deposits and Other Liabilities are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment. The management, however, does not expect any material adjustment.

7. There are no dues to the Micro, Small and Medium Enterprises which are outstanding as at the Balance Sheet Date. The information regarding Micro Small and Medium Enterprises has been determined on the basis of information available with the Company.

8. Secured Loans:

i. Term Loan From Banks:

Rs.3,354.71 lacs (PY Rs.2,786.44 lacs) Secured by mortgage of land and building, plant & machinery, furniture & fixtures (to be acquired for the new project) situated at Plot No.20,Sheetal Industrial Estate,Demini Road,dadra & Nagar Haveli which is further collaterally secured by entire stocks of imported/indigenous raw materials, finished goods, stock in process, and other current assets of the company and Personal Guarantee of Promoter Directors.

ii. Working Capital Loans From Banks:

Rs.2,873.51 lacs (PY Rs.1,204.03 lacs) First Hypothecation charge over Company's entire stocks of Imported/ Indigenous raw materials, finished goods, stock-in- process and other current assets and Second charge on pari passu with other lenders on the proposed Land & building, Plant & machinery, Office Equipments, and all other fixed assets and Personal Guarantee of Promoter Directors.

iii. Vehicle Loans:

Rs.37.08 Lacs(PY Rs.Nil) Secured by specific asset financed.(Vehicles)

9. Unsecured Loan in Schedule "4" includes Interest free loan from Alidhra Machines Private Limited amounting to Rs. 175 lacs (PY. Rs. Nil).

10. Contingent Liabilities not provided for:

a) Outstanding Bank Guarantee Rs. 79.15 lacs (Previous year Rs. 49.55 lacs).

b) Estimated amount of Contracts remaining to be executed on Capital account Rs. 224.06 lacs (Net of Advances) (Previous Year Rs. 791.44 lacs).

c) The Company has purchased Machinery under the EPCG Scheme whereby it has obligation of exporting goods on FOB basis amounting to 8 times the Import duty saved within a period of 8 years. The amount of duty saved till 31st March, 2011 is Rs.705.91 lacs (P.Y. Rs. 593.36 lacs). Accordingly, the Company has exported goods amounting to Rs. 1899.55 lacs ( P.Y. 236.02 lacs) on FOB Basis and export obligations as on 31st March 2011 is Rs.3747.69 lacs (P.Y.Rs. 4510.89 lacs).

11. Miscellaneous Expenses in Schedule "19" include Donation amounting to Rs.1 lacs (PY Rs. Nil) given to Bhartiya Janta Party.(Politcal Party)

12. Miscellaneous Expenses in Schedule "19" includes Excise Duty Receivable of Rs. 0.13 lacs on and Excise Duty Receivable of Rs. 10.95 lacs on Raw Material and Packing material relating to Unit I written off during the year as the balances are no more recoverable as the Company has surrendered the Excise Registration certificate on 19th October,2010.

13. Other Liabilities in Schedule "12" includes Rent Deposit (Interest free) against Factory Premises of Unit I amounting to Rs. 150 lacs (PY Rs. Nil).

14. Taxes on Income

Provision for taxation for the accounting year has been computed on the basis of Minimum Alternate Tax (MAT) in accordance with section 115 JB of the Income Tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the Company has recognized "MAT credit entitlement "of Rs.40.15 lacs (P.Y. Rs. 9.90 lacs) as an assets by crediting to the Profit and Loss Account an equivalent amount and included under "Loans and Advances " in accordance with the Guidance Note on "Accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India

In terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the Company has recognized Deferred Tax Liability (net) amounting to Rs. 110.41 lacs (P.Y. Rs. 72.13 lacs) for the year ended on 31st March, 2011 in the Profit & Loss Account.

15.Related Party Disclosures

As required under Accounting Standard 18 "Related Party Disclosure" (AS-18), following are details of transactions during the year with the related parties of the Company as defined in AS 18:

i) For the year ended 31st March, 2011

a) Key Management Personnels :

Shri Ramniranjan Ruia Chairman

Shri Mukesh Ruia Managing Director

b) Relative of Director and Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the company has entered into transactions during the period.

SKI Buildcon Pvt. Ltd.

Sanjay Jogi.

ii) For the year ended 31st March, 2010

a) Key Management Personnels and their Relatives :

Shri Ramniranjan Ruia Chairman

Shri Mukesh Ruia Managing Director

b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

Ruia Rayons Private Limited

16. During the year the Company has been converted into a Public Limited Company and accordingly the name of the Company has been changed to Shekhawati Poly-Yarn Limited from Shekhawati Poly-Yarn Private Limited and fresh certificate of incorporation dated 19th April, 2010 has been received from Registrar of Companies, Maharashtra.

17. During the year, the Authorized Share Capital has been increased to Rs.2500 lacs divided into 2,50,00,000 equity share of Rs.10/- each from Rs.1100 lacs divided into 1,10,00,000 equity shares of Rs. 10/- each vide resolution passed in Extra Ordinary General Meeting held on 11th June,2010.

18. The Company has allotted 57,72,165 equity shares of Rs. 10/- each as bonus shares in the ratio of 7 equity shares for every 2 equity shares held as per the resolution passed at the Meeting of Board of Directors held on 17th April, 2010.

19. The Company has raised Rs. 3602.67 lacs through a public issue of equity shares during the year. Out of the said proceeds an amount of Rs.3302.67 lacs is deployed partly in expansion of factory building, corporate office building, plant & machinery, working capital requirements, meeting IPO expenses and the balance of Rs. 300 lacs have been temporarily invested in fixed deposits with banks.

20. Segmental Information:

In accordance with the requirements of Accounting Standard 17 "Segmental Reporting", the Company’s business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

21. Additional Information Pursuant to the Provision of Part II of the Schedule VI of the Companies Act 1956 are given in Annexure ‘A’.

22. Previous figures have been regrouped, reclassified and rearranged wherever considered necessary.


Mar 31, 2010

Notes on Accounts

1. Liabilities in respect of Gratuity & Bonus are accounted for on Payment basis which is not in conformity with Accounting Standard (AS) 15 (Revised 2005) on Employee Benefits as notified by the Companies Accounts Standard, Rule 2006 which requires that Gratuity and Bonus Liabilities be accounted for on accrual basis.

2. Company is consistently following the accounting of excise duty on closing stock of finished goods on clearance of finished goods from the factory and such treatment has no impact on Profit & loss for the year.

3. Purchases are inclusive of Cenvat after deducting purchase return, discount, rebate and Incentive, if any.

4. Sales inclusive of Excise Duty after deducting Sales Return and Discount if any.

5. In the opinion of the board the Current Assets, Loans & Advances are approximately of the value stated and realizable in the ordinary course of business. The Provision of all known liabilities is adequate and not in excess of the amount reasonably necessary.

6. The balances appearing under the head sundry debtors, loans and advances, current liabilities are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

7. There are no dues to the Micro, Small and Medium Enterprises which are outstanding as at the Balance Sheet Date. This information regarding Micro Small and Medium Enterprises has been determined on the basis of information available with the Company.

8. Contingent liabilities not provided for:

a) Outstanding Bank Guarantee Rs. 49.55 lacs (Previous year Rs. 42.50 lacs).

b) The Company has purchased Machinery under the EPCG Scheme whereby it has obligation of exporting goods on FOB basis amounting to 8 times the Import duty saved within a period of 8 years. The amount of duty saved till 31st March, 2010 is Rs. 593.36 lacs (P.Y. Rs.367.89 lacs). Accordingly the Company has exported goods amounting to Rs. 236.02 lacs ( P.Y. 89.20 lacs) on FOB Basis and export obligation as on 31-03-2010 is Rs. 4510.89 lacs (P.Y.Rs.2853.91 lacs).

c) Estimated amount of Capital contract remaining to be executed on capital account Rs. 791.44 lacs (Net of Advances) (Previous Year Rs.304.25 lacs).

9. Taxes on Income

Provision for taxation for the accounting year has been computed on the basis of Minimum Alternate Tax (MAT) in accordance with I section 115 JB of the Income Tax Act, 1961. Considering the future profitability and taxable positions in the subsequent years, the I Company has recognized "MAT credit entitlement "of Rs.9.90 lacs (P.Y. Rs. 30.37 lacs) as an assets by crediting to the Profit and Loss Account an equivalent amount and included under "Loans and Advances " in accordance with the Guidance Note on "Accounting for credit available in respect of Minimum Alternate Tax under Income Tax Act, 1961" issued by the Institute of Chartered Accountants of India

In terms of Accounting Standard on "Accounting for Taxes on Income" (AS 22) the company has recognized Deferred Tax Liability (net) amounting to Rs.72.13 lacs (P.Y. Rs. 60.68 lacs) for the year ended on 31st March, 2010 in the Profit & Loss Account.

11. Related Party Disclosures

As required under Accounting Standard 18 "Related Party Disclosure" (AS-18), following are details of transactions during the year with the related parties of the Company as defined in AS 18:

I) For the year ended 31st March, 2010

a) Key Management Personnels and their Relatives :

Shri Ramniranjan Ruia Chairman

Shri Mukesh Ruia Managing Director

b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

Ruia Rayons Private Limited

Note : Related Parties are as disclosed by the Management and relied upon by the auditors There is no amount written off / written back due from / to related parties

II) For the year ended 31st March, 2009

a) Key Management Personnels and their Relatives :

Shri Ramniranjan Ruia Ch airman

Shri Mukesh Ruia M a naging Director

Smt. Kalpana M. Ruia Wife of Mukesh Ruia

b) Name of the enterprises having same Key Management Personnel and / or their relatives as the reporting enterprise with whom the Company has entered into transactions during the year.

Ruia Rayons Private Limited

Mukesh Silk Mills

Ruia Silk and Synthetics Private Limited

11. Post Balance Sheet Event

a) The Company has been converted into a Public Limited Company and accordingly the name of the Company has been changed to Shekhawati Poly Yarn Limited from Shekhawati Poly Yarn Private Limited and fresh certificate of incorporation dated 19th April, 2010 has been received from Registrar of Company, Maharashtra.

b) The Company has allotted 57,72,165 equity shares as bonus shares of Rs. 10/- each in the ratio of 7 equity shares for every 2 equity shares held as per the resolution passed at the Meeting of Board of Directors held on 17th April 2010

12. Segmental Information:

In accordance with the requirements of Accounting Standard 17 ''''Segmental Reporting", the Company''s business consist of one reportable segment of textile business, hence no separate disclosure pertaining to attributable Revenues, Profits, Assets, Liabilities, Capital employed are given.

13. Previous years figures have been regrouped, reclassified and rearranged wherever considered necessary.

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