Mar 31, 2014
1. NOTES:
I. Term Loans refered at (a) to (c) above are secured by mortgage of
fixed assets present and future of the company on first charge pari
passu basis and guaranteed by four Directors of the Company.
II. Working capital term loans referred at (d) above are Secured by
way of hypothecation of Raw materials, Stock-in- process, finished
goods and stores and spares and book debts of the Company and also
secured by way of second charge on fixed assets of the company on pari
passu basis and guranteed by four Directors of the Company.
2. (1) A Scheme of arrangement (referred to as "Scheme of Arrangement
under Section 391-394 of the Companies Act, 1956 was approved by the
shareholders of Suryavavanshi Spinning Mills Limited (SVSML) on 24th
May 2014 , for demerger of Spinning unit at Bhongir, Nalgonda District,
Telangana , into Aananda Lakshmi Spinning Mills Ltd'' (ALSML) and
Spinning unit at Rajna,Pandhurna Taluq, Chindwara District, Madhya
Pradesh - and Garment manufacturing Units at Aliabad, Medchal,
Rangareddy District, Telangana and at Bhongir, Nalgonda District,
Telangana, into ''Sheshadri Industries Ltd'' (SIL) and retaining Spinning
unit at Aliabad, Medchal Taluq, Ranga Reddy District, Telangana , and
Medical Textile Unit at Aliabad, Medchal,Ranga Reddy District,
Telangana with ''Suryavanshi Spinning Mills Ltd''.
(2) A) In terms of Scheme of Arrangement (the Scheme) under sections
391 -394 of the Companies Actl956, which was sanctioned by the Hon''ble
High Court on 30th July 2014. The Spinning unit at Rajna, Pandhurna
Taluq, Chindwara District, Madhya Pradesh and Garment manufacturing
Units at Aliabad, Medchal, Rangareddy District, Telangana and at
Bhongir, Nalgonda District, Telangana (( here in after called
Undertaking-2) stand demerged from Suryavanshi Spinning Mills Limited
and vested in the company as a going concern so as to become as and
from the Appointed Date (1st April 2013) the estate, assets, claims,
title, interest etc of Undertaking-2, to the company. The Scheme became
effective from 21st August, 2014.
B) The Scheme also provides for transfer of the assets and liabilities
of the Spinning unit at Rajna, Pandhurna Taluq, Chindwara District,
Madhya Pradesh - and Garment manufacturing Units at Aliabad, Medchal,
Rangareddy District, Telangana and at Bhongir, Nalgonda District,
Telangana , the legal proceedings, the employees, employee related
benefits and all contracts and agreements in relation to Undertaking-2,
to the Company.
C) In consideration of the Demerger of the Spinning unit at Rajna,
Pandhurna Taluq, Chindwara District, Madhya Pradesh and Garment
manufacturing Units at Aliabad, Medchal, Rangareddy District, Telangana
and at Bhongir, Nalgonda District, Telangana, from Suryanvanshi
Spinning Mills Limited to the company, the company has allotted
49,08,577 fully paid up equity shares of the Company Rs. 10 each,
aggregating to Rs.4,90,85,770, to the share holders of Suryavanshi
Spinning Mills Limited whose names were recorded in the register of
members of Suryavanshi Spinning Mills Limited on 28th August, 2014 (the
record date), in the ratio of 37 equiity shares of the company of Rs.10
each credited as fully paid upfor every 100 shares of Rs.10 each fully
paid up held by such members in Suryavanshi Spinning Mills Limited in
the same proportion in which shares are held by them in Suryavanshi
Spinning Mills Limited.
3. Contingent Liabilities not provided for As at 31st
March 2014
a) Against Foreign Bills Discounted 834.75
b) Against Foreign and Inland Letter of credit 879.40
c) Contracts to be executed on Capital Accounts 405.01
d) Demand raised by Sales Tax Department for the
year 2003-04 on subjecting the turnover of unit at 3.40
Madhya Pradesh to tax for not furnishing "C" Forms.
The matter is pending in Appeal before the Deputy
Commissioner (Appeals) Sales Tax, Bhopal, Madhya
Pradesh.
e) Demand raised by Sales Tax Department for the
year 2004-05 on subjecting the turnover of unit at 7.26
Madhya Pradesh to tax for not furnishing "C" Forms.
The matter is pending in appeal before the Deputy
Commissioner (Appeals) Sales Tax, Bhopal, Madhya
Pradesh.
f) The Department of Central Excise & Customs
raised a Demand for payment of Interest on the duty 20.32
payable on the depreciated value of plant and
machinery of Rajna Unit M.P at the time of debonding
from E.O.U. unit to D.TA unit. The company challanged
the demand before the Hon''ble High Court, M.P
g) The Department of Central Excise & Customs,
Bhopal, M.P raised a Demand for short payment of
Central Excise duty on the dispatch of synthetic 16.14
yarn in to DTA market at connessional rate of Excise
duty during the accounting year 2002-03 . The company
prefered an appeal before the Hon''ble Appellate
Tribunal for Customs Excise and Service Tax, New
Delhi.
h) M/s.Suryavanshi Textiles Ltd was amalgamated
with Suryavanshi Spinning Mills Limited vide scheme
of merger sanctioned by Board for Industrial and
Financial Reconstruction (BIFR) under the provisions
of Sick Industrial Companies (Special Provisions)
Act, 1985 with effect from 01-04-2007.The scheme
incorporates certain reliefs and concessions for
consideration by income tax department including
exemption from applicability of MAT u/s.115JB of the
Income Tax Act, 1961 for a period of five years from
01-04-2007.The company is pursuing the matter with the
authorities concerned for the said reliefs as per the
scheme of merger and liability under MAT u/s I 15JB of
Income Tax Act 1961 including interest as per
assessment orders is Rs.41 lacs and Rs.443 lacs for
the assessment years 2010- 11 and 20 I1-12 respectively.
In the event of the liability being chrystalized, the
liability shall be shared by Suryavanshi Spinning Mills
Limited (Demerged Company), Aananda Lakshmi Spinning
Mills Limited (Resulting Company-1) and Sheshadri
Industries Limited (Resulting Company - II) equally,
since the Company Demerged on 01.04.2013 (Appointed
Date) as per the Scheme of Arrangement approved by
Hon''ble High Court at Hyderabad. However, the relief
sought by the company was heard by BIFR and the
proceedings are awaited.
4. During the year 2005-06, the company recognized an income of Rs.
361.26 lakhs being export incentive under the Target Plus Scheme in
terms of the then prevailing Foreign Trade Policy. The Govt., of India,
Ministry of Commerce vide their Notification No.8 (RE-2006)/ 2004-09
dated 12.06.06 retrospectively reduced the benefit of entitlement from
15% to 5% on the exports effected since 01.04.2005. The company has
since received duty free credit entitlement for Rs.121.86 lakhs @ 5%
and for the balance 10%, the Company has contested before the Hon''ble
High Court at Mumbai for the restrospective reduction of the export
incentive by the Government of India. The High Court has granted an
interim stay of the notification and the matter is pending for final
orders.
5. Segment reporting is not applicable since the Company operates in
single segment i.e., Textile product
6. Since it is the first annual accounts subsequent to Demerger
previous year''s figures are not comparable.
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