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Notes to Accounts of Shree Krishna Paper Mills & Industries Ltd.

Mar 31, 2015

1. Rights, preferences and restrictions attached to Shares:

Equity Shares

The Company has one class of Equity Shares referred to as Equity Shares having at par value of Rs. 10/- each. Each Shareholder is entitled to one vote per share. In the event of liquidation, the equity-holders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

Preference Shares

The Company has one class of Preference Share referred to as Preference Shares redeemable at par value of Rs. 100 each. These shares carry a fixed cummulative dividend of 4% per annum and a preferential right in respect of dividend and capital over Equity Shareholders. The Preference Shares are redeemable at par on or before March 31, 2017. In view of arrear of dividend, preference shareholders are entitled to vote on every resolution placed before the Company.

2. Details of Security and Terms of Repayment:

(a) Current maturities of long term borrowings are taken under current liabilities (Refer note no. 9)

(b) Term Loans from Banks, under consortium arrangement having Bank of India as Lead Bank, are secured by first pari - passu charge on all movable and immovable property (other than current assets) of Kotputli unit both present and future, second charge on the current assets of the Company, collaterally secured by first pari-passu charges on the block assets of Bahadurgarh Unit and by personal guarantee of two Directors of the Company.

(c) Term Loans from banks are also collaterally secured by pledge of 48,20,400 (Previous Year 48,20,400) Equity Shares held by the Promoter and promoter group.

(e) Unsecured Loans are repayable on March 31,2017. However, the Company has the option to pay before maturity by giving prior notice of 30 days.

(f) The above loans carry varying rates of interest with the maximum rate of interest going upto 12.45% (Previous Year 12.50%).

3. Details of Security:

(a) Cash Credit facilities from Banks under consortium arrangement having Bank of India as Lead Bank, are secured by first pari - passu charge on hypothecation of Inventories and receivables and all other current assets of the Company, collaterally secured by second pari - passu charge on the entire movable and immovable assets of the Company both present and future and personal guarantee of two Directors of the Company.

(b) Cash Credit facilities are also collaterally secured by pledge of 48,20,400 (Previous Year 48,20,400) Equity Shares held by Promoter and promoter group.

(c) Maximum rate of interest was 11.45% per annum (Previous year 11.50% per annum).

4. CONTINGENT LIABILITIES AND COMMITMENTS (to the extent not provided for) (Rs. in lacs)

Particulars 2014-2015 2013-2014

(I) Contingent Liabilities

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

(i) Central Excise duty and Service Tax matters 4,065.50 4,002.91

(ii) Custom Duty matters 228.14 228.14

(iii) Water Cess 6.70 6.70

(iv) Sales Tax matters 259.98 248.13

* The contingent liabilities comprise mainly amount related to show cause notices issued by the Excise Department in respect of coating of uncoated paper amounting to 'manufacture' and applicability of duty thereon. The issue has been finally decided by the Hon'ble Supreme Court in case of Pitamber Coated Paper that the coating of uncoated paper does not amounts to manufacture. Accordingly, the Company has made request to the Commisioner to drop the show cause notices.

* The other contingent liabilities have been disputed by the Company before respective authorities on account of classification, rates and applicability.

* Based on the legal advices, the Company is reasonably certain that the outcome of these proceedings shall not have a material impact on its financial statements.

(b) Other money for which the Company is contingently liable;

(i) Right of Recompense under CDR package 769.34 660.26

(ii) Arrears of Dividend on 4% Cummulative Redeemable Preference Share 127.49 100.91 (including dividend distribution tax)

(II) Commitments

(i) Estimated amount of contracts remaining to be executed on capital account 32.45 16.87 and not provided for

5. Disclosure under clause 32 of Listing Agreement is not applicable since the Company does not have any subsidiary/ associates.

6. The accumulated losses of the Company had fully eroded the net worth of the Company as on March 31,2013. During the financial year 2013-14 and 2014-15, the performance of the Company has improved and the Company has earned profit but still the accumulated losses are higher than the net worth of Company. The Company is in continuing process of implementing various measures such as increasing the production, optimising resources utilisation, improving operational efficiencies and other cost control measures to improve the Company's operating results and cash flows. With the improvement in business conditions, the Company expects to perform better in the future. The Company believes that these measures will result in substantial cash flows. Accordingly, Company's financial statements have been prepared on a going concern basis. In the opinion of the Board, going concern assumption is appropriate for preparation and presentation of financial statements.

7. The reference filed by the Company with Board for Industrial & Financial Reconstruction based on negative net worth as on March 31, 2014 has been registered by the Board. The accumulated losses are still higher than the net worth of the Company as on March 31,2015.

8. Corporate Debt Restructuring (CDR) Package was sanctioned to the Company vide LOA dated August 17, 2009. The package was successfully implemented by all the Bankers w.e.f. the cut off date i.e. April 01, 2009 as per terms and conditions set out in the Letter of Approval (LOA). The CDR lenders have a right to recompense of their waivers & sacrifices made as part of the CDR proposal. The recompense payable by the Company is contingent on various factors, outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as contingent liability.

9. During the year, the Company has revised the useful life of fixed assets as prescribed in Schedule II to the Companies Act, 2013. Accordingly, depreciation of the year is lower is by Rs. 180.39 lacs. Further, an amount of Rs. 28.83 lacs (net of deferred tax) on account of assets whose useful life is already exhausted on April 01, 2014 has been adjusted with Reserves & Surplus.

10. Based on the information available with the management regarding status of suppliers under Micro, Small & Medium enterprises development Act, 2006, there is no due to the supplier as on 31st March, 2015. Further, there is no interest paid/ payable to the suppliers.

11. The debit / credit balances of Trade Payables, Trade Receivables and Short / Long Term Loans & Advances are subject to reconciliation /confirmation, although confirmations have been sent after the close of the year. In the opinion of the management, there shall be no material impact on the financial statements of any adjustments, if any, arising on such confirmation /reconciliation.

12. Net increase/decrease in excise duty liability on closing stock of finished goods as at year end has been shown as "Excise Duty on Stock (Net)" in note no. 27 of Notes to the financial statements

13. In the opinion of the management, no liability towards Income Tax is contemplated and hence no provision has been made in the books of account for Income Tax.

14. The Company's current business activity has only one primary reportable segment i.e. paper. Hence, "Segment Reporting", under AS-17 is not applicable.

15. RELATED PARTY DISCLOSURES

As per Accounting Standard 18, all related parties have been identified by the management and relied upon by the auditors. There are no related parties where control exists.

i) Key Management Personnel:

Mr. N.K. Pasari

ii) Relative of Key Management Personnel Mr. Naynesh Pasari

iii) Enterprise where Key Management Personnel/Relative of Key Managerial Personnel has significant influence:

Laxmi Traders Amer Hotels Ltd.

Gopala sales Pvt. Ltd. Bishwanath Industries Ltd.

Bishwanath Traders & Investments Ltd. Govinda Power & Products Pvt. Ltd.

SKCS Finvest Pvt. Ltd.

16. Comparative corresponding figures for the previous year have been regrouped and/or re-arranged wherever considered necessary.


Mar 31, 2014

1) The accumulated losses of the Company had fully eroded the net worth of the Company as on March 31, 2013. During the financial year 2013-14, the performance of the Company has improved a lot and the Company has earned profit but still the accumulated losses are higher than the net worth of Company. The Company is in continuing process of implementing various measures such as increasing the production, optimising resources utilisation, improving operational efficiencies and other cost control measures to improve the Company''s operating results and cash flows. With the improvement in business conditions, the Company expects to perform better in the future. The Company believes that these measures will result in substantial cash flows. Accordingly, Company''s financial statements have been prepared on a going concern basis. In the opinion of the Board, going concern assumption is appropriate for preparation and presentation of financial statements.

2) The reference filed by the Company with Board for Industrial & Financial Reconstruction based on negative net worth as on March 31, 2013 has been rejected by the Board keeping in view of the profits during the year and expectation of positive net worth at the earliest. Further as on March 31, 2014, the accumulated losses are still higher than the net worth of the Company and hence, necessary reference will be made again to the Board for Industrial & Financial Reconstruction within the prescribed time.

3) Corporate Debt Restructuring (CDR) Package was sanctioned to the Company vide LOA dated August 17, 2009. The package was successfully implemented by all the Bankers w.e.f. the cut off date i.e. April 1, 2009 as per terms and conditions set out in the Letter of Approval(LOA). The CDR lenders have a right to recompense of their waivers & sacrifices made as part of the CDR proposal. The recompense payable by the Company is contingent on various factors, outcome of which currently is materially uncertain and hence the proportionate amount payable as recompense has been treated as contingent liability.

4) Based on the information available with the management regarding status of suppliers under Micro, Small & Medium enterprises development Act, 2006, there is no due to the supplier as on March 31, 2014. Further, there is no interest paid/ payable to the suppliers.

5) The debit / credit balances of Trade Payables, Trade Receivables and Short / Long Term Loans & Advances are subject to reconciliation /confirmation, although confirmations have been sent after the close of the year. In the opinion of the management, there shall be no material impact on the financial statements of any adjustments, if any, arising on such confirmation /reconciliation.

6) Excise duty has been deducted from gross sales/revenue from operations on the face of the statement of Profit & Loss and represents amount recovered from the customers. Net increase/decrease in excise duty liability on closing stock of finished goods as at year end has been shown under the head "Excise Duty on Stock (Net)" in note no. 27 of Notes to the financial statements.

7) In the opinion of the management, no liability towards Income Tax is contemplated and hence no provision has been made in the books of account for Income Tax.

8) The Company''s current business activity has only one primary reportable segment viz. Paper. Hence, "Segment Reporting", under AS-17 is not applicable. The Secondary segment is also not relevant as there is no exports sale during this year.

9) RELATED PARTY DISCLOSURES

As per Accounting Standard 18, all related parties have been identified by the management and relied upon by the auditors. There are no related parties where control exists.

i) Key Management Personnel:

Mr. N. K. Pasari- Managing Director

ii) Enterprise where Key Management Personnel/Relative of Key Managerial Personnel has significant influence: Laxmi Traders Amer Hotels Ltd.

Gopala sales Pvt. Ltd. Bishwanath Industries Ltd.

Bishwanath Traders & Investments Ltd. Govinda Power & Products Pvt. Ltd.

iii) Details of transactions with the related parties.

10) Comparative corresponding figures for the previous year have been regrouped and/or re-arranged wherever considered necessary.


Mar 31, 2013

1.1) The accumulated losses of the Company have fully eroded the net worth of the Company.However, the Company has been actively implemanting various measures such as increasing the production, optimising resources utilisation, improving operational efficiencies and other cost control measures to improve the Company''s operating results and cash flows. With the improvement in business conditions, the Company expects to perform better in the future. The Company believes that these measures will result in substantial cash flows. Accordingly, Company''s financial statements have been prepared on a going concern basis. In the opinion of the Board, going concern assumption is appropriate for preparation and presentation of financial statements.

1.2) Based on the information available with the management regarding status of suppliers under Micro, Small & Medium enterprises development Act, 2006, there is no due to the supplier as on 31st March, 2013. Further, there is no interest paid/ payable to the suppliers.

1.3) The debit / credit balances of Trade Payables, Trade Receivables and Short / Long Term Loans & Advances are subject to reconciliation /confirmation, although confirmations have been sent after the close of the year. In the opinion of the management, there shall be no material impact on the financial statements of any adjustments, if any, arising on such confirmation /reconciliation.

1.4) The Company''s current business activity has only one primary reportable segment viz. Paper. Hence, "Segment Reporting", under AS-17 is not applicable. The Secondary segment is also not relevant as exports sale is insignificant.

1.5) RELATED PARTY DISCLOSURES

As per Accounting Standard 18, all related parties have been identified by the management and relied upon by the auditors. There are no related parties where control exists.

i) Key Management Personnel:

Mr. N.K. Pasari- Managing Director

ii) Enterprise where Key Management Personnel/Relative of Key Managerial Personnel has significant influence:

Laxmi Traders Amer Hotels Ltd.

Gopala sales Pvt. Ltd. Bishwanath Industries Ltd.

Bishwanath Traders & Investments Ltd. Govinda Power & Products Pvt. Ltd.


Mar 31, 2012

1.1) Hitherto leasehold land was shown at cost and no amortisation in respect of premium paid was done in the statement of Profit &Loss . However, from the current financial year, the Company has amortised premium paid w.e.f. the date of acquisition. Total depreciation includes lease amortisation amounting to Rs. 1.77 lacs for current year and Rs. 15.78 lacs for period upto 31.03.2011.

1.2) CONTINGENT LIABILITIES NOT PROVIDED FOR: (Rs. in lacs)

Particulars 2011-2012 2010-2011

a) (i) Central Excise duty and Service Tax matters 3,705.95 3703.22

(ii) Custom Duty matters 249.97 228.14

(iii) Water Cess 4.92 3.99

(iv) Sales Tax matters 213.83 184.65

b) Arrear of Dividend on 4% Cumulative Redeemable Preference Share 53.80 30.55 (including dividend distribution tax)

c) Capital Commitments 36.38 4.22

1.3) The Company has not received any memorandum (as required to be filed by the suppliers with the notified authority under Micro, Small & Medium enterprises development Act, 2006) claiming their status as micro, small or medium enterprises. Consequently, the amount including interest, if any, paid/payable to the parties during the year is Nil.

1.4) The Company had created deferred tax assets upto March 31, 2011 and was virtual certain based on business model, future business plans and profitability projections. However, during the current year, the Company has considered deferred tax assets only to the extent of deferred tax liability arises on tax impact of differential depreciation.

1.5) The debit / credit balances of Trade Payables, Trade Receivables and Short / Long Term Loans & Advances are subject to reconciliation /confirmation, although confirmations have been sent after the close of the year. In the opinion of the management, there shall be no material impact on the financial statements of any adjustments, if any, arising on such confirmation /reconciliation.

1.6) The Company's current business activity has only one primary reportable segment viz. paper. Hence, "Segment Reporting", under AS-17 is not applicable. The Secondary segment is also not relevant as exports sale is insignificant.

1.7) RELATED PARTY DISCLOSURES UNDER ACCOUNTING STANDARD (AS) 18:

All related parties have been identified by the Management and relied upon by the auditors. There are no related parties where control exists.

i) Key Management Personnel:

Mr. N.K. Pasari- Managing Director

ii) Enterprise where Key Management Personnel/Relative of Key Managerial Personnel has significant influence: Laxmi Traders Gopala sales Pvt. Ltd. Amer Hotels Ltd.

Bishwanath Traders & Investments Ltd. Bishwanath Industries Ltd.

iii) Details of transactions with the related parties.

1.8) During the year ended March 31, 2012, the revised Schedule-VI notified under the Companies Act,1956 has become applicable to the Company for preparation and presentation of its Financial Statements. Accordingly, the Company has reclassified, regrouped and rearranged the previous year figures to make them comparable with current year's figures.


Mar 31, 2010

I. Contingent Liabilities not provided for:

(a) Guarantees given by the banks on behalf of the Company Rs. 10,677 thousands (Rs. 10,196thousands).

(b) letter of Credit issued by the banks on behalf of the Company Rs, 4,392 thousands (Rs, 28,724 thousands).

(c.) Claims not acknowledged as debts by the Company to the extent ascertainable Rs. 1,958 thousands (Rs. 1,958 thousands).

(d) Arrears of 4% Cumulative Redeemable Preference Shares dividend (including dividend distribution tax) of Rs, 731 thousands (Rs. NIL), (e) Estimated amount of contracts remaining to be executed on capita) commitment (net of advance} Rs,15,665 thousands (Rs.25,754 thousands),

(f) The Company is in receipl of show cause notices for Rs,4,06,861 thousands (Rs. thousands) from the Central Excise & Custom, DGFX Service Tax department and other authorises. Replies to show cause notices have been submitted and adjudication is. pending with the department.

(g) The Company has deposited Rs. 25,000 thousands in the year 2005-2006 under protest with the Custom 1 Department, Jaipur, (Rajasthan) and the matter Is sub-judice. 2. The Company has accounted for deferred tax assets of Rs. 44,057 thousands (Rs, 26,098 thousands) and is confident that subsequent realisation of the deferred tax assets created is virtually certain in the mar future based on existing business model, future business plans of the Company and its profitability projections.

Further break-op of deferred tax assets (liabilities) is as under:-

2. The Company has not received any memorandum as required to be tiled by the suppliers with the notified authority under Micro, Small & Medium enterprises development Act, 2006) claiming their status as. micro, small or medium enterprises. Consequent!}, the amount paid/payable to the parties during the year is nil.

3. During the year, the Company has been sanctioned a Restructuring Package by Corporate Debl Restruduring Cell vide LOA No. CDR(ABP) No.605/2009-10 dated 17,08-2009 under the CDR Mechanism, for restructuring of the existing financial assistance and sanction of additional finance to the Company. The COR Package has bee implemented w.e.f. cut off date i.e 1st April 2009 by all the Bankers in the manner and as per terms .and conditions set out in the Latter of Approval (LOA). The Bankers will have the right to reverse the waiveers/sacrifices in case of events of default as setout in LOA. The COR proposal includes reschedulement of existing Term bans, sanrlion of new term loans, additional working capital finance, reduction in interest rates, carving out of working tapilal limits and funding of inreest. As per terms & conditions of CDR packagc, 48,20.400l equity shares held by the Promoters of the Company have been pledged with the Bankers.

4. The Company has issued 5,00.000 4% Cumtskitive Redeemable Preference Shares, in cash, of Rs, 100/- each amounting Rs 50,000 thousands during the year to all the Companys Banker as per CDR Package.

5. The debit/credit balances of Sundry Creditors. Sundry Debtors and Loans & Advances are subject to recimriliatkm/confimation, although confimations have been sent after the close of the year In the opinion of the management, there shall be no material impact on the financial stalements of any adjustments, if any, arising on such conrinmation /reconciliation.

6, The Companys current business activity has only one primary reportable segment viz. paper. Heme "Segment Repotting", under AS -17 is not required. The Secondary segment is also not relevant as exports sale is insignificant,

7, During the year, modification/renovation of the keshwana unit was done by the Company which has resulted into into increase in installed capacity from 30,000 TPA to 36,000 TPA.

8 Information pursuant to the provisions of paragraph 3.4C &4D of part-II of Schedule VI of the Companies Act, 195. Quantitative other information regarding:

9, Earning Per Share

The Company reports basic. and diluted earnings per equity share in accordance with Accounting Standard 20 "Earmings per share". Busk /Diluted earnings per share computed by dividing net profit lax by the weighted average number of equity ahares outstanding during the year.

10. Related Party Disclosures under At counting Standard (AS) 18, All related parties have been identified by the Management and relied upon by the auditors There are no related parties where control exists.

i)Key Management Personnel;

Mr. N.K. Pasari - Managing Director

ii) Relative of Key Managerial Personnel:

Mr. Naynesh Pasari - Son of Managing Director

11. figures in brackel represens previous year figures, 18.Comparative comesponding figures for the previous year have been regrouped and or sharrangged wherever considered necessary

12. All the figures are rounded off to the nearest thousands.

 
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