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Notes to Accounts of Shree Rajasthan Syntex Ltd.

Mar 31, 2015

1. Contingent Liabilities And Commitments:

a. Claims not acknowledged as debts by the Company Rs. 88.25 Lacs (Previous Year Rs 215.97 Lacs)

b. Bills discounted with Banks and outstanding Rs. 657.22 lacs (Previous Year Rs.486.37 Lacs)

c. Counter guarantees given by the Company in respect of guarantees and Letter of Credits given by the Bankers on behalf of the Company Rs. 1590.64 Lacs (Previous year Rs. 1358.06 Lacs)

d. Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 159.53 lacs (Previous Year Rs. 319.67 lacs).

e. Demands issued by the Excise/Custom Authorities amounting to Rs. 205.43 Lacs ( Previous Year 349.65 Lacs) besides other penalties in law. The company is contesting the issues under legal advice. The company has however deposited Rs.89.93 Lacs (Previous year 92.03 lacs ) under protest.

2. Assessment of Sales Tax For The Assessment Years 2012-13, 2013-14 & 2014-15 Are Pending, Liabilities If Any, Arising Thereon Shall Be Accounted For In The Year of Assessment.

3. A. Assessment of Income Tax Has Been Completed Up To The Assessment Year 2012-13.

B. In View of Carry Forward Losses No Provision Is Required Towards Income Tax.

4. Legal Cases:

a.) The Company has received various demands of ESI aggregating to Rs. 24.44 Lacs. (Previous year Rs.24.44 Lacs). Since the matter is pending in appeal and the Company does not envisage any liability, no provision has been made. Amount deposited under Protest Rs 0.93 lacs. (Previous year Rs. 0.93 Lacs).

b.) The Company suffered losses due to breaches/non- fulfillment of the terms and conditions of the Contract with M/s. Kirloskar Oil Engines Ltd. in respect of 2 Nos. DG set of 2.5 M W supplied by them. These losses have been partly recovered by the Company by encashment of Bank Guarantee taken under the Contract with the party. For balance recovery of Rs. 234.23 lacs suit against KOEL is filed.

c) (i) The Hon'ble Supreme court in the case of Jindal Stainless Ltd. Has held levy of Entry Tax unconstitutional. It has also directed all the High Courts to look in to the constitutional validity of respective Entry Tax. Consequent to that 5 High Courts namely Allahabad, Punjab, Haryana, Jharkhand and Kerla has held the respective Entry Tax to be constitutionally invalid . The Hon'ble High Court of Rajasthan in the case of Dinesh Pouches has also held the levy of Entry Tax by the Government of Rajasthan as unconstitutional. As per legal opinion obtained amount paid by the company towards Entry Tax pursuant to Rajasthan Entry Tax Act 1999 has become refundable since inception. It filed refund claim of Entry Tax aggregating to Rs.252.32 Lacs , for the year 2001-02 to 2005-06. (ii) The Company is not liable to pay Entry Tax pursuant to the above said decision of Supreme Court, as such the Company has not provided for Entry Tax for the year 2006-2007 to 2014-15 aggregating to Rs.233.71 Lacs & interest Rs. 80.62 Lacs. (iii) The aggrieved State Governments including Government of Rajasthan filed appeals with Hon'ble Supreme Court of India. (iv) During the year various Hon'ble High Courts, including the Hon'ble High Court of Rajasthan rejected all the cases relating to Entry Tax. Aggrieved by the judgement of Hon'ble High Court of Rajasthan, the "Trade" had filed S LP with Hon'ble Supreme Court of India with Stay Application, While disposing off stay petition Hon'ble Supreme Court has given Interim Order for deposit of 50% of demand and for balance 50% Bank Guarantee to be submitted to Govt through assessing authorities. The company has deposited Rs. 121.31 Lacs against demand of Rs 303.40 Lacs.upto 2012-13 and has given bank guarantee of balance 50% Rs. 98.34 Lacs. From February 2015 the company is regularly paying Entry Tax.

d.) The company has filed writ petitions with hon'ble high court of Rajasthan against disallowances of benefits receivable by it under Rajasthan Investment Promotion Scheme 2003 (RIPS) for expansion and modernization towards interest subsidy and wage and employment subsidy aggregating to Rs.261.05 Lacs for the assessment year 2007-08 to 2011-12 inclusive of interest Rs. 63.64 Lacs. As per legal opinion obtained by the company, it is accounting these benefits in its books of account it has also filed appeal before appellate authority and deposited under protest Rs. 60.85 Lacs (Previous year Rs.60.85Lacs).

e.) As per legal opinion Urban Cess and Water Cess levied by State of Rajasthan is not leviable on the company being established at RIICO Industrial land. The entire amount Rs.245.95 lacs paid upto 31.03.2012 has become recoverable. The company has charged Rs.245.95 lacs paid upto 31.03.2012 to Profit & Loss Account. However Rs.479.68 lacs paid during 2012-13, 2013-14 & 2014-15 stands recoverable under the head Urban Cess / Water Cess deposited under Protest recoverable Account. The company has filed SLP in Supreme Court for the recovery of entire amount.

f. ) The company has paid Rs. 18,69,956/- to M/s TUSCON ENGINEERS LTD. as per arbitration award given against the company. The company has filed an appeal with Hon'ble High Court of Rajasthan against the arbitration award.

5. Since the company is upgrading its main Plant & Machinery under Technology Up gradation Fund scheme regularly, it is not carrying any asset of which carrying cost is more than its recoverable amount / value in use on the Balance Sheet date. Hence there is no impairment loss.

6. Balances appearing under the head Creditors, Debtors, Advances and Deposits are subject to confirmations yet to be received by the company.

7. All the investments of the company have been considered by its management to be of long term nature.

No provision for decline in the carrying amount of investment is made in this year's accounts as in the management's considered opinion, such decline is not of a permanent nature.

8. The company has fulfilled its export obligation under all EPCG Licenses. Hence no obligation is pending.

9. Primary Segment Information : As per Accounting Standard 17 , the requirement of Segment reporting is not applicable to the Company both in respect of Geographical Segment and Product Segment , The Company is engaged in Production of Textile products, Revenue from other segment is less than 10% of total revenue.

10. Depreciation

(i) Pursuant to the enactmant of Companies Act 2013, the company has applied the estimated useful lives as specified in Schedule II. Accordingly the unamortised carrying value is being depreciated /amortised over the revised remaining useful lives. The written down value of Fixed asstes whole lives have expired as at 1st April 2014 have been adjusted, in the opening balance of Profit and Loss Account amounting to Rs. 136.25 Lacs.

(ii) The company has provided depreciation as per Schedule II to the companies Act 2013 based on useful life of the Assets on straight line basis as under:-

(a) Where the useful life as per this schedule remains, it has been depreciated over the remaining useful life.

(b) Where the useful life is NIL, and there remains a balance after retaining the residual value, it is recognised in the opening balance of retained earnings.

(iii) The company continue to provide 100% depreciation on assets below Rs. 5000.

11. Change Valuation Method Of Inventory Of Stores & Spares.

Observing the difficulties in Computer programming the company has changed method of valuation of Inventories of Stores Spares etc. from moving weighted average cost to FIFO. This change in the basis of valuation does not have material impact on inventory cost & profit/loss of the year.

12. Exceptional Item.

Profit on Account of sale of fixed asstes shown under other non operating income includes:

Non factory building: 248.74 Lacs.

Plant & Machinery : 74.61 Lacs

Total 323.35 Lacs

13. Related Party Transactions :

Name of the Companies/Firms with whom transactions have taken place during the year :

Associate Company: Nil

Related to the Key Management Personnel :

14. The National Highway Authority has acquired 2450 Sq Meters of land situated at Bagru Ravan. The Company has filed legal case for recovery of adequate compensation. The matter is sub judice.,

15. Figures have been rounded off to the nearest rupees in Lacs.

16. Figures for previous year have been regrouped /reclassified, wherever necessary to confirm to this year's classification.


Mar 31, 2014

1. CONTINGENT LIABILITIES AND COMMITMENTS:

a. Claims not acknowledged as debts by the Company Rs. 215.97 Lacs (Previous Year Rs 645.15 Lacs)

b. Bills discounted with Banks and outstanding Rs. 486.37 lacs (Previous Year Rs.225.53 Lacs)

c. Counter guarantees given by the Company in respect of guarantees and Letter of Credits given by the Bankers on behalf of the Company Rs. 1358.06 Lacs (Previous year Rs. 1826.97 Lacs)

d. Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 319.67 lacs (Previous Year Rs.835.48 lacs).

e. (I) Demands issued by the Excise/Custom Authorities amounting to Rs. 349.65 Lacs ( Previous Year 232.63 Lacs) besides other penalties in law. The company is contesting the issues under legal advice. The company has however deposited Rs.92.03 Lacs (Previous year 84.88 lacs ) under protest.

(II) The company has not provided for various sales tax demands for the assessment years 2003-04, 2004-05 aggregating to Rs. 34.11 lacs (Previous year Rs 32.63 lacs) as these are disputed and are pending under appeal/reconsideration with appropriate authorities. Rs. 13.69 lacs (Previous Year Rs. 13.69 lacs) deposited under protest.

2. Assessment of Sales Tax for the assessment years 2012-13 & 2013-14 are pending, liabilities if any, arising thereon shall be accounted for in the year of assessment.

3. a. Assessment of Income Tax has been completed up to the assessment year 2011-12

b. In view of carry forward losses no provision is required towards Income Tax.

4. The Company has received various demands of ESI aggregating to Rs. 24.44 Lacs. (Previous year Rs. 24.44 Lacs). Since the matter is pending in appeal and the Company does not envisage any liability, no provision has been made. Amount deposited under Protest Rs. 0.93 lacs. (Previous year Rs. 0.93 Lacs).

5. The Company suffered losses due to breaches/non-fulfillment of the terms and conditions of the Contract with M/s. Kirloskar Oil Engines Ltd. in respect of 2 Nos. DG set of 2.5 MW supplied by them. These losses have been partly recovered by the Company by encashment of Bank Guarantee taken under the Contract with the party. For balance recovery of Rs. 234.23 lacs suit against KOEL is filed.

6. Since the company is upgrading its main Plant & Machinery under Technology Up gradation Fund scheme regularly, it is not carrying any asset of which carrying cost is more than its recoverable amount / value in use on the Balance Sheet date. Hence there is no impairment loss.

7. Balances appearing under the head Creditors, Debtors, Advances and Deposits are subject to confirmations yet to be received by the company..

8. All the investments of the company have been considered by its management to be of long term nature.

No provision for decline in the carrying amount of investment is made in this year''s accounts as in the management''s considered opinion, such decline is not of a permanent nature.

9. The company has fulfilled its Export obligation under all EPCG licenses. In respect of current Licences for which the obligation comes to Rs. 1487.76 Lacs (USD 24.83 Lacs) to be fulfilled within 6 Years commencing from 10.05.2013 onwards towards Custom Duty saved to the extent of Rs.265.70 Lacs. Against these Licences, export obligation has been fulfilled to the extent of Rs. 359.52 Lacs (USD 6.00 lacs)

10. (a) The Hon''ble Supreme court in the case of Jindal Stainless Ltd. Has hold levy of Entry Tax unconstitutional. It has also directed all the High Courts to look in to the constitutional validity of respective Entry Tax. Consequent to that 5 High Courts namely Allahabad, Punjab, Haryana, Jharkhand and Kerla has held the respective Entry Tax to be constitutionally invalid. The Hon''ble High Court of Rajasthan in the case of Dinesh Pouches has also held the levy of Entry Tax by the Government of Rajasthan as unconstitutional. The aggrieved State Governments including Government of Rajasthan filed appeals with larger bench of Hon''ble Supreme Court of India. The Hon''ble Supreme Court has recommended to constitute a bigger bench to decide the matter as it involves huge amount of Government funds.

As per legal opinion obtained amount paid by the company towards Entry Tax pursuant to Rajasthan Entry Tax Act 1999 has become refundable since inception.

(b) The Company is not liable to pay Entry Tax pursuant to the decision of Supreme Court, as such the Company has not provided for Entry Tax for the year 2006-2007 to 2013-14 aggregating to Rs.227.16 Lacs & interest Rs. 78.95 Lacs.

(c) The Hon''ble High Court has given interim order to deposit 50% of original entry tax liability and for remaining tax, interest & penalty a solvent security be provided accordingly company has deposited Rs. 1,08,34,422/- under protest & provided solvent security for Rs. 2,01,67,021/- for the year from 2006-07 to 2011-12. The assessment for the year 2012-13 & 2013-14 are pending.

(d) The company has filed refund claim of Entry Tax aggregating to Rs.252.32 Lacs , for the year 2001-02 to 2005-06.

11. (a) The company has filed writ petitions with Hon''ble High Court of Rajasthan against disallowances of benefits receivable by it under Rajasthan Investment Promotion Scheme 2003 (RIPS) for expansion and modernization towards interest subsidy and wage and employment subsidy aggregating to Rs.358.25 Lacs for the assessment year 2007-08 to 2011-12 inclusive of interest Rs. 115.14 Lacs. As per legal opinion obtained by the company, it is accounting these benefits in its books of account it has also filed appeal before appellate authority and deposited under protest Rs. 60.85 Lacs (Previous year Rs. 26.84 Lacs).

12. As per legal opinion Urban Cess and Water Cess levied by State of Rajasthan is not leviable on the company being established at RIICO Industrial land. The entire amount Rs. 245.95 lacs paid upto 31.03.2012 has become recoverable. The company has charged Rs.245.95 lacs paid upto 31.03.2012 to Profit & Loss Account. However Rs.310.01 lacs paid during 2012-13 and 2013-14 stands recoverable under the head Urban Cess / Water Cess deposited under Protest recoverable Account. The company has filed SLP in Supreme Court for the recovery of entire amount.

13. The company has paid Rs. 18,69,956/- to M/s TUSCON ENGINEERS LTD. as per arbitration award given against the company. The company has filed an appeal with Hon''ble High Court of Rajasthan against the arbitration award.

14. Assessments of TC Cess from 1996 for Shree Rajasthan Texchem Division is pending. The TC Cess is not payable and appeals are pending before Hon''ble TC Cess Tribunal Mumbai. The demand so created by TC Cess office for Rs.10.14 lacs are not payable.

15. PRIMARY SEGMENT INFORMATION : As per Accounting Standard 17, the requirement of Segment reporting is not applicable to the Company both in respect of Geographical Segment and Product Segment , The Company is engaged in Production of Textile products, Revenue from other segment is less than 10% of total revenue.

16. RELATED PARTY TRANSACTIONS :

Name of the Companies/Firms with whom transactions have taken place during the year :

Associate Company: Nil

Related to the Key Management Personnel :

1 Shree Shyam Distributors & Marketing Pvt Ltd.

2 SRSL Employees Welfare Trust

3 Kunawat & Associates

4 Sh. Vikas Ladia

5 V.K. Texchem Pvt. Ltd.

6 Sh. Anubhav Ladia

7 Shanti Trading Corporation.

8 Smt Monika Ladia

9 Sh Aman Ladia

10 Sh. V.K. Ladia

11 Sh. Pranav Ladia

12 Mrs. Puja Ladia

13 Mrs. Poonam Ladia

14 Shree Shyam Industries Pvt. Ltd.

15 M/s A.M. Traders

16 M/s A.P. Enterprises

Name of Directors :

V.K. Ladia Amita

Narain N.N. Agarwala

Vikas Ladia R.S. Nirwan Sunil Goyal

Anubhav Ladia R.L. Kunawat R.K. Pandey

17. The National Highway Authority has acquired 2450 Sq Meters of land situated at Bagru Ravan. The Company has filed legal case for recovery of adequate compensation. The matter is sub judice.,

18. The Company has acquired industrial lease of 7800 Sq. Meters at Bagru Ravan, Jaipur, Legal formalities are under way.

19. Figures have been rounded off to the nearest rupees in Lacs.

20. Figures for previous year have been regrouped/reclassified, wherever necessary to confirm to this year''s classification.


Mar 31, 2013

1.1 The employees gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognized in the same manner as gratuity.

2. CONTINGENT LIABILITIES AND COMMITMENTS:

a. Claims not acknowledged as debts by the Company Rs. 645.15 Lacs (Previous Year Rs 651.96 Lacs)

b. Bills discounted with Banks and outstanding Rs. 225.53 lacs (Previous Year Rs.446.04 Lacs)

c. Counter guarantees given by the Company in respect of guarantees and Letter of Credits given by the Bankers on behalf of the Company Rs. 1826.97 Lacs (Previous year Rs. 1897.87 Lacs)

d. Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 835.48 lacs (Previous Year Rs.571.60 lacs).

b. (I) Demands issued by the Excise/Custom Authorities amounting to Rs.232.63 Lacs ( Previous Year Rs.192.48 Lacs) besides other penalties in law. The company is contesting the issues under legal advice. The company has however deposited Rs.84.88 Lacs (Previous year Rs.73.68 lacs ) under protest. (II) The company has not provided for various sales tax demands for the assessment years 2003-04, 2004-05 aggregating to Rs. 32.63 lacs (Previous year Rs 34.38 lacs) as these are disputed and are pending under appeal/reconsideration with appropriate authorities. Rs 13.69 lacs (Previous Year Rs.13.69 lacs) deposited under protest.

3. Assessment of Sales Tax for the assessment years 2011-12 & 2012-13 are pending, liabilities if any, arising thereon shall be accounted for in the year of assessment.

4. a. Assessment of Income Tax has been completed up to the assessment year 2010-11

b. In view of carry forward losses no provision is required towards Income Tax.

5. The Company has received various demands of ESI aggregating to Rs. 24.44 Lacs. (Previous year Rs.24.44 Lacs). Since the matter is pending in appeal and the Company does not envisage any liability, no provision has been made. Amount deposited under Protest Rs 0.93 lacs. (Previous year Rs. 0.93 Lacs).

6. The Company suffered losses due to breaches/non- fulfillment of the terms and conditions of the Contract with M/s. Kirloskar Oil Engines Ltd. in respect of 2 Nos. DG set of 2.5 MW supplied by them. These losses have been partly recovered by the Company by encashment of Bank Guarantee taken under the Contract with the party. For balance recovery of Rs. 234.23 lacs suit against KOEL is filed.

7. Profit on Disposal of Fixed Assets is - Net of loss of Rs.144 lacs on sale of Fixed Assets.

8. Balances appearing under the head Creditors, Debtors, Advances and Deposits are subject to confirmations yet to be received by the company..

9. All the investments of the company have been considered by its management to be of long term nature. No provision for decline in the carrying amount of investment is made in this year''s accounts as in the management''s considered opinion, such decline is not of a permanent nature.

10. The company has fulfilled its Export obligation under all EPCG licenses. During the year no new licenses issued.

11. (a) The Hon''ble Supreme court in the case of Jindal Stainless Ltd. Has hold levy of Entry Tax unconstitutional. It has also directed all the High Courts to look in to the constitutional validity of respective Entry Tax. Consequent to that 5 High Courts namely Allahabad, Punjab, Haryana, Jharkhand and Kerla has held the respective Entry Tax to be constitutionally invalid . The Hon''ble High Court of Rajasthan in the case of Dinesh Pouches has also held the levy of Entry Tax by the Government of Rajasthan as unconstitutional. The aggrieved State Governments including Government of Rajasthan filed appeals with larger bench of Hon''ble Supreme Court of India. The Hon''ble Supreme Court has recommended to constitute a bigger bench to decide the matter as it involves huge amount of Government funds.

As per legal opinion obtained amount paid by the company towards Entry Tax pursuant to Rajasthan Entry Tax Act 1999 has become refundable since inception.

(b) The Company is not liable to pay Entry Tax pursuant to the decision of Supreme Court, as such the Company has not provided for Entry Tax for the year 2006-2007 to 2012-13 aggregating to. Rs.222.57 Lacs & interest Rs. 77.92 Lacs.

(c) The Hon''ble High Court has given interim order to deposit 50% of original entry tax liability and for remaining tax, interest & penalty a solvent security be provided accordingly company has deposited Rs.1,06,47,663/- under protest & provided solvent security for Rs.2,01,67,021/- for the year from 2006-07 to 2010-11. The assessment for the year 2011-12 & 2012-13 are pending.

(d) The company has filed refund claim of Entry Tax aggregating to Rs.252.32 Lacs, for the year 2001-02 to 2005-06.

12. The company has filed writ petitions with hon''ble high court of Rajasthan against disallowances of benefits receivable by it under Rajasthan Investment Promotion Scheme 2003 (RIPS) for expansion and modernization towards interest subsidy and wage and employment subsidy aggregating to Rs.189.76 Lacs for the assessment year 2007-08 to 2010-11. As per legal opinion obtained by the company, it is accounting these benefits in its books of account it has also filed appeal before appellate authority and deposited against this disallowance Rs.26.84 lacs under protest (Previous year Rs. 19.02 Lacs).

13. As per legal opinion Urban Cess and Water Cess levied by State of Rajasthan is not leviable on the company being established at RIICO Industrial land. The entire amount Rs. 245.95 lacs paid in earlier years and Rs. 140.09 lacs paid in current year has become recoverable. The company has charged Rs. 245.95 lacs paid for earlier years to Profit & Loss Account. However Rs. 140.09 lacs paid during the year stands recoverable under the head Urban Cess / Water Cess deposited under Protest recoverable Account. The company has filed SLP in Supreme Court for the recovery of entire amount.

14. The company has paid Rs. 18,69,956/- to M/s TUSCON ENGINEERS LTD. as per arbitration award given against the company. The company has filed an appeal with Hon''ble High Court of Rajasthan against the arbitration award.

15. Assessments of TC Cess from 1996 for Shree Rajasthan Texchem Division is pending. The TC Cess is not payable and appeals are pending before Hon''ble TC Cess Tribunal Mumbai. The demand so created by TC Cess office for Rs.10.14 lacs are not payable.

16. PRIMARY SEGMENT INFORMATION: As per Accounting Standard 17 , the requirement of Segment reporting is not applicable to the Company both in respect of Geographical Segment and Product Segment , The Company is engaged in Production of Textile products, Revenue from other segment is less than 10% of total revenue.

17. RELATED PARTY TRANSACTIONS :

Name of the Companies/Firms with whom transactions have taken place during the year: Associate Company: Nil

Name of Directors :

V.K. Ladia Vikas Ladia, Anubhav Ladia, Jitendra Balakrishnan, R S Nirwan, R L Kunawat, N N Agarwala, Sunil Goyal

18. The National Highway Authority has acquired 2450 Sq Meters of land situated at Bagru Ravan. The Company has filed legal case for recovery of adequate compensation. The matter is sub judice.,

19. The Company has acquired industrial lease of 7800 Sq. Meters at Bagru Ravan, Jaipur, Legal formalities are under way.

20. Since the company is upgrading its main Plant & Machinery under Technology Up gradation Fund scheme regularly, it is not carrying any asset of which carrying cost is more than its recoverable amount / value in use on the Balance Sheet date. Hence there is no impairment loss.

21. Figures have been rounded off to the nearest rupees in Lacs.

22. Figures for previous year have been regrouped/rearranged, wherever considered necessary.


Mar 31, 2012

1.1 Out of above equity shares, 37,59,899 equity shares of Rs.10/~ each fully paid have been alloted to erstwhile share holders of the amalgamating Company M/s Shree Rajasthan Texchem Ltd., pursuant to the scheme of amalgamation as approved by the Honb'le High Court of Rajasthan , Jodhpur without payment being received in cash.

2.1 The company has issued and allotted 6,50,000 warrants of Rs.14/- each on 21st March, 2012 convertible into one equity share of Rs.10/- each at the option of the holder at any time on or before 20th September 2013 on payment of balance of 710.50 per warrant. Failure to exercise the conversion right shall entitle the company to forfeit the amount of Rs.3.50 per warrant received on allotment.

3.1 Term Loans from IDBI Bank Ltd. (IDBI), State Bank of India (SBI), Bank of Baroda (BOB) and ICICI Bank Ltd. (eBOR) are secured by a joint equitable mortgage, by deposit of title'deeds, over the company's immovable assets and a charge by way of hypothecation of all movable assets (except Plant & Machinery exclusively charged in favour of SBI for Loan of Rs. 492.20 Lacs, Previous year 573.79 Lacs ) present and future subject to prior charges on specified movables created in favour of company's Bankers and personal guarantee of two directors. The mortgage and charges created shall rank pari-passu inter-se amongst the financial Institution and Banks.

4.1 The Company has estimated the deferred tax charge using the applicable rate of taxation based on the impact of timing difference between financial Statements and estimated taxable income for the current year. The component of the deferred tax balance as on 31.03.2012 and 31.03.2011 are as follows :

5.1 Borrowings for Working Capital from State Bank of India, Bank of Baroda , State Bank of Bikaner & Jaipur and IDBI Bank Ltd. are secured by hypothecation of raw materials, stock-in-process, stock-in-transit, finished goods, consumable stores and spares and book debts and are further secured by way of second charge on immovable assets of the Company ranking pari-passu inter-se amongst the Bankers and personal guarantee of two directors.

6.1 The employees gratuity fund scheme managed by a Trust is a defined l:tenefit plan.The present value of obligation is determined based on actinia valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately the build up the final obligation. The obligation for leave encashment is recognized in the same manneras gratuity

6.2. Extraordinary Item - The dispute with Shree Shyam Filaments Labour Union Bagru has been settled during the year with tripartite settlement before Labour Commissioner Rajasthan Jaipur, The amount settled as golden hand shakes has been shown as extraordinary item.

7. CONTINGENT LIABILITIES AND COMMITMENTS:

a. Claims not acknowledged as debts by the Company Rs.192.48 Lacs (Previous Year Rs.383.63 Lacs)

b. Bills discounted with Banks and outstanding 1446.04 lacs (Previous Year Rs.343.88 Lacs)

c. Counter guarantees given by the Company in respect cf guarantees and Letter of Credits given by the Bankers on behalf of the Company1897.87 Lacs (Previous yearRs. 1369.87 Lacs)

d. Estimated amount of contratts remaining to be executed on capita! account and not provided for net of advancesRs. 571.60 lacs (Previous YearRs. 261.26 lacs)

e. (I) Demands issued by the Excise/Custom Authorities amounting to Rs. 651.96 Lacs ( Previous Year f 491.08 Lacs) besides other penalties in law. The company is contesting the issues under legal advice. The company has however deposited Rs. 73.68 Lacs (Previous year Rs. 13.86 lacs) under protest.

(ll)The company has riot provided for various sales tax demands for the assessment years 2003-04 & 2004 05 aggregating to Rs. 34.38 lacs (Previous year Rs. 33.00 iacs) as these are disputed and are pending under appeal/reconsideration with appropriate authorities. Rs. 13.69 lacs (Previous Year Rs. 13.69 lacs) deposited under protest.

8. Assessment of Sales Tax for the assessment years 2010-11 & 2011-12 are pending, liabilities if any, arising thereon shal; be accounted for in the year of assessment.

9. a. Assessment of Income Tax has been completed up to the assessment year 2009-10

b. In view of carry forward losses no provision is required towards income Tax.

c. In view of amendment in income Tax Acts with retrospective date the Income tax liability on deferred tax in SRT unit are being assessed. The notice u/s 154 received from Income Tax Dept. The liability of MAT works out to Rs. If. 17 Lacs is contingent

10. The Company has received various demands of ESS aggregating to Rs. 24,44 Lacs, (Previous year Rs. 24.64 Lacs). Since the matter is pending in appeal and the Company does not envisage any liability, no provision has been made. Amount deposited under ProtestRs.0.93 lacs. (PreviousyearRs.0.90 Lacs)

11. The Company suffered losses due to breaches/non fulfillment of the terms and conditions of the Contract with M/s. Kirloskar Oil Engines Ltd. in respect of 2 Nos. DG set of 2.5 MW supplied by them. These losses have been partly recovered by the Company by encashment of Bank Guarantee taken under the Contract with the 'party. For balance recovery of Rs. 234.23 lacs suit against KOEL is filed

12. Balances appearing under the head Creditors, Debtors, Advances and Deposits are subject to confirmations yet to be received by the company.

13. All the investments of the company have been considered by its management to be of long term nature.

No provision for decline in the carrying amount of investment is made in this year's accounts as in the management's considered opinion, such decline is not of a permanent nature.

14. The company has fulfilled its fexport obligation under all EPCG iiences. Du ring the year no new licences issued.

15. (a) The Hon'ble Supreme court in the case of Jindal Stainless Ltd. Has hold levy of Entry Tax unconstitutional. It has also directed all the High Courts to look in to the constitutional validity of respective Entry Tax. Consequent to that 5 High Courts namely Allahabad, Punjab, Haryana, Jharkhand and Kerla has held the respective Entry Tax to be constitutionally invalid. The Hon'ble High Court of Rajasthan in the case of Dinesh Pouches has also held the levy of Entry Tax by the Government of Rajasthan as unconstitutional. The aggrieved State Governments including Government of Rajasthan filed appeals with larger bench of Hon'ble Supreme Court of India. The Hon'ble Supreme Court has recommended to constitute a bigger bench to decide the matter as it involves huge amount of Government funds. As per legal opinion obtained amount paid by the company towards Entry Tax pursuant to Rajasthan Entry Tax Act 1999 has become refundable since inception.

(b) The Company is not liable to pay Entry Tax pursuant to the decision of Supreme Court, as such the Company has not provided for Entry Tax for the year 2006-2007 to 2011-12 aggregating to. Rs. 216.63 Lacs.

(C) The Hon'ble High Court has given interim order to deposit 50% of original entry tax liability and for remaining tax, interest & penalty a solvent security be provided accordingly company has deposited Rs. 97,48,433/- on 13.04.2011 under protest & provided solvent security for Rs. 2,01,67,021/- for the year from 2006-07 to 2008-09. The assessment for the year 2009-10,2010-11 & 2011-12 are pending.

(d) The company has filed refund claim of Entry Tax aggregating to Rs. 252.32 Lacs, for the year 2001-02 to 2005-06.

16. The company has filed writ petitions with hon'ble high court of Rajasthan against disallowances of benefits receivable by it under Rajasthan Investment Promotion Scheme 2003 (RIPS) for expansion and modernization towards interest subsidy and wage and employment subsidy aggregating to Rs. 188.79 Lacs for the assessment year 2007-08 to 2011-12. As per legal opinion obtained by the company, it is accounting these benefits in its books of account it has also filed appeal before appellate authority and deposited against this disallowance Rs. 19.02 lacs under protest.

17. The company has paid Rs. 18,69,956/- to M/s TUSCON ENGINEERS LTD. as per arbitration award given against the company. The company has filed an appeal with Hon'ble High Court of Rajasthan against the arbitration award.

18. Assessments of TC Cess from 1996forShree Rajasthan Texchem Division is pending. The TC Cess is not payable and appeals are pending before Hon'ble TC Cess Tribunal Mumbai. The demand so created by TC Cess office for Rs. 10.14 lacs are not payable.

19. PRIMARY SEGMENT INFORMATION : As per

Accounting Standard 17, the requirement of Segment reporting is not applicable to the Company both in respect of Geographical Segment and Product Segment, The Company is engaged in Production of Textile products, Revenue from other segment is less than 10% of total revenue.

20. RELATED PARTY TRANSACTIONS : Name of the Companies/Firms with whom transactions have taken place during the year:

Associate Company: Nil

Related to the Key Management Personnel:

Name of Directors:

V.K. Ladia, Vikas Ladia, Anubhav Ladia, Jitender Balakrishnan, R S Nirwan, R L Kunawat, N N Agarwala, Sunil Goyal, R.K.Pandey

21. The National Highway Authority has acquired 2450 Sq Meters of land situated at Bagru Ravan. The Company has filed legal case for recovery of adequate compensation. The matter is sub judice.,

22. The company has acquired industrial lease of 7800 Sq. Meters at Bagru Ravan, Jaipur, Legal formalities are underway.

23. Since the company is upgrading its main Plant & Machinery under Technology Upgradation Fund scheme regularly, it is not carrying any asset of which carrying cost is more than its recoverable amount / value in use on the Balance Sheet date. Hence there is no impairment loss.

24. Figures have been rounded off to the nearest rupees in Lacs.

25. Figures for previous year have been regrouped/rearranged, as per new Schedule VI to the Companies Act 1956.


Mar 31, 2010

1. CONTINGENT LIABILITIES IN RESPECT OF:

a. Claims not acknowledged as debts by the Company Rs. 314.62 lacs (Previous Year Rs 170.54 lacs)

b. Bills discounted with Banks and outstanding Rs. 810.10 lacs (Previous Year Rs. 468.58 lacs)

c. Counter guarantees given by the Company in respect of guarantees and Letter of Credits given by the Bankers on behalf of the Company Rs. 858.37 lacs (Previous year Rs. 1084.12 lacs)

d. Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances Rs. 138.77 lacs (Previous Year Rs. NIL)

e. (i) Demands issued by the Excise Authorities amounting to Rs.510.40 lacs ( Previous Year 389.25 lacs) besides other penalties in law. The Company is contesting the issues under legal advice. The Company has however deposited Rs. 205.35 lacs (Previous year 246.36) under protest.

(ii) The Company has not provided for various sales tax demands for the assessment years 2003-04, 2004-05 & 2007-08 aggregating to Rs. 112.73 lacs (Previous year Rs 33.01 lacs) as these are disputed and are pending under appeal / reconsideration with appropriate authorities. Rs 21.65 lacs (Previous Year Rs 13.68 lacs) deposited under protest.

2. Assessment of Sales Tax for the assessment years 2008-09 & 2009- 10 are pending, liabilities if any, arising thereon shall be accounted for in the year of assessment.

3. a. Assessment of Income Tax has been completed up to the assessment year 2007-08

b. In view of carry forward losses no provision is required towards Income Tax.

c. In view of amendment in Income Tax Act with retrospective date the Income tax liability on deferred tax in SRT unit are being assessed. The notice u/s 154 received from Income Tax Dept. The liability of MAT works out to Rs. 19.17 lacs is contingent.

4. The Company has received various demands of ESI aggregating to Rs. 24.68 lacs. (Previous year Rs. 23.82 lacs). Since the matter is pending in appeal and the Company does not envisage any liability, no provision has been made. Amount deposited under Protest Rs 1.37 lacs. (Previous year 0.35 lacs)

5. The Company suffered losses due to breaches/non-fulfillment of the terms and conditions of the Contract with M/s. Kirloskar Oil Engines Ltd. in respect of 2 Nos. DG set of 2.5 MW supplied by them. These losses have been partly recovered by Company by encashment of Bank Guarantee taken under the Contract with the party. For balance recovery of Rs. 234.23 lacs suit against KOEL is filed.

6. Balances appearing under the head Creditors, Debtors, Advances and Deposits are subject to confirmations yet to be received by the Company.

7. All the investments of the Company have been considered by its management to be of long term nature.No provision for decline in the carrying amount of investment is made in this years accounts as in the managements considered opinion, such decline is not of a permanent nature.

8. The Company has fulfilled its Export obligation under all EPCG Licences. In respect of current Licences for which the obligation comes to Rs. 12603 lacs ( USD 281 lacs) to be fulfilled within 8 years , against these licences export obligation have been fulfilled to the extent of Rs.12436 lacs ( USD 277 lacs), balance outstanding Rs.167 lacs, (USD 4 lacs) from 18.3.2010.

9. (a) The Honble Supreme court in the case of Jindal Stainless Ltd. has held levy of Entry Tax unconstitutional.It has also directed all the High Courts to look in to the constitutional validity of respective Entry Tax.Consequent to that 5 High Courts namely Allahabad, Punjab, Haryana, Jharkhand and Kerala has held the respective Entry Tax to be constitutionally invalid. The Honble High Court of Rajasthan in the case of Dinesh Pouches has also held the levy the Entry Tax by the Government of Rajasthan as unconstitutional. The aggrieved State Governments including Government of Rajasthan filed appeals with larger bench of Honble Supreme Court of India. The Honble Supreme Court has recommended to constitute a bigger bench to decide the matter as it involves huge amount of Government funds. As per legal opinion obtained amount paid by our Company towards Entry Tax pursuant to Rajasthan Entry Tax Act 1999 has become refundable since inception.

(b) The Company is not liable to pay Entry Tax pursuant to the decision of Supreme Court, as such the Company has not provided for Entry Tax for the year 2006-2007, 2007-2008, 2008-09 & 2009-10 aggregating to.Rs. 208.79 lacs.

(c) The Company has filed refund claim of Entry Tax aggregating to Rs. 252.32 lacs, during previous year for the year 2001-02 to 2005-06.

10. The company has filed following writ petitions with Honble high court of Rajasthan against disallowances of certain benefits receivable by it under Rajasthan Investment Promotion Scheme 2003 (RIPS) for expansion and modernization.

(a) Electricity duty exemption aggregating to Rs. 80 lacs

(b) Interest subsidy and wage and employment subsidy aggregating to Rs. 167.05 lacs.

As per legal opinion obtained by the Company, it is accounting these benefits in its books of account.

11. The Company has paid Rs. 18,69,956/- to M/s TUSCON ENGINEERS LTD. as per arbitration award given against the Company. The Company has filed an appeal with Honble High Court of Rajasthan against the arbitration award.

12. Assessments of T C Cess from 1996 for Shree Rajasthan Texchem Division is pending. The TC Cess is not payable and appeals are pending before Honble TC Cess Tribunal Mumbai. The demand so created by TC Cess office for Rs. 10.14 lacs are not payable.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held ,assessed risks, historical results of return on plan assets and the Companys policy for plan assets management.

13. PRIMARY SEGMENT INFORMATION

As per Accounting Standard 17 , the requirement of Segment reporting is not applicable to the Company both in respect of Geographical Segment and Product Segment , The Company is engaged in Production of Textile products, Revenue from other segment is less than 10% of total revenue.

14.RELATED PARTY TRANSACTIONS :

Name of the Companies/Firms with whom transactions have taken place during the year :

Associate Company: Nil

Related to the Key Management Personnel:

1 Shree Shyam Distributors & Markt. Pvt L td.

2 SRSL Employees Welfare Tr ust

3 Kunawat & Associ ates

4 Shri Vikas Ladia

5 Shri Vikas Lad ia (HUF)

6 Shri Anubhav Ladia

7 Shri Anubhav Ladia (HUF)

8 Smt. Monika Ladia

9 Shri Aman Lad ia

10 Shri V.K. Ladia

11 V.K. Texchem (P) Ltd.

12 Shri Pranav Ladia



Name of Directors :

V.K. Ladia

R. S. Nirwan

Vikas Ladia

R. L. Kunawat

S. C. Kuchhal

N. N. Agrawala

Anubhav Ladia

Sunil Goyal

R.K.Pandey

15 The National Highway Authority has acquired 2450 Sq Meters of land situated at Bagru Ravan. The Company has filed legal case for recovery of adequate compensation. The matter is sub judice.,

16. The Company has acquired industrial lease of 7800 Sq. Meters at Bagru Ravan, Jaipur, Legal formalities are under way.

17. Since the company is upgrading its main Plant & Machinery under Technology Up gradation Fund scheme regularly, it is not carrying any asset of which carrying cost is more than its recoverable amount value in use on the Balance Sheet date. Hence there is no impairment loss.

18. Figures have been rounded off to the nearest rupees in lacs.

19. Figures for previous year have been regrouped/rearranged, wherever considered necessary.

 
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