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Notes to Accounts of Shreyas Intermediates Ltd.

Mar 31, 2015

A) CORPORATE INFORMATION

Shreyas Intermediates Limited (The Company) was incorporated in the year 1992 and is engaged in the business of manufacturing of Pigments and Pigment Intermediates.

B) OTHER NOTES TO ACCOUNTS: -

1. The company has incurred Cash Losses during the year as well as in the earlier year and accordingly has been covered under the definition and provisions of The Sick Industrial Companies (Special Provisions) Act, 1985. The company had made an application with the Board of Industrial & Financial Restructuring under the provisions of the Act which was declined due to technical issues. The company has made a fresh reference to the Board of Industrial & Financial restructuring which is pending before the Secretariat. The notice was issued by the Secretariat for personal hearing on a date however the notice was received upon the lapse of the above date. The company has represented its case and is awaiting further instruction and intimations from the respective authority and forums.

2. The company had availed secured loans from the bankers which had been defaulted. The company had approached the financial institutions with a settlement scheme which has been duly approved by both the lending bankers. Bank of Baroda had approved a One Time Settlement option in respect of its dues by assigning its entire dues to Invent ARC. Furthermore State Bank of India had also assigned their dues on Security Realization basis to Invent ARC. The company remains committed to settle the dues according to the above scheme on specified terms. According to the specified terms under the scheme, the company has not made any provision towards the above and thus we remain unable to quantify the implication of the above scheme of restructuring in our report.

3. During the year, the company has reduced the carrying cost of its Plant & Machinery by the quantum of interest and principal which had been capitalized by the Company. An additional amount which represents the value of Capital Repairs undertaken in respect of the said plant & machineries during the production trial run period, has been reduced and reclassified under Other Non-Current Assets, pursuant to the advice of the technical evaluation team. Accordingly, during the year the cost of Plant & Machinery have been decreased to account for the above reduction of carrying cost of the plant as also Capital Repairs to bring the value of the Plant at its reasonable realistic value as per the technical evaluation team. The company has claimed a rebate on the Interest during the year which represents cessation of the interest liability in respect of its Secured Loans availed during the earlier years.

4. The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

5. The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the dose of the year from any said party.

6. Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation.

7. The financial statements have been prepared covering for the period of six months from 1 st of October 2014 to 31 st of March 2015 whereas the previous year cover a period of year ended 30thSeptember, 2014. The figures pertaining to previous year have been regrouped/reclassified wherever required.


Sep 30, 2014

1. Contingent Liabilities

As at 30th September

2014 2013 Rupees in Rupees in Lacs Lacs a. Guarantee given by the company''s Bankers 26.00 26.00 and Counter guaranteed by the company

b. Claims against the company not acknowledged 1600.00 1600.00 as Debts*

c. Liability towards Sales Tax Assessment 382.00 382.00

d. Liability towards Central Excise Dues 540.00 540.00

* A claim has been filed during the earlier year by a creditor for Rs. 1600.00 Lacs which is over & above its claims.

2. The company has incurred Cash Losses during the year as well as in the earlier year and accordingly has been covered under the definition and provisions of The Sick Industrial Companies (Special Provisions) Act, 1985. The company has made an application with the Board of Industrial & Financial Restructuring under the provisions of the Act. The application remains under process during the year and the company is awaiting further instruction and intimations from the respective authority and forums.

3. During the earlier year, the company had approached the bank consortium with a scheme of restructuring, detailing the causes and reasons of its defaults and the bankers had approved the restructuring proposal, thereby sanctioning and approving a scheme of financial restructuring. However the said scheme of restructuring could not be implemented by the bankers during the earlier year and the company has been pursuing its case with the respective bankers. However the bankers, Bank of Baroda & State Bank of India have transferred their respective assets to an Assets Reconstruction Company. The company remains committed to settle the issue amicably and has approached the Financial Institutions with a proposal for settlement of the dues on reasonable terms, the same remains under consideration and process with the concerned authority. No provision towards the above has been considered in the preparation of the Financial Statements and thus we remain unable to quantify the implication of the above scheme of restructuring in our report.

4. The company had been availing the benefit of exemption under the erstwhile Bombay Sales Tax Act, 1959 which was converted into deferment of taxes under the package scheme of incentives under the Maharashtra Value Added Tax Act, 2002 from August 2006. Further the company shall be liable to repay the taxes collected under the deferment scheme within 10 years from the date of such collection and deferment in 5 equal annual installments. The Management has not made any provision for the same in the accounts during the year under consideration as in its opinion the company is eligible for adequate refunds due on account with the Maharashtra Value Added Tax Department which shall be adjusted off against the above dues upon its assessment. However the company has classified the total liability of Rs. 382.00 Lacs as Contingent Liability in Schedule 25 A (12) above.

5. The Company has not provided for liability towards its Gratuity and Leave Encashment payable to employees on retirement as the same are accounted for on cash basis by the company. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India and the liabilities and the losses for the year remain understated by the amount of such non provision of Employee benefits.

6. The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

7. The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the close of the year from any said party.

8. Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation.

9. Figures pertaining to previous year have been regrouped / reclassified wherever required.


Sep 30, 2013

1. The excise duty paid in respect of raw materials purchased and used for manufacture does not form part of consumption of raw materials to the extent of the CENVAT credit availed. Such duty is debited to Central Excise Duty Account and adjusted against excise duty payable on the finished goods.

The excise duty payable on stock of finished goods not cleared from excise bonded warehouse is neither included in expenses nor in the value of such stocks but ts accounted for on clearance of goods However, non-provision of this liability will not affect the profit for the year.

2. The company had been availing the benefit of exemption under the erstwhile Bombay Sales Tax Act, 1959 which was converted into deferment of taxes under the package scheme of incentives under the Maharashtra Value Added Tax Act, 2002 from August 2006.

During the year the eligibility tenure of the said scheme has elapsed and the company is- liable for payment of taxes collected as per the stipulation of the said act. Further the company shall be liable to repay the taxes collected under deferment scheme within 10 years from the date of such collection and deferment in 5 equal annual installments.

3. During the year, the company has approached the bank consortium with a scheme of restructuring detailing the causes and reasons of such defaults and during the year the bankers have approved the restructuring proposal thereby sanctioning and approving a scheme of financial restructuring. Accordingly the accumulated overdue interests on the above loans have been sanctioned as a fresh Term Loan under the said scheme of financial restructuring and the fresh tenure of moratorium has been accorded to the company. During the year the company is availing the sanctioned period of moratorium as per the sanctioned restructuring scheme. -

4. The Sales Tax incentives Scheme 1993 of SICOM provides that the unit should work for 35 years or during the currency of the Sales Tax Benefits/other benefits drawn/availed of under the 1993 Scheme by way of incentives there under, whichever longer. Accordingly, the Sales Tax benefits availed by the company is subject to compliance of the terms and conditions of the said scheme. The company has opted for Deferral Scheme of Sales Tax liability. Accordingly the sales tax liability shall be repayable after Ten years in five equal annual installments.

The Management has not made any provision for the same in the accounts during the year under consideration. In our opinion the short term liabilities and the losses for the year remain understated by the amount of such pro-rata installment due on account of the repayment of the Deferred Sales Tax benefit availed by the company in the earlier years.

5. The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

6. The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the close of the year from any said party.

7. Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation.

8. Figures pertaining to previous year have been regrouped / reclassified wherever required.


Sep 30, 2012

1. Contingent Liabilities

As at 30th September 2012 2011 Rupees in Lacs Rupees in Lacs

a. Guarantee given by the company''s Bankers and Counter guaranteed by the company 26.00 26.00

b. Claims against the company not acknowledged as 69.30 148.51 Debts*

* A claim filed by a Creditor of the company in respect of Letter of Credit Dues dishonored by the bank during the previous year has been decided by the Honorable High Court. The above dues shall be payable by the company in 15 equal monthly installments commencing from 01/2/2012.

1. The excise duty paid in respect of raw materials purchased and used for manufacture does not form part of consumption of raw materials to the extent of the CENVAT credit availed. Such duty is debited to Central Excise Duty Account and adjusted against excise duty payable on the finished goods.

The excise duty payable on stock of finished goods not cleared from excise bonded warehouse is neither included in expenses nor in the value of such stocks but is accounted for on clearance of goods. However, non-provision of this liability will not affect the profit for the year.

2. The company had been availing the benefit of exemption under the erstwhile Bombay Sales Tax Act, 1959 which was converted into deferment of taxes under the package scheme of incentives under the Maharashtra Value Added Tax Act, 2002 from August 2006.

During the year the eligibility tenure of the said scheme has elapsed and the company is liable for payment of taxes collected as per the stipulation of the said act. Further the company shall be liable to repay the taxes collected under deferment scheme within 10 years from the date of such collection and deferment in 5 equal annual installments.

3. During the year, the company has approached the bank consortium with a scheme of restructuring detailing the causes and reasons of such defaults and during the year the bankers have approved the restructuring proposal thereby sanctioning and approving a scheme of financial restructuring. Accordingly the accumulated overdue interests on the above loans have been sanctioned as a fresh Term Loan under the said scheme of financial restructuring and the fresh tenure of moratorium has been accorded to the company. During the year the company is availing the sanctioned period of moratorium as per the sanctioned restructuring scheme.

4. The Sales Tax incentives Scheme 1993 of SICOM provides that the unit should work for 35 years or during the currency of the Sales Tax Benefits/other benefits drawn/availed of under the 1993 Scheme by way of incentives there under, whichever longer. Accordingly, the Sales Tax benefits availed by the company is subject to compliance of the terms and conditions of the said scheme. The company has opted for Deferral Scheme of Sales Tax liability. Accordingly the sales tax liability shall be repayable after Ten years in five equal annual installments.

The Management has not made any provision for the same in the accounts during the year under consideration. In our opinion the short term liabilities and the losses for the year remain understated by the amount of such pro-rata installment due on account of the repayment of the Deferred Sales Tax benefit availed by the company in the earlier years.

5. The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

6. The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the close of the year from any said party.

7. Balances of Sundry Creditors, Debtors'' and advances are subject to reconciliation and confirmation.

8. Figures pertaining to previous year have been regrouped / reclassified wherever required.


Sep 30, 2011

The excise duty paid in respect of raw materials purchased and used for manufacture does not form part of consumption of raw materials to the extent of the CENVAT credit availed. Such duty is debited to Central Excise Duty Account and adjusted against excise duty payable on the finished goods.

The excise duty payable on stock of finished goods not cleared from excise bonded warehouse is neither included in expenses nor in the value of such stocks but is accounted for on clearance of goods. However, non- provision of this liability will not affect the profit for the year.

The company had been availing the benefit of exemption under the erstwhile Bombay Sales Tax Act, 1959 which was converted into deferment of taxes under the package scheme of incentives under the Maharashtra Value Added Tax Act, 2002 from August 2006.

During the year the eligibility tenure of the said scheme has elapsed and the company is liable for payment of taxes collected as per the stipulation of the said act. Further the company shall be liable to repay the taxes collected under deferment scheme within 10 years from the date of such collection and deferment in 5 equal annual installments.

Contingent Liabilities

As at 31st March

2011 2010 Rupees in Lacs Rupees in Lacs

a. Guarantee given by the company's Bankers and Counter guaranteed by the company 26.00 1.00

b. Claims against the company not acknowledged as Nil 148.51 Debts*

* A claim filed by a Creditor of the company in respect of Letter of Credit Dues dishonoured by the bank during the previous year has been decided by the Honourable High Court. The above dues shall be payable by the company in 15 equal monthly installments commencing from 01/2/2012.

During the year, the company has approached the bank consortium with a scheme of restructuring detailing the causes and reasons of such defaults and during the year the bankers have approved the restructuring proposal thereby sanctioning and approving a scheme of financial restructuring. Accordingly the accumulated overdue interests on the above loans have been sanctioned as a fresh Term Loan under the said scheme of financial restructuring and the fresh tenure of moratorium has been accorded to the company. During the year the company is availing the sanctioned period of moratorium as per the sanctioned restructuring scheme.

The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the close of the year from any said party.

Figures pertaining to previous year have been regrouped / reclassified wherever required.

Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation.


Sep 30, 2010

The excise duty paid in respect of raw materials purchased and used for manufacture does not form part of consumption of raw materials to the extent of the CENVAT credit availed. Such duty is debited to Central Excise Duty Account and adjusted against excise duty payable on the finished goods.

The excise duty payable on stock of finished goods not cleared from excise bonded warehouse is neither included in expenses nor in the value of such stocks but is accounted for on clearance of goods. However, non- provision of this liability will not affect the profit for the year.

Contingent Liabilities

As at 31- March 2010 Rupees in Lacs

a. Guarantee given by the companys Bankers and Counter guaranteed by the company Nil

b. Claims against the company not acknowledged as 148.51 Debts*

* A claim filed by a Creditor of the company is pending in the. High Court in respect of Letter of Credit Dues dishonoured by the bank. The company has called for the honour of the dues citing adequate credits claimed by the bank against the same to which the bank has certain disputes. The company had credit balances remaining to its account in the said bank which to date remains in the custody of the bank. The company has appealed for relief against the above claim from the High Court.

During the year, the company has defaulted in repayment of its Term Loans and Cash Credit Loans. The company has not been able to service its Loan from the quarter ended March 2010 and June 2010. The principal as well as the interest component remain due from the above periods. The total sums due in respect of the same is Rs. 614.70 Lacs. The company has initiated a re-negotiation process with the banking institutions with respect to the above loans. The terms and conditions thereof still remain under consideration by the banks.

The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet Directors are of the opinion that provision for al known liabilities has been made during the year and not in excess of the amount reasonably necessary.

The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any Claim for interest outstanding at the close of the year from any said party.

Figures pertaining to previous year have been regrouped/reclassified wherever required.

Balances of Sundry Creditors, Debtors and advances are subject to recontiliation and confirmation.


Sep 30, 2009

The excise duty paid in respect of raw materials purchased and used for manufacture does not form part of consumption of raw materials to the extent of the CENVAT credit availed. Such duty is debited to Central Excise Duty Account and adjusted against excise duty payable on the finished goods.

The excise duty payable on stock of finished goods not cleared from excise bonded warehouse is neither included in expenses nor inthe value of such stocks but is accounted for on clearance of goods. However, non- provision of this liabjlity will not affect the profit for the year.

The Directors of the Company have certified that Current Assets, Loans, Advances and Deposits have a realizable value at least equal to the amount at which they are stated in the Balance Sheet. Directors are of the opinion that provision for all known liabilities has been made during the year and not in excess of the amount reasonably necessary.

The Company has not yet been able to completely identify the suppliers covered under Interest on Delayed Payments to Small Scale and Ancillary Industrial Undertakings Act, 1993. However, the Company does not have any claim for interest outstanding at the close of the year from any said party.

Figures pertaining to previous year have been regrouped/redassified wherever required.

Balances of Sundry Creditors, Debtors and advances are subject to reconciliation and confirmation.

 
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