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Notes to Accounts of Shri Lakshmi Cotsyn Ltd.

Mar 31, 2015

** Actual capacity utilization includes Job Work

* Garment Unit Situated at Roorkee has not been operational during the financial year

# Quilt & Comforters Unit at Noida was non-operational from Sept,2014

1. Related Party Transactions:

The related party disclosure in accordance with Accounting Standard-18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India is given below:-

* Dr. M.P. Agarwal (Rs. 48,00,000), Mr. Pawan Kumar Agarwal (30,00,000), Mrs. Sharda Agarwal (15,00,000), Mr. Devesh Gupta (24,00,000), Mr. Alok Agarwal (Rs 15,00,000), Mr. Vikas Agarwal (Rs. 15,00,000) Mr. Jayant Gupta (24,00,000)

** Galaxy Capital Finance Limited (Rs. 6,00,000) , Divya Trade Impex (P) Ltd. (Rs.3,00,000) , Sarveshwari International Limited (Rs. 6,00,000)

*** Mr. PawanKumar Agarwal (Rs. 3,00,000), Mr. Alok Agarwal (Rs. 3,60,000), Mr. Vikas Agarwal (Rs. 3,60,000)

2. Contingent Liabilities:

Contingent liabilities as shown in the notes to the accounts, may affect the future profitability to the extent they materialize for payment

(i) Guarantees given by the Company Rs 2.72 Crore

(ii) Claim against the Company not acknowledged as Debt Rs. NIL

(iii) Letter of Credit outstanding Rs. NIL

(iv) Export Bill Discounted Rs. 3.58 Crore


Mar 31, 2014

PRINCIPLES OF CONSOLIDATION:-

(In respect of stand alone accounts, there is no requirement of an accounting policy of principles of consolidation)

The Consolidated Financial Statements relate to Shri Lakshmi Cotsyn Ltd. (the Company) and its subsidiary companies viz. SLCL Overseas (FZC), Shri Lakshmi Defence Solutions Ltd. and Synergy Global Home Inc., U.S.A. The Consolidated Financial Statements have been prepared on the following basis:

a) The Financial Statements of the company and its subsidiary companies have been combined on a line-by-line basis adding together the book values of like items of assets, liabilities, income and expenses after fully eliminating intra group & Intra group transactions resulting in unrealized profit & losses as per Accounting Standard 21- "The Consolidated Financial Statements" notified by the companies Accounting Standards Rules, 2006.

b) The Financial Statements of the subsidiaries used in the consolidation are drawn upto the same reporting date as that of the company i.e., 31st March 2014.

c) The Consolidated Financial Statements have been prepared in accordance with AS-21.

d) The difference between the cost of investment in the subsidiaries, and the Company''s share of net assets at the time of acquisition of shares in the subsidiaries is recognized in the financial statements as Goodwill or Capital reserves as the case may be.

e) Minority Interest in the net assets of consolidated subsidiaries is identified and presented in the consolidated Balance Sheet separately from liabilities and equity of the company''s shareholders.

Minority interest in the net assets of consolidated subsidiaries consists of:

- The amount of equity attributable to minority at the date on which the investment in subsidiary is made; and

- The minority share of movements in equity since the date the parent subsidiary relationship came into existence.

f) Minority''s share of net profit for the year of consolidated subsidiaries is identified and adjusted against the Profit After Tax of the Group.

g) Accounting for Investments in Associate in Consolidated Financial Statements as per Accounting Standard – 23 " Accounting for Investment in Associates in Consolidated Financial Statements" notified by the companies (Accounting Standards) Rules, 2006.

1. Personal accounts are subject to confirmation, reconciliation and consequential adjustments (if any).

2. During the financial year under consideration, the Company has received Capital Subsidy of Rs. 5.69 Crores under Textile Upgradation Fund Scheme (TUFS) which has been credited to Capital Reserve Account.

3. As per the CDR Package approved by the CDR EG on 28th June 2013 a sum of Rs. 93.80 crores was stipulated to be inducted as promoter''s contribution. In compliance with the same the company raised Rs. 93.90 Crore as Unsecured Loans from business associates to be converted into equity subject to approval of BSE/NSE, at a rate as may be mutually agreed between investor and the company in accordance with SEBI norms. However, in view of the present financial position of the company the investors have expressed their unwillingness to convert their unsecured loans into equity. The company is in discussion with such investors and is hopeful of a favorable decision in the matter.

4. Trade receivables include a sum of Rs. 252.30 Crore which is outstanding for a period of more than 6 months. Out of the same, receivables aggregating to Rs. 182.78 crores are doubtful of recovery, However no provision against the same has been made in the books of account as the management is hopeful of recovery of the same through constant follow up or by legal process as the management is contemplating to initiate legal action against such debtors.

5. Other current assets include Rs. 104.41 Crore towards accrued TUFS subsidy during the period.

6. Investment of Rs. 32.66 Crore includes investment in group companies.

7. The Accumulated Losses of the company as at 31.03.2014 have eroded the entire net worth of the company as on that date. As such the company has become a Sick Industrial Company as defined under Section 3(1) (O) of the Sick Industrial Companies (Special Provisions) Act 1985.

8. IFCI filed an application before Honorable debt recovery Tribunal, Delhi for recovery of its claim amounting to Rs. 6.68 Crore in respect of certain loan given to company. Company is contesting the case before DRT.

9. In Financial Year 2007-08 the company had issued 5-year Zero-coupon Foreign Currency Convertible Bonds of the nominal value of US $ 10 million with YTM of 7.5%. As per the terms of the Offering Circular dated 20.09.2007 issued by the company, conversion price of the bond was Rs. 108.49 per equity share and the bond holders have converted the FCCB Bonds amounting to US $ 4.5 Mn into equity. However subsequently due to unfavorable share prices the Bond holders could not exercise their conversion right for FCCB worth USD 5.5 Mn till the date of maturity and as such the Bonds had fallen due for redemption on 23.10.2012.

Out of that, FCCB worth USD 5 mn (including interest on FCCB of USD 1.5 mn) have been redeemed by availing ECB of USD 5.00 mn from UCO Bank.

Current FCCB outstanding is USD 2.8 mn (including interest on FCCB of USD 0.8mn) which could not be redeemed in view of stringent financial position of the company. Due to non payment of the dues to FCCB Holders, some of them have filed the winding up petition before Hon''ble High Court, Allahabad for recovery of their dues. The winding up petition filed by the FCCB Holders have since been admitted by the Hon''ble High Court and the matter is pending before the Hon''ble High Court.

10. Loss for the year is inclusive of Rs. 340.14 crore being the loss suffered by the company on disposal of slow moving stocks of finished goods/ raw material of Rs. 424.87 crore which was identified during the previous financial year. In addition to this, the company has also suffered a loss of Rs 40.69 Crore on sale of rejected stock. Due to the overall slowdown in demand in the textile sector and due to deterioration in the quality of stocks of such slow moving inventory and in order to mitigate the working capital shortages, the Company was forced to sell the same at relatively lower prices which resulted in substantial losses to the company.

11. In view of the liquidity crisis in the company and non receipt of TUFS subsidy, company is finding difficulties in making payment of dues i.e. interest and instalments to Banks as per CDR scheme. Due to non-payment of Bank dues, some accounts of the company may become NPA.

12. Deferred tax liability amounting to Rs. 140.54 crore recognized in the preceding financial years has been written back during the year under consideration due to substantial accumulated losses of the company and in such an event there is no likelihood of any Tax Liability in the near future in accordance with the provisions of AS 22.

13. As per CDR package, company was sanctioned Rs. 65.40 Crore as priority loan for critical capex, which should be available to the company in Aug'' 2013, but it could not happen. Therefore Technical Textile unit , Spinning unit and Yarn Dyed Shirting Unit could not be made fully operational.

14. RELATED PARTY DISCLOUSRES :

The related party disclosure in accordance with Accounting Standard-18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India is given below:-

15. CONTINGENT LIABILITIES:

Contingent liabilities as shown in the notes to the accounts, may affect the future profitability to the extent they materialize for payment

(i) Guarantees given by the Company Rs 5.99 Crore

(ii) Claim against the Company not acknowledged as Debt Rs. NIL (iii) Letter of Credit outstanding Rs. 38.17 Crore

(iv) Export Bill Discounted Rs. 9.28 Crore

Estimated average contract remaining to be executed on Capital account and not provided for (Net of Advances payment) Rs. NIL (Previous year NIL).

1. Additional information wherever applicable or required are as under:- A) Licensed Capacity: The Company is not required to obtain any licensed under the Industrial Development & Regulation Act, therefore the details of license capacity is not applicable.


Jun 30, 2013

1) Related Party Disclousres:

The related party disclosure in accordance with Accounting Standard-18 "Related Party Disclosures" issued by the Institute of Chartered Accountants of India is given below:-

I) NAME OF RELATED PARTIES & DESCRIPTION OF RELATIONSHIP (A) Key Managerial Personnel:

(i) Dr. M.P. Agarwal CMD

Significant Accounting Policies and Notes to Accounts

(ii) Mr. Pawan Kumar Agarwal Jt. M.D.

(iii) Mr. Devesh Gupta Dy. M.D.

(B) Relatives of Key Managerial Personnel:

(i) Mrs. Sharda Agarwal Director (Wife of Dr. M.P. Agarwal)

(ii) Mr. Alok Agarwal President (Works) (Son of Dr. M.P Agarwal)

(ii) M r. Vikas Agarwal President (Marketing) (Son of Dr. M.P.Agarwal)

(C) Companies & Concerns controlled by Key Managerial Personnel/Relatives

(i) Shri Lakshmi Defence Solutions Ltd. (ii) SLCL Overseas (FZC) at Sharjah, UAE (iii) Synergy Global Home Inc. N.Y., U.S.A.

Significant Accounting Policies and Notes to Accounts

2) Contingent Liabilities:

Contingent Liabilities as shown in the notes to the accounts, may affect the future profitability to the extent they materialize for payment.

(i) Guarantees given by the Company Rs. NIL

(ii) Claim against the Company not acknowledges Debt Rs. NIL

(iii) Letter of Credit outstanding Rs. 2826.15 Lacs


Jun 30, 2010

1. During the accounting year ended 30th June, 2010 the Company has converted 2,221,500 Warrants of Rs.100/- each into 2,221,500 Equity Shares of Rs. 10/- each at a premium of Rs. 90/- per Equity Share, 1,975,000 Warrants of Rs. 56/- each into 19,75,000 Equity Shares of Rs. 10/- each at a premium of Rs. 46/- per Equity Share. The proceeds thereof have been utilized for meeting the long-term capital expenditure. Also, out of 10.00 Million FCCB, the Company has converted FCCB for an amount of USD 0.5 Million and issued 188,405 nos., of equity shares at a predetermined price of Rs. 108.41 per share as mentioned in the term sheet and offering cirular of Foreign Currency Convertible Bonds (FCCBs).

2. The Company has provided Rs. 10 crores (in aggregate Rs. 20 crores) as Debenture Redemption Reserve.

3. Calculation of earning per share (EPS) in accordance with AS-20 issued by Institute of Chartered Accountants of India".

4. RELAtED PARTY DISCLOUSRE : The related party disclosure in accordance with AS-18 issued by the institute of Chartered Accountants of India is given below:-

I) Name of Related Parties & Description of Relationship

(A) KEY MANAGERIAL PERSONNEL

(i) Dr. M.P. Agarwal CMD

(ii) Mr. Pawan Kumar Agarwal Jt. M.D.

(iii) Mr. Devesh Gupta Dy. M.D.

(B) RELATIVES OF KEY MANAGERIAL PERSONNEL:-

(i) Mrs. Sharda Agarwal Director(Wife of Dr. M.P. Agarwal)

(ii) Mr. Alok Agarwal President (Works) (Son of Dr. M.P Agarwal)

(ii) Mr.Vikas Agarwal President(Marketing) (Son of Dr. M.P.Agarwal)

(C) COMPANIES & CONCERNS CONTROLLED BY KEY MANAGERIAL PERSONNEL/ RELATIVES (i) Galaxy Capital Finance Limited

(ii) Shri Lakshmi Infrastructure Limited (iii) Shri Lakshmi Power Limited (iv) Shri Lakshmi Nano Technologies Limited

(v) Shri Lakshmi Defence Solutions Limited (formerly known as Armet Armored Vehicles (India) Limited) (v) SLCL Overseas (FZC) at Sharjah, UAE

5. The Company is engaged in manufacturing of textiles which in the context of AS-17 as notifed under the companies Accounting Standards Rules, 2006, is considered as the only business segment.

6. As per provisions of As-22 (Accounting for taxation of income) issued by Institute of Chartered Accountants of India, total deferred tax liability have been calculated to be Rs. 3,193.76 Lacs.

7. No operations have been discontinued during the year.

8. Personal accounts are subject to confrmation, reconciliation and consequential adjustments (if any).

9. CONTINGENT LIABILITIES

(i) Guarantees given by the Company NIL

(ii) Claim against the Company not acknowledges Debt Rs. NIL

(iii) Letter of Credit outstanding Rs. 6,100 Lacs

Estimated average contract remaining to be executed on Capital account & provided for (Net of Advances payment) Rs. NIL (Previous year NIL).

(iv) Provision for Tax amounting to Rs. 650 Lacs has been made in the accounts.

10. Additional information where applicable pursuant to the provisions of Schedule VI of the Companies Act, 1956 is as under:- A) Licensed Capacity: The Company is not required to obtain any licensed under the Industrial Development & Regulation Act, therefore the details of license capacity is not applicable.


Jun 30, 2009

Not Available

 
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