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Notes to Accounts of Silktex Ltd.

Mar 31, 2011

1. Work in Progress and manufactured finished goods have been valued on the basis of costing records maintained by the Company and certified by the cost accountant. Work in Progress includes Building Work in Progress at Factory Rs. 62,91,415/- and Building Work in Progress at Head Office Rs. 92,339/-.

2. Building includes a sum of Rs. Nil (Previous year NIL) being the cost of tenements for staff allotted by KIADB. The same Building has been surrendered to KIADB for poor quality and a necessary adjustment has been done. An amount of Rs. 2,55,000/- is receivable from KIADB.

3. Building Construction at factory lease hold land at site No. 41 allotted by KIADB at Industrial Area, Hoskote is in progress. Upon completion of the construction of the factory building, KIADB will register the land in the name of the Company.

4. The registration of the office building is under process and is expected to be completed shortly. The registration charges and other expenses is estimated at Rs. 17,80,000/- (Previous year Rs. 20,10,000/-) has not been provided.

5. Advances for purchases and recoverable in cash or kind include an amount of Rs. 4,20,25,342/- (previous year Rs. 4,25,42,975/-) due from Companies / Firms / Others, which are long pending. The management considers that all these advances as good for recovery.

6. In the opinion of the management, the value on realisation of current assets and loans & advances in the ordinary course of business, would not be less than the amount at which they are stated in the Balance Sheet.

7. Estimated amount of capital contracts remaining to be executed & not provided for at the end of the period (net of advances) is Rs. 2,41.15,183/- (previous period Rs. 2,47,19,874/-).

8. Payment against supplies from all undertakings is made in accordance with the agreed credit term.

9. An amount of Rs. 4,24,917/- overdue outstanding as on 31st March, 2011 to the suppliers. We do not have the required information about suppliers, who are the small scale undertakings.

10. Travelling & conveyance and business & export promotion expenses include Rs. 1,78,422/- (previous year Rs. 1,59,401/-) & Rs. 23,14,560/- (previbus year Rs. 45,57,976/-) respectively relating to directors traveling for export promotion.

11. Research and development expenses are net of development charges received Rs. 48,987/- (previous period Rs. 71,454/-)

12. Details of Related party transactions (As identified by the Management and relied upon by the Auditors)

A. Related Parties

(i) Companies where control exists Siltex International Limited Silcotex Private Limited Saswath Finserve Private Limited

(ii) Key Management Personnel (KMP) Sushil Kumar Churiwala Sandeep Kumar Churiwala Saket Kumar Churiwala

(iii) Relatives of Directors Deepika Churiwala Premlata Churiwala Manisha Churiwala

13. Contingent liabilities not provided for at the year end:

Counter guarantees given to Bank by the Company for guarantees given by bankers on behalf of the Company is Rs. 3,50,000/- (Previous Year Rs. 3,50,000/-).

14. As per the prevailing laws and guidelines, the Company being a 100% Export Oriented Unit has been exempted from Customs and Central Excise duty levies. Such exemptions are subject to fulfillment of certain terms and conditions. The Company has executed legal undertakings to pay the duties and other applicable levies in respect of duty free imports in the event of non-fulfillment of such terms and conditions.

15. An entry tax demand of Rs. 1,54,253/- has been raised by commercial tax department. The Company has preferred an appeal before the Asst. Commissioner of commercial tax. As such no provision has been made for the same. Further under Section 73 & 75 of the Finance Act, 1975, service tax demand for Rs. 1,28,804/- for the period from 1st January, 2005 to 31st March, 2007 was raised by service tax department. The Company has appealed before The Commissioner of Central Excise (Appeals), who has passed order partially rejecting the demand and hence Company has claimed a refund of Rs. 5,08,414/-.

16. Export Sales include Rs. 59,80,679/- (Previous year Rs. 55,16,913/-) being the value of the goods invoiced against confirmed orders and shipped after 31 st March, 2011.

17. No Remittances in Foreign Currency on account of dividends were made during the year.

18. Miscellaneous Expenses includes Rs. 2,75,824/- (Previous Year Rs. 62,068/-) for loss on sale of investments.

19. Previous period's figures have been re-grouped / re-arranged wherever necessary.

20. Paises are rounded off to the nearest rupee.


Mar 31, 2010

1. Work in Progress and manufactured finished goods have been valued on the basis of costing records maintained by the Company and certified by the cost accountant.

2. Building includes a sum of Rs.NIL (Previous year Rs.5,10,000/-) being the cost of tenements for staff allotted by KIADB. The same Building has been surrendered to KIADB for poor quality and necessary adjustments has been done. An amount of Rs.2,55,000/- is receivable from KIADB.

3. Building Construction at factory land at site No.41 allotted by KIADB at Industrial Area, Hoskote is in progress. Upon completion of the construction of the factory building, KIADB has agreed to register the land in the name of the Company.

4. The registration of the office building is under process and is expected to be completed shortly. The registration charges and other expenses is estimated at Rs.20,10,000/- has not been provided.

5. Advances for purchases and recoverable in cash or kind include an amount of Rs. 4,25,42,975/- (previous year Rs.4,54,78,476/-) due from Companies / Firms / Others, which are long pending. The management considers that all these advances as good for recovery.

6. In the opinion of the management, the value on realisation of current assets and loans & advances in the ordinary course of business, would not be less than the amount at which they are stated in the Balance Sheet.

7. Estimated amount of capital contracts remaining to be executed & not provided for at the end of the period (net of advances) is Rs.2,47,19,874/- (previous period Rs.2,37,55,224/-).

8. Payment against supplies from all undertakings are made in accordance with the agreed credit terms. There was no amount overdue outstanding as on 31st March, 2010 to the suppliers. We do not have the required information about suppliers, who are the small scale undertakings.

9. Travelling & conveyance and business & export promotion expenses include Rs.1,59,401/- (previous period Rs.1,74,003/-) & Rs.45,57,976/- (previous period Rs.37,55,755/-) respectively relating to directors travelling.

10. Research and development expenses are net of development charges received Rs.71,454/- (previous period Rs.29,605/-)

11. Contingent liabilities not provided for at the year end :

Counter guarantees given to Bank by the Company for guarantees given by bankers on behalf of the Company is Rs.3,50,000/- (previous period Rs.3,50,000/-).

12. As per the prevailing laws and guidelines, the Company being a 100% Export Oriented Unit has been exempted from Customs and Central Excise duty levies. Such exemptions are subject to fulfillment of certain terms and conditions. The Company has executed legal undertakings to pay the duties and other applicable levies in respect of duty free imports in the event of non-fulfillment of such terms and conditions.

13. An entry tax demand of Rs.1,54,253/- has been raised by commercial tax department. The Company has preferred an appeal before the Asst. Commissioner of commercial tax. As such no provision has been made for the same. Further under Section 73 & 75 of the Finance Act, 1975, service tax demand for Rs.1,28,804/- for the period from 1st January, 2005 to 31st March, 2007 has been raised by service tax department. Company has presented an appeal before the Commissioner of Central Excise (Appeals), hence the provision has not been made for the same.

14. Export Sales include Rs.55,16,913/- (previous year Rs.NIL) being the value of the goods invoiced against confirmed orders and shipped after 31st March, 2010.

15. No Remittances in Foreign Currency on account of dividends were made during the year.

16. Miscellaneous Expenses includes Rs.62,068/- (previous year Rs.NIL) for loss on sale of investments.

17. Previous periods figures have been re-grouped / re-arranged wherever necessary.

18. Paisas are rounded off to the nearest rupee.

 
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