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Notes to Accounts of Silverton Spinners Ltd.

Dec 31, 2013

Terms/Rights attached to Equity Shares

The company has only one class of equity shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company,after distribution of all preferential amounts.

The distribution will be in proportion to the number of equity shares held by the shareholders.

Terms/Rights attached to Non-Cumulative Redeemable Preference Shares

The company has only one class of Non-Cumulative Redeemable Preference Shares, having a par value of Rs.100 per share.

Redemption of fully paid Non-Cumulative Redeemable Preference shares shall be made at par on 1st March 2025 or earlier at the option of Company. Such reedemption shall be made out of profits of the company which would otherwise be available for dividend i.e. out of general reserve created by ploughing back of distributable profits or may be made out of the proceeds of a fresh issue of shares made for the purpose of redemption.

Terms/Rights attached to 0.01% Cumulative Redeemable Preference Shares

The company has only one class of Cumulative Redeemable Preference Shares, having a par value of Rs.10 per share.

Redemption of fully paid Cumulative Redeemable Preference shares shall be made at par on 1st March 2025 or earlier at the option of Company. Such reedemption shall be made out of profits of the company which would otherwise be available for dividend i.e. out of general reserve created by ploughing back of distributable profits or may be made out of the proceeds of a fresh issue of shares made for the purpose of redemption.

Terms/Rights attached to 6.5% Cumulative Convertible Preference Shares

The company has only one class of Cumulative Convertible Preference Shares, having a par value of Rs.100 per share.

These shares will be paid dividend @ 6.5% p.a. from their respective deemed dates of allotment.These shares are subject to the rules framed by SEBI, convertible into Equity Shares in two equal installments in 2017-18 & 2018-2019 at a price to be determined at the time of conversion in accordance with the SEBI (ICDR) Regulations 2009.

The equity shares to be issued on conversion of the CCPS shall rank pari passu in all respects, with the existing equity shares of the Company, except that dividend, if any, declared for the company for the financial year of issuance of the CCPS shall be paid to the CCPS proportionate to the date of issue.

** Export Packing Credit and Export bills discounted are secured by paripassu first charge created through hypothecation of company''s raw materials, work-in-process, finished goods, stores and spares meant for export and book debts and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company alongwith personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Cash Credit is secured by paripassu first charge created through hypothecation of company''s raw materials. Work-in-progress, finished goods, stores and spares meant for domestic sale and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company alongwith personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

2. Sales include Rs.111861992/- (P.Y. Rs.54649755/-) being the sale value of Cotton Waste. Sales of cotton waste is inclusive of Sales Tax thereon.

3. Based on the Company''s approach, the Corporate Debt Restructuring Empowered Group approved reworking of existing CDR Package on 31st December, 2012 by allowing deferment of repayment of Term Loans. Accordingly the Consortium Member Banks sanctioned and implemented the reworked CDR Package. In accordance with the reworked CDR Package, repayment of Term Loans will start from March, 2014.

4. In view of brought forward business losses, unabsorbed depreciation and other applicable provisions of the Income Tax Act, no provision is required for current Income Tax for the year under audit.

5. Due to continuous losses suffered by the Company and in the absence of virtual certainty of availability of taxable income in the immediate future, the Company has not accounted Deferred Tax Asset for the current year and also adjusted carrying amount of Deferred Tax Assets and Liabilities recognized by the Company in the earlier years. The position of Deferred Tax is reviewed by the Company as at each Balance Sheet date for its recognition on a going concern basis.

6. As certified by technical expert, Plant & Machinery and Electrical installations have been considered to be continuous process plants as per Schedule XIV to the Companies Act 1956.

7. The balances of Sundry Debtors, Sundry Creditors, Loans and Advances are subject to confirmation from respective parties.

8. Segment Reporting :

In terms of Accounting Standard 17 of the Institute of Chartered Accountants of India, Segment Information has not been given as the Company is engaged primarily in manufacture and sale of Textile Products and has no significant reportable Business or Geographical segment.

9. Related party disclosures as per Accounting Standard 18 are given below :- i) Name and description of relationship with the related parties :

a) Key Management Personnel : Nature of Designation

1. Mr. Ashok Mehra : Chairman cum Whole Time Director

2. Mr. C. P. Mehra : Managing Director

3. Mr. Basudeo Prasad Agarwal : Sr. Vice President & Secretary

b) Enterprises in which relatives of key management personnel exist and name of the relatives :

1. Bala Techno Industries Ltd.

2. Gautam Mehra

10. Additional depreciation of Rs.19488887/- (P.Y. Rs.15591110/-) arising due to revaluation of certain fixed assets is charged to Statement of Profit & Loss.

11. These accounts are covering a period of 15 months (from 1st October 2012 to 31st December 2013) and as such figures relating to previous year (covering a period of 12 months (from 1st October 2011 to 30th September 2012) are not strictly comparable with those of current period.

12. Previous year figures are regrouped and rearranged wherever necessary.


Sep 30, 2012

1. Sales include Rs.54649755/- (P.Y. Rs.97945987/-) being the sale value of Cotton Waste. Sales of cotton waste is inclusive of Sales Tax thereon.

2. The Company approached to Consortium Banks for reworking of existing CDR Package by allowing deferment of repayment of Term Loans and the Consortium Banks have agreed in principle to defer the repayment of Term Loans starting from March, 2014. However, the Company has shown the amount of Term Loans falling due within one year under Note No. 8 : Other Current Liabilities, pending final approval of reworked CDR package.

3. Contingent Liability in respect of :

(Amount in Rs.)

As at 30th Sept. 2012 As at 30th Sept. 2011 Particulars (Rs.) (Rs.)

Letter Of Credit 6999200 6999200

Dividend payable on 6.5% CCPS to Banks 85842027 58707563

4. In view of brought forward business losses, unabsorbed depreciation and other applicable provisions of the Income Tax Act, no provision is required for current Income Tax for the year under audit.

5. As there is no certainty for immediate future taxable income, deferred tax asset on account of brought forward business losses are not accounted for in the accounts under audit.

6. As certified by technical expert, Plant & Machinery and Electrical installations have been considered to be continuous process plants as per Schedule XIV to the Companies Act 1956.

7. The balances of Sundry Debtors, Sundry Creditors, Loans and Advances are subject to confirmation from respective parties.

8. Segment Reporting :

Since the Company is engaged primarily in manufacture and sale of Textile Products, this is the only reportable segment. The Company''s operating facilities are located in India.

Since sales out of India made to many countries without any significant difference in the value of supplies made to individual countries, these have been aggregated ''Export'' . The Company has chosen the following geographical segments as primary segments :

1. Export

2. Domestic

9. Related party disclosures as per Accounting Standard 18 are given below :- i) Name and description of relationship with the related parties :

a) Key Management Personnel : Nature of Designation

1. Mr. Ashok Mehra : Chairman cum Whole Time Director

2. Mr. C P Mehra : Managing Director

3. Mr. Basudeo Prasad Agarwal : Sr. Vice President & Secretary

b) Enterprises in which relatives of key management personnel exist and name of the relatives :

1. Atlantic Projects Ltd.

2. Bala Techno Industries Ltd.

3. Bala Techno Global Ltd.

4. City Desk Finance Pvt. Ltd.

5. Cross Finance Pvt. Ltd.

6. Mehra Traders

7. Techno Dyeing & Bleaching Works

8. Techno Elastics

9. Gautam Mehra

Note : Related Party relationship is as identified by the Company and relied upon by the auditor.

10. Additional depreciation of Rs.15591110/- (P.Y. Rs.15591110/-) arising due to revaluation of certain fixed assets is charged to Statement of Profit & Loss.

11. Previous year figures are regrouped and rearranged wherever necessary.


Sep 30, 2011

1. In Terms of the CDR Package approved on 25th June, 2009, 6.5% Cumulative Convertible Preference Shares of Rs.416312700/- has been allotted to the banks during the period.

2. Sundry Creditors are inclusive of liability of Rs.71182502/- (P.Y. Rs.165282493/-) on account of export bills discounted with banks.

3. Sundry Creditors includes Rs.Nil (P.Y. Rs.1528633/-) due to directors lying in their current account with the Company.

4. Sales include Rs. 97945987/- (P.Y. Rs.118086332/-) being the sale value of Cotton Waste. Sales of cotton waste is inclusive of Sales Tax thereon.

5. Contingent Liability in respect of :

(Amount in Rs.) (Amount in Rs.) As at 30th September, 2011 As at 30th Septem ber, 2010

Letter Of Credit 6999200 6999200

Dividend payable on 6.5% CCPS to Banks 58707563 Nil

6. Rupee Term Loan from Canara Bank, State Bank of India and Central Bank of India are secured by paripassu first charge on all fixed assets of the company and paripassu second charge on all current assets of the company along with personal guarantee of the two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Export Packing Credit and Export bills discounted from the above three Banks are secured by paripassu first charge created through hypothecation of company''s raw materials, work-in-process, finished goods, stores and spares meant for export and book debts and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company along with personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Cash Credit from the above three Banks is secured by paripassu first charge created through hypothecation of company''s raw materials, work-in-progress, finished goods, stores and spares, book debts meant for domestic sale and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company along with personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Soft Loan from Government of West Bengal is secured by creation of the residuary charges on the Fixed Assets of the Company.

7. Based on information available with the Company, there were no dues payable to Small Scale Industrial Undertakings, which are outstanding for more than thirty days.

8. In view of carry forward unabsorbed depreciation and other applicable provisions of the Income Tax Act, no provision is required for current Income Tax for the year under audit.

9. As certified by technical expert, Plant & Machinery and Electrical installations have been considered to be continuous process plants as per Schedule XIV to the Companies Act 1956.

10. The balances of Sundry Debtors, Sundry Creditors, Loans and Advances are subject to confirmation from respective parties.

11. Segment Reporting :

Since the Company is engaged primarily in manufacture and sale of Textile Products, this is the only reportable segment. The Company''s operating facilities are located in India.

Since sales out of India made to many countries without any significant difference in the value of supplies made to individual countries, these have been aggregated "Export" . The Company has chosen the following geographical segments as primary segments :

12. Related party disclosures as per Accounting Standard 18 are given below :- i) Name and description of relationship with the related parties :

a) Key Management Personnel : Nature of Designation

1. Mr. Ashok Mehra : Chairman cum Whole Time Director

2. Mr. C P Mehra : Managing Director

3. Mr. Basudeo Prasad Agrawal : Sr. Vice President & Secretary

b) Enterprises in which relatives of key management personnel exist and name of the relatives :

1. Atlantic Projects Limited

2. Bala Techno Industries Limited

3. City Desk Finance Pvt. Ltd.

4. Cross Finance Pvt. Ltd.

5. Mehra Traders

6. Techno Dyeing and Bleaching Works

7. Techno Elastics

8. Sarda Mehra

9. Premlata Mehra Family Welfare Trust

10. Siddharth Mehra

11. Gautam Mehra

* Sales including 27.26 Kgs. (P.Y. 33.80 Kgs.) for free trade samples. Figures in bracket are for the previous year.

13. Additional depreciation of Rs.15591110/- (P.Y. Rs.23386665/-) arising due to revaluation of certain fixed assets is charged to Profit & Loss Account.

14. These accounts are covering a period of 12 months (from 1st October 2010 to 30th September 2011) and as such figures relating to previous year (covering a period of 18 months from 1st April 2009 to 30th September 2010) are not strictly comparable with those of current period.

15. Previous year figures are regrouped and rearranged wherever necessary.


Sep 30, 2010

1. Certain Fixed Assets of the Company had been revalued by an approved valuer using going concern concept at net replacement cost basis and the difference of Rs.335154868/- between revalued amount and net book value of Fixed Assets as on 1st April 2005 has been credited to revaluation reserve account of the Company and the same has been fully adjusted against the debit balance in Profit & Loss Account of the Company as per scheme sanctioned by Hon''ble High Court at Calcutta.

2. The CDR Package approved on 25th June, 2009 has been successfully implemented by the banks during the period. In terms of the sanctioned package an amount of Rs.405850240/- lying as Term Loan liability including accrued interest as on 30th September, 2010 will be converted into Cumulative Convertible Preference Shares on receipt of Statutory Approvals by the banks. In absence of necessary approvals, the said amount has shown under the head Share Capital Suspense Account for pending issue / allotment of Cumulative Convertible Preference Shares.

3. Sundry Creditors are inclusive of liability of Rs.165282493/- (P.Y. Rs.130935637/-) on account of export bills discounted with banks.

4. Sundry Creditors includes Rs.1528633/- (P.Y. Rs.7820630/-) due to directors lying in their current account with the Company.

5. Contingent Liability in respect of :

(Amount in Rs.) (Amount in Rs.) As at 30th September, 2010 As at 31st March, 2009

Letter Of Credit 6999200 5500000

Goods removed on Bond furnished

for Excise Duty Nil 14297976

6. Rupee Term Loan from Canara Bank, State Bank of India and Central Bank of India are secured by paripassu first charge on all fixed assets of the company and paripassu second charge on all current assets of the company along with personal guarantee of the two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Export Packing Credit and Export bills discounted from the above three Banks are secured by paripassu first charge created through hypothecation of company''s raw materials, work-in-process, finished goods, stores and spares meant for export and book debts and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company along with personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Cash Credit from Canara Bank is secured by paripassu first charge created through hypothecation of company''s raw materials. Work-in-progress, finished goods, stores and spares meant for domestic sale and also by extension of charge (by way of second paripassu charge) over all fixed assets of the company along with personal guarantees of two directors, namely Mr. Ashok Mehra and Mr. C.P.Mehra.

Soft Loan from Government of West Bengal is secured by creation of the residuary charges on the Fixed Assets of the Company.

7. Based on information available with the Company, there were no dues payable to Small Scale Industrial Undertakings, which are outstanding for more than thirty days.

8. In view of carry forward unabsorbed depreciation and other applicable provisions of the Income Tax Act, no provision is required for current Income Tax for the year under audit.

9. As certified by technical expert, Plant & Machinery and Electrical installations have been considered to be continuous process plants as per Schedule XIV to the Companies Act 1956.

10. Advances recoverable include Rs. ''Nil'' (P.Y. Rs.10692274/-) for C.S.T. Reimbursement as the company is entitled for the same on account of being 100% EOU.

11. The balances of Sundry Debtors, Sundry Creditors, Loans and Advances are subject to confirmation from respective parties.

12. Segment Reporting :

Since the Company is engaged primarily in manufacture and sale of Textile Products, this is the only reportable segment. The Company''s operating facilities are located in India.

Since sales out of India made to many countries without any significant difference in the value of supplies made to individual countries, these have been aggregated "Export" . The Company has chosen the following geographical segments as primary segments :

13. Related party disclosures as per Accounting Standard 18 are given below :-

i) Name and description of relationship with the related parties :

a) Key Management Personnel : Nature of Designation

1. Mr. Ashok Mehra : Chairman cum Whole Time Director

2. Mr. C P Mehra : Managing Director

3. Mr. Basudeo Prasad Agrawal : Sr. Vice President & Secretary

b) Enterprises in which relatives of key management personnel exist and name of the relatives :

1. Bala Techno Industries Limited

2. Atlantic Projects Limited

3. City Desk Finance Pvt. Ltd.

4. Cross Finance Pvt. Ltd.

5. Mehra Traders

6. Techno Dyeing and Bleaching Works

7. Techno Elastics

8. Sarda Mehra

9. Premlata Mehra Family Welfare Trust

10. Siddharth Mehra

* includes Nil Kgs. sold for Rs.Nil (P.Y. 2939755 Kgs. sold for Rs.130698689/-).

* includes Nil Kgs. sold for Rs.Nil (P.Y. 2939755 Kgs. sold for Rs.130698689/-).

14. Additional depreciation of Rs.23386665/- (P.Y. Rs.11693333/-) arising due to revaluation of certain fixed assets is charged to Profit & Loss Account.

15. These accounts are covering a period of 18 months (from 1st April 2009 to 30th September 2010) and as such figures relating to previous year (covering a period of 9 months from 1st July 2008 to 31st March 2009) are not strictly comparable with those of current period.

16. Previous year figures are regrouped and rearranged wherever necessary.

Note : a. Figures in Brackets indicates Outflows.

b. Previous Years figures have been regrouped and rearranged whenever necessary.

 
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