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Notes to Accounts of Sir Shadilal Enterprises Ltd.

Mar 31, 2015

1.1 In absence of balance Confirmations from certain creditors, debtors and securities lodged shown in Notes of Trade payable, Other current liabilities, Long - term loans and advances, Trade Receivables, Short-term loans and advances and Other current assets the Auditors have relied upon the fgures appearing in the books of the Company. However, no provisions of doubtful debts amounting to Rs. 150.38 Lacs appearing in Note No. 2.20 has been made.

1.2 Income Tax assessments (regular u/s 143(3)) have been completed upto the Accounting year 2011-2012 (Assessment Year 2012-2013). The Company has gone to appeal against tax demanded as a result of certain assessment order. The Company has been legally advised that in view of expected reliefs, no further provision for income tax liability is required.

1.3 Certain 'C' forms in respect of inter-state sale will be collected in due course of time. Liability on account of Sales-Tax may arise on such inter-state sales relating to which 'C' forms are not received.

1.4 The Company, during the year has reviewed impairment of major Fixed Assets of the Company to identify the impairment loss, if any. The review has not revealed any impairment of assets in terms of Accounting standard-28 issued by the Institute of Chartered Accountants of India.

1.5 During the year Company has disposed off its Sugar Unit "Unn Sugar Complex" as slump sale after prior approval of Shareholders for consideration of Rs. 75.50 Crores. The exceptional item in note no. 2.29 represents net of capital Profit of Rs. 16.51 crores after adjusting the loss of Rs. 1.67 crores on transfer of stores.

1.6 Pursuant to the Companies Act, 2013, the Company had during the year, revised remaining useful life of its Fixed Assets. The carrying amount as on 01.04.2014 is depreciated over the revised remaining useful life of the assets. The revised depreciation for the period prior to 01.04.2014 results in excess depreciation charged by Rs. 1.53 crores (excluding its effect of Rs. 0.47 crores on the figure of deferred tax which has been adjusted in the current year) and shown as income in note no. 2.29 under the head exceptional item in the statement of Profit & Loss.

1.7 During the financial year 2012-13 Company has accepted/ renewed deposits in excess of Rs. 42.34 lacs under rule 3 (2)(I) and Rs. 190.93 lacs under rule 3(2)(II) of the provision of section 58 A and other relevant provision of the Companies Act, 1956, and Companies (Acceptance of Deposits) Rules 1975. However, the Company has since refunded the entire amount of fixed deposits.

1.8 The Company has over the last few years incurring losses, due to which its net worth has been completely eroded. Last year the Company has become Sick Industrial company under provision of Sick Industrial Company (Special Provisions) Act, 1985 and the fact was reported to the BIFR as required under the provisions of section 15(1) of Sick Industrial Company (Special Provisions) Act, 1985 and relevant Form A was duly fled with the Registrar of BIFR, who had asked the Company, to fle a revised Form A along with Balance Sheet in which assets and liability of Unn Sugar Complex are not depicted.

The relevant adjustment entry regarding sale of Unn Sugar Complex are recorded in the books which will be appearing in the accounts for the year ended 31.03.2015

The revised Form A shall be submitted after the approval of the accounts of the Company of year ended 31.03.2015 by the Board of Director of Company.

1.9 Certain previous year figures have been rearranged to make them comparable with current figures. Figures have been rounded off nearest to rupee.

2. Quantitative figures of Distillery products are not ascertainable, because the basic product of spirits is converted later into various strengths with water dilution.

3. Closing stock of Molasses arrived at after adjustment of wastage of 2,101 Qtls. (Previous year 3,484 Qtls.)

4. Turnover includes inter-unit sales of Rs. 14,03,09,964/- (Previous year Rs. 14,92,60,131/-).

5. Other Sales includes Sale of Bagasse, Press Mud and Bio Compost.

6. Sale of Sugar includes 6,445 bags of BISS (Previous year Rs. 2,453 bags)

7. Segment Reporting :

The Company's operation predominantly relates to manufacture and sale of Sugar and Alcohol products. Accordingly the Sugar and Alcohol products primarily comprises the basis for primary and secondary for segment information :


Mar 31, 2014

1.1 CONTINGENT LIABILITIES NOT PROVIDED FOR : As at March 31, 2014 As at March 31,2013 Rs. Rs.

a) In respect of Statutory Liabilities :

i) Subjudice,Income Tax/ Penalty determined by Income tax department 34,83,320 38,86,036

ii) Subjudice, Sales tax and Entry Tax including interest thereon 59,94,685 55,73,768

iii) Subjudice, Excise Duty and penalty thereon 65,24,049 67,87,367

iv) Subjudice, In respect of alleged claim of Stamping fee on vats 55,42,460 55,42,460

b) In respect of Other Liabilities :

i) Alleged claim of interest on arrears of late

payment of cane price 73,08,696 73,08,696

ii) In respect of labour cases in dispute, the amount of which is not ascertainable.

iii) Bank Guarantees in favour of Oil Companies and Excise Department of Rs. 1,60,34,000/-.

NOTE 2 : ADDITIONAL INFORMATION

2.1 In absence of balance confirmations from certain creditors, debtors and securities lodged shown in Notes of Trade payable,Other current liabilities, Long - term loans and advances, Trade Receivables, Short - term loans and advances and Other current assets the Auditors have relied upon the figures appearing in the books of the Company. However, no provision of doubtful debts amounting to Rs. 150.38 Lacs appearing in Note No. 2.18 has been made.

2.2 Income Tax assessments (regular u/s 143(3)) have been completed upto the Accounting year 2010-2011 ( Assessment Year 2011-2012). The Company has gone in appeals against certain such assessment orders. The Company has been legally advised that in view of expected reliefs, the provision for Income Tax liabilities made in Accounts is considered adequate.

2.3 Certain ''C'' forms in respect of inter-state sales will be collected in due course of time. Liability on account of Sales-Tax may arise on such inter- state sales relating to which ''C'' forms are not received.

2.4 The Company, during the year on test check basis has reviewed impairment of major Fixed Assets of the Company to identify the impairment loss, if any, based on the test check of the assets, the recoverable value for such Assets is higher than their carrying book value. Accordingly, the review has not revealed any impairment of assets in terms of Accounting Standard-28 issued by the Institute of Chartered Accountants of India.

2.5 The Company has entered into an agreement on 14th January 2014 for sale of its Unit - Unn Sugar Complex located at Block - Unn, District Shamli. However, the execution / formalities of conveyance deed is pending because the purchaser has to Comply with certain Conditions / Formalities for transfer of lease hold rights in his favour.

2.6 The Company over the last few years has been incurring losses due to which its net worth has been completely eroded and its current liabilities are far in excess of its current assets. The accumulated losses of the Company as at 31.03.2014 have resulted in 100% erosion of the peak net worth during the immediately preceding four financial years therefore, the Company has become sick industrial Company under provision of the Sick Industrial Companies (Special Provisions) Act 1985 and this fact will be reported to the BIFR as required under the provisions of section 15 (1) of the Sick Industrial Company (Special Provisions) Act, 1985.

The Indian sugar industry, particularly in the State of Uttar Pradesh, has faced difficulties on account of increasing sugar cane prices and corresponding lower than expected recovery of sugar from cane, lower sugar prices and consequential under recovery of cost of production. These factors have adversely affected the Company''s operations and financial performance. Higher finance costs have also added to the cash losses.

During the previous year, based on the Company''s audited financial statements for the year ended March 31, 2012, the Company had filed Form ''C'' with the Board for Industrial and Financial Reconstruction (BIFR), Government of India, about the "Potential Sickness" of the Company in line with the provisions of Section 23 of the Sick Industrial Companies (Special Provisions), Act, 1985 (SICA).

2.7 During the financial year 2012-13 Company has accepted/ renewed deposits in excess of Rs. 42.34 lacs under rule 3 (2)(I) and Rs. 190.93 lacs under rule 3(2)(II) of the provisions of section 58 A and other relevant provisions of the Companies Act, 1956, and Companies (Acceptance of Deposits) Rules 1975. During the financial year 2013-14 the Company has refunded Rs. 42.34 lacs under rule 3 (2)(I) and Rs.175.82 under rule 3 (2)(II) upto 31.03.2014. The balance refund are being made during the current year.

2.8 Certain previous year figures have been rearranged to make them comparable with current year figures. Figures have been rounded off nearest to rupee.

2.9 Particulars of Stocks, Purchases and Sales of Products :

2.10 Related parties'' Disclosures :

I Relationship

A Key Management personnel Designation

i. Sh. Rajat Lal Managing Director ii. Sh. Vivek Viswanathan Joint Managing Director

iii. Sh. Rahul Lal Executive Director

B Relatives of Key Management Personnel Relation with Key Management Personnel

1. Smt. Sudha Singhania Sister of Shri Rajat Lal

2. Smt. Poonam Lal Wife of Shri Rajat Lal

3. Sh. Rahul Lal Son of Shri Rajat Lal

4. Ms. Pooja Lal Daughter of Shri Rajat Lal

5. Smt. Radhika Viswanathan Hoon Sister of Shri Vivek Viswanathan


Mar 31, 2013

1.1.1 Salary & Wages includes Rs.38,45,295/– paid to Managerial Personnel (Previous year Rs. 38,41,361/–).

1.1.2 Provident Fund includes Rs.2,73,600/– for Managerial Personnel (Previous year Rs. 2,73,600/–)

1.1.3 Contribution to Provident fund, Superannuation fund and Family Pension Fund charged off during the year are as under.

2.1 Estimated amount of contracts remaining to be executed on capital Account is NIL (Previous year Rs. 40.22 Lacs) against which advance of Rs. NIL has been made (Previous Year Rs. 8.04 Lacs).

2.2 In absence of balance confrmations from certain creditors, debtors and securities lodged shown in Notes of Trade payable,Other current liabilities, Long – term loans and advances, Trade Receivables, Short – term loans and advances and Other current assets the Auditors have relied upon the fgures appearing in the books of the Company.

2.3 Income Tax assessments (regular u/s 143(3)) have been completed upto the Accounting year 2009–2010 (Assessment Year 2010–2011). However in view of ITAT, Delhi order dated 23.11.12, the block Assessment orders made for the years 2000–01 to 2005–06 under section 153C read with section 153A has been quashed. However regular assessment for assessment year 2000–01 to 2003–04 have since been completed and notice for assessment for the assessment year 2004–05 and 2005–06 have been issued by the Department. However, intimation for processing of Return for the Accounting Year 2010–11 (Assessment year 2011–2012) Under Section 143 (1) of the Income Tax Act 1961 has been received and necessary adjustments in view thereof have been accounted for in the books of accounts. The Company has gone in appeals against certain such assessment orders and the Company has been legally advised that in view of expected reliefs, the provision for Income Tax liabilities made in Accounts is considered adequate.

2.4 Certain ‘C'' forms in respect of inter–state sale will be collected in due course of time. Liability on account of Sales–Tax may arise on such inter– state sales relating to which ‘C'' forms are not received.

2.5 The Company, during the year on test check basis has reviewed impairment of major Fixed Assets of the Company to identify the impairment loss, if any. Based on the test check of the assets, the recoverable value for such Assets is higher then their carrying book value. Accordingly, the review has not revealed any impairment of assets in terms of Accounting standard–28 issued by the Institute of Chartered Accountants of India.

2.6 The fact that accumulated losses of the Company as on 31.03.2012 have resulted in more than 50% erosion of the peak Net Worth during the immediately preceding four fnancial years, which in compliance of provisions of section 23(1) (a) (I) of the Sick Industrial Companies (Special Provisions) Act, 1985 was reported by the Company to BIFR on 31.10.2012 by flling Form-''C''. The Net Worth of the Company as on 31.03.2013 has been further reduced by Rs. 9.25 crore on account of loss during the year, however Net Worth of the Company as on 31.03.2013, is still positive.

2.7 The Cabinet Committee of Economic Affairs (CCEA) of Central Government has approved decontrol of Sugar on 4th April, 2013, pursuant thereto the Food Ministry has issued notifcation on 2nd May, 2013, abolishing the obligation of the sugar industry for selling 10% sugar as Levy Quota Sugar from start of the season 2012–13.Consequently for valuation of sugar stock at the close of the year as on 31.3.2013, the entire sugar stock of "Levy Quota Sugar" as on that date has been treated by the Company as "Free Quota Sugar".

2.8 During the year the Company has accepted/renewed deposits in excess of the prescribed limits, laid down under provisions of section 58A and other relevant provision of the Companies Act, 1956, and Companies (Acceptance of Deposits) Rules, 1975. The inadvertent excess acceptance of deposit is now being rectifed by way of repayment of excess deposit of Rs. 42.34 lacs under rule 3(2) (i) and Rs. 190.93 lacs under rule 3(2) (ii).

2.9 Certain previous year fgures have been rearranged to make them comparable with current year fgures. Figures have been rounded off nearest to rupee.


Mar 31, 2012

1.1.1 Out of the issued subscribed and paid up capital 17,50,000 equity shares of Rs. 10/- each issued as fully paid up bonus shares, by way of capitalization of General Reserve during the year ended on 31/03/2007.

1.2.1 a) Term Loan mentioned at A (i) Secured against first pari passu charge with Sugar Development Fund on the Fixed Assets of the company at Shamli.

b) Term Loan mentioned at A(ii) & A(iii) Secured against first pari passu charge of State Bank of India with Punjab National Bank on the entire Fixed Assets of Unn Sugar Unit and by way of Collateral Security on second pari passu charge on Fixed Assets at Shamli.

c) Loan from SDF Secured against first pari passu charge on the Fixed Assets of the Company at Shamli and second pari passu charges on the entire current assets of the Company.

1.2.2 Rate of Interest on Term Loan is based to PLR as on 31.3.2012. The applicable rate of Interest on Loan A (i) and A (ii) is 4.75 % above PLR and in case of A (iii) is 3.50% above PLR.

1.2.3 The rate of Interest on Loan from Sugar Development Fund is 4.00 % per annum.

1.2.4 The applicable rate of Interest on Fixed deposits ranges from 10.50 % to 11.50 % per annum as was prevailing at the time of acceptance of deposits.

1.3.1 Cash Credit from Banks Secured against first pari passu charge by way of Hypothecation of the entire current assets including Finished & Semi-finished stocks, raw materials, stores and receivables of the Company in favour of State Bank of India and Punjab National Bank and by way of Collateral Security on second pari passu charge on fixed assets including extension of Equitable Mortgage of land and building of the Company at Shamli and Unn.

The working capital loan of Rs. 2,825.02 lacs from Zila Sahakari Bank Ltd., Ghaziabad is secured by way of pledging of Sugar stock of the book value of Rs. 3,413.30 Lacs

1.4.1 In accordance with "Accounting Standard-22" the company has recognized the Deferred Tax Assets Rs. 16,09,53,773/- which has been adjusted in Profit & Loss account.

1.5.1 Government Securities of the book value of Rs. 1,51,000/- are lodged as security with different government departments for which confirmations from respective departments are still awaited (Previous Year Rs. 1,51,000/-).

1.6.1 Fixed Deposits with banks lying in Security Lodged Account includes deposit of Rs.17,73,630/- (Previous year Rs. 17,73,630/-) with maturity of more than 12 Months.

1.6.2 Fixed Deposits lodged as Security includes Rs. 26,59,000/- pledged with bank against Bank Guarantee (Previous year Rs. 84,000/-)

1.7.2 Turnover includes inter-unit sales of Rs. 10,17,12,920/- (Previous year Rs. 11,57,49,427/-).

1.8.1 Tax deducted at source on Interest income Rs. 1,13,472/- (Previous year Rs. 6,03,549/-)

1.9.1 The Hon'ble Supreme Court vide its Judgment dated 17.01.2012 have decided that differential Cane price for the season 2007-08 is payable by the Company. The deficit in provision of differential Cane price for Rs. 4,02,41,350/- has been made during the year.

1.10.1 Salary & Wages includes Rs.38,41,361/- paid to Managerial Personnel (Previous year Rs. 40,16,653/-) and also includes Rs. NIL paid under Voluntary Retirement Scheme (Previous Year Rs. 69,54,217/-).

1.10.2 Provident Fund includes Rs. 2,73,600 for Managerial Personnel (Previous year Rs. 2,83,200/-)

1.11.1 Interest Includes Rs. 2,24,65,460/- paid to Managerial Personnel (Previous Year Rs. 2,68,81,866/-)

1.12 CONTINGENT LIABILITIES NOT PROVIDED FOR :

As at March 31, 2012 As at March 31, 2011 Rs. Rs.

a) In respect of Statutory Liabilities :

i) Subjudice, Sales tax and Entry Tax including interest thereon 1,21,98,069 10,42,74,474

ii) Subjudice, Excise Duty and penalty thereon 91,73,293 1,53,86,796

iii) Subjudice, Administrative charges of Molasses 4,38,706 4,38,706

iv) Subjudice, In respect of alleged claim of Stamping fee on vats 55,42,460 55,42,460

b) In respect of Other Liabilities :

i) Alleged claim of interest on arrears of late payment of cane price 73,08,696 73,08,696

ii) Alleged lease rent of land demanded by Northern Railway - 2,41,99,346

iii) In respect of labour cases in dispute, the amount of which is not ascertainable.

iv) Bank Guarantee given by State Bank of India for Rs. 53.05 Lacs (Previous year Rs. 306.20 Lacs), against which 100 % lien is marked on Drawing Power against Stocks, Stores, Hypothecated with the bank and receivable of the Company.

v) Bank Guarantees for Rs. 26,29,302/- in favor of Oil Companies and Excise Department.

NOTE 2 : ADDITIONAL INFORMATION

2.1 Estimated amount of contracts remaining to be executed on capital Account is Rs.40.22 Lacs (Previous year Rs. NIL) against which advance of Rs. 8.04 Lacs has been made (Previous Year Rs. NIL).

2.2 In absence of balance confirmations from certain creditors, debtors and securities lodged shown in Notes of Trade payable,Other current liabilities, Long - term loans and advances, Trade Receivables, Short - term loans and advances and Other current assets the Auditors have relied upon the figures appearing in the books of the Company.

2.3 Income Tax assessments have been completed upto the Accounting year 2008-2009 (Assessment Year 2009-2010). However intimation for processing of return for the Accounting Year 2009-10, 2010-2011 (Assessment year 2010-2011& 2011-2012) U/Sec. 143 (1) of the Act has been received and necessary adjustments in view there of have been accounted for in the books of accounts. The Company has gone in appeal against certain such assessment orders and has been legally advised that in view of expected reliefs the provision for Income Tax made in Accounts is considered adequate.

2.4 Certain 'C' forms in respect of inter-state sale will be collected in due course of time. Liability on account of Sales-Tax may arise on such inter- state sales relating to which 'C' forms are not received.

2.5 The Company, during the year on test check basis has reviewed impairment of major Fixed Assets of the Company to identify the impairment loss, if any. Based on the test check of the assets, the recoverable value for such Assets is higher then their carrying book value. Accordingly, the review has not revealed any impairment of assets in terms of Accounting standard-28 issued by the Institute of Chartered Accountants of India.

2.6 The accumulated losses of the company as at 31st March, 2012 have resulted in more than 50% erosion of the peak Net Worth during the immediately preceding four Financial Years and this fact will be reported to the BIFR as required under the provisions of section 23(1)(a)(i) of the Sick Industrial Companies (Special Provisions) Act, 1985.

2.7 Certain previous year figures have been rearranged to make them comparable with current year figures. Figures have been rounded off nearest to rupee.

2.8 Cash Flow statement for the year ended 31st March, 2012 is enclosed in the statement annexed to these accounts at Note No. 4.

2.9.1 Quantitative figures of Distillery products are not ascertainable, because the basic product of spirits is converted later into various strengths with water dilution.

2.9.2 Closing stock of Molasses arrived at after adjustment of wastage of 5,097 Qtls. (Previous year 4,170 Qtls.) & Excess of 2,134 Qtls.

2.9.3 Turnover includes inter-unit sales of Rs. 10,17,12,920/- (Previous year Rs. 11,57,49,427/-).

2.9.4 Other Sales includes Sale of Bagasse, Press Mud and Bio Compost.

 
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