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Notes to Accounts of SKM Egg Products Export (India) Ltd.

Mar 31, 2015

WORKING CAPITAL FINANCE FROM SBI ARE SECURED BY

a) Hypothecation of stocks consisting of Raw materials, semi finished goods, finished goods and stores and spares and other current assets of the company.

b) Personal guarantees of Executive Chairman and Managing director.

c) Second charge on the entire fixed assets of the company.

d) SBI - Pledge of shares 33,72,752 Nos of the company held by the Managing Director.

I) Previous year figures are regrouped, rearranged and reclassified wherever necessary to facilitate comparison with current year's figures and figures have been rounded off to nearest rupee.

II) ContingentLiability:

i) Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 2114.84 Lacs. (Previous year Rs. 2085.65 Lacs).

ii) Income Tax Liability Rs. 492.81 lacs (Net of recovery and Payments) (Previous year 552.81 lacs).

iii) Service Tax Liability Rs.41.25 Lacs (Previous year Rs.39.62 Lacs).

iv) Excise Duty Liability Rs.32.48 Lacs (Previous year Rs.27.17 Lacs).for the items referred to in item no.(b) to (d) refer note no.2 (vii).

III) Balances of Sundry creditors and Sundry debtors are subject to confirmation.

The company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium ienterprises development Act, 2006 (The Act) and hence disclosure regarding I)Amount due and outstanding to suppliers as at the end of the accounting year.

ii) Interest paid during the year.

iii) Interest payable at the end of the accounting year.

iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

The company is making efforts to get the confirmations from the suppliers as regards their status under the Act.

IV) Disclosure of Related Party transactions, as required under Accounting Standard (AS) 18 of the Companies (Accounting Standards) Rules, 2006

(a) Name of the Related PartiesI)

i) SKM Animal Feeds and Foods (India) Limited

ii) SKM Siddha and Ayurvedha Company (India) Limited

iii) SKM Universal Marketing Company India Ltd

iv) SKM Shree Shivkumar

v) Sri.SKM Maeilanandhan

vi) SKM Europe BV,Utrecht,The Netherlands

(b) Description of relationship between the parties :

I)SKM Animal Feeds and Foods (India) Limited Common Directors

ii) SKM Siddha and Ayurvedha Company (India) Limited Common Managing Director

iii) SKM Universal Marketing Company India Ltd Common Directors

iv) SKM Shree Shivkumar Managing Director

v) Sri.SKM Maeilanandhan Whole time Director

vi) SKM Europe BV,Utrecht,The Netherlands Subsidiary Company

VI. Provision for Income Tax

Provision had been made in respect of Income Tax liablility arising under the provisions of MAT under section 115JB of the Income Tax Act, 1961, since the tax liability when computed in accordance with the Normal Provisions of the Income Tax Act, 1961 is lesser than the book profits. Excess tax amount paid/payable over the tax paid/payable under normal provisions of the Income Tax Act constitutes MAT credit and is thus recognised as an asset in the balance sheet, since the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will fructify

VII. No provision has been made in respect of demand of Excise Duties Rs.32.48 lacs and Service Tax of Rs.41.25 Lacs, for which the company has filed appeals with various Higher Appellate Forums, against the orders of the Lower Authorities since the company is confident of coming out successful in the Appeals as per the advice taken from the legal experts. Similarly there are Income Tax Demands totalling to the tune of of Rs.492.81 lacs i.e for the Assessment year 2008-2009 (Rs.270.07 Lacs - Net of Recovery) and 2009-2010 (Rs.222.74 Lacs Net of Part Payment and payments in instalments). Based on the decisions of Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made for the balance amount net of payments.

The carried forward losses under the Income Tax Act,1961 of the earlier assessment years has been reduced by the Assessing Officer while completing the assessment for the A.Y.2011-12 vide his order under section 143(3) of the Income Tax Act, 1961 dated 31.03.2015 by making some adjustments by way of disallowances of expenses against which the company has preferred an appeal before the immediate superior authority which appeal is pending for disposal as on the date of the financial reports. Since the adjustment has resulted only in the reduction of carry forward losses, there is no immediate demand raised for the relevant assessment year, but the adjustments have an impact on the availability of Future MAT credit of Rs.97.81 lacs

VIII. There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute of Chartered Accountants of India. The Company had disposed some of the assets during the current fnancial year which has been suitablly recognised / dealt with in the financial statements in accordance with the Accounting Standard No.10 issued by the Institute of Chartered Accountants of India.

XI. FOB Value of goods exported Rs.25,396 Lacs (Previous Year Rs.21,214 Lacs)

The Company made annual Contributions to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made by the LIC or the Break-down of plan assets by investment type.

XIII. Poultry Division

All the consumption of Feeds, Drugs, Vaccines and Medicines upto the grower stage are being added on the value of birds and shown as "Value of Livestock" under inventory in the Balance Sheet.

The Cost of Birds thus arrived at is being amortised over remaining life time of the Birds and is recognized in the Profit and loss account.

The remaining unamortized value of the Birds is shown as "Unamortised Value of Live Stock" under the head under inventory in the Balance Sheet.

XIV. CSR Expenditure:

Though the company's net profit had exceeded Rs.5 crores and provisions of Corporate Social Responsibility are attracted, the average net profits of the company is in negative when computed for the three immediately preceding financial years and hence, for the current financial year, there is no obligation on the part of the company to incur Expenditures on account of CSR Related Activities for the year.

XV Foreign Exchange Fluctuation - Net:

The net foreign exchange fluctuation difference of Rs.930.26 lacs has been disclosed under the head "Other Income" instead of the head "Finance charges" as required by Schedule III of the Companies Act 2013 and hence the figures disclosed under both the heads are to be read taking into consideration of the above fact. However there is no impact on the profit or loss for the year.

XVI. Details Of Loans Given, Investments Made And Guarantee Given Covered Under Section 186(4) of The Companies Act 2013

I)Loans Given Nil

ii) Investements Made Disclosed under Respective Heads

iii) Corporated Guarantees Nil


Mar 31, 2014

1. Previous year figures are regrouped, rearranged and reclassified wherever necessary to facilitate comparison with currentyear sfigures and figures have been rounded offto nearest rupee.

2. Contingent Liability

i) Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 2085.65 Lacs. (Previous year Rs. 2464.11 Lacs).

ii) Income Tax Liability Rs. 552.81 lacs (Net of recovery and Payments) (Previous year Rs.359.06 lacs).

iii) Service Tax Liability Rs.39.62 Lacs (Previous year Rs.39.62 Lacs).

iv) Excise Duty Liability Rs.27.17 Lacs (Previous year Rs.14.53 Lacs). forthe items referred to in item no. (ii) to (iv) refer note no.27.

3. Balances of Sundry creditors and Sundry debtors are subject to confirmation.

The company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium enterprises development Act, 2006 (The Act) and hence disclosure regarding:

i) Amount due and outstanding to suppliers as at the end of the accounting year.

ii) Interest paid during the year.

iii) Interest payable atthe end of the accounting year.

iv) Interest accrued and unpaid atthe end of the accounting year, have not been provided.

The company is making efforts to getthe confirmations from the suppliers as regards their status underthe Act.

4. Disclosure of Related Party transactions, as required under Accounting Standard (AS) 18 of the Companies (Accounting Standards) Rules, 2006.

(a) Name ofthe Related Parties

i) SKM Animal Feeds and Foods (India) Limited

ii) SKM Universal Marketing Company India Ltd.

iii) SKM Meailanandhan (Excutive Chairman) - Key Managerial Person

iv) SKM Shree Shivkumar (Managing Director) - Key Managerial Person

v) SKM Europe BV,Utrecht, The Netherlands

(b) Description of relationship between the parties Presumption of significance influence

(c) Transaction Details

i. Sale of Egg Shell waste to SKM Animal Feeds and Foods (India) Limited Rs.20.88/- Lacs (Tonnage 911.70 Tons)

5. Provision for Income Tax

Provision had been made in respect of Income Tax liablility arising under the provisions of MAT under section 115 JB of the Income Tax Act 1961 and there is no tax liability when computed in accordance with the Normal Provisions of the Income Tax Act 1961 because of the availability of benefit of set off of brought forward losses of the earlier years. MAT thus paid/payable is recognised as an asset in the balance sheet since the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will fructify.

7. No provision has been made in respect of demand of excise duties Rs.27.17 lacs and Service Tax of Rs.39.62 Lacs, for which the company has filed appeals with various Higher Appellate Forums, against the orders of the Lower Authorities and the company is confident of coming out successful in the Appeals. Similarly there are Income Tax Demands totalling to the tune of of Rs.552.81 lacs i.e for the Assessment year 2008-2009 (Rs.270.07 Lacs - Net of Recovery) and 2009-2010 (Rs.282.74 Lacs Net of Part Payment). Based on the decisions of Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made.

8. There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute of Chartered Accountants of India. The Company had disposed some of the assets during the current financial year which has been suitably recognised / Deal with in the financial statements in accordance with the Accounting Standard No.10 issued by the Institute of Chartered Accountants of India.

9. FOB Value of goods exported Rs.21,214 Lacs (Previous Year Rs.16,801 Lacs)

10. During the year the company has recognized the following amounts in the Profit and Loss Account:

The Company made annual Contributions to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made by the LIC or the Break-down of plan assets by investment type.

11. Poultry Division

All the consumption of Feeds, Drugs, Vaccines and Medicines upto the growerstage are being added on the value of birds and shown as Value of Livestock under thefixed assets in the Balance Sheet.

The Cost of Birds thus arrived at is being amortised over remaining life time of the Birds and is recognized in the Profit and loss account.

The remaining unamortized value of the Birds is shown as Unamortised Value of Live Stock under the head Other Current Assets in the Balance Sheet.


Mar 31, 2013

1. Previous year figures are regrouped, rearranged and reclassified wherever necessary to facilitate comparison with current year''s figures and figures have been rounded off to nearest rupee.

2. Contingent Liability:

i) Export Bills discounted with the State Bank of India, Commercial Branch, Erode Rs. 2464.11 Lacs. (Previous year Rs. 2092.58 Lacs).

ii) Income Tax Liability Rs. 359.06 lacs (net of recovery) (Previous year Rs.359.06 lacs). iii) Service Tax Liability Rs.39.62 Lacs (Previous year Rs.35.19 Lacs).

iv) Excise Duty Liability Rs.14.53 Lacs (Previous year Rs.9.55 Lacs). for the items referred to in item no. (ii) to (iv) refer note no.26.

3. Balances of Sundry creditors and Sundry debtors are subject to confirmation.

The company has not received any intimation from the suppliers regarding status under the Micro, Small and Medium enterprises development Act, 2006 (The Act) and hence disclosure regarding: i) Amount due and outstanding to suppliers as at the end of the accounting year. ii) Interest paid during the year.

iii) Interest payable at the end of the accounting year.

iv) Interest accrued and unpaid at the end of the accounting year, have not been provided.

The company is making efforts to get the confirmations from the suppliers as regards their status under the Act.

4. Disclosure of Related Party transactions, as required under Accounting Standard (AS) 18 of the Companies (Accounting Standards) Rules, 2006

(a) Name of the Related Parties

i) SKM Animal Feeds and Foods (India) Limited

ii) SKM Universal Marketing Company India Limited

iii) SKM Shree Shivkumar ( Managing Director) - Key Managerial Person

iv) Sri.SKM Meailanandhan (Excutive Chairman) - Key Managerial Person

(b) Description of relationship between the parties :

Presumption of significance influence

(c) Transaction details :

i. Sale of Egg Shell waste to SKM Animal Feeds and Foods (India) Limited – Rs.25.05/- Lacs (Tonnage 1164.85 Tons)

ii. Details of Loans Borrowed, Repayments and Interest Payments (Amount in Rs.)

iv. Rent Paid to Managing Director, Rs. 76,500/- v. Lease Rent received from SKM Universal Marketing Company India Limited Rs.6 lacs (Net of VAT and Service Tax).

The Executive Chairman and Managing Director''s remuneration is covered under part II of Schedule XIII of the Companies Act, 1956.

5. Provision for Income Tax :

Provision had been made in respect of Income Tax liablility arising under the provisions of MAT under section 115 JB of the Income Tax Act 1961 and there is no tax liability when computed in accordance with the Normal Provisions of the Income Tax Act 1961 because of the availability of benefit of set off of brought forward losses of the earlier years. MAT thus paid/payable is recognised as an asset in the balance sheet since the asset can be measured reliably and it is probable that the future economic benefit associated with the asset will fructify.

6. No provision has been made in respect of demand of Excise Duties Rs.14.53 lacs and Service Tax of Rs.39.62 Lacs, for which the company has filed appeals with various Higher Appellate Forums, against the orders of the Lower Authorities and the company is confident of coming out successful in the Appeals. Similarly there are Income Tax Demands of Rs.4.29/- crores for the Assessment years 2007-2008 (Rs.88.98 Lacs), 2008-2009 (Rs.270 Lacs - Net of Recovery) and 2009-2010 (Rs.302.74 Lacs - Demand raised after the end of the financial year). Based on the decisions of Appellate Authorities and the interpretations of other relevant provisions, the company has been legally advised that the demand is likely to be either deleted or substantially reduced and accordingly no provision has been made. (For the demand for the Asst.year 2008-09 the Income Tax department has recovered taxes to the extent of Rs.70.07 lakhs through seperate proceedings) (Seperate stay proceedings in respect of the above demands are pending before varies judicial authorities).

7. There are no impairment of assets in terms of Accounting Standard No.28 issued by The Institute of Chartered Accountants of India. The Company had disposed some of the assets in the subsequent financial year which will be suitablly recognised/Deal with in the financial statements of the subsequent year in accordance with the Accounting Standard No.10 issued by the Institute of Chartered Accountants of India.

The Company made annual Contributions to the LIC of an amount advised by the LIC. The Company was not informed by LIC of the investments made by the LIC or the Break-down of plan assets by investment type.

8. Poultry Division:

All the consumption of Feeds, Drugs, Vaccines and Medicines upto the grower stage are being added on the value of birds and shown as "Value of Livestock" under the fixed assets in the Balance Sheet.

The Cost of Birds thus arrived at is being amortised over remaining life time of the Birds and is recognized in the Profit and loss account.

The remaining unamortized value of the Birds is shown as "Unamortised Value of Live Stock" under the other Current Assets in the Balance Sheet.

 
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