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Notes to Accounts of Soma Papers & Industries Ltd.

Mar 31, 2014

1. The net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), for which a reference has been made to the Board of Industrial and Financial Reconstruction (BIFR) under Section 15 of SICA.

2. As per scheme of arrangement sanctioned by the Bombay High Court under Section 391 and 394 of Companies Act, 1956 made between Shree Vindhya Paper Mills Ltd and the Company, the coating division of Shree Vindhya Paper Mills Ltd. with its assets, investments, liabilities and reserves as at 31st December, 1991 has been transferred to and vested with the Company with effect from 1st January, 1992. However, certain assets and liabilities of the said division before its transfer though reflected in the accounts are yet to be transferred in the name of the Company.

3. Contingent liability not provided for in respect of:

As at As at 31/03/2014 31/03/2013 Rs. Rs.

a) Claims against Company not acknowledged as debts 437,567 437,567

b) Guarantee given to financial institution for loans taken by its 48,454 48,454 employees

c) Bank guarantee to constituents and others. 1,360,000 1,360,000

d) Corporate Guarantee given to financial institutions and banks 25,000,000 25,000,000 on behalf of Vecron Industries Limited (a wholly owned subsidiary Company)

e) Liability as may arise for non-payment of wages, PF, Gratuity Amount Amount and other labour dues since the date of closure of factory, as unascertained unascertained the case filed by the worker''s union in Nashik Labour Court

f) Liability as may arise due to non compliance of certain fiscal Amount Amount statute unascertained unascertained

g) Income Tax Penalty Demand 19.38,082 19.38,082

h) Liability for Interest on deferred sales tax liability Amount Amount unascertained unascertained

i) Sales Tax Liability 1996-97 51,606 51,606

j) Bank Liability – Subsidiary Co. 4,91,14,993 4,91,14,993

4. The bank has auctioned the Land. Factory Premises, Plant and Machinery, Inventory and other assets lying at Nasik in Financial Year 2007-08 which was approved by the Debt Recovery Tribunal. On the basis of correspondence received from the bank, auction proceeds received by bank has been utilised directly by bank to repaid Bank Cash Credit Liabilities, Debentures with interest, Electricity Charges, deposit given to Labour Court for Labour Settlement and other related expenses. The documentary evidences for such payments made not available with the Company. The accounting of the above transaction has been done on the basis of correspondence taken place with bank. No confirmations from banks, debenture holders, electricity department or labour court have been received against the proceeds received.

5. The auction proceed which were not utilized by bank for payment of any liabilities of the company has been kept by bank. The bank is not providing interest on such amount held.

6. Sales Tax Incentive loan became payable w.e.f. 4th August, 2004 as per terms of its sanction due to closure of factory / business. The liability is shown under the head "Current Liability". The management is of the view that the liability will be settled with the Sales Tax Authority, hence no interest on the loan amount due has been provided in the books of accounts.

7. Security deposit received from the dealers shown under the head "Current Liability" The management is of the view that Interest on deposit will not be paid hence not provided.

8. There were no amounts due to Small Scale and / or Ancillary Industrial suppliers on account of principal and / or interest as at the end of year. This disclosure is based on the information available with the Company regarding the status of the suppliers as defined under the Interest on Delayed Payments of Small Scale and Ancillary Industrial undertaking Act, 1993.

9. The Company has closed the business; hence segment reporting is not applicable.

10. The secondary segment, i.e. ''geographical segment by location of customers'' is not applicable.

11. Related party disclosures:

Related party relationships:

A Subsidiary Company Vecron Industries Limited

enterprises where control exists)

B Key management personnel Mr. Vikram Somani

Mr. Bharat Somani

C Enterprise in which Key management SRS Trading & Agencies Private Limited personnel have significant influence

Notes:

1. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS-18) ''Related Party Disclosures'' issued by the Institute of Chartered Accountants of India and the same have been relied upon by the auditors.

2. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year (except where control exists, in which case the relationships are disclosed irrespective of exact transactions).

12. As per the Accounting standard AS-22 "Accounting for Taxes on Income" issued by the Institute of

Chartered Accountants of India, the deferred tax assets (net) arising during the previous year on account of timing difference. Having regard to the net worth of the Company being fully eroded and the Company is a Sick industrial company within the meaning of SICA and uncertainty as to whether the Company can continue as a going concern, the deferred tax assets / liabilities has not been recognised.

13. In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known and determined liabilities are adequate and not in the excess of the amount reasonably stated. The balances in case of sundry creditors, debtors and banks are subject to confirmation and reconciliations. The differences if any, as may arise will be accounted for on receipt of such information/reconciliation.

14. In view of the carried forward losses, provision for current year taxation and provision for deferred tax is not provided in the books of accounts.

15. Previous year figures have been regrouped and rearranged, wherever necessary.


Mar 31, 2013

1. The net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), for which a reference has been made to the Board of Industrial and Financial Reconstruction (BIFR) under Section 15 of SICA.

2. As per scheme of arrangement sanctioned by the Bombay High Court under Section 391 and 394 of Companies Act, 1956 made between Shree Vindhya Paper Mills Ltd and the Company, the coating division of Shree Vindhya Paper Mills Ltd. with its assets, investments, liabilities and reserves as at 31st December, 1991 has been transferred to and vested with the Company with effect from 1st January, 1992. However, certain assets and liabilities of the said division before its transfer though reflected in the accounts are yet to be transferred in the name of the Company.

3. Contingent liability not provided for in respect of:

As at As at 31/03/2013 31/03/2012 Rs. Rs.

a) Claims against Company not acknowledged as debts 437,567 437,567

b) Guarantee given to financial institution for loans taken by its 48,454 48,454 employees

c) Bank guarantee to constituents and others. 1,360,000 1,360,000

d) Corporate Guarantee given to financial institutions and banks 25,000,000 25,000,000 on behalf of Vecron Industries Limited (a wholly owned subsidiary Company)

e) Liability as may arise for non-payment of wages, PF, Gratuity Amount Amount

and other labour dues since the date of closure of factory, as unascertained unascertained the case filed by the worker''s union in Nashik Labour Court

4. The bank has auctioned the Land. Factory Premises, Plant and Machinery, Inventory and other assets lying at Nasik in Financial Year 2007-08 which was approved by the Debt Recovery Tribunal. On the basis of correspondence received from the bank, auction proceeds received by bank has been utilised directly by bank to repaid Bank Cash Credit Liabilities, Debentures with interest, Electricity Charges, deposit given to Labour Court for Labour Settlement and other related expenses. The documentary evidences for such payments made not available with the Company. The accounting of the above transaction has been done on the basis of correspondence taken place with bank. No confirmations from banks, debenture holders, electricity department or labour court have been received against the proceeds received.

5. The auction proceed which were not utilized by bank for payment of any liabilities of the company has been kept by bank. The bank is not providing interest on such amount held.

6. Sales Tax Incentive loan became payable w.e.f. 4* August, 2004 as per terms of its sanction due to closure of factory / business. The liability is shown under the head "Current Liability". The management is of the view that the liability will be settled with the Sales Tax Authority, hence no interest on the loan amount due has been provided in the books of accounts.

7. Security deposit received from the dealers shown under the head "Current Liability" The management is of the view that Interest on deposit will not be paid hence not provided.

8. There were no amounts due to Small Scale and / or Ancillary Industrial suppliers on account of principal and / or interest as at the end of year. This disclosure is based on the information available with the Company regarding the status of the suppliers as defined under the Interest on Delayed Payments of Small Scale and Ancillary Industrial undertaking Act, 1993.

9. The Company has closed the business; hence segment reporting is not applicable.

10. The secondary segment, i.e. ''geographical segment by location of customers'' is not applicable.

11. Related party disclosures:

Related party relationships:

A Subsidiary Company Vecron Industries Limited

enterprises where control exists)

B Key management personnel Mr. Vikram Somani

Mr. BharatSomani

C Enterprise in which Key management SRS Trading & Agencies Private Limited

personnel have significant influence

12. As per the Accounting standard AS-22 "Accounting for Taxes on Income" issued by the Institute of

Chartered Accountants of India, the deferred tax assets (net) arising during the previous year on account of timing difference. Having regard to the net worth of the Company being fully eroded and the Company is a Sick industrial company within the meaning of SICA and uncertainty as to whether the Company can continue as a going concern, the deferred tax assets / liabilities has not been recognised.

13. In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known and determined liabilities are adequate and not in the excess of the amount reasonably stated. The balances in case of sundry creditors, debtors and banks are subject to confirmation and reconciliations. The differences if any, as may arise will be accounted for on receipt of such information/ reconciliation.

14. Payment to Auditor as:

(a) Statutory Audit Fees Rs.22,500

(b) Tax Audit Fees

(c) Certification and Consultation Fees Rs. 7,500

15. In view of the carried forward losses, provision for current year taxation and provision for deferred tax is not provided in the books of accounts.

16. Previous year figures have been regrouped and rearranged, wherever necessary.


Mar 31, 2012

1. The net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), for which a reference has been made to the Board of Industrial and Financial Reconstruction (BIFR) under Section 15 of SICA.

2. As per scheme of arrangement sanctioned by the Bombay High Court under Section 391 and 394 of Companies Act, 1956 made between Shree Vindhya Paper Mills Ltd and the Company, the coating division of Shree Vindhya Paper Mills Ltd. with its assets, investments, liabilities and reserves as at 31st December, 1991 has been transferred to and vested with the Company with effect from 1st January, 1992. However, certain assets and liabilities of the said division before its transfer though reflected in the accounts are yet to be transferred in the name of the Company.

3. Contingent liability not provided for in respect of:

As at As at 31/03/2012 31/03/2011 Rs. Rs.

a) Claims against Company not acknowledged as debts 437,567 437,567

b) Guarantee given to financial institution for loans taken by its 48,454 48,454 employees

c) Bank guarantee to constituents and others. 1,360,000 1,360,000

d) Corporate Guarantee given to financial institutions and banks 25,000,000 25,000,000 on behalf of Vecron Industries Limited (a wholly owned

subsidiary Company)

e) Liability as may arise for non-payment of wages, PF, Gratuity Amount Amount

and other labour dues since the date of closure of factory, as unascertained unascertained

the case filed by the worker's union in Nashik Labour Court

f) Liability as may arise due to non compliance of certain fiscal Amount Amount statute unascertained unascertained

g) Income Tax Penalty Demand 19.38,082 19.38,082

h) Liability for Interest on deferred sales tax liability Amount Amount

unascertained unascertained

4. The bank has auctioned the Land. Factory Premises, Plant and Machinery, Inventory and other assets lying at Nasik in Financial Year 2007-08 which was approved by the Debt Recovery Tribunal. On the basis of correspondence received from the bank, auction proceeds received bank has been utilised directly by bank to repaid Bank Cash Credit Liabilities, Debentures with interest, Electricity Charges, deposit given to Labour Court for Labour Settlement and other related expenses. The documentary evidences for such payments made not available with the Company. The accounting of the above transaction has been done on the basis of correspondence taken place with bank. No confirmations from banks, debenture holders, electricity department or labour court have been received against the proceeds received.

5. The auction proceed which were not utilized by bank for payment of any liabilities of the company has been kept by bank. The bank is not providing interest on such amount held.

6. Sales Tax Incentive loan became payable w.e.f. 4th August, 2004 as per terms of its sanction due to closure of factory / business. The liability is shown under the head "Current Liability". The management is of the view that the liability will be settled with the Sales Tax Authority, hence no interest on the loan amount due has been provided in the books of accounts.

7. Security deposit received from the dealers shown under the head "Current Liability" The management is of the view that Interest on deposit will not be paid hence not provided.

8. There were no amounts due to Small Scale and / or Ancillary Industrial suppliers on account of principal and / or interest as at the end of year. This disclosure is based on the information available with the Company regarding the status of the suppliers as defined under the Interest on Delayed Payments of Small Scale and Ancillary Industrial undertaking Act, 1993.

9. The Company has closed the business, hence segment reporting is not applicable.

10. The secondary segment, i.e. 'geographical segments by location of customers' is not applicable.

Notes:

1. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS-18) 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India and the same have been relied upon by the auditors.

2. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year (except where control exists, in which case the relationships are disclosed irrespective of exact transactions).

11. As per the Accounting standard AS-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the deferred tax assets (net) arising during the previous year on account of timing difference. Having regard to the net worth of the Company being fully eroded and the Company is a Sick industrial company within the meaning of SICA and uncertainty as to whether the Company can continue as a going concern, the deferred tax assets / liabilities has not been recognised.

12. In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known and determined liabilities are adequate and not in the excess of the amount reasonably stated. The balances in case of sundry creditors, debtors and banks are subject to confirmation and reconciliations. The differences if any, as may arise will be accounted for on receipt of such information / reconciliation.

13. In view of the carried forward losses, provision for current year taxation and provision for deferred tax is not provided in the books of accounts.

14. Previous year figures have been regrouped and rearranged, wherever necessary.


Mar 31, 2010

1. The net worth of the Company is fully eroded and the Company is a sick industrial company within the meaning of clause (o) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA), for which a reference has been made to the Board of Industrial and Financial Reconstruction (BIFR) under Section 15 of SICA.

2. As per scheme of arrangement sanctioned by the Bombay High Court under Section 391 and 394 of Companies Act, 1956 made between Shree Vindhya Paper Mills Ltd and the Company, the coating division of Shree Vindhya Paper Mills Ltd. with its assets, investments, liabilities and reserves as at 31st December, 1991 has been transferred to and vested with the Company with effect from 1st January, 1992. However, certain assets and liabilities of the said division before its transfer though reflected in the accounts are yet to be transferred in the name of the Company.

3. Contingent liability not provided for in respect of:

As at As at 31/03/2010 31/03/2009 Rs. Rs.

a) Claims against Company not acknowledged as debts 437,567 437,567

b) Guarantee given to financial institution for loans taken by its employees 48,454 48,454

c) Bank guarantee to constituents and others. 1,360,000 1,360,000

d) Corporate Guarantee given to financial 25,000,000 25,000,000 institutions and banks on behalf of Vecron Industries Limited (a wholly owned subsidiary Company)

e) Liability as may arise for non-payment of Amount Amount wages, PF, Gratuity and other labour unascert unascertaine dues since the date of closure of factory, ained d as the case filed by the worker's union in Nashik Labour Court

F) Liability as may arise due to non Amount Amount compliance of certain fiscal statute unascert unascertaine ained d

g) Income Tax Penalty Demand 19.38,082 19.38,082

h) Liability for Interest on deferred sales tax Amount Amount liability unacert unacertained ained



4. a) The bank has auctioned the Land. Factory Premises, Plant and Machinery, Inventory and other assets lying at Nasik in previous year, which was approved by the Debt Recovery Tribunal. On the basis of correspondence received from the bank, auction proceeds received bank has been utilised directly by bank to repaid Bank Cash Credit Liabilities, Debentures with interest, Electricity Charges, deposit given to Labour Court for Labour Settlement and other related expenses. The documentary evidences for such payments made not available with the Company. The accounting of the above transaction has been done on the basis of correspondence taken place with bank. No confirmations from banks, debenture holders, electricity department or labour court have been received against the proceeds received.

b) Interest income on Balance amount of auction money, lying with bank not provided since bank has not provided any interest on such amount.

5. Sales Tax Incentive loan became payable w.e.f. 4th August, 2004 as per terms of its sanction due to closure of factory / business. The liability is shown under the head "Unsecured Loan" instead of "Current Liability". Since, the management of the view of to settle the liability with Sales tax interest on the mount due has not been provided in the books of accounts.

6. Security deposit received from the dealers shown under the head "Unsecured Loan" though there is no business has been carried out during the year. The management is of the opinion that such liability is payable in due course. Interest on deposit is not payable hence not provided.

7. There were no amounts due to Small Scale and / or Ancillary Industrial suppliers on account of principal and / or interest as at the end of year. This disclosure is based on the information available with the Company regarding the status of the suppliers as defined under the Interest on Delayed Payments of Small Scale and Ancillary Industrial undertaking Act, 1993.

8. The Company has closed the business, hence segment reporting is not applicable.

9. The secondary segment, i.e. "geographical segments by location of customers" is not applicable.

10. Related party disclosures:

Related party relationships:

a) Subsidiary Company : Vecron Industries Limited (Enterprises where control exists)

b) Key management : Mr. Vikram Somani personnel Mr. Bharat Somani

c) Enterprise in which Key SRS Trading & Agencies Private management personnel Limited have significant influence

Notes:

1. The related party relationships have been determined on the basis of the requirements of the Accounting Standard (AS-18) 'Related Party Disclosures' issued by the Institute of Chartered Accountants of India and the same have been relied upon by the auditors.

2. The relationships as mentioned above pertain to those related parties with whom transactions have taken place during the year (except where control exists, in which case the relationships are disclosed irrespective of exact transactions).

11. As per the Accounting standard AS-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the deferred tax assets (net) arising during the previous year on account of timing difference. Having regard to the net worth of the Company being fully eroded and the Company is a Sick industrial company within the meaning of SICA and uncertainty as to whether the Company can continue as a going concern as mentioned in note 1 above, the deferred tax assets has not been recognised during the year.

12. The Company has received a favourable award against GTC Industries Ltd. (GTC) given by the Arbitral Tribunal directing GTC to pay Rs. 32.51 lacs with interest @ 15% p.a. from 01.01.1997 till payment plus Rs. 2.00 lacs for cost of arbitration proceedings in the matter of merger of Raighadh Paper Mills Ltd. (RPL) with the Company and take over of Premier Paper Mills Ltd. (PPML) by the Company, as a composite deal on the terms and conditions mentioned in the agreement dated 13.12.1995 made by the Company with GTC. The Company has not accounted for the said award pending disposal of appeal filed by GTC in Bombay High Court against the said award.

13. In the opinion of the management, current assets, loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated and provision for all known and determined liabilities are adequate and not in the excess of the amount reasonably stated. The balances in case of sundry creditors, debtors and banks are subject to confirmation and reconciliations. The differences if any, as may arise will be accounted for on receipt of such information / reconciliation.

14. Previous year figures have been regrouped and rearranged, wherever necessary.

15. The balance sheet abstract and Company's general business profile as per GSR No. 388(E) [F. No. 3/24/93-CLV], Dated 15/05/1995, issued by the Department of Company Affairs, Ministry of Law, Justice and Company Affairs is given in Annexure 'A'.

 
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