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Notes to Accounts of Spenta International Ltd.

Mar 31, 2015

1. SHARE CAPITAL

a) Terms / rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10/-. The equity shares have rights, preferences & restrictions which are in accordance provisions of law, in particular the companies Act, 1956.

2. Details of Security: Working Capital loan taken from DCB Bank & same is 1) Secured by hypothecation of inventories and book debts. 2) Equitable mortgage of the factory land & building of plot no. 13 to 16 standing in the name of the Company at Palghar. 3) Personal Guarantees of Executive/ Promoter Directors of the Company.

3. CONTINGENT LIABILITIES

Amount in Rs

March 31,2015 March 31, 2014

i) Claims against the company not acknowledgement as debts

a) Income tax matters disputed in 7,446,117.00 7,446,117.00 appeal

(The Company has filled an Appeal before Income Tax Appellate Tribunal, Mumbai against Income Tax Demand of Rs. 7,446,117/- for A.Y. 2005-06 and A.Y. 2006-07 and paid Rs. 2861057/- against these)

b) Sales Tax matter disputed in appeal - NIL

In the above matter the Company is hopeful of succeeding and as such does not expect any significant liability to crystallize

4. EMPLOYEE BENEFITS PLAN

Disclosure's required by Accounting Standard 15

Liability in respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee Benefits as issued by the institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis and as per actuarial basis.

5. Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

6. In the opinion of the Board, the current assets, loans & advances are approximately of the value stated and are realizable in the ordinary course of business.

7. The items of inventories are measured at lower of cost or or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in brining them to their respective present location and condition. Raw material comprises of Yarn and packing mate rail at cost, Wastage is valued at net realized value. Cost of Raw material, finished goods, Spare and Consumables are determined on First in First out basis. (FIFO)

8. Previous year figure have been regrouped / reclassified to confirm with current year presentation, whenever considered necessary

9. Insurance claim of Rs. 89.35 Lacs filed by the company on account of fire occurred at the Company's God own at Aliyali * Palghar, Maharashtra on 26 th August, 2008 damaging complete Building and Stock in hand is still pending with the insurance company. The Company has filled a case against the insurance company in the Consumer Court. The case is still pending as on March 31,2015.

10. The Company has to fulfil export obligations under EPCG licence granted to the same on conversion from EOU status to DTA status. Since the Machineries required for completion of the said obligation has destroyed in fire in Dec 2004, the Company has taken up the matter with the relevant authorities for cancellation of the said Licence. The matter is still pending with relevant Authority as on March 31,2015.

11. The Company has received a notice from the Octroi department for recovery Octroi duty for goods cleared under "N" form for the period ended 2008,2009, & 2010. The Company has however disputed the same and has filled a FIR in the current year against a courier company who have fraudulently forged the Company's documents to clear such goods. The matter is pending with the Octroi authorities as on March 31,2015.

12. As per Accounting Standard 18, the disclosures of transaction with the related parties as defined in the Accounting Standard are given below:

Sr.No Name of Related Party Relationship

1 Carnival Properties Pvt Ltd

2 Juvenile Trading Pvt Ltd Group Companies

3 Mr. Sanjay S Gadodia

4 Mr. Danny F Hansotia Key Management Personnel

5 Mr. Sandeep S Gadodia

6 Mr. Firoz M Hansotia

7 Mrs. Sulochana Gadodia Relatives of Key Management Personnel 8 Mrs. Rita Gadodia

13. Segment Reporting

Based on the guiding principles given in Accounting Standards on ' Segment Reporting' [(Accounting Standard -17) issued by the Institute of Chartered Accounts of India] the company's primary business segment is Knitted Socks. As the Company's business activity falls within a single primary business segment the disclosure requirement of As-17 in this regards not applicable.


Mar 31, 2014

1) CONTINGENT LIABILITIES

Amount In Rs March 31,2014 March 31,2013

i) Claims against the company not acknowledgement as debts

a) Income tax matters disputed in appeal 7,446,117,00 7,446,117.00

(The Company has filled an Appeal before Income Tax Appellate Tribunal, Mumbai against Income Tax Demand of Rs. 7,446,117/- for A.Y. 2005-06 and A.Y. 2006-07 and paid Rs. 2861057/- against these) b) Sales Tax matter disputed in appeal - NIL

In the above matter the Company is hopeful of succeeding and as such does not expect any significant liability to crystalize

2) EMPLOYEE BENEFITS PLAN

Disclosure as required by Accounting Standard 15

Liability In respect of gratuity and leave encashment are accounted on payment basis which is not in conformity with Accounting Standard (AS)15 (Revised 2005) on Employee Benefits as issued by the institute of Chartered Accountant of India, which requires that gratuity and Leave Encashment Liabilities be accounted for on accrual basis and as per actuarial basis.

3) Some of the sundry debtors, sundry creditors and loans & advances are subject to confirmation and reconciliation. Consequential adjustment thereof, if any, will be given effect into the books of accounts in the year of such adjustment.

4) In the opinion of the Board, the current assets, loans & advances are approximately of the value stated and are realizable in the ordinary course of business.

5) The items of inventories are measured at lower of cost or or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in brining them to their respective present location and condition. Raw material comprises of Yarn and packing materail at cost. Wastage is valued at net realized value. Cost of Raw material, finished goods. Spare and Consumables are determi ned on Fi rst in First out basis. (FIFO)

6) Previous year figure have been regrouped / reclassified to confirm with current year presentation, whenever considered necessary

Installed capacity has been calculated on the basis of machines running on production of pouch heel socks & real heel socks. For the year the number of machines making such production as of March 31,2014 is 6 & 123 respectively)

7) Insurance claim of Rs. 89.35 Lacs filed by the company on account of fire occurred at the Company''s Godown at Aliyali - Palghar, Maharashtra on 26 th August, 2008 damaging complete Building and Stock in hand is still pending with the insurance company. The Company has filled a case against the insurance company in the Consumer Court. The case is still pending as on March 31,2014.

8) The Company has to fulfil export obligations under EPCG licence granted to the same on conversion from EOU status to DTA status. Since the Machineries required for completion of the said obligation has destroyed in fire in Dec'' 2004, the Company has taken up the matter with the relevant authorities for cancellation of the said Licence. The matter is still pending with relevant Authority as on March 31,2014.

9) The Company has received a notice from the Octroi department for recovery Octroi duty for goods cleared under" N" form for the period ended 2008,2009, & 2010. The Com pany has however disputed the same and has filled a FIR in the current year against a courier com pany who have fraudulently forged the Company''s documents to clear such goods. The matter is pending with the Octroi authorities as on Ma rch 31,2014.

10. Segment Reporting

Based on the guiding principles given in Accounting Standards on '' Segment Reporting'' [(Accounting Standard -17) issued by the Institute of Chartered Accounts of India] the company''s primary business segment is Knitted Socks. As the Company''s business activity falls within a single primary business segment the disclosure requirment of As-17 in this regards not applicable.


Mar 31, 2013

1. Contingent Liabilities

In respect of guarantee provided by bank on behalf of the Company Rs. 28,65,910/- (Previous year Rs.28,65,910/-) Income Tax demand of Rs.74,46,117/- for A.Y.2005-06 & A.Y.2006-07 (Previous Year Rs.6,62,248/-) against which the company paid 28,61,057/- in March 2012 (Previous Year Rs. Nil/-) and has filed an appeal with the Income Tax Appellate Tribunal, Mumbai.

2. Insurance claim of Rs. 89.35 Lacs filed by the company on account of fire occurred at the Company''s Godown at Aliyali- Palghar, Maharashtra on 26th August, 2008 damaging complete Building and Stock in hand is still pending with the insurance company. The Company has filled a case against the insurance company in the consumer court. The case is still pending as on March 31, 2013.

3. The company has pending Export obligation under EPCG against Machinery destroyed in fire in Dec''2004. In the current year company has taken up the matter with the relevant authorities for waiver of the said export obligation. The matter is still pending as on March 31, 2013.

4. The Company has received a notice from the Octroi department for recovery of Octroi duty for goods cleared under "N" form for the period ended 2008, 2009, & 2010. The Company has however disputed the same and has filled a FIR in the current year against a courier company who have fraudulently forged the company''s documents to clear such goods. The matter is pending with the Octroi authorities as on March 31, 2013.

5. Segment reporting

Based on the guiding principles given in Accounting Standard on ''Segment Reporting ''[(Accounting Standard - 17) issued by the Institute of Chartered Accounts of India] the company''s primary business segment is Knitted Socks. As the Company''s business activity falls within a single primary business segment the disclosure requirement of AS-17 in this regards are not applicable.


Mar 31, 2012

A. Subscribed and Paid up Share Capital shown above includes Share forfeited amount of Rs.40,500/- on 8,100 Shares The said amount is transferred to security premium A/c in April 2012

B. Allotment money due on 1,100 Shares amounting to Rs.5,500/- is pending.

CAPITAL RESERVES

Subsidy given by Government is under State Government Subsidy Scheme for setting up Industrial unit in backward area. Since, this is only an incentive, and not for acquiring any specific Capital Asset, the same is treated as Capital Reserve.

SECURED LOANS

(1) Term Loan from banks is taken from DCB Bank and is secured by first charge on Freehold Land situated at Palghar and on the Other Fixed Assets of the company.

(2) Car Loan from Banks & Financial Institution are secured by first charge on the said Cars.

UNSECURED LOANS

(1) Unsecured Loan from Financial Institution is taken from Magma Finance and is guaranteed by the Executive Directors, in their personal capacities.

Provision for Gratuity is made on the assumption that such benefits are payable on termination of employment and method adopted for its calculation has been worked by management internally in place of actuarial valuation method.

Working Capital Loans is taken from DCB Bank and the same is secured by hypothecation of Inventories and Book Debts and are further secured by a second charge on the Fixed Assets of the company

Note :

1 Depreciation is provided on old factory shed building upto 31st December, 2009, after which depreciation is provided on new factory shed building

2 New factory shed building is capitalized in January 2010 in place of old factory shed building (burn by fire).

3 Depreciation is provided on old factory shed building up to 31st December, 2009, after which depreciation is provided on new factory shed building

Investments in Quoted Equity Shares

TELCO ( Tata Motors Ltd) on 13/09/2011 sub divided existing ordinary equity shares from every ONE equity share of Rs.10/- each into FIVE equity shares of Rs.2/- each. Hence, Number of Equity Shares increased from 300 to 1500 Shares.

Investments in Capital of Partnership Firm

Company has made an Investments of Rs.100 Lacs in a Partnership Firm viz. Vyas Developers- Property Developers for developing land in Palghar, in May 2008.

As per information obtained from management, the said Business has not commenced in the current year, hence,

Valuation of inventories

Items of inventories are measured at lower of cost or net realizable value after providing for obsolescence, if any. Cost of inventories comprises of cost of purchase, cost of conversion and other costs incurred in bringing them to their respective present location and condition. Raw material comprises of Yarn and packing material at cost, Wastage is valued at net realizable value. Cost of Raw material, finished goods, Spares and Consumables are determined on First in First out basis.

Investments in Company

Company has Share Application money of Rs.145 Lacs in M/s Spenta Global Pvt Ltd. and as per management, no share have issued or allotted to the company as at 31.03.2012

Fixed Deposits

Fixed Deposits stated above includes Rs.NIL/- (P.Y. Rs. 8,27,601/-) under Lien for Bank Guarantee given to DGFT for EPCG

Balance in Loans and Advances as shown in the accounts are subject to confirmation and reconciliation. However, in the opinion of the Board of Directors all loans and advances would in the ordinary course of business realize at least the value stated.

1. Contingent Liabilities

In respect of guarantee provided by bank on behalf of the Company Rs. 28,65,910/- (Previous year Rs.28,65,910/-) Income Tax demand of Rs.74,46,117/- for A.Y.2005-06 & A.Y.2006-07 (Previous Year Rs.6,62,248/-) against which the company paid 28,61,057/- in March 2012 (Previous Year Rs. Nil/-) and has filed an appeal with the Income Tax Appellate Tribunal, Mumbai.

Installed capacity has been calculated on the basis of machines running on production of pouch Heel Socks & real Heel Socks. For the year the number of machines making such production as of 31st March, 2012 is 6 & 115 respectively (previous year as of 31st March, 2011 is 6 & 98 respectively).

2. Insurance claim of Rs. 89.35 Lacs filed by the company on account of fire occurred at the Company's Godown at Aliyali- Palghar, Maharashtra on 26th August, 2008 damaging complete Building and Stock in hand is still pending with the insurance company. The Company has filled a case against the insurance company in the consumer court. The case is still pending as on 31st March 2012.

3. The company has pending Export obligation under EPCG against Machinery destroyed in fire in Dec'2004. In the current year company has taken up the matter with the relevant authorities for waiver of the said export obligation. The matter is still pending as on 31st March 2012.

4. The Company has received a notice from the Octroi department for recovery of Octroi duty for goods cleared under "N" form for the period ended 2008, 2009, & 2010. The Company has however disputed the same and has filled a FIR in the current year against a courier company who have fraudulently forged the company's documents to clear such goods. The matter is pending with the Octroi authorities as on 31st March 2012.

Note : Related party relationship is as identified by the Company and relied upon by the Auditors

5. Segment reporting

Based on the guiding principles given in Accounting Standard on 'Segment Reporting '[(Accounting Standard - 17) issued by the Institute of Chartered Accounts of India] the company's primary business segment is Knitted Socks. As the Company's business activity falls within a single primary business segment the disclosure requirement of AS-17 in this regards are not applicable.


Mar 31, 2010

(a) The previous years figures have been regrouped, rearranged and reclassified wherever necessary. Amounts and other disclosures for the proceeding year are included as an integral part of the current year financial statements and are to be read in relation to the amounts and other disclosures relating to the current year.

(b) Contingent Liabilities

In respect of guarantee provided by bank on behalf of the Company Rs. 11,34,910 (Previous year Rs.11,34,910).

Income Tax demand of Rs.662,248/- (Previous Year Rs.662,248/-) for the previous years, against which the company has filed an appeal with the Income Tax Appellate Tribunal, Mumbai. The matter is still pending with the said authority.

(c) Balance in Loans and Advances as shown in the accounts are subject to confirmation and reconciliation. However, in the opinion of the Board of Directors all loans and advances would in the ordinary course of business realize at least the value stated. During the year under review an amount of Rs.Nil (Previous Year Rs.Nil) has been written off as the same is not recoverable.

(d) Secured Loan from Financial Institution is secured by first charge on Freehold Land situated at Palghar and on the Other Fixed Assets of the company.

(e) Working Capital Loans from Dena Bank are secured by hypothecation of Inventories and Book Debts and are further secured by a second charge on the Fixed Assets of the company. The loans are also guaranteed by the Executive Directors, in their personal capacities.

(f) There is no small scale Industrial Undertakings to whom an amount of more than 1 Lac is outstanding for more than 30 days.

(g) During the previous year company has made Investments in partnership firm (Vyas Developers- Property Developers) for developing land in Palghar. The said Business has not commenced in the current year, hence, no share of profit & loss account of firm is accounted in the companys book.

(a) Insurance claim of Rs. 89.35 Lacs filed by the company on account of fire occurred at the Companys Godown at Aliyali- Palghar, Maharashtra on 26th August, 2008 damaging complete Building and Stock in hand is still pending with the insurance company.

(h) Segment reporting

Based on the guiding principles given in Accounting Standard on Segment Reporting [(Accounting Standard -17) issued by the Institute of Chartered Accounts of India] the companys primary business segment is Knitted Socks. As the Companys business activity falls within a single primary business segment the disclosure requirement of AS-17 in this regards are not applicable.

 
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