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Notes to Accounts of SPL Industries Ltd.

Mar 31, 2015

1 General Information

The company was incorporated on December 6, 1991 in India. The company is a garment manufacturing company and majorly deals in exports however during the year, value of exports are INR 124,392,737 and further company has domestic sales and processing income during the year.

2. The above cash flow statement has been prepared under the indirect method set out in AS-3 and notified under Companies Act, 2013

3. Figures in brackets indicate cash outflows

4. The notes to the Financial Statements are an integral part of the Cash Flow Statement This is the Cash Flow Statement referred to in our report of even date

5 Segment Reporting

As per Accounting Standard AS 17 on "Segment Reporting" segment information is as follow:- Primary Segment Reporting (Business Segment):

Primary business segments of the company is sale & export of cotton knitted garments and made ups and Processing Charges, which in the context of Accounting Standard 17 on "Segment Reporting" as notified in Companies (Accounting Standard ) Rules , 2006 . But the manufacturing relating to cotton knitted garments and processing charges is common therefore the expenditure, assets & liabilities relating to these two activities cannot be bifurcated. Sale relating to sale of knitted garments and processing charges is shown separately.

6 The previous year figures have been regrouped/ reclassified, wherever necessary to conform to the current year presentation.


Mar 31, 2014

1. General Information

The company was incorporated on December 6, 1991 in India. The company is a garment manufacturing company and majorly deals in exports however during the year, value of exports are INR 17,860,290 and further company has domestic sales and processing income during the year.

2.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 in entitled to one vote per share. There is no dividend proposed by the Board of Directors.

In the event of liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company. The distribution will be in proportion to the number of equity shares held by the shareholders.

3. Segment Reporting

As per Accounting Standard AS 17 on "Segment Reporting" segment information is as follow:- Primary Segment Reporting (Business Segment):

Primary business segments of the company is sale of cotton knitted garments and made ups and Processing Charges, which in the context of Accounting Standard 17 on "Segment Reporting" as notified in Companies (Accounting Standard) Rules , 2006 . But the manufacturing relating to cotton knitted garments and processing charges is common therefore the expenditure relating to these two activities can only be bifurcated on estimated basis. Sale relating to sale of knitted garments and processing charges is shown separately.

4. Contingent Liability and Commitments

Particulars As at As at 31.03.2014 31.03.2013

1. Bills Discounted -

2. Disputed tax liability * 7,77,49,273 8,52,81,903

3. Surety given to Sales Tax Department for third party -

4. Debt not acknowledge as liability - 14,64,353

Total 7,77,49,273 4,74,25,042

* Disputed tax liability includes INR 6.28 crores raised by department relating to AY 2005-06 u/s 147/143(3) of the Income Tax Act on the basis of CAG query which subsequently dropped by CAG but matter still pending before First Appellate Authority

5. The previous year figures have been regrouped/ reclassified, wherever necessary to conform to the current year presentation.


Mar 31, 2013

1.1 Deferred Tax Assets recognized to the extent of Deferred Tax Liability for the year ending 31st March 2012.

1.2 As the company has substantial losses and value of the business has reduced substantially . Also there is huge fxed cost relating to depreciation. In view of facts stated above and keeping in view the fnancial position of the company the Deferred Tax Assets in respect of carry forward losses has been recognized only to the extent of Deferred Tax Liability.

2 Related Party Disclosure

The names of related parties of the company as required to be disclosed under Accounting Standard 18 are as follows: Key Management Personnel (KMP)

Sh. H. R. Gupta Sh. Vijay Jindal Sh. Mukesh Aggrawal Sh. Anil Garg

During the current and previous year, there are no transactions with the related parties

3 Segment Reporting

As per Accounting Standard AS 17 on "Segment Reporting" segment information is as follow:-

Primary Segment Reporting (Business Segment):

Primary business segments of the company is sale of cotton knitted garments and made ups and Processing Charges, which in the context of Accounting Standard 17 on "Segment Reporting" as notifed in Companies (Accounting Standard ) Rules , 2006 . But the manufacturing relating to cotton knitted garments and processing charges is common therefore the expenditure relating to these two activities can only be bifurcated on estimated basis. Sale relating to sale of knitted garments and processing charges is shown separately.

Secondary Segment Reporting (Geographical Segments):

The Following is the distribution of the company''s consolidated sales by geographical segment, regardless of where the goods were produced:

4 Contingent Liability and Commitments

Particulars As at As at 31.03.2013 31.03.2012

1.Bills Discounted

2.Disputed tax liability * 85,281,903 46,723,000

3.Surety given to Sales Tax Department for third party

4. Debt not acknowledge as liability 1,464,353 702,042

Total 86,746,256 47,425,042

* Disputed tax liability includes INR 6.28 crores raised by department relating to AY 2005-06 u/s 147/143(3) of the Income Tax Act on the basis of CAG query which subsequently dropped by CAG but matter still pending before First Appellate Authority.

5 The previous year fgures have been regrouped/ reclassifed, wherever necessary to conform to the current year presentation. Note 34 Signifcant Accounting Policies & Notes on Financial Statements

6 General Information

The company was incorporated on December 6, 1991 in India. The company is a garment manufacturing company and majorly deals in exports however during the year, the exports are Nil and the company has only domestic sales and processing income.


Mar 31, 2012

* Fixed Assets of the company have been revalued as on 31st March, 2012 except for Car (vehicles), furniture & fixture and other equipments whose total net carrying amount before revaluation of fixed assets is less than 5% of the total net carrying amount of total fixed assets. The effect of revaluation of fixed assets have been taken by restating the Net Book Value by adding there in the net increase on account of revaluation. Due to revaluation there is increase in value of Land by Rs. 647,518,624/- and increase in net book value of Building by Rs. 35,731,273/- as per valuation report of Certified/Registered valuer Mr. Ashok Raichand and M/S P & A Valuetech Private Limited. The Plant and Machinery is valued at net book value of Plant and Machinery as on 31st March 2012 as per valuation report of Mr. Ashok Raichand ( certified/ registered valuer).

* Rs. 24,398,043/- are secured by first charge in respect of the immovable property situated at Plot No. 21, Sector 6 Faridabad (Haryana) together with all building and structures there on including plant & machinery. The loan is a Standard Asset as per IRAC norms and carries interest rate at BPLR minus 150 bps. The loan is further secured by personal guarantee of Shri H.R. Gupta and Shri Vijay Jindal.

The balance loan is repayable in monthly equal installment of 1,060,784 /- till 1st February, 2014.

** Rs. 502,498/- (Car Loan from ICICI bank) is secured against the hypothecation of vehicle (Honda City) carrying interest rate of 12.5% per annum. The loan is repayable in 36 installments of 19,169/- each starting from 15th November, 2011 till 15th October, 2014.

a. First pari - passu charge on entire asset of the company including receivables, both present and future as primary security.

b. First exclusive charge as collateral security on factory land & building situated at Plot No. 7, Plot No. 39 and Plot No. 22, sector 6, Faridabad, Haryana.

c. Second pari - passu charge on entire fixed asset of the company on which IDBI is having first charge.

The status of the accounts maintained with the State Bank of India slipped to Non Performing Asset (NPA) on 23rd May, 2011. Notice under SARAFESI Act was issued to the company on 26th December, 2011 raising a demand of Rs. 85,27,33,880/- including undue liability of Rs. 25,79,39,410/- (Rs. 12,99,34,285 relating to MTM derivative losses (not provided for) and Rs. 12,80,05,125 relating to amount of installments, not due on Corporate loan).

The Company has submitted proposal for normalizing the account as Standard with SBI and the same under consideration with SBI.

Rs. 43,35,42,955 against working capital loan in the books of accounts does not account for the derivative loss of Rs. 4,53,82,639 but banks certificate shows amount of Rs. 47,89,25,595 as on 31st March, 2012 including derivative loss of Rs.4,53,82,639.

Also interest on bank borrowing from SBI is charged on the basis of last interest charged by the bank when status of the account slipped to NPA. Any penal or other interests claimed by the bank over and above are not accounted for.

* Investment in Elkay Strips Limited formerly subsidiary NIL(Previous year 255364 Equity Shares of Rs. 100/- each)

The company has disposed off the equity shares of M/s Elkay Strips Ltd On March 19, 2012 (260368 shares) at Rs. 18,04,35,024, based on the valuation report.

** Advances recoverable from Income Tax Authorities are net of provision of Rs. 1,41,83,000/- which has been considered in the financials owing to the various demands by the Income Tax Department which are confirmed as liability.

"Receivable from various statutory departments including Sales Tax, CBEC and Income Tax Authorities.

*** Advance to supplier is net of provision for doubtful amount of Rs. 5,49,57,410/-

Defined Benefit Plan

The employee's gratuity fund scheme managed by a Trust (LIC of India and SBI ) is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the Project Unit Credit Method, which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. The obligation for leave encashment is recognised in the same manner as gratuity. The company had permanently closed down its two units and the other one unit has remained partly closed during the year. Closed unit has not been considered for the purpose of actuarial valuation.

Deferred Tax Assets recognized to the extent of Deferred Tax Liability for the year ending 31st March 2012.

As the company has substantial losses and value of the business has reduced substantially . Also there is huge fixed cost relating to interest and depreciation. In view of facts stated above and keeping in view the financial position of the company the Deferred Tax Assets in respect of carry forward losses has been recognized only to the extent of Deferred Tax Liability.

1 Related Party Disclosure

AS per accounting Standard 18, the disclosure of transaction with the related parties are given below:

List of related parties where control exists and related parties with whom transaction have taken place and relationships:

1. Subsidiaries

Elkay Strips Ltd. (Up to 19th March 2012)

2. Key Management Personnel (KMP)

Sh. H R Gupta

Sh. Vijay Jindal

Sh. Mukesh Aggrawal

Sh. Anil Garg

2 Segment Reporting

As per Accounting Standard AS 17 on 'Segment Reporting' segment information is as follow:- Primary Segment Reporting (Business Segment):

Primary business segments of the company is sale of cotton knitted garments and made ups and Processing Charges, which in the context of Accounting Standard 17 on 'Segment Reporting' as notified in Companies (Accounting Standard ) Rules , 2006 . But the manufacturing relating to cotton knitted garments and processing charges is common therefore the expenditure relating to these two activities can only be bifurcated on estimated basis. Sale relating to sale of knitted garments and processing charges is shown separately.

(Figures in Rupees)

Particulars As at As at 31st March, 2012 31st March, 2011

3 Contingent Liability and Commitments

1. Bills Discounted Nil 9,900,000

2. Disputed tax liability 46,723,000 14,512,000

3. Surety given to Sales Tax Department for third party - 100,000

4. Debt not acknowledge as liability 702,042 -

Total 47,425,042 24,512,000

4 Financial Derivatives And Instrument:

During the year SBI intimated to the company about the derivative losses amounting to Rs 12,99,34,285/- as on 26-12-2011 but the company has not acknowledged and accepted these liabilities and therefore not provided for in the accounts.

 
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