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Notes to Accounts of Stanpacks (India) Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION:

Stanpacks (India) Limited is a Public Company in India, incorporated on 20th December 1991. The Company is engaged in the business of manufacturing Polypropylene Bags. The shares of the Company are being listed in the Bombay Stock Exchange.

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

3. With respect to the Balances of Debtors & Creditors and advances/deposits received from the customers as per books of account. Confirmations of balances are awaited and adjustments if any will be made in the books on receipt of confirmations.

4. During the year, the Company had a good improvement in the performance achieving the target for the year with an increase of 7% in the turnover against the previous year a cash profit of Rs. 116.70 lakhs against the cash loss of Rs. 32.40 lakhs of the previous year. The Company has reassessed the depreciation of every asset based on their useful life as prescribed under part C of schedule II of the Companies Act, 2013 resulting in the additional transitional depreciation.

As a result of above transitional depreciation provision, the Company stood at Net loss of Rs. 5.89 lakhs for the year and the accumulated losses have increased to Rs. 480.13 lakhs resuting in an erosion of 78% of Networth of the Company. With the improvement in the performance during the year, the anticipated big orders, the capability in productivity, the continuous working capital support by the bankers and the promoters, and the prospect of bringing long term funds to the company by selling of unutilized land and building at Nellore, the Management is confident of generating profits in years to come and meet its financial obligation as they arise consequently resulting in wiping off the erosion of Networth in the near future.

5. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES:

The management is currently in the process of identifying enterprises which have provided goods and services to the company which qualify under the definition of micro, small and medium enterprises, as defined in Micro, Small and Medium Enterprises Act 2001. Accordingly, based on information available, the amount payable to such enterprises as on 31st March 2015 is Nil.

6. The computation of profit under section 198 of the Companies Act, 2013 is not considered necessary as the managerial remuneration that is paid is minimum remuneration based on the effective capital of the Company as prescribed under Schedule V of the said Act.

7. LEASES:

Operating leases:

The company is obligated under cancelable operating leases for Kavarapet which are renewable at the options of the lessor and the lessee. The expense under the contracted lease amounts to Rs.18.53 lacs (previous year Rs.22.53 lacs)

Estimated rate of return on the plan assets 8%

The estimate of future salary increments, contribution in actual valuation, taxing into account of inflation, seniority promotion and other factors in the employment.

Salary escalation - 5%

8. As at 31st March, 2015, the company had Rs.677.48 lakhs unabsorbed depreciation and carried forward of losses under tax laws.

9. SEGMENTAL REPORTING:

The Company currently operates in one business segment in manufacturing of PP bags and one geographical segment in India. In line with Accounting Standard 17, as the relevant information is available from the Balance Sheet and the Statement of Profit and Loss itself, and therefore keeping in view of the objective of segment reporting, the company has not disclosed segment information.

10. CONTINGENT LIABILITIES:

(Rs. In Lakhs)

Particulars As at 31.03.2015 As at 31.03.2014

a) Disputed Amount of Sales tax 5.63 5.63

b) Disputed Amount of Central Excise 6.31 6.31

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. During the previous year, the Company has received an order favoring them as no cost for the case filed for the year 1994-95. The Appellate Tribunal has issued certain claims/ show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

11. Secured Loans availed from The Karnataka Bank Limited are secured by first charge on specific assets acquired out of the loan and personal guarantees of directors Sri. G. Radhakrishna, Sri. G. S. Sridhar and Sri. G.V. Gopinath

12. (a) Working capital facilities from The Karnataka Bank Limited are secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G. S. Sridhar and Sri. G.V. Gopinath.

(b) Additional working capital (Term Loan) facilities from The Karnataka Bank Limited sanctioned in the month of February 2015, repayable given a period of 15 months secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in -process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G.S. Sridhar and Sri. G.V. Gopinath.

13. Advances & Deposits includes an amount of Rs. 18,11,934/- being Admitted and Disputed Sales Tax of Rs.15,84,266/- for various years paid and Income Tax for the Assessment Year 1996-97 of Rs.2,27,668/- paid, but kept as Deposit in the books since the company has gone on appeal in respect of these matters. Necessary adjustments in the books of accounts will be made in the year in which the outcome of the appeal is known.

14. During the year deferred tax asset arising out of unabsorbed depreciation has not been recognized in the absence of virtual certainty supported by convincing evidence of future taxable income. Unrecognized deferred tax asset will be reassessed in future years.

15. Previous year figures:

The company has reclassified previous year figures to conform to this year's classification. It significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.

16. CAPACITY AND PRODUCTION DURING THE YEAR 2014-15: a. Product: Polymer Product

Licensed Capacity : Not applicable

Installed Capacity : 3800 tons

Production : 2654 tons


Mar 31, 2014

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

1. The accumalated losses have increased to Rs. 431.60 lakhs resulting in an erosion of 71% of the Networth of the Company. Operational inefficiency, under-utilization of capacity, lack of orders, global economic scenario and liquidity issues are the major contributing factors for the losses incurred. In view of the change in the political scenario, the company will be in a better position to sell the unutilized land and buildings at Nellore which will bring in long term funds to the Company to liquidate some of the borrowings resulting in substantial saving of interest cost.

2. With respect to the Balances of Debtors & Creditors and advances/deposits received from the customers as per books of account, confirmations of balances are awaited and adjustments if any will be made in the books on receipt of confirmations.

3. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The management is currently in the process of identifying enterprises which have provided goods and services to the company which qualify under the definition of micro, small and medium enterprises, as defined in Micro, Small and Medium Enterprises Act 2001. Accordingly, based on information available, the amount payable to such enterprises as on 31st March 2014 is Nil.

4. The computation of profit under section 349 of the Companies Act, 1956 is not considered necessary as the managerial remuneration that is paid is minimum remuneration based on the effective capital of the Company as prescribed under Schedule XIII of the said Act.

5. LEASES

Operating leases

The company is obligated under cancelable operating leases for Kavarapet which are renewable at the options of the lessor and the lessee. The expense under the contracted lease amounts to Rs.22.53 lacs (previous year Rs.26.53 lacs)

6. Estimated rate of return on the plan assets 8%

The estimate of future salary increments, contribution in actual valuation, taxing into account of inflation, seniority promotion and other factors in the employment

Salary escalation - 5%

7. As at 31st March, 2014, the company had Rs.566.46 lakhs unabsorbed depreciation and carried forward of losses under tax laws.

8. SEGMENTAL REPORTING

The Company currently operates in one business segment in manufacturing of PP bags and one geographical segment in India. In line with Accounting Standard 17, as the relevant information is available from the balance sheet and the profit and loss account itself, and therefore keeping in view of the objective of segment reporting, the company has not disclosed segment information.

9. CONTINGENT LIABILITIES (Rs. in Lakhs)

Particulars As at 31.03.2014 As at 31.03.2013

Disputed Amount of Sales tax 5.63 13.88

Disputed Amount of Central Excise 6.31 6.31

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. During the year, the Company has received an order favoring them as no cost for the case filed for the year 1994-95. The Appellate Tribunal has issued certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

10. Secured Loans availed from The Karnataka Bank Limited are secured by first charge on specific assets acquired out of the loan and personal guarantees of directors Sri.G. Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath.

11. (a) Working capital facilitates from The Karnataka Bank Limited are secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath.

(b) Working capital loan converted to Term Loan, repayable given a period of 3 years Secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath.

12. Advances & Deposits includes an amount of Rs.18,11,934/- being Admitted and Disputed Sales Tax of Rs.15,84,266/- for various years paid and Income Tax for the Assessment Year 1996-97 of Rs.2,27,668/- paid, but kept as Deposit in the books since the company has gone on appeal in respect of these matters. Necessary adjustments in the books of accounts will be made in the year in which the outcome of the appeal is known.

13. During the year deferred tax asset arising out of unabsorbed depreciation has not been recognized in the absence of virtual certainty supported by convincing evidence of future taxable income. Unrecognized deferred tax asset will be reassessed in future years.

14. The company has reclassified previous year figures to conform to this year''s classification. It significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2013

The previous period figures have been regrouped/reclassified, wherever necessary to confirm to the current presentation.

1. With respect to the Balances of Debtors & Creditors and advances/deposits received from the customers as per books of account. Confirmations of balances are awaited and adjustments if any will be made in the books on receipt of confirmations.

2. DUES TO MICRO, SMALL AND MEDIUM ENTERPRISES

The management is currently in the process of identifying enterprises which have provided goods and services to the company which qualify under the definition of micro, small and medium enterprises, as defined in Micro,

Small and Medium Enterprises Act 2001. Accordingly, based on information available, the amount payable to such enterprises as on 31st March 2013 is Nil.

3. The computation of profit under section 349 of the Companies Act, 1956 is not considered necessary as the managerial remuneration that is paid is minimum remuneration based on the effective capital of the Company as prescribed under Schedule XIII of the said Act.

4. LEASES

Operating leases

The company is obligated under cancelable operating leases for Kavarapet factory which are renewable at the options of the lessor and the lessee. The expense under the contracted lease amounts to Rs. 26.53 lacs (previous year Rs. 29.73 lacs)

(ii) Defined Benefit Plans:

Gratuity:

The Gratuity liability is covered by a Master Policy taken out with LIC of India under the Cash Accumulation Scheme. The Following table set; out the status of the gratuity plan as required under AS 15.

Expended rate of return on the plan assets 8%

The estimate of future salary increments, contribution in actual valuation, taking into account of inflation, seniority promotion and other factors in the employment.

Salary escalation - 5%

5. As at 31st March, 2013, the company had Rs. 495.76 lakhs unabsorbed depreciation and carried forward of losses under tax laws.

6. SEGMENTAL REPORTING

The company currently operates in one business segment in manufacturing of PP bags and one geographical segment in India. In line with Accounting Standard 17, as the relevant information is available from the balance sheet and the Statement of Profit and Loss itself, and therefore keeping in view of the objective of segment reporting, the company has not disclosed segment information.

7. CONTINGENT LIABILITIES (Rs. in Lakhs)

Particulars As at 31.03.2013 As at 31.03.2012

Disputed Amount of Sales tax 13.88 13.88

Disputed Amount of Central Excise 6.31 6.31

No provision has been made in the accounts in respect of disputed amount of sales tax as the company has contested the case and is hopeful of getting the verdict in its favor. Certain claims/show cause notices disputed have neither been considered as contingent liability nor acknowledged as claim, based on the opinion obtained, since the possibility of loss is remote.

8. Secured Loans availed from The Karnataka Bank Limited are secured by first charge on specific assets acquired out of the loan and personal guarantees of directors Sri G. Radhakrishna, Sri G.S.Sridhar and Sri G.V.Gopinath, further Secured by personal guarantees of Sri G.V.Chalapathi, and Sri G. Muralidhar.

9. (a) Working capital facilitates from The Karnataka Bank Limited are secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri G. Radhakrishna, Sri G.S. Sridhar and Sri G.V. Gopinath.

(b) Working capital loan converted to Term Loan, repayable given a period of 3 years Secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri G. Radhakrishna, Sri G.S. Sridhar and Sri G.V. Gopinath.

10. Advances & Deposits includes an amount of Rs. 16,55,273/- being Admitted and Disputed Sales Tax of Rs. 14,27,605/- for various years paid and Income Tax for the Assessment Year 1996-97 of Rs. 2,27,668/- paid, but kept as Deposit in the books since the company has gone on appeal in respect of these matters. Necessary adjustments in the books of accounts will be made in the year in which the outcome of the appeal is known.

11. During the year deferred tax asset arising out of unabsorbed depreciation has not been recognized in the absence of virtual certainty supported by convincing evidence of future taxable income. Unrecognized deferred tax asset will be reassessed in future years.

12. The company has reclassified previous year figures to conform to this year''s classification. It significantly impacts presentation and disclosures made in the financial statements, particularly presentation of balance sheet.


Mar 31, 2011

1. CONTINGENT LIABILITIES

As at As at 31.03. 2011 31.03. 2011 (Rs.) (Rs.)

a) Disputed Amount of Sales tax 13,88,945 13,88,945

b) Disputed Amount of Central 6,31,723 6,31,723 Excise 2. Secured Loans availed from The Karnataka Bank Limited are secured by first charge on specific assets acquired out of the loan and personal guarantees of directors Sri. G.Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath, further Secured by personal guarantees of Sri. G.V.Chalapathi, and Sri. G.Muralidhar.

3 (a) Working capital facilitates from The Karnataka Bank Limited are secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath.

(b) Working capital loan converted to Term Loan, repayable given a period of 3 years Secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of directors Sri. G. Radhakrishna, Sri. G.S.Sridhar and Sri. G.V.Gopinath.

4. Advances & Deposits includes an amount of Rs.16,55,273/- being Admitted and Disputed Sales Tax of Rs.14,27,605/- for various years paid and Income Tax for the Assessment Year 1996-97 of Rs.2,27,668/- paid, but kept as Deposit in the books since the company has gone on appeal with respect to these matters. Necessary adjustments in the books of accounts will be made in the year in which the outcome of the appeal is known.

5. During the year deferred tax asset arising out of depreciation has not been recognized in the absence of virtual certainty supported by convincing evidence of future taxable income. Unrecognized deferred tax asset will be reassessed in future years.

6. Previous year figures have been regrouped and recast wherever necessary for comparison purpose.


Mar 31, 2010

1. LEASES

The company is obligated under cancellable operating leases for Kavarapet and Marasur factories which are renewable at the options of both the lessor and the lessee. The expense under the contracted lease amounts to Rs. 31,50,956/- ( previous year Rs. 42,25,691/-)

2. DISCLOSURE UNDER AS-15

2009 - 2010 2008 - 2009

(i) Defined Contribution Plans:-

(a) Contribution to Provident Fund Rs.9,15,579/- Rs. 8,67,571/-

(b) Contribution to Superannuation Fund Rs. 4,33,284/- Rs. 4,33,284/-

Effective 1st April 2009, the company has adopted revised accounting standard AS15 - "Employee Benefits" issued by the ICAI.

(ii) Defined Benefit Plans:-

Gratuity: -

The Gratuity liability is covered by a Master Policy taken out with LIC of India under the Cash Accumulation Scheme. The Following table set out the status of the gratuity plan as required under section AS 15.

Expended rate of return on the plan assets 8%

The estimate of future salary increments, contribution in actual valuation, taxing into account of inflation, seniority promotion and other factors in the employment.

3. As at 31st March,2010, the company had Rs.659.08 lakhs unabsorbed depreciation and carried forward of losses under tax laws.

4. SEGMENTAL REPORTING

The company currently operates in one business segment in manufacturing of PP bags and one geographical segment in India. In line with AS 17, the relevant information is available in the balance sheet and the profit and loss account.

5. (a) Working capital facilitates from The Karnataka Bank Limited are secured by first charge on the current assets consisting of stock of raw materials, finished goods, work-in-process, debtors and personal guarantees of Messrs. G.V.Chalapathi, G.Muralidhar, G. Radhakrishna, G.S.Sridhar and G.V.Gopinath, Directors of the company .

(b) Working capital loan converted to Term Loan, repayment of 3 years Secured with existing terms & conditions.

6. Interest Free Sales Tax Deferral :

Due Within 1 year : Rs. 18,19,125/-

Due Within 1 to 5 Years : Rs. 1,24,25,789/-

Due more than 5 Years : Rs. 84,23,296/-

7. Advances & Deposits include an amount of Rs. 16,55,273/- being Admitted and Disputed Sales Tax of Rs. 14,27,605/- for various years paid and Income Tax for the Assessment Year 1996-97 of Rs.2,27,668/- paid, but kept as Deposit in the books since the company has gone on appeal in respect of these matters. Necessary adjustments in the books of accounts will be made in the year in which the outcome of the appeal is known.

8. Deferred Tax Liability accrued during the year aggregating to Rs. (27,41,541/-) Previous year Rs. 1,06,24,299/-) has been recognised in P&L A/c.

9. Confirmation of Balances in respect of debtors, creditors are not obtained in few cases.

10. Previous year figures have been regrouped and recast wherever necessary for comparison purpose.

11. Capacity and Production during the year 2009 - 2010

Product : Polymer Products

Licensed Capacity : Not Applicable

Installed Capacity : 7920 Tons

Production : 3907 Tons

 
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