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Notes to Accounts of Vardhman Acrylics Ltd.

Mar 31, 2015

NOTE NO.-1 (Rs.in Lacs-

As at 31.03.2015 As at 31.03.2014

A. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 1683.40 4487.28

b) Bank Guarantees 302.00 302.00

c) Service Tax, Excise duty and cenvat credit under dispute against which appeals have been filed / are being filed 120.63 51.59

d) Company has contested demand in respect of Sales tax / VAT amounting to Rs. 406.75 lac (Previous year Rs. 406.75 lac). As against the above demand a sum of Rs. 45.04 Lac (Previous year Rs. 20.04 Lac) has been deposited under protest and stands under the head "Other current Asset-Balances and Deposits with Government Authorities & Others'. The company has filed an appeal with Appellate Authorities and is advised that the demand is not in accordance with law. No Provision therefore, has been made in accounts in respect thereof.

e) The Company has contested the additional demand in respect of income tax amounting to Rs. 1182.61 lac (Previous Year Rs. 899.56 lac). Pending appeal with appellate authorities, provision of Rs. 571.22 lac (Previous Year Rs. 293.09 lac) has not been made in the books of account as the comDanv is confident to get the desired relief.

B. Employee Benefits:

(b) The Liability in respect of leave encashment and gratuity is un-funded; therefore no disclosure of change in fair Value of Plan Assets has been made.

C. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 1 7 on "Segment Reporting", issued by companies (Accounting Standards) Rules 2006.

D. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies : VMT Spinning Company Limited,

: VTL Investments Limited,

: Vardhman Yarns and Threads Limited, -

: Vardhman Nisshinbo Garments Comoanv Limited

E. Operating lease: company as lessee

The Company's significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Note-15.

F. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" referred to in the Companies (Accounts) Rules, 2014.

FI. Consequent to the enactment of the Companies Act,2013 (the Act) and its applicability for accounting periods commencing from 1st April 2014, the Company has recalculated the remaining useful life of fixed assets in accordance with provisions of Schedule II to the Act. In case of Fixed assets which have already completed their useful life in terms of Schedule II of the Act, the carrying value (net of residual value) of such assets as at 1st April 2014 amounting to Rs. 296.61 Lacs has been adjusted to Retained Earnings and in case of other fixed assets the carrying value (net of residual value) is being depreciated as per Straight line method over the re-calculated remaining useful life. The depreciation and amortisation expense charged for the period ended 31 st March, 2015 would have been higher by Rs. 671.60 Lacs respectively, had the Company continued with the previously prescribed depreciation rates as per Schedule-XIV of Companies Act, 1956.

I. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

Notes to financial statements for the year ended 31st March 2013.

J. There are no Micro and Small Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2015. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

K. Disclosure required by Clause 32 of Listing Agreement:

The Company has given inter corporate deposits aggregating to Rs. 24,073.00 lacs (Previous Year Rs. 75,878.46 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 7,021.00 lacs (Previous Year Rs. 9,458.46 Lacs). The Balance outstanding as on 31.03.15 is Nil (Previous Year is Rs. Nil).

L. Excise Duty amounting to Rs. 4,272.47 Lacs (Previous Year Rs. 4,108.66 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

M. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.


Mar 31, 2014

As at As at 31.03.2014 31.03.2013

A. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 4487.28 5593.91

b) Bank Guarantees 302.00 277.36

c) Service Tax, Excise duty and cenvat credit under dispute against which appeals have been filed / are being filed. 51.59 47.68

d) Demand in respect of sales tax/ VAT / purchase tax pending appeal with Appellate Authorities. 406.75 203.55

e) Income Tax demands where the cases are pending at various stages of appeal with the authorities. 293.09 149.00

f) Capital and other commitments

i) For commitments relating to lease arrangements, please refer note no – 16.E - –

ii) Corporate guarantees/undertaking issued on behalf of third parties. 232.90 232.90

iii) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances). 315.94 –

B. Employee Benefits:

The summarized position of Post–employment benefits and long term employee benefits recognized in the Statement of Profit & Loss and Balance Sheet as required in accordance with Accounting Standard – 15 are as under: –

Notes to financial statements for the year ended 31st March 2014.

(e) Investment details of Fund: Not Applicable

(f) Principal actuarial assumption at the Balance Sheet Date (expressed as weighted average)

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in employee market.

(g) Other Short term employee''s benefits (Un–Funded)

(h) During the year, the company has recognized an expense of Rs.44.34 Lac (Previous Year Rs.40.39 Lac) in respect of Contribution to Provident Fund and Rs.2.81 Lac (Previous Year Rs.4.46 Lac) in respect of Contribution to Superannuation Scheme.

C. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) – 17 on "Segment Reporting", issued by Companies (Accounting Standards) Rules 2006.

D. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:–

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies : VMT Spinning Company Limited,

VTL Investments Limited,

Vardhman Yarns & Threads Limited,

Vardhman Nisshinbo Garments Company Limited

(Formerly known as Vardhman Texgarments Limited)

b) Details of transactions entered into with related parties during the year as required by Accounting Standard (AS) – 18 on "Related Party Disclosures" issued by issued by Companies (Accounting Standards) Rules 2006 are as under:

* No transaction has taken place with fellow subsidiary companies during the year.

** As the liabilities for gratuity, leave encashment and sick leave are provided on an actuarial basis for the Company as a whole, the amount pertaining there to are not included in above.

E. Operating lease: company as lessee

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non–cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Note–15.

Future minimum rentals payable under non–cancellable operating leases are as follows:

F. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)–20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

A statement on calculation of Basic / diluted EPS is as under:

b) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as ''Deferred tax adjustment''.

H. In accordance with the Accounting Standard (AS)–28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

I. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2014. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

J. Disclosure required by Clause 32 of Listing Agreement

The Company has given inter corporate deposits aggregating to Rs. 75,878.46 lacs (Previous Year Rs. 53,288.00 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 9,458.46 lacs (Previous Year Rs. 4,241.00 Lacs). The Balance outstanding as on 31.03.14 is Nil (Previous Year is Rs. Nil).

K. Excise Duty amounting to Rs. 4,108.66 Lacs (Previous Year Rs. 3,720.24 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

L. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.


Mar 31, 2013

A. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

I Key Management Personnel : Mr. B. K. Choudhary (Managing Director)

II Holding Company : Vardhman Textiles Limited

III Fellow Subsidiary Companies VMT Spinning Company Limited,

VTL Investments Limited,

Vardhman Yarns & Threads Limited,

Vardhman Nisshinbo Garments Company Limited

(Formerly known as Vardhman Texgarments Limited)

Vardhman Special Steels Limited (upto 7th April 2011)

b) Details of transactions entered into with related parties during the year as required by Accounting Standard (AS) - 18 on "Related Party Disclosures" issued by Companies (Accounting Standards) Rules, 2006 are as follows:

B. Operating lease: company as lessee

The Company''s significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements, which are non-cancellable, range between 11 months to 9 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent underNote-15.

C. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

D. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

E. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31 st March, 2013. This information as required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

F Disclosure required by Clause 32 of Listing Agreement:

(a) The Company has given inter corporate deposits aggregating to Rs. 53,288.00 lacs (Previous Year Rs. 50,473.60 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 4,241.00 lacs (Previous Year Rs. 5,627.95 Lacs). The Balance outstanding as on 31.03.13 was Rs. Nil (Previous Year Rs. 1 75.00 lacs).

(b) The Company has given inter corporate deposits aggregating to Rs. Nil ( Previous year Rs. Nil) to M/s Vardhman Special Steels Ltd, (cease to be fellow subsidiary with effect from 8th April 2011). The maximum amount outstanding during the year was Rs. Nil ( Previous Year Rs. 3,202.00 lacs.).

G. Excise Duty amounting to Rs. 3,720.24 Lacs (Previous Year ^ 3,107.96 Lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss.

H In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

I. Project and Pre-operative Expenses (included in Capital Work-in-Progress)

Company has abandoned the Project and Rs. 30.33 Lacs has been accounted for in the statement of Profit & Loss in respective accounts during the year.

J. The company uses forward contracts to hedge its risk associated with fluctuation in foreign currency relating to foreign currency assets and liabilities, firm commitment and highly probable forecast transactions. The use of the aforesaid financial instruments is governed by the company''s overall strategy. The company does not use forward contracts and options for speculative purposes. The details of the outstanding forward contracts is as under:


Mar 31, 2011

As at As at 31.03.2011 31.03.2010 (Rs. in Lacs) (Rs. in Lacs)

1.Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 4,374.77 297.63

b) Bank Guarantees 293.45 206.00

c) Guarantee given by the Company on behalf of another company, to the extent utilized. 232.90 232.90

d) Custom duty, Excise duty and Cenvat Credit under dispute against which appeals have been filed / are being filed. 45.85 66.69

e) Demand in respect of Sales tax/ Purchase tax pending appeal with Appellate Authorities. 43.28 43.28

f) Bonds executed in favour of Govt. Authorities in respect of EPCG license in which export obligation has already been completed in previous year. - 793.39

2. Employees Benefits:

(b) The liability in respect of leave encashment and gratuity is un-funded; therefore, no disclosure of change in fair Value of Plan Assets has been made.

(e) Investment details of Fund: Not Applicable

3. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) -17 on "Segment Reporting", issued by Companies (Accounting Standads)Rules, 2006.

4. Related Party Disclosure:

a) Disclosure of Related parties and relationship between parties:-

i key Management Personnel : Mr. B. K. Choudhary

ii Holding Company : Vardhman Textiles Limited

iii Fellow Subsidiary Companies : VMT Spinning Company Limited

VTL Investments Limited

Vardhman Yarns & Threads Limited

Vardhman Nisshinbo Garments Company Limited

Vardhman Special Steels Limited

5. The Company's significant leasing arrangements are in respect of operating leases for premises (residential, godown etc.). These leasing arrangements which are not-cancellable range between 11 months and 9 years generally, or longer, and are usually renewable on mutually agreeable terms. The aggregate lease rentals payable are charged as Rent under Schedule- 15.

6. Earning Per Share

The calculation of Earning Per Share (EPS) as disclosed in the Statement of profit and loss has been made in accordance with Accounting Standard (AS)-20 on "Earning Per Share" issued by Companies (Accounting Standards) Rules, 2006.

7. b) Any change in the amount of deferred tax liability on account of change in the enacted tax rates and change in the quantum of depreciation allowable under the tax laws, is disclosed in the statement of profit and loss account as 'Deferred tax adjustment'.

8. In accordance with the Accounting Standard (AS)-28 on Impairment of Assets, the Company has assessed as on the balance sheet date, whether there are any indications (listed in paragraphs 8 to 10 of the Standard) with regard to the impairment of any of the assets. Based on such assessment it has been ascertained that no potential loss is present and therefore, formal estimate of recoverable amount has not been made. Accordingly no impairment loss has been provided in the books of account.

9. There are no Micro, Small and Medium Enterprises, to whom the Company owes dues, which are outstanding for more than 45 days during the year and also as at 31st March, 2011. This information as required to be disclosed under the Micro, Small and Medium enterprises Development Act, 2006 has been determined to the extent such parties have been identified on the basis of information available with the company.

10. Disclosure required by Clause 32 of Listing Agreement:

a) The Company has given inter corporate deposits aggregating to Rs. 44,899.20 lacs (Previous Year Rs. 39,392.53 lacs) to M/s Vardhman Textiles Ltd. during the year. The maximum amount outstanding during the year was Rs. 7,835.00 lacs (Previous Year Rs. 6,917.00 lacs). The Balance outstanding as on 31.03.11 is Rs. 590.70 lacs (Previous Year Rs. 5,543.00 lacs).

b) The Company has given inter corporate deposits aggregating to Rs. 3,202.00 lacs (Previous Year Rs. NIL.) to M/s Vardhman Special Steels Limited during the year. The maximum amount outstanding during the year was Rs. 3,202.00 lacs (Previous Year Rs. NIL). The Balance outstanding as on 31.03.11 is Rs. 3,202.00 lacs (Previous Year Rs. NIL).

11. Excise Duty amounting to Rs. 3,153.87 lacs (Previous Year Rs. 1,625.69 lacs) has been reduced from gross turnover as the same is included in the figure of gross turnover. Further, the difference of excise duty between the closing stock and opening stock has been disclosed separately in the statement of profit and loss,

12. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

13. Previous year's figures have been recast / regrouped, wherever necessary, to make them comparable with current year's figures.'


Mar 31, 2010

As at As at

31.03.2010 31.03.2009

(Rs. in Lacs) (Rs. in Lacs)

1. Contingent Liabilities not provided for:

a) Letters of Credit Outstanding 297.63 1,682.34

b) Bank Guarantees 206.00 248.75

c) Guarantee given by the Company on behalf of another company, to the 232.90 232.90

extent utilized

d) Custom duty, Excise duty and cenvat credit under dispute against which 66.69 58.25

appeals have been filed / are being filed

e) Demand in respect of Sales tax/ Purchase tax pending appeal with Appellant Authorities 43.28 44.28

f) Bonds executed in favour of Govt. Authorities in respect of license in 793.39 793.39

which export obligation has already been completed

2. Estimated amount of contracts remaining to be executed on capital account and 45.45 Nil not provided for (net of advances)

3. In the opinion of the Board, current assets, loans and advances have a value in the ordinary course of business at least equal to that stated in the Balance Sheet.

4. Previous years figures have been recast/regrouped, wherever necessary, to make them comparable with current years figures.

5. Figures in bracket indicate deductions.

6. Sundry Creditors include amounts owed to small scale industrial undertaking(s) Rs. 9.28 lacs (Previous year Rs. 0.24 lacs). Amount which is outstanding for a period of more than 30 days is Rs. Nil (Previous year Rs. Nil). The Company has not made any delays in settlement of balances due to small scale undertakings and hence no provision for interest on delayed payment is required. Further, there are no outstanding amounts payable beyond the agreed period to small, micro and medium enterprises as on the Balance Sheet date to the extent such enterprises have been identified, based on the information available with the Company.

7. Depreciation adjustments represent provision for depreciation for earlier years, provision written back and similar adjustments for depreciation.

8. The Company operates in only one business segment viz. "Acrylic Fibre & Tow", which is the reportable segment in accordance with the requirements of Accounting Standard (AS) - 17 on "Segment Reporting", issued by the Institute of Chartered Accountants of India.

9. No asset qualifies for the current year according to AS-28 issued by the Institute of Chartered Accountants of India.

 
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