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Notes to Accounts of Vardhman Concrete Ltd.

Mar 31, 2015

1. Rights, preference and restrictions attached to shares

The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, except in the case of interim dividend, is subject to the approval of the shareholders in the ensuing Annual General Meeting, In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

2. CONTINGENT LIABILITIES NOT PROVIDED FOR

a. The Company has pending claims on customers for variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims for which exact liability cannot be ascertained. The Company has received legal advice that none of the counter-claims are legally tenable.

b. The Company has pending arbitration matters for one side for claims and the exact liability and claims are not determinable. There are no claims made against the company whatsoever except as stated above.

3. SEGMENT REPORTING - ACCOUNTING STANDARD 17

The Company has a single segment namely, 'Civil Construction and Allied Activities' and hence there are no separate reportable segments as envisaged by the Accounting Standard - 17 on Segment Reporting issued by ICAI.

4. RELATED PARTY DISCLOSURES - ACCOUNTING STANDARD 18

I. List of Related Parties:

a) Where Control Exists None

b) Key Management Personnel Ramesh B. Vardhan

Rajesh B. Vardhan Anshul G. Gupta

c) Relatives of Key Management None

Personnel

d) Other Related Parties Vardhman Growmore Developers Pvt. Ltd.

Vardhman Home Developers Pvt. Ltd.

Vardhan Capital & Finance Ltd.

Stork Realtors Pvt. Ltd.

Diviniti, - A Joint Venture Concern

5. INVESTMENT IN JOINT VENTURE - ACCOUNTING STANDARD 27

The Company has entered into a Joint Venture named "Diviniti" for Construction of Low Cost Housing and related Infrastructure work under the Jawaharlal Nehru Scheme in which the partners are as under:

a. Sumer Infrastructure Private Limited - 34%

b. Vardhman Concrete Limited - 33%

c. S V Inova Build Private limited - 33%

As on 31 March 2015, the Company has overdrawn balance of Rs 7,010,519 in Diviniti. During the current year there was transaction of profit sharing from Diviniti. The closing credit balance of Rs 7,010,519 (which is inclusive of any share of Profit/ Loss in the Joint Venture) is shown in Note No 6.

The accounts of Diviniti are not yet finalized and therefore disclosures as required by Accounting Standard - 27 "Financial Reporting of Interest in Joint ventures" are not given.

The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and relevant factors including supply and demand in the employment market. The above information is certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan asset held, assessed risks, historical results of return and the Company's policy for plan assets Management.

The Net Liability stated in the books at the end of the financial year Rs.136,935/- (PY Rs 96,902/-) is as per the Actuarial Valuation Report.

6. The Company is a Sick Company in terms of Sick Industrial Companies (Special Provision) Act, 1985. The Company has been legally advised by a firm of solicitors that it has an option to apply to the Board for Industrial and Financial Reconstruction; however the Company does not wish to apply. Though the Company's losses have exceed the net worth, the Company has received large orders and on the basis of positive future projection prepared, the Company is expecting turn around by itself. Therefore the Company believes that there will be turnaround and accordingly the accounts are prepared on a going concern basis.

7. The Management is in the process of updating the fixed assets register, considering the nature of the assets no major discrepancies are anticipated. Based on the same no impairment is required.

8. There are no earnings in Foreign exchange during the current year as well as in previous year.

9. a) Confirmations are not available for Trade Receivables of Rs. 59,569,033.

b) Short Term Loans and Advances include Rs. 18,051,441 in respect of which the confirmations are not available with the Company.

These items are under close and constant recovery of the management. The Management is hopeful about the recovery of the same, hence no provision has been considered necessary by the management.

10. The Company does not have a Designated Chief Financial Officer and Chief Executive Officer though required as per the provisions of the Companies Act, 1956 and Listing Agreement and the accounts have been authenticated by the Directors only.


Mar 31, 2014

1. Rights, preference and restrictions attached to shares

The company has one class of equity shares having a par value of Rs.10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors, except in the case of interim dividend, is subject to the approval of the shareholders in the ensuing Annual General Meeting, In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company, after distribution of all preferential amounts, in proportion of their shareholding.

NOTE 2 CONTINGENT LIABILITIES NOT PROVIDED FOR

a. The Company has pending claims on customers for variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims for which exact liability cannot be ascertained. The Company has received legal advice that none of the counter-claims are legally tenable.

b. The Company has pending arbitration matters for one side for claims and the exact liability and claims are not determinable. There are no claims made against the company whatsoever except as stated above.

3. As on 31 March 2014, the Company has overdrawn balance of Rs 7,300,000 in Diviniti. During the current year there were no transactions from Diviniti. The closing credit balance of Rs 7,300,000 (which is exclusive of any share of Profit/ Loss in the Joint Venture) is shown in Note No 6.

The accounts of Diviniti are not yet finalized and therefore disclosures as required by Accounting Standard - 27 "Financial Reporting of Interest in Joint ventures" are not given.

4. The estimates of rate of escalation in salary considered in actuarial valuation take into account inflation, seniority, promotion and relevant factors including supply and demand in the employment market. The above information is certified by the Actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan asset held, assessed risks, historical results of return and the Company''s policy for plan assets Management.

The Net Liability stated in the books at the end of the financial year Rs.96,902/- (PY Rs 3,46,872/-) is as per the Actuarial Valuation Report.

5. The Company is a Sick Company in terms of Sick Industrial Companies (Special Provision) Act, 1985. The Company has been legally advised by a firm of solicitors that it has an option to apply to the Board for Industrial and Financial Reconstruction; however the Company does not wish to apply. Though the Company''s losses have exceed the net worth, the Company has received large orders and on the basis of positive future projection prepared, the Company is expecting turn around by it self. Therefore the Company believes that there will be turnaround and accordingly the accounts are prepared on a going concern basis.

6. The Management is in the process of updating the fixed assets register, considering the nature of the assets no major discrepancies are anticipated. Based on the same no impairment is required.

7. There are no earnings in Foreign exchange during the current year as well as in previous year.

8. a) Confirmations are not available for Trade Receivables of Rs. 59,544,278.

b) Short Term Loans and Advances includes Rs. 18,048,821 in respect of which the confirmations are not available with the Company

These items are under close and constant recovery of the management. The Management is hopeful about the recovery of the same, hence no provision has been considered necessary by the management

9. The Company does not have a Designated Chief Financial Officer and Chief Executive Officer though required as per the provisions of the Companies Act, 1956 and Listing Agreement and the accounts have been authenticated by the Directors only.


Mar 31, 2013

NOTE 1 CONTINGENT LIABILITIES NOT PROVIDED FOR

a. Guarantees given by banks in respect of performance bonds and other contracting commitments given in the normal course of business Rs. NIL (PY Rs 2,500,000).

b. The Company has pending claims on customers for variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims for which exact liability can not be ascertained. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly, no provision is considered necessary in respect of these counter claims.

c. The Company has pending arbitration matters for one side for claims and the exact liability and claims are not determinable. There are no claims made against the company whatsoever except as stated above. There are no other pending claims against the Company, except above.

d. Company has long outstanding dues payable to the creditors that may include amount payable to Micro, Small and Medium Scale Industrial undertakings. Interest on the same, if any, is not quantifiable and not provided for.

e. In the opinion of the Management no additional liabilities are anticipated in respect of Income taxes, VAT, Service Tax and other applicable laws in respect of pending assessments.

NOTE 2 SEGMENT REPORTING - ACCOUNTING STANDARD 17

The Company has a single segment namely, ''Civil Construction and Allied Activities'' and hence there are no separate reportable segments as envisaged by the Accounting Standard -17 on Segment Reporting issued by ICAI.

NOTE 3 RELATED PARTY DISCLOSURES - ACCOUNTING STANDARD 18

I. List of Related Parties:

a) Where Control Exists None

b) Key Management Personnel RameshB. Vardhan

RajeshB. Vardhan Anshul G. Gupta

c) Relatives of Key Management None Personnel

d) Joint Venture Diviniti

e) Other Related Parties Vardhan Capital & Finance Limited

Vardhman Growmore Developers Private Limited Vardhman Home Developers Private Limited

NOTE 4 INVESTMENT IN JOINT VENTURE - ACCOUNTING STANDARD 27

The Company has entered into a Joint Venture named "Divimti" for Construction of Low Cost Housing and related Infrastructure work under the Jawaharlal Nehru Scheme in which the partners are as under:

a. Sumer Infrastructure private Limited - 34%

b. Vardhman Concrete Limited - 33%

c. S V Pnova Build Private limited - 33%

Upto 31 March 2012, the Company has credit balance of Rs 7,300,000 in Divimti. During the current year there were no transactions from Diviniti. The closing credit balance of Rs 7,300,000 (which is exclusive of any share of Profit/ Loss in the Joint Venture) is shown under head "Inter Corporate Deposit from Others" in Note No 6.

The accounts of Divimti are not yet finalized and therefore disclosures as required by Accounting Standard - 27 "Financial Reporting of Interest in Joint ventures" are not given.

5. The Company is a Sick Company in terms of Sick Industrial Companies (Special Provision) Act, 1985. The Company has been legally advised by a firm of solicitors that it has an option to apply to the Board for Industrial and Financial Reconstruction; however the Company does not wish to apply. Though the Company''s losses have exceed the net worth, the Company has received large orders and on the basis of positive future projection prepared, the Company is expecting turn around by it self. Therefore the Company believes that there will be turnaround and accordingly the accounts are prepared on a going concern basis.

6. The Management is in the process of updating the fixed assets register, considering the nature of the assets no major discrepancies are anticipated. Based on the same no impairment is required.

7. There are no earnings in Foreign exchange during the year (FY NIL)

8. a) Individual confirmations are not available for Trade Receivables of Rs. 59,544,278 (including non-moving

Trade Receivables of Rs. 36,197,335), Short Term Loans and Advances given of Rs 17,123,101 (including Bank Guarantee Invocation of Rs 9,052,410). These items are under constant scrutiny and follow-up by the Management.

b) Trade receivables include Rs. 361.97 lacs due from a debtor, which is outstanding since long time. The management has taken necessary steps including legal recourse to recover the same. The management is confident for recovery of same, hence no provision has been considered necessary by the management.

The Management does not anticipate any significant discrepancy/ adjustment out of the above and is of the opinion that these would realize the value which is at-least equivalent to the value as stated in the books of account.

9. The company has made one time settlement on 1st October, 2012 with Development Credit Bank for settlement @ Rs. 405 lakhs, payable in 5 installments and the same were paid before 31st March,2013. The one time settlement resulted in an interest waiver of Rs. 92,56,720/-, which has been accounted as other income.

10. The Company does not have a Designated Chief Financial Officer and Chief Executive Officer though required as per the provisions of the Companies Act, 1956 and Listing Agreement and the accounts have been authenticated by the Directors only.


Jun 30, 2010

The Company has received a fresh certificate of incorporation from Registrar of Companies dated 22nd April 2010 changing the name of the Company from Sresscrete India Ltd. to Vardhman Concrete ltd.

1. CONTINGENT LIABILITIES NOT PROVIDED FOR

a) Guarantees given by banks in respect of performance bonds and other contracting commitments given in the normal course of business Rs.19,236,693 /- (Previous year Rs. 14,718,671/-).

b) The Company has pending claims on customers for variation in contract work. In certain cases which are currently under arbitration, the customers have raised counter-claims for which exact liability can not be ascertained. The Company has received legal advice that none of the counter-claims are legally tenable. Accordingly, no provision is considered necessary in respect of these counter claims.

c) The Company has pending arbitration matters for one side for claims and the exact liability and claims are not determinable. There are no claims made against the company what so ever except as stated above. There are no other pending claims against the Company, except above.

d) Company has long outstanding dues payable to the creditors that may include amount payable to Micro, Small and Medium Scale Industrial undertakings. Interest on the same, if any, is not quantifiable and not provided for.

2. In the opinion of the Management no additional liabilities are anticipated in respect of Income taxes, VAT, Service Tax and other applicable laws in respect of pending assessments.

3. The Company has a single segment namely, Civil construction and allied activities and hence there are no separate reportable segments as envisaged by the Accounting Standard - 17 (AS 17) on Segment Reporting issued by ICAI.

4. Related Party Disclosures: (as identified by the management)

Disclosure of related party transactions as per AS -18

I. Particulars of related parties:

a) Where Control Exists None

b) Key Management Personnel Ramesh B. Vardhan

Rajesh B. Vardhan

Anshul G. Gupta

c) Relatives of Key Management None Personnel

d) Other Related Parties

Vardhan Capital & Finance Limited

Vardhman Growmore Developers Pvt. Ltd.

Vardhman Home Developers Pvt. Ltd.

Blue Stock investments Pvt. Ltd.

Vardhman Developers Ltd.

Diwali Capital and Finance Pvt.Ltd.

Vibhuti Construction Pvt.Ltd.

Diwali Developers Pvt.Ltd.

Flower Boom Builders Pvt.Ltd.

Flower Queen Builders Pvt.Ltd.

Vardhman Entertainment and Hospitality Pvt.Ltd.

Vardhman Residency Pvt.Ltd.

Enso Holdings and Finance Pvt.Ltd.

Indelible Holdings Pvt.Ltd.

Vardhan Comtrade Pvt.Ltd.

Servicesmart Consultants and Financial Services Pvt.Ltd.

Comfund Consulting Ltd.

Sunteck Realty Ltd.

Hall & Andersons Ltd.

Vardhman Resources

5. Earnings in Foreign Exchange:

There are no earnings in Foreign exchange during the year (Previous period - NIL)

6. The Company is a Sick Company in terms of Sick Industrial Companies (Special Provision) Act, 1985. The Company has been legally adviced by a firm of solicitors that it has an option to apply to the Board for Industrial and Financial Reconstruction and Company does not wish to apply. Though Companies losses have exceed the net worth, the Company has received orders worth Rs.100 Crores and on the basis of positive future projection prepared, the Company is expecting turn around by it self. The Company has also appointed professional as independent directors. Therefore the Company believes that there will be turnaround and accordingly the accounts are prepared on a going concern basis.

7. Company has obtained valuation reports in respects of property. Based on the same no impairment is required. The Management in the opinion that though fixed assets register is not maintained, considering the nature of the assets no major discrepancies are anticipated.

8. Sundry Debtors Rs.5,97,62,792/- (including non-moving Debtors of Rs.41,499,143/-), advances given for Rs.40,297,620/- and Sundry Creditors of Rs 21,361,078 /- (including non- moving Creditors of Rs.4,557,791/-), advance from customers Rs 29,307,742/-, other liabilities of Rs 6,562,359/-and fixed Deposit with a bank for Rs.411,562/- are under tracing are under constant scrutiny and follow-up by the management. The management does not anticipate any significant discrepancy / adjustment out of the same and is of the opinion that these would realize the same value in the ordinary course of business. Company has defaulted in some of the payments to a Bank. Consequentially interest due is fully provided for.

9. a) The Company has identified long outstanding debit balance of Creditors and not disputed/claimed. There are other debit balances and credit balances which in the opinion of the Management are not recoverable/payable respectively and are not claimed. The same has been appropriately adjusted in Prior Year Adjustments" in schedule R at Rs. 16,85,965/-(Net)

b) Apart from as stated in note a) above the Company has creditors outstanding for more than 3 years; however the Management firmly believe that the same are payable.

c) Creditors may include amount payable to those falling under the category of Micro, Small and Medium Scale Industrial undertakings; however the Company is unable to identify the same.

10. One of the customers of the Company had invoked a bank guarantee of Rs. 9,052,410/- the Company is pursuing the claims aggressively and has been treated as a current asset.

11. The Company did not have a qualified Company Secretary, Designated Chief Financial Officer and Chief Executive Officer though required as per the provisions of the Companies Act, 1956 and Listing Agreement and the accounts have been authenticated by the Directors only.

12. During the year the Company has forfeited 2,34,400 equity shares which were in arrears and the forfeited amount of Rs. 15,70,250/- arising from the same is included in Schedule A of share capital.

13. Previous years figures have been regrouped/ recast/ rearranged wherever necessary to conform to Current Years classification. Previous year figures are for a period of 15 months ending 30th June09, so not comparable with C.Y. 12 months figures.

 
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