Notes to Accounts of Ashima Ltd.
Mar 31, 2018
Note: 1 - Corporate Information:
Ashima Limited is engaged in manufacture of 100% cotton Yarn Dyed Shirting fabrics and Denim fabrics. It offers a wide range of products including basic denims, ring/slub denims, pigment/discharged print, polyester denim, various yarn dyed fabrics like stripes, chambrays,twills, oxford, herringbones, indigo checks, pique, satin, dobbies, etc. It also operates into ready-to-stitch product under the brand name âICONâ.
The company has a state of the art design studio which can cater to the requirements of the best of the high-end customers. Because of its compact size and the product specific model, it possesses versatility in terms of product offering, ranging from 6''s to 12''s counts.
A substantial part of the goods manufactured by the company are meant for exports. Apart from direct exports, the company also sells to garment manufacturers nominated by overseas buyers. The company therefore contributes significantly to the government exchequer in terms of foreign currency earnings and also in terms of payment of various direct and indirect taxes.
The company employs substantial work force and has an impeccable record on labour relations. The company is also committed to environment friendly approach across its manufacturing operations and has many innovations and certifications to its credit on that front.
The company is abreast of changing fashion trends affecting product requirements of brands and international customers. To cater to such product innovation and changing fashion trends as well as to strengthen customer servicing capabilities, the company has recently undertaken a comprehensive modernization programme to make targeted investments into the Denim and Spinfab (shirting) divisions.
The company is a public company domiciled in India and is incorporated under the provisions of the Companies Act, 1956 (now Companies Act, 2013) (''the Act"). Its shares are listed on the Bombay Stock Exchange (BSE Limited) and the National Stock Exchange (National Stock Exchange of India Limited) in India. The registered office of the company is located at Texcellence Complex, Near Anupam Cinema, Khokhara-Mehmedabad, Ahmedabad - 380021.
The financial statements for the year ended 31st March, 2018 were authorised for issue in accordance with a resolution of the directors on 19th May, 2018.
* Note:
Company keeps Axed deposits with the Nationalised / Scheduled banks, which can be withdrawn by the company as per its own discretion / requirement of funds, except the deposits ofRs. 253 Lacs, (Rs. 237 Lacs as at 31st March, 2017 and Rs.219 Lacs as at 1st April, 2016) which is not available for free use as per the court order.
C Rights of Equity Shareholders
(a) Holder of equity shares is entitled to one vote per share.
(b) The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.
(c) In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.
(d) In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.
D 1,50,00,000 Equity Shares of Rs.10/- each at par have been issued to a secured creditor by conversion of debt pursuant to scheme of arrangement u/s 391 of The Companies Act, 1956 approved by Honâble High Court of Gujarat vide order dated 24th September, 2015.
Securities and Terms of Repayment for Secured Long Term Borrowings: a Preference Shares
1% redeemable non-cumulative preference shares of Rs.100/- each fully paid to be redeemed at par at the end of 20th year from the date of allotment. The Company has an option to redeem the preference shares at par at any time after the end of 12 months from the date of allotment.
Rights of Preference Shareholders
(a) As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.
(b) Voting rights of the preference shareholders shall be in proportion as the paid up preference share capital bears to the paid up equity share capital.
(c) Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
b Term Loan from Bank
i The Loan is primarily secured by exclusive charge on the Plant and Machineries financed by the said term loan and secondarily secured by charge on the factory land admeasuring about 30,000 Square meters situated at Mithipur, TalukaManinagar, District Ahmedabad of TP Scheme no. 7 (Khokhara- Mehmedabad) and Registration District Sub-District Ahmedabad - 7 (Odhav).
ii Term Loan from bank is Rs.1304 Lacs, bearing interest rate of 8.25% per annum (Axed), which is repayable in 20 equal installments at quarterly rest starting from August-2018.
c Unsecured Loan
The unsecured loans include Rs.750 Lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFCBank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.
Order dated 18th April, 2016 of the Debt Recovery Tribunal (DRT), Mumbai, directing BBK to refund amount received by it to HDFC and thereupon increase loan amount of Ashima with continuing rate of interest as contractually applicable on the loan amount under intimation to Ashima, was stayed by the Honâble Bombay High Court and the stay continued till disposal of the proceedings before DRT. The proceedings at DRT were completed and Order dated 30th June, 2017 was passed directing BBK (Defendant No. 1) and the Company (Defendant No.2) jointly and severally to pay the suit amount with further simple interest @12% per annum. Recovery Proceedings have been initiated.
The Company filed an application before DRT to review its order dated 30th June, 2017. The matter was reserved for orders. However, DRT has reopened the matter for further arguments. The Company has also filed an Appeal at Debt Recovery Appellate Tribunal, Mumbai (DRAT) against the said DRT order of 30th June, 2017, which is pending. In view of this, thesaid amount of Rs.750 Lacs is continued in the suspense account.
* Note: The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006 and hence disclosures regarding the following matters as required under Section 22 of MSMED Act, 2006 have not been given:
a. Principal amount and the interest due thereon remaining unpaid to any suppliers as at the end of accounting year;
b. Interest paid during the year;
c. Amount of payment made to the supplier beyond the appointed day during accounting year;
d. Interest due and payable for the period of delay in making payment;
e. Interest accrued and unpaid at the end of the accounting year; and
f. Further interest remaining due and payable even in the succeeding years, until such date when the interest dues above are actually paid to the small enterprise;
The Company is making efforts to get the confirmations from the suppliers as regard to their status under the MSMED Act.
Significant Estimates :
As regards deferred tax as per Ind AS-12 on âIncome Taxesâ there is a net deferred tax asset for the past years and for the period up to 31st March, 2018. The Company has taken conservative view of future profitability. Accordingly, the Company has not recognized deferred tax asset.
Note: 2 - Disclosures as required by Ind AS-19 Employee Benefits:
The Company has classified the various benefits provided to employees as under:-
(a) Defined benefit plans Gratuity
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. The gratuity plan is a funded plan administered by a Trust and t he Co mpany makes contributions to recognised Trust. In accordance with Indian Accounting Standard 19, actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions.
Economic Assumptions
The discount rate and salary increases assumed are the key financial assumptions and should be considered together; it is the difference or âgapâ between these rates which is more important than the individual rates in isolation.
Discount Rate
The discounting rate is based on the gross redemption yield on medium to long term riskfree investments. The estimated term of the benefits/obligations works out to eight years.
Salary Escalation Rate
The salary escalation rate usually consists of at least three components, viz. regular increments, price inflation and promotional increases. In addition to this, any commitments by the management regarding future salary increases and the Companyâs philosophy towards employee remuneration are also to be taken into account.
(b) Leave Encashment
Liability for the Leave Encashments for Rs.102 Lacs has been fully provided for by the company.
Note: 3 - Segment Information:
The companyâs operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable. The company sells goods in domestic market and also exports them to various countries. However, for the year as well as previous year, export sales, which is the reportable segment, is less than the prescribed threshold of 10% of total revenue, hence secondary segment reporting is not applicable as per Ind AS -108 on Operating Segment.
Note: 4 - Assets Held for Sale and Exceptional items:
Pursuant to the companyâs plan to meet the balance funds requirement for secured debt settlement as per court sanctioned scheme as well as funds requirements for its textile operations, the Board of directors of the company has constituted an empowered committee to identify disposable assets, which are not required for its textile operations. Accordingly, the said committee has identified some portion of the land which is not required for the textile operations and the sale proceeds can be utilized for settlement with the creditors and also for the textile operations.
The land identified as disposable assets have been classified as âNon-current assets held for saleâ until the same is sold and is disclosed separately in the financial statements. The management of the company expects to dispose off the assets classified as âNon-current held for saleâ within a period of 12 months.
The Exceptional items in the Statement of Profit and Loss represents the difference between the sale value and the actual cost of the respective assets classified as asset held for sale, which includes land and other assets. Accordingly, the company has recognized the gain of Rs.14540 Lacs (financial year 2016-17 - Rs.5255 Lacs), which includes an amount of Rs.1945 Lacs (financial year 2016-17 - Rs.1506 Lacs) transferred from Revaluation Reserve to Statement of Profit and Loss on disposal of such assets.
Note: 5 - Financial Instruments:
A Fair values hierarchy:
Financial assets and financial liabilities measured at fair value in the financial statements are grouped into three Levels of a fair value hierarchy. The three Levels are defined based on the observability of significant inputs to the measurement, as follows:
Level 1 : quoted prices (unadjusted) in active markets for financial instruments.
Level 2 : The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity specific estimates.
Level 3 : If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
B Risk Management:
The Companyâs activities expose it to market risk, liquidity risk, interest risk and credit risk. This note explains the sources of risk which the entity is exposed to and how the entity manages the risk and the related impact in the financial statements.
Risk Management is embedded in the companyâs operating framework. The Audit Committee of the Board evaluates the Risk Management systems and the Board takes responsibility for the total process of Risk Management in the organization, which includes framing, implementing and monitoring Risk Management Plan.
The Company does not actively engage in the trading of financial assets for speculative purposes nor does it write options.
The most significant financial risks to which the Company is exposed are described below:
a Credit risk:
Credit risk arises from the possibility that customer may not be able to settle its obligations as agreed. The company is exposed to credit risk from trade receivables, bank deposits and other financial assets.
The Company periodically assesses the financial reliability of the counter party taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Party-wise credit is monitored and reviewed accordingly.
Bank deposits:
The company maintains its Cash and cash equivalents and Bank deposits with reputed and highly rated banks. Hence, there is no significant credit risk on such deposits.
Trade Receivable:
The Company is exposed to credit risk in the event of non-payment by customers. Major part of sales is made on âDelivery against paymentâ basis, hence the credit risk is insignificant. To eliminate credit risk further, the high value sales are made by adequate coverage through Letters of Credit, wherever possible. The Company trades with recognized and credit worthy customers. It is the Companyâs policy that all customers who wish to trade on credit terms are subjected to scrutiny and periodic review. In addition, receivable balances are monitored on an on-going basis with the result that the Companyâs exposure to bad debts is not significant.
Further, credit risk concentration with respect to trade receivables is mitigated by the Companyâs large customer base, widely distributed both economically and geographically. Adequate expected credit losses are recognized as per the assessments based on historic data and prevalent market conditions.
Allowance for bad and doubtful debts amounts toRs. 76 Lacs as at 31st March, 2018. The Company has made allowance of Rs. 24 Lacs (Previous Year-Rs. Nil), against trade receivables ofRs.76 Lacs (Previous year - Rs.52 Lacs).
b Liquidity risk:
a Liquidity risk is the risk that the Company may not be able to meet its present and future cash and collateral obligations without incurring unacceptable losses, b Management monitors rolling forecasts of the Companyâs liquidity position and cash and cash equivalents on the basis of expected cash flows. The Company takes into account the liquidity of the market in which the entity operates. In addition, the Companyâs liquidity management policy involves considering the level of liquid assets necessary to meet these.
c Maturities of financial liabilities:
The tables below analyse the Companyâs financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities.
c Foreign currency risk:
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the US Dollar, GBP and EURO. Foreign exchange risk arises from recognised assets and liabilities denominated in a currency that is not the Companyâs functional currency. The company uses forward contracts for high valued foreign currency transaction to hedge the foreign currency risk.
Foreign currency risk exposure:
The Companyâs exposure to foreign currency risk at the end of the reporting period expressed in '' are as follows:
Sensitivity Analysis:
The sensitivity of profit or loss and equity to changes in the exchange rates arises mainly from foreign currency denominated financial instruments: *
d Interest rate risk:
Interest rate risk is the risk that the fair value of future cash flow of the financial instrument may fluctuate because of the change in market interest rates.
The Companyâs policy is to minimise interest rate cash flow risk exposures on long-term financing. As at 31st March, 2018, the Company is not exposed to changes in market interest rates through bank borrowings as all its bank borrowings are at Axed interest rate.
Also, the Company opts for investments in Fixed Deposits at Axed interest rates.
e Price risk:
The Company has no significant exposure to price risk arising from investments in mutual funds, as the investments are in debt funds.
Note: 6 - Capital Management:
The Companyâs capital management objectives are: a to ensure the Companyâs ability to continue as a going concern, b to provide an adequate return to shareholders, c maintain an optimal capital structure to reduce the cost of capital.
Management assesses the Companyâs capital requirements in order to maintain an efficient overall financing structure while avoiding excessive leverage. This takes into account the subordination levels of the Companyâs various classes of debt. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.
Note: 7 - First Time Adoption of Ind AS:
The accounting policies set out in the note here have been applied in preparing the financial statements for the year ended 31st March, 2018, the comparative information presented in these financial statements for the year ended 31st March, 2017 and in the preparation of an opening Ind AS balance sheet as at 1st April, 2016 (the Companyâs date of transition).
In preparing its opening Ind AS balance sheet, the Company has adjusted the amounts reported previously in financial statements prepared in accordance with the accounting standards notified under Companies (Accounting Standards) Rules, 2006 (as amended) and other relevant provisions of the Act (previous GAAP). An explanation of how the transition from previous GAAP to Ind AS has affected the Companyâs financial position and financial performance is set out in Note 42.
Exemptions and exceptions availed:
Set out below are the applicable Ind AS 101 optional exemptions and mandatory exceptions applied in the transition from previous GAAP to Ind AS.
A Deemed cost:
Ind AS 101 permits a first-time adopter to elect to continue with the carrying value for all of its property, plant and equipment as recognised in the financial statements as at the date of transition to Ind AS, measured as per the previous GAAP and use that as its deemed cost as at the date of transition after making necessary adjustments required under other Ind AS. This exemption can also be used for intangible assets covered by Ind AS 38 âIntangible Assetsâ.
Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying values.
B Estimates:
An entityâs estimates in accordance with Ind ASs at the date of transition to Ind AS shall be consistent with estimates made for the same date in accordance with previous GAAP (after adjustments to reflect any difference in accounting policies), unless there is objective evidence that those estimates were in error.
Ind AS estimates as at 1st April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP.
C Classification of financial assets:
As per the requirements of Ind AS 101 the Company assessed classification of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
D De-recognition of financial assets and liabilities:
Ind AS 101 requires a first-time adopter to apply the de-recognition provisions of Ind AS 109 prospectively for transactions occurring on or after the date of transition to Ind AS. The company has followed such policy. However, there were no assets or liabilities to be derecognised.
E Transition to Ind AS- Reconciliations:
The following reconciliations, as provided in Note 42, provide a quantification of the effect of significant differences arising from the transition from previous GAAP to Ind AS as required under Ind AS 101:
i. Reconciliation of Equity as at 1st April 2016 (Transition date) and as at 31st March, 2017
ii. Reconciliation of Net Profit for the year ended 31st March, 2017
F Classification and Presentation for Assets held for sale:
Under the previous GAAP, the concept of asset held for sale did not exist. As per Ind AS 105, Non-Current Assets held for sale are required to be identified as held for sale if the carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considerably highly probable.
Ind AS 105 lays down detailed guidelines and criteria in this regard. Based on the assessment performed by the management, certain land and certain other items of property, plant and equipment are classified as held for sale under Ind AS and the same have been presented separately from the other assets. There is no impact on the total equity as a result of this adjustment.
G Discounts to customers:
Under the previous GAAP, discounts to the customers were shown as a part of selling and distribution expenses. Under Ind AS, revenue from sale of products is recognised at net of discounts and incentives to the customers. Thus, sale of products under Ind AS has decreased by ''55 Lacs during the previous year with a corresponding decrease in selling and distribution expenses.
@ Effective Interest rate on Long term Borrowings:
- As required under the Ind AS 109, transaction costs incurred towards origination of term loan borrowings were charged to Statement of Profit and Loss account in FY 2016-17. Under Ind-AS, the same has been re-considered as asset and will be recognised in the Statement of Profit and Loss over the tenure of the borrowing as interest expense, computed using the effective interest rate method, with corresponding effect being in Long term borrowings to the extent attributable to current maturity of long term debts.
Under previous GAAP, the transaction cost were charged to Statement of Profit and Loss as and when incurred. Consequently, the profit for the year ended 31st March, 2017 has been increased by Rs.32 Lacs, thereby increasing the retained earnings with a corresponding increase in asset (prepaid expenses).
# Fair Value adjustment and Amortisation effect on Long Term Financial Instrument (Preference Shares):
Preference Shares are considered as debt as per Ind AS, which were included in Equity as per previous GAAP. Under previous GAAP, the company carried the amount of Preference Shares issued at the value at which they were redeemable at a future date. Under Ind-AS, the amount of Preference Shares have been fair valued and discounted to the date of balance sheet for respective years, and the discounted value is carried in the balance sheet. The difference between the fair value and payable amount at future date is adjusted in the retained earnings from the opening balance as at 1st April, 2016. As per the requirement of Ind-AS, the amount is to be amortised each year, which affects the Statement of Profit and Loss of the previous years. The amortisation for the financial year 2016-17 works out to be Rs.36 Lacs, which has reduced the Net Profit and retained earnings of previous year.
$ Other adjustments:
Security Deposits:
Under previous GAAP, the security deposits given and taken by the company were carried at the transacted amount. Under Ind-AS, all financial assets and liabilities are required to be recognised at fair value. Accordingly, the amounts of security deposits (given and taken by the company) have been fair valued and the difference between transacted value and fair value has been recognised as other current asset or liability.
Consequently, security deposits given by the company as at 1st April, 2016 have been reduced by Rs.4 Lacs, the Prepaid expenses as at 1st April, 2016 have increased by Rs.2 Lacs and retained earnings as at 1st April, 2016 has reduced by Rs.2 Lacs. Security Deposits taken by the company as at 1st April, 2016 has reduced by Rs.2 Lacs, the other current financial liabilities as at 1st April, 2016 have increased by Rs.1 Lacs and retained earnings as at 1st April, 2016 have increased by Rs.1 Lacs.
£ Actuarial loss on defined benefit plan:
The Company recognises costs related to its post-employment defined benefit plan on an actuarial basis. Under previous GAAP, the entire cost, including actuarial gains and losses, was charged to Statement of Profit or Loss. Under Ind AS, re-measurements gains and losses (comprising of actuarial gains and losses, the effect of the asset ceiling, excluding amounts included in net interest on the net defined benefit liability and the return on plan assets excluding amounts included in net interest on the net defined benefit liability) are recognised immediately in the balance sheet with a corresponding debit or credit to retained earnings through OCI.
Other comprehensive income:
Under Ind AS, all items of income and expense recognised in a period should be included in profit or loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in Statement of Profit or Loss but are shown in the Statement of Profit and Loss as âother comprehensive incomeâ include remeasurements of defined benefit plans and fair value gains or (losses) on FVOCI equity instruments and corresponding tax impact thereon.
The amount of actuarial gain and loss on defined benefit plan of Rs.116 Lacs for the previous year ended 31st March, 2017 was grouped under Employee Benefits as per previous GAAP. Under Ind AS, the same has been reduced from Employee Benefits and reclassified as other comprehensive income. The concept of other comprehensive income did not exist under previous GAAP.
Statement of cash flows:
The transition from previous GAAP to Ind AS does not have a material impact on the statement of cash flows.
Mar 31, 2017
1. Shares Held by holding/ultimate holding company and/or their subsidiaries/associates
Out of issued, subscribed and paid up capital:
Nil (Previous Year Nil) Equity Shares are held by holding company
Nil (Previous Year Nil) Equity Shares are held by ultimate holding company
Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company
Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.
2. The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:
The company issued 1,50,00,000 equity shares of Rs.10/- each aggregating to Rs.1500 Lacs by conversion of secured debt as explained in Note 2.2(a)(3) above. The company has not issued any bonus shares and has not bought back any shares in year under review and preceding five years.
3. Details of Unpaid calls due from Directors or officers
There were no unpaid calls due from Directors/Officers of the Company.
4. Rights of Shareholders, Dividend and Repayment of Capital:
Rights of Equity Share holders
5. Holder of equity shares is entitled to one vote per share.
6. The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.
7. In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.
8. In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders.
Rights of Preference Share holders
9. As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.
10. Voting rights of the preference shareholders shall be in proportion as the paid up equity share capital bears to the paid up preference share capital.
11. Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
12. Loans and advances include an amount of Rs.1.66 lacs (Previous year Rs. 1.41 lacs) due from officers of the company.
13. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.
14. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year 2017-18 (Previous year Rs. NIL).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on âAccounting for Taxes on Incomeâ issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognized the said deferred tax asset while preparing the accounts for the year under review.
The Income-tax assessments of the company are completed up to A.Y 2014-15. In respect of assessment for A.Y 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.
15. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.
16. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 128 of the Companies Act, 2013.
17. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings. The company has provided for interest of Rs.NIL (Previous year Rs.NIL) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs.NIL (Previous year Rs.NIL) as at the balance sheet date. This information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.
18. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.
Order dated 18.4.2016 of the Debt Recovery Tribunal (DRT), Mumbai, directing BBK to refund amount received by it to HDFC and thereupon increase loan amount of Ashima with continuing rate of interest as contractually applicable on the loan amount under intimation to Ashima, was stayed by the Hon''ble Bombay High Court and the stay continues till disposal of the proceedings before DRT. The proceedings at DRT are under completion stage. Until such time the DRT pronounces its order, the said amount of Rs.750 lacs is continued in the suspense account.
19. The Company has fulfilled all its commitments and obligations under the Scheme of Arrangement for Reconstruction and Compromise between the Company and its Equity Shareholders, Preference Shareholders and Secured Creditors under sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (âthe Schemeâ) which had become effective on 5th October, 2015. It has paid entire settlement amount as per the scheme. It also prepaid amounts due to a secured creditor at present value arrived at by discounting the amounts due on various dates specified in the scheme and accounted for the same as prescribed in the Scheme.
20. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.
21. Extraordinary item represents profit on sale of part of surplus land mainly to repay dues to secured creditors settled under the Scheme of Arrangement.
22. As stated in the notes to financial statements for the previous year, equity shares under Rights Issue of 8,00,85,089 equity shares of Rs. 10 each at par aggregating to Rs.8008.51 Lacs were allotted on 5th May, 2016. Further, a secured creditor was allotted 1,50,00,000 equity shares of Rs. 10 each at par aggregating to Rs. 1500.00 Lacs on the same date. Consequently, upon the allotment, the issued, subscribed and paid up equity share capital stands at Rs.12845.39 Lacs. The amounts appearing as share application money pending allotment, refunds due and share application money collected have been duly adjusted upon allotment of equity shares.
23. Segment reporting (Accounting Standard - 17):
The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.
The company sells goods in domestic market and also exports them to various countries. However, for the year as well as previous year, export sales, which is the reportable segment, is less than the prescribed threshold of 10% of total revenue, hence secondary segment reporting is not applicable as per AS - 17 on Segment Reporting.
24. Based on review carried out as on 31.03.2017, no impairment loss is required to be provided for as per Accounting Standard 28 on âImpairment of Assetsâ.
25. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.
26. Remittances in foreign currency on account of dividend: NIL
27. Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets. As per our report of even date attached
Mar 31, 2016
1 reconciliation of number of shares outstanding:
2 Equity Share: The Company has issued shares on Right Basis, which are pending allotment, as per Note No.41. As a result, there is no addition to issued equity share capital during the year.
3 Preference Shares: The Company has not issued or bought back any preference share during the year under review. However, as provided for in the Scheme of Arrangement under section 391 of the Companies Act, 1956, which has become effective on 5th October, 2015 the company has issued 20,50,000 1% Redeemable Non-cumulative Preference Shares of Rs.100/- each aggregating to Rs.2050.00 Lacs as fully paid up against existing 4,50,000 13% redeemable cumulative preference shares of Rs.100/- each fully paid up and 16,00,000 11% redeemable cumulative preference shares of Rs.100/- each fully paid up, with 1 new Preference share being issued against every existing Preference Share. The aggregate issued and paid up Preference Share Capital remains the same in number and value terms.
4 shares Held by holding/ultimate holding company and/or their subsidiaries/associates
Out of issued, subscribed and paid up capital:
Nil (Previous Year Nil) Equity Shares are held by holding company
Nil (Previous Year Nil) Equity Shares are held by ultimate holding company
Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding company
Nil (Previous Year Nil) Equity Shares are held by associates of holding or ultimate holding company.
5 (a) the details of equity shareholders holding more than 5 % of issued equity share capital:
6 The details of bonus shares issued, shares issued for consideration otherwise than in cash and shares bought back in preceding five years:
The company has not issued any bonus shares, shares for consideration otherwise than in cash and has not bought back any shares in year under review and preceding five years.
7 Details of Unpaid calls due from Directors or officers
There were no unpaid calls due from Directors/Officers of the Company.
8 Rights of Shareholders, Dividend and Repayment of Capital:
Rights of Equity Share holders
(a) Holder of equity shares is entitled to one vote per share.
(b) The Company declares and pays dividends in Indian Rupees. The Companies Act, 2013 provides that the Dividend shall be declared only out of the profits of the relevant year or out of the profits of any previous financial year(s) after providing for depreciation in accordance with the provisions of the Act and the Company may transfer such percentage of its profits for that financial year as it may consider appropriate to the reserves of the Company.
(c) In case of inadequacy or absence of profits in any year, the Company may declare dividend out of free reserves subject to the condition that the rate of dividend shall not exceed average of the rates at which dividend was declared by the Company in three years immediately preceding that year.
(d) In the event of Liquidation of the Company, the holders of shares shall be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The amount distributed will be in proportion to the number of equity shares held by the shareholders. Rights of Preference Share holders
(a) As per Section 47(2) of the Companies Act, 2013, Preference Shareholders shall have right to vote only on resolutions placed before company which directly affect their rights attached to preference shares and any resolution for winding up of the company or for repayment or reduction of share capital shall be deemed directly to affect their rights.
(b) Voting rights of the preference shareholders shall be in proportion as the paid up equity share capital bears to the paid up preference share capital.
(c) Where the dividend in respect of a class of preference shares has not been paid for a period of two years or more, such class of preference shareholders shall have a right to vote on all the resolutions placed before the company.
9. Appropriations out of Balance in Profit and Loss Account:
There is no appropriation out of Profit and Loss Account for the period / previous year.
Notes:
10 All the debentures and loans are secured/ to be secured by charge on plant and machinery and land and building of the compamy situated at Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at Mithipur, Ahmedabad in the State of Gujarat and the land and building situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani Chambers situated at Nariman Point, Mumbai-400021. The details of debentures in terms of respective debenture trust deeds and/or memorandum of entry signed and executed by the company are as per details given below.
11 Secured by current assets including stock of raw materials, stock-in-process, finished goods, stores, spares, color chemicals and book debts and second charge on movable and immovable assets of the company.
12. Terms of repayment of term Loans:
The rate of interest and terms of repayment of debt outstanding as on 31.03.2016 is as follows, which are as provided in the Scheme of Arrangement u/s. 391 of the Companies Act, 1956 which became effective on 5.10.2015:
13. FOREIGN CURRENCY TRANSACTIONS:
The company used forward exchange contracts to hedge against its foreign currency exposures relating to the underlying transactions and firm commitments. The company did not enter into any contract to derivative instruments for trading or speculative purposes. The foreign currency exposure not hedged as at March 31, 2016 are as under:
14. Loans and advances to staff include Rs.1.41 lacs (Previous year Rs. 0.65 lacs) due from officers of the company.
15. The Sales Tax authorities have issued notices for demand of Sales Tax of Rs. 747.93 lacs, penalty of Rs.619.58 lacs and interest of Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment years. The company disputes the said demand. The company has filed appeals against these notices and got stay orders against the same.
16. During the year under review due to loss the company has not provided for Income-tax for the Assessment Year 2016-17 (Previous year Rs. NIL). Wealth tax has been abolished w.e.f. Assessment year 2016-17(Wealth tax provision of Rs.0.32 lacs was made for the previous year).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on âAccounting for Taxes on Incomeâ issued by The Institute of Chartered Accountants of India, there is a net deferred tax asset for the past years and for the current year after adjusting unabsorbed depreciation and carry forward losses of the past years. Considering the provisions of the AS-22 and as a matter of prudence, the company has not recognized the said deferred tax asset while preparing the accounts for the year under review.
The Income-tax assessments of the company are completed up to A.Y 2013-14. In respect of assessment for A.Y 1996-97, income-tax department had disputed some of the claims and raised demand of Rs. 676.66 lacs for tax and interest. The company had preferred an appeal against the said assessment and had succeeded before Commissioner of Income-tax (Appeal) and demand has been deleted. However, Income-tax department has preferred further appeal before the Income-tax Appellate Tribunal for which Tribunal has sent back file to Assessing Officer with certain directions for which appeal effect order is yet to be received from the Assessing Officer.
17. The cost of purchase is arrived at after considering effect of any settlement reached with the suppliers during the year.
18. Export benefits/incentives in respect of duty draw back and purchase of raw material from local suppliers (against advance released orders under duty exemption scheme) are accounted on accrual basis in order to follow the system of accounting which is mandatory as per the provisions of section 209 of the Companies Act, 1956.
19. There are no amounts outstanding for more than 30 days in respect of small scale industrial undertakings. The company has provided for interest of Rs.NIL (Previous year Rs.NIL) on outstanding for more than 45 days payable to Micro, Small and Medium enterprises. The total amount due to these parties is Rs. NIL (Previous year Rs.NIL) as at the balance sheet date. This information has been determined to the extent such parties have been identified on the basis of information available with the company. This has been relied upon by the auditors.
20. The unsecured loans include Rs. 750.00 lacs in the suspense account representing amount of a cheque drawn on HDFC Bank given by the company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing house because of the delay by HDFC Bank in returning the cheque to BBK. The dispute is the subject matter of notice correspondence between HDFC Bank and BBK and under dispute between the company, BBK and HDFC Bank in various courts.
The Debt Recovery Tribunal (DRT), Mumbai, vide its order dated 18.4.2016, has directed BBK to refund amount received by it to HDFC and thereupon increase loan amount of Ashima with continuing rate of interest as contractually applicable on the loan amount under intimation to Ashima. No such intimation has been received by Ashima in pursuance to the said Order and the Company has decided to appeal against this order, hence the said amount of Rs.750 lacs is continued in the suspense account.
21. The Company came out with a Rights Issue of 8, 00, 85,089 equity shares of Rs. 10 each aggregating to Rs.8008.51 Lacs at par in the ratio of 24:10 to part-finance settlement of secured debt under Scheme of Arrangement u/s. 391 of the Companies Act, 1956. The issue closed on 2nd December, 2015 and the basis of allotment was approved by BSE Limited, the designated Stock Exchange, on 11th December, 2015. The process of refund, allotment and listing of shares was to be completed by 17th December, 2015, but the company could not complete these processes due to a status-quo order passed by the Debt Recovery Tribunal (âDRTâ), Mumbai, restraining Bankers to the Issue from release of any funds and the Company from withdrawing the funds collected in the Rights Issue, in a pending case which was filed by HDFC Bank against the Company.
Subsequently, several legal cases and processes followed at DRT the Debt Recovery Appellate Tribunal and Hon. Bombay High Court. As per various orders of The Hon. Bombay High Court including final order dated 3rd May 2016, which directed the Bankers to release the funds collected under Rights Issue towards refund and release allotment money which allowed company to complete the further processes of the Rights Issue, allotment was made on 5th May, 2016 and refund amounts were processed on 7th May, 2016. The shares of the company under the Rights Issue will be listed shortly upon completion of certain other formalities.
The Company has sufficient authorized share capital to cover the shares issued under the Rights Issue.
The âshare application money pending allotmentâ amounting to Rs. 8008.51 lacs has been disclosed as a separate item below Shareholders'' Funds in the Balance Sheet. Refunds due, amounting to Rs.179.12 lacs, under non-ASBA applications has been disclosed as part of Other Current Liabilities. Share application money amounting to Rs.813.13 Lacs collected through non-ASBA applications has been disclosed as part of Cash and Bank Balance. Allotment money collected through ASBA applications amounting to Rs.1156.78 lacs have been disclosed as part of Other Current Assets.
22. The expenditure incurred in respect of assets damaged for which insurance claim has been received has been debited under respective heads.
23. The company has componentized its fixed assets and has separately assessed the life of the major components forming part of the main asset. Consequently, the depreciation charge for the year is higher by Rs.30.56 lacs.
24. During the year, the Company filed a Scheme of Arrangement for Reconstruction and Compromise between the Company and its Equity Shareholders, Preference Shareholders and Secured Creditors under sections 391 to 394 read with Sections 100 to 103 of the Companies Act, 1956 and Section 52 of the Companies Act, 2013 (the âSchemeâ). The Equity Shareholders, Preference Shareholders and Secured Creditors of the company, present and voting, approved the said Scheme unanimously at their respective court convened meetings held on 20th August, 2015. The Honorable High Court of Gujarat sanctioned the Scheme vide its order dated 24th September, 2015 and the Scheme became effective on 5th October, 2015 upon filing of the same with the Registrar of Companies at Ahmedabad.
Key features of the Scheme are as follows:
(a) As full and final settlement of the entire Outstanding Secured Debts of the Secured Creditors, the Company has offered three different settlement options consisting of cash payments (to be made upon the Scheme becoming effective), deferred payments (to be paid in annual installments over a period of 5 years) and conversion of a part of debt into equity shares. The deferred payments will be secured by an exclusive charge on assets and will carry interest @15% under Option I. In case of equity shares, the Company shall also pay to Secured Creditors the âShortfall Amountâ, if any, upon disposal of shares by the Secured Creditors as more particularly detailed in the Scheme. As per the options selected by various secured creditors, cash payments amount to Rs.11,075.21 lacs, deferred payments amount to Rs.8,782.60 lacs and amount of debt to be converted into equity shares amounts to Rs.1,500 lacs.
(b) The balance outstanding secured debts together with outstanding interest, penalty and other charges, etc. whether provided or not in the books of the Company to be regarded as waived.
(c) Existing charge or security held by the Secured Creditors shall be released upon occurrence of various milestones provided in the Scheme.
(d) Preference Shareholders to be allotted 1(one) 1% Redeemable Non Cumulative Preference Share of the face value of Rs.100/- each for every 1(One) Redeemable Cumulative Preference Share of the face value of Rs.100/- each held by them. Arrears of dividend of the Preference Shareholders shall be considered as waived.
(e) Funds required for the purpose of payments under the Scheme are to be raised through various sources including funding by the Promoters, proceeds from the Rights Issue of the equity shares of the company and realization of its current/fixed assets.
(f) The Scheme provides for various Events of Default that include non-payment of any amount as per the provision of the Scheme, default in issuance of Equity Shares, non-payment of Shortfall amount, if any, etc. In case of occurrence of any of the Event of Default, the Secured Creditors have stringent rights including cancellation of reliefs and concessions given under the Scheme, forfeiture of monies already paid to them and taking over the management control and enforcement of security interest subject to applicable laws.
The Company has given effect to the Scheme in its books of accounts during the year.
25. Retirement Benefits (Accounting Standard - 15):
Provision for Gratuity
The following table sets out the status of the gratuity plan as required under AS 15 on âEmployee Benefitsâ. 45.1 Reconciliation of opening and closing balances of the present value of the defined benefit and fair value of the plan assets.
26. Segment reporting (Accounting Standard - 17):
The company''s operations relate only to manufacture and sale of textile and related products and hence primary reporting disclosure is not applicable.
The company sells goods in domestic market and also exports them to various countries. Accordingly, secondary segment reporting is based on sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and liabilities are used interchangeably between the segments and hence cannot be allocated to segments.
Note: For F.Y 2015-16, the Preference shares being non-cumulative in nature, no dividend is considered in view of loss. For F.Y 2014-15 the old 13% and 11% Preference shares being cumulative in nature, its dividend has been added to loss for the year in the above calculation, though the appropriation for the same has not been done.
27. Based on review carried out as on 31.03.2016, no impairment loss is required to be provided for as per Accounting Standard 28 on âImpairment of Assetsâ.
28. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year''s figures.
29. Remittances in foreign currency on account of dividend: NIL
30. Earnings in foreign currency:
- Figures less than Rs. 500/- which are required to be shown separately have been shown as actual in brackets.
Mar 31, 2015
1. Reconciliation of number of shares outstanding:
The company has not issued or bought back any equity or preference
shares during the year under review.
2. Shares Held by holding/ultimate holding company and/or their
subsidiaries/associates
Out of issued, subscribed and paid up capital:
Nil (Previous Year Nil) Equity Shares are held by holding company
Nil (Previous Year Nil) Equity Shares are held by ultimate holding
company
Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding
company
Nil (Previous Year Nil) Equity Shares are held by associates of holding
or ultimate holding company.
3.The details of bonus shares issued, shares issued for consideration
otherwise than in cash and shares bought back in preceding five years:
The company has not issued any bonus shares, shares for consideration
otherwise than in cash and has not bought back any shares in year under
review and preceding five years.
4. Details of Unpaid calls due from Directors or officers
There were no unpaid calls due from Directors/Officers of the Company.
5. Rights of Shareholders, Dividend and Repayment of Capital:
Rights of Equity Share holders
(a) Holder of Equity Shares is entitled to one vote per share.
(b) The Company declares and pays dividends in Indian Rupees. The
Companies Act, 2013 provides that the Dividend shall be declared only
out of the profits of the relevant year or out of the profits of any
previous financial year(s) after providing for depreciation in
accordance with the provisions of the Act and the Company may transfer
such percentage of its profits for that financial year as it may
consider appropriate to the reserves of the Company.
(c) In case of inadequacy or absence of profits in any year, the
Company may declare dividend out of free reserves subject to the
condition that the rate of dividend shall not exceed average of the
rates at which dividend was declared by the Company in three years
immediately preceding that year.
(d) In the event of Liquidation of the Company, the holders of shares
shall be entitled to receive the remaining assets of the Company, after
distribution of all preferential amounts. The amount distributed will
be in proportion to the number of equity shares held by the
shareholders.
Rights of Preference Share holders
(a) As per Section 47(2) of the Companies Act, 2013, Preference
Shareholders shall have right to vote only on resolutions placed before
company which directly affect their rights attached to preference
shares and any resolution for winding up of the company or for
repayment or reduction of share capital shall be deemed directly to
affect their rights.
(b) Voting rights of the preference shareholders shall be in proportion
as the paid up equity share capital bears to the paid up preference
share capital.
(c) Where the dividend in respect of a class of preference shares has
not been paid for a period of two years or more, such class of
preference shareholders shall have a right to vote on all the
resolutions placed before the company.
6. Appropriations out of Balance in Profit and Loss Account:
There is no appropriation out of Profit and Loss Account for the year /
previous year.
7. All the debentures and loans are secured/ to be secured by charge
on plant and machinery and land and building of the company situated at
Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at
Mithipur, Ahmedabad in the State of Gujarat and the land and building
situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani
Chambers situated at Nariman Point, Mumbai - 400 021. The details of
debentures in terms of respective debenture trust deeds and/or
memorandum of entry signed and executed by the company are as per
details given below.
8. Secured by current assets including stock of raw materials,
stock-in-process, finished goods, stores, spares, colour chemicals and
book debts and second charge on movable and immovable assets of the
company.
9. Terms of Repayment of Debentures and Loans:
The company has filed draft scheme of arrangement, which provides for
debt settlement as elaborately referred to in Note No.44.
The draft scheme provides for three options for debt settlement, with
each option specifying payment of certain portion of outstanding
principal secured debt, as settlement money, over varying time period
extending upto 31.03.2020 and includes, in one option, issue of equity
shares for certain portion of settlement amount. As per one of the
options, interest is payable at 15% p.a. on payments to be made after
1.4.2015.
10. Period and Amount of Default:
As stated above, the company has filed draft scheme of arrangement,
which provides for debt settlement with secured creditors. Secured
creditors accounting for about 99% of total secured debt of the company
have given letters to the company indicating their in-principal
approval for preference of options from those given in the scheme. The
status of the scheme is as given in note no.44.
In view of this, there are no defaults in repayment of dues to banks,
financial institutions and debenture holders.
(Rupees in lacs)
As at As at
Mar. 31,15 Mar. 31, 14
11. CONTINGENT LIABILITIES AND
COMMITMENTS (TO THE EXTENT NOT
PROVIDED FOR)
(A) Claims against the company not 2,781.51 2,691.44
acknowledged as debt
(B) Guarantees - 24,625.14
(C) Other money for which the company 44.00 40.73
is contingently liable
TOTAL 2,825.51 27,357.31
12. Loans and advances to staff include Rs.0.65 lacs(Previous year Rs.
0.63 lacs) due from officers of the company.
13. The Sales Tax authorities have issued notices for demand of Sales
Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of
Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment
years. The company disputes the said demand. The company has filed
appeals against these notices and got stay orders against the same.
14. During the year under review due to loss the company has not
provided for Income-tax for the Assessment Year (A.Y) 2015-16 (Previous
year Rs. NIL). Provision for wealth-tax is made of Rs.0.32 lacs
(Previous year Rs. 0.39 lacs).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of Chartered
Accountants of India, there is a net deferred tax asset for the past
years and for the current year after adjusting unabsorbed depreciation
and carry forward losses of the past years. Considering the provisions
of the AS-22 and as a matter of prudence, the company has not
recognised the said deferred tax asset while preparing the accounts for
the year under review.
The Income-tax assessments of the company are completed up to A.Y
2012-13. In respect of assessment for A.Y 1996-97, income-tax
department had disputed some of the claims and raised demand of Rs.
676.66 lacs for tax and interest. The company had preferred an appeal
against the said assessment and had succeeded before Commissioner of
Income-tax (Appeal) and demand has been deleted. However, Income-tax
department has preferred further appeal before the Income-tax Appellate
Tribunal for which Tribunal has sent back file to Assessing Officer
with certain directions for which appeal effect order is yet to be
received from the Assessing Officer.
15. The cost of purchase is arrived at after considering effect of any
settlement reached with the suppliers during the year.
16. Export benefits/incentives in respect of duty draw back and
purchase of raw material from local suppliers (against advance released
orders under duty exemption scheme) are accounted on accrual basis in
order to follow the system of accounting which is mandatory as per the
provisions of section 128 of the Companies Act, 2013.
17. There are no amounts outstanding for more than 30 days in respect
of small scale industrial undertakings. The company has provided for
interest of Rs.NIL (Previous year Rs.0.07 lacs) on outstanding for more
than 45 days payable to Micro, Small and Medium enterprises. The total
amount due to these parties is Rs.NIL (Previous year Rs.NIL) as at the
balance sheet date. This information has been determined to the extent
such parties have been identified on the basis of information available
with the company. This has been relied upon by the auditors.
18. The unsecured loans include Rs. 750.00 lacs in the suspense
account representing amount of a cheque drawn on HDFC Bank given by the
company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing
house because of the delay by HDFC Bank in returning the cheque to BBK.
The dispute is the subject matter of notice correspondence between HDFC
Bank and BBK and under dispute between the company, BBK and HDFC Bank
in various courts.
19. The expenditure incurred in respect of assets damaged for which
insurance claim has been received has been debited under respective
heads.
20. The company has retired its captive power plant from active use,
as it had become very old and was not commercially viable to operate
due to high fuel costs. The same is being carried at its estimated
realizable value as asset held for sale. A portion of old building of
its Spinfab Division, which was unusable and in a dilapidated
condition, was demolished during the year. The aggregate loss of
Rs.1096.73 lacs on account of retirement/demolition has been debited to
revenue as a separate line item under Note 26 "other expenditure".
21.Based on useful life of each class of fixed assets determined upon
technical evaluation, depreciation for the year comes to Rs.441.22 lacs
compared to Rs.648.62 lacs as per old basis of providing depreciation.
22. The company has signed a term sheet for settlement of secured
loans with one of its major secured creditors during the year. The Term
Sheet provided for a Scheme of Arrangement under section 391 of the
Companies Act 1956 to be implemented for debt settlement. Accordingly,
the company has filed with the Stock Exchanges, a draft Scheme of
Arrangement for Reconstruction and Compromise between the company and
its equity shareholders, preference shareholders and secured creditors
under Sections 391 to 394 read with Sections 100 to 103 of the
Companies Act, 1956 and Section 52 of the Companies Act, 2013. It
provides for settlement based on percentage of outstanding principal
amount only, as per various options given to secured creditors. As per
the scheme, no interest is payable on these loans for the period till
date. Secured creditors accounting for about 99% of total secured debt
of the company have given letters to the company indicating their
in-principle approval for preference of options from those given in the
scheme. The scheme also provides for restructuring of preference
shares.
The company has received Observation Letter for the scheme from the
Stock Exchanges. The company is in the process of filing the Scheme
with the Hon. Gujarat High Court for approval. The scheme will be
effective upon approval by the Hon. Gujarat High Court.
The company has made on account payment of Rs.7700.00 lacs to one of
its secured creditors against debt settlement dues under the scheme,
which will be appropriated as payment of settlement dues upon the
scheme becoming effective. The amount is disclosed in the Balance Sheet
as "Short Term Loans and Advances" under the head "Advances Recoverable
in Cash or Kind" in Schedule 17.
23. In view of the substantial progress in debt restructuring as
stated above, and considering that the draft scheme of arrangement
provides for debt settlement at less than outstanding principal amount
of secured debt, and does not provide for payment of any interest, the
company is not required to provide for interest on secured loans.
24. The company has settled secured loans with certain lenders during
the year for consideration less than the outstanding principal loan
amounts and taken the excess of liability over settlement amount to
"Reconstruction Reserve".
25. Retirement Benefits (Accounting Standard - 15) :
Provision for Gratuity
The following table sets out the status of the gratuity plan as
required under AS 15 on "Employee Benefits".
26. Segment reporting (Accounting Standard - 17):
The company's operations relate only to manufacture and sale of textile
and related products and hence primary reporting disclosure is not
applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting is based on
sales in India and exports outside India.
27. Related parties disclosures (Accounting Standard - 18):
(i) Relationships
(a) Key management personnel and their relatives:
Mr. Chintan N. Parikh - Chairman & Managing Director
Mr. Krishnachintan C. Parikh - Relative of key managerial
personnel
(Vice President - Denims)
(b) Other related parties:
Ashima Dyecot Limited Atrium Exports Private Limited
Elephants Enterprises Limited Lahar Trading and Investments
Limited
Apus Investments Private Limited Albus Investments Private
Limited
28. Based on review carried out as on March 31,2015, no impairment
loss is required to be provided for as per Accounting Standard 28 on
"Impairment of Assets".
29. Previous year figures have been regrouped / rearranged wherever
necessary to confirm to this year's figures.
30. Remittances in foreign currency on account of dividend: NIL
31. Figures less than Rs. 500/- which are required to be shown
separately have been shown as actual in brackets.
Mar 31, 2014
1. Reconciliation of number of shares outstanding:
The company has not issued or bought back any equity or preference
shares during the year under review.
2. Shares Held by holding/ultimate holding company and/or their
subsidiaries/associates Out of issued, subscribed and paid up capital:
Nil (Previous Year Nil) Equity Shares are held by holding company
Nil (Previous Year Nil) Equity Shares are held by ultimate holding
company
Nil (Previous Year Nil) Equity Shares are held by subsidiary of
holding company
Nil (Previous Year Nil) Equity Shares are held by associates of
holding or ultimate holding company.
3. The details of bonus shares issued, shares issued for consideration
otherwise than in cash and shares bought back in preceding five years:
The company has not issued any bonus shares, shares for consideration
otherwise than in cash and has not bought back any shares in year under
review and preceding five years.
4. Details of Unpaid calls due from Directors or officers
There were no unpaid calls due from Directors/Officers of the Company.
5. Rights of Shareholders, Dividend and Repayment of Capital:
Rights of Equity Share holders
a. Holder of equity shares is entitled to one vote per share.
b. The Company declares and pays dividends in Indian Rupees. The
Companies Act, 1956 provides that any dividend be declared out of
accumulated distributable profits only after the transfer to a general
reserve of a specified percentage of net profit computed in accordance
with current regulations.
c. In the event of liquidation of the Company, the holders of shares
shall be entitled to receive the remaining assets of the Company, after
distribution of all preferential amounts. The amount distributed will
be in proportion to the number of equity shares held by the
shareholders.
Rights of Preference Share holders
a. Preference shareholders shall have right to vote only on resolutions
placed before company which directly affect their rights attached to
preference shares. As per explanation to Sec. 87 (2)(a) any resolution
for winding up the company or for repayment or reduction of share
capital shall be deemed directly to affect their rights.
b The holders of preference Shares (whether cumulative or non
cumulative) have a right to vote on any resolutions of the company
where dividends are in arrears -
1 In case of cumulative preference shares, on all resolutions of the
company at any meeting if dividends are in arrears for aggregate period
of not less than 2 years on the date of meeting.
2 In case of non cumulative preference shares, if arrears of 2
financial years immediately preceding date of such meeting or any 3
years arrears out of 6 years preceding date of meeting.
3 Such voting right is proportionate to preference paid up capital
bears to total paid up equity capital.
6. Notes :
1 All the debentures and loans are secured/ to be secured by charge on
plant and machinery and land and building of the company situated at
Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at
Mithipur, Ahmedabad in the State of Gujarat and the land and building
situated at Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani
Chambers situated at Nariman Point, Mumbai - 400 021. The details of
debentures in terms of respective debenture trust deeds and/or
memorandum of entry signed and executed by the company are as per
details given below.
2 Secured by current assets including stock of raw materials,
stock-in-process, finished goods, stores, spares, colour chemicals and
book debts and second charge on movable and immovable assets of the
company.
(Rupees in lacs)
As at As at
Mar. 31, 14 Mar. 31, 13
7. CONTINGENT LIABILITIES AND COMMITMENTS
(TO THE EXTENT NOT PROVIDED FOR)
(A) Claims against the company not
acknowledged as debt 2,691.44 2,689.89
(B) Guarantees 24,625.14 24,625.14
(C) Other money for which the company is
contingently liable 40.73 37.92
TOTAL 27,357.31 27,352.95
8. Loans and advances to staff include Rs.0.63 lacs (Previous year
Rs. 2.71 lacs) due from officers of the company.
9. The Sales Tax authorities have issued notices for demand of Sales
Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of
Rs.538.51 lacs, aggregating to Rs.1906.01 lacs for various assessment
years. The company disputes the said demand. The company has filed
appeals against these notices and got stay orders against the same.
10. During the year under review due to loss the company has not
provided for Income-tax for the Assessment Year (A.Y.) 2014-15
(Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.39
lacs (Previous year Rs. 0.35 lacs).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of Chartered
Accountants of India, there is a net deferred tax asset for the past
years and for the current year after adjusting unabsorbed depreciation
and carry forward losses of the past years. Considering the provisions
of the AS-22 and as a matter of prudence, the company has not
recognised the said deferred tax asset while preparing the accounts for
the year under review.
The Income-tax assessments of the company are completed up to A.Y.
2011-12. In respect of assessment for A.Y. 1996-97, income-tax
department had disputed some of the claims and raised demand of Rs.
676.66 lacs for tax and interest. The company had preferred an appeal
against the said assessment and had succeeded before Commissioner of
Income-tax (Appeal) and demand has been deleted. However, Income-tax
department has preferred further appeal before the Income- tax
Appellate Tribunal for which Tribunal has sent back file to Assessing
Officer with certain directions for which appeal effect order is yet to
be received from the Assessing Officer.
11. The cost of purchase is arrived at after considering effect of any
settlement reached with the suppliers during the year.
12. Export benefits/incentives in respect of duty draw back and
purchase of raw material from local suppliers (against advance released
orders under duty exemption scheme) are accounted on accrual basis in
order to follow the system of accounting which is mandatory as per the
provisions of section 209 of the Companies Act, 1956.
13. There are no amounts outstanding for more than 30 days in respect
of small scale industrial undertakings.
The company has provided for interest of Rs.0.07 lacs (Previous year
Rs.0.19 lacs) on outstanding for more than 45 days payable to Micro,
Small and Medium enterprises. The total amount due to these parties is
Rs.NIL (Previous year Rs.6.43 lacs) as at the balance sheet date. This
information has been determined to the extent such parties have been
identified on the basis of information available with the company. This
has been relied upon by the auditors.
14. In view of ongoing comprehensive debt restructuring, the company
has not made provision of Rs.32,213.63 lacs for unpaid interest
(Previous year Rs.27,409.57 lacs). The loss for the year is understated
by Rs. 32,213.63 lacs (Previous year Rs. 27,409.57 lacs). This amount
and the amount due to the lenders is disclosed based on information
available with the management. As a result, outstanding dues of lenders
are subject to reconciliation.
15. The unsecured loans include Rs. 750.00 lacs in the suspense
account representing amount of a cheque drawn on HDFC Bank given by the
company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing
house because of the delay by HDFC Bank in returning the cheque to BBK.
The dispute is the subject matter of notice correspondence between HDFC
Bank and BBK and under dispute between the company, BBK and HDFC Bank
in various courts.
16. The expenditure incurred in respect of assets damaged for which
insurance claim has been received has been debited under respective
heads.
17. The net worth of the company has eroded. However, the company
expects to revive its financial position in view of the ongoing debt
restructuring and good prospects of improvement in its operational
performance in future. Considering these facts, the accounts of the
company are prepared on going concern basis.
18. Segment reporting (Accounting Standard - 17):
The company''s operations relate only to manufacture and sale of textile
and related products and hence primary reporting disclosure is not
applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting is based on
sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and
liabilities are used interchangeably between the segments and hence
cannot be allocated to segments.
19. Related parties disclosures (Accounting Standard - 18):
(i) Relationships
(a) Key management personnel:
Mr. Chintan N. Parikh - Chairman & Managing Director
(b) Other related parties where control exists:
Ashima Dyecot Limited Atrium Exports Private Limited
Elephants Enterprises Limited Lahar Trading and Investments Limited
Apus Investments Private
Limited Albus Investments Private Limited
20. Based on review carried out as on March 31, 2014, no impairment
loss is required to be provided for as per Accounting Standard 28 on
"Impairment of Assets".
21. Previous year figures have been regrouped / rearranged wherever
necessary to confirm to this year''s figures.
22. Remittances in foreign currency on account of dividend: NIL
23. Figures less than Rs. 500/- which are required to be shown
separately have been shown as actual in brackets
Mar 31, 2013
1. Loans and advances to staff include Rs.2.71 lacs (Previous year
Rs. 2.16 lacs) due from officers of the company.
2. The Sales Tax authorities have issued notices for demand of Sales
Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of
Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment
years. The company disputes the said demand. The company has filed
appeals against these notices and got stay orders against the same.
3. During the year under review due to loss the company has not
provided for Income-tax for the Assessment Year (A.Y.) 2013-14
(Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.35
lacs (Previous year Rs. 0.33 lacs).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of Chartered
Accountants of India, there is a net deferred tax asset for the past
years and for the current year after adjusting unabsorbed depreciation
and carry forward losses of the past years. Considering the provisions
of the AS-22 and as a matter of prudence, the company has not
recognised the said deferred tax asset while preparing the accounts for
the year under review.
The Income-tax assessments of the company are completed up to A.Y.
2010-11. In respect of assessment for A.Y. 1996-97, income-tax
department had disputed some of the claims and raised demand of Rs.
676.66 lacs for tax and interest. The company had preferred an appeal
against the said assessment and had succeeded before Commissioner of
Income-tax (Appeal) and demand has been deleted. However, Income-tax
department has preferred further appeal before the Income- tax
Appellate Tribunal for which Tribunal has sent back file to Assessing
Officer with certain directions for which appeal effect order is yet to
be received from the Assessing Officer.
4. The cost of purchase is arrived at after considering effect of any
settlement reached with the suppliers during the year.
5. Export benefits/incentives in respect of duty draw back and
purchase of raw material from local suppliers (against advance released
orders under duty exemption scheme) are accounted on accrual basis in
order to follow the system of accounting which is mandatory as per the
provisions of section 209 of the Companies Act, 1956.
6. Names of small scale industrial undertakings in whose account
amount was outstanding for more than 30 days are as under:
Krupa Printers, Super Engineering Co., Atul Enterprise, Gemini
Polyplast Industries, Mascot Industries, Hydro Flex Hose Industries,
Sun Industries, Balagee Textile Services, Vaishali Corporation, Kadam
Environmental Consultants, Mina Tin Works, Royal Electric Engineering
Co. and Hariom Refrigeration.
The company has provided for interest of Rs.0.19 lacs (Previous year
Rs.0.10 lacs) on outstanding for more than 45 days payable to Micro,
Small and Medium enterprises. The total amount due to these parties is
Rs.6.43 lacs (Previous year Rs.9.36 lacs) as at the balance sheet date.
This information has been determined to the extent such parties have
been identified on the basis of information available with the company.
This has been relied upon by the auditors.
7. In view of ongoing comprehensive debt restructuring, the company
has not made provision of Rs.27,409.57 lacs for unpaid interest
(Previous year Rs.23,442.98 lacs). The loss for the year is understated
by Rs. 27,409.57 lacs (Previous year Rs. 23,442.98 lacs). This amount
and the amount due to the lenders is disclosed based on information
available with the management. As a result, outstanding dues of lenders
are subject to reconciliation.
8. The unsecured loans include Rs. 750.00 lacs in the suspense
account representing amount of a cheque drawn on HDFC Bank given by the
company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing
house because of the delay by HDFC Bank in returning the cheque to BBK.
The dispute is the subject matter of notice correspondence between HDFC
Bank and BBK and under dispute between the company, BBK and HDFC Bank
in various courts.
9. The expenditure incurred in respect of assets damaged for which
insurance claim has been received has been debited under respective
heads.
10. The net worth of the company has eroded. However, the company
expects to revive its financial position in view of the ongoing debt
restructuring and good prospects of improvement in its operational
performance in future. Considering these facts, the accounts of the
company are prepared on going concern basis.
11. Retirement Benefits (Accounting Standard  15) : Provision for
Gratuity
The following table sets out the status of the gratuity plan as
required under AS 15 on "Employee
Benefits".
Reconciliation of opening and closing balances of the present value of
the defined benefit and fair value of the plan assets.
12. Segment reporting (Accounting Standard - 17):
The company''s operations relate only to manufacture and sale of textile
and related products and hence primary reporting disclosure is not
applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting is based on
sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and
liabilities are used interchangeably between the segments and hence
cannot be allocated to segments.
13. Related parties disclosures (Accounting Standard  18): (i)
Relationships
(a) Subsidiary
Ashima Textiles Inc., U.S.A. - up to 05.05.2011
(b) Key management personnel:
Mr. Chintan N. Parikh - Chairman & Managing Director
(c) Other related parties where control exists:
Ashima Dyecot Limited Atrium Exports Private Limited
Elephants Enterprises Limited Lahar Trading and Investments Limited
Apus Investments Private Limited Albus Investments Private Limited
Note: Preference shares being cumulative in nature, its dividend has
been added to loss for the year in the above calculation, though the
appropriation for the same has not been done.
14. Based on review carried out as on 31.03.2013, no impairment loss
is required to be provided for as per Accounting Standard 28 on
"Impairment of Assets".
15. Previous year figures have been regrouped / rearranged wherever
necessary to confirm to this year''s figures.
16. Remittances in foreign currency on account of dividend: NIL
17. Figures less than Rs. 500/- which are required to be shown
separately have been shown as actual in brackets
Mar 31, 2012
1.1 Reconciliation of number of shares outstanding:
The company has not issued or bought back any equity or preference
shares during the year under review.
1.2 Shares Held by holding/ultimate holding company and/or their
subsidiaries/associates Out of issued, subscribed and paid up capital:
Nil (Previous Year Nil) Equity Shares are held by holding company
Nil (Previous Year Nil) Equity Shares are held by ultimate holding
company
Nil (Previous Year Nil) Equity Shares are held by subsidiary of holding
company
Nil (Previous Year Nil) Equity Shares are held by associates of holding
or ultimate holding company.
1.3 The details of bonus shares issued, shares issued for consideration
otherwise than in cash and shares bought back in preceding five years:
The company has not issued any bonus shares, shares for consideration
otherwise than in cash and has not bought back any shares in year under
review and preceding five years.
1.4 Details of Unpaid calls due from Directors or officers
There were no unpaid calls due from Directors/Officers of the company.
1.5 Rights of Shareholders, Dividend and Repayment of Capital:
Rights of Equity Share holders
a. Holder of equity shares is entitled to one vote per share.
b. The Company declares and pays dividends in Indian Rupees. The
Companies Act, 1956 provides that any dividend be declared out of
accumulated distributable profits only after the transfer to a general
reserve of a specified percentage of net profit computed in accordance
with current regulations.
c. In the event of liquidation of the Company, the holders of shares
shall be entitled to receive the remaining assets of the Company, after
distribution of all preferential amounts. The amount distributed will
be in proportion to the number of equity shares held by the
shareholders.
Rights of Preference Share holders
a. Preference shareholders shall have right to vote only on resolutions
placed before company which directly affect their rights attached to
preference shares. As per explanation to Sec. 87 (2)(a) any resolution
for winding up the company or for repayment or reduction of share
capital shall be deemed directly to affect their rights.
b The holders of preference Shares (whether cumulative or non
cumulative) have a right to vote on any resolutions of the company
where dividends are in arrears -
1 In case of cumulative preference shares, on all resolutions of the
company at any meeting if dividends are in arrears for aggregate period
of not less than 2 years on the date of meeting.
2 In case of non cumulative preference shares, if arrears of 2
financial years immediately preceding date of such meeting or any 3
years arrears out of 6 years preceding date of meeting.
3 Such voting right is proportionate to preference paid up capital
bears to total paid up equity capital.
Notes :
1 All the debentures and loans are secured/ to be secured by charge on
plant and machinery and land and building of the company situated at
Mouje Karannagar, Taluka Kadi, District Mehsana, North Gujarat; and at
Mithipur, Ahmedabad in the State of Gujarat and the land and building
situated Mouje Rajpur-Hirpur, District Ahmedabad and 201, Tulsiani
Chambers situated at Nariman Point, Mumbai - 400 021. The details of
debentures in terms of respective debenture trust deeds and/or
memorandum of entry signed and executed by the company are as per
details given below.
2 Secured by current assets including stock of raw materials,
stock-in-process, finished goods, stores, spares, colour chemicals and
book debts and second charge on movable and immovable assets of the
company.
(Rupees in lacs)
As at As at
Mar. 31, 12 Mar. 31, 11
3. CONTINGENT LIABILITIES AND COMMITMENTS
(TO THE EXTENT NOT PROVIDED FOR)
(A) Claims against the company not
acknowledged as debt 2,676.89 2,948.21
(B) Guarantees 24,625.14 24,625.14
(C) Other money for which the company
is contingently liable 32.80 358.31
TOTAL 27,334.83 27,931.66
4. Loans and advances to staff include Rs.2.16 lacs (Previous year
Rs. 0.44 lacs) due from officers of the company.
5. The Sales Tax authorities have issued notices for demand of Sales
Tax of Rs.747.93 lacs, penalty of Rs.619.58 lacs and interest of
Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment
years. The company disputes the said demand. The company has filed
appeals against these notices and got stay orders against the same.
6. During the year under review due to loss the company has not
provided for Income-tax for the Assessment Year 2012-13 (Previous year
Rs. NIL). Provision for wealth-tax is made of Rs.0.33 lacs (Previous
year Rs. 0.47 lacs).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of
Chartered Accountants of India, there is a net deferred tax asset for
the past years and for the current year after adjusting unabsorbed
depreciation and carry forward losses of the past years. Considering
the provisions of the AS-22 and as a matter of prudence, the company
has not recognised the said deferred tax asset while preparing the
accounts for the year under review.
The Income-tax assessments of the company are completed up to A.Y.
2010-11. In respect of assessment for A.Y. 1996-97, income-tax
department had disputed some of the claims and raised demand of Rs.
676.66 lacs for tax and interest. The company had preferred an appeal
against the said assessment and had succeeded before Commissioner of
Income-tax (Appeal) and demand has been deleted. However, Income-tax
department has preferred further appeal before the Income-tax Appellate
Tribunal for which Tribunal has sent back file to Assessing Officer
with certain directions for which appeal effect order is yet to be
received from the Assessing Officer.
7. Export benefits/incentives in respect of duty draw back and
purchase of raw material from local suppliers (against advance released
orders under duty exemption scheme) are accounted on accrual basis in
order to follow the system of accounting which is mandatory as per the
provisions of Section 209 of the Companies Act, 1956.
8. The cost of purchase is arrived at after considering effect of any
settlement reached with the suppliers during the year.
38. In view of ongoing comprehensive debt restructuring, the company
has not made provision of Rs.23,442.98 lacs for unpaid interest
(Previous year Rs.19,989.04 lacs). The loss for the year is understated
by Rs. 23,442,98 lacs (Previous year Rs. 19,989.04 lacs).
9. The unsecured loans include Rs. 750.00 lacs in the suspense
account representing amount of a cheque drawn on HDFC Bank given by the
company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing
house because of the delay by HDFC Bank in returning the cheque to BBK.
The dispute is the subject matter of notice correspondence between HDFC
Bank and BBK and under dispute between the company, BBK and HDFC Bank
in various courts.
10. Exceptional item represents amount of compensation paid to workers
for voluntary retirement. Extraordinary items for the previous year
mainly include balances written off.
11. The expenditure incurred in respect of assets damaged for which
insurance claim has been received has been debited under respective
heads.
12. The net worth of the company has eroded. However, the company
expects to revive its financial position in view of the ongoing debt
restructuring and good prospects of improvement in its operational
performance in future. Considering these facts, the accounts of the
company are prepared on going concern basis.
13. Names of small scale industrial undertakings in whose account
amount was outstanding for more than 30 days are as under:
Krupa Printers, Alpa Industries, Super Engineering Co., Hariom
Industries, Atul Enterprise, Gemini Polyplast Industries, Mascot
Industries, Sun Industries, Balagee Textile Services, Vaishali
Corporation, Kadam Environmental Consultants, Sohanlal Chauhan, Royal
Electric Engineering Co. and Hariom Refrigeration.
The company has provided for interest of Rs.0.10 lacs (Previous year
Rs.0.02 lacs) on outstanding for more than 45 days payable to Micro,
Small and Medium enterprises. The total amount due to these parties is
Rs.9.36 lacs (Previous year Rs.3.63 lacs) as at the balance sheet date.
This information has been determined to the extent such parties have
been identified on the basis of information available with the company.
This has been relied upon by the auditors.
14. Segment reporting (Accounting Standard - 17):
The company's operations relate only to manufacture and sale of textile
and related products and hence primary reporting disclosure is not
applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting is based on
sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and
liabilities are used interchangeably between the segments and hence
cannot be allocated to segments.
Note: Preference shares being cumulative in nature, its dividend has
been added to loss for the year in the above calculation, though the
appropriation for the same has not been done.
15. Based on review carried out as on 31.03.2012, no impairment loss
is required to be provided for as per Accounting Standard 28 on
"Impairment of Assets".
16. Previous year figures have been regrouped / rearranged wherever
necessary to confirm to this year's figures.
17. Remittances in foreign currency on account of dividend: NIL
Mar 31, 2010
1. Estimated amount pf contracts remaining to be executed on capital
account and not provided for Rs 7.22 lacs (Previous year Rs. 1.95
lacs).
2. Contingent liabilities not provided for:
(Rupees in lacs)
As on
Mar. 31,10 Mar. 31, 09
(i) In respect of bills of exchange discounted 35.88 28.32
(ii) In respect of guarantee given by the
company to lenders on behalf of Ashima
Dyecot Limite.d 24,625.14 24,625.14
(iii) In respect of disputed income-tax demand
not acknowledged by the company 719.15 774.61
(iv) In respect of disputed demand of central
excise not acknowledged by the company 273.74 292.92
(v) In respect of disputed custom duty not
acknowledged by the company 46.89 44.48
(vi) In respect of disputed demand of service
tax not acknowledged by the company 148.01 142.06
(vii) In respect of disputed demand of Sales tax
not acknowledged by the company 1906.02 -
(viii) In respect of employees who have yet not
opted for VRS. 470.03 416.89
(ix) Arrears of fixed cumulative dividend
(including dividend tax) on cumulative
preference shares for the following period.
11 % cumulative preference shares for the
period from March 26, 2001 to Mar. 31, 2010
Rs. 1857.71 lacs.
13% cumulative preference shares for the
period from ,,
July 1,2000 to Mar, 31, 2010 Rs. 667.74 lacs. 2,525.45 2,251.10
3. (i) Sundry debtors as appearing in the balance sheet include Rs.
NIL (Previous year Rs. 917.97 i lacs) due from companies in which a
director of the company is director. (ii) Loans and advances to staff
include Rs*. 2.38 lacs (Previous year Rs. 9.00 lacs) due from officers
of the company (Maximum amount outstanding at any time during the year
Rs.4.54 lacs, previous year Rs. 20.95 lacs). .
4. During the year 2002, central excise authorities had raised a
demand for excise duty of Rs. 127.18 lacs and penalty of Rs. 139.00
lacs aggregating to Rs. 266.18 lacs. The company has paid Rs. 15.00
lacs under protest. Subsequently the company has succeeded in the
appeal before Commissioner of Central Excise, Ahmedabad. The department
has preferred an appeal before Customes, Excise and Service Tax
Appellate Tribunal against the order passed by Commissioner of Central
Excise, Ahmedabad.
5. The service tax authorities have raised demand of service tax of
Rs. 43.01 lacs (Previous year Rs.43.01 lacs), penalty of Rs. 46.36 lacs
(Previous, year Rs. 46.00 lacs) and interest of Rs. 58.64 lacs
(Previous year Rs. 53.05 lacs) aggregating to Rs. 148.01 lacs (Previous
year Rs. 142.06 lacs).The appeal filed by the company against the
demand was decided in favour of the company by the Commissioner of
Central Excise (Appeals). A subsequent appeal against the same by the
Excise department has been rejected by the CESTAT.
6. The Sales Tax authorities have issued notices for demand of Sales
Tax of Rs.747.93 lacs, penalty of Rs.619:58 lacs and interest of
Rs.538.51 lacs, aggregating to Rs.1906.02 lacs for various assessment
years. The company disputes the said demand. The company has filed
appeals and got stay orders against some notices and is in the process
of filing appeals and stay applications for the remaining notices.
7. During the year under review due to loss the company has not
provided for income-tax for the Assessment Year (A.Y.) 2010-11
(Previous year Rs. NIL). Provision for wealth-tax is made of Rs.0.61
lacs. (Previous year Rs. 0.86 lacs).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of Chartered
Accountants of India, there is a net deferred tax asset for the past
years and for the current year after adjusting unabsorbed depreciation
and carry forward losses of the past years. Considering the provisions
of the AS-22 and as a matter of prudence, the company has not
recognised the said deferred tax asset while preparing the accounts for
the year under review.
The Income-tax assessments of the company are completed up to A.Y.
2006-07. In respect of assessment for A.Y. 1996-97, income-tax
department had disputed some of the claims and raised demand of Rs.
676.66 lacs for tax and interest. The company had preferred an appeal
against the said assessment and had succeeded before Commissioner of
Income-tax (Appeal) and demand has been deleted. However, Income-tax
departme/it has preferred further appeal before the Income-tax
Appellate Tribunal for which Tribunal has sent back file to Assessing
Officer with certain directions for which appeal effect order is yet to
be received from the Assessing Officer.
8. The cost of purchase is arrived at after considering effect of any
settlement reached with the suppliers during the year.
9. Export benefits/incentives in respect of duty draw back and
purchase of raw material from local suppliers (against advance released
orders under duty exemption scheme) are. accounted on accrual basis in
order to follow the system of accounting which is mandatory as per the
provisions of section 209 of the Companies Act, 1956.
10. Names of small scale industrial undertakings in whose account
amount was outstanding for more than 30 days are as under:
Krupa Printers, Alpa Industries, Super Engineering Co., Perfect
Engineering Corporation, Hariom Industries, Atul Enterprise, Gemini
Polyplast, Mascot Industries, Sun Industries, Vaishali Corporation,
Balagee Textile Services, Sapphire, Hariom Refrigeration.
The company has provided for interest of Rs.0.10 lacs (Previous year
Rs.0.13 lacs) on outstanding for more than 45 days payable to Micro,
Small and Medium enterprises. The total amount due to these parties is
Rs.3.51 lacs (Previous year Rs.5.90 lacs) as at the balance sheet date.
This information has been determined to the extent such parties have
been identified, on the basis of information available with the
company. This has been relied upon by the auditors.
11. In view of ongoing comprehensive debt restructuring, the company
has not made provision of Rs.19,617.97 lacs for unpaid interest
{Previous year Rs.13,357.80 lacs). The loss for the year is understated
by Rs. 19,617.97 lacs (Previous year Rs. 13,357.80 lacs).
12. The unsecured loans include Rs. 750.00 lacs in the suspense
account representing amount of a cheque drawn on HDFC Bank given by the
company to Bank of Bahrain & Kuwait (BBK) and paid to BBK by clearing
house because of the delay by HDFC Bank in returning the cheque to BBK.
The dispute is the subject matter of notice correspondence between HDFC
Bank and BBK and under dispute between the company, BBK and HDFC Bank
in various courts.
13. Extraordinary items mainly include loss on sale of investments.
14. The expenditure incurred in respect of assets damaged for which
insurance claim has been received has been debited Under respective
heads.
15. The net worth of the company has eroded. However, the company
expects to revive its financial position in view of the ongoing debt
restructuring and good prospects of improvement in its operational
performance in future. Considering these facts, the accounts of the
company are prepared on going concern basis.
16. Retirement Benefit* (Accounting Standard -15): Provision for
Gratuity
The following table sets out the status of the gratuity plan as
required under AS 15 on "Employee Benefits".
17. Segment reporting (Accounting Standard-17):
The companys operations relate only to manufacture and sale of textile
and related products and hence primary reporting disclosure is not
applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting is based on
sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and
liabilities are used interchangeably between the segments and hence
cannot be allocated to segments.
(d) Other related parties where control exists:
Atrium Exports Private Limited
N.C.P. Enterprises Limited
Elephants Enterprises Limited
Lahar Trading and Investments Limited
Nachmo Trading Company Limited
Amrakadamb Investments Private Limited
Amrashagun Investments Private Limited
Note: Preference shares being cumulative in nature, its dividend has
been added to loss for the year in the above calculation, though the
appropriation for the same has not been done.
18. As per Accounting Standard 21 on "Consolidated Financial
Statements" and Accounting Standard 23 on" Accounting for investments
in Associates in Consolidated Financial Statements" issued by The
Institute of Chartered Accountants of India, the company has presented
consolidated financial statements separately, including subsidiaries
and associate, in this annual report.
19. In accordance with the provisions of Accounting Standard 28 on
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, the company has provided for the impairment loss of Rs.95.95
lacs, which has been set off against revaluation reserve.
20. Previous year figures have been regrouped/rearranged Wherever
necessary to confirm to this years figures.
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