Mar 31, 2018
1. Reporting Entity
Deepak Spinners Limited referred to as âthe Companyâ is domiciled in India. The Companyâs registered office is at 121 Industrial Area, Baddi, Himachal Pradesh- 173212. The Company is a manufacturer of Synthetic Staple Fibres Yarn, Man-made Fibres blended yarn. It has two spinning units located at Guna (Madhya Pradesh) and Baddi (Himachal Pradesh).
These financial statements were authorised for issue by the Board of Directors in their meeting held on 28th Mayâ2018.
a. Securities
Term Loan from a bank is secured by first charge on the Plant & Machineries, other movable fixed assets and extension of equitable mortgage on all immovable fixed assets and second charge on current assets of the textile business. These Loans are further secured by personal guarantee of the Chairman and Managing Director and a Director.
Term Loan from a bank is secured by Plant & Machinery and other fixed assets and extension of equitable mortgage of the immovable fixed assets of the Solar Power Plant and second charge on current assets of the Company. This Loan is further secured by personal guarantee of the Chairman and Managing Director and a Director.
*Secured by hypothecation of vehicles financed.
2 Leases
Operating lease
The Companyâs significant leasing arrangements are in respect of operating leases of premises for offices and warehouse. These leasing arrangements, which are cancellable, are typically for a period of 11 months and are usually renewable on mutually agreeable terms. The Company has recognised expense amounting to Rs. 28.10 (Previous year Rs. 37.19)
3 Employee benefits
The Company contributes to the following post-employment defined benefit plans in India.
(i) Defined Contribution Plans:
The Company makes contributions towards provident fund to a defined contribution retirement benefit plan for qualifying employees. Under the plan, the Company is required to contribute a specified percentage of payroll cost to the retirement benefit plan to fund the benefits. During the year the Company has contributed to Government Provident Fund Rs. 312.31 (Previous year Rs. 262.38).
(ii) Defined Benefit Plan:
The Company provides for gratuity for employees in India as per the Payment of Gratuity Act, 1972. Employees who are in continuous service for a period of 5 years are eligible for gratuity. The amount of gratuity payable on retirement/ termination is the employees last drawn basic salary per month computed proportionately for 15 days salary multiplied for the number of years of service. Gratuity liability is being contributed to the Group Gratuity-cum-life Assurance Cash Accumulation Policy administered by the LIC of India.
The most recent actuarial valuation of plan assets and the present value of the defined benefit obligation for gratuity were carried out as at 31 March 2018. The present value of the defined benefit obligations and the related current service cost and past service cost, were measured using the Projected Unit Credit Method.
A. Based on the actuarial valuation obtained in this respect, the following table sets out the status of the gratuity plan and the amounts recognised in the Companyâs financial statements as at balance sheet date:
Sensitivities due to mortality and withdrawals are insignificant, hence ignored. Sensitivities as to rate of inflation, rate of increase of pensions in payment, rate of increase of pensions before retirement and life expectancy are not applicable being a lump sum benefit on retirement.
Although the analysis does not take account of the full distribution of cash flows expected under the plan, it does provide an approximation of the sensitivity of the assumptions shown.
F. Description of Risk Exposures:
Valuations are based on certain assumptions, which are dynamic in nature and vary over time. As such Company is exposed to various risks as follow -
A) Salary Increases- Higher than expected increase in salary will increase the defined benefit obligation.
B) Discount Rate: Reduction in discount rate in subsequent valuations can increase the planâs liability.
C) Mortality & disability - Actual deaths & disability cases proving lower or higher than assumption in the valuation can impact the liabilities.
D) Withdrawals - Actual withdrawals proving higher or lower than assumed withdrawals and change of withdrawal rates at subsequent valuations can impact Planâs liability.
4 Related parties
A. Related parties and their relationships
i. Key Managerial Personnel (KMP) and their relatives
Name Relationship
Sh. P. K. Daga Chairman and Managing Director.
Sh. Yashwant Kumar Daga Director ( Son of Shri P. K. Daga) (KMP under Ind-AS)
Sh. Shantanu Daga Senior Management Executive (Son of Shri Yashwant Kumar Daga).
Sh. Binod Kr. Agrawal Independent Director (KMP under Ind-AS)
Sh. P. K. Drolia Independent Director (KMP under Ind-AS)
Sh. Vikram Prakash Agrawal Independent Director (KMP under Ind-AS) (upto 10 Aug, 2017)
Mrs.Neelu Agrawal Independent Director (KMP under Ind-AS)
ii. Enterprise over which Key Management Personnel and their relatives exercise significant influence and with whom transactions have taken place during the year
Deepak Industries Ltd.
Contransys Pvt Ltd.
# The above said remuneration is excluding provision for Gratuity & Leave Encashment, where the actuarial valuation is done on overall Company basis.
Apart from above Shri. P. K. Daga, Chairman and Managing Director and Shri Yashwant Kumar Daga (Son of Shri P.K. Daga) have given âpersonal guarantees to the bankers of the company for securing various borrowings.
B. Fair value hierarchy
This section explains the judgements and estimates made in determining the fair values of the financial instruments that are:
(a) recognised and measured at fair value and
(b) measured at amortised cost and for which fair values are disclosed in the financial statements.
To provide an indication about the reliability of the inputs used in determining fair value, the Company has classified its financial instruments into the three levels prescribed under the accounting standard. An explanation of each level follows underneath the table.
Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices. This includes listed equity instruments, traded bonds and mutual funds that have quoted price. The fair value of all equity instruments (including bonds) which are traded in the stock exchanges is valued using the closing price as at the reporting period.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, traded bonds, over-the counter derivatives) is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
There are no transfers between level 1 and level 2 during the year
The carrying amounts of the above mentioned financial assets and financial liabilities are considered to be the same as their fair values, due to their short-term nature.
II. Financial risk management
The Company has exposure to the following risks arising from financial instruments:
- credit risk;
- liquidity risk; and
- market risk
i. Risk management framework
The Companyâs board of directors has overall responsibility for the establishment and oversight of the Companyâs risk management framework. The board of directors has established the processes to ensure that executive management controls risks through the mechanism of property defined framework.
The Companyâs risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed by the board annually to reflect changes in market conditions and the Companyâs activities. The Company, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.
The Companyâs Audit Committee oversees compliance with the Companyâs risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by Internal Audit. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the Audit Committee.
ii. Credit risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Companyâs receivables from customers.
The carrying amount of financial assets represents the maximum credit exposure. The Company monitor credit risk very closely both in domestic and export market. The Management impact analysis shows credit risk and impact assessment as low.
Trade and other receivables
The Companyâs exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk of the industry and country in which customers operate.
The Company Management has established a credit policy under which each new customer is analyzed individually for creditworthiness before the Companyâs standard payment and delivery terms and conditions are offered. The Companyâs review includes market check, industry feedback, past financials and external ratings, if they are available. Sale limits are established for each customer and reviewed periodically. Any sales exceeding those limits require approval from the President of the Company.
More than 60 % of the Companyâs customers have been transacting with the Company for over four years, and no impairment loss has been recognized against these customers. In monitoring customer credit risk, customers are reviewed according to their credit characteristics, including whether they are an individual or a legal entity, their geographic location, industry and existence of previous financial difficulties.
The Company establishes an allowance for impairment that represents its expected credit losses in respect of trade and other receivables. The management uses a simplified approach for the purpose of computation of expected credit loss for trade receivables
The carrying amount net of credit loss allowances of trade receivables is Rs. 3666.05 (31st March, 2017 - Rs. 3928.17, 1st April, 2016 - Rs. 2632.52).
During the period, the Company has made no write-offs of trade receivables, it does not expect to receive future cash flows or recoveries from collection of cash flows previously written off. The Company management also pursue all legal option for recovery of dues wherever necessary based on its internal assessment.
iii. Liquidity risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Companyâs approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are fallen due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Companyâs reputation.
Prudent liquidity risk management implies maintaining sufficient cash and marketable securities and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due and to close out market positions. Due to the dynamic nature of the underlying businesses, Company treasury maintains flexibility in funding by maintaining availability under committed credit lines.
Management monitors rolling forecasts of the Companyâs liquidity position (comprising the undrawn borrowing facilities) and cash and cash equivalents on the basis of expected future cash flows. This is generally carried out at unit level and monitored through caproate office of the Company in accordance with practice and limits set by the Company. These limits vary by location to take into account requirement, future cash flow and the liquidity in which the entity operates. In addition, the Companyâs liquidity management strategy involves projecting cash flows in major currencies and considering the level of liquid assets necessary to meet these, monitoring balance sheet liquidity ratios against internal and external regulatory requirements and maintaining debt financing plans.
(a) Financing arrangements
The company had access to the following undrawn borrowing facilities at the end of the reporting period:
The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice. Subject to the continuance of satisfactory credit ratings, the bank loan facilities may be drawn at any time in indian rupee and have an average maturity within a year.
(b) Maturities of financial liabilities
The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and exclude contractual interest payments and the impact of netting agreements.
The inflows/(outflows) disclosed in the above table represent the contractual undiscounted cash flows relating to financial liabilities held for liquidity / credit management purposes and which are not usually closed out before contractual maturity.
The interest payments on variable interest rate loans in the table above reflect market forward interest rates at the reporting date and these amounts may change as market interest rates change.
iv. Market risk
Market risk is the risk that changes in market prices - such as foreign exchange rates and interest rates - will affect the Companyâs income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return.
The Company uses derivatives like forward contracts to manage market riskson account of foreign exchange. All such transactions are carried out within the guidelines set by the Board of Directors.
v. Currency risk
The Company is exposed to foreign exchange risk arising from foreign currency transactions, primarily with respect to the USD and small exposure in EUR and GBP. Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the companyâs functional currency (INR). The risk is measured through a forecast of highly probable foreign currency cash flows. The objective of the hedges is to minimise the volatility of the INR cash flows of highly probable forecast transactions by hedging the foreign exchange inflows on regular basis.
Currency risks related to the principal amounts of the Companyâs foreign currency payables, have been partially hedged using forward contracts taken by the Company.
In respect of other monetary assets and liabilities denominated in foreign currencies, the Companyâs policy is to ensure that its net exposure is kept to an acceptable level by buying or selling foreign currencies at spot rates when necessary to address short-term imbalances.
Exposure to currency risk
The summary quantitative data about the Companyâs exposure to currency risk as reported to the management of the Company is as follows( amounts in lakhs)
The Companyâs main interest rate risk arises from long-term borrowings with variable rates, which expose the Company to cash flow interest rate risk. During 31st March, 2018 and 31st March, 2017, the Companyâs borrowings at variable rate were denominated in Indian Rupees and US Dollars.
Currently the Companyâs borrowings are within acceptable risk levels, as determined by the management, hence the Company has not taken any swaps to hedge the interest rate risk.
5 First Time Adoption of Ind AS
As stated in note 2, these are the Companyâs first financial statements prepared in accordance with Ind AS.
The accounting policies set out in note 2 have been applied in preparing the financial statements for the year ended 31 March 2018, the comparative information presented in these financial statements for the year ended 31 March 2017 and in the preparation of an opening Ind AS statement of financial position at 1 April 2016 (the Companyâs date of transition). In preparing its opening Ind AS statement of financial position, the Company has adjusted amounts reported previously in financial statements prepared in accordance with Previous GAAP. An explanation of how the transition from Previous GAAP to Ind AS has affected the Companyâs financial position, financial performance and cash flows is set out in the following tables and the notes that accompany the tables.
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. Ind AS optional exemptions
(i) 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 for de-commissioning liabilities. This exemption can also be used for intangible assets covered by Ind AS 38 Intangible Assets.
Accordingly, the Company has elected to measure all of its property, plant and equipment and intangible assets at their previous GAAP carrying value.
(ii) Leases
Appendix C to Ind AS 17 requires an entity to assess whether a contract or arrangement contains a lease. In accordance with Ind AS 17, this assessment should be carried out at the inception of the contract or arrangement. Ind AS 101 provides an option to make this assessment on the basis of facts and circumstances existing at the date of transition to Ind AS, except where the effect is expected to be not material. The Company has elected to apply this exemption for such contracts/arrangements.
B. Ind AS mandatory exceptions
(i) 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 1 April, 2016 are consistent with the estimates as at the same date made in conformity with previous GAAP. The Company made estimates for Impairment of financial assets based on expected credit loss model in accordance with Ind AS at the date of transition as these were not required under previous GAAP.
(ii) Classification and measurement of financial assets
Ind AS 101 requires an entity to assess classification and measurement of financial assets on the basis of the facts and circumstances that exist at the date of transition to Ind AS.
C. Reconciliations between previous GAAP and Ind AS
Ind AS 101 requires an entity to reconcile equity, total comprehensive income and cash flows for prior periods. The following tables represent the reconciliations from previous GAAP to Ind AS.
D. Notes to first-time adoption:
1 Borrowings
Ind AS 109 requires transaction costs incurred towards origination of borrowings to be deducted from the carrying amount of borrowings on initial recognition. These costs are recognised in the profit or loss over the tenure of the borrowing as part of the interest expense by applying the effective interest rate method.
Under previous GAAP, these transaction costs were charged to profit or loss and capitalised under PPE as and when incurred. Accordingly, borrowings as at 31st March, 2017 have been reduced by Rs. 7.10 (1st April, 2016 - Rs. 66.56) with a corresponding adjustment to retained earnings. The total equity increased by an equivalent amount of reatined earning. The profit for the year ended 31st March, 2017 reduced by Rs. 7.10 (Gross) as a result of the additional interest expense.
2 Remeasurements of post-employment benefit obligations
Under Ind AS, remeasurements i.e. actuarial gains and losses and the return on plan assets, excluding amounts included in the net interest expense on the net defined benefit liability are recognised in other comprehensive income instead of statement of profit and loss. Under the previous GAAP, these remeasurements were forming part of the statement of profit and loss for the year. As a result of this change, the profit for the year ended March 31st, 2017 increased by Rs. 16.09 (Net of tax Rs. 10.77) There is no impact on the total equity as at 31st March 2017.
3 Deferred Tax
Under previous GAAP, deferred tax was prepared using income statement approach. Under Ind AS, company has prepared deferred tax using balance sheet approach. Also, deferred tax have been recognised on the adjustments made on transition to Ind AS.
4 Retained earnings
Retained earnings as at April 1, 2016 has been adjusted consequent to the above Ind AS transition adjustments.
5 Other comprehensive income
Under Ind AS, all items of income and expense recognised in a period should be included in the statement of profit and loss for the period, unless a standard requires or permits otherwise. Items of income and expense that are not recognised in profit or loss but are shown in the statement of profit and loss as âother comprehensive incomeâ includes remeasurements of defined benefit plans and tax thereon. The concept of other comprehensive income did not exist under previous GAAP.
6 Balances of certain trade receivables, advances, trade payables and other liabilities are in the process of confirmation and/or reconciliation.
7 Segment Reporting
According to Ind AS 108, identification of operating segments is based on Chief Operating Decision Maker (CODM) approach for making decisions about allocating resources to the segment and assessing its performance. The business activity of the company falls within one broad business segment viz. âTextileâ and substantially sale of the product is within the country. The Gross income and profit from the other segment is below the norms prescribed in Ind AS 108. Hence, the disclosure requirement of Ind AS 108 of âSegment Reportingâ is not considered applicable.
8 Capital management
The Companyâs policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The following table summarises the capital of the Company :
Mar 31, 2016
1. Balances of debtors, creditors and others loans & advances are subject to confirmation.
2. Segment reporting :
3. As per guidelines contain in AS 17 (Segment reporting), the company is operating in a single segment mainly in manufacture and sale of yarn.
4. Secondary Segment is geographical Segment which includes export sales (including export incentive) Rs. 2392.50 lakhs (Previous year Rs. 2803.23 lakhs) and domestic sales Rs. 37698.66 lakhs (Previous year Rs. 40655.97 lakhs ) All assets of the Company are Located in India except export debtors Rs. 88.54 lakhs (Previous year Rs. 42.38 lakhs).
5. Related Party Disclosures as per AS-18 :
6. List of related parties and relationship
Key Management personnel & his relatives :-
7. Shri P.K. Daga, Chairman and Managing Director.
8. Shri Yashwant Kumar Daga, Director ( Son of Shri P. K. Daga).
9. Shri Shantanu Daga, Senior Management Executive (Son of Shri Yashwant Kumar Daga).
10. Enterprises over which Key Management Personnel or his relatives are able to exercise significant influence
M/s. Deepak Industries Ltd.
M/s. Contransys Pvt Ltd.
11. Previous Year''s figures have been reclassified/regrouped to conform to current year figure.
Mar 31, 2015
1.1 Nature of Operations
The Company is a manufacturer of Synthetic Man Made Yarn. It has two
spinning units at Baddi (H.P) and Guna (M.P). The company is generating electricity from it's Solar Power Plant at Rajgarh (M.P)
2 Contingent Liabilities and Commitments
A. Contingent Liabilities not provided for in respect of
i) Demand for Excise duty, being contested
by the Company 43.73 43.73
(Amount deposited 9.00 lakhs,
Previous year 9.00 lakhs)
ii) Demand for Income Tax, being
contested by the Company 48.16 67.97
(Amount deposited Rs. 23.56 lakhs,
Previous year 64.42 lakhs)
iii) Legal Cases (Employees) 3.68 3.00
iv) Demand for Cess on own generation of
electricity 44.89 44.89
The management believes that the Company
has a strong chance of favourable decision in above
cases, hence no provision has been considered
necessary.
B. Capital Commitments (Net of Advance paid) 16.83 85.91
*Power & Fuel includes Rs. 180.30 lakhs, Miscellaneous expenses includes
Rs. 21.70 lakhs, Contribution to Provident and other Funds Rs. 28.41 lakhs
and interest expenses includes Rs. 59.09 lakhs related to prior period
but demand received during the year.
3. Related Party Disclosures as per AS-18 :
a) List of related parties and relationship
Key Management personnel & his relatives
i) Shri P. K. Daga, Chairman and Managing Director.
ii) Shri Yashwant Kumar Daga, Director (Son of Shri P. K. Daga).
iii) Shri Shantanu Daga, Senior Management Executive (Son of Shri
Yashwant Kumar Daga).
b) Enterprises over which Key Management Personnel or his relatives are
able to exercise significant influence
M/s. Deepak Industries Ltd.
M/s. Contransys Pvt Ltd.
Mar 31, 2014
1. Nature of Operations
The Company is a manufacturer of Synthetic Man Made Yarn. It has two
spinning units at Baddi (H.P) and Guna (M.P) having capicity of 76752
Spindles. The company is generating electricity from it''s Solar Power
Plant at Rajgarh (M.P)
2. Terms / Rights attached to Equity Shares
Each holder of equity shares is entitled to one vote per share. In the
event of liquidation of the company, the holders of equity shares will
be entitled to receive remaining assets of the company. The
distribution will be in proportion to the number of equity shares held
by the shareholders. There is no restriction on distribution of
dividend. However same other than interim dividend, is subject to the
approval of the shareholders in the Annual General Meeting.
3. a Term Loan from a bank is secured by first charge on the Plant &
Machineries, other movable fixed assets and extension of equitable
mortgage on all immovable fixed assets and second charge on current
assets of the textile business. These Loans are further secured by
personal guarantee of the Chairman and Managing Director and a
Director.
b Term Loan from a bank is secured by Plant & Machinery and other fixed
assets and extension of equitable mortgage of the immovable fixed
assets of the Solar Power Plant and second charge on current assets of
the company. This Loan is further secured by personal guarantee of the
Chairman and Managing Director and a Director.
c Secured by hypothecation of vehicle financed.
4. Contingent Liabilities and Commitments
As at As at
A. Contingent Liabilities not 31st March, 2014 31st March, 2013
provided for in respect of (Rs. In lakhs) (Rs. In lakhs)
i) Bank Guarantee - 1.00
ii) Demand for Excise duty, being
contested by the Company * 43.73 43.73
(Amount deposited Rs. 9.00 lakhs,
Previous year Rs. 9.00 lakhs)
iii) Demand for Income Tax, being
contested by the Company * 67.97 114.81
(Amount deposited Rs. 64.42 lakhs,
Previous year Rs. 98.49 lakhs)
iv) Legal Cases (Employees) * 3.00 6.77
*The management believes that the
Company has a strong chance of
success in these cases, hence no
provision considered necessary.
v) Demand for Cess on own
generation of electricity . 62.63 40.52
B. Capital Commitments 85.91 326.49
(Net of Advance paid)
5. Segment reporting :
I) As per guidelines contain in AS 17 (Segment reporting), the company
is operating in a single segment mainly in manufacture and sale of
yarn.
ii) Secondary Segment is geographical Segment which includes export
sales (including export incentive) Rs. 3487.00 lakhs (Previous year Rs.
3401.31 lakhs) and domestic sales Rs. 35749.61 lakhs (Previous year Rs.
27490.16 lakhs) All assets of the Company are Located in India except
export debtors Rs. 201.25 lakhs (Previous year Rs. 298.94 lakhs).
6. Related Party Disclosure :
a) List of related parties and relationship
Key Management personnel & their relatives :-
i) Sh. P. K. Daga, Chairman and Managing Director
ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri
P. K. Daga)
iii) Sh. Yashwant Daga, Director (Son of Shri P. K. Daga)
b) Enterprises over which Key Management Personnel are able to exercise
significant influence M/s. Deepak Industries Ltd.
7. Previous Year''s figures have been reclassified/regrouped to
conforms current year figure.
Mar 31, 2013
1.1 Nature of Operations
The Company is a manufacturer of Synthetic Man Made Yarn, It has two
spinning units at Baddi (H.P) and Guna (M.P) having capicity of 63552
Spindles. The company has started generating electricity from it''s
Solar Power Plant at Rajgarh (M.P) with effect from 08th November,
2012.
1.2 Balances of debtors, creditors and others loans & advances are
subject to confirmation.
1.3 Borrowing cost capitalised during the year Rs. 178.36 lakhs
(Previous year Rs. 49.57 lakhs).
1.4 Segment reporting :
I) As per guidelines contain in AS 17 (Segment reporting), the company
is operating in a single segment mainly in manufacture and sale of
yarn.
ii) Secondary Segment is geographical Segment which includes export
sales (including export incentive) Rs. 3401.31 lakhs (Previous year Rs.
4786.23 lakhs) and domestic sales Rs. 27490.16 lakhs (Previous year
Rs.23282.56 lakhs ) All assets of the Company are Located in India
except export debtors Rs. 298.94 lakhs (Previous year Rs.305.88
lakhs).
1.5 Related Party Disclosure :
a) List of related parties and relationship
Key Management personnel & their relatives :
i) Sh. P.K. Daga, Chairman and Managing Director
ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri
P. K. Daga)
iii) Sh. Yashwant Daga, Director (Son of Shri P. K. Daga)
1.6 Previous Year''s figures have been reclassified/regrouped to
conforms current year figure.
Mar 31, 2012
Terms / Rights attached to Equity Shares
Each holders of equity shares is entitled to one vote per share. In the
event of liquidation of the company, the holders of equity shares will
be entitled to receive remaining assets of the company. The
distribution will be in proportion to the number of equity shares held
by the shareholders. There is no resctriction on distribution of
dividend. However same is subject to the approval of the share holders
in the Annual General Meeting.
a. Term loans from a bank are secured by first charge on present and
future movable plant and machinery purchased under TUFS subject to
prior charges in favour of bankers for securing working capital
borrowings. These loans are further secured by personal gurantees of
two directors of the company.
b. Corporate loans from Banks is secured by way of first charge on
fixed assets of the Company on pari-passu basis except assets charged
exclusively for term loan under TUFS. These loans are further secured
by personal guarantee of two directors of the company.
c. Secured by hypothecation of vehicle financed and carries interest
rate of 10.97% per annum. Payable in 48 equal monthly instalment
beginning with April, 2012.
*The company has not received any information from its suppliers
regarding registered under the Micro, Small and Medium Enterprises
Development Act,2006. Hence, the information required to be given in
accordence with section 22 of the said Act, is not ascertainable and
not disclosed.
(a) The Excise duty on Finished Goods (i.e. man made synthetic yarn)
was lower than on its input which has resulted in accumulation of
unutilised balance in Cenvat account. From 1st March,2006 excise duty
on input i.e.men made fibre has been reduced to be at par with finished
goods. As on 31.03.2012 the accumulated cenvat credit balance was
Rs.856.60 lakhs (Previous Year Rs. 1005.28 lakhs). Based on sale
projections, the management is quite hopeful to utilise the above
accumulated cenvat credit by paying duty on export goods under claim
for rebate/ refund and on value addition of the yarn.
Hence in the opinion of the management at this stage, no provision is
required for non usable excess cenvat credit.
1.1 Nature of Operations
The Company is a manufacturer of Synthetic Man Made Yarn. It has two
spinning units at Baddi (H.P.) and Guna (M.P.).
1.2 Balances of debtors, creditors and others are subject to
confirmation.
1.3 Exceptional items represents interest paid Rs.Nil (Previous Year
Rs. 70.80 lakhs)
1.4 Borrowing cost capitalised during the year Rs. 49.57 lakhs
(Previous year Rs. Nil)
1.5 Segment reporting :
I) As per guidelines contain in AS 17 (Segment reporting), the company
is operating in a single segment mainly in manufacture and sale of
yarn.
ii) Secondary Segment is geographical Segment which includes export
sales (including export incentive) Rs. 4786.23 lakhs (Previous year Rs.
2450.75 lakhs) and domestic sales Rs. 23282.56 lakhs (Previous year
Rs.23081.50 lakhs ) All assets of the Company are Located in India
except export debtors Rs. 305.88 lakhs (Previous year Rs.248.08
lakhs).
1.6 Related Party Disclosure :
a) List of related parties and relationship
A) Subsidiary : DSL Hydrowatt Ltd.
B) Key Management personnel & their relatives :
i) Sh. P.K. Daga, Chairman and Managing Director
ii) Sh. Shantanu Daga, Senior Management Executive (Grand Son of Shri
P. K. Daga)
1.7 The Company has prepared current year account as per presentation
and disclosure requirement of Revised Schedule Vi to the Companies Act,
1956 applicable with effect from 1st April 2011. Previous Year's
figures have been reclassified/regrouped to conforms current year
figure.
Signature to notes 1 to 27.17
Mar 31, 2010
(Rs. in 000s)
As at As at
31st March, 2010 31st March, 2009
1. Contingent Liability not
provided for in respect of
i) Bank Guarantee 2,00 2,00
ii) Demand for Excise duty,
being contested by the Company* 57,08 40,86
iii) Demand for Income Tax,
being contested by the Company
(Amount deposited Rs.75,57 1,13,31 1,10,60
Previous year Amount Rs 69,04)*
iv) Legal Cases (Employees)* 21,00 -
*The management belives that
The Company has a strong
chance of success in these
cases,here no
provision considered necessary.
2. Capital Commitments (Net of
Advance paid) 8,42,32 8,54,78
3. Due to non-viablity of one of the power generating unit,the
management has decided to conduct impairment test as on 31.03.2010 and
based on net selling price estimated by the management, the company has
recognised impairment loss of Rs. 85000 in Profit & Loss A/c.
4. Deferred tax assets on unabsorbed depreciation has been recognized
only to the extent of timing diffrence on depreciation, the reversal of
which will result in sufficient income in future.
5. Prior Period Expenses (Net) Rs. 2 (Previous year Rs. 2,93) has been
adjusted in respective heads.
6. Sales includes export incentives/benefits Rs.2,69,87 .(Previous
year Rs.2,29,59) and are net of returns/claims relating to earlier
years amounting to Rs.1,27,42 (Previous year Rs.29,54).
7. Balances of debtors, creditors and others are subject to
confirmation.
8. The Excise duty on Finished Goods (i.e. man made synthetic yarn)
was lower than on its input which has resulted in accumulation of
unutilised balance in Cenvat account. From 1st March, 2006 excise duty
on input i.e.men made fibre has been reduced to be at par with finished
goods. As on 31.03.2010 the accumulated cenvat credit balance is
Rs.11,19,27 (Previous year Rs.11,93,89).Based on export sale
projections and additional duty due to value addition of yarn,the
management is quite hopeful to utilise the above accumulated Cenvat
credit by paying duty on export goods under claim for rebate/ refund.
Hence in the opinion of the management at this stage, no provision is
required for non usable excess cenvat credit, if any.
* Net of amount deposited of Rs. 75,57 against above disputed cases In
case of Income Ta x dispute, related year means assessment year.
9. The Company has not received any information from its suppliers
regarding registred under" The Micro, Small and Medium Enterprises
Development Act,2006." Hence, the information required to be given in
accordence with Section 22 of the said Act, is not ascertainable and
not disclosed.
10. Auditors Remuneration represents : Audit Fee Rs. 3,05 (Rs. 2,05),
for Certification & other matters Rs. 2,02 (Rs. 2,16), for Service Tax
Rs. 52 (Rs. 48).
Reimbursement of Expenses Rs. 84 (Rs. 51) (Figures in brackets related
to previous year).
11. In the previous year power and fuel was after taking credit of
Rs.1,12,15 for estimated sale value determined on the basis of
previling rate of carbon credit emission reduction units for the period
January, 2008 to December, 2008.Credit for the period January, 2009 to
December, 2009 estimated to be Rs. 92,50 will be taken as and when same
shall be sold in the market after approval for CER units by UNFCC.
12. Interest on term loan is net off Tuff subsidy received Rs. 2,16,93
(Previous year Rs.1,69,38).
13. Exceptional iitems represents loss on sale of cotton spinning
machines.
14. Sundry balances written off includes Rs. 9,20 (Previous year
Rs.86,70) on account of value declined/ lower realisation on sale of
carbon credit.
15. a) Managerial Remuneration paid/provided to the Executive Director
of the Company for the Year include:Salary Rs. 5,00 (Rs. 9,00) Provident
Fund Rs. 60 (Rs. 1,08) Rent Rs. 75 (Rs. 1,35) Other perquisites Rs. 79
(Rs. 2,22) (Figures in brackets related to previous year).
b) Due to loss, Commission is not payable to Executive Director and
therefore computation of Net Profit under Section 349 of the Companies
Act,1956, has not been given.
16. Segment reporting :
i) As per guidelines contain in AS 17 (Segment reporting), the Company
is operating in a single segment mainly in manufacture and sale of
yarn.
ii) Secondary Segment is geographical Segment which includes export
sales (including export incentive) Rs. 33,99,16 (Previous year Rs.
22,96,35) and domestic sales Rs. 1,76,27,82 (Previous year
Rs.1,17,94,24) All assets of the Company are Located in India except
export debtors Rs. 1,75,46 (Previous year Rs.2,48,20).
17. Related Party Disclosure :
a) List of related parties and relationship
A) Subsidiary : DSL Hydrowatt Ltd.
B) Key Management personnel : Sh. V.N. Khemka, Executive Director & CEO
(upto 31st Aug, 2009)
C) Relative of key management personnel : Smt. Sulochana Khemka
(31st Aug, 2009)
18. Previous Year the Company has changed its accounting year ending
on 30th June to 31st March and therefore figures for 2008-09 being for
the period of nine months are not comparable with the Current year
ended on 31st March, 2010.
19. Previous Years figures have been regrouped and re-arranged
wherever found necessary to confirm with current periodÃs
classification.
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