Mar 31, 2012
(*) The above loans of SOB, PNB, ICICI, AXIS, SBT, HDFC and PSB
(working & term loans are secured by the following securities :-
Primary security is all current assets, fixed assets acquired with term
loan. Collalateral security for all above loans is as below
Mortgage of immovable properties owned by *he company are Plot No. 23,
Sector - 7, IMT Manesar, Plot no. 535, Sector - 37, Gurgaon, Plot No,
14, Block 17B, Dev Nagar, Karol Bagh, New Delhi and building No. T-60,
DCM School Road, Karol Bagh, New Delhi and further immovable property
owned by the borrower, promoters and their wives are Plot No. 274-275,
Udyog Vihar, Sector - 37, Phase VI, Gurgaon, Plot No. 539 & 539A, Udyog
Vihar, Sector - 37, Phase - VI, Gurgaon, T-59, DCM School Road, KaroJ
Bagh, New Delhi, Khasra No. 10, Ahmedpur Brahman, Sarsawa, Saharanpur,
UP, Khasra No. 15, Ahmedpur Brahman, Sarsawa, Saharnpur, UP Khasra
No.8/1,8/2, Ahmedpur Brahman, Sarsawa, Saharnpur, UP. The loans from
1DB1 Band are secured against properties owned by M/s. Klone Avinash
Infrastructure Pvt. Ltd., Gurmeet Singh Sawhney, Bhupinder Singh
Sawhney and Davinder Pal Singh Kohli are Khasra No. 14, Khasra No.
46/3,47/3,48,46/1,46/2 and Khasra No. 8/1, & 8/2, Gram Megh, Chhapper,
Paragana Tehsil, Distt. Saharnpur, (U.P.)
The loans from BO) Bank are secured agianst proerties owned by M/s.
Klone Avinash Infrasturcture Pvt. Ltd. Are Khasra Nos.
337,344,345,354,343,346,377, 378, 408,409,413, 224, 230, 232, 236, 237,
238, 227, 224, 218, 231, 235, 381, 382, 384,412, 347, 348,376 & 379
Dara Shivpuri, Berun, Near Gram Kajipura Dar Abadi Tirupati Garden,
Saharanpur (U.P.) Further all the above loans are secured by personal
guarantees of Directors and their wives.
{*} The above loans of IOB, PNB, ICICI, AXIS, SBT, HDFC and PSB
(workings term loans are secured by the following securities
Primary security is all current assets, fixed assets acquired with term
loan. Collalateral security for all above loans is as below
Mortgage of immovable properties owned the company are Plot No. 23,
Sector - 7, IMT Manesar, Plot no. 535, Sector - 37, Gurgaon, Plot No.
14, Block 17B, Dev Nagar, Karol Bagh, New Delhi and building No. T-60,
DCM School Road, Karol Bagh, New Delhi and further immovable property
owned by the borrower, promoters and their wives are Plot No. 274-275,
Udyog Vihar, Sector - 37, Phase VI, Gurgaon, Plot No. 539 & 539A, Udyog
Vihar, Sector - 37, Phase - VI, Gurgaon, T-59, DCM School Road, Karol
Bagh, New Delhi, Khasra No. 10, Ahmedpur Brahman, Sarsawa, Saharanpur,
UP, Khasra No. 15, Ahmedpur Brahman, Sarsawa, Saharnpur, UP Khasra
No.8/1,8/2, Ahmedpur Brahman, Sarsawa, Saharnpur, UP. The loans from
IDBI Band are secured against properties owned by M/s. Klone Avinash
Infrastructure Pvt. Ltd., Gurmeet Singh Sawhney, Bhupinder Singh
Sawhney and Davinder Paf Singh Kohfi are Khasra No. 14, Khasra No.
46/3,47/3,48,46/1,46/2 and Khasra No. 8/1, & 8/2, Gram Megh, Chhapper,
Paragana Tehsil, Distt. Saharnpur, (U.P.)
The loans from BOI Bank are secured agianst proerties owned by M/s,
Klone Avinash Infrasturcture Pvt. Ltd. Are Khasra Nos.
337,344,345,354,343,346,377, 378,408,409,413,224, 230, 232, 236, 237,
238, 227, 224, 218, 231, 235, 381, 382, 384,412, 347, 348,376 & 379
Dara Shivpuri, Berun, Near Gram Kajipura
Dar Abadi Tirupati Garden, Saharanpur (U.P.) Further all the above
loans are secured by personal guarantees of Directors and their wives.
1. In the opinion of the Board of Directors of the company and to the
best of their knowledge and belief the realizable value of current
assets, loans & advances if realized in the ordinary course of
business, will not be less than the amount at which they are stated in
the Balance Sheet as at 31st March, 2012.
2. The Balances of the debtors, creditors, loans & advances (both
given & taken) and inventory lying with franchisees, transporters and
job workers are subject to confirmation and reconciliation.
3. The name of the Micro, Small and Medium Enterprises suppliers
defined under the "The Micro Small and Medium Enterprises Development
Act, 2006"except in the case of a few suppliers, mentioned below, could
not be identified, as the necessary information is not in the
possession of the Company.
4. The Company had made investment of Rs. 1.95 crore in the share
capital of DBG Retail Holdings Ltd., a wholly owned subsidiary company
in F.Y. 2007-08. In view of the long term investment of the company in
the said company, a provision equal to the accumulated losses in the
wholly owned subsidiary company has been made in the books of accounts.
5. The company has issued NCD in two trenches, one with 10.15%
redeemable at Par, on 6/04/2009 for Rs. 5,000 lacs (Balances as on
31-03-2012 Rs. 2856.45 lacs) and another NCD with 13.00% redeemable at
Par on 16/07/2009 for Rs. 5,000 lacs (Balance as on 31-03-2012 Rs.
4800.00 lacs) and both are secured by post dated cheques for Principal
and Interest and further secured by charge on land owned by the company
in Gujrat state.
The company could not redeem the above debentures on due dates. The
Company has not provided for penal interest or liquidated damages on
loans and debentures defaulted for payment on due dates. Some of the
agreements with the lenders has stipulated penal interest/liquidated
damages .In view of the ongoing negotiations in which the Company has
asked for waiver of these the Management does not consider it necessary
to provide for this.
6. The Company has taken certain office premises, showrooms and retail
commercial outlets on non-cancellable operating lease. The future
minimum lease rentals payable at the Balance Sheet date, in respect of
the non-cancellable operating lease, are as follows:
7. SEGMENT REPORTING
i. Primary- Business Segment
The Company''s business consists of and is organized as single segment
of Textiles in terms of Accounting Standard 17 and as such there are no
separate reportable segments.
ii. Secondary-Geographical Segment
There are no secondary segments identified in terms of Accounting
Standard 17.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for the events of bonus issue, if any.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
9. Disclosure pursuantto Accounting Standard-lS(Revised) "Employee
Benefits"
i. DETAILS OF DEFINED CONTRIBUTION PLAN
The Company has recognized Rs. 8.93 lacs (Previous year Rs. 19.61 lacs)
as provident fund in the Profit & Loss Account for the year ended 31st
March 2012 under Defined Contribution Plans.
ii. DETAILSOF DEFINED BENEFIT PLAN
a) GRATUITY
The company makes annual contribution to the employees'' group-cum life
assurance scheme of the Life Insurance Corporation of India, a funded
defined benefit plan for qualifying employees. The scheme provides for
lumpsum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to
15 days salary for service more than 5 years, payable for each
completed year of service or part thereof in excess of 6 months.
Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related
current service cost were measured using the Projected unit credit
method, with actuarial valuations being carried out at each balance
sheet date.
b) LEAVE ENCASHMENT
Provision for leave entitlement is accrued and provided for at the end
of the financial year on the estimates made by the management but the
same is not being determined on actuarial basis of valuation.
10. Contingent liabilities not provided for:
(Rs. in lacs)
Particulars As at 31.03.12 As at 31.03.11
i) Bank Guarantee O/S - -
ii) Claims against the company not
acknowledged as debts 5,224.48
in respect of past disputed
liabilities of DVAT /HVAT. 3314.26
iii) There are 88 cases which have been filed against the company under
section 138 of Negotiable Instrument Act by 19 parties. The amount
involved is Rs. 10098.89 lacs. There are 23 parties who have filed
civil suit for recovery against the company for an amount of Rs.
1759.75 lacs.
iv) Various workmen have filed 8 labour cases against the Company for
recovery of an amount of Rs. 4.76 lacs and the same are pending before
different authorities as on 31.03.12.
v) 10 parties have filed Ten suits U/s 433(e), 434 of the Companies Act
1956 in the High Court of Delhi against the company for winding up and
recovery of Rs. 1958.17 lacs and the same are pending for adjudication.
In one casethe Ld. Delhi High Court has admitted the petition for
winding up but in further proceedings has said put the order in
abeyance till 11.02.2013.
vi) State government of U.P. has filed a case against the company for
recovery of underpaid stamp duty and same are pending before
Commissioner (Stamp) Meerut as on 31.03.2012.
* Based on the discussions with the solicitor/ legal opinion taken, the
management believes that company has strong chance of success in the
above mentioned cases and hence no provision against is considered
necessary.
11. Related Party Disclosure
As per Accounting Standard 18, issued by The Institute of Chartered
Accountants of India, the disclosures of transactions with related
parties for the year ended 31st March, 2012 as defined in Accounting
Standard are given as below:
c) Wholly Owned Subsidiary Company
i) DBG Retail Holdings Ltd.
d) Companies under the same Management
i) Klone Infrastructure Private Ltd.
ii) K & S Knitwears Private Ltd.
iii) PBP Marketing Private Ltd.
iv) Klone Avinash Infrastructure Private Ltd.
v) Gartex Concept Clothings Ltd.
vi) Venezia Leathers Ltd.
vii) S.R. Resorts Pvt. Ltd.
viii) JEG Hospitality Holdings Ltd.
ix) Vian Hospitality Pvt. Ltd.
x) JogurApparelsand Clothing Pvt. Ltd.
12. Sundry Debtors includes Rs. 348.67 Crores outstanding for more
than six month and are subject to confirmation. As the debtors more
than one year old but no provision for bad & doubtful debts has been
made as the management is of the view that all the debtors are
realizable and company is making efforts for the same.
13. There are some bank accounts wherein the credit entries are not
traceable for Rs. 1,72,61,944/-. The said amount has been reduced from
the total of list of debtors.
14. The Company has imprest with employees amounting to Rs.
88,60,770/-. So this amount is recoverable and as most of the employees
have left the job. The company is pursuing with the employees for the
recovery of said amount and is confident of recovery so no provision
has been made for this amount.
15. The management has conducted physical verification of stocks lying
in its warehouse at various intervals and has reviewed these
inventories for its realisability on the basis of business enquiries
and has found that the stock is realizable at full value, so no
provision is necessary for lowering the valuation, in the opinion of
the management. The stock lying with transporters and job workers is
still lying with them and company has taken legal measures against them
by sending legal notices and is in the process of filling of legal suit
for recovery of stocks. As per the opinion of lawyer all these stocks
can be recovered, so no provision for doubtful recovery is required in
the books.
16. Advances given to suppliers are quite old. These advances are
fully recoverable and management is in the process of negotiations with
these parties for recovery and no provision for non recovery is
required in the opinion of the management.
17. During the year total 769 stores have been closed by the Company
on considerations of ecomonic viability. 140 stores have been closed
after the close of the financial year. The fixed assets and inventories
of these stores are lying in the stores and shall be adjusted against
the dues of the franchisees/ property owners. The process of
reconciliation of available assets/ stocks with the balances in books
is on and may require financial adjustment for losses on account of non
realisability / physical shortage of certain assets. As the process is
underway, the Management has decided to provide for the resultant loss
in this regard after the exercise is complete and accounts are
reconciled .Meanwhile Company has provided for loss of Rs. 35.50 Lacs
on account of fixed assets lying in respect of stores for which the
reconciliation exercise was completed. Further the sales, expenses have
been provided upto the period till sales are received from individual
store.
18. A few lenders / creditors have filed cases for liquidation of the
Company to recover their dues. Due to operational losses and cash flow
mismatches the Company has not been able to pay its debts on time. The
Ld. Delhi High Court has admitted the winding up petition in one case
but in further proceeding has put the order in abeyance till
11.02.2013.
19. During the year the scheme of CDR was approved and master
restructuring agreement (MRA) was signed on 25.02.2012. As per the
terms of CDR the total loan of Rs. 425/- Crores, out of which share of
CDR members amounted to Rs. 357/- Crores. The said amount was
restructured into cash credit limits of Rs. 252.77 Crores, working
capital term loan limits of Rs. 67.76 Crores and OCRPS of Rs. 36.47
Crores. The cash credit limits and working capital terms loans limits
carry an interest of 10.75% and working capital term loan to be paid on
quarterly in 10 years. The OCRPS is to be fully redeemed on 31 December
2021 an interest payable is 0.1% P.A. The Lenders holding OCRPS has the
option of conversion of OCRPS into equity at any time within three
years of the effective date as SEBI determined price & regulation. Some
of the lenders has not been implemented the said scheme.
20. Inline with the accounting policy adopted by the Company is this
regard, Deferred Tax Assets to the extent of Rs. 63.06 Cr has been
recognized on the business losses incurred during the year and the
unabsorbed deprecation allowance which is to be carried forward to be
set off against future taxable income. The adoption of the accounting
policy and the recognition of deferred tax assets is after careful
consideration by the Audit Committee and the Board of Directors in view
of the business plan worked out in the scheme of CDR and the estimates
of future taxable income of the Company, based on the business plan of
the company.
21. The export of Rs. 370.25 lacs made is outstanding for a period of
more than six months.
22. The management is of the view that going concern concept for the
company is applicable in view of the business plan made by the
management for the future implementation
23. The income tax appeals filed by the company has been rejected by
the first appellate authority confirming the demand of Rs. 48.84
Crores. Against this the income department has made attachment of four
immovable properties (Plot No. 535, Sector 37, Gurgaon, Plot No. 539 &
539A, Sector 37, Gurgaon, Shop No. 115, DLF City Centre Mall, Shalimar
Bagh, New Delhi and building no. 23, Sector 7, IMT Manesar, Gurgaon)
owned by the company. The company is in the process of filling of
second appeal before ITAT, New Delhi against the said order.
24. The figures of the previous year are regrouped /reclassified
wherever necessary to make them comparable with that of the current
year.
Mar 31, 2011
1. In the opinion of the Board of Directors of the company and to the
best of their knowledge and belief the realizable value of current
assets, loans & advances if realized in the ordinary course of
business, will not be less than the amount at which they are stated in
the Balance Sheet as at 31st March, 2011.
2. The Balances of the debtors, creditors and loans & advances are
subject to confirmation and reconciliation.
3. The name of the Micro, Small and Medium Enterprises suppliers
defined under the "The Micro Small and Medium Enterprises Development
Act, 2006"except in the case of a few suppliers, mentioned below, could
not be identified, as the necessary information is not in the
possession of the Company.
4. The Company had made investment of Rs. 1.95 crore in the share
capital of DBG Retail Holdings Ltd., a wholly owned subsidiary company
in F.Y.2007-08. In view of the long term investment of the company in
the said company, a provision equal to the accumulated losses in the
wholly owned subsidiary company has been made in the books of accounts.
5. Term loan secured against hypothecation of machinery and collateral
security of immovable properties registered in the name of company and
directors & their wives and personal guarantees of directors and their
wives are Rs 13.03 Lacs & Rs. 240.43 Lacs for the year ended on
31.03.11 & 31.03.10 respectively.
Term loan secured against hypothecation of car are Rs 23.99 Lacs Lacs &
Rs.45.91 Lacs for the year ended on 31.03.11 & 31.03.10 respectively.
Term loan secured against hypothecation of Retail Commercial Outlets
are Rs.168.69 Lacs & Rs.178.91 Lacs for the year ended on 31.03.11 &
31.03.10 respectively. Working Capital Loans from Banks are secured
against hypothecation of inventories and collateral security of
immovable properties registered in the name of company and directors &
their wives and personal guarantees of directors and their wives.
The company has issued NCD in two trenches, one with 10.15% redeemable
at Par, on 6/04/2009 for Rs 5000 lacs (Balances as on 31-03-2011 Rs
3344.89 lacs ) and another NCD with 13.00% redeemable at Par on
16/07/2009 for rs 5000 lacs (Balance as on 31-03-2011 Rs 5667.02 lacs
),and both are secured by post dated cheques for Principal and Interest
and further secured by charge on land owned by the company in Gujrat
state.
The company could not redeem the debentures on due dates. The Company
has not provided for penal interest or liquidated damages on loans and
debentures defaulted for payment on due dates. Some of the agreements
with the lenders may stipulate penal interest/ liquidated damages. In
view of the ongoing debt restructuring in which the Company has asked
for waiver of these the Management does not consider it necessary to
provide for this.
6. The Company has taken certain office premises, showrooms and retail
commercial outlets on non-cancellable operating lease. The future
minimum lease rentals payable at the Balance Sheet date, in respect of
the non- cancellable operating lease, are as follows:
7. SEGMENT REPORTING
i. Primary- Business Segment
The Company's business consists of and is organized as single segment
of Textiles in terms of Accounting Standard 17 and as such there are no
separate reportable segments.
Koutons Retail India Limited
ii. Secondary- Geographical Segment There are no secondary segments
identified in terms of Accounting Standard 17.
8. EARNINGS PER SHARE
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for the events of bonus issue, if any. For the purpose of
calculating diluted earnings per share, the net profit or loss for the
period attributable to equity shareholders and the weighted average
number of shares outstanding during the period are adjusted for the
effects of all dilutive potential equity shares.
9. Disclosure pursuant to Accounting Standard-15(Revised) "Employee
Benefits"
DETAILS OF DEFINED CONTRIBUTION PLAN
The Company has recognized Rs.19.61 lacs (Previous year Rs.31.64 lacs)
as provident fund in the Profit & Loss Account for the year ended 31st
March 2011 under Defined Contrition Plans.
DETAILS OF DEFINED BENEFIT PLAN a) GRATUITY
The company makes annual contribution to the employees' group-cum life
assurance scheme of the Life Insurance Corporation of India, a funded
defined benefit plan for qualifying employees. The scheme provides for
lump sum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to
15 days salary for service more than 5 years, payable for each
completed year of service or part thereof in excess of 6 months.
Vesting occurs upon completion of 5 years of service.
10. * Contingent liabilities not provided for:
(Rs. in lacs)
Particulars As at 31.03.11 As at 31.03.10
i) Bank GuaranteeO/S Ã 12.58
ii) Claims against the company not 5,224.48 93.80
acknowledged as debts
in respect of past disputed liabilities
of sales tax & income Koutons
Retail India Limited NIl
iii) There are 124 cases which have been filed against the company
under section 138 of Negotiable Instrument Act by 21 parties. The
amount involved is Rs. 6,588.86 lacs.*
iv) There are 12 parties who have filed civil suit for recovery against
the company for an amount of Rs 1,683.17 lacs.*
v) Various workmen have filed 5 labour cases against the Company for
recovery of an amount of Rs 4.27 lacs and the same are pending before
different authorities as on 31.03.11.
v) 4 parties have filed four suits U/s 433(e), 434 of the Companies Act
1956 in the High Court of Delhi against the company for winding up and
recovery of Rs. 2,839.84 lacs and the same are pending as on 31.03.11.
vii) State government of U.P. has filed a case against the company for
recovery of underpaid stamp duty and same are pending before
Commissioner (Stamp) Meerut as on 31.03.2011.
* Based on the discussions with the solicitor/ legal opinion taken, the
management believes that company has strong chance of success in the
above mentioned cases and hence no provision against is considered
necessary.
11. Related Party Disclosure
As per Accounting Standard 18, issued by The Institute of Chartered
Accountants of India, the disclosures of transactions with related
parties for the year ended 31st march, 2011 as defined in Accounting
Standard are given as below:
12. Sundry Debtors include Rs371.18 Cr being Debtors which were
assigned to settle creditors/ liabilities in earlier years and which
failed to pay resulting in reversal of these assignments. These debts
are old for recovery but the Company is working out modalities and
economically viable options to recover these old debts. Pending outcome
of such exercise write-off of Rs 55.45 Cr made during the year is
considered adequate by the management.
13. Advances include Rs 77.56 Cr being amounts assigned in earlier
years to settle creditors/ liabilities. Some of the Advances are quite
old. These old advances as well as some new advances are proving to be
difficult to recover on account of Company's failure to keep
commitments regarding material off take etc on account of stressed
financial position. The Company is in process of negotiation with these
parties to work out modalities to resume business with them and enable
realization of these advances. Pending outcome of such exercise
write-off of Rs48.45 Cr made during the year is considered adequate by
the management.
14. During the year an audit of stocks and receivables of the Company
was conducted by a firm of chartered accountants on behalf of the
consortium of Banks funding the working capital of the Company. The
Auditors have considered certain amounts of Stocks and Receivables as
ineligible for Drawing Power on considerations of ageing and doubts on
realisability. The Management has reviewed these Inventories for their
realisability on the basis of business enquiries, trade trends and
rework requirements and has written off a sum of Rs 218.65 Cr for
possible impairment in value of these Inventories, which is considered
adequate and Rs 16.58 Cr for shortages found during the physical
verifications done by stock auditor and no further provisioning is
necessary in this regard, in the opinion of the Management.
15. During the year total 479 stores have been closed by the Company
on considerations of economic viability. 82 stores have been closed
after the close of the financial year. The fixed assets and inventories
of these stores are being relocated and/or adjusted against the dues of
the franchisees/ property owners. The process of reconciliation of
available assets/ stocks with the balances in books is on and may
require financial adjustment for losses on account of non realisability
/ physical shortage of certain assets. As the process is underway, the
Management has decided to provide for the resultant loss in this regard
after the exercise is complete and accounts are reconciled. Meanwhile
Company has provided for loss of Rs 3.34 Cr in respect of stores for
which the reconciliation exercise was complete.
16. A few lenders / creditors have filed cases for liquidation of the
Company to recover their dues. Due to operational losses and cash flow
mismatches the Company has not been able to pay its debts on time. As
the Company has moved to Corporate Debt Restructuring ( CDR ) Cell to
restructure its debts and is confident of getting support from CDR
members as also non CDR members in its proposed debt restructuring, the
accounts have been drawn on going concern assumption which in the
opinion of the Management, is not challenged.
17. The Company has approached the lenders to restructure its debt
under CDR mechanism in view of cash flow challenges faced on account of
inventory mismatches and non recovery of sales receivables in time and
consequent inability to repay and service its debt in timely manner.
SBI Capital Markets Limited has been appointed to advise the Company in
its Debt Recast Exercise. The Company undertook a detailed and critical
analysis of its inventories, receivables and advances as also its
business model in consultation with Advisors and after careful
consideration of observations of stock auditors appointed for the
purpose. As a result a onetime charge has been taken in Profit and Loss
account to provide for impairment in the values of current assets in
view of present business conditions, distressed sale of inventory and
reworked business model. This has been reflected in the profit & loss
account and consists of Rs218.65 Cr being loss on sale of damaged/ non
moving inventories write-down in the value of inventories, Rs.16.58 Cr
being shortage of inventories(these figures are being included in the
cost of goods sold during the year) and Rs55.45 Cr as write-off for
Receivables and Rs 48.45Cr as write-off for Advances doubtful of
recovery. As the proposal under CDR mechanism is yet to be approved so
the accounting entries of the benefit to be received would be passed
after its approval.
18. During the year some orders placed for capital goods were
cancelled and the advances given there against and reflected as capital
work in progress have been regrouped under "Loans & Advances" to the
extent not received back or adjusted.
19. In line with the accounting policy adopted by the Company is this
regard, Deferred Tax Assets to the extent of Rs 167.80 Cr has been
recognized on the business losses (including the write-offs) incurred
during the year and the unabsorbed deprecation allowance which is to be
carried forward to be set off against future taxable income. The
adoption of the accounting policy and the recognition of deferred tax
assets is after careful consideration by the Audit Committee and the
Board of Directors in view of the business plan worked out in the
ongoing restructuring of Debt and the estimates of future taxable
income of the Company.
Mar 31, 2010
1. In the opinion of the Board of Directors of the company and to the
best of their knowledge and belief the realisable value of current
assets, loans & advances if realised in the ordinary course of business
will not be less than the amount at which they are stated in the
Balance Sheet as at 31st March, 2010.
2. Balance from some of the sundry debtors, sundry creditors and loans
& advances are subject to confirmation and reconciliation.
3. The name of the Micro, Small and Medium Enterprises suppliers
defined under the ÃThe Micro Small and Medium Enterprises Development
Act, 2006" could not be identified, as the necessary information is not
in the possession of the Company.
4. The Company had made investment of Rs. 1.95 crore in the share
capital of DBG Retail Holdings Ltd., a wholly owned subsidiary company
in F.Y.2007-08. In view of the long term investment of the company in
the said company, a provision equal to the accumulated losses in the
wholly owned subsidiary company has been made in the books of accounts.
5. The Company had raised Rs. 10,822.77 Lacs through a public issue of
equity shares during the financial year 2007-08 and whole amount of the
proceeds are utilized as per object of the issue.
6. Term loan secured against hypothecation of machinery and collateral
security of immovable properties registered in the name of company and
directors & their wives and personal guarantees of directors and their
wives are Rs.240.44 Lacs & Rs.602.59 Lacs for the year ended on
31.03.10 & 31.03.09 respectively.
Term loan secured against hypothecation of car are Rs.45.91 Lacs &
Rs.57.40 Lacs for the year ended on 31.03.10 & 31.03.09 respectively.
Term loan secured against hypothecation of Retail Commercial Outlets
are Rs.178.91 Lacs & Rs.186.64 Lacs for the year ended on 31.03.10 &
31.03.09 respectively.
Working Capital Loans from Banks are secured against hypothecation of
inventories and collateral security of immovable properties registered
in the name of company and directors & their wives and personal
guarantees of directors and their wives.
The company has NCD which, with 10.15% redeemable at Par on 6/04/2009
for Rs 5000 lacs (Balances as on 31- 03-2010 Rs 3356.45 lacs ) and
13.00% redeemable at Par on 16/07/2009 for Rs 5000 lacs (Balance as on
31-03- 2010 Rs 4800 lacs ), are secured by post dated cheques for
Principal and Interest and further secured by charge on land in Gujrat.
7. The company could not fully redeem the debentures on due dates and
has asked the Debenture holder for reschedulement of repayment dates
which is pending their consideration. Meanwhile the interest rate on
10.15% NCD has been revised to 13.50%.
8. SEGMENT REPORTING
i. Primary- Business Segment
In accordance with the requirements of Accounting Standard 17 ÃSegment
Reportingà issued by the ICAI, the CompanyÃs business consists of
multiple segments like Manufacturing, Trading and Selling of Textile
products, Accessories and Shoes. But the separate disclosure under the
Accounting Standard 17 is not applicable.
ii. Secondary- Geographical Segment
Secondary Segment Reporting is performed on the basis of geographical
location of the customers. The operation of the Company comprises local
sales only in the current year. Hence no separate disclosure pertaining
to attributable Revenues, profits, assets, Liabilities and Capital
employed are given.
9. During the year the company has settled some of its creditors
assignment of its receivables with mutual consent.
10. EARNINGS PER SHARE:
Basic earnings per share are calculated by dividing the net profit or
loss for the period attributable to equity shareholders by weighted
average number of equity shares outstanding during the period. The
weighted average numbers of equity shares outstanding during the period
are adjusted for the events of bonus issue, if any.
For the purpose of calculating diluted earnings per share, the net
profit or loss for the period attributable to equity shareholders and
the weighted average number of shares outstanding during the period are
adjusted for the effects of all dilutive potential equity shares.
11. Disclosure pursuant to Accounting Standard-15(Revised) "Employee
Benefits"
(i) DETAILS OF DEFINED CONTRIBUTION PLAN
The Company has recognized Rs.31.64 lacs (Previous year Rs.32.02 lacs)
as provident fund in the Profit & Loss Account for the year ended 31st
March 2010 under Defined Contribution Plans.
(ii) DETAILS OF DEFINED BENEFIT PLAN
(a) GRATUITY
The company makes annual contribution to the employeesà group-cum life
assurance scheme of the Life Insurance Corporation of India, a funded
defined benefit plan for qualifying employees. The scheme provides for
lumsum payment to vested employees at retirement, death while in
employment or on termination of employment of an amount equivalent to
15 days salary for service more than 5 years, payable for each
completed year of service or part thereof in excess of 6 months.
Vesting occurs upon completion of 5 years of service.
The present value of the defined benefit obligation and the related
current service cost were measured using the Projected unit credit
method, with actuarial valuations being carried out at each balance
sheet date.
(b) LEAVE ENCASHMENT
Provision for leave entitlement is accrued and provided for at the end
of the financial year but the same is not being determined on actuarial
valuation basis.
12. Capital work-in-progress include a sum of Rs. 156.84 lacs being
advance paid to a real estate developer against purchase of immovable
property which the Developer has given notice for forfeiture and
company is contesting. In view of the fact that the Developer had
failed to acquire land andor achieve desired milestones justifying the
withholding of further payments by Company as also further negotiations
with the Developer, the amount is considered good for recovery.
13. Contingent liabilities not provided for:
Rs. in lacs
Particulars As at 31.03.10 As at 31.03.09
i) Bank Guarantee O/S 12.58 91.60
ii) Claims against the company
not acknowledged as debts
in respect of past disputed
liabilities of sales tax 93.80 93.80
iii) Landlords Mr Jai Kishan Chikara & others has filed civil suit for
recovery amounting to Rs 20.00 lacs* against the company.
iv) Various workmen have filed 4 labour cases against the Company and
the same are pending before different authorities as on 31.03.10
v) State government of U.P. has filed a case against the company and
same are pending before Commissioner (Stamp) Meerut as on 31.03.2010.
* Based on the discussions with the solicitor/ legal opinion taken, the
management believes that company has strong chance of success in the
above mentioned cases and hence no provision against is considered
necessary.
c) Wholly Owned Subsidiary Company
i) DBG Retail Holdings Ltd.
d) Companies under the same Management
i) Klone Infrastructure Private Ltd.
ii) K & S Knitwears Private Ltd.
iii) PBP Marketing private Ltd.
iv) Klone Avinash Infrastructure Private Ltd.
v) Gartex Concept Clothings Ltd.
vi) Venezia Leathers Pvt. Ltd.
vii) S.R. Resorts Pvt. Ltd.
viii) JEG Hospitality Holdings Ltd.
ix) Vian Hospitality Pvt. Ltd.
14. The figures of the previous year are regrouped /reclassified
wherever necessary to make them comparable with that of the current
year.
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