Mar 31, 2018
1. In absence of any probable operating profits in the near future, the management is of view the provision for deferred tax assets are not required to be made during the year.
2. Based on the information available with the Company, there are no suppliers who are registered as micro or small enterprises under The Micro, Small and Medium Enterprises Development Act, 2006, as at 31st March 2018.
3. In view of the management there were certain outstanding liabilities from the financial year 1997-98 with respect of Sales Tax & Entry Tax demand amounting Rs.36.48 lacs, these statutory liabilities are in respect of Biplus division (Demerged Unit w.e.f 01.04.1997). Accordingly the company has transferred the said statutory liabilities to the respective division.
4. The remuneration paid to non-executive chairman is subject to approval of Central Government for which application has been filed on 04.10.2011 followed by the further applications on 30th October, 2012 & 22nd July, 2013 respectively. However, the approval of govt. is yet to be received. The same is pending before the Central Government till date.
5. The Board of Directors at its meeting dated 25,h November, 2010 have taken note of the Report of Independent Chartered Accountant firm elaborating the details of certain financial transactions of the Company. As directed by the board, the efforts were made for recovery of dues and issued legal notices to respective parties. During the year company the board is of the considered view that advances for which provisions have already been made in the books & charged to Profit & Loss Account in no longer receivable and therefore the company has written off the such advances in the current year.
6. The terms of Debentures (series 1 to 4) outstanding are Rate of Interest : waived off by holders company Repayment : yet to be finalised
7. Pursuant to section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 including further amendments thereto, a company has to spend, in every year, at least 2% of the average net profit of the company made during the last three years immediately preceding financial year, as per the objects mentioned in the Rules since there is no average net profit made by the Company during the last three years, excluding the abnormal non- recurring profit on sale of joint venture shares, the provisions of section 135 of the companies act, 2013 related to CSR are not applicable.
8. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of textiles consisting of yarn and fabrics. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz. textile segment. The company operates in one geographical segment.
9. As per Accounting Standard 15 âEmployee Benefitsâ, the disclosure of Employee benefits as defined in the Accounting Standard are given below:
Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
Changes in present value of obligation
B. Gratuity
The employees'' Gratuity Fund Scheme, which is a defined plan, is managed by the Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using Projected Unit Credit Method, which is recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
The Company has recognized Rs. 41.60 lacs (68.72 lacs) in the Profit & Loss account for the year ending 31st March 2018 under Defined Contribution Plan
10. Related Party Disclosures (As certified by Management)
a) List of Related Parties and Relationships.
11. The net worth of the company is eroded, the accounts have been prepared on the principle of going concern with a view to revive the operation of the Company in the future notwithstanding the fact that its net worth is completely eroded.
12. Previous year figures have been re-grouped / reclassified wherever necessary to make them comparable in accordance with
Mar 31, 2016
1. Expenditure during construction period
The expenditure incurred and attributable interest & financing costs incurred prior to commencement of commercial production including Trial Run Expenses in respect of new project & substantial expansion of existing facilities are capitalized.
2. The Honâble BIFR Bench, vide order dated 1st November, 2010 while accepting the report of Operating Agency directed the company to incorporate the dues of GUJCOT in Draft Rehabilitation Scheme (DRS).
3. The Company has preferred an appeal against the said order before Appellate Authority for Industrial & Financial Reconstruction (AAIFR) and the AAIFR vide their order dated 6th April, 2011 directed that impugned directions passed by the BIFR shall be subject to the final order passed by AAIFR in the Appeal.
4. In the final hearing dated 29fi April, 2013 the AAIFR agreed with the submissions of the Company and remanded the case to BIFR with a direction to hear matter on the points raised in appeal before AAIFR. The hearing was scheduled on 25ââ March, 2015. However the same was not heard as the bench did not function on the said date. No further date of hearing has been notified.
5. The Board of Directors at its meeting dated 25fi November, 2010 has taken note of the Report of Independent Chartered Accountant firm elaborating the details of certain financial transactions of the Company. The Board has directed to take necessary action in this regard. As directed by the board, the efforts are being made for recovery of dues and issued legal notices to respective parties. There is no ascertainable effect on the financials except some non-recoverable advances for which provisions have already been made in the books & charged to Profit & Loss Account.
6. Managerial Remuneration
The remuneration paid to non executive chairman in earlier year (s) is subject to approval of Central Government for which application has been filed on 4th October, 2011 followed by the further applications on 30* October, 2012 & 22â* July, 2013 respectively. However, the approval of govt, is yet to be received. The same is pending before the Central Government till date.
7. On 8* July, 2011, the fire had broken out at the factory premises of the company. The company has filed an intimation about the total loss of Rs.. 5 crores on 9* July, 2011 to the insurance company and also requested for deputing surveyor for assessing losses. During the earlier years company had received Rs. 124.94 lacs as on account payment towards the insurance claim and Rs. 168.12 lacs towards salvage value. The remaining of the insurance claim would be processed after the company reinstates the damage assets, which according to the management is under process.
8. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of textiles consisting of yam and fabrics. Considering the nature of business and financial reporting of the Company, the Company has only one segment viz. textile segment. The company operates in one geographical segment.
9. Based on the information available with the Company, there are i no suppliers who are registered as micro or small enterprises under The Micro, Small and Medium Enterprises Development Act, 2006, as at 31â March 2016.
10. As per Accounting Standard 15 âEmployee Benefitsâ, the disclosure of Employee benefits as defined in the Accounting Standard are given below:
11. In view of the Management, in absence of the virtual certainty of the company making taxable/ operating profit in the near future, the management is of the company has decided to not to make a provision for the deferred tax asset during the year and accordingly they gave reversed the deferred tax assets of Rs. 1319.54 Lakhs standing on 1 April-15, this stand would be maintained by the company till there is reasonable certainty of Operating/ taxable profit.
12. Defined Benefit Plan:
13. Leave Encashment:
The present value of obligation under Leave Encashment is determined based on actuarial valuation using the Projected Unit Credit Method, which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
14. Gratuity
The employeesâ Gratuity Fund Scheme, which is a defined plan, is managed by the Trust maintained with Life Insurance Corporation of India (LIC). The present value of obligation is determined based on actuarial valuation using Projected Unit Credit Method, which is recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.
15. During the Year the company has sold the investment of 1,20,00,000 (One Crore Twenty Lacs) Equity Shares of STI Sanoh India Limited (the Joint Venture Company) to Sanoh Industrial Company Limited, Japan. Accordingly, Joint Venture Agreement with Sanoh Industrial Company Limited, Japan has come to an end.
16. The net worth of the company is eroded, the accounts have been prepared on the principle of going concern with a view to revive the operation of the Company in the future notwithstanding the fact that its net worth is completely eroded, and the Company is a Sick Industrial Company.
17. Pursuant to section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 including further amendments thereto, a company has to spend, in every year, at least 2% of the average net profit of the company made during the last three years immediately preceding financial year, as per the objects mentioned in the Rules.
As the company has no average net profit during the immediately preceding last three financial years, therefore the provisions of section 135 of the Companies Act, 2013 are not applicable.
Mar 31, 2015
(I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The Company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
2. CONTINGENT LIABILITIES NOT PROVIDED FOR:
(Rs. In Lacs)
S. As at As at
N. Particulars 31.03.2015 31.03.2014
(i) Claims against the company towards 490.32 490.32
energy charges on Captive Generation.
(ii) Estimated Interest amount payable on 87.21 79.94
confirmed demand for sales and entry tax
(iii) Liability towards M/s Maharashtra 73.82 73.82
state Cotton Grower Mktg. Federation on
account of pending dispute under court
of law.
(iv) Disputed Sales Tax/ Entry Tax Demands 63.00 64.43
(v) Demand towards Show Cause Notice 11.02 11.02
Issued by Additional commissioner of
Central excise in the matter of wrong
availment of cenvat on packing material
used in packing of cotton waste, amount
inclusive of penalty.
(vi) Demand towards Show Cause Notice 65.49 65.49
issued by Excise Department for charging
Additional Customs Duty including penalty,
on the import of HSD on account of which
dispute is pending in high court
(vii) Demand towards Show Cause Notice 27.03 27.03
issued by Excise Department for charging
Additional Custom Duty including penalty,
on the import of HSD on account of which
dispute is pending under Appeal
(viii) Disputed Income tax demand 7.00 7.00
(ix) Claim of Gujarat State Co-operative 10384.84 10384.84
Cotton Federation Limited (GUJCOT) for cotton supplies, interest,
carrying charges etc. disputed and not acknowledged by the Company.
(Refer note No. 26)
Capital Commitments :
Estimated amount of Capital Contracts remaining to be executed (net of
advances) is Rs. 264.63 Lacs. (P.Y. Rs. 730.01 Lacs)
3. a) The Hon'ble BIFR Bench, vide order dated 1st November, 2010
while accepting the report of Operating Agency directed the company to
incorporate the dues of GUJCOT in Draft Rehabilitation Scheme (DRS).
b) The Company has preferred an appeal against the said order before
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
and the AAIFR vide their order dated 6th April, 2011 directed that
impugned directions passed by the BIFR shall be subject to the final
order passed by AAIFR in the Appeal.
c) In the final hearing dated 29th April, 2013 the AAIFR agreed with
the submissions of the Company and remanded the case to BIFR with a
direction to hear matter on the points raised in appeal before AAIFR.
The hearing was scheduled on 25th March, 2015. However the same was not
heard as the bench did not function on the said date. No further date
of hearing has been notified.
4. The Board of Directors at its meeting dated 25th November, 2010 has
taken note of the Report of Independent Chartered Accountant firm
elaborating the details of certain financial transactions of the
Company. The Board has directed to take necessary action in this
regard. As directed by the board, the efforts are being made for
recovery of dues and issued legal notices to respective parties. There
is no ascertainable effect on the financials except some
non-recoverable advances for which provisions have already been made in
the books & charged to Profit & Loss Account.
5. Managerial Remuneration
The remuneration paid to non executive chairman is subject to approval
of Central Government for which application has been filed on
04.10.2011 followed by the further applications on 30th October, 2012 &
22nd July, 2013 respectively. However, the approval of govt. is yet to
be received. The same is pending before the Central Government till
date.
6. On 08.07.2011, the fire incidence took place in the factory
premises of the company. The company has filed an intimation about the
total loss of Rs. 5 crores on 09.07.2011 to the insurance company and
also requested for deputing surveyor for assessing losses. However,
During the earlier years company has received Rs. 124.94 lacs as on
account payment towards the insurance claim and Rs 168.12 lacs towards
salvage value. Damaged assets will be re-instated at the earliest
possible and soon thereafter remaining claim will be processed by
insurance company.
7. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of
textiles consisting of yarn and fabrics. Considering the nature of
business and financial reporting of the Company, the Company has only
one segment viz. textile segment. The company operates in one
geographical segment.
8. Based on the information available with the Company, there are no
suppliers who are registered as micro or small enterprises under The
Micro, Small and Medium Enterprises Development Act, 2006, as at 31st
March 2015.
9. As per Accounting Standard 15 "Employee Benefits", the
disclosure of Employee benefits as defined in the Accounting Standard
are given below:
10. Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation.
B. Gratuity
The employees' Gratuity Fund Scheme, which is a defined plan, is
managed by the Trust maintained with Life Insurance Corporation of
India (LIC). The present value of obligation is determined based on
actuarial valuation using Projected Unit Credit Method, which is
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
11. The total amount of expenses incurred by the company has debited to
Profit & loss accounts is Rs. 517.70 Lacs during the year (cumulative Rs.
574.90 Lacs), in respect of legal issues related to proposal for
disposal of company's stake in STI Sanoh India Ltd.
12. The Company has incurred substantial losses and its net worth is
eroded, the accounts have been prepared on the principle of going
concern with a view to revive the operations of the Company in future
notwithstanding the fact that its net worth is completely eroded, and
the company is a Sick Industrial Company.
Previous year figures have been re-grouped / reclassified wherever
necessary to make them comparable in accordance with revised schedule
VI.
13. Pursuant to section 135 of the Companies Act, 2013 read with
Companies (Corporate Social Responsibility Policy) Rules, 2014
including further amendments thereto, a company has to spend, in every
financial year, atleast 2% of the average net profits of the company
made during the last three years immediately preceding financial year,
as per the objects mentioned in the Rules.
The company has suffered a net loss for the current year and having no
average net profits during the immediately preceding last three
financial years, the provisions of section 135 of the Companies Act,
2013 are not applicable.
Mar 31, 2014
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
2. Expenditure during construction period
The expenditure incurred and attributable interest & financing costs
incurred prior to commencement of commercial production including Trial
Run Expenses in respect of new project & substantial expansion of
existing facilities are capitalised.
3. CONTINGENT LIABILITIES NOT PROVIDED FOR:
(Rs. In Lacs)
S. As at As at
N. Particulars 31.03.2014 31.03.2013
(i) Claims against the company towards 490.32 490.32
energy charges on Captive Generation.
(ii) Estimated Interest amount payable on 79.94 72.68
confirmed demand for sales and entry
tax
(iii) Liability towards M/s Maharashtra
State Cotton Grower Mktg. Federation 73.82 73.82
on account of pending dispute under
court of law.
(iv) Disputed Sales Tax/ Entry Tax Demands 64.43 64.43
(v) Demand towards Show Cause Notice 11.02 11.02
Issued by Additional commissioner of
Central excise in the matter of wrong
availment of cenvat on packing material
used in packing of cotton waste,
amount inclusive of penalty.
(vi) Demand towards Show Cause Notice Issued 65.49 65.49
by Excise Department for charging
Additional Customs Duty ,including
penalty, on the import of HSD on
account of which dispute is pending in
high court
(vii) Demand towards Show Cause Notice
Issued by Excise Department for
charging Additional Custom Duty , 27.03 27.03
including penalty, on the import of
HSD on account of which dispute is
pending under Appeal
(viii) Disputed Income tax demand 7.00 7.00
(ix) Claim of Gujarat State Co-operative 10384.84 10384.84
Cotton Federation Limited (GUJCOT) for
cotton supplies, interest, carrying
charges etc. disputed and not
acknowledged by the Company. (Refer
note No. 4)
4. Capital Commitments :
Estimated amount of Capital Contracts remaining to be executed (net of
advances) is Rs. 730.01 Lacs. (P.Y. Rs. 840.69 Lacs)
5. a) The Hon''ble BIFR Bench, vide order dated 1st November, 2010
while accepting the report of Operating Agency directed the company to
incorporate the dues of GUJCOT in Draft Rehabilitation Scheme (DRS).
b) The Company has preferred an appeal against the said order before
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
and the AAIFR vide their order dated 6th April, 2011 directed that
impugned directions passed by the BIFR shall be subject to the final
order passed by AAIFR in the Appeal. c) In the final hearing dated
29th April, 2013 the AAIFR agreed with the submissions of the Company
and remanded the case to BIFR with a direction to hear matter on the
points raised in appeal before AAIFR. The hearing was scheduled on 25th
March, 2014. However the same was not heard as the bench did not
function on the said date. No further date of hearing has been
notified.
6. The Board of Directors at its meeting dated 25th November, 2010 has
taken note of the Report of Independent Chartered Accountant firm
elaborating the details of certain financial transactions of the
Company. The Board has directed to take necessary action in this
regard. As directed by the board, the efforts are being made for
recovery of dues and issued legal notices to respective parties. There
is no ascertainable effect on the financials except some
non-recoverable advances for which provisions have already been made in
the books & charged to Profit & Loss Account.
7. Managerial Remuneration
The remuneration paid to non executive chairman is subject to approval
of Central Government for which application has been filed on
04.10.2011 followed by the further applications on 30th October, 2012 &
22nd July, 2013 respectively. However, the approval of govt. is yet to
be received.
8. On 08.07.2011, the fire incidence took place in the factory
premises of the company. The company has filed intimation about the
total loss of Rs. 5 crores on 09.07.2011 to the insurance company and
also requested for deputing surveyor for assessing losses. However,
During the previous year company has received Rs. 124.94 lacs as on
account payment towards the insurance claim and Rs. 168.12 lacs towards
salvage value. Pending the processing of the insurance claim, the
balance claim of the company remains to be crystallized therefore to
that extent no effect has been given in books of accounts.
9. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of
textiles consisting of yarn and fabrics. Considering the nature of
business and financial reporting of the Company, the Company has only
one segment viz. textile segment. The company operates in one
geographical segment.
10. Based on the information available with the Company, there are no
suppliers who are registered as micro or small enterprises under The
Micro, Small and Medium Enterprises Development Act, 2006, as at 31st
March 2014.
11. As per Accounting Standard 15 "Employee Benefits", the disclosure
of Employee benefits as defined in the Accounting Standard are given
below:
12. Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation. Changes in present value of
obligation
13. The Company has provided corporate guarantee for securing the term
loans and working capital loan facilities availed by the holding
company restricted upto the realizable value of assets provided as
security.
14. Previous year figures have been re-grouped / reclassified wherever
necessary to make them comparable in accordance with revised schedule
VI.
Mar 31, 2013
1. BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
2. Expenditure during construction period:
The expenditure incurred and attributable interest & financing costs
incurred prior to commencement of commercial production including Trial
Run Expenses in respect of new project & substantial expansion of
existing facilities are capitalised.
3. CONTINGENT LIABILITIES NOT PROVIDED FOR:
(Rs In Lacs)
S. As at As at
N Particulars 31.03.2013 31.03.2012
(i) Claims against the company towards 490.32 490.32
energy charges on Captive Generation.
(ii) Outstanding Amount of Madhya Pradesh - 31.72
Audyogik Kendra VikasNigam Limited
(MPAKVN) towards Land Acquisition
Settlement.
(iii) Estimated Interest amount payable 72.68 65.41
on confirmed demand for sales
and entry tax
(iv) Liability towards M/s Maharashtra 73.82 73.82
State Cotton Grower Mktg.
Federation on account of
pending dispute under court
(V) DisputedSalcsTax/EntryTaxDemands 64.43 67.76
(vi) Demand towards Show Cause Notice 11.02 11.02
Issued by Additional commissioner
of Central excise in the matter
of wrong availment of cenvat on
packmg material used in packing
of cotton waste, amount inclusive
of penalty.
(vii) Demand towards Show Cause Notice 65.49 65.49
Issued by Excise Department for
charging Additional Customs
Duty .including penalty, on the
import of HSD on account of
which dispute is pending in
high court
(Vii) Demand towards Show Causc Notice 27.03 27.03
lssued by Excise Department for
charging Additional Customs
Duty, including penalty,
on the import of HSD on account
of which dispute is pending
under appeal
(ix) Disputed Income tax demand 7.00 7.00
(x) Demand towards Show Cause Notice - 2129.07
Issued by Excise Department for
rcmoval/Salc of waste in Domestic
Tariff Area (DTA) in excess
ofpermission granted to the
company. Reply to show cause
notices have already been
filed before Commissioner
(Customs & Excise), Indore.
(xi) ClaimofGujaratStatcCo-operativeCotton 10384.84 10384.84
Federation Limited (GUJCOT) for cotton
supplies, interest, carrying charges
etc. disputed and not acknowledged by the
Company. (RcfcrnolcNo.4)
4. Capital Commitments:
Estimated amount of Capital Contracts remaining to be executed (net of
advances) is ? 840.69 Lacs. (P.Y. 262.52 Lacs)
5. a) The Hon'ble BIFR Bench, vide order dated 1 st November,
2010 while accepting the report of Operating Agency directed the
company to incorporate the dues of GUJCOT in Draft Rehabilitation
Scheme (DRS). The next date of BIFR is fixed for 16th May, 2013.
b) The Company has preferred an appeal against the said order before
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
and the AAIFR vide their order dated 6th April, 2011 directed that
impugned directions passed by the BIFR shall be subject to the final
order passed by AAIFR in the Appeal. The matter is pending for hearing.
The case is at final stage and final hearing from company side since
completed, and on 29th April the AAIFR has remanded the case to BIFR
with a direction to hear matter on the points raised in appeal before
AAIFR.
6. The Board of Directors at its meeting dated 25th November, 2010 has
taken note of the Report of Independent Chartered Accountant firm
elaborating the details of certain financial transactions of the
Company. The Board has directed to take necessary action in this
regard. As directed by the board, the efforts are being made for
recovery of dues and issued legal notices to respective parties. There
is no ascertainable effect on the financials except some
non-rccoverable advances for which provisions have already been made in
the books & charged to Profit & Loss Account.
7. Managerial Remuneration
The remuneration paid to non executive chairman is subject to approval
of Central Government for which application has been filed on
04.10.2011 but the approval is not yet received.
8. On 08.07.2011, the fire incidence took place in the factory
premises of the company. The company has filed an intimation about the
total loss of Rs 5 crores on 09.07.2011 to the insurance company and
also requested for deputing surveyor for assessing losses. However,
during the previous year company has received Rs 124.94 lacs as on
account payment towards the insurance claim and RS 168.12 lacs towards
salvage value. Pending the processing of the insurance claim, the
balance claim of the company remains to be crystallized therefore to
that extent no effect has been given in books of accounts.
9. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of
textiles consisting of yam and fabrics. Considering the nature of
business and financial reporting of the Company, the Company has only
one segment viz. textile segment. The company operates in one
geographical segment.
10. Based on the information available with the Company, there are no
suppliers who are registered as micro or small enterprises under The
Micro, Small and Medium Enterprises Development Act, 2006, as at 31 si
March 2013.
11. As per Accounting Standard 15 "Employee Benefits", the disclosure
of Employee benefits as defined in the Accounting Standard are given
below:
12. Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation.
B. Gratuity
The employees' Gratuity Fund Scheme, which is a defined plan, is
managed by the Trust maintained with Life Insurance Corporation of
India (LIC). The present value of obligation is determined based on
actuarial valuation using Projected Unit Credit Method, which is
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
13. Related Party Disclosures (As certified by Management)
a) List of Related Parties and Relationships: *
S. Name of Related Party Relationship
No.
1. Bombay Rayon Fashions Limited Holding Company
2. STI Sanoh India Limited Incorporated Joint Venture
3. Key Management Personnel:
A. Dr. R.B.Baheti Non Executive Chairman
B. Mr. Prashant Agrawal Managing Director
C. Mr.AmanAgrawal Vice-Chairman
14. Company has provided corporate guarantee of? 155749 lakhs for
secured loan facilities taken by the holding company.
15. Information inrespect of Joint Venture Company (JVC) - STI Sanoh
India Limited, as per available financial statements as at 31st March,
2013 (Provisional) and 31 st March, 2012 (Audited), is provided
hereunder:-
Country of Incorporation India
Proportion of Ownership Interest 43.48% (? 1199.93 lacs of paid up
equity share capital out of Rs 2760 lacs)
Description of Interest Joint Venture Company (JVC) is
established principally for
manufacturing of Single Walled
Copper Brazed Tubes and Break
fuel components.
16. Previous year figures have been re-grouped / reclassified wherever
necessary to make them comparable in accordance with revised schedule
VI.
Mar 31, 2012
(I) BASIS OF PREPARATION OF FINANCIAL STATEMENTS:
The company follows the mercantile system of accounting and recognizes
income and expenditure on accrual basis. The accounts are prepared on
historical cost basis as a going concern and are consistent with
generally accepted accounting principles.
1. CONTINGENT LIABILITIES NOT PROVIDED FOR:
(Rs In Lacs)
Sl. As at As at
No. Particulars 31.03.2012 31.03.2011
(i) Claims against the company
towards 490.32 490.32
energy charges on Captive Generation.
(ii) Outstanding Amount of Madhya
Pradesh 31.72 522.06
Audyogik Kendra Vikas Nigam Limited
(MPAKVN) towards Land Acquisition
Settlement.
(iii) Estimated Interest amount
payable on 65.41 58.13
confirmed demand for sales and entry tax
(iv) Liability towards M/s Maharashtra 73.82 73.82
State Cotton Grower Mktg. Federation
on account of pending dispute under court
of law.
(v) Disputed Sales Tax/ Entry Tax
Demands 67.76 67.31
(vi) Demand towards Show Cause Notice 11.02 -
Issued by Additional commissioner of
Central excise in the matter of wrong
availment of cenvat on packing material
used in packing of cotton waste, amount
inclusive of penalty.
(vii) Demand towards Show Cause Notice
Issued - 11.24
by Additional commissioner of Central
excise & Service tax for wrong availment
of cenvat credit of Service Tax on
commission on export
(Viii)Demand towards Show Cause Notice
Issued 65.49 65.49
by Excise Department for charging
Additional Customs Duty ,including
penalty, on the import of HSD on
account of which dispute is pending
in high court
(ix) Demand towards Show Cause Notice
Issued 27.03 27.03
by Excise Department for charging
Additional Custom Duty ,including
penalty, on the import of HSD on
account of which dispute is pending
under Appeal
(x) Disputed Income tax demand 7.00 -
(xi) Demand towards Show Cause Notice
issued 2129.07 2129.07
by Excise Department for removal/Sale
of waste in Domestic Tariff Area
(DTA) in excess of permission granted
to the company. Reply to show cause
notices have already been filed
before Commissioner
(Customs & Excise), Indore.
(xii) Claim of Gujarat State
Co-operative Cotton 10384.84 10384.84
Federation Limited (GUJCOT) for
cotton supplies, interest, carrying
charges etc. disputed and not
acknowledged by the Company.
(Refer note No. 4)
2. Capital Commitments :
Estimated amount of Capital Contracts remaining to be executed (net of
advances) is 262.52 Lacs. (P.Y. 565.86 Lacs)
3. a) The Hon'ble BIFR Bench, vide order dated 1st November,
2010 while accepting the report of Operating Agency directed the
company to incorporate the dues of GUJCOT in Draft Rehabilitation
Scheme (DRS). The next date of BIFR is fixed for 05t1' July, 2012.
b) The Company has preferred an appeal against the said order before
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
and the AAIFR vide their order dated 6th April, 2011 directed that
impugned directions passed by the BIFR shall be subject to the final
order passed by AAIFR in the Appeal. The matter is pending for hearing.
The case is at final stage and final hearing from company side since
completed. The next date of hearing is fixed for 28th May, 2012.
4. The Board of Directors at its meeting dated 25th November, 2010 has
taken note of the Report of Independent Chartered Accountant firm
elaborating the details of certain financial transactions of the
Company. The Board has directed to take necessary action in this
regard. As directed by the board, the efforts are being made for
recovery of dues and issued legal notices to respective parties. There
is no ascertainable effect on the financials except some
non-recoverable advances for which provisions have already been made in
the books & charged to Profit & Loss Account.
5. Managerial Remuneration
The remuneration paid to non executive chairman is subject to approval
of Central Government for which application has been filed on
04.10.2011 but the approval is not yet received.
6. On 08.07.2011, the fire incidence took place in the factory
premises of the company. The company has filed an intimation about the
total loss of Rs 5 crores on 09.07.2011 to the insurance company and
also requested for deputing surveyor for assessing losses. However,
during the year the company has received Rs 124.94 lacs as on account
payment towards the insurance claim and Rs 168.12 lacs towards salvage
value. Pending the processing of the insurance claim, the balance claim
of the company remains to be crystallized therefore to that extent no
effect has been given in books of accounts.
7. Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of
textiles consisting of yarn and fabrics. Considering the nature of
business and financial reporting of the Company, the Company has only
one segment viz; textile as reportable segment. The Company operates
in Local & Export segments Geographically. The sales for both are
separately given, but due to the nature of business the assets /
liabilities and expenses for these activities cannot be bifurcated
separately.
8. Based on the information available with the Company, there are no
suppliers who are registered as micro or small enterprises under The
Micro, Small and Medium Enterprises Development Act, 2006, as at 31st
March 2012.
9.As per Accounting Standard 15 "Employee Benefits", the disclosure of
Employee benefits as defined in the Accounting Standard are given
below:
10. Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation.
B. Gratuity
The employees' Gratuity Fund Scheme, which is a defined plan, is
managed by the Trust maintained with Life Insurance Corporation of
India (LIC). The present value of obligation is determined based on
actuarial valuation using Projected Unit Credit Method, which is
recognizes each period of service as giving rise to additional unit of
employee benefit entitlement and measures each unit separately to build
up the final obligation.
11. Previous year figures have been re-grouped / reclassified wherever
necessary to make them comparable in accordance with revised schedule
VI.
Mar 31, 2011
1. CONTINGENT LIABILITIES NOT PROVIDED FOR:
(Rs. In Lacs)
As at As at
Particulars 31.03.2011 31.03.2010
(i) Claims against the company 490.32 490.32
towards energy charges on Captive
Generation.
(ii) Outstanding Amount of 522.06 28.80
Madhya Pradesh Audyogik Kendra
Vikas Nigam Limited (MPAKVN)
towards Land Acquisition Settlement.
(iii) Estimated Interest amount 58.13 39.55
payable on confirmed demand for
sales and entry tax
(iv) Liability towards M/s 73.82 73.82
Maharashtra State Cotton Grower
Mktg. Federation on account of
pending dispute under court of law.
(v) Disputed Sales Tax/ Entry
Tax Demands 67.31 67.31
(vi) Demand towards Show Cause 11.24 11.24
Notice Issued by Additional
commissioner of Central excise
& Service tax for wrong
availment of cenvat credit of
Service Tax on commission on export.
(vii) Demand towards Show Cause Notice 65.49 65.49
Issued by Excise Department for
charging Additional Customs Duty ,
including penalty, on the import
of HSD on account of which dispute
is pending in high court
(viii)Demand towards Show Cause Notice 27.03 27.03
Issued by Excise Department for
charging Additional Custom Duty ,
including penalty, on the import
of HSD on account of which
dispute is pending under Appeal
(ix) Demand towards Show Cause Notice 2129.07 2129.07
issued by Excise Department for
removal/Sale of waste in Domestic
Tariff Area (DTA) in excess of
permission granted to the company.
Reply to show cause notices have
already been filed before
Commissioner (Customs & Excise),
Indore
(x) Claim of Gujarat State 10384.84 10384.84
Co-operative Cotton
Federation Limited (GUJCOT) for
cotton supplies, interest,
carrying charges etc. disputed
and not acknowledged by the
Company. (Refer note No. 4)
2. Capital Commitments :
Estimated amount of Capital Contracts remaining to be executed (net of
advances) is Rs. 565.86 Lacs.
3. a) The Hon'ble BIFR Bench, vide order dated 1st November,
2010 while accepting the report of Operating Agency directed the
company to incorporate the dues of GUJCOT in Draft Rehabilitation
Scheme (DRS).
b) The Company has preferred an appeal against the said order before
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
and the AAIFR vide their order dated 6th April, 2011 directed that
impugned directions passed by the BIFR shall be subject to the final
order passed by AAIFR in the Appeal. The matter is pending for hearing.
5. a) Bombay Rayon Fashions Limited (BRFL) has acquired 86,47,336
equity shares of Rs. 10 each fully paid-up and 32,180,000 OCDs (along
with all the underlying security) from the erstwhile Private Equity
share holders and OCD holders of Series 1, 2, 3 & 4 as intimated to the
Company vide letter dated October 27, 2010. Further the underlying
security including 1,18,14,114 equity shares of Rs. 10 each held by the
IDBI Trusteeship Services Ltd. (on behalf of OCD holders) on invocation
of the pledge were also transferred to BRFL.
b) Consequent to the acquisition by BRFL as above- mentioned, the Open
offer was triggered pursuant to SEBI (Acquisition and Takeover)
Regulation, 1997 and at present BRFL is holding 2,13,79,722 equity
shares constituting 73.72% of the equity capital of the Company. On
conclusion of Open Offer, BRFL has become now Promoter of the Company.
c) The erstwhile OCD holders have waived principal to the extent of Rs.
2828 Lacs against the principal outstanding on proportionate basis and
the interest due on the OCDs from February 14, 2008 to October 26,
2010. Further BRFL has waived the interest due on the OCDs from October
27, 2010 to March 31, 2011.
d) Since the debentures are presently owned by Indian Resident Company,
the RBI Circular A.P. (DIR Series) No. 74 dated June 8, 2007 is not be
applicable.
4. During the year the Company has changed method of depreciation in
respect of Motor Vehicles from Written Down Value Method to Straight
Line Method prospectively w.e.f. 1st April 2010. However, there is no
material impact on the financial statements.
5. The Board of Directors at its meeting dated 25th November, 2010
have taken note of the Report of Independent Chartered Accountant firm
elaborating the details of certain financial transactions of the
Company. The Board has directed to take necessary action in this
regard. There is no ascertainable effect on the financials except some
non-recoverable advances for which provisions have already been made in
the books & charged to Profit & Loss Account.
6.Segmental Reporting:
The Company is mainly engaged in the business of manufacturing of
textiles consisting of yarn and fabrics. Considering the nature of
business and financial reporting of the Company, the Company has only
one segment viz; textile as reportable segment. The Company operates in
Local & Export segments Geographically. The sales for both are
separately given, but due to the nature of business the assets /
liabilities and expenses for these activities cannot be bifurcated
separately.
7. Based on the information available with the Company, there are no
suppliers who are registered as micro or small enterprises under The
Micro, Small and Medium Enterprises Development Act, 2006, as at 31st
March 2011.
8. As per Accounting Standard 15 "Employee Benefits", the disclosure
of Employee benefits as defined in the Accounting Standard are given
below:
Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation.
9. Related Party Disclosures (As certified by Management)
a) List of Related Parties and Relationships.
S.No. Name of Related Party Relationship
1. Eight Capital Master Fund Private Foreign upto 26.10.2010
Limited (Cayman Island) Investors
jointly control
2. Spinnaker Global Opportunity ling 70.56%
Fund Ltd. (British Virgin equity capital
Islands) of the company
3. Spinnaker Global Emerging
Markets Fund Ltd. (British
Virgin Islands)
4. Spinnaker Global Strategic
Fund Ltd. (British Virgin
Islands)
5. Bombay Rayon Fashions Holding Company w.e.f. 27.10.
Limited Incorporated 2010
Joint Venture
6. STI Sanoh India Limited
7. Key Management Personnel Whole time upto 31.10.
Director 2010
A Dr. R.B .Baheti Non Executive w.e.f. 01.11.
Chairman 2010
B Mr. Prashant Agrawal Managing
Director
C. Mr. Aman Agrawal Vice - Chairman w.e.f. 25.11.
2010
8. Associate Companies (Enterprises in which key management personnel
/ relatives exercises significant influence)
A STI Power India Pvt. Ltd. upto 31.10.
2010
B STI Fabricraft Pvt. Ltd.
C Hyson Investment & Finance Pvt. Limited
D East West Finance Pvt. Ltd
10. Information in respect of Joint Venture Company (JVC) - STI Sanoh
India Limited, as per available financial statements as at 31st March,
2011 (Provisional) and 31st March, 2010 (Audited), is provided
hereunder:-
Country of Incorporation India
Proportion of Ownership Interest 43.48% (Rs. 1199.93 lacs of paid up
equity share capital out of Rs. 2760 lacs)
Description of Interest Joint Venture Company (JVC) is established
principally for manufacturing of Single Walled Copper Brazed Tubes
and Break fuel components.
11. The disclosures mandated by paragraphs 3(i)(a), 3(ii)(a), 3(ii)(b)
and 3(ii)(d) of Part II, Schedule VI to the Companies Act, 1956 have
not been provided in view of applicability of exemption vide General
Notification No. S.O. 301(E) dated 8th February 2011 issued under
Section 211(3) of the Companies Act, 1956 by The Ministry of Corporate
Affairs, Government of India.
12. Previous year figures have been re-grouped reclassified wherever
necessary to make them comparable.
Mar 31, 2010
1. CONTINGENT LIABILITIES:
As at As at
Particulars 31.03.2010 31.03.2009
(Rs. In Lacs) (Rs. In Lacs)
(i) Claims against the company
towards 490.32 490.32
energy charges on Captive Generation
(ii) Outstanding of MPAKVN 28.80 28.80
towards Land Acquisition Settlement.
(iii) Bonds executed in favour of
President of NIL 5300.00
India towards Customs/Excise obligations.
(iv)Estimated amount of contracts NIL 21.78
remaining to be executed on capital
account and not provided for
(v) Estimated Interest amount
payable on 39.55 33.80
confirmed demand for sales and entry tax
(vi)*Liability towards Gujarat State 10384.84# 10384.84#
Co-operative Cotton Federation Limited
for cotton supplies, interest, carrying
charges etc. under dispute.
(vii)Liability towards M/s
Maharashtra state 73.82 73.82
Cotton Grower Mktg. Federation on account
of pending dispute under court of law.
(viii)Disputed Sales Tax/Entry
Tax Demands 67.31 67.31
(ix) Disputed Service Tax Demand NIL 6.12
(x) Demand towards Show Cause Notice 11.24 NIL
Issued by Additional commissioner of
Central Excise & Service Tax for wrong
availment of cenvat credit of
Service Tax on commission on export.
(xi) Demand towards Show Cause Notice 65.49 NIL
Issued by Excise Department for charging
Additional Customs Duty, including penalty,
on the import of HSD on account of
which dispute is pending in high court
(xii)Demand towards Show Cause Notice 27.03 27.03
Issued by Excise Department for charging
Additional Customs Duty, including penalty,
on the import of HSD on account of
which dispute is pending under Appeal
(xiii)Demand towards Show Cause Notice 2129.07 2129.07
Issued by Excise Department for
removal/Sale of waste in Domestic
Tariff Area (DTA) in excess of permission
granted to the company. Reply to show
cause notices have already been filed before
Commissioner (Customs & Excise), Indore.
* Though the contingent liability towards Gujcot is appearing due to
the case filed by them against the Company, as per records of the
Company there is no such liability towards Gujcot as the principal
liability has been assigned to the other company in the year 2004-05
after obtaining approval from the Gujcot for restructuring of the debt.
#This amount includes interest amounting to Rs. 5529.84 lacs.
2. Investments include Rs. 1199.93 lacs representing equity shares of
STI Sanoh India Limited (SSIL) held on long term basis and on perusal
of available provisional financial statements of SSIL it appears that
no permanent decline exists in value such of investments.
3. The Company has been declared as a Sick Industrial Undertaking
under Section 3(l)(o) of the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) vide Summary Record of proceedings of the
hearing held on 23rd January 2006 against reference registration No.
743/2002 dated 30th December, 2002.
The Honble BIFR Bench has appointed State Bank of India as Operating
Agency to prepare Draft Rehabilitation Scheme.
4. The Honble BIFR Bench, vide order dated 2nd January 2008 has
reserved its decision on the action of the company in mortgaging the
entire block assets of the company in favour of two foreign investors
without the Boards permission. The Board has further recorded that
till then, the mortgage shall be treated as unenforceable. The
Appellate Authority for Industrial & Financial Reconstruction (AAIFR)
vide order dated 12th January 2009 has set aside the order of BIFR and
directed that permission of BIFR is not required for creation of
mortgage. The Honble High Court vide order dated 2nd June 2010 has
affirmed the above mentioned order of Appellate Authority for
Industrial & Financial Reconstruction (AAIFR).
5. Due to adverse market conditions the Company has not been able to
generate sufficient revenues to serve the interest on Optionally
Convertible Debentures (OCD) issued to Private Foreign Investors from
1st July 07 onwards. The Company has also not been able to redeem
Optionally Convertible Debentures-Series 1 to 4 for Rs. 141.00 crores.
6. As per A.P. (DIR Series) Circular No. 74 dated June 8, 2007 issued
by RBI, it is clarified that henceforth, only instruments which are
fully and mandatorily convertible into equity, within a specified time
would be reckoned as part of equity under the FDI Policy and eligible
to be issued to persons resident outside India under the Foreign Direct
Investment Scheme in terms of Regulation 5 (1) of Foreign Exchange
Management (Transfer and Issue of shares by a Person Resident outside
India) Regulations, 2000 notified vide Notification No. FEMA 20/2000-RB
dated May 3,2000. Optionally convertible debentures Series 1,2,3 & 4
had fallen due for redemption / conversion during the earlier years.
Option to convert OCDs into equity shares had not been exercised. In
light of the RBI Circular the said debentures cannot be rolled over,
and are subjected to redemption.
7. The Optionally Convertible Debentures (OCDs) holders have intimated
by their letter dated October 27,2010 of transfer to Bombay Rayon
Fashions Limited of 32,180,000 Optionally Convertible Debentures (OCDs)
held by them alongwith the underlying properties / securities including
the invoked 1,18,14,114 equity shares held by IDBI Trusteeship Services
Limited as debenture trustee on behalf of the aforesaid.
8. The Optionally Convertible Debentures (OCDs) holders have by their
letter dated October 26,2010 also completely waived interest due on the
Optionally Convertible Debentures (OCDs) from the date, i.e. February
14, 2008, of invocation of pledge of 1,18,14,114 shares.
9.The Optionally Convertible Debentures (OCDs) holders by their letter
dated October 26, 2010 waived principal to the extent of Rs.
28,18,00,000 against the principal outstanding of OCD Series 1 to 4 on
proportionate basis.
10.During the year, vide order no F.No.04/323/99-100% EOU/109 dated
24th April 2009, The Asstt. Development Commissioner, Indore Special
Economic Zone, Indore has passed an order allowing the company for
final debonding from 100% Export Oriented Unit (EOU) to DTAunit.
11. The company has changed its Accounting Policy of valuation of
closing stock, i.e. excluding the indirect costs like Administrative
expenses, selling expenses, depreciation on non factory building etc.
As a result of change in the Accounting Policy, the value of closing
stock has decreased by Rs. 14,47,399/-. Had these not been changed, the
loss of the company would have been lower by the same amount.
12. Increase in raw cotton prices etc. company has suffered losses
during the year. The management is hopeful, of better performance
during coming years, and confident that company shall be able to
wipe-off its accumulated losses in next few years and accordingly the
accounts have been prepared on a going concernbasis.
13. Interest amounting to Rs. 2.41 crores (P. Year Rs.2.69 crores) on
delayed payments to suppliers has been accounted for on cash basis.
14.Computer software has not been amortized over the useful expected
life as recommended in Accounting Standards 26 "Intangible Asset".
15.Confirmation of balances from Debtors, Creditors and Advances given
were not available, and reconciliation thereof is pending.
16.During the year, the following claim has filed by the company to
various authorities, which has been settled in the favour of the
company.
17. The management has taken a legal opinion on the non- applicability
of wealth tax liability to the company and accordingly, no provision
for wealth tax liability has been provided in the books of accounts.
18. The Board of Directors at its meeting dated 20th April 2010 took a
note of the certain financial transactions and to carry out a further
investigation into this, the Board therefore had appointed an
independent Chartered Accountant firm, covering the period from
01-04-2004 to 31-03-2010. The scope of the audit was further extended
to cover the financial year 2010-11 also and as on date there is no
finality in the matter.
19. Segmental Reporting:
The Companys operating business is organized and managed according to
a single primary reportable business segment namely yarn and fabric. As
part of secondary reporting, revenues are attributed to geographic
areas based on the location of the customer.
In accordance with Accounting Standards (AS)-17 on Segment Reporting,
the following table presents information relating to the geographical
segment for the year ended March 31,2010.
20. In the absence of taxable income during the year and due to huge
brought forward losses, no provision for income tax has been made.
Further the Deferred Tax Assets has also not been recognized as there
is no reasonable certainty that sufficient future taxable income will
be available against which such deferred assets can be realized.
21. The company is in process of identifying Micro & Small Enterprises
as defined under the Micro, Small and Medium Enterprises Development
Act, 2006. Consequently it is not possible for the company to give
relevant disclosure under the said Act.
22. As per Accounting Standard 15 "Employee Benefits", the disclosure
of Employee benefits as defined in the Accounting Standard are given
below:
Defined Benefit Plan:
A. Leave Encashment:
The present value of obligation under Leave Encashment is determined
based on actuarial valuation using the Projected Unit Credit Method,
which recognizes each period of service as giving rise to additional
unit of employee benefit entitlement and measures each unit separately
to build up the final obligation.
23. Derivative Instruments
The company uses foreign currency forward contract to hedge its risk
associated with foreign currency fluctuation relating to forecasted
revenue receivable transaction. The company not uses the forward for
speculative purpose.
24. Previous year figures have been re-grouped / rearranged wherever
considered necessary to make them comparable with the current year.
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