| 1. BRIEF BACKGROUND
Suryajyoti Spinning Mills Ltd was incorporated in the year 1983 and has
commenced operations from the year 1992. The company is into
manufacture of Yarn and Fabric. The manufacturing facilities are
located in four places in the district of Mahaboobnagar of Telengana
State. The company's products include Cotton Yarn, Polyester Yarn and
Bottom Weight Fabric.
i) Reconciliation of number and amount of Shares at the beginning and
end of reporting period.
iii) Rights, preferences and restrictions attached to Equity Shares:
The company has one class of equity shares having a par value of Rs. 10
each. Each equity shareholder is entitled to one vote per share. The
dividend proposed by the Board of Directors is subject to the approval
of the shareholders in the annual general meeting except in the case of
interim dividend. In the event of liquidation of the company, the
holders of equity shares will be entitled to receive remaining assets
of the company, after distribution of all preferential amounts. The
distribution will be in proportion to number of equity shares held by
them.
iv) Rights, preferences and restrictions attached to Preference Shares:
The company has one class of preference shares called Cumulative
Redeemable Preference Shares having a par value of Rs. 100 each with a
fixed dividend rate of 10% pa with cumulative rights to the dividend.
The holders are eligible to vote on all the resolutlions of the company
at General Meetings, in case the dividend is in arrear for not less
than two years as on the date of the meeting. The holders will be
preferencial right to the paid up capital and arreas of dividend over
the equity holders, in case of winding up the company. The shares are
redeemable at par on the due date as mentioned below by giving three
months notice of redemption by the Board of Directors of the company.
2. SHARE APPLICATION MONEY PENDING ALLOTMENT
During the Year our Company has allotted 3,07,000, 10% Cumulative
Redeemable Preference shares on 13.11.2014 pursuant to the approval of
Share Holders in their meeting held on 30.09.2014.
Previous year
Share Application money of ' 307 Lakhs is pending for allotment subject
to approval of share holders and completion of formalities with
Securities and Exchange Board of India and Stock Exchanges.
i. The Primary security for the loans mentioned at (i) above is
Pari-passu 1st charge on the entire fixed assets of the company, both
present and future, situated at the four locations of the factories.
Further secured by Pari-Passu II nd charge on the entire Current Assets
of the company along with other Lenders.
ii. The Collateral security for the loans mentioned a (i) above are a )
Pledge of shareholding of the promoters in the company of 76,1 1,397
equity shares on pari-passu basis along with other Lenders; b) EM of
commercial property belonging to the relatives of the Promoters on
Pari-Passu basis along with other Lenders.
iii. The loans mentioned at (i) above are further secured by way of
Personal Guarantee of three Directors of the company and by five of the
relative of the Promoters. These are further secured by Corporate
Guarantees of two of the group companies.
iv. The Loans at (i) (b) and (e) are further secured by pledge of
500,000 equity shares of the company held by the Promoters on exclusive
basis to SBI and SBH.
v. The Loans at (i) (m) (n) and (o) are further secured by way of
exclusive charge in respect of open land and commercial property
belonging to the relatives of the Directors of the company.
vi. The security for the loan mentioned at (ii) above is II nd
pari-passu charge on the fixed assests of the company along with other
lenders.
vii. The company has taken vehicle loans from NBFC's for Rs.32.82 lakhs
under hypothecatin scheme. These loans are repayable in 36 monthly
instalments including interest. The outstandng loan as on 31 Mar 2015
is repayable in 3-18 monthly instalemnts with the last instalment due
on Sep-2016. The loan is secured by way of hypothecation of the
respective vehicle acquired and further guaranteed by one of the
Director of the company.
3.i. The Unsecured Loans from Promoters and Corporate are in complaince
with the stipulations of Banks at the time of approval of CDR
restructuring. These unsecured loans does not carry any interest and
are sub servent to Bank loans.
ii. The ROR amount represents the differential interest amount payable
to the Banks as on 31 Mar 2015 in terms of the CDR scheme sanctioned.
This amount is payable at the end of the CDR period if the banks raise
demand. As on 31 Mar 2015, the Banks have not raised any demand.
However, the company is making provision for the same as a matter of
prudence.
iii. The Foregin Currency Convertible Bonds have been repaid during the
year by availing Priority Debt from the Consortium Banks under the CDR
scheme.
iv. The company had availed interest free Sales Tax Deferment Loan from
Government of Andhra Pradesh on Burgul unit Original and availing on
Burgul unit Expansion Scheme. The Sales Tax Deferment loan shown under
Unsecured Loans under Schedule 4 indicates sales tax collected under
deferral scheme and is payable at the end of 10 th year in respect of
Burgul unit original and is payable at the end of 14th year in respect
of Burgul unit expansion. The same is repayable as under:
4.i. The Primary security for the loans mentioned above is Pari-passu
1st charge on the entire current assets of the company, both present
and future, situated at the four locations of the factories. Further
secured by Pari-Passu II nd charge on the entire Fixed Assets of the
company along with other Lenders.
ii. The Collateral security for the loans mentioned above are a) Pledge
of shareholding of the promoters in the company of 76,1 1,397 equity
shares on pari-passu basis along with other Lenders; b) EM of
commercial properties belonging to the relatives of the Promoters on
Pari-Passu basis for SBI and SBH.
iii. The loans mentioned above are further secured by way of Personal
Guarantee of three Directors of the company and by five of the relative
of the Promoters. These are further secured by Corporate Guarantees of
two of the group companies.
iv. The Loan of SBI is further secured by way of exclusive charge on
the non-agricultural land belonging to one of the Director of the
company.
5. OTHER DISCLOSURES
A. Contingent Liabilities not provided for (Rs. in lakhs)
PARTICULARS Amount Amount
(a) Arrears of Preference Dividend 477.03 308.46
(b) Claims against the company 25.49 25.49
Total 502.52 333.95
Notes:
(a) The Company has purchased HSD and FO form Bharat Petroleum
Corporation Ltd from 1997- 98 onwards against C form. However, BPCL has
subsequently raised demand for additional tax amounting to Rs.12.71
lacs on the basis that HSD can not be purchased against C form and
filed a case in the Court for recovery of the same. The case is still
not disposed off by the Honorable Court as at the date of Balance
Sheet.
(b) The Electrical Inspectorate of Govt of Andhra Pradesh has raised a
demand for Rs. 12.78 lacs for payment of Electricity Duty at the rate
of 0.25 paisa per every unit of power generated and used for captive
purposes as per the provisions of Andhra Pradesh Electricity Act, 1939
in the year 2004. The company has made an appeal for waiver of the same
and also deposited an amount of Rs. 6.34 lakhs under protect. Further,
the company has filed a petition in the High Court of AP in 2012 and
the matter is still pending as on the date of Balance Sheet.
6. Capital commitments
Estimated amount of contracts remaining to be executed on Capital
account and not provided for Rs. Nil
(Previous Year Rs. 153.21 lakhs).
7. Related parties disclosure
(a) Name of the related parties and description of the Relationship
Name of the Related Parties Nature of Relationship
R K Agarwal Key Managerial Personnel
A K Agarwal Key Managerial Personnel
Neha Agarwal Key Managerial Personnel
Umabhai Agarwal Relative of KMP
Suryajyoti Infotech Ltd Enterprise in which KMP has
significant influence
Pangea Fabrics India Pvt Ltd Associate Company
Suryalakshmi Cotton Mills Ltd Enterprise in which relative of
KMP have significant influence
Aananda Lakshmi Spinning Mills Ltd Enterprise in which relative of KMP
have significant influence
(b) The transactions with related parties have been entered at amounts
which are not materially different from those on normal commercial
terms.
(c) The amount due from related parties are good and hence no provision
for doubtful debts in respect of dues from such related parties is
required.
8. No provision is made in respect of Deferred Tax asset and
Liability during the year. As the company has incurred losses during
the year and is having substantial brought forward losses and un
absorbed depreciation and as there is uncertainty of sufficient future
taxable income which may be available for its realization. The deferred
tax asset with reference AS22 issued by ICAI is thus is not considered
as a matter of prudence.
9. Payment of Excise Duty on sales is taken into consideration on
removal of goods and consequently no Excise Duty is provided on the
closing stock of inventories and corresponding liability. There is no
effect on profit or loss.
10. The information with regard to Micro, Small and Medium Enterprises
has been determined to the extent such parties could be identified on
the basis of the information available with the company. Accordingly,
the trade payables include Rs. NIL (previous year Rs. NIL) due to them
for a period exceeding 30 days and the company has not paid any
interest during the year to any enterprise registered under Micro,
Small and Medium Enterprises Development Act, 2006.
11. Employee Benefits :
a. Provident Fund
The company makes provident fund to defined contribution plans for
qualifying employees. Under the scheme, the company is required to
contribute a specified percentage of the payroll costs to fund the
benefits. The company recognised Rs. 84.83 lakhs during the year
(Previous year Rs. 87.23 lakhs) for Provident Fund contributions in the
statement of Profit and Loss. The contribution payable to these plans
by the company are at the rates specified in the rules of the scheme.
12. Central Excise applicability
Vide Notifications No. 29 & 30 of 2004 of the Central Excise
Department, we can opt for zero rate of duty by not taking Cenvat
credit on Inputs or for payment of duty on Final products by taking
credit on inputs and capital items. Accordingly, in case of Cotton yarn
the Company has opted for Zero rate of duty and not availed Cenvat
credit on the purchase of inputs and capital items; where as in case of
Polyester yarn we have taken Cenvat credit on part of the raw material
which are used for production of polyester yarn meant for export and
cleared the material for export on payment of duty.
13. Depreciation
Consequent to the enactment of Companies Act, 2013, the company has
charged depreciation based on the balance useful life of the Assets as
per Schedule II of the Companies Act 2013 except in case of weaving
mill Plant and Machinery, which has been based on internal assessment
and independent Technical evaluation. The management believes that the
useful lives as determined, best represents the period over which it
expects to use these assets. In terms of the Schedule II of the
Companies Act 2013, an amount of Rs. 82.76 lakhs representing the
carrying amount (after retaining the residual value) of assets for
which the remaining useful life is 'NIL' has been adjusted against the
Retained Earnings. Similarly, the excess depreciation claimed in
earlier years amounting to Rs. 518.50 lakhs has been shown under
Exceptional Items in the Statement of Profit and Loss.
14. The previous year figures are re-arranged and/or re-grouped
wherever necessary.
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