| 1. CORPORATE INFORMATION
Namaste Exports Limited (hereinafter called as "Company") is a public
limited Company incorporated under provisions of Companies Act, 1956,
with its registered office at Bangalore. The Company is engaged in the
manufacturing of leather garments.
2. The Honourable Board for Industrial and Financial Reconstruction
(BIFR) vide their order dated 20th December 2013 approved the modified
sanction scheme (the scheme) for the rehabilitation of the Company. As
per the said scheme, Success Apparels Private Limited (SAPL)
(transferor Company) was amalgamated with Namaste Exports Limited
(transferee Company) with retrospective effect from the appointed date,
i.e. 1st April 2012. The certified copies of the orders of the BIFR has
been filed with the Registrar of Companies, Bangalore. In accordance
with the said amalgamation / scheme.
a. All the assets and liabilities of SAPL have been transferred to the
and vested with the Company on the appointed date and have been
recorded at their respective book value, under the pooling of interest
method of accounting for amalgamation. SAPL was wound up without
applicablity of the provisions of the Companies Act, 1956.
3. i) Non current assets includes amount due from Thrive Leathers Rs.
186,34,639/- a firm in which a director is interested. The above amount
has been considered good and recoverable by the management.
b. 10,00,00,000 equity shares of face value of Rs. 2 each have been
allotted to the shareholders of SAPL as a consideration for the
amalgamation.
c. 38,71,800 equity shares of the Company held by SAPL has been
written off and to that extent the paid up capital of the Company
stands reduced without applicability of the provisions of the Companies
Act, 1956.
d. The face value of the shares are reduced from Rs. 2 to Re. 1.
e. As per the scheeme,
i. Balance in security premium account,capital reserve account and
general reserve account is set off against brought forward losses.
ii. General reserve and surplus in profit &loss account of SAPL is set
off against goodwill arising on account of amalgamation.
iii. Reduction in capital is set off against carry forward losses and
goodwill on account of amalgamation.
4. The accounting of amalgamation stands at variance from AS-14 with
respect to treatment of adjustment of debit balance in profit and loss
account with capital reserve Rs. 16,71,000/-, securities premium Rs.
24,49,87,193/-, general reserve Rs. 49,14,49,765/-. Had the scheme not
prescribed the treatment, capital reserve would have been higher by Rs.
16,71,000/-, securities premium would have been higher by Rs.
24,49,87,193/-, general reserve would have been higher by Rs.
49,14,49,765/- and debit balance in profit & loss account would have
been higher by Rs. 73,81,07,958/-.
5. BIFR in their order waived payment of fees to Registrar of
Companies, Karnataka, Bangalore for increasing the authorised capital.
However The Registrar of Companies, Karnataka have not accepted the
documents filed by the Company earlier without payment of requisite
fees. hence company could not file documents for changes in the
authorised and paid up capital. The Company is taking necessary steps
to complete filing of other documents with the statutory authorities
relating to amalgamation and restructuring.
6. Considering the amalgamation, the figures of previous year are not
readily comparable with those of the current year.
7. DETAILS OF SECURITIES TO LOANS:
The Company has earlier created charge on the fixed and current assets
of the Company in favour of Industrial Development Bank of India, State
Bank of India Mutual Fund, Karnataka State Industrial Investment
Development Corporation, Karnataka State Financial Corporation, State
Bank of India and Canara Bank. The Company has repaid / allotted shares
towards these dues as approved by the BIFR. (Refer note 1.2). Company
is in the process of filing satisfaction of charges with Registrar of
Companies in respect of these charges. Short term borrowings are
secured by hypothecation of inventories and receivables, personal
guarantee of Directors of Success Apparels Private Limited and
Equitable mortgage of an immovable property.
8. CURRENTS ASSETS AND LIABILITIES:
Confirmation of the balances under Sundry Debtors, Loans & Advances,
Deposits and Sundry Creditors are not obtained. In the opinion of the
management current assets and Loans & Advances would in the ordinary
course of business realise the values stated. Certain bank accounts are
subject to confirmation.
9. CHANGE IN ACCOUNTING POLICY:
During the year, the Company has changed the method of depreciation of
fixed assets of Namaste Exports Limited, from straight line method to
written down value method. Consequent to the change, depreciation
charge for the year is increased by Rs. 62,462/- with consequential
effect on reserve.
10. Considering/taking a conservative approach, the management has
decided not to create any further deferred tax asset for the period and
restricted it to Rs. 7,44,205/- made as at 31.03.2013 by Success
Apparels Private Limited.
11. SEGMENT REPORTING POLICIES:
The Company is primarily engaged in the business of production of
leather garments and is managed as one entity, for its various service
offerings and is governed by a similar set of risks and returns. In the
opinion of the manage- ment, disclosure regarding Segment Reporting as
required in Accounting Standard on Segment Reporting (AS 17) is not
applicable to the Company during the year under review as there are no
reportable segments.
12. RETIREMENT BENEFIT PLANS:
a. Defined contribution plans:
The Company makes Provident Fund contribution to defined contribution
retirement benefit plans for eligible em- ployees. Under the schemes,
the Company is required to contribute a specified percentage of the
payroll costs to fund the benefits. The Company recognized Rs.
70,55,142 (Rs. 26,89,915/-) for provident fund contributions in the
Statement of Profit and Loss. The contributions payable to these plans
by the Company are at rates specified in the rules of the respective
scheme.
13. PROVISIONS AND CONTINGENCIES:
The Company has made provision for leave salary on estimated basis.
These being retirement benefits an obligation to pay these amounts
might arise at the time of resignation / superannuation of the
employees. There is no reimbursement receivable against these
obligations. The following table sets out the funded status of the
leave salary and the amounts recognized in the Company's financial
statements as at March 31, 2014:
Particulars As at As at
31-03-2014 31-03-2013
Carrying amount in the beginning of the year 925,992 826,532
Additional provision made during the year 2,354,148 417,345
Additions on amalgamation 1,859,962 -
Amounts used during the year 1,462,686 317,885
Unused amounts reversed during the year 732,250 -
Carrying amount in the end of the year 2,945,166 925,992
14. The figures of the current year includes the performance of Success
Apparels Private Limited and are hence not comparable. The previous
figures have been regrouped / reclassified, wherever necessary to
confirm to the current presentation. Figures in brackets are in respect
of previous year.
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