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SENSEX NIFTY India | Notes to Account > Textiles - Spinning - Synthetic Blended > Notes to Account from Banswara Syntex - BSE: 503722, NSE: BANSWRAS

Banswara Syntex

BSE: 503722|NSE: BANSWRAS|ISIN: INE629D01012|SECTOR: Textiles - Spinning - Synthetic Blended
May 25, 15:40
2 (2.15%)
May 25, 15:45
2.45 (2.63%)
Mar 14
Notes to Accounts Year End : Mar '16

1. The Board of Directors in its meeting held on 13th November, 2013 has issued 16,00,000 warrants to promoters and promoter''s group on preferential basis, convertible in equal number of equity shares at the rate of Rs, 10/- per warrant at Rs, 41.50 including premium of Rs, 31.50 per warrant. Out of these 16,00,000 warrants, the Board of Directors has converted 1,70,000 warrants in to equal number of shares, in its meeting held on 12th February, 2014. The Board in its Meeting held on 12th November, 2014 has also converted 9,20,000 warrants in equal number of shares. The balance 5,10,000 warrants were converted in equal no. of equity shares on 08th May, 2015. The above preferential issue was made as per the SEBI (ICDR) Regulations, 2009.

2. Rights, preferences and restrictions to the shareholders

3. Equity Shares :-

All equity shareholders are having right to get dividend in proportion to paid up value of the each equity share as and when declared.

No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has, and has exercised, any right of lien.

4 The Company has forfeited 27,015 number of partly paid up equity shares as was approved by the board of directors in its meeting held on 27th May, 2015. The amount originally paid up was Rs, 1.35 Lacs which has been transferred to Capital Reserve. (Refer Note no. 3)

* Reversal of previous year provision on partly paid up shares which have been forfeited during the year.

5. Capital Subsidy received under scheme of TUFS on purchase of capital items subject to fulfilling the conditions prescribed in the scheme.

6. Dividend on preference shares for the year 2014-15 was declared in AGM held on 12.09.2015 (for the period up to 12.05.2014, since the preference shares were redeemed on 13.05.2014).

7. Securities/ Guarantees

For Term Loans from Financial Institutions and Banks:

Term Loans from Financial Institutions and Banks are secured by a joint equitable mortgage and/or hypothecation charges ranking pari-passu on immovable/movable properties, present and future of the Company subject to prior charges in favour of the Bankers on specified movable properties created and/or to be created for working capital facilities and Term Loans of Rs, 2,154 Lacs (Previous Year Rs, 1,848 Lacs) are also secured by second charge on current assets.

Term Loans from Financial Institutions and Banks are guaranteed by Shri R.L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities other than Export-Import Bank of India and IDBI Bank Ltd. Term Loans outstanding of Rs, 4,796.11 Lacs (Previous Year 6,851.66 Lacs) from Export-Import Bank of India, Term Loans outstanding of Rs, 1,260 Lacs (Previous Year Rs, 1,680 Lacs) from Punjab National Bank of India, Rs, 490 Lacs from Union Bank of India (Previous Year Rs, 630 Lacs) and Rs, 245 Lacs from Bank of Baroda (Previous Year Rs, 315 Lacs) are guaranteed by both whereas term loans outstanding of Rs, NIL (Previous Year Rs, 76.40 Lacs) from Export-Import Bank of India are guaranteed only by Shri R. L. Toshniwal, Chairman.

For Fixed deposits

Fixed Deposits accepted by the Company are in accordance with the provisions of section 73(2)(a) and section 76 of the Companies Act, 2013 and rule 4(1) and 4(2) of the Companies (Acceptance of Deposits) Rules, 2014 are unsecured. Fixed Deposits are repayable within 1 to 3 years depending upon the terms of deposits.

Net deferred tax liability of Rs, 511.08 Lacs has been booked during the year, besides current tax Rs, 1917.00 Lacs as per The Income Tax Act, 1961.

Company is treating assets of Thermal Power Plant as permanent difference as profit of power plant is exempt under section 80IA of the Income Tax Act, 1961. Since Thermal Power Plant is not generating profits now and is not expected to generate in future, accordingly this permanent difference is being treated as timing difference, this has increased the deferred tax liability by Rs, 775.00 lacs.

8. Securities and Guarantees

Loans repayable on demand from banks are secured by way of hypothecation (Floating charges) of Raw material, Dyes-Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all the Fixed Assets of the Company and also guaranteed by Shri R.L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities.

@ To the extent information received for status under the Micro, Small and Medium Enterprises Development Act, 2006.

9. Special Leave Petition (SLP) has been filed before the Hon''ble Supreme Court and the Hon''ble Supreme Court passed interim order dated 12.01.2015 granting stay of 50% of arrear of demand raised up to the date of order i.e. dated 12.01.2015 under The Rajasthan Tax on Entry of Goods into Local Area Act,1999, provision of Rs, 154.95 Lacs (Previous Year Rs, 176.88 Lacs along with interest thereon) has been made and charged to the Statement of Profit and Loss for the year in respective expenses account. The outstanding balance, after making the payment during the year, is Rs, 445.39 Lacs (Previous Year Rs, 574.90 Lacs).

10. Accounting Standard: -29 Provisions, Contingent Liabilities and Contingent Assets: Movement in Provisions:

11. Buildings & Road includes Rs, 331.31 Lacs paid for acquiring 657 equity shares of M/s Rastogi Estate & Construction Co. (Pvt.) Ltd. attached with right of ownership and possession of office building at Mumbai and Rs, 324.01 Lacs paid for acquiring a residential flat with 5 shares of Maker Tower J Co-operative Housing Society Ltd. Mumbai attached with right of ownership and possession.

12. Depreciation has been charged on Straight Line Method (SLM) based on useful life of the assets as mentioned in Schedule II of the Companies Act, 2013, except in case of Plant & machinery where the useful life has been taken as ascertained by the Independent Chartered Engineer and technical experts of the Company. The useful life of the Plant & Machinery so ascertained is ranging from 10 to 18 years on triple shift basis as against the life of 15 years given in Part C of Schedule II of the Companies Act, 2013. Further, considering materiality of assets costing less than Rs, 5,000 are fully depreciated in the year of purchase/acquisition. The Company provide pro-rata depreciation from/to the date on which asset is acquired or put to use/ disposed off as appropriate.

13. Lease hold lands are amortized over the period of lease

14 Accounting Standard 16 - Borrowing Cost

In terms of Accounting Policy No. 1(J) borrowing cost of Rs, NIL Lacs (Previous year Rs, NIL Lacs) have formed part of cost of relevant tangible assets.

15. Shares of Banswara Fabrics Limited were listed on Delhi Stock Exchange. Now, due to the de-listing of Delhi Stock Exchange, shares of Banswara Fabrics Limited have been categorized under Unquoted Shares.

16. Treves Banswara Private Limited (TBPL), a joint venture of the Company, has accumulated losses of Rs, 317.12 lacs as on 31 March 2016 (Previous year Rs, 315.01 lacs) as per audited accounts. Keeping in view of the ongoing efforts for revival of TBPL, no provision has been considered necessary in respect of CompanyRs,s Investment of Rs, 360 lacs (previous year Rs, 260 lacs) in TBPL, as the diminution in the value is considered as temporary.

17. Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with Guidance Note issued by the Council of the Institute of Chartered Accountants of India.

18. Subsidy received from governments has been treated as capital receipt. This has reduced tax on income, resulting in increase of MAT Credit Entitlement amounting to Rs, 764.87 lacs recognized during the year.

Cash and Cash equivalent include restricted cash and bank balance of Rs, 571.84 Lacs (Previous Year Rs, 713.88 Lacs). The restrictions are primarily on account of cash and bank balances held as margin money deposits against guarantees, Letter of Credits and unclaimed dividends.

Deposits maintained by the Company with Banks comprise of time deposits, which can be withdrawn by the Company at any point of time without prior notice with reduced rate of interest.

19. Accounting Standard: 15 Employee Benefits, the disclosures of Employee benefits as defined in the accounting standard are given below:

20. Defined Contribution Plan

Employer''s contribution to provident fund paid Rs, 1,139.46 Lacs (Previous year Rs, 1,034.12 Lacs) has been recognized as expense for the year.

21. Defined Benefit Plan

Present value of gratuity and long earned leave obligation 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. Short term earned leave encased during the year charged to Statement of Profit & Loss.

Note No. ''22'' Accounting Standard 17 - Segment Reporting

The Company is engaged in production of textile products having integrated working and captive power generation. For management purpose, Company is organized into major operating activity of the textile products. The Company has no activity outside India except export of textile products manufactured in India. Thereby, no geographical segment and no segment wise information is reported.

Note No. ''23'' Accounting Standard 18 - Related Party Disclosure

The Company has identified all the related parties as per details given below:

1. Relationship:

a) Subsidiary, Joint Venture and Associate concerns :

Banswara Global Limited (formerly known as Carreman Fabrics India Ltd.) a wholly owned subsidiary Treves Banswara Private Limited (Joint Venture)

Banswara Fabrics Limited (Associate)

b) Key Management Personnel :

Shri R.L.Toshniwal Shri Ravindra Kumar Toshniwal Shri Rakesh Mehra Shri Shaleen Toshniwal Shri J.K. Jain

c) Enterprises where Key Management Personnel has control /interest:

Dhruv Impex Mehra International Lawson Trading Co. Pvt. Ltd.

Niral Trading Pvt. Ltd.

Moonfine Trading Co. Pvt. Ltd.

Speed Shore Trading Co. Pvt. Ltd.

Toshniwal Trust Lawson Corporation RR Toshniwal Enterprises Excel Pack Limited Shaleen Synthetics

d) Relative of Key Management Personnel where transactions have taken place :

Shri Rameshwar Lal Ravindra Kr Toshniwal HUF

Shri Ravindra Kumar Toshniwal HUF

Shri Dhruv Toshniwal

Shri Udit Toshniwal

Smt. Prem Toshniwal

Note No. ''24'' All assets and liabilities are presented as Current or Non-current as per the criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle less than 12 months, accordingly, 12 months period has been considered for the purpose of Current/Non-current classification of assets and liabilities.

Note No. ''25''The Company has adopted a system of obtaining periodical confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of any bank account, borrowing from Banks, NBFC''s etc. So far as the loans and advances, trade payables, trade receivables and other assets and liabilities are concerned, the balance confirmation letter with the negative assertion, are being send to concerned parties as referred in the Standard on Auditing (SA) 505 Revised External Confirmation. The company has received replies from various parties confirming the balances. Certain outstanding balances got automatically confirmed on receipt/ remittance of payments from/to the parties in subsequent period.

Note No. ''26'' The Board of Directors of the Company has approved the scheme of arrangement or amalgamation of Banswara Fabrics Limited (an Associate Company) and Banswara Global Limited (a wholly owned subsidiary) with Banswara Syntex Limited w.e.f. 1st April, 2015 U/s 391 to 394 of the Companies Act, 1956 and other applicable provisions including SEBI guidelines. The equity shareholders, secured creditors and unsecured creditors had given their respective approval to the scheme in the court convened meeting held on 28th March 2016. The said scheme is subject to the approval of the Hon''ble High court of Rajasthan and such other approvals/fulfillment of conditions as per applicable statue/guidelines.

Note No. ''27'' During the year, fraud was committed on the Company by foreign entity of Bulgaria through hacking of email-ID of an India agent of the Company''s foreign supplier involving 31,000 Euro. The Company has filed an FIR and also took up the matter with concerned authorities, however so far, no recovery could be made. The Board of Directors in their meeting held on 4th November, 2015 decided to write-off the amount involved of Rs, 23.72 lacs as loss, the said sum is included in Miscellaneous expenses under Note no. 32.

Note No. ''28'' During the year, certain clarificatory changes/alterations have been made in the wording of the accounting policies including insertion of new clauses for more appropriate disclosures. Such alterations have no impact on the financial statements.

Note No. ''29'' The previous year figures have been regrouped/ reclassified wherever it found necessary to correspond with the current year''s classification/disclosure. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year''s financial statements and are to be read in relation to the amounts and other disclosures relating to current year.

Source : Dion Global Solutions Limited
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