1.1 Rights, Preferences and Restrictions attached to Shares Equity
The Company has one class of shares referred to as equity shares having
a par value of Rs. 10 each. Each shareholder is entitled to one vote per
share held. The dividend as and when proposed by the Board of Directors
is subject to the approval of the shareholders at the Annual General
Meeting. In the event of liquidation, Equity Shareholders are eligible
to receive the remaining assets of the Company after distribution of
all preferential amounts, in proportion to their shareholding.
The Company had two class of shares referred to as Equity Shares and
Optionally Convertible Cumulative Preference Shares (OCCPS) at the
begining of the year. During the year, the OCCPs, have been converted
in to equity shares as referred in note 2.2 above.
OCCPS holder had the option to apply for and obtain allotment, from
time to time, not later than 18 (eighteen) months from the date of
allotment of OCCPS, of such number of fully paid-up equity shares of
the face value of Rs. 10 each (Equity Shares) against conversion
ofthe OCCPS in such manner and on such price, terms and conditions as
determined by the Board, such that the total issue size ofthe
preferential allotment does not exceed an aggregate value ofRs. 7.00
crores (including, premium if any, on such Equity Shares), in
accordance with the provisions of Chapter VII ofthe SEBI (ICDR)
Regulations or other provisions ofthe law as may be prevailing at that
2.1 During the financial year 2013-14, the Company had issued and
allotted 0.001% Optionally Convertible Cumulative Preference Shares
(OCCPS) of Rs. 10 each aggregating to Rs. 7.00 crores in accordance with
the SEBI (ICDR) Regulations, 2009, as amended, in favour of Promoters
on preferential basis as part of the arrangement with the lenders to
realign debts repayment schedules.
As per the terms of issue and in accordance with the provisions of SEBI
(ICDR) Regulation, 2009, consequent to the rights of conversion
exercised by the OCCPS holders, the Board of Directors of the Company
at its meeting held on 18th March 2015 allotted 1949860 equity shares
ofRs. 10/- each at a premium of Rs. 25.90 per share in favour of Praful
Amichand Shah, Partner of M/s. Isha Enterprises, the promoter and/or
promoter group of the Company.
3.1 Note on Secured Long-Term Borrowings:
a) Term Loans from Banks and Financial Institutions are secured by
first mortgage on pari passu basis on all immovable properties (except
those specifically excluded by lenders, of Rupee Term Loans as per Note
(b) below), both present and future and first charge by way of
hypothecation of all movables (except book debts) both present and
future subject to prior charges created/to be created in favor of
Bankers for working capital borrowings.
b) Of the Rupee Term Loans from banks:
i) Loans from Bank of India to the extent of Rs. 212.50 Lacs (Previous
year Rs. 250.00 Lacs) are secured by hypothecation of specific machinery
of Fully Drawn Yarn (FDY) Project at Jolwa.
ii) Loans from Bank of India to the extent of Rs. 1012.61 Lacs (Previous
yearRs. 1191.11 Lacs) are secured by hypothecation of specific Building
and machinery ofTexturising plant and Draw Twisting plant at Jolwa.
iii) Term loans from ICICI Bank, Kotak Mahindra Prime Limited and Axis
Bank Ltd aggregating to Rs. 107.69 Lacs (Previous yearRs. 116.03 Lacs)
under vehicle finance scheme are secured by an exclusive charge by way
of hypothecation of specific vehicles purchased under the arrangements.
iv) Housing Loan ofRs. 565.14 Lacs (Previous yearRs. 643.21 Lacs) from
ICICI Bank is secured by hypothecation of residential flat at Mumbai.
v) Loans from Corporation Bank to the extent ofRs. 3094.00 Lacs (Previous
YearRs. 3640.00 Lacs) are secured by hypothecation of movable fixed
assets of Specific Continuous Polymerisation Project at Jolwa.
vi) Loan from Union Bank of India to the extent ofRs. 4461.40 Lacs
(Previous YearRs. 5248.90 Lacs) is secured by hypothecation of specific
machinery of Coal Based Thermal Power Project at Jolwa.
c) As on the Balance Sheet date, part of the payment of interest for
the quarter January-March, 2015, aggregating to Rs. 777.33 Lacs (Previous
YearRs. 1371.77 Lacs) to various lender banks were unpaid.
4.1 The Company has unabsorbed depreciation and carried forward losses
under Tax laws. In absence of virtual certanty of sufficient future
taxable income,net deferred tax assets have not been recognised
considering prudence in accordance with Accounting Standard (AS) 22
Acounting for Taxes on Income issued by the Institute of Chartered
Accountants of India.
5.1 The Company has entered into a Long Term Advance Payment and Supply
Agreement (ASPA) with one of its export customers (Refer Note
30(i)&(ii)). Under the ASPA, the Company has received Long Term
Advances against Exports to the tune of USD 66.48 Million which will be
adjusted against exports to that Customer over 10 years.
6.1 Cash Credit facilities are part of Working Capital facilities
availed from Consortium of Banks and are secured with hypothecation by
way of first pari passu charge on all company''s current assets and by
way of second pari passu charge on immovable and all movable properties
(excluding current assets) of the Company. Rate of Interest on Cash
Credit facilities ranged between 11.50% to 12.00%
6.2 Buyers'' Credit is secured by Letter Of Comfort (LOC) / Undertaking
(LOU) forming part of Working Capital facilities issued by the banks.
Rate of Interest on Buyers'' Credit facility is 3M Libor 41 bps above
the Libor at the relevant time.
7.1 During the year, the Central Government vide its letter dated 31st
July, 2014, granted its approval for payment of total remuneration @ Rs.
1,46,91,000 (Rupees One Crore Forty-six Lacs Ninety-one Thousand only)
per annum to Shri Praful A. Shah for the period from 01/09/2013 to
31/03/2014. Further the Company has already tiled an application with
the Central Government seeking their approval for the remaining tenure
i.e. from 01/04/2014 to 31/08/2016. The approval of Central Government
for the said period is awaited. However, the actual remuneration paid
to Shri Praful A. Shah during the year 2014-15 is in accordance with
the provisions of Part II Section II of Schedule V to the Companies
Act, 2013. The arrears if any, would be paid on receipt of approval of
7.2 Employee Benefits as per AS 15:
Brief description : The type of detined benetit plans is as follows
The employee gratuity fund is managed by Garden Silk Mills - Employees
Gratuity Fund. The present value of obligation is determined based on
actuarial valuation. The liability is fully funded.
The present value of obligation for Leave encashment is determined
based on actuarial valuation and is unfunded.
Note 8 : Earnings per share (EPS)
Earning Per Share (EPS) computed in accordance with Accounting Standard
20 Earning per Share as notified under Section 133 of the Companies
Act, 2013, read together with paragraph 7 of the Companies (Accounts)
8.1 Basic earnings per share is calculated by dividing the net profit
/ (loss) for the year attributable to equity shareholders (after
deducting preference dividends and attributable taxes) by weighted
average number of equity shares outstanding during the year.
For the purpose of calculating diluted earnings per share, the net
profit / (loss) for the year attributable to equity shareholders and
the weighted average numbers of shares outstanding during the year are
adjusted for the effects of all dilutive potential equity shares (i.e.
Optionally convertible Cumulative Preference shares)
Since, resultant EPS due to dilution decreased net loss per share as
compared to basic earning per share, both basic and diluted EPS are
considered at basic earnings.
Nature of relationships Names of related parties
Subsidiary Companies :
GAIA International FZE
Garden Exim Pte Ltd
Group Company :
SuratTextile Mills Limited
Key Management Personnel :
Shri Praful A. Shah
Shri Sanjay S. Shah
Shri Alok P. Shah
Shri Suhail P. Shah
Relatives of Key management personnel and their enterprises where
transactions have taken place.
Smt. Shilpa P. Shah
Smt. Sujata V. Parsai
Shri V. K. Parsai
Shri Parthiv S. Shah
Armorax Business Centre Pvt. Ltd.
ComoTextile Pvt. Ltd.
SorrentoTextile Pvt. Ltd.
Amalfi Textile Pvt. Ltd.
Note 9: Contingent Liabilities and Commitments 1 Contingent
(i) Disputed liabilities for Excise Duty not acknowledged as debts Rs.
18987.14 Lacs (Previous YearRs. 50264.32 Lacs).
(ii) Disputed liabilities for Gujarat Sales Tax not acknowledged as
debts Rs. 70.51 Lacs (Previous YearRs. 70.51 Lacs).
(iii) Counter-guarantees to Banks against guarantees issued to third
parties Rs. 23.75 Lacs (Previous yearRs. 24.02 Lacs)
(iv) Foreign bills Discounted with Banks Rs. 4361.81 Lacs (Previous YearRs.
2902.43 Lacs )
(v) Unpaid dividend on 0.001% Optionally Convertible Cumulative
Preference shares(now converted into equity shares) not acknowledged as
debts Rs. 0.01 Lacs (Previous year Nil)
Note 10 :
The Company has only one reportable segment viz. ''Textiles'' as per
Accounting Standard (AS) 17 of The Institute of Chartered Accountants
of India (ICAI).
Note 11 :
Previous year''s figures have been regrouped / reclassified wherever
necessary to correspond with the current year''s classification /