SENSEX NIFTY India | Notes to Account > Textiles - Weaving > Notes to Account from Garden Silk Mills - BSE: 500155, NSE: GARDENSILK

Garden Silk Mills

BSE: 500155|NSE: GARDENSILK|ISIN: INE526A01016|SECTOR: Textiles - Weaving
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1.05 (3.48%)
VOLUME 12,722
Feb 21, 15:59
1.1 (3.65%)
VOLUME 69,628
« Mar 14
Notes to Accounts Year End : Mar '15
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
 Central Government.
 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.
 Leave Encashment:
 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)
 Rules, 2014
 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 /
Source : Dion Global Solutions Limited
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