1 a) The scheme of Amalgamation of The Hindoostan Spinning and Weaving
Mills Limited (transferor company) with the Company (transferee
company) has been sanctioned by the Hon''ble High Court of Bombay vide
its Order dated 1st April,2011 with effect from 1st April,2010, being
the appointed date. Accordingly, pursuant to the said Order all assets
and liabilities (including reserves) of the said transferor Company
have been recorded in the transferee Company at their respective book
b) The Amalgamation has been accounted for under the Pooling of
Interest Method as prescribed by Accounting Standard (AS 14)
Accounting for Amalgamation issued under the Companies (Accounting
Standards) Rules, 2006 . The assets, liabilities and reserves of the
transferor Company as at 1st April, 2010 have been taken over at their
respective book values subject to adjustments as follows:-
i) A sum of Rs.26.50 lacs has been debited to Capital Reserve due to
the cancellation of 28,00,044 equity shares held by the transferee
company with the transferor company.
ii) A sum of Rs. 1102.51 lacs has been credited to Capital Reserve
Account on account of reduction in the capital while issuing the shares
to the shareholders of the transferor company as per the ratio
prescribed in the Scheme of Amalgamation, which has been sanctioned by
the Hon''ble High Court''of Bombay.
2 Contingent Liabilities in respect of:
In lac In lac
(a) The Income-tax demands in respect of 210.01 -
earlier years under dispute and are pending
in appeal before higher authorities. In
respect of some of the assessment years,
the higher authorities have decided the
matters fully/partially in favour of the
company and are pending before the
assessing officer for giving
(b) Claims against the Company not 763.75 132.31
acknowledged as debts [including
disputed demands of Central Excise
for Rs. 136.44 lakhs (P. Y - Nil),Sales Tax
under Works Contract Act Rs. 111 lacs
(P. Y. - Rs. 111 lacs)
(c) Government of Maharashtra had served - -
a demand notice for payment of electricity
duty @ P15/Unit on power consumption
generated in the company''s captive power
plant at Karad for the period: 1.4.2000 to
30.4.2005, together with penal interest
thereon amounting to Rs.228.20 lakhs.
The company''s writ petition against
this levy was decided by the Bombay
High Court on 7.11.2009 in favour of
the company. The State of Maharashtra
has however filed a special leave
petition (SLP) in the Supreme Court of
India, challenging the High Court order.
3 a) The Investment of 42 Shares in Yeshwant Sahakari Sakhar Karkhana
Ltd., are held in the names of two Directors of the Company, being its
nominees, as required by the bye-laws of the Society. Yeshwant Sahakari
Sakhar Karkhana in the earlier year appropriated the deposits /amount
payable to the company towards the increased cost of face value of
shares and issued the certificate of holding.
b) During the year the Company had sold 3,50,000 Equity shares of
Lexicon Finance Limited which was acquired by the earstwhile
subsidiaries of the Company during the year 1994-95. The said Company
has not declared any dividend for the last several years and there is a
substantial erosion in the net worth. Since the shares were not quoted,
the Company had to sell the shares lower than the purchase cost as per
the valuation report of a Chartered Accountant and accordingly inurred
a loss of Rs.28 lacs.
4. The Property under Development refelected in stock in trade is valued
at Rs.500 lakhs. The construction work of the residential complex has
been completed but settlement of account is pending with the Developer.
Settlement of accounts is a matter of dispute between the Company
(Owner) and Developer and there are claims and counter claims. The
matter has been referred to arbitration, pending resolution since 2002.
As a measure of prudence, the Company has adopted a conservative
approach and has written down the value of inventory by Rs.499 lac
however reserving its claim in arbitration.
Accordingly , surplus if any will be accounted in the year in which the
arbitration award is finalised.
5. The Company has not received any intimation from the suppliers
regarding their status under the Micro, Small and Medium Enterprises
Development Act,2006 and hence the disclosures relating to amount
unpaid as at the end of the year together with interest paid / payable
as required under the said Act have not been furnished and therefore
provision for interest,if any, on delayed payments, is not
ascertainable at this stage.
6. During the year 2003-04,in terms of Sanctioned Scheme of the
erstwhile The Hindoostan Spinning and Weaving Mills Ltd. secured
lenders dues were transferred to the SPVs in full settlement of their
dues from the company. All secured lenders except Union Bank of India
(UBI) have released their charge on the assets of Karad unit. In
respect of UBI, the SPV is yet to settle their dues and hence, they
continue to hold the charge on the assets of the Karad Unit by way of
7. ( i) Deferred tax : In accordance with Accounting Standard (AS -
22) on Accounting for Tax on Income notified by the Companies
(Accounting Standards) Rules,2006 , Deferred Tax Assets consist of
substantial amounts of carry forward losses and unabsorbed depreciation
under the Income Tax Act, 1961. However, since the availability of
sufficient future taxable income against which the said benefits can be
set off is not possible to be ascertained with virtual certainty, the
Deferred Tax Assets have not been recognised as a measure of abundant
(ii) Current Tax : In view of the unabsorbed Business Losses and
Depreciation of the earlier years, provision for normal tax has not
been made. However , Provision for Minimum Alternate Tax u/s 115 JB of
the Income Tax Act on the Book Profit of the Company has been made for
the year ended 3 lst March 2011.
8. Employee Benefits:
A Leave Encashment
The liability towards leave encashment for the year ended 3 lst March,
2011 as per acturial valuation is Rs.48.89 lacs which has been duly
9. Related Party Information:
Associates / companies where Capricon Realty Limited ,
control exists Bhishma Realty Limited ,Delta
Investments Ltd, Thackersey
Moolji & Co
Key Managerial Persons (KMP) Hrishikesh J.Thackersey
Relative of Key Managerial Jagdish U.Thackersey
Subsidiary Company Hindoostan Technical Fabrics Ltd.
10. The figures of the current year are consolidated figures due to the
Amalgamation, hence not comparable with the previous year.
11. The figures of the previous year have been reclassified, where ever
necessary to correspond to the figures of the current year.
12. The amounts in Balance Sheet and Profit and Loss Account are rounded
off to the nearest thousand and indicated in lac of Rupees.