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SEL Manufacturing Company
BSE: 532886|NSE: SELMCL|ISIN: INE105I01012|SECTOR: Textiles - General
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« Mar 11
Notes to Accounts Year End : Mar '12
1.  Corporate Information
 
 SEL Manufacturing Co. Limited is a public company incorporated in India
 under the provisions of the Companies Act, 1956. Its shares are listed
 on Bombay Stock Exchange and National Stock Exchange. The Company is
 engaged in the manufacturing, processing & trading of yarn, fabric,
 readymade garments and towel.
 
 2. Contingent Liabilities
 
 There are contingent liabilities in respect of the following items: No
 outflow is expected in view of the past history relating to these
 items:-
 
                                                (Rs.In Crores)
 Particulars                    March 31,2012         March 31,2011
 
 (i) Export Bills Discounted           20.38              18.81
 
 (ii) Estimated amount of 
 capital contracts remaining to be
 
 executed net of advances             238.11              38.33
 
 (iii) Income Tax demand for 
 AY 2005-06 to AY 2009-10
 (Previous Year AY 2004-05 
 to AY 2008-09) net of deposit             0               1.16
 
 of Rs. Nil crores (Previous year 
 Rs. 1.91 crores) against the said
 demand, contested in appeals.
 
 (iv) Guarantees given by the 
 Company on behalf of SEL
 
 Textiles Ltd. (Subsidiary Company)  1487.55             316.15
 
 (v) Performance Guarantee           1381.92            1534.75
 
 3.  Earnings Per Share
 
 The calculation of Earnings per Share as disclosed in the statement of
 Profit & Loss has been in accordance with Accounting Standard (AS)-20
 on Earning per Share issued by Companies (Accounting Standards)
 Rules, 2006.
 
 4.  Debit or Credit balances on whatsoever account are subject to
 confirmation from parties; as such their effect on profit and loss
 account cannot be reflected.
 
 5.  In opinion of the Board, all the current assets, loans & advances
 have the value on realization in the ordinary course of business
 at-least equal to amount at which they are stated.
 
 6.  Expenses on issue of QIBs and increase in authorized capital are
 being adjusted against Securities Premium Account as permitted by the
 Section 78 of the Companies Act.
 
 7.  There are no outstanding forward exchange contracts.
 
 8.  Segment Reporting
 
 Segment Information as required by Accounting Standard (AS)-17 on
 Segment Reporting, issued by Companies (Accounting Standards) Rules
 2006, has been compiled on the basis of the consolidated financial
 statements and is disclosed in the notes to accounts forming part of
 the consolidated financial statements in accordance with the above
 standard. Therefore segment information in respect of separate
 financial statements of the company is not being disclosed in the stand
 alone financial statements.
 
 9.  The Company has purchased, through auction by Official Liquidator,
 the assets of a closed unit namely, Mangla Cotex Limited for Rs. 6.70
 Crores. However, so far the Company has paid Rs. 1.675 Crores as
 advance for property, which has been shown under Capital Work in
 Process & Advances, and the possession of the same would be taken only
 after the confirmation of auction by the High Court.
 
 10.  In accordance with the Accounting Standard (AS)-28 on Impairment
 of Assets, the Company has access as on the balance sheet date, whether
 there are any indications (listed in paragraph 8 to 10 of the Standard)
 with regard to the impairment of any of the assets. Based on such
 assessment it has been ascertained that no potential loss is present
 and therefore, formal estimate of recoverable amount has not been made.
 Accordingly no impairment has been provided in the books of account.
 
 11.  a) In 2009-10 the Company has issued 5,600,000 Global Depositary
 Receipts (GDRs) at the rate of USD 1.52 per GDR (USD 8,512,000), out of
 which USD 8,392,000 amounting to Rs. 39.48 crores (after netting of USD
 120,000 for GDRs issue expenses) were unutilized and lying with
 Overseas Bank, in the form of fixed deposit. The said amount has been
 utilized for the purpose for which these were raised during the year.
 
 b) During the year 2010-11 the Company has issued two series of Global
 Depositary Receipts (GDRs). The first series being of 3,000,000 Global
 Depositary Receipts (GDRs) at the rate of USD 15.50 per GDR amounting
 to Rs. 207.20 crores (USD 46,500,000). The second series being of
 3,500,000 Global Depositary Receipts (GDRs) at the rate of USD 10.00
 per GDR amounting to Rs. 162.96 crores (USD 35,000,000).  The funds
 have been used for working capital/capital expenditures. The funds USD
 2,500,000 amounting to Rs. 11.64 crores, and lying with Overseas Bank
 have been utilized for the purpose for which these were raised during
 the year.
 
 12.  During the year the Company had allotted 12,000,000 equity
 warrants on preferential basis, carrying an option to the holder of
 such warrants to subscribe to one equity share of Rs. 10/- each at a
 premium of Rs. 5.25/- per share for every warrant held, within 18
 months from the date of allotment (i.e. from Dec. 21, 2011), in terms
 of SEBI (DIP) Guidelines read with SEBI (Issue of Capital & Disclosure
 Requirements) Regulation, 2009. All of the aforesaid holders of
 12,000,000 equity warrants have exercised this option by depositing the
 amount during the year itself.
 
 13.  The summarized position of Post-Employment benefits and long term
 employee benefits recognized in the Profit & Loss Account and Balance
 Sheet as required in accordance with Accounting Standard (AS15) are as
 under:
 
 a.  Gratuity
 
 The principal assumptions used in actuarial valuation of gratuity are
 as below:
 
 b.  Provident Fund
 
 During the year the company has recognized an expense of Rs.
 34,706,164/- (Previous Year Rs. 22,092,868/-) towards provident fund
 scheme.
 
 c.  Leave Encashment
 
 During the year the company has recognized an expense of Rs.
 5,216,533/- (Previous Year Rs. 4,783,052/-).
 
 14.  A sum of Rs. Nil crores (Previous Year Rs. 0.47 crores) is
 included in profit & loss account under different expenditures heads
 representing prior period items.
Source : Dion Global Solutions Limited
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