Shamken Spinners Ltd. के अकाउंट के लिये नोट

Mar 31, 2011

1. Several of forced legal litigations exposed the company for contingent liabilities o n adjudication or otherwise. Similarly, contingent liability, on account of penalties/interest on default in payment/ deposits of statutory dues exists. Lack of harmonizing owing to scarce managerial infrastructure, with different agencies, fettered in asserting the quantum subject to this other contingent liability is Rs.67.14 Lacs on account of excise duty demand against which company filed an appeal. The Income Tax Department has also raised demand of Rs.8,95,04,520 and Wealth Tax Demand of Rs.4,91,815 for the financial year ended 31.03.2003.

The above assessments have been challenged by the company in appeal. To this extent the above demands are contingent liabilities.

2. The company continued to encounter limitations in operating bank account of enforced moratorium by the consortium of lender financial/banking institutions and directions adhering restraints/attachments on operating such bank accounts. However, restricted operations of accounts relating to borrowing were perpetrated for repayment in view of directions from courts or negotiations/settlements with the lender institutions. Some of the lenders like Bank of India, ICICI Bank Ltd, Industrial Development Bank of India, Development Credit Bank & Indian Overseas Bank have assigned their debts to Assets Reconstruction Company (India) Limited and Stressed Assets Stabilization Fund, respectively. One Time Settlement Scheme(s) (OTS) are being continued to be afforded for the company to settle the borrowings outstanding either owned/assigned to Asset Management Entities and/or lender institutions. Therefore the exercise are undergoing by the respective concerned to enable to company to settle liabilities. Expectations are hopefully OTS may be completed soon affording vantage and benefit to the company.

3. Due to losses, Company has not created any provision for the payment of preference dividend.

4. As per accounting standard (AS22) on accounting for taxes on income issued by ICAI, the company does not have deferred tax liability as on 31.03.2011, which has not been recognized in the books of accounts as on 31.03.2011 in view of uncertainty due to accumulated losses.

5. Remuneration paid to Auditor and Cost Auditor is in accordance with their terms of appointment as approved in the General Meeting.

6. Interest amounting to Rs. 3186 Lacs payable on working capital & term loans availed by the company, has not been provided in the books of accounts as all loan accounts of company with banks & financial institutions have become NPA and the company is in the process of availing OTS Scheme.

7. Related Party Transactions

a. Disclosure as per Accounting Standard-18 relating to transactions with related Parties during the Year

a) Associates Companies: M/s Shamken Multifab Limited, Shamken Cotsyn Ltd and Dwarikadhish spinners Ltd.

b) Key Managerial Persons: Mr. H B Chaturvedi, Mr. Amit Chaturvedi, Mr. Sanjay Chaturvedi.

b. Transactions with Related Parties

8. Segmental reporting as defined in Accounting Standard -17 of ICAI is not applicable.

9. Earning Per Share

10. The unit is closed as at 31st March, 2011 and the amount of gratuity payable as on this date has been fully charged to P & L account.

11. The ARCIL has exercised it's right under The Securitization And Reconstruction of Financial Assets And Enforcement of Security Interest Act,2002 and accordingly it has obtained the symbolic possession of all the assets of the company. However the company has defended the above in the Court of Law.

12. The comparative figures for the previous period have been rearranged and regrouped wherever required.

13. The debit and credit balances of debtors / creditors and other receivables and payables are subject to confirmations from the parties.

14. Schedules 1 to 19 form an integral part of Balance Sheet and Profit & Loss A/c.etc.