Mar 31, 2015
1. Term Loan from Banks:
Term Loan from Banks includes Term Loan from HDFC Bank of Rs. 32.75
Lacs (Outstanding as on 31-03-2015 Rs. 3.84 Lacs) which is secured
against hypothecation of vehicles. The same is repayable by way of 48
monthly installments of Rs. 0.95 Lacs each.
AsonSl-OS-lOW the company has defaulted in payment of installment for
the month of March low amounting
2. Long Term Liabilities of Finance Lease Obligations:
The Company has availed Term Loan from 'Sundaram Finance Limited' a Non
Banking Financial Corporation amounting to Rs. l,268.741akhs for
expansion off abilities. The Finance Lease obligations are secured
against leased assets.-
Ason31-03-2015,the company has defaulted in Payment of installments
aggregating to RsA62Lacs.
3. Deferred Payment Liabilities
Manufacture of MFL Brands owned by other Corporate
The Company manufactures and sells its own brand of liquors and also
uses the brand of others. For the purpose of manufacture and sales of
liquor brands not owned by the company the company has entered into
arrangement / agreement with the respective brand owners. The terms of
the Agreement / Arrangement with such brand owners provide for payment
of consideration for use of Trade Mark / for the additional services
rendered by the brand owners / other amount due to the Trade Mark
owners in the agreed proportion. The payment towards use of Trade Mark
/ for the additional service rendered by the Trade Mark owners / other
amounts due to the Trade Mark Owners are grouped as "Operational
Support Cost". The Operational Support Cost is included under the head"
Other Manufacturing Expenses"
Further the Agreements / Arrangements with other Brand owners provide a
facility of Deferred Payment of the amount due under the agreement.
These payables, as per the Terms, which are payable after a period
exceeding 12 months are classified as "Deferred Credit from Corporate
Suppliers" and are grouped under "Non Current Long Term Borrowings".
Other Long Term Liabilities represent 'Deposits' received from 'Tie Up
Parties' which are not expected to be repaid back within
aperiodofl2monthsfromthedateoffinancialstatements.
4. Working Capital Loans are secured by hypothecation of present and
future stock of raw materials, Stock in Process, Finished Goods,
Spares, Book Debts, Outstanding monies, receivables, claims, materials
in transit etc.
5. Term Loan from Banks:
5.1 Term Loan from State Bank of lndia is collaterally secured by
Equitable Mortgage of Factory and Building at RS No. 89 / 4A and 89 /
1, Katterikuppam, Mannadipet Commune, Pondicherry The collateral
security as mentioned above is Common security for all facilities
granted by the bank viz. Cash Credit, Term Loan, Bank Guarantee etc.
5.2 The promoters, directors and shareholders of the company have
also given their personal assets as collateral security for Entire
facilities sanctioned by State Bank of media. The disclosure of the
same is given below:
5.3 Overdue Facilities with State Bank of India:
State Bank of India has classified entire facilities as 'Non Performing
Assets' as on 31-03-2015 (Outstanding Rs. 2874 Lacs) (Principal Overdue
Rs. 2386.37 Lacs and Interest Overdue Rs. 487.63 Lacs). Further, State
Bank of India has initiated action under' SERFAESI Act'for recovery of
dues outstanding amounting to Rs.2615.08Lacs.
The company has submitted a proposal in March 2015 for 'One Time
Settlement (OTS) for repayment of over dues to Financial Institution
which is under consideration. The company expects to derive economic
benefit out of the above OTS in the form of waiver of overdue interest.
Therefore, provision for interest amounting to Rs. 153.41 Lacs for the
quarter ended March 2015 has not been made in the accounts.
The company has not received intimation from all the "Suppliers"
regarding their status under Micro, Small and Medium Enterprises
Development Act, 2006, and hence, the disclosure relating to amounts
unpaid as at March 31, 2015 together with Interest paid/payable as
required under the said Act has been provided only to the extent of
intimations received.
6. During the Financial Year 2011-2012, the Company acquired 38.43%
stake in 'Liquors India Limited'. However, due to various issues with
Mr. Anil Agrawal, Managing Director of 'Comfort Securities Limited'
(the Merchant Banker to the Initial Public Offerings of the Company)
and M/s Comfort Intech Limited, the Company entered into an agreement
with Mr. Anil Agrawal and'Lemonade Shares and Securities Private
Limited' for sale of the entire undertaking. The agreement has been
challenged and Civil Suit has been filed before Ilnd Additional
District Judge, Ranga Reddy District, L. B. Nagar, Hyderabad with
prayers in ter-aliatorescind the agreements as being
voidandrestorethepartiesbacktothepositionprior to MOU dated 05-09-2012.
Pending the outcome of the Suit, the amount received from 'M/s Lemonade
Shares and Securities Private Limited' is shown under 'Other Current
Liabilities'.
7. During the Financial Year 2011-2012, the Company acquired 38.43%
stake in 'Liquors India Limited'. However, due to various issues with
Mr. Anil Agrawal, Managing Director of 'Comfort Securities Limited'
(the Merchant Banker to the Initial Public Offerings of the Company)
and M/s Comfort Intech Limited, the Company entered into an agreement
with Mr. Anil Agrawal and'Lemonade Shares and Securities Private
Limited' for sale of the entire undertaking. The agreement has been
challenged and Civil Suit has been filed before Ilnd Additional
District Judge, Ranga Reddy District, L. B. Nagar, Hyderabad with
prayers inter-alia to rescind the agreements as being void and restore
the parties back to the position prior to MOU dated 05-09-2012. Pending
the outcome of the Suit, the amount received from 'M/s Lemonade Shares
and Securities Private Limited' is shown under' Other Current
Liabilities'.
8. As on 31-03-2015,the company holds 49% stake of' SVD is toiletries
Private Limited' amounting toRs.477Lacs.
9. In Financial Year 2010-2011, the Company made total investment of
Rs. 1,311 Lacs in 'Liquor India Limited' and Rs. 2,423 Lacs in'SV
Distilleries Private Limited'. Out of the above, investment in shares
of Liqur India Limited' is Rs. 826 Lacs and in 'S V Distilleries
Private Limited' is Rs. 477 Lacs respectively and investment in the
form of acquisition cost of respective companies is Rs. 485 Lacs in
'Liquor India Limited' and Rs. 1,946 Lacs in 'S V Distilleries Private
Limited' respectively. During the current Financial Year, the
investment is Shares of above companies has been classified under the
head 'Non Current investments' and other acquisition cost have been
classified under the head' Short Term Loans and Advances'.
10. Other Loans and advances includes amounts transferred to various
parties post IPO amounting to Rs. 2,900 Lacs given as advances to
suppliers during Financial Year 2010-2011. However, since, the capital
commitments were not acted upon by the parties, the management has
decided to recall the advances paid. During the financial year
2013-2014, the company has sent legal notices to parties for refund of
advances lying with them The management expects to get the advances
back in due course. Hence, no provision has been made in the accounts
for doubtful recovery of above advances. Further, the Company has also
Filed a complaint with Economic Offences Wing,Unit-V,Mumbai,En for
cement Director ate and other forums for Recovery
# "During the Financial Year 2014-2015, the High Court of Madras has
dismissed the pending petitions of the Company regarding "Turnover Tax"
payable to Financial Year 1999-2000, to Financial Year 2006-2007. The
High Court has directed the Company to pay total demand of Rs. 119.72
to Department of Sales Tax. Accordingly, the Company has made provision
in the accounts during the year for Turnover Tax payable and disclosed
the same under the head "Exceptional Items"
The Balances of trade receivables are subject to confirmation and
reconciliation. In the opinion of management, there would not be any
substantial differences on reconciliation.
11. Balance with banks include unclaimed dividend of Rs.0.44Lacs
(Previous Year Rs.0.44Lacs).
12. Fixed Deposits of Rs.lLacsarepledged with Electricity Departments
as Deposit.
13. Margin onBankFacilitiesofRs.24.72 Lacs are pledged with State Bank
of India for Non Funded Facilities granted.
14. Loans and Advances to related parties includes, working capital
advance given to 'Liquor India Limited' (Also Refer Note No. 13.1 and
Note No. 13.3) of Rs. 1,640 Lacs and'S V Distilleries Private Limited'
(Also Refer Note No. 13.2 and Note No. 13.3) of Rs. 3,387Lacs. No
interest has been charged on these loan on prudence basis.
15. During the Financial Year 2011-2012, the Company acquired 38.43%
stake in 'Liquors India Limited'. However, due to various issues with
Mr. Anil Agrawal, Managing Director of' Comfort Securities Limited'
(the Merchant Banker to the Initial Public Offerings of the Company)
and M/s Comfort Intech Limited, the Company entered into an agreement
with Mr. Anil Agrawal and 'Lemonade Shares and Securities Private
Limited' for sale of the entire undertaking. The agreement has been
challenged and Civil Suit has been filed before Ilnd Additional
District Judge, Ranga Reddy District! L. B. Nagar, Hyderabad with
prayers inter-alia to rescind the agreements as being void and restore
the parties back to the position prior to MOU dated 05-09-2012.
Pending the outcome of the Suit, the amount received from 'M/s Lemonade
Shares and Securities Private Limited' is shown under' Other Current
Liabilities'.
The liability for Gratuity to employees as at the Balance Sheet date is
determined on the basis of actuarial valuation based on Projected Unit
Credit method and is funded to a Gratuity fund administered by the
trustees and managed by Life Insurance Corporation of India. The
contribution there of paid/ payable is charged in the books of
accounts.
The employees and the Company make monthly fixed contributions to a
Provident Fund Trust, equal to a specified percentage of the covered
employee's salary: The interest rate payable by the Trust to the
beneficiaries is being notified by the Government every year. The
Company has an obligation to make good the shortfall, if any, between
the return from the investments of the trust and the notified
interstate.
In the absence of adequate information, the status of the Gratuity plan
and the Superannuation and the other Pension Plans of The Company and
the amount recognized in the Balance Sheet and Profit and Loss Account
could not be disclosed.
16. Impairment of Assets:
Assets of the Company are being tested for impairment. Considering the
internal and external sources of information, there was No indication
of potential impairment loss, and hen estimation of recoverable amount
does not arise.
17. Segment Reporting:
The company operates only in one reportable business segment namely
manufacture and sale of Indian Manufactured Foreign Liquor. The liquor
business;-incorporates the product groups (viz) IMFL and others, which
have similar risks and returns. Hence Segment reporting is not
applicable.
18. Exceptional Items: "DuringtheFinancialYear2014-2015,theHigh Court
of Madras has dismissed the pending petitions of the Company regarding
"Turnover Tax" payable to Financial Year 1999-2000, to Financial Year
2006-2007. The High Court has directed the Company to pay total demand
of Rs. 119.72 to Department of Sales Tax. Accordingly, the Company has
made provision in the accounts during the year for Turnover Tax payable
and disclosed the same under the head "Exceptional Items"
19. Taxation Matters:
The Company has received a Demand Notice from Income Tax Department
regarding Appeals filed by with the Commissioner of Income Tax
(Appeals) against the orders of the Assessing Officer; in respect of
the Assessment Year 2010-2011; on account of disallowance of
expenditure under section 40 a (ia) of the Income Tax Act, 1961. The
Department has raised a demand of Rs.138.94 Lacs for the said
assessment year. The Company has decided to file an appeal with the
Income Appellate Tribunal against the Appeal Orders issued by the
Commissioner-of Income Tax (Appeals). Further, the Company has received
a Demand Notice from Income Tax Department regarding Assessment
Proceedings for the Assessment Year 2012-2013. The Department has
raised a demand of Rs. 1,209.99 Lacs for the said assessment year. The
Company has filed an appeal with the Commissioner of Income Tax
(Appeals) against the Appeal Orders issued by the Assessing Officer:
The Company is confident of succeeding in the said petition and the
Company has also taken favorable opinion from legal experts. Hence no
provision has been made in the books of accounts and the demand raised
by the Department has been shown under "Contingent Liabilities".
In respect of other disputed liabilities pertaining to earlier years
such as Turnover Tax, Bank Guarantee amount, the amounts Have been
shown under" Contingent Liabilities" in there specie years.
Legal Cases Pertaining To The Company
The company's performance was also severely affected due to various
issues and fraudulence committed by Mr. Anil Agrawal, Managing Director
of M/s. Comfort Securities Limited, M/s. Comfort Intech Limited and his
associates against the Company
Your Company has filed complaints against Mr. Anil Agrawal, M/s.
Comfort Securities Ltd., Merchant Bankers, M/s. Comfort Intech Ltd. And
rioter group companies with the foUowmg authorities.
1. A Civil Suit OS No. 103/2013 and LA. No. 405/2013 before 2nd
Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad
with prayers:
a. To rescind the agreements as being void and restore the parties
back to the position prior to the MOU dated 05.09.2012.
b. To declare the notice for EGM dated 05.02.2013 as null and void and
illegal. The court has passed an order restraining Mr. Anil Agrawal
from holding the EGM till further orders in the case of M/s.
Liquors India Ltd.,
c. LA. No. 1453 of 2013 filed with Ilnd Additional District Judge,
Ranga Reddy District, L.B. Nagar, Hyderabad praying not to alienate,
encumber assets of M/s. Liquors India Ltd.
d. LA. No. 1452 of 2013 filed with Ilnd Additional District Judge,
Ranga Reddy District, L.B. Nagar, Hyderabad praying not to alter the
Board.
i. The Court has passed interim order in IA No.1452 & 1453, not to
alienate, encumber assets of LIL and not to alter the Board.
ii. Mr. Anil Agrawal filed appeal in High Court, Hyderabad and HC
permitted to sub-lease with third parties.
iii. Aggrieved by this order, your company filed SLP with the Supreme
Court of India against the above order. The Supreme Court has stayed
the High Court Order till further hearings.
e. LA. No. 654of 2015 inOSno. 103/2013 filed with Ilnd Additional
District Judge, Ranga Reddy District, L.B.Nagar, Hyderabad praying to
appoint Official Receiver conferring powers on the receiver for the
management, protection, collection of profits and improvement of M/s.
Liquors India Limited. Thecase is in argument stage.
20. Writ Petition No. 12713 of 2014 with the Hon'ble High Court, Andhra
Pradesh praying License of Liquors India Limited issued by the Excise
Department should be cancelled and sub-lease agreement also be
cancelled. The order has been passed that all transactions including
financial transactions between Mr. Anil Agrawal and Tilaknagar
Industries Limited shall be booked and recorded faithfully pending
further consideration of this
W.PM.PNo.l5944of2014inW.PNo.l2713of2014.Mr.AnilAgrawal and Tilaknagar
Industries Limited shall not create any charge or third party interest
relating to the assets of Liquors India Limited.
21. You company has filed a Complaint with the Commissioner of Police,
Hyderabad against the fraud and cheating committed by Mr. Anil Agrawal.
The Police has registered the FIR No.248/2013 dated 23.08.2013 against
Mr. Anil Agrawal and others under Section406-IPC, 420-IPC, 447-IPC,
385-IPC, 386-IPC, 467-IPC, 468-IPC, 469-IPC, 471-IPC, 120B-IPC, 34-IPC.
a) Mr. Anil Agrawal has filed C.P No. 11292 of 2013 in the High Court
of Hyderabad against FIR No. 248/2013 dated 23.08.2013 and High Court
passed order to complete the investig ation with out arresting Mr. Anil
Agrawal and others.
22. Your company has filed a Complaint with EOW, Mumbai for cheating
and money laundering to recover company's money of Rs. 33.73crores.
EOW has registered FIR No.34/14 dated 21.01.2014 under section
409,420,465,467,468,471,474,120(B).
a. Mr. Anil Agrawal filed W.P No. 2059 of 2014 in High Court of Mumbai
and the Court has declared that the FIR registered by EOW is not
maintain able since Nacharam Police Station has registered the FIR
first.
i. Aggrieved by delay in investigation by the Hyderabad Police and
order by the High Court, Mumbai, Your company has filed.
a. Two SLPs with the Supreme Court of India against High Court of
Mumbai order and delay in investigation by Hyderabad Police. These SL
Ps have been taken by the Supreme Court and the next hearing is
onl4.09.2015.
23. Your company has filed a Complaint with SEBI, Mumbai against BRLM
M/s. Comfort Securities Ltd., (DP) promoted by Mr. Anil Agrawal for
violations of SEBI Regulations and others.
24. Your company has filed a Recovery suits No. SL/1135, 1136, 1137,
1138 and 1139 of 2013 filed against M/s. Ranisati Dealer PvtLtd., M/s.
Vibhuti Multi Trade Pvt. Ltd., M/s. Gulistan Vanijya Pvt.Ltd., M/s.
Sukusama Trading and Investments Pvt.Ltd. andM/s.BLC Trading and
Agencies Pvt. Ltd. in the High Court of Mumbai. Matter pending before
the court.
25. Your company has filed a Complaint with Enforcement Directorate,
Mumbai to investigate the frauds committed by Mr. Anil Agrawal and his
companies. Enforcement Directorate has initiated enquiries against Mr.
Anil Agrawal, his companies and others under the provisions of
prevention of Money aundering Act 2002 on the basis of the FIR No.34/14
dated 21.01.2014.
26. Your company has filed a Complaint with RBI and Ministry of Finance
to appoint officer to investigate the affair of CIL and cancel the
License to act as NBFC for violating the guidelines. RBI has cancelled
the NBFC License of Comfort Intech Limited based on forgery and
mis-representation by CIL in some other different matter for forging
and fabricating RBI documents.
27. Your company has filed a Complaint with The Police Commissioner of
Chennai against the fraud and cheating committed by Mr. Anil Agrawal.
Mr. Anil Agrawal filed Writ Petition No. 32829 of 2013 with High Court
of Chennai to direct the Police, Chennai not to proceed further with
the investigation. The matter is pending before the Court.
28. Your company has filed a Petition Under section 111 A r/w 111(4)
of the Companies Act filed before the Company Law Board, Chennai in the
matter of Liquor lndia Limited, Mr. Anil Agrawal and others. Matter is
pending before the CLB.
Mr. Anil Agrawal has filed complaints against the company with the
following authorities:
1. The Company Law Board, Chennai under section 397, 398, 235(2) and
237(b) of the Companies Act, 1956. The Company has filed counter and
the matter is pending before the CLB.
2. Mr. Anil Agrawal filed a Counter Complaint with Hyderabad Police
against Mr. R.V. Ravikumar. The Hyderabad Police have not considered
the complaint since there was no substance. Aggrieved, Mr. Anil Agrawal
filed W.P No. 7956 of 2014 filed with Hon'ble High Court, Andhra
Pradesh to register the complaint filed by him against Mr. R.V.
Ravikumar with Hyderabad Police. The Police have submitted their report
to the High Court, Hyderabad stating that there is no substance in the
Complaint. The matter is pending before the court without further date.
3. Mr. Anil Agrawal has filed a Counter Complaint with Malad Police
Station, Mumbai against the company and its Directors. Preliminary
enquiry was conducted by the Malad Police and since there was no
substance in the Complaint, Malad Police Did not pursue further.
4. M/s. First Financial Services Limited, Chennai has filed O.S. No.
6602 of 2013 alleging mis-management of the company. The court has
rejected the suit.
5. M/s. Tilaknagar Industries Limited - accused A7, A8 and A9 in the
Hyderabad Police FIR, filed W.P. No. 4945 of 2014 with the Hon'ble High
Court, Andhra Pradesh to stay all further proceedings of the FIR. The
W.P. is pending for admission.
29. Previous Year Figures:
The financial statements for the year ended March 31,2015 have been
prepared as per Schedule III of the Companies Act, 2013. The figures
for the previous year have been regrouped, reclassified or rearranged
to meet the recognition and measurement principles followed for
preparation of financial statements.
Mar 31, 2014
1. General Information:
The Company was incorporated during the year 1993 and is engaged in the
business of manufacture and sale of Indian Manufactured Foreign Liquor
(IMFL). The Company has its manufacturing unit at Pondicherry.
1.2 Contingent Liabilities and Provisions:
Provisions are recognized only when there is a present obligation as a
result of past events and when a reliable estimate of the amount of
obligation can be made.
Contingent Liability is disclosed for
a. Possible obligation which will be confirmed only by future events
not wholly with in the control of the company or
b. Present obligations arising from the past events where it is not
probable that an outflow of resources will be required to settle the
obligation or a reliable estimate of the amount of the obligation can
not be made.
c. Contingent Assets are not recognized in the financial statements
since this may result in the recognition of income that may never be
realized.
1.3 Earnings Per Share:
In determining the Earnings Per share, the company considers the net
profit after tax including any post tax effect of any extraordinary /
exceptional item. The number of shares used in computing basic earnings
per share is the Weighted average number of shares outstanding during
the period. The number of shares used in computing Diluted earnings per
share comprises the Weighted average number of shares considered for
computing Basic Earning per share and also the weighted number of
equity shares that would have been issued on conversion of all
potentially dilutive shares.
In the event of issue of bonus shares, or share split the number of
equity shares outstanding is increased without an increase in the
resources. The number of Equity shares outstanding before the event is
adjusted for the proportionate change in the number of equity shares
outstanding as if the event had occurred at the beginning of the
earliest period reported.
1.4 Leases:
Finance Lease
Leases which effectively transfer to the company all the risks and
benefits incidental to ownership of the leased item, are classified as
Finance Lease. Lease rentals are capitalized at the lower of the fair
value and present value of the minimum lease payments at the inception
of the lease term and disclosed as leased assets. Lease payments are
apportioned between the finance charges and reduction of the lease
liability based on the implicit rate of return.
Operating Lease
Lease where the lessor effectively retains substantially all risks and
benefits of the asset are classified as Operating lease. Operating
lease payments are recognized as an expense in the Profit & Loss
account on a Straight Line Basis over the Lease term.
1.5 Segment Reporting:
The generally accepted accounting principles used in the preparation of
the financial statements are applied to record revenue and expenditure
in individual segments.
Segment revenue and segment results include transfers between business
segments. Such transfers are accounted for at the agreed transaction
value and such transfers are eliminated in the consolidation of the
segments.
Expenses that are directly identifiable to segments are considered for
determining the segment result. Expenses, which relate to the company
as a whole and are not allocable to segments are included under
unallocated corporate expenses.
Segment assets and liabilities include those directly identifiable with
the respective segments. Unallocated corporate assets and liabilities
represent the assets and liabilities that relate to the company as a
whole and not allocable to any segment.
2.1 Term Loan from Banks:
Term Loan from Banks includes Term Loan availed from HDFC Bank of Rs.
32.75 Lacs (Outstanding as on 31-03-2014 Rs. 14.07 Lacs) which is
secured against hypothecation of vehicles. The same is repayable by way
of 48 monthly installments of Rs. 0.95 Lacs each. As on 31-03-2014, the
company has defaulted in payment of installment for the month of March
2014 amounting to Rs. 0.98 Lacs.
2.2 Long Term Liabilities of Finance Lease Obligations:
The Company has availed Term Loan from ''Sundaram Finance Limited'' a Non
Banking Financial Corporation amounting to Rs. 1,268.74 lakhs for
expansion of facilities. The Finance Lease obligations are secured
against leased assets. Outstanding as on 31-03-2014 Rs. 442.20 lacs.
As on 31-03-2014, the company has defaulted in payment of installments
aggregating to Rs. 278.39 Lacs.
2.3 Deferred Payment Liabilities Manufacture of IMFL Brands owned by
other Corporates
Manufacture of IMFL Brands owned by other Corporates
The Company manufactures and sells its own brand of liquors and also
uses the brand of others. For the purpose of manufacture and sales of
liquor brands not owned by the company, the company has entered into
arrangement / agreement with the respective brand owners. The terms of
the Agreement / Arrangement with such brand owners provide for payment
of consideration for use of Trade Mark / for the additional services
rendered by the brand owners / other amount due to the Trade Mark
owners in the agreed proportion. The payment towards use of Trade Mark
/ for the additional service rendered by the Trade Mark owners / other
amounts due to the Trade Mark Owners are grouped as "Operational
Support Cost". The Operational Support Cost is included under the head
"Other Manufacturing Expenses"
Further the Agreements / Arrangements with other Brand owners provide a
facility of Deferred Payment of the amount due under the agreement.
These payables, as per the Terms, which are payable after a period
exceeding 12 months are classified as "Deferred Credit from Corporate
Suppliers" and are grouped under "Non Current Long Term Borrowings".
The Balances of tie up parties are subject to confirmation and
reconciliation. In the opinion of management, there would not be any
substantial differences on reconciliation.
3.1 Working Capital Loans are secured by hypothecation of present and
future stock of raw materials, Stock in Process, Finished Goods,
Spares, Book Debts, Outstanding monies, receivables, claims, materials
in transit etc.
3.2 Term Loan from Banks:
3.2.1 Term Loan from State Bank of India is collaterally secured by
Equitable Mortgage of Factory Land and Building at RSNo. 89 / 4A and
89 / 1, Katterikuppam, Mannadipet Commune, Pondicherry. The collateral
security as mentioned above is common security for all facilities
granted by the bank viz. Cash Credit, Term Loan, Bank Guarantee etc.
3.2.3 Overdue Facilities with State Bank of India:
State Bank of India has classified entire facilities as ''Non Performing
Assets'' as on 31-03-2014 (Outstanding Rs. 2650 Lacs) (Principal Overdue
Rs. 2386.37 Lacs and Interest Overdue Rs. 264.02 Lacs). Further, State
Bank of India has initiated action under ''SERFAESI Act'' for recovery of
dues outstanding amounting to Rs. 2615.08 Lacs.
4.1 During the financial year 2011-12, the Company acquired 38.43%
stake in Liquors India Limited. However due to various issues with Mr.
Anil Agrawal, Managing Director of ''Comfort Securities Ltd.'', (the
Merchant Banker to the Initial Public Offering of the company) and
''M/s. Comfort Intech Ltd.'', the company entered into agreement with Mr.
Anil Agrawal and ''Lemonade Shares & Securities Private Limited'' for
sale of entire undertaking. The agreement has been challenged and Civil
suit has been filed before Ilnd Additional District Judge, Ranga Reddy
District, L.B. Nagar, Hyderabad with prayers inter-alia to rescind the
agreements as being void and restore the parties back to the position
prior to the MOU dated 05.09.2012. Pending the outcome of the suit, the
amount received from M/s. Lemonade Shares and Securities Private
Limited is shown under "Other Current Liabilities".
5.1 During the financial year 2011-12, the Company acquired 38.43%
stake of Liquors India Limited. However due to various issues with Mr.
Anil Agrawal, Managing Director of Comfort Securities Ltd., (the
Merchant Banker to the IPO) and M/s. Comfort Intech Ltd., the company
entered into agreement with Mr. Anil Agrawal and Lemonade Shares &
Securities Private Limited for sale of entire undertaking. The
agreement has been challenged and Civil suit has been filed before Ilnd
Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad
with prayers inter-alia to rescind the agreements as being void and
restore the parties back to the position prior to the MOU dated
05.09.2012. Pending the outcome of the suit, the investment in shares
of "Liquor India Ltd." is considered as disputed and shown under
"Non-Current Investments."
5.2 As on 31-03-2014, the company holds 49% stake of''S V Distilleries
Private Limited'' amounting to Rs. 2,422.49 Lacs.
6.1 Other Loans and advances amounts transferred to various parties
post IPO includes of Rs. 2,900 Lacs given as advances to suppliers
during Financial Year 2010-2011. However, since, the capital
commitments were not acted upon by the parties, the management has
decided to recall the advances paid. During the financial year
2013-2014, the company has sent legal notices to parties and has also
filed Recovery Suits for refund of advances lying with them. The
management expects to get the advances back in due course. Hence, no
provision has been made in the accounts for doubtful recovery of above
advances. The company has also filed complaint with Economic Offence
Wing, Unit-V, Mumbai for recovery.
7.1 Balance with banks include unclaimed dividend of Rs. 0.44 Lacs
(Previous Year Rs. 0.44 Lacs).
7.2 Fixed Deposits of Rs. 1 Lacs are pledged with Electricity
Departments as Deposit.
7.3 Fixed Deposits of Rs. 47.63 Lacs with Axis Bank are pledged as
security against deposit given to BSE.
7.4 Fixed Deposits of Rs. 25.74 Lacs are pledged with State Bank of
India for Non Funded Facilities granted.
8.1 Loans and Advances to related parties includes, working capital
advance given to ''Liquor India Limited'' (Associate Enterprises - Also
Refer Note No. 13.1) of Rs. 1,155 Lacs and''S V Distilleries Private
Limited'' (Associate Enterprises - Also Refer Note No. 13.2) of Rs.
1,458 Lacs. No interest has been charged on these loan on prudence
basis.
8.2 During the financial year 2011-12, the Company acquired 38.43%
stake of Liquors India Limited. However due to various issues with Mr.
Anil Agrawal, Managing Director of Comfort Securities Ltd., (the
Merchant Banker to the IPO) and M/s. Comfort Intech Ltd., the company
entered into agreement with Mr. Anil Agrawal and Lemonade Shares &
Securities Private Limited for sale of entire undertaking. The
agreement has been challenged and Civil suit has been filed before Ilnd
Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad
with prayers inter-alia to rescind the agreements as being void and
restore the parties back to the position prior to the MOU dated
05.09.2012. Pending the outcome of the suit, the advances given to
"Liquors India Ltd." is considered as disputed and shown under "Short
Term Loans and Advances to Related Parties."
9. Gratuity and Other Post Employment Benefit Plans:
As per Accounting Standard 15 "Employee Benefits", the disclosures of
Employee benefits as defined in the Accounting Standard are given below
Gratuity
The liability for Gratuity to employees as at the Balance Sheet date is
determined on the basis of actuarial valuation based on Projected Unit
Credit method and is funded to a Gratuity fund administered by the
trustees and managed by Life Insurance Corporation of India. The
contribution thereof paid/payable is charged in the books of accounts.
The employees and the Company make monthly fixed contributions to a
Provident Fund Trust, equal to a specified percentage of the covered
employee''s salary. The interest rate payable by the Trust to the
beneficiaries is being notified by the Government every year. The
Company has an obligation to make good the shortfall, if any, between
the return from the investments of the trust and the notified interest
rate.
In the absence of adequate information, the status of the Gratuity plan
and the Superannuation and the other Pension Plans of the Company and
the amount recognized in the Balance Sheet and Profit and Loss Account
could not be disclosed.
10. Impairment of Assets:
Assets of the Company are being tested for impairment. Considering the
internal and external sources of information, there was no indication
of potential impairment loss, and hence estimation of recoverable
amount does not arise.
11. Segment Reporting:
The company operates only in one reportable business segment namely
manufacture and sale of Indian Manufactured Foreign Liquor. The liquor
business incorporates the product groups (viz) IMFL and others, which
have similar risks and returns. Hence segment reporting is not
applicable.
12. Taxation Matters:
The Company has received a Demand Notice from Income Tax Department
regarding Appeals filed by with the Commissioner of Income Tax
(Appeals) against the orders of the Assessing Officer; in respect of
the Assessment Year 2010-2011; on account of disallowance of
expenditure under section 40 a (ia) of the Income Tax Act, 1961. The
Department has raised a demand of Rs.138.94 Lacs for the said
assessment year. The Company has decided to file a petition in High
Court against the Appeal Orders issued by the Commissioner of Income
Tax (Appeals). The Company is confident of succeeding in the said
petition and the Company has also taken favorable opinion from legal
experts. Hence no provision has been made in the books of accounts and
the demand raised by the Department has been shown under "Contingent
Liabilities".
In respect of other disputed liabilities pertaining to earlier years
such as Turnover Tax, Bank Guarantee amount, the amounts have been
shown under "Contingent Liabilities" in the respective years.
13. Contingent Liabilities: (Rs.inLacs)
Contingent Liability not Year Ending March Year Ending March
provided for in the books 31,2014 31,2013
Turnover Tax 222.55 222.55
Guarantee given to a bank 1.00 1.00
Counter Guarantee provided by the
Bank on behalf of the Company 120.00 120.00
Counter Guarantee in favour of
Bank of Baroda, Barkatpura Branch,
Hyderabad against credit facilities
sanctioned to'' SV Distilleries
Private Limited'' 8,385.00 8,385.00
Income Tax matters 142.19 562.58
Claims against the company not
acknowledged as debt Nil Nil
Legal cases filed by and against the company are as follows:
1. A Civil Suit OS No. 103/2013 and I.A. No. 405/2013 before 2nd
Additional District Judge, Ranga Reddy District, L.B. Nagar, Hyderabad
with prayers (i) to rescind the agreements as being void and restore
the parties back to the position prior to the MOU dated 05.09.2012.
(ii) To declare the notice for EGM dated 05.02.2013 as null and void
and illegal. The court has passed an order restraining Mr. Anil Agrawal
from holding the EGM till further orders.
2. I.A. No. 1452 of 2013 filed with Ilnd Additional District Judge,
Ranga Reddy District, L.B. Nagar, Hyderabad praying Not to
alienate, encumber assets of M/s.Liquors India Ltd. Judgement is
reserved.
3. I.A. No. 1453 of 2013 filed with Ilnd Additional District Judge,
Ranga Reddy District, L.B. Nagar, Hyderabad praying Not to alter
the Board. Judgement is reserved.
4. Writ petition No. 12960 of 2013 filed with the Hon''ble High Court,
Andhra Pradesh requesting not to transfer the excise license of M/s.
Liquors India Limited, Nacharam, Hyderabad to Mr. Anil Agrawal. Case
disposed off directing the Excise Commissioner of Prohibition & Excise,
Hyderabad to consider Mr. R.V. Ravikumar''s representation dated
23.01.2013 and 05.02.2013 before considering the application of Mr.
Anil Agrawal for transfer of the license of Liquor India Limited. Mr.
Anil Agrawal has filed a Writ Petition No. 34448 of 2013. The court as
orderd to dispose the petition in accordance with law.
5. Complaint with Excise Commissioner of Prohibition and Excise,
Hyderabad stating that the Company has filed several complaints /
petitions and the same are pending before the Courts and Authorities
and therefore the Excise License of Liquors India Limited should not be
transferred until all our cases / complaints are resolved. License not
transferred in the name of Mr. Anil Agrawal. The Excise Department has
renewed the License of Liquors India Limited in the name of the
company.
6. Complaint with the Commissioner of Police, Hyderabad against the
fraud and cheating committed by Mr. Anil Agrawal. The
Police has registered the FIR No.248/2013 dated 23.08.2013 against Mr.
Anil Agrawal and others under Section 406-IPC, 420-IPC, 447-IPC,
385-IPC, 386-IPC, 467-IPC, 468-IPC, 469-IPC, 471-IPC, 120B-IPC, 34-IPC.
i. Mr. Anil Agrawal has filed C.P. No. 11292 of 2013 in the High Court
of Hyderabad against FIR No. 248/2013 dated 23.08.2013 filed with the
Police Department, Hyderabad and order was passed to the concerned
police to complete the investigation without arresting Mr. Anil Agrawal
and others.
ii. Mr. Anil Agrawal has also filed C.P. No. 3389 of 2013 in the High
Court of Bombay against the same FIR No. 248/2013 dated 23.08.2013 of
Police Department, Hyderabad and the same was withdrawn by him, after
objection by the Government of Andhra Pradesh.
iii. M/s. Tilaknagar Industries Limited - accused A7, A8 and A9 filed
W.P. No. 4945 of 2014 with the Hon''ble High Court, Andhra Pradesh to
stay all further proceedings of FIR No. 248/2013 of Andhra Police. The
W.P. is pending for admission.
7. Writ Petition No. 12713 of 2014 with the Hon''ble High Court, Andhra
Pradesh praying License of Liquors India Limited issued by the Excise
Department should be cancelled and sub-lease agreement also be
cancelled. The order has been passed that all transactions including
financial transactions between Mr. Anil Agrawal and Tilaknagar
Industries Limited shall be booked and recorded faithfully pending
further consideration of W.P.M.P. No. 15944 of 2014 in W.P. No. 12713
of 2014. Mr. Anil Agrawal and Tilaknagar Industries Limited shall not
create any charge or third party interest relating to the assets of
Liquors India Limited.
8. Complaint with SEBI, Mumbai against BRLM M/s. Comfort Securities
Ltd., & Comfort Intech Ltd. (DP) promoted by Mr. Anil Agrawal for
violations of SEBI Regulations.
9. Complaint with EOW, Mumbai for cheating and money laundering to
recover company''s money of Rs. 33.72 crores. EOW has registered FIR
No.34/14 dated 21.01.2014 under section 409, 420, 465, 467, 468, 471,
474, 120(B) and the case is under active investigation.
i. Mr. Anil Agrawal has filed application for Anticipatory Bail vide
Petition No. 148 of 2014. Bail Application is pending before the
Session Court, Mumbai.
ii. Mr. Anil Agrawal has also filed quash petition No. 2059 of 2014
with High Court of Mumbai for quash of EOW-FIR. The same is pending
before the court.
iii. M/s. Sukusama Trading & Investment Pvt.Ltd., M/s. Rani Sati
Dealers Pvt.Ltd., M/s. Gulistan Vanijiya Pvt.ltd., Gangor Suppliers
Pvt.Ltd., and M/s. B.L.C. Trading Agencies Pvt.Ltd. have filed C.W.P.
Nos. 811, 812, 861, 863 & 913 of 2014 in the High court of Mumbai
praying to direct EOW to record their statements as true facts without
insisting on additions / alterations. The cases were dismissed.
14. Recovery suits No. SL/1135, 1136, 1137, 1138 and 1139 of 2013 filed
against M/s. Ranisati Dealer Pvt.Ltd., M/s. Vibhuti Multi Trade
Pvt.Ltd., M/s. Gulistan Vnijya Pvt.Ltd., M/s. Sukusama Trading and
Investments Pvt.Ltd. and M/s. BLC Trading and Agencies Pvt.Ltd. in the
High Court of Bombay. Matter pending before the court.
15. Complaint with Enforcement Directorate, Mumbai to investigate the
frauds committed by Mr. Anil Agrawal and his companies. Enforcement
Directorate has initiated enquiries against Mr. Anil Agrawal, his
companies and others under the provisions of prevention of Money
Laundering Act 2002 on the basis of the FIR No. 34/14 dated 21.01.2014.
16. Complaint with SEBI for Cancellation of BRLM License. The complaint
has been registered by SEBI in its site www.scores.gov.in vide
Complaint Registration No. SEBIP/MH14/0003906/1 dated 07.08.2014.
17. Complaint with SEBI and CDSL for Cancellation of DP License. The
complaint has been registered with SEBI in its site www.scores.gov.in
vide Complaint Registration No. SEBIP/MH14/0003325/1 dated 07.07.2014.
18. Complaint with RBI and Ministry of Finance to appoint officer to
investigate the affair of CIL and cancel the License to act as NBFC for
violating the guidelines. The matter is under process.
19. Complaint with The Police Commissioner of Chennai against the fraud
and cheating committed by Mr. Anil Agrawal. Mr. Anil Agrawal filed Writ
Petition No. 32829 of 2013 with High Court of Chennai to direct the
Police, Chennai not to proceed further with the investigation. The
matter is pending before the Court without further date since December
2013.
20. Petition Under section lllAr/w 111(4) of the Companies Act 1956
filed before the Company Law Board, Chennai in the matter of Liquor
India Limited, Mr. Anil Agrawal and others. Matter is pending before
the CLB.
Mr. Anil Agrawal has filed complaints against the company with the
following authorities:
1. The Company Law Board, Chennai under section 397, 398, 235(2) and
237(b) of the Companies Act, 1956. The Company has filed counter and
the matter is pending before the CLB.
2. W.P. No. 7956 of 2014 filed with Hon''ble High Court, Andhra Pradesh
to register the complaint filed by him against Mr. R.V. Ravikumar. The
matter is pending before the court without further date.
3. Complaint with Malad Police Station, Mumbai against the company.
Preliminary enquiry by the Malad Police Station is in progress.
One Mr. Anand Agrawal, Director of M/s.Comfort Intech Limited has filed
a complaint with RoC under Investor''s Complaint and ROC has closed the
complaint after verification and proper scrutiny.
M/s. First Financial Services Limited, Chennai has filed O.S. No. 6602
of 2013 at City Civil Court, Chennai alleging mis-management of the
company. The matter is pending before the court.
21. Previous Year Figures:
The financial statements for the year ended March 31,2014 have been
prepared as per Revised Schedule VI. The figures for the previous year
have been regrouped, reclassified or rearranged to meet the recognition
and measurement principles followed for preparation of financial
statements.
Mar 31, 2013
1. General Inf ormation:
The Company was incorporated during the year 1993 and is engaged in the
business of manufacture and sale of Indian Made Foreign Liquor (IMFL).
The Company has its manufacturing unit at Pondicherry.
2.1 Capital Advances:
The Company had entered into an Agreement with one of the group
companies for purchase of immovable properties in Tamilnadu. The
Company had submitted all the necessary documents to the Government
Authorities for getting the manufacturing licence. The advance paid in
respect of the same amounted to Rs. 3,290 lakhs and was shown as
''Capital Work in Progress'' during the previous financial year. Since,
the company could not initiate the obligations under the said
agreement, the same is cancelled during the current financial year and
accordingly an amount of Rs. 2,713 Lakhs was repaid by the company.
Outstanding balance of Rs. 557 Lakhs as on 31-03-2013 is shown under
''Short Term Loans and Advances to Related Parties since the same is
immediately receivable.
2.2 Other Loans and Advances
Other Loans and advances of Rs. 2,932 Lacs represent advances to
suppliers paid during Financial Year 2010-2011. However, since, the
capital commitments were not acted upon by the parties, the management
has decided to recall the advances paid. During the financial year
2012-2013, the company has sent legal notices to parties for refund of
advances lying with them. The management expects to get the advances
back in due course. Hence, no provision has been made in the accounts
for doubtful recovery of above advances.
3.1 Balance with banks include unclaimed dividend of Rs. 0.44 Lacs
(Previous Year Rs. 0.45 Lacs).
3.2 Fixed Deposits of Rs. 1 Lacs are pledged with Electricity
Departments as Deposit.
3.3 Fixed Deposits of Rs. 43 Lacs with Axis Bank are pledged as
security against deposit given to BSE.
3.4 Fixed Deposits of Rs. 41 Lacs are pledged with State Bank of India
for Non Funded Facilities granted.
3.5 Fixed Deposit of Rs. 5 Lacs is pledged with HDFC Bank for Term
Loan facility.
4. Impairment of Assets:
Assets of the Company are being tested for impairment. Considering the
internal and external sources of information, there was no indication
of potential impairment loss, and hence estimation of recoverable
amount does not arise.
5. Segment Reporting:
The company operates only in one reportable business segment namely
manufacture and sale of Indian Made Foreign Liquor. The liquor
business incorporates the product groups (viz) IMFL and others, which
have similar risks and returns. Hence segment reporting is not
applicable.
6. Taxation Matters:
The Company has received a Demand Notice from Income Tax Department in
respect of the Assessment year 2005-2006, Assessment Year 2007-2008,
Assessment Year 2009-2010 and Assessment Year 2010-2011; on account of
disallowance of exemption under section-80 IB of the Income Tax Act,
1961 and disallowance of expenditure under section 40 a (ia) of the
Income Tax Act, 1961. The Department has raised a demand of Rs. 562.58
lakhs for all the assessment years. The Company has filed appeals with
the Commissioner of Income Tax (Appeals) against the orders of the
Assessing Officer. The Company is confident of succeeding in both the
appeals and the Company has also taken favorable opinion from legal
experts. Similar disallowance of deduction under Section 80 IB has been
made by the Department which has been contested and favorable decisions
have been received from the First Appellate Forum. Hence no provision
has been made in the books of accounts and the demand raised by the
Department has been shown under "Contingent Liabilities".
In respect of other disputed liabilities pertaining to earlier years
such as Turnover Tax, Compounding Fees under the Company Law, Bank
Guarantee amount, the amounts have been shown under "Contingent
Liabilities" in the respective years.
7. Contingent Liabilities: (Rs. in Lacs)
Contingent Liability not provided for
in the books Year Ending
March 31,2013 Year Ending
March 31,2012
Turnover Tax 222.55 222.55
Company law Matters-Compounding Fee Nil Nil
Guarantee given to a bank 1.00 1.00
Counter Guarantee provided by the
Bank on behalf of the Company 120.00 120.00
Counter Guarantee in favour
of Bank of Baroda,
Barkatpura Branch, Hyderabad
against credit facilities
sanctioned to'' S V Distilleries
Private Limited'' 8,385.00 0.00
income Tax matters 562.58 400.13
Claims against the company
not acknowledged as debt Nil Nil
8. Previous Year Figures:
The financial statements for the year ended March 31, 2013 have been
prepared as per Revised Schedule VI. The figures for the previous year
have been regrouped, reclassified or rearranged to meet the recognition
and measurement principles followed for preparation of financial
statements.
Mar 31, 2012
1. General Information:
The Company was incorporated during the year 1993 and is engaged in the
business of manufacture and sale of Indian Manufactured Foreign Liquor
(IMFL). The Company has its manufacturing unit at Pondicherry.
a. The Company issued 55 Lacs Shares as bonus shares during the
Financial Year 2007-2008 and 2009-2010.
c. Out of the above, 25 Lacs shares were issued for consideration
other than cash during the financial year 2007-2008.
1.1 Term Loan from Banks :
1.1.1 Term Loan from Banks include Term Loan from State Bank of India
of Rs. 1.000 Lacs (Outstanding as on 31-03-2012 Rs. 1,033.88 Lacs)
which is secured against Plant and Machinery, Building and other assets
belonging to 'Liquor India Limited' which was proposed to be acquired
by the company. The same is repayable by way of 72 monthly installments
of Rs. 12.50 Lacs each commencing from April 2012.
1.1.2 Term Loan from State Bank of India is collaterally secured by
Equitable Mortgage of Factory Land and Building at R S No. 89 / 4A and
89/1, Katterikuppam, Mannadipet Commune, Pondicherry and Term Deposit
Receipts in the name of Company. The collateral security as mentioned
above is common security for all facilities granted by the bank viz.
Cash Credit. Term Loan, Bank Guarantee etc.
1.1.4 Term Loan from Banks include Term Loan from HDFC Bank of Rs.
22.40 Lacs (Outstanding as on 31-03-2012 Rs. 18.85 Lacs) which is
secured against hypothecation of vehicle. The same is repayable by way
of 48 monthly installments of Rs. 0.59 Lacs each.
1.2 Long Term Liabilities of Finance Lease Obligations :
The Company has availed Term Loan from "Sundaram Finance Limited' a Non
Banking Financial Corporation amounting to Rs. 958.74 lakhs for
expansion of facilities. The Finance Lease obligations are secured
against leased assets.
1.3 Deferred Payment Liabilities
Manufacture of IMFL Brands owned by other Corporates
The Company manufactures and sells its own brand of liquors and also
uses the brand of others. For the purpose of manufacture and sales of
liquor brands not owned by the company, the company has entered into
arrangement / agreement with the respective brand owners.
The terms of the Agreement / Arrangement with such brand owners provide
for payment of consideration for use of brand name / for the additional
services rendered by the brand owners / other amount due to the brand
owners in the agreed proportion. The payment towards use of Brand name
is accounted in the books as "Royalty". Other dues / payments along
with Royalty are grouped as "Operational Support Cost". The
Operational Support Cost is included under the head "Other
Manufacturing Expenses"
Further the Agreements / Arrangements with other Brand owners provide a
facility of Deferred Payment of the amount due under the agree- ment.
These payables, as per the Terms, which are payable after a period
exceeding 12 months are classified as "Deferred Credit from Corporate
Suppliers" and are grouped under "Non Current Long Term
Borrowings".
1.4 Other Loans and Advances :
'Other Loans and advances' represents an amount due to 'ETK
Investment and Finance Limited' of Rs. 8.27 Lacs and an amount of Rs.
7.20 lacs maintained as deposit with State Bank of India represents the
amount withheld by the Bank as per the specific direction of the Madras
High Court towards the Income Tax due by 'ETK Investment and Finance
Limited'. The same is treated as 'Non Current Borrowings'.
2.1 Working Capital Loans are secured by hypothecation of present and
future stock of raw materials. Stock in Process, Finished Goods.
Spares, Book Debts, Outstanding monies, receivables, claims, materials
in transit etc.
2.2 Out of the above Working Capital Demand Loan of Rs. 1,889 Lacs are
secured against pledge of Term Deposits of Rs. 1,987 Lacs.
2.3 Loans and advances from related parties includes short term loans
received from Mr. R V Ravikumar of Rs. 39 Lacs (Previous Year Rs. 2
Lacs) for temporary working capital purposes.
The company has not received intimation from all the "Suppliers"
regarding their status under Micro, Small and Medium Enterprises
Develop- ment Act, 2006, and hence, the disclosure relating to amounts
unpaid as at March 31, 2012 together with interest paid /payable as
required under the said Act has been provided only to the extent of
intimations received.
3.1 Capital Advances :
The Company had entered into an Agreement with one of the group
companies for purchase of immovable properties and Capital equipments
for expansion of manufacturing operations in Tamilnadu. The Company had
submitted all the necessary documents to the Government Authorities for
getting the manufacturing licence. The advance paid in respect of the
same amounted to Rs. 3,290 lakhs and was shown as 'Capital Work in
Progress' during the previous financial year. Since, the company
could not initiate the obligations under the said agreement, the same
is cancelled during the current financial year and accordingly an
amount of Rs. 2,708 Lakhs was repaid by the company. Outstanding
balance of Rs. 832 Lakhs as on 31-03-2012 is shown under 'Short Term
Loans and Advances to Related Parties since the same is immediately
receivable.
4.1 Investment includes short term investment in SBI-SHF-Ultra Short
Term Fund of Rs. Nil Lacs (Previous Year Rs. 400 Lacs).
5.1 Balance with banks include unclaimed dividend of Rs. 0.45 Lacs
(Previous Year Rs.NIL).
5.2 Fixed Deposits with Banks include an amount of Rs. 7.20 Lacs
maintained as deposit with State Bank of India which is withheld by
Bank as per the specific direction of the Madras High Court towards the
Income Tax due by 'ETK Investment and Finance Limited'. (Also Refer
Note No. 5.4)
5.3 Fixed Deposits of Rs. 1 Lacs are pledged with Electricity
Departments as Deposit.
5.4 Fixed Deposits of Rs. 55 Lacs are pledged as security for Non
Funded Facilities granted by State Bank of India.
5.5 Fixed Deposits of Rs. 37 Lacs with Axis Bank are pledged as
security against deposit given to BSE.
6.1 The above includes an amount of Rs. 1257.97 Lacs as an advance
given for acquisition of shares of 'Liquor India Limited' (Rs.
761.22 Lacs) and "S V Distilleries Private Limited' (Rs. 496.75 Lacs)
during the Financial Year 2011-2012. However, no share purchase
agreement has been entered into till date. The company could not
acquire entire shareholding of the target companies. In view of the
above, the above advance is immediately receivable and accordingly
shown as 'Advance for Purchase of Shares' under 'Short Term Loans
and Advances'.
6.2 The Company had entered into an Agreement with one of the group
companies for purchase of immovable properties and Capital equipments
for expansion of manufacturing operations in Tamilnadu. The Company had
submitted all the necessary documents to the Government Authorities for
getting the manufacturing licence. The advance paid in respect of the
same amounted to Rs. 3,290 lakhs and was shown as 'Capital Work in
Progress' during the previous financial year. Since, the company
could not initiate the obligations under the said agreement, the same
is cancelled during the current financial year and accordingly an
amount of Rs. 2,708 Lakhs was repaid by the company. Outstand- ing
balance of Rs. 832 Lakhs as on 31-03-2012 is shown under 'Short Term
Loans and Advances to Related Parties'.
7. Impairment of Assets :
Assets of the Company are being tested for impairment. Considering the
internal and external sources of information, there was no indication
of potential impairment loss, and hence estimation of recoverable
amount does not arise.
8. Segment Reporting :
The company operates only in one reportable business segment namely
manufacture and sale of Indian Manufactured Foreign Liquor. The liquor
business incorporates the product groups (viz) IMFL and others, which
have similar risks and returns. Hence segment reporting is not
applicable.
9. Taxation Matters :
The Company has received a Demand Notice from Income Tax Department in
respect of the Assessment year 2003-04, Assessment Year 2007-2008 and
Assessment Year 2009-2010 on account of disallowance of exemption under
section 80 IB of the Income Tax Act, 1961 and disallowance of
expenditure under section 40 a (ia) of the Income Tax Act, 1961. The
Department has raised a demand of Rs. 400.13 lakhs for all the
assessment years. The Company has filed appeals with the Commissioner
of Income Tax (Appeals) against the orders of the Assessing Officer.
The Company is confident of succeeding in both the appeals and the
Company has also taken favorable opinion from legal experts.
Similar disallowance of deduction under Section 80 IB has been made by
the Department which has been contested and favorable decisions have
been received from the First Appellate Forum. Hence no provision has
been made in the books of accounts and the demand raised by the
Department has been shown under "Contingent Liabilities".
In respect of other disputed liabilities pertaining to earlier years
such as Turnover Tax, Compounding Fees under the Company Law, Bank
Guarantee amount, the amounts have been shown under "Contingent
Liabilities" in the respective years.
10. Contingent Liabilities :
Contingent Liability not
provided for in the books Year Ending
March 31,2012 Year Ending
March 31, 2011
Turnover Tax 222.55 222.55
Company law Matters - Compounding Fee Nil 2.80
Guarantee given to a bank 1.00 1.00
Counter Guarantee provided by the
Bank on behalf of the Company 120.00 90.00
Income Tax matters 400.13 479.66
Claims against the company not
acknowledged as debt Nil Nil
11. Previous Year Figures :
The financial statements for the year ended March 31, 2011 had been
prepared as per the then applicable, pre revised Schedule VI to the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the financial statements for the year
ended March 31, 2012 are prepared as per Revised Schedule VI.
Accordingly, previous year figures have also been reclassified to
conform to this year's classifi- cation. The adoption of Revised
Schedule VI for previous year figures does not impact recognition and
measurement principles followed for preparation of financial
statements.
Mar 31, 2009
1. General
The Company was incorporated during the. year 1993 and is engaged in
the business of manufacture and sale of Indian Manufactured Foreign
Liquor. The Company has its manufacturing unit at Pondichcrry.
2. Equity Share Capital
During the year the Company had increased its Authorised Capital by Rs.
10,00,00,000/- represented by 100,00,000 Equity Shares of Rs. 10/-each
3. Term Loan and Working Capital
a. The Company has availed Term Loan from Non Banking Finance Company
(Financial Institutions) amounting to Rs. 4,50,00,000/- for expansion
of facilities.
b. The Company had also been sanctioned Term Loan by a Bank for Rs.
1,20,00,000/- from a bank towards purchase of capital equipments and
expansions.
c. The Company has availed Cash Credit from a Scheduled Bank for a sum
of Rs 1852.28 lacs for Working Capital requirements.
d. The above facilities are secured by .Hypothecation of all present
and future goods, book debts and all other movable assets of the
Company, outstanding monies, receivables claims by way of refund of
cess to excise duties under the duty draw back credit scheme or any
other scheme and Companys plant and machinery and First charge on die
entire assets acquired out of the term loan. Further the Facilities
from the Bank are secured by the personal Guarantee of 4 Directors.
4. Manufacture of IMFL Brands owned by other Corporate
The Company manufactures and sells its own brand of liquors and also
uses the brand of others For the purpose of manufacture and sales of
liquor brands not owned by the company, the company has entered in to
arrangement / agreement with the respective brand owners.
The terms of the Agreement / Arrangement with such brand owners provide
for payment of consideration for use of brand name / for the additional
services rendered by the brand owners / other amount due to the brand
owners in the agreed proportion. The, payment towards use of Brand name
is accounted in the books as "Royalty". Other dues / payments along
with Royalty arc grouped as "Operational Support Cost". The Operational
Support Cost is included under the head "Other Manufacturing Expenses"
Further the Agreements / Arrangements with other Brand owners provide a
facility of Deferred Payment of the amount due under the. agreement.
These payables, as per the Terms, which are payable after a period
exceeding 12 months are classified as "Deferred Credit from Corporate
Suppliers" and are grouped under "Unsecured Loans".
5. The amount due to ETK Investment and Finance Limited is lls.8.27
Lacs and amount of Rs.7.20 lacs maintained as deposit with State Bank
of India represents the amount withheld by the Bank as per the specific
direction of the Madras High Court towards the Income Tax due by ETK
Investment and Finance Limited.
6. Company Law
The Company had entered into certain contracts with regard to which
compliance u/s.297 of the Companies Act, have not I wen fulfilled. The
Company is in the process of approaching the Company Law Board for
compounding such non compliances. The Company had provided for the
liability towards such compounding on the basis of estimation made by
the management and supported by legal advise. The difference between
total amount payable and theprovision made has been shown under
contingent liability. The company has not entered into such
transactions during the year.
7. Related Party transaction
A. Related patties and their relationship:
Nature of Relationship Name of the Related Party
Enterprises that directly
or indirectly Ravikumar Properties Private
Limited
through one or more intermediaries, Graze India Private Limited
control, or arc controlled hy
or are under Ravikumar Resorts and Hotels
Private Limited
common control with the reporting Ravikiimar Powerucn Private
Limited
enterprises RKR Hotels Private Limited
Reality Projects & Entertai
nments Private Limited
Brahmar Cellulose Products
Private Limited
RV Matrix SoftwareTechnologies
Private Limited
Key Management personnel R.V.Ravikumar
R.Amirthavalli
Vijayalakshmi
N R Acluin
K S M Rao
R Ramanujam
Badrinath S Gandhi
V Sivasankar
8. Current Assets / Loans and Advances
The Confirmation of Advances and Creditors are being received. In the
opinion of the Management the balances under the head Current Assets,
Loans & Advances are recoverable in the ordinary course at the amount
stated in the Financial Statements and all known Liabilities and
expenses have been provided for.
9. Others
(b) Micro Enterprises
The company has not received intimation from all the "Suppliers"
regarding their status under Micro, Small and Medium Enterprises
Development Act, 2006, and hence, the disclosure relating to amounts
unpaid as at March 31, 2009 together with interest paid /payable as
required under the said Act has been provided only to the extent of
intimations received.
(b)Investmcnt:
Investment represents Unquoted - Non-Trade - at Cost value of National
Saving Certificate of Rs.51,000/- (Previous Year Rs.51,000/-)
10. Employee Benefit
As per Accounting Standard 15" Employce Benefits", the disclosures of
Employee benefits as defined in the Accounting Standard are given below
Gratuity
The liability for Gratuity.to employees as at the Balance Sheet date is
determined on the bas of actuarial valuation based on-Projected Unit
Credit method and is funded to a Cxratuity fur administered by the
trustees and managed by life Insurance Corporation of India. The
contribution thereof paid/payable is charged in the books of accounts.
The employees and (he Company make monthly fixed contributions to a
Provident Fun Trust, equal to a specified percentage of the covered
employees salary. The interest rai payable by the Trust to the
beneficiaries is being notified by the Government every year, Tr
Company has an obligation to make good the shortfall, if any, between
the return from th investments of the trust and the notified interest
rate.
The following table sets forth the stains of (lie Gratuity plan and the
Superannuation and th other Pension Plans of the Company and the amount
in the Balance Sheet an Profit and Loss Account
11. Segment Repotting
The company operates only in one reportable business segment namely
manufacture and sale of Indian Manufactured Foreign Liquor. The liquor
business incorporates the product groups (viz) IMFL and others, which
have similar risks and returns. Hence segment reporting is not
applicable.
12. Impairment of Asset
Assets of the Company are being tested for impairment. Considering the
internal and external sources of information, there was no indication
of potential impairment loss, and hence estimation of recoverable
amount does not arise.
13. The figures have been rounded off to neatest rupee.
14. The figures have been regrouped / reclassified wherever necessary
to conform with the current year presentation.
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