KUWER INDUSTRIES LTD. CIN:L74899DL1993PLC056627 NOTES FORMING PART OF THE FINANCIAL STATEMENTS for the Year Ended March 31, 2016 1 Corporate information Kuwer Industries Ltd. is engaged in Metalizing & Embossing of Polyster and BOPP films. The company has been incorporated in the year 1993. The company s registered office is in Delhi. 2 Significant accounting policies. The accounts of the company are prepared under the historical cost convention and in accordance with applicable accounting standards and relevant disclosure requirement of the companies Act 2013, as adopted consistently by the company. 2.1 Revenue Recognition: Mercantile system of accountings is followed. 2.2 Foreign Currency Transaction Transaction in Foreign Currency is recorded at the rates prevailing at the time of the transaction. (ii) Any income and expenses on account of exchange difference either on settlement or transaction is recognized in the profit or loss account except in cases where they are adjusted to the carrying cost of such assets. 2.3 Inventory Valuation The valuation of inventory has been done as per method of valuation prescribed under section 145A of the income Tax Act 1961.Stock of Raw material is stated at cost. Finished goods and Scrap are valued at cost or realizable value whichever is lower. 2.4 Fixed Assets & Depreciation (i)'fixed Assets are stated at cost, net of modvat, less accumulated depreciation. All cost including financing cost till commencement of commercial production, net charges on foreign exchange contracts and adjustment arising from exchange rate variations relating to borrowings attributable to the fixed assets are capitalized. (ii) Depreciation on Fixed Assets is provided in accordance with the rates as specified in Part C of Schedule II of the companies Act, 2013, on straight line method (SLM) on pro rata basis 2.5 Insurance/Claims 2.6 Sales The Company covers all the risk on the basis of cost for the fixed assets and inventories. The premium pertaining to the year is charged against the revenue of the year. The insurance claims lodged by the company will be adjusted as and when the final amount will be received by the company from the insurance companies. Sales are stated net of returns, sales tax and excise duty.
Notes to the financial statement for the year ended March 31, 2016 Note 3: Share Capital Number of shares Rs. Number of shares Authorized Share Capital (Equity Shares of Rs. 10 each) 15,000,000 150,000,000 15,000,000 150,000,000 Issued, Subscribed and fully paid up (Equity Shares of Rs. 10 each) 5,095,000 50,950,000 5,095,000 50,950,000 Rs. Reconciliation of the number of shares Particulars As at 31 March, 2016 As at 31 March, 2015 Number of shares Rs. Number of shares Balance at the beginning of the year 9,076,072 90,760,720 5,095,000 50,950,000 Add: Issued/Allotted - - 3,981,072 39,810,720 Less: Forfeiture Shares - - - - Balance at the end of the year 9,076,072 90,760,720 9,076,072 90,760,720 Rs. Details of Equity Shares held by each shareholder holding more than 5% shares: Class of shares / Name of shareholder As at 31 March, 2016 As at 31 March, 2015 Number of shares held % holding in that class of shares Number of shares held % holding in that class of shares Tarun Agrawal 1,936,826 21.34 1,936,826 21.34 Usha agrawal 977,119 10.77 977,119 10.77 Kuwer Packaging Pvt. Ltd. 1,219,300 13.43 1,219,300 13.43 Jai Bhagwan Agarwal 523,369 5.77 523,369 5.77 Note 4: Reserve & Surplus Surplus: At The Beginning Of The Accounting Period 29,881,086 43,480,129 Add: Additions During The Year 1,474,641 1,119,472 (Balance as per statement of profit & loss) Less: Adjusted Depreciation - 14,718,515 31,355,727 29,881,086 Add: Share Premium 47,773,280 47,773,280 Total 79,129,007 77,654,366
Note 5: Long Term Borrowings Secured Long Term Borrowings From Banks: HDFC Bank (NEO FLUIDIC Elantra Loan) 509,673 - From Others : Volkswagen Finance Pvt. Ltd. (Audi Car Loan) - 272,322 Karnataka Bank (Innova Car Loan) 221,344 530,684 Kotak Mahindra Bank (Eicher Loan) 570,367 - Unsecured Long Term Borrowings: 1,301,384 803,006 Loans From Directors 270,000 270,000 270,000 270,000 Total 1,571,384 1,073,006 Note 6: Deferred Tax Liability/(Asset) Balance at the beginning of the year 14,177,837 14,732,629 Add: Current Year 38,797 (554,792) Balance at the end of the year 14,216,634 14,177,837 Note 7: Long-Term Provisions Provision for Gratuity Balance at the beginning of the year 1,557,454 1,490,102 Add: Current Year provision 90,962 67,352 Balance at the end of the year 1,648,416 1,557,454 Note 8: Short-Term Borrowings Current Maturities of Long Term Borrowings HDFC Bank (NEO FLUIDIC Elantra Loan) 392,116 96,735 Volkswagen Finance Pvt. Ltd. (Audi Car Loan) 272,322 437,908 Kotak Mahindra Bank (Eicher Loan) 269,065 - Karnataka Bank (Innova Car Loan) 309,340 280,020 Secured Loan from Banks State Bank Of Bikaner And Jaipur Working Capital Loan 36,326,044 26,158,807 Bank Overdraft 37,568,887 26,973,470 SBBJ-482 212,403 - Total 37,781,290 26,973,470
Note 9: Trade Payables Sundry Creditors 19,431,668 12,329,291 Advances from Customers 532,154 3,797,141 Total 19,963,822 16,126,432 Note 10: Other Current Liabilities Statutory Liabilities Sales Tax Payable Earlier Years 693,765 TDS Payable 53,908 39,054 Provident Fund Payable 96,813 - ESIC Payable 22,534 66,231 Excise & Service Tax Payable - 200,699 Entry Tax Payable 3,391 Other Liabilities Income Tax Liability (Preceding Years) 2,862,157 2,819,127 Equity Share Capital Refund A/C 18,900 18,900 Other Payables 2,293,137 1,832,359 Total 6,044,606 6,670,593 Note 11: Short-Term Provisions Provision For Tax 869,094 1,218,599 Total 869,094 1,218,599
Note 12: Fixed Assets Tangible assets Gross Block Depreciation Net Block Balance as at 01 April, 2015 Additions Disposal Balance as at 31 March, 2016 Balance as at 01 April, 2015 Depreciati on for the year Adjustmen t during the year Balance as at 31 March, 2016 As on 31 March, 2016 As on 31 March, 2015 Land 1,210,654 - - 1,210,654 - - - - 1,210,654 1,210,654 Buildings 9,918,337 - - 9,918,337 4,249,925 287,778-4,537,703 5,380,634 5,668,412 Plant and Equipments 167,855,129 12,442,340-180,297,469 121,038,442 7,766,396-128,804,838 51,492,631 46,816,687 Furniture and Fixtures 308,522-308,522 308,522 - - 308,522 - - Vehicles 13,193,473 2,703,672 2,621,265 13,275,880 7,624,846 1,122,024 2,490,202 6,256,668 7,019,212 5,568,627 Office equipments 3,106,013 128,923-3,234,936 2,706,915 69,947-2,776,862 458,074 399,098 244707 16,606-261,313 176,129 37,578-213,707 47,606 68,578 195,836,835 15,291,541 2,621,265 208,507,111 136,104,779 9,283,723 2,490,202 142,898,300 65,608,811 59,732,05 5 Previous Year 182,807,034 13,029,801-195,836,835 112,665,424 8,720,840 14,718,515 136,104,779 59,732,055 70,141,613
Note 13: Long Term Loans and Advances Security Deposits (unsecured considered good unless otherwise stated) Security Deposits For Electricity 752,000 752,000 For Telephone 57,340 57,340 Security Deposit Others 146,691 146,691 Deposit with Authorities Excise Duty Deposit 5,914,892 5,409,892 Deposit With Commercial Tax Deptt. - 123,120 CST Demand (2006-07) - 283,023 Sales Tax Demand (2008-09) 172,606 172,606 Sales Tax Demand 3,713,464 3,661,464 Local Sales Tax Demand (06-07) - 159,449 Sales Tax Demand (Against F.Y 2010-11) 1,152,996 1,152,996 Deposits Others Tender Money 103,000 145,000 Advance Rent 100,000 100,000 Paschmanchal Viduyat Vitaran - 134,844 Security To APL India P. Ltd. 10,432 10,432 Security Deposit with IGL 771,359 - Unsecured 12,894,781 12,308,857 Elite Appliances Ltd. 1,555,492 1,555,492 Total 14,450,272 13,864,349 Note 14: Inventories: (As Taken, Valued & Certified By The Management) Raw Material 11,048,578 13,986,374 Work In Progress 39,090,578 28,793,112 Finished Goods 6,196,980 3,532,058 Stores, Spares & Loose Tools 6,107,352 20,581,474 Scrap 12,235 100,399 Total 62,455,722 66,993,417
Note 15: Trade Receivables: (Unsecured considered good unless otherwise stated) Debts outstanding for a period exceeding six 19,741,931 34,707,635 months from the date they are due for payment Other Debts 61,053,039 24,136,467 Total 80,794,970 58,844,102 Note 16: Cash & Cash Equivalents Balance With Banks In Fixed Deposits #Earmarked Balances With Banks 587,411 587,411 #Held as margin money against borrowings, 62,937 62,937 and other commitments. #Share Application Money Refund A/c 23,264 23,264 #Against Bank Guarantee 100,000 - In Current Accounts: HDFC Bank 10,160 696,245 Karnataka Bank 159,166 1,417,745 SBBJ - 39,556 942,938 2,827,158 Cash In Hand 854,465 280,968 Cash With Excise Department 94,000 854,465 374,968 Total 1,797,403 3,202,127 Note 17: Short Term Loans & Advances: (Unsecured considered good unless otherwise stated) Advances recoverable in cash or in kind ( for the value to te received) Advance To Suppliers 8,345,078 15,793,979 Deposit In Excise Department 42,000 500,000 Sales Tax - 34,889 TDS Recivable 743,404 767,778 Input VAT on Capital Goods 299,554 Input VAT - 835,503 Excise Duty (Input Credit) 624,357 Interest Receivable 224,381 133,707 Advances against purchase of property 12,938,829 12,938,829 Jaideep Ispat & Alloys - 52,594 Capital Securities (P) Ltd 2,500,000 2,500,000 Developed Technologies 234,122 234,122 Total 26,787,228 33,355,898
Note 18: Other Current Assets: Prepaid Expenses 90,566 220,530 Total 90,566 220,530 Note 19: Revenue from operations Sale Of Products 320,769,423 262,735,077 Other Operating Revenues 311,609 336,802 321,081,032 263,071,879 Less: Excise Duty 35,754,481 28,580,519 Total 285,326,551 234,491,360 Note 20: Other Income Other Income Interest Income 90,674 556,916 Processing Charge Received 19,986,132 17,238,188 Art Work, Designing & Development - 65,500 Other Non-Operating Income 335,025 1,538,399 Total 20,411,831 19,399,003 Note 21: Cost of Material Consumed Opening Stock 13,986,374 11,338,542 Add: Purchases during the year 235,275,991 147,447,788 Less: Inventory at the year end 11,048,578 13,986,374 Total 238,213,787 144,799,956 Note 22: Change in Inventories At The Beginning Of The Accounting Period 3,532,058 7,060,997 At The End Of The Accounting Period 6,196,980 3,532,058 (2,664,922) 3,528,939 Work-In-Progress At The Beginning Of The Accounting Period 28,793,112 53,931,614 At The End Of The Accounting Period 39,090,578 28,793,112 (10,297,466) 25,138,502 Scrap At The Beginning Of The Accounting Period 100,399 102,226 At The End Of The Accounting Period 12,235 100,399 88,165 1,827 Total (12,874,223) 28,669,268
Note 23: Employee Benefit Expense Factory Salary And Wages 3,577,877 2,264,400 Office Staff Salary 2,137,431 1,650,356 Director's Remuneration 1,080,000 1,080,000 Contribution To Provident And Other Funds - Contribution To Provident Fund 490,933 349,552 Contribution To ESIC 201,395 141,239 Workers And Staff Welfare 203,548 53,620 Bonus 333,812 227,480 Gratutiy 90,962 67,352 Total 8,115,958 5,833,999 Note 24: Finance Cost Interest Expense Interest To Bank 4,517,870 4,976,319 Interest On Term Loan (Others) - 527,134 Interest To Bank On Vehicle Loan 227,095 147,981 Bank & Other Processing Charges 319,208 1,397,994 5,064,173 7,049,427 Note 25: Depreciation and Amortization Expense Depreciation 9,283,723 8,720,840 Preliminary & Preoperative Exp Written Off 9,283,723 8,720,840 Note 26: Other Expenses Manufacturing Expense : Consumption Of Stores And Spare Parts Opening Stock 20,581,474 19,629,114 Add:Purchases 416,211 30,125,389 Total 20,997,685 49,754,503 Less:Closing Stock 6,107,352 20,581,474 14,890,333 29,173,029 Other Manufacturing Expenses Freight Inward 359,757 267,080 Power & Fuel 28,159,008 19,240,165 Pollution Exp. - 47,815 Repair To Machinery 3,720,508 1,840,748 Art Work & Designing Charges - 97,114 32,239,273 21,492,922 Administrative Expense: Advertisement Expenses 67,781 257,292 Travelling And Conveyance 67,307 44,460 Printing And Stationery 84,111 52,555 Freight And Forwarding 11,508 35,500 Sales Commission 909,000 666,672 Donation 1,100 158,350 Packing Expense 18,047 20,300 Rebate And Discount 21,095 19,188 Legal And Professional 622,391 591,402 Audit Fees 90,000 90,000
Office expenses 288,457 Rent 600,000 1,086,525 Repair To Buildings 3,365 297,326 Repair & Maintenance (General) 613,372 447,215 Insurance Expences 755,958 256,996 Postage & Stamp/Courier Charges 17,032 132,908 Telephone Expenses 225,039 226,371 Vehcle Running & Maintainance 194,093 185,324 Watch & Ward Exp 596,107 384,649 Membership & Subciption 214,718 336,762 Custom duty Paid 23,375 Administration Exp On PF 36,280 30,914 SBC (Swachh Bharat Cess) Paid 500 - Entry Tax Paid for FY 12-13 81,684 - Entry Tax Paid 370,611 Interest Paid On Statutory Dues 227,410 155,134 Penalty on Sales Tax Demand 353,283 - Lease Rent Paid 1,100,625 - Balances Written Off 109,569 - Miscellaneous Expenses 797,945 891,798 Total 8,501,763 6,367,641 Grand Total 55,631,369 57,033,592 NOTES FORMING PART OF THE FINANCIAL STATEMENTS for the Year Ended March 31, 2016 27) Previous year figures : The previous year s figures have been reworked, regrouped, rearranged and reclassified wherever considered necessary to make their classification comparable with that of the current year. 28) Secured Loans: i) Working Capital loan from State Bank of Bikaner and Jaipur is secured against all current & fixed assets. ii) The Vehicle loans are secured by way of hypothecation of vehicles. 29) Provision of Income Tax: Provision of Rs. 8,69,094 on account of Income Tax has been made for the year. 30) Related Party Disclosures as prescribed by Accounting Standard 18 of issued by the Institute of Chartered Accountant of India. Detail are as under Name Nature of relationship Nature of transaction Amount (Rs.) Ellora Mechanical Under the Control of Payment of Rent 6,00,000 Products Pvt Ltd. same Management J.B. Aggarwal Director Payment of Remuneration 6,00,000 Tarun Aggarwal Director Payment of Remuneration 4,80,000 31) In the opinion of the Board the Current Assets, loans & Advances have a value on realization in the ordinary course of business at least equal to the amount at which they have been stated in the balance sheet.
32) Auditors Remuneration Auditor s Remuneration Year Ended March 31, 2016 Year Ended March 31, 2016 Statutory Audit Fee 72,000 72,000 For Tax Audit Fees & Other Services 18,000 18,000 Out of Pocket Expenses NIL NIL Total 90,000 90,000 33) Balances in accounts whether in debtors, creditors, and loans & advances are subject to verification and confirmations. 34) Contingent Liabilities: (a) The company bankers has issued bank guarantee of Rs. 5.88 lacs for EPCG license margin held by the bank Rs 5.88 lacs. During the year company has issued Bank guarantee of Rs. 1 lac in favour of UP Pollution Control Board against the Fixed Deposit of Rs. 1 lac with bank. (b) Demand raised by Excise department and disputed by the company: Details are as under: Demands of Rs. 114 lacs for the year 2007-08 and Rs. 111 lacs for the year 2011-12 have been raised by the excise department and the same are pending as on the year end. However the amount of Rs.40 lacs has been deposited by the company to Excise department for getting stay and also furnished security of company s machinery worth Rs 111 lacs. (c) Demand raised by Income Tax Authorities and disputed by the company: Details are as under: Demand of Rs. 43,71,630 has been raised by the Income Tax Authorities for the AY 2011-12 and the same is pending as on the year end. However the company has filled the appeal with The Commissioner of Income Tax (Appeals) and is pending as on the date of balance sheet. (d) Demand raised by Commercial Tax Authorities, Uttar Pradesh: During the Financial Year 2015-16 Commercial Tax Authorities, Uttar Pradesh assessed demand for FY 2008-09 to FY 2012-13 under VAT, Central Sales Tax and Entry Tax. In some cases assessed tax by authorities is higher than the tax accepted by the company, against which company has filed the appeal in the court of Ad. Commissioner (Appeals) Commercial Tax, Noida Details of them are follows Year Act under which appeal relates Amount of Disputed Tax As Per Appeal Filed (Rs.) 2008-09 Value Added Tax 3,45,058 2008-09 Central Sales Tax 2,28,096 2009-10 Central Sales Tax 72,027 2010-11 Value Added Tax 16,48,923 2010-11 Central Sales Tax 6,94,241 2011-12 Central Sales Tax 1,10,578 2011-12 Entry Tax 8,77,990 2012-13 Central Sales Tax 3,03,518
35) Provision for Gratuity : Provisions of Rs.90,962 has been made on account of Gratuity for the year. 36) A. Information in respect of capacity and class goods Class of goods : Metallized Polyster & BOPP Films Metallized Embossed Polyester & BOPP B. Information in respect of Production, Sales, Stock, Item Production Sales/Consumption Opening Stock Closing Stock Qty Value Qty Value Metallised / Embossed 18,34,614.80 19,01,613.30 92,764.98 20,52,966 25,766.52 45,19,663.10 Plastic Film (In Kg) Met Paper (In Kg) 2,76,137.51 2,72,245.04 9,181.2 11,01,744 13,073.67 13,07,367.00 Holograme Sticker 32,231.00 28,099.00 12,610 25,472 16,742.00 33,818.84 (In Sheet) Holographic Tap 6,29,619.99 6,86,350.00 62,053.01 19,848.9 5,323.00 58,446.54 (In Meter) Coated Polyester Film 742.00-1,028 1,52,144 1,770.00 2,62,951.20 (In Kg) Hologram (In No.) 45,51,383.00 49,90,330.00 5,12,612 1,78,619 73,665.00 14,733.00 Scrap (In Kg) 72,119.40 73,149.00 2,858.5 1,00,399 1,045.90 12,234.50 C. Information in respect of Raw Material Consumed. Particulars Polyester Film & BOPP Film For the year ended 31 March, 2016 For the year ended 31 March, 2015 Qty. (Kg.) Value (Rs.) Qty. (Kg.) Value (Rs.) 10,57,022.00 13,10,70,740.00 3,06,513.58 3,00,38,330.84 Paper Aluminum Wire 15,22,947.72 20,51,86,746.32 17,006.00 29,88,709.85 1,26,191.90 1,16,09,654.80 12,035.00 21,19,561.17 For KUWER INDUSTRIES LTD. As per our Report of even date attached For and on behalf of PVSP & Co. Chartered Accountants TARUN AGGARWAL J.B.AGGARWAL VINOD RALHAN (DIRECTOR) (DIRECTOR) (PARTNER) M.No:091503 FRN: 08940N Date: 28.05.2016 Place: New Delhi