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Notes to Accounts of Cosco (India) Ltd.

Mar 31, 2015

1. Working Capital Loans are secured against hypothecation of all moveable properties including plant & equipments, stocks of raw materials, stores, semi-finished goods, manufactured goods, stock in trade and all book debts, bills and claims receivables. The loans from banks are collaterally secured against equitable mortgage of factory land/building & guaranteed by all Executive Directors.

2. The above information regarding micro, small and medium enterprises have been determined to the extent such parties are identified on the basis of information available with the Company, which has been relied upon by the Auditors.

3. Provision for excise duty has been made on closing stock of finished goods lying in the store for sale. No provision has been created in respect of finished goods meant for export, job work, transferred to branches and lying in finishing store pending inspection and packing.

4. Long Term Loans & Advances include advance aggregating Rs. 1,26,24,129 given to a Builder / Developer Company in earlier years for Immovable Properties. The Builder / Developer Company to whom the amount was advanced, has been admitting from time to time that the said amount is due to our company and has also been assuring to transfer suitable properties of equitable value and get documents of title, executed in favour of our company. However till date, the Builder / Developer Company has neither transferred any property and / or executed title deed(s) in favour of our company nor repaid any amount in spite of the assurances given by that company from time to time . As a matter of abundant precaution the amount has already been provided during the year ended 31.03.2013.

5. Refer note no. 1 (C ) of Significant Accounting Policies, regarding valuation of inventories.

6. All inventories shown above are non-moving and valued at scrap value except Finished Goods which are valued at 50% of Net Realisable value.

7. Other investments (current) are valued at lower of cost or net realisable value.

8. Refer note no. 1 (C ) of Significant Accounting Policies, regarding valuation of inventories.

9. Goods In Transit of Rs. 12,49,869 (pevious year Rs. 29,81,766) and Rs. 40,425 (prevoius year nil) are included in the Inventories of Stock-in-Trade and Stores respectively.

10. During the year the defective items of health and fitness equipment and spares of Rs. 8.91 lacs (previous year Rs. 8.33 lacs) included in stock in trade has been valued at scrap value and inventory of traded goods amounting to Rs. 71.78 lacs (previous year J102.85 lacs) included above is slow moving and valued at estimated realisable value as certified by the management.

11. In the opinion of the board, the current assets, loans and advances (Refer Note no.20) have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

12. Other operating income includes Rs. 65,24,909 (previous year Rs. nil) as Royalty Income. This also includes Rs. 26,01,968 (previous year Rs. 26,70,323) as Duty Drawback and Rs. 19,00,000 (previous year Rs. 19,24,000) towards value of licence granted by DGFT subsequent to the date of Balance Sheet, on account of exports made during the year under Product Focus Scheme and the income being in the nature of Export Incentive has been accounted for in terms of AS-9 issued by ICAI.

13. Other Non-Operating income includes Rs. 9,69,994 (previous year Rs. 2,303,157) towards Provisions Written Back for Doubtful Debts, Taxation, Excise Duty on Closing Stock of Finished Goods, Diminution in value of Investment and Non Moving Stock. 74

14. Staff Welfare includes Rs. 5,86,693 medical expenses reimbursed to Directors (previous year Rs. 6,14,986).

The management of funds is entrusted with Life Insurance Corporation of India. The detail of investments made by them are not available.

Leave Encashment

It is an unfunded defined benefit plan for which the obligation is recognised on actuarial valuation basis. A sum of Rs. 2,70,178 (previous year Rs. 18,25,959) has been provided and included in Salaries & Wages.

15. Bonus provision under The Payment of Bonus Act,1965 for the year has been made on estimated basis and any adjustment on account of final liability will be made in the subsequent year.

16. Segment Information:

The company has identified two segments viz. Own Manufactured Products and Traded Goods. Segments have been identified and reported taking into account nature of products and services, the differing risk and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the company with following additional policies for segment reporting :

(a) Expenses have been identified to a segment on the basis of sale of the respective segment to the total sale of the company. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

17. Related Party Disclosure

As per Accounting Standard 18 issued by the Institute of Chartered Accountants of India the disclosure of transactions with the related parties as defined in the Accounting Standard are given below :

(i) List of Parties with whom transactions entered during the year Companies under the same Management

1 Cosco Polymer Industries (P) Ltd.

2 Vijay Vallabh Securities Ltd.

3 Cosco Polymer Lanka Pvt. Ltd.

Key Management Personnel

1 Devinder Kumar Jain Managing Director and CEO

2 Narinder Kumar Jain Managing Director

3 Darshan Kumar Jain ** Whole Time Director

4 Pankaj Jain Whole Time Director and CFO

5 Manish Jain Whole Time Director

6 Neeraj Jain Whole Time Director

7 Arun Jain Whole Time Director

** Ceased to be Whole Time Director w.e.f 13th November,2014 due to death.

Relatives of Key Management Personnel

1 Devinder Kumar Jain HUF

2 Narinder Kumar Jain HUF

3 Prabha Jain

4 Veena Jain

18. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

(i) Claims against the company not acknowledged as debt : Cases against the Company in Labour Court & High Court by ex-employees 5,146,158 5,096,158

(ii) Guarantee

(a) Outstanding Letters of Credit 23,499,000 32,451,531

(b) To Sales Tax Authorities :

for group concerns 100,000 100,000

for others 527,303 527,303

(c) To State Electricity Board : for others Not Not Ascertainable Ascertainable

(d) To Others 7,500,000 7,500,000

19. No impairment loss is recognised as on 31.03.2015 since the present value of estimated future cash flows over a period of five years exceeds the carrying value of assets of the Company's cash generating units.

20. The Equity Shares held by the company in Cosco Polymer Lanka (Private) Ltd. (erstwhile Subsidiary of the Company in Sri Lanka) stand vested in the Secretary to the Treasury of the Government of Sri Lanka under the Revival of Underperforming Enterprises or Underutilised Assets Act, No.43 of 2011 (of Republic of Sri Lanka) as per disclosures made in the earlier year Accounts. Competent Authority appointed under the said Act is controlling, administering and managing such Enterprises /Units / Assets. The Act (of Sri Lanka), provides for payment of compensation to the Shareholders. The Compensation claim filed in Sri Lanka with the Compensation Tribunal constituted under the said Act, is yet to be adjudicated. No compensation has been received till date. The management does not expect any net realisable value of its investment in the erstwhile subsidiary which was written off in the earlier year having regard to the accumulated losses and outstanding liabilities of the subsidiary company. Cosco Polymer Lanka (Private) Ltd. has been ordered to be wound up by the Hon'ble High Court of the Western Province, Colombo. Accordingly, "Consolidated Financial Statements" as per Accounting Standard 21 issued by the Institute of Chartered Accountants of India, have not been prepared.

21. The previous year figures have been regrouped / rearranged, wherever considered necessary to make them comparable with those of current year figure and also figures have been rounded off to nearest rupee.


Mar 31, 2014

1 Working Capital Loans are secured against hypothecation of all moveable properties including plant & equipments, stocks of raw materials, semi-finished goods and manufactured goods and all book debts, bills and claims receivables. The loans from banks are collaterally secured against equitable mortgage of factory land/building & guaranteed by Executive Directors.

2 Provision for excise duty has been made on closing stock of finished goods lying in the store for sale. No provision has been created in respect of finished goods meant for export, job work, transferred to branches and lying in finishing store pending inspection and packing.

3 Long Term Loans & Advances include advance for Immovable Properties aggregating Rs 1,26,24,129 in respect of which the Builder/ Developer has earmarked three flats at Diamond Harbour Road, Kolkata at a transfer price of Rs 69,00,000. On payment of registration charges these properties shall be physically handed over and registered in the name of the company. As certified by the builder / developer the properties for the balance amount shall be allocated in due course. As a matter of abundant precaution the amount has already been provided during the year ended 31.03.2013.

4 Refer note no.1(C ) of Significant Accounting Policies, regarding valuation of inventories.

5 All inventories shown above are non-moving and valued at 5% of cost except some Finished Goods and Traded Goods which are valued at net realisable value as estimated by the management.

6 Refer note no.1(C ) of Significant Accounting Policies, regarding valuation of inventories.

7 Goods In Transit of Rs 29,81,766 is included in the Inventories of Stock-in-Trade.

8 During the year the defective items of health and fitness equipment and spares of Rs 8.33lacs (previous year Rs 9.44 lacs) included in stock in trade has been valued at scrap value and Inventory of traded goods amounting to Rs 102.85 lacs included above is slow moving and valued at estimated realisable value as certified by the management.

9 Staff Welfare includes medical expenses of Rs 614,986 reimbursed to Directors (previous year Rs 768,171).

10 EMPLOYEE BENEFITS

As per Accounting Standard AS-15 (Revised), the disclosures of Employee benefits as defined in the Accounting Standard are given below:-

Defined Contribution Plans

The Company makes contribution towards provident fund and pension fund. These funds are administered by Government of India. Under the schemes; the Company is required to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit. Contribution to Defined Contribution Plan, recognised as expense for the year.

11 Bonus provision under The Payment of Bonus Act,1965 for the year has been made on estimated basis and any adjustment on account of final liability will be made in the subsequent year.

12 Segment Information:

The company has identified two segments viz. Own Manufactured Products and Traded Goods. Segments have been identified and reported taking into account nature of products and services, the differing risk and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the company with following additional policies for segment reporting :

(a) Expenses have been identified to a segment on the basis of sale of the respective segment to the total sale of the company. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable".

13 Related Party Disclosure

As per Accounting Standard 18 issued by the Institute of Chartered Accountants of India the disclosure of transactions with the related parties as defined in the Accounting Standard are given below :

(i) List of Parties with whom transactions entered during the year

Companies under the same Management

1 Cosco Polymer Industries (P) Ltd.

2 Vijay Vallabh Securities Ltd.

3 Cosco Polymer Lanka Pvt. Ltd.

Key Management Personnel

1 Devinder Kumar Jain Chairman Cum. Managing Director

2 Narinder Kumar Jain Managing Director

3 Darshan Kumar Jain Whole Time Director

4 Pankaj Jain Whole Time Director

5 Manish Jain Whole Time Director

6 Neeraj Jain Whole Time Director

7 Arun Jain Whole Time Director

Relatives of Key Management Personnel

1 Devinder Kumar Jain HUF

2 Narinder Kumar Jain HUF

3 Prabha Jain

4 Veena Jain

14 CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

(i) Claims against the company not acknowledged as debt :

Cases against the Company in Labour Court &

High Court by ex-employees 5,096,158 4,063,678

(ii) Guarantee

(a) Outstanding Letters of Credit 32,451,531 5,781,330

(b) To Sales Tax Authorities :

for group concerns 100,000 100,000

for others 527,303 527,303

(c) To State Electricity Board :

for others Not Not Ascertainable Ascertainable

(d) To Others 7,500,000 5,132,099

(e) To Bank on behalf of Cosco - 108,841,425 Polymer Lanka Pvt. Ltd., to secure fund based & non-fund based limits (USD 20,05,000)

15 No impairment loss is recognised as on 31.03.2014 since the present value of estimated future cash flows over a period of five years exceeds the carrying value of assets of the Company''s cash generating units.

16 The Equity Shares held by the company in Cosco Polymer Lanka (Private) Ltd. (erstwhile Subsidiary of the Company in Sri Lanka) stand vested in the Secretary to the Treasury of the Government of Sri Lanka under the Revival of Underperforming Enterprises or Underutilised Assets Act, No.43 of 2011 (of Republic of Sri Lanka) as per disclosures made in the last year Accounts. Cosco Polymer Lanka (Private) Ltd. has been ordered to be wound up by the Hon''ble High Court of the Western Province, Colombo. The management does not expect any realisable value of its investment in the erstwhile subsidiary which was written off in the earlier year. Accordingly, "''Consolidated Financial Statements" as per Accounting Standard 21 issued by the of Chartered Accountants of India, have not been prepared.

17 The previous year figures have been regrouped / rearranged, wherever considered necessary to make them comparable with those of current year figure and also figures have been rounded off to nearest rupee.


Mar 31, 2013

1. Segment Information:

The company has identified two segments viz. Own Manufactured Products and Traded Goods. Segments have been identified and reported taking into account nature of products and services, the differing risk and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the company with following additional policies for segment reporting:

(a) Expenses have been identified to a segment on the basis of sale of the respective segment to the total sale of the company. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable".

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable",

2. Related Party Disclosure

As per Accounting Standard 18 issued by the Institute of Chartered Accountants of India the disclosure of transactions with the related parties as defined in the Accounting Standard are given below : (i) List of Parties with whom transactions entered during the year Companies under the same Management

1 Cosco Polymer Industries (P) Ltd.

2 Vijay Vallabh Securities Ltd.

3 Cosco Polymer Lanka Pvt. Ltd. Key Management Personnel

1 Devinder Kumar Jain Chairman Cum. Managing Director

2 Narinder Kumar Jain Managing Director

3 Darshan Kumar Jain Whole Time Director

4 Pankaj Jain Whole Time Director

5 Manish Jain Whole Time Director

6 Neeraj Jain Whole Time Director

7 Arun Jain Whole Time Director Relatives of Key Management Personnel

1 Devinder Kumar Jain HUF

2 Narinder Kumar Jain HUF

3 Prabha Jain

4 Veena Jain

3. No impairment loss is recognised as on 31.03.2013 since the present value of estimated future cash flows over a period of five years exceeds the carrying value of assets of the Company''s cash generating units.

4. For the Current Accounting year, "Consolidated Financial Statements" as per Accounting Standard 21 issued by the Institute of Chartered Accountants of India, have not been prepared since the equity shares held by the company in Cosco Polymer Lanka Pvt. Ltd. (erstwhile Subsidiary) stand vested in the Secretary to the Treasury of the Government of Sri Lanka under the Revival of Underperforming Enterprises or Underutilised Assets Act, No.43 of 2011 (of Republic of Sri Lanka).

5. The previous year figures have been regrouped / rearranged, wherever considered necessary to make them comparable with those of current year figure and also figures have been rounded off to nearest rupee.


Mar 31, 2012

1.1 Working Capital Loans are secured against hypothecation of all moveable properties including plant & equipments' stocks of raw materials' semi-finished goods and manufactured goods and all book debts' bills and claims receivables. The loans from banks are collaterally secured against equitable mortgage of factory land/building & guaranteed by Executive Directors.

1.2 Other loans from banks Rs. Nil (previous year Rs.11.24 lacs) are secured against hypothecation of vehicles.

2.1 Other Liabilities include Rs. 1'93'72'674/- (previous year Rs. 1'88'70'322/-) towards Interest Payable on unsecured short and long term borrowings and Rs. 6'37'67'200/- (previous year f nil) towards Corporate Guarantee obligation on behalf of the wholly owned subsidiary company.

2.2 The possession of land' belonging to the company' bearing Khasra No.420' total area measuring 1 bigha' 19 biswas and 3 biswansi situated at village Gurgaon' is in dispute and company has filed a suit for getting possession of the same. Rs. 11.3 Computer Software amortised @40% on WOV basis considering it as part of computers.

3.1 The National Saving Certificate ofRs. 5'000/- shown as investment is in the name of a Director of the Company and the same is pledged with the Sales Tax Authorities' Mumbai.

3.2 Due to continued suffering of losses' operation of subsidiary company were discontinued and underutilised assets comprising of land' building' fixtures and fitting which are part of the building stand vested in the Secretary to the Treasury of Government of Sri Lanka under "Revival of Underperforming Enterprises of Underutilised Assets Act No. 43 of 2011"' Under section 4 of the Act' the company is entitled to get compensation in lieu of the vesting of the assets. State Bank of India' Colombo' Sri Lanka' (lender of the subsidiary company) has got the valuation of assets of the Subsidiary done and in terms of the report' the forced sale value of the various assets has been estimated at Rs. 2.77'97'000 against liability of State Bank of India' Colombo off 9'15'64'200 (considering one time settlement of USD 1.80 Millions). Keeping in view the stated facts' company is not likely to get any compensation and therefore investment of Rs. 5'86'47'928 made in the subsidiary company has become nil. The amount of Rs. 5'86'47'928 is charged to Statement of Profit & Loss as Business Loss of subsidiary.

4.1 Long Term Loans & Advances include advance for Immovable Properties aggregating Rs. 1'26'24'129/- in respect of which the Builder/Developer has earmarked three flats at Diamond Harbour Road' Kolkata at a transfer price off. 69'00'000/-. On payment of registration charges these properties shall be physically handed over and registered in the name of the company. As certified by the builder/developer the properties for the balance amount shall be allocated in due course. In view of the above the advance is considered good for recovery.

5.1 Refer note no. 1 (c) of Significant Accounting Policies' regarding valuation of inventories.

5.2 Slow moving/non-moving stocks of 192.55 lacs (previous year) have been valued in the current year at scrap value and included in Note No. 17

6.1 Other investments (current) are valued at lower of cost or net realisable value.

7.1 Refer note no.1(C ) of Significant Accounting Policies' regarding valuation of inventories.

7.2 Refer note No. 15.2.

7.3 During the year the defective items of health & fitness equipments and spares Rs. 54.51 lacs (previous year) included in stock-in-trade have been valued at scrap value.

7.4 During the year the company has changed the method of valuation of synthetic panel sets' included in finished goods' from estimated sale price to lower of net realisable value or conversion cost. As a result of the change the loss of the company is reduced by Rs. 91.81 lacs.

8.1 Advances recoverable include Rs. 25'311/- recoverable from directors on account of expenses.

8.2 In the opinion of the board' the current assets' loans and advances have a value on realisation in the ordinary course of business at least equal to the amount at which they are stated.

8.3 Other operating income includes Rs. 3'535'633 as Duty Drawback and f 2'521'200 towards value of licence granted by DGFT subsequent to the date of Balance Sheet' on account of exports made during the year under Product Focus Scheme. Income being in the nature of Export Incentive has been accounted for in terms of AS-9 issued by ICAI.

9.1 Other Non-Operating income includes Rs. 16'25'826 towards Provision for Doubtful Debts' Doubtful Advances' Taxation and Diminution in value of Investment Written back.

10.1 Staff Welfare includes Rs. 498'763 medical expenses reimbursed to Directors (previous year 7 492'392).

10.2 EMPLOYEE BENEFITS

As per Accounting Standard AS-15 (Revised)' the disclosures of Employee benefits as defined in the Accounting Standard are given below:-

Defined Contribution Plans

The Company makes contribution towards provident fund and pension fund. These funds are administered by Government of India. Under the schemes; the Company is requirea to contribute a specified percentage of salary to the retirement benefit schemes to fund the benefit. Contribution to Defined Contribution Plan' recognised as expense for the year are as under:-

Leave Encashment

It is an unfunded defined benefit plan for which the obligation is recognised on actuarial valuation basis. A sum of

Rs. 42'978/- has been provided and included in Salaries & Wages. 26. Minimum Bonus provision under The Payment of Bonus Act' 1965 for the year has been made on estimated basis and any adjustment on account of final liability will be made in the subsequent year. 26.4 No provision has been made for leave encashment in respect of directors as it is decided that actual leave will be granted.

11.1 Travelling Expenses include Directors'Travelling Rs. 1796529/- (previous yearRs. 1230012/-).

11.2 House Tax Assessment Notice dated 15.07.2010 received from Municipal Corporation Gurgaon (MCG) during 2009 2010 assessed the annual house tax at Rs. 777089/- on the proposed assessment of annual value' which was objected by the company for difference in rate of land' type of construction and age of building in the assessment notice. Accordingly as per company's assessment the liability of Rs. 444854/- towards house tax was provided as on 31.03.2010 for the period 01.07.2008 to 31.03.2010 as againstRs. 1395906/- as per MCG assessment. Since no fresh demand has been raised as yet by MCG against objections raised by the company' therefore house tax liability for the year 2010-11 & 2011- 12 has not been provided for.

12.1 The company has given Corporate Guarantee to State Bank of India' Colombo' Sri Lanka to secure the various loans granted by the bank to M/s Cosco Polymer Lanka Private Limited' a wholly owned subsidiary of the company. The subsidiary company has closed its unit in Sri Lanka due to losses suffered by it. The bank has demanded the repayment of its loans from the Borrower/ Guarantor(s)). The management is under negotiation with the bank for One Time Settlement (OTS). The company has offered USD 1.55 Million for OTS. The bank requires further improvement in the offer and is agreeable to consider offer of USD 1.8 Million Having regard to the within stated facts' the Net Guarantee Liability has been provided at USD 12'53'557(INR 6'37'67'200) after deducting USD 546446 (INR 2'77'97'000)' the Estimated Net Realisable Value of the Assets of the unit charged to the bank as per last valuation report of the Bank on record from OTS offer amount of USD 1.8 Million (INR 9'15'64'200) acceptable to the bank.

13. Segment Information:

The company has identified two segments viz. Own Manufactured Products and Traded Goods. Segments have been identified and reported taking into account nature of products and services' the differing risk and returns and the internal business reporting systems. The accounting policies adopted for segment reporting are in line with the accounting policy of the company with following additional policies for segment reporting : (aRs. Expenses have been identified to a segment on the basis of sale of the respective segment to the total sale of the company. Revenue and expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as "Unallocable". (b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments' tax related assets and other assets and liabilities that cannot be allocated to a segment on reasonable basis have been disclosed as "Unallocable". Less: Corporate Guarantee obligation provided 63'767'200 38'225'145 Rs. 88721250

14. As per Accounting Standard 21 on "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India' the company has presented consolidated financial statements separately in this annual report.

15. No impairment loss is recognised as on 31.03.2012 since the present value of estimated future cash flows over a period of five years exceeds the carrying value of assets of the Company's cash generating units.

16. The previous year figures have been regrouped / rearranged' wherever considered necessary to make them comparable with those of current year figure and also figures have been rounded off to nearest rupee.'


Mar 31, 2010

1. CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

As at As at

31.03.2010 31.03.2009

Rs. Rs.

(i) Letters of Credit for purchase of

Raw Materials, Stores & Spares 30,316,937 11,298,763 (ii) Guarantee

(a) To Sales Tax Authorities:-

for group concerns 100,000 100,000

for others 527,303 300,000

(b) To State Electricity Board:-

for others Not Not Ascertainable Ascertainable

(c) To Others 5,132,099 5,132,099

(d) To Bank on behalf of Cosco Polymer Lanka 90,004,450 101,974,300

Pvt. Ltd., wholly owned subsidiary company (USD 20,05,000) (USD 20,05,000)

to secure fund based & non-fund based limits.

(iii) Sales Tax Under Appeal / Dispute - 357,530 (iv) Cases against the Company in Labour Court &

High Court by ex-employees 3,297,056 1,403,479

(v) Case against the Company by ESIC - 599,674

(vi) House Tax Liability 915,052 -



2. (i) MANAGERIAL REMUNERATION



Salaries 6,840,000 6,840,000 Commission 5,472,000 5,080,000

Contribution to Provident & Other Funds 65,520 65,520

Perquisites 724,415 171,085

Gratuity 46,286 -

H.R.A - 378,000

13,148,221 12,534,605

3. Sundry Creditors include amount due to Small Scale Industrial Undertakings Rs. 106.63 lacs (Previous Year Rs. 105.46 lacs). In terms of section 22 of the Micro, Small and Medium Enterprises Development Act, 2006, the outstanding to these enterprises are required to be disclosed. However, these enterprises are required to be registered under the Act. In the absence of the information about registration of the Enterprises under the above Act, the required information could not be furnished.

The names of the Small Scale Industrial Undertakings so far ascertained having outstanding more than thirty days from the company are given below:

Abhishek Enterprises, Ajit Pershad Jai Pal Jain & Co., D.P.Packaging Industries, Lexpo Overseas, Paras Cotton Industries, Premier Legguard Works, S.S Printers, Star Engineering Works, Speciality Organics Pvt.Ltd., Throu Flex House Division.

The above information regarding small scale undertakings has been determined to the extent such parties are identified on the basis of information available with the Company, which has been relied upon by the Auditors.

4. RELATED PARTY DISCLOSURE

As per Accounting Standard 18 issued by the Institute of Chartered Accountants of India the disclosure of transactions with the related parties as defined in the Accounting Standard are given below :

(i) List of Parties

Wholly owned subsidiary Company

1. Cosco Polymer Lanka (P) Ltd.

Companies under the same Management

1. Cosco Polymer Industries (P) Ltd.

2. Navendu Investment Co. (P) Ltd.

3. Cosco International (P) Ltd.

4. Radha Phool Fin-Investments (P) Ltd.

5. DDN Polymers (P) Ltd.

6. Vijay Vallabh Securities Ltd.



Key Management Personnel

1. Devinder Kumar Jain Chairman Cum. Managing Director

2. Narinder Kumar Jain Managing Director

3. Darshan Kumar Jain Whole Time Director

4. Pankaj Jain Whole Time Director

5. Manish Jain Whole Time Director

6. Neeraj Jain Whole Time Director

7. Arun Jain Whole Time Director

Relatives of Key Management Personnel



1. Devinder Kumar Jain HUF

2. Darshan Kumar Jain HUF

3. Narinder Kumar Jain HUF

4. Pankaj Jain HUF

5. Manish Jain HUF

6. Neeraj Jain HUF

7. Arun Jain HUF

8. Prabha Jain

9. Veena Jain

5. No investments are purchased and sold during the year.

6. The amount of net exchange difference (profit) in respect of transactions other than fixed assets included in the Profit & Loss Account for the year is Rs.4,23,168/- [Previous Year - Rs.77,97,105/-(loss)].

7. Minimum Bonus provision for the year has been made on estimated basis and any adjustment on account of final liability will be made in the subsequent year. Bonus charged to Profit & Loss Account includes Rs.3,07,276/- relating to previous year.

8. No provision has been made for leave encashment in respect of directors as it is decided that actual leave will be granted.

9. Investments include advance for Immovable Properties aggregating Rs.1,26,24,129/- in respect of which neither formal agreements have been executed nor any allocation / earmarking of the property has been made till date by the Builder/ Developer. However the company has received balance confirmation from the party in the earlier year. The management is persuing for execution of agreement / title documents or alternatively for refund of amount advanced and exploring the alternate possibility for specific performance of the contract.

10. The National Saving Certificate of Rs. 5,000/- shown as investment is in the name of a Director of the Company and the same is with the Sales Tax Authorities, Mumbai.

11. The company has taken loans from Companies, directors & others (related persons) during the year, carrying differential interest rates viz.

- 6% per annum (same as per last year), the minimum permissible u/s 372A of the Companies Act, 1956, on existing inter-corporate loans taken at the specified rates;

- 9% p.a on inter-corporate loans (previous year 8%), from Cosco Polymer Industries P. Ltd., taken during current year;

- 9% per annum (previous year 8%) on loans taken from Directors.

12. During the year Cosco Polymer Lanka Pvt. Ltd., the subsidiary company, has reported loss of Rs. 147.90 lacs (Previous year Rs. 460.36 lacs). The accumulated loss as on 31.03.2010 is Rs.1,296.25 lacs (Previous year Rs.1279.99 lacs reconverted at Rs. 1,148.35 lacs). The business operations of the subsidiary company, which were suspended last year due to global recession and unfavourable political situations in Sri Lanka, could not be re-started till date. Considering the favourable political environment in Sri Lanka at present and in view of the global recovery, the management is in active deliberations with the potential customers to re-start the production at commercially viable scale. The management is quite hopeful that investment of the company in the subsidiary is well protected by fair value of the assets of subsidiary / future operational profits. Further, the management is of the view that there will be no devolvement of any liability on account of Corporate Guarantee issued by it against the loan given by State Bank of India to its subsidiary having regard to the realisable market value of its assets.

13. In respect of payments overdue from foreign customers excluding subsidiary company amounting to Rs.7,51,560/- (previous year Rs.4,32,312/-). The company has received payment of Rs.3,82,620/- from the party in the next financial year; so the management is hopeful to recover the balance amount. Therefore no provision for doubtful debts is made in the accounts.

14. As per Accounting Standard 21 on "Consolidated Financial Statements" issued by the Institute of Chartered Accountants of India, the company has presented consolidated financial statements separately in this annual report.

15. No impairment loss is recognised as on 31.03.2010 since the present value of estimated future cash flows over a period of five years exceeds the carrying value of assets of the Companys cash generating units.

16. The possession of land, belonging to the company, bearing Khasra No.420, total area measuring 1 bigha, 19 biswas and 3 biswansi situated at village Gurgaon is in dispute and company has filed a suit for getting possession of the same.

17. Advance of Rs. 2,89,48,160/- (previous year Rs.3,08,50,840/-) to wholly owned subsidiary, Cosco Polymer Lanka Private Limited, includes Rs.1,94,71,284/- (previous year Rs.2,20,01,864/-) on account of Advance against Supplies and Rs.94,76,876/- (previous year Rs.88,48,976/-) recoverable on account of expenses incurred on their behalf. In view of Note No.29, advance is considered recoverable and does not require any provision in the accounts.

18. Loans & Advances include Rs.76,67,584/- (previous year Rs.42,20,060/-) as Additional Custom Duty Recoverable as per Notification No. 102/2007 Customs dated 14/09/2007, being refund of 4% special additional duty paid on import of goods for trading, accordingly the income has increased to that extent. The company has regularly received the claim amount from time to time.

19. Loans & Advances include Rs.40,00,000/- (previous year Rs.40,00,000/-) paid on capital account for purchase of commercial property for business purposes of the company. Agreement for purchase of property has been cancelled by the company in the interest of business. The company has received Rs.20 lacs from the party in the next financial year and the management is hopeful of realising the balance amount.

20. Other income includes Rs.23,22,508/- towards value of license granted by DGFT subsequent to the date of Balance Sheet, on account of exports made during the year under Product Focus Scheme. The said license was accordingly sold in the subsequent year. Income being in the nature of Export Incentive has been accounted for in terms of AS-9 issued by. ICAI.

21. Unsecured Loans include Rs.54 lacs (previous year Rs.54 lacs) borrowed from bank against term deposit receipt of the company under the same management.

22. Sundry Debtors include Rs. 16,40,279/- due from Zenith Cycle Co. who have closed their business and the said amount will be adjusted against the goods to be returned by the party. Therefore no provision for doubtful debts is made in the accounts.

23. Misc. Income includes Bonus Provision Written Back Rs.5,025/- (previous year Rs 62,883/-).

24. No provision has been made in respect of tax on Capital Gain relating to compulsary acquisition of part of factory land during the year. Since the compensation has not been received till date.

25. Previous year figures have been regrouped / rearranged wherever considered necessary to make them comparable with those of current year figure.

26. Figures have been rounded off to nearest rupee.

 
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