Mar 31, 2015
(I) Contingent Liabilities not provided for in respect of (including
interest up to the date of Demand/claim):
a) Claims against the Company not acknowledged as debts (excluding
claims where amounts not Ascertainable / the cases where the
possibility of any outflow on settlement / decision is remote)
(b) Pledge of shares (Investment) for borrowing by an associate 248.74
248.74
(c) Arrears of Preference Shares dividend (Including dividend 233.43
206.59 tax)
(d) In respect of other matters under litigation (including Not
ascertainable workmen claims pending at different stages.)
(e) Interest /Compound interest /penalty on delayed /non Not
ascertainable payment of statutory dues / Trade payables / Promoters'
contribution / Loan from secured and unsecured lenders.
* By certain notifications issued by Government of Maharashtra, the
water charges payable by the Company were sought to be enhanced by the
Government of Maharashtra from 1991. The Company approached the Court,
disputing such enhancement on the premise of non-applicability of the
notification and/or classification to the Company, the matter is
pending in the court. During the proceeding before Hon. Bombay High
Court, the Company was interalia directed to give non disposal
undertaking for the immovable property of the Company including 103
acres of land (excluding the surplus 345 acres land), buildings and
plant & machinery, which were complied with. The water charges as
sought to be enhanced has been disclosed in contingent liability
accordingly.
The Company's pending litigations comprise claims mainly against the
Company and proceedings pending with tax and other authorities. The
Company has reviewed all its pending litigations and proceedings and
has made provisions to the extent ascertainable, wherever required and
disclosed in the contingent liabilities, wherever applicable, in its fi
nancial statements. The Company does not reasonably expect the outcome
of these proceedings to have a material impact on its financial
statement
III) Disclosure in respect of Operating Leases:
(a) The Company has taken and also given various commercial premises
under cancellable Operating Leases. The Lease Agreements are usually
renewable by mutual consent on mutually agreeable terms.
**The premises of Registered office of the Company was taken on lease
from a Nationalised Bank for which the bank has filed a Eviction suit
and demanded a mesne profit of Rs.529.43 lacs (Previous year
Rs.(529.43 lacs included in the notes 19(1)(a)(5) . The High Court has
ordered for vacation of the premises for which Company filed a
petition in Supreme Court. The Hon Supreme Court upheld the Hon. High
Court Order and accordingly Company vacated the Premises. The Company
has challenged the vacation and, also the liability of mesne profit in
Court, which is pending and accordingly the amount of mesne profit is
not provided in books but included in contingent liability.
(b) The rental expense in respect of Operating Leases is charged as
rent under Note 17. The rental income is included in other income.
1) Rehabilitation Scheme and Sale of Land:
a) Board For Industrial and Financial Reconstruction (BIFR) in its
order dated 4th January, 2013,clarified that the status of land has
already been decided by BIFR in its order dated 16.07.2009 and directed
the Operating Agency (OA) to expedite submission and circulation of
Draft Rehabilitation Scheme (DRS), based on the parameters given in the
BIFR order dated 16-07-2009. The said BIFR order was challenged before
Appellate Authority for Industrial and Financial Reconstruction
(AAIFR). The AAIFR vide ex-party order dated 20th March, 2013 directed
the BIFR to give clear parameters to OA for preparation of DRS. As the
Company being of the view that clear parameters has already been laid
down in BIFR order dated 16.07.2009, has filed a writ petition in
Honourable High Court against the above said AAIFR order, which has
since been disposed off , as the said order did not decide the issue of
locus of the party. In the meanwhile the BIFR vide its order dated
22.01.2014, directed the OA to explore possibility of amicable
understanding between the parties on disposal of surplus land. The
labour Union has also filed a writ petition in Hon. Bombay high Court,
seeking formulation of Draft Rehabilatations Scheme (DRS) in time bound
manner and instruction in early disposal of surplus land, which is
pending. The OA has yet to file DRS.
(b) The Company has received Rs. 7425.92 Lacs (Previous Year Rs 7425.92
lacs) from a developer, towards advance against sale of land. out of
which Rs.2450 Lacs (Previous Year Rs 2450 lacs) are deposited and lying
in no lien account, which can be utilised only in accordance with the
directions of BIFR/Court, as and when given.
2) There was no manufacturing operation during the year. The lockout
declared by Company w.e.f. 15th November, 2009 is continue to be in
force; Labour Union challenged the Lockout, which is pending at
Industrial Court, and the consequent liabilities if any is not
ascertainable.
3) (a) Pending submission and sanction of DRS, these Financial
Statements have been prepared on a going concern basis.
(b) In view of suspension of manufacturing operations, pending
submission and sanction of DRS, the impairment loss on assets if any,
as required by Accounting Standard 28, has not been dealt with in these
Financial Statements.
4) The remuneration amounting to Rs 142.10 lacs (Previous Year Rs
142.10 lacs) paid to the Managing Director for the period from
December, 2008 to January, 2011 was not approved by central government.
The Company has applied to central government for the waiver of the
same and is hopeful of getting the same in due course.
5) (a) Confirmation / reconciliation of balances of certain Banks,
Loans & Advances, Other non- current assets, Trade Payables, Other
liabilities and Lenders are also not available. However, necessary
action in this regard is already initiated and on receipt of the same,
will be reviewed by the Company. Consequential adjustments arising
thereon, which are presently not ascertainable, will be made.
(b) During the year, due to severe financial crunch, Company was not
regular in payment of statutory dues. Since the Company is under BIFR,
the interest / installments to Lenders / penalty etc on delayed / non
payment to certain trade payable / promoters' contribution / Loan from
secured and unsecured lenders and statutory dues are not provided for
and shall be appropriately considered if required on sanction of DRS.
6. Land and Buildings of the Company were re-valued as on 31st
December, 1984 on market value / replacement cost basis using Standard
indices as assessed by the approved valuer. Further the land was again
re-valued on 31st March, 2005 and 25th January, 2006 considering their
present market prices as per valuation report submitted by the approved
valuer appointed for the purpose. The revaluations of March, 2005 and
January, 2006 have resulted in a net increase in the book value by
Rs.8355.89 lacs, and Rs.4450 lacs, respectively. The total increase as
a result of these revaluations was transferred to Revaluation Reserve
in the respective years.
7. Deferred Tax Assets / (Liabilities)
As a matter of prudence due to continuous losses deferred tax assets
has not been recognised for the current year and earlier years.
8 Related party Disclosure pursuant to Accounting Standard  18
a) Associates / Group Companies and Key Management personal with whom
the Company has entered into transactions during the period:
i) ISG Traders Ltd, Kavita Marketing Private Limited, Shubh Shanti
Services Limited (SSSL) and Duncan Industries Limited (Associates).
ii) Mr.. Arun Jain Managing Director.
* Amount provided for Managerial remuneration which excludes gratuity
and leave entitlement.
** Being an unsecured loan advanced to the Company by a body Corporate
now assigned to SSSL.
b) Related parties have been identified by the Management and relied
upon by the auditors
c) No amount in respect of related parties have been written
off/written back / provided for during the year.
9. During the year, arising out of the suspension of production for a
considerable time, the management has further carried out a thorough
review (both qualitative and quantitative) of the potential realisable
value of certain assets in a prudent manner. Accordingly, the following
provisions/ write-offs have been made, as considered appropriate by the
management, in the light of the changed prevailing scenario as a matter
of abundant caution. :
The Company has compiled the above information based on available
information from suppliers as at the year end, as most of the supplier
has not intimated the Company about its status as a Micro or Small and
Medium Enterprise Development Act, 2006. No interest is likely to be
paid to unsecured Trade payables under the DRS as referred in note no.
19( 6)(b) above and hence, no interest liability on the above category
of creditors is provided / disclosed.
10. Consequent to the enactment of the Companies Act, 2013 ( the Act )
and its applicability for accounting periods commencing from April 1,
2014, the Company has realigned the remaining useful life of its
tangible assets in accordance with the provisions under Schedule II to
the Act. Consequently, in case of tangible assets which completed their
useful life, the carrying value (net of residual value) as at April1,
2014 amounting to Rs.6,347.75 lacs (net of revaluation reserve on
building of Rs 1,443.16 lacs) has been adjusted to the accumulated
balance of retained earnings (deficit) and in case of other assets
carrying value (net of residual value) is being depreciated over the
revised remaining useful lives. Accordingly, the depreciation expense
for the year is lower by Rs. 1,190.19 lacs as compared to the previous
year.
11. Previous year's figures have been regrouped / rearranged wherever
necessary to conform to the current year's presentation.
Mar 31, 2014
As at As at
1. OTHER NOTES FORMING PART OF THE
FINANCIAL STATEMENTS 31.03.2014 30.03.2013
(I) Contingent Liabilities not provided for in respect of (including
interest up to the date of Demand/claim):
(a) Claims against the Company not acknowledged as debts (excluding
claims where amounts not Ascertainable / the cases where the
possibility of any outfl ow on settlement / decision is remote)
Disputed Matters: Rs.Lacs Rs.Lacs
1 Electricity (Including electricity
duty) 4280.50 4238.31
2 Water Charges * 17073.00 16537.00
3 Open Land Tax 2215.07 928.48
4 Income Tax 2145.60 2174.79
5 Others (Buyer''s / Suppliers /
Lenders / Quasi Govt. etc) 1429.04 1326.01
6 Excise Duty 3297.72 3297.72
7 Service Tax 105.02 105.02
8 Disputed Sales Tax matters 423.25 423.25
(b) Pledge of shares (Investment) for
borrowing by an associate 248.74 248.74
(c) Arrears of Preference Shares
dividend (Including dividend tax) 206.59 179.76
(d) In respect of other matters under litigation (including Not
ascertainable workmen claims pending at different stages.)
(e) Interest /Compound interest /penalty on delayed /non Not
ascertainable payment of statutory dues / Trade payables / Promoters''
contribution / Loan from secured and unsecured lenders.
* By certain notifi cations issued by Government of Maharashtra, the
water charges payable by the Company were sought to be enhanced by the
Government of Maharashtra from 1991. The Company approached the Court,
disputing such enhancement on the premise of non-applicability of the
notifi cation and/or classifi cation to the Company, the matter is
pending in the court. During the proceeding before Hon. Bombay High
Court, the Company was interalia directed to give non disposal
undertaking for the immovable property of the Company including 103
acres of land (excluding the surplus 345 acres land), buildings and
plant & machinery, which were complied with. The water charges as
sought to be enhanced has been disclosed in contingent liability
accordingly
II) Commitments:
Capital Commitments Nil Nil
Others Commitments Nil Nil
III) Disclosure in respect of Operating Leases
(a) The Company has taken and also given various commercial premises
under cancellable Operating Leases. The Lease Agreements are usually
renewable by mutual consent on mutually agreeable terms
The premises of Registered offi ce of the Company was taken on lease
from a Nationalised Bank for which the bank has fi led a Eviction suit
and demanded a mesne profi t of Rs.529.43 lacs (Previous year
Rs.(451.31lacs included in the notes 20.(1)(a)(5)). The High Court has
ordered for vacation of the premises for which Company fi led a
petition in Supreme Court, The Hon Supreme Court upheld the Hon. High
Court Order and accordingly Company vacated the Premises. Company has
also challenges the vacation and thus liability of mesne profi t in a
Court, which is pending and accordingly the amount of mesne profi t is
not provided but included in contingent liability.
(b) The rental expense in respect of Operating Leases is charged as
rent under Note 18. The rental income is included in other income.
2) Rehabilitation Scheme and Sale of Land:
a) Board For Industrial and Financial Reconstruction (BIFR) in its
order dated 4th January, 2013,clarifi ed that the status of land has
already been decided by BIFR in its order dated 16.07.2009 and directed
the Operating Agency (OA) to expedite submission and circulation of
Draft Rehabilitation Scheme (DRS), based on the parameters given in the
BIFR order dated 16-07-2009. The said BIFR order was challenged before
Appellate Authority for Industrial and Financial Reconstruction
(AAIFR). The AAIFR vide ex-party order dated 20th March, 2013 directed
the BIFR to give clear parameters to OA for preparation of DRS. As the
company being of the view that clear parameters has already been laid
down in BIFR order dated 16.07.2009, has fi led a writ petition in
Honourable High Court against the above said AAIFR Order, which is
pending. In the meanwhile the BIFR vide its Order dated 22.01.2014,
directed the OA to explore possibility of amicable understanding
between the parties on disposal of surplus land. The labour Union has
also fi led a writ petition in Hon. Bombay High Court, seeking
formulation of DRS in time bound manner and instruction in early
disposal of surplus land, which is pending. The OA has yet to file DRS
(b) The Company has received Rs 7425.92 lacs from a developer, towards
advance against sale of land. out of which Rs 2450 lacs is deposited
and lying in no lien account, which can be utilised only in accordance
with the directions of BIFR, as and when given.
3) There was no manufacturing operation during the year. The lockout
declared by Company w.e.f 15th November, 2009 is still in force; Labour
Union challenged the Lockout, which is pending at Industrial Court and
the consequent liabilities if any is not ascertainable.
4) (a) Pending submission and sanction of DRS, these Financial
Statements have been prepared on a going concern basis.
(b) In view of suspension of manufacturing operations, Pending
submission and sanction of DRS, the impairment loss on assets if any,
as required by Accounting Standard 28, has not been dealt with in these
Financial Statements.
5) The remuneration paid / payable to Managing Director for the year
amounting to Rs. 161.02 lacs (Rs.665.02 lacs from 19th December, 2008
to 31st March, 2014), out of which Rs. 131.87 Lac for the period from
April 2013 to Jan 2014 was approved by share holders subject to
approval of Central Govt. Central Government did not approved the same.
The Company is taking necessary steps to secure the approval in this
regard. Share holders'' approval for Rs. 29.15 Lac For the period from
Feb 2014 to March 2014 is being taken in the ensuing Annual General
meeting.
6) The exceptional item is in respect of diminution in value of
Investments by Rs.Nil (Previous Year. 448.95 lacs).
7) (a) Confi rmation / reconciliation of balances of certain Banks,
Loans & Advances, Other non-current assets, Trade Payables, Other
liabilities and Lenders are also not available. However, necessary
action in this regard is already initiated and on receipt of the same,
will be reviewed by the Company. Consequential adjustments arising
thereon, which are presently not ascertainable, will be made. (b)
During the year, due to severe fi nancial crunch, Company was not
regular in payment of statutory dues. Since the Company is under BIFR,
the interest / instalments to Lenders / penalty etc on delayed / non
payment to certain trade payable / promoters'' contribution / Loan from
secured and unsecured lenders and statutory dues are not provided for
and shall be appropriately considered if required on sanction of DRS.
8) (a). Land and Buildings of the Company were re-valued as on 31st
December, 1984 on market value / replacement cost basis using Standard
indices as assessed by the approved valuer. Further the land was again
re-valued on 31st March, 2005 and 25th January, 2006 considering their
present market prices as per valuation report submitted by the approved
valuer appointed for the purpose. The revaluations of March, 2005 and
January, 2006 have resulted in a net increase in the book value by
Rs.8355.89 lacs, and Rs.4450 lacs respectively. The total increase as a
result of these revaluations was transferred to Revaluation Reserve in
the respective years.
9) Power and Fuel as disclosed in Note-16, is net of Rs.Nil (Previous
year Rs.Nil ) credit allowed by MSEDCL during the year on account of
certain charges relating to earlier years.
10) The Company is in the process of appointing a new Company Secretary
as the incumbent resigned from offi ce. Inspite of best effort the
Company is not able to fi nd a suitable candidate for full time Company
Secretary. However the efforts are continued.
11) Deferred Tax Assets / (Liabilities)
As a matter of prudence due to continuous losses deferred tax assets
has not been recognised for the current year and earlier years.
12) Related party Disclosure pursuant to Accounting Standard  18
a) Associates / Group Companies and Key Management personal with whom
the Company has entered into transactions during the period: i) ISG
Traders Ltd, Kavita Marketing Private Limited, Shubh Shanti Services
Limited and Duncan Industries Limited (Associates). ii) Shri. Arun
Jain Managing Director.
** Being an unsecured loan advanced to us by a body Corporate now
assigned to SSSL.
b) Related parties have been identifi ed by the Management and relied
upon by the auditors
c) No amount in respect of related parties have been written
off/written back / provided for during the year.
13) During the year, arising out of the suspension of production for a
considerable time, the management has further carried out a thorough
review (both qualitative and quantitative) of the potential realisable
value of certain assets in a prudent manner. Accordingly, the following
provisions/ write-offs have been made, as considered appropriate by the
management, in the light of the changed prevailing scenario as a matter
of abundant caution. :
The Company has compiled the above information based on available
informations from suppliers as at the year end, as most of the supplier
has not intimated the Company about its status as a Micro or Small and
Medium Enterprise Development Act, 2006. No interest is likely to be
paid to unsecured Trade payables under the DRS as referred in note 7(b)
above and hence, no interest liability on the above category of
creditors is provided / disclosed.
13) Previous year''s figures have been regrouped / rearranged
wherever necessary to conform to the current year''s presentation.
Mar 31, 2013
1) Rehabilitation Scheme and Sale of Land:
(a) Board For Industrial and Financial Reconstruction (BIFR) in its
order dated 4th January, 2013,clarifed that the status of land has
already been decided by BIFR in its order dated 16.07.2009 and directed
the Operating Agency (OA) to expedite submission and circulation of
Draft Rehabilitation Scheme (DRS), based on the parameters given in the
BIFR order dated 16-07-2009. The said BIFR order was challenged before
Appellate Authority for Industrial and Financial Reconstruction
(AAIFR). The AAIFR vide ex-party order dated 20th March, 2013 directed
the BIFR to give clear parameters to OA for preparation of DRS. As the
company being of the view that clear parameters has already been laid
down in BIFR order dated 16.07.2009, has fled a writ petition in
Honourable High Court against the above said AAIFR order, which is
pending. Further directions of BIFR regarding sale of land are awaited.
The company is in the process of formulating the DRS based on estimated
current valuation of land proposed to be sold, which will be submitted
to BIFR as soon as the litigations are resolved.
(b) We have received Rs.7425.92 lacs from a developer, towards advance
against land sale. Out of which Rs.2450 lacs is deposited and lying in
No lien Account.
2) The lockout declared w.e.f 15th November, 2009 is still in force.
There was no manufacturing operation during the year.
3) (a) Pending submission and sanction of DRS, these Financial
Statements have been prepared on a going concern basis.
(b) In view of suspension of manufacturing operations, submission and
sanction of DRS, the impairment loss on assets if any, as required by
Accounting Standard 28, has not been dealt with in these Financial
Statements.
4) The remuneration paid / payable to Managing Director for the year
amounting to Rs. 148.90 lacs (Rs.504.lacs from 19th December, 2008 to
31st March, 2013) was approved by shareholders subject to approval of
Central Government. The Company is taking necessary steps to secure the
approval in this regard.
5) The exceptional item is in respect of diminution in value of
Investments by Rs.448.95 lacs (Previous Year. 223.05 lacs).
6 (a) Confrmation / reconciliation of balances of certain Loans &
Advances, Other non-current
assets, Trade Payables, Other liabilities and Lenders are also not
available. However, necessary action in this regard is already
initiated and on receipt of the same, will be reviewed by the Company.
Consequential adjustments arising thereon, which are presently not
ascertainable, will be made.
(b) During the year, due to severe fnancial crunch, Company was not
regular in payment of statutory dues. Since the Company is under BIFR,
the interest / instalments to Lenders / penalty etc on delayed / non
payment to certain trade payable / promoters contribution / Loan from
secured and unsecured lenders and statutory dues are not provided for
and shall be appropriately considered if required on sanction of DRS.
7 (a) Land and Buildings of the Company were re-valued as on 31st
December, 1984 on market value / replacement cost basis using Standard
indices as assessed by the approved valuer. Further the land was again
re-valued on 31st March, 2005 and 25th January, 2006 considering their
present market prices as per valuation report submitted by the approved
valuer appointed for the purpose. The revaluations of March, 2005 and
January, 2006 have resulted in a net increase in the book value by
Rs.8355.89 lacs, and Rs.4450 lacs respectively. The total increase as a
result of these revaluations was transferred to Revaluation Reserve in
the respective years.
The following re-valued amounts (net of withdrawals) remain substituted
for the historical cost in the gross block of fxed assets:
8 Power and Fuel as disclosed in Note-15, is net of Rs. Nil lacs
(Previous year Rs.80.07 lacs) credit allowed by MSEDCL during the year
on account of certain charges relating to earlier years.
9 Company is in the process of appointing a new Company Secretary as
the incumbent resigned from offce. Inspite of best effort the Company
is not able to fnd a suitable candidate for full time Company
Secretary. However the efforts are continued.
10 Deferred Tax Assets / (Liabilities)
As a matter of prudence due to continuous losses deferred tax assets
has not been recognised for the current year and earlier years.
11 Calculation in respect of Earnings Per Share:
12 Related party Disclosure pursuant to Accounting Standard  18
a) Associates / Group Companies and Key Management personal with whom
the Company has entered into transactions during the period:
i) ISG Traders Ltd, Kavita Marketing Private Limited, and Duncan
Industries Limited (Associates).
ii) Shri. Arun Jain Managing Director.
The following transactions were carried out with the associates / group
companies in the ordinary course of business and at armÂs length:
13 During the year, arising out of the suspension of production for a
considerable time, the management has further carried out a thorough
review (both qualitative and quantitative) of the potential realisable
value of certain assets in a prudent manner. Accordingly, the following
provisions/ write-offs have been made, as considered appropriate by the
management, in the light of the changed prevailing scenario as a matter
of abundant caution. :
14 Previous yearÂs fgures have been regrouped / rearranged wherever
necessary to conform to the current yearÂs presentation.
Mar 31, 2012
Rights of Equity Shareholders
The Company has only one class of equity shares having par value of Rs.
10 each. Each shareholder of equity share is entitled to one vote per
share. In the event of liquidation of the Company, the holder of equity
shares will be entitled to receive any of the remaining assets of the
Company after distribution of preferential amounts. Terms of the
Preference Shares
a) 2,45,525 8% Cumulative Redeemable Preference Shares were redeemable
at par on 29th March,2010.
b) 82,192 4% Cumulative Redeemable Preference Shares were redeemable at
par on 29th March,2010.
c) As per approved CDR package sanctioned by CDR EG redemption of
Preference Shares has been extended for the period of three years from
the date of redemption.
(a) 3,16,800 Zero% Secured Redeemable non convertible Debentures
privately placed with Financial Institutions were redeemable in three
equal yearly installments commencing from 29th March, 2007 and at a
premium of 25% of the outstanding amount on respective redemption
dates. However, as per approved CDR package dt.21.01.2008., redemption
of debentures has been rescheduled. As per CDR re schedulement
redemption of debentures is to be made in two instalments out of land
proceeds as under.
40% out of second tranche of land sale proceeds of Rs. 48.90 crore
60% out of third and last tranche of Rs. 72.50 crore
Redemption premium due on debentures as per existing terms to be paid
pro rata alongwith redemption of debentures.
(b) Debentures are secured by mortgage/hypothecation of all the
immoveable and/or movable assets of the Company, present and future,
ranking pari passu subject to the prior charges of the Company's
Bankers for working capital borrowings.
(c) The Financial Institutions have, under certain circumstances of
default by the Company, an option to convert Rs. 316.80 Lacs (Previous
Year Rs.316.80 Lacs) out of Debentures into fully paid up Equity Shares
of the Company at par at any time during the currency of these
Debentures.
(d) Term Loan of Rs.2143.12 Lacs (Previous Year Rs.2080.78) from a bank
is having exclusive charge on certain Plant & Machinery and all other
Term loans from Banks are secured by mortgage /hypothecation of entire
fixed assets of the Company (other than certain plant& machinery
exclusively charged as referred above and a part of land) having pari
passu charge with the debenture holders. PNB Short Term Loan is further
secured by pledge of investments (Refer note 3 of 7)
(e) Working Capital borrowings and non fund based out standing of Rs.
2634.01 Lacs (Previous Year Rs.2752.09 Lacs) from the Banks are secured
by hypothecation of inventories and book debts etc. and by second
charge by way of mortgage on the immovable assets of the Company.
(f) One of the bank has assigned it's Financial Assistance term loan
and working capital agreegating to Rs.4743.60 (Previous Year Rs.5060
Lacs) to an asset reconstruction company at previous year end.
(g) All the above loans are further secured by personal guarantee of a
director of the Company.
(h) The Company has defaulted in repayment of loans and interest as
follows:
(i) a) Terms of unsecured loans from body corporate Repaybale on demand
however no interest has been provided for the finnacial year under
consideration b) Other loans from Promotor's contribution Repayable
as per CDR package approved dated 21.01.2008. Note: The Company is
under BIFR and revised scheme is under preparation, all the accounts
are Non Performing Assets (NPA) and repayment of loans and interest
will be made as per sanctioned scheme.
1) Rehabilitation Scheme and Sale of Land:
(a) The Company had entered in to Agreement for sale of surplus land
with Raheja Universal Ltd (RUL) in the year 2007. Board For Industrial
and Financial Reconstruction (BIFR), vide it's order dated 16.07.09
held that now that the Company has filed a reference with BIFR, the
sale of land also has to be made a part of the rehabilitation scheme
(DRS) to be prepared u/s 18(1 )(d) of SICA and further directed the
Company, not to dispose off any assets except with the consent of BIFR
as per section 22A of SICA. On appeal, the Appellate Authority for
Industrial and Financial Reconstruction (AAIFR) vide its order dated
28.05.2010 held that the pre existing contract is beyond the purview of
section 22A and the land cannot form part of DRS, permitted the
implementation of the said Agreement for sale. Accordingly part
possession of the land was handed over to RUL. In the Writ Petition
filed against the said AAIFR order, Hon'ble Bombay High Court (BHC),
vide order dated 29.07.11 quashed and set aside the aforesaid AAIFR
order and confirmed the said BIFR order. In SLP filed against the BHC
order by RUL, the Hon'ble Supreme Court in its order dated 07.02.2012
upheld the Hon'ble High Court's order, dismissed the SLP and
directed the parties to appear before BIFR for further directions.
Further directions of BIFR regarding sale of land under section 18 of
SICA are awaited. The company is in the process of formulating the DRS
based on estimated current valuation of land proposed to be sold under
DRS.
(b) We have received Rs.7425.92 lacs from RUL in 3 tranches since 2007,
towards advance against land sale. Out of which Rs.2450 lacs (as on
31.03.2012 is Rs.2749.32 lacs including interest) is lying in Interest
bearing No lien Account under note no 11.
2) The lockout declared w.e.f 15th November, 2009 is still in force.
There was no manufacturing operations during the year, However, the
essential services remained in operation.
3) (a) Pending submission and sanction of DRS, these Financial
Statements have been prepared on a going concern basis.
(b) In view of suspension of manufacturing operations, submission and
sanction of DRS, the impairment loss on assets if any, as required by
Accounting Standard 28, has not been dealt with in these Financial
Statements.
4) The remuneration Paid /Payable to Managing Director for the year
amounting to Rs. 134.55 lacs ( Rs.354.97 lacs from 19th December 2008
to 31st March 2012 ) which was approved by shareholders but was subject
to approval of Central Government. The Central Government did not
approve the same on procedural ground. The Company is taking necessary
steps to secure the approval in this regard.
5) a) The Exceptional items of current year is diminution in value of
Investments by Rs.223 lacs.
b) Exceptional item of previous year includes excess provision made in
the earlier years, and written back of Bad debts written off earlier
and recovered and reversal of profit on sale of long term investment of
Rs.1410.71 lacs.
6) (a) Confirmation / reconciliation of balances under certain Trade
Receivables, Trade Payables and Lenders are also not available. However, necessary action in this regard is already initiated and on receipt of the same, will be reviewed by the company. Consequential adjustments arising thereon, which are presently not ascertainable, will be made.
(b) During the year, due to severe financial crunch, Company was not
regular in payment of statutory dues. Since the Company is under BIFR,
the interest / instalments to Lenders / penalty etc on delayed / non
payment to certain trade payable / promoters' contribution / Loan
from secured and unsecured lenders and statutory dues are not provided
for and shall be considered if required on sanction of DRS.
7) (a) Land and Buildings of the Company were re valued as on 31st
December 1984 on market value / replacement cost basis using Standard
indices as assessed by the approved valuer. Further the land was again
re valued on 31st March 2005 and 25th January 2006 considering their
present market prices as per valuation report submitted by the approved
valuer appointed for the purpose. The revaluations of March 2005 and
January, 2006 have resulted in a net increase in the book value by
Rs.8355.89 lacs, and Rs.4450 lacs respectively. The total increase as a
result of these revaluations was transferred to Revaluation Reserve in
the respective years.
8) The Company is in the process of appointing a new Company Secretary
as the incumbent resigned from office. Inspite of best effort the
Company is not able to find a suitable candidate for full time Company
Secretary. However the efforts are continued.
9) Power and Fuel as disclosed in the Note 15, is net of Rs.80.07 lacs
(Previous Period Rs.77.58 lacs) credit allowed by MSEDCL during the
year on account of certain charges relating to earlier years.
10) Deferred Tax Assets / (Liabilities)
As a matter of prudence due to continuous losses deferred tax assets
has not been recognised for the current year and earlier years.
11) Related party Disclosure pursuant to Accounting Standard 18
a) Key Management Personnel : Shri Arun Jain (Managing Director)
b) Associates / Group Companies with whom the Company has entered into
transactions during the period:
ISG Traders Ltd, Kavita Marketing Private Limited, and Duncan
Industries Limited.
The following transactions were carried out with the associates / group
companies in the ordinary course of business and at arm's length:
(a) Related parties have been identified by the Management and relied
upon by the auditors
(b) No amount in respect of related parties have been written
off/written back / provided for during the year.
12) During the year, arising out ofthe suspension of production for a
considerable time, the management has further carried out a thorough
review (both qualitative and quantitative) of the potential realisable
value of certain assets in a prudent manner. Accordingly, the following
provisions/ write offs have been made, as considered appropriate by the
management, in the light ofthe changed prevailing scenario as a matter
of abundant caution. :
The Company has compiled the above information based on verbal
confirmations from suppliers. As at the year end, no supplier has
intimated the Company about its status as a Micro or Small and Medium
Enterprise Development Act, 2006. No interest is likely to be paid to
unsecured Trade payables under the DRS as referred in note 7(b) above
and hence, no interest liability on the above category of creditors is
provided / disclosed.
13) The Financial statements for the period ended 31st March, 2011 had
been prepared as per then applicable, pre revised Schedule VI to the
Companies Act, 1956. Financial Statements for the year ended 31st March
2012 has been prepared as per Revised Schedule VI. Accordingly, the
previous year figures have also been reclassified to conform to this
year's classification. The adoption of Revised Schedule VI does not
impact recognition and measurement principles followed for preparation
of Financial Statements.
14) Previous period's figures comprising of 18 months have been
rearranged / regrouped, wherever necessary to conform to the current
year's presentation comprising of 12 months and therefore not
comparable.
Sep 30, 2009
Rs. in Lacs
30.09.2009 30.06.2008
1. Contingent Liabilities (including
interest up to the date of Demand/claim)
not provided for in respect of:
(a) Claims against the Company not
acknowledged as debts (excluding
claims where amounts not ascertainable /
the cases where the possibility of
any outflow on settlement / decision
is remote)
i. Electricity 2571.76 2571.76
ii. Water charges 2759.16 2747.76
iii. Open Land Tax 638.57 1010.98
iv. Others (Buyers/Suppliers/
Lenders/Quasi Govt, etc) 902.59 899.01
(b) Disputed Excise duty and Service Tax matters:
i. Excise Duty 3542.29 792.64
ii. Service Tax 55.26
(c) Disputed Sales Tax matters 423.25 423.25
(d) Disputed Income Tax matters - 186.80
(e) Arrears of Preference Shares
dividend 103.18 90.31
(Including dividend tax)
(f) In respect of other matters
under litigation
(including workmen claims)
pending at different stages. <----Unascertainable---->
(g) Interest /compound Interest /
penalty on delayed /
non paymentof statutory dues /
to creditors <-----Unascertainable---->
2. Estimated amount of contracts remaining to be executed on Capital
Account and not provided for Rs.NIL (net of advances Rs.NIL), Previous
Year Rs. 34.90 Lakhs (net of advances Rs. 70.82 Lac)
3. (a) In a reference made to the Board of Industrial and Financial
Reconstruction (BIFR), the Company has been declared as sick industrial
undertaking by BIFR under section 3 (1) (o) of Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA) vide order dated
16.07.2009 with a direction to submit Draft Rehabilitation Scheme (DRS)
under Section 18(d) of the said Act. The Company aggrieved on certain
portion of the Order passed by BIFR had filed an appeal in the
Appellate Authority of Industrial and Financial Reconstruction (AAIFR)
which is pending.
(b) The Company was constrained to declare Lock-out in Mohone plant
w.e.f. 15.11.09, arising out of the actions of groups of workmen not
honouring the subsisting and binding settlement signed with the
recognised union in conciliation, litigating and using coercive method
to obstruct the restarting of the plant, contrary to the terms and
conditions agreed under the said settlement and thereby contributing
further delay in receipt of balance land sale proceed.
4. a) Pending receipt of balance land sale proceeds and submission and
sanction of the DRS to BIFR, these accounts have been prepared on a
going concern basis.
(b) In view of suspension of manufacturing operations and pending
receipt of balance land sale proceeds and submission and sanction of
DRS, the impairment loss on assets, as required by Accounting Standard
28, is not ascertainable and therefore, has not been dealt with in
these Financial Statements.
5. Other Income includes amount of Rs. 1,453.46 Lakhs being profit
on sale of long term investment, sold to an associate as per the
provisions of the restructuring package approved by CDR empowered
Group. The realisation of the sale consider- ation of Rs. 2700 lakhs
has been delayed due to overall delay in implementation of CDR package
and the BIFR order, against which the appeal is pending before AAIFR.
6. Confirmations / reconciliation of balances under certain Debtors,
Creditors and Lenders are not available. However, necessary action in
this regard is already initiated and on receipt the same and. review
thereof by the company, consequential adjustments arising thereon, if
any, which are presently not ascertainable, will be appropriately dealt
with.
7. During the period due to severe financial crunch, Company was not
regular in payment of statutory dues and was constraint to default in
payments of interest/instalments to Lenders and Debenture holders.
8. Land and Buildings of the Company were re-valued as on 31st
December 1984 on market value / replacement cost basis using Standard
indices as assessed by the approved valuer. Further the land was again
re-valued on 31st March 2005 and 25th January 2006 considering their
present market prices as per valuation report submitted by the approved
valuer appointed for the purpose. The revaluations of March, 2005 and
January, 2006 has resulted in a net increase in the book value by Rs.
8355.09 lakhs, and Rs. 4450 lakhs respectively. The total increase as a
result of these revaluations was transferred to Revaluation Reserve in
the respective years.
9 Details of transactions with related parties as identified by the
management in accordance with Accounting Standard - 18 of the Companies
Accounting Standard Rules, 2006 are as follows:
a) Key Management Personnel : Shri Arun Jain (Managing Director)
b) Associates / Group Companies:
With whom the Company has entered into transactions during the period:
I.S.G. Traders Ltd., Unimers India Ltd., Shubh Shanti Services Ltd.,
Kavita Marketing Private Limited, Boydell Media Private Limited .
Duncan Industries Ltd., Gujrat Carbon Industries Ltd. and Odyssey
Travels Ltd.
The following transactions were carried out with the each type of the
above related parties, associates / group companies in the ordinary
course of business and at arms length:
i. Related party relationship is as identified by the Company and
relied upon by the Auditors.
ii. No amount in respect of related parties have been written off /
written back-during the period, nor any provision has been made for
doubtful debts / receivable.
10. Research and Development costs included under various heads of
expenses Nil 182.75
11. Disclosure in respect of Operating leases: Assets taken on lease:
(a) The Company has taken various residential /commercial premises
under cancel- lable Operating Leases. The Lease Agreements are usually
renewable by mutual consent on mutually agreeable terms.
(b) The rental expenses in respect of Operating Leases are charged as
rent under Schedule 20.
12. During the period, arising out of the suspension of production for
a considerable time, the management has carried out a thorough review
(both qualitative and quantitative) of the potential realisable value
of certain assets in a prudent manner. Accordingly, the following
provisions /write-offs have been made, as considered appropriate by the
management, in the light of the changed prevailing scenario as a matter
of abundant caution.
(c) provided Rs.600 lakhs towards water charges being deposit paid in
earlier years to irrigation department pursuant to Mumbai High court
order and Rs. 372.42 lakhs towards property tax paid as a deposit to
Kalyan-Dombivli Municipal Corporation pursuant to Supreme court order.
(d) provided Rs. 82 lakhs (Previous Year Rs. 550 lakhs) for estimated
diminution in the value of long term investments.
(e) written-off Rs.80.85 lakhs (Gross Block Rs.428.39 lakhs;
Accumulated depreciation Rs. 347.54 lakhs) net book value of fixed
assets, being not usable.(Refer schedule 5)
(f) previous years Figures are not comparable as the plant was not in
operation since July 2008.
13. Previous years figures are regrouped and rearranged, wherever
necessary to conform to the current periods presentation.
LIST OF GROUP COMPANIES
Name of certain companies the disclosure of which is made in view of
the disclosure requirement of SEBI (Substantial Acquisition of Shares
and Takeovers) Regulations, 1997 in relation is inter-se transfer of
share, amongst group companies :
1. Albert Trading Company Pvt. Ltd.
2. Andhra Cements Ltd.
3. Bargate Communications Pvt. Ltd.
4. Boydell Media Pvt. Ltd.
5. Continuous Forms (Calcutta) Ltd.
6. Dail Consultants Ltd.
7. Duncans Agro Chemicals Ltd.
8. Duncans Tea House Pvt. Ltd.
9. Duncans Industries Ltd.
10. Duncans Tea Ltd.
11. Gujarat Carbon & Industries Ltd.
12. Infratech Software Services Pvt. Ltd.
13. ISG Traders Ltd.
14. Julex Commercial Co. Ltd.
15. Kavita Marketing Pvt. Ltd.
16. Leyden Leasing & Financial Services Ltd.
17. Marleybone Travels & Resorts Pvt. Ltd.
18. North India Fertilizer Ltd.
19. Napier Softech Pvt. Ltd.
20. Octave Technologies Pvt. Ltd.
21. Odyssey Travels Ltd.
22. Orchard Holdings Pvt. Ltd.
23. Pentonville Software Ltd,
24. Sewand investments Ltd.
25. Santipara Tea Company Ltd.
26. Shubh Shanti Services Ltd.
27. Silent Valley Investment Co. Ltd.
28. Skylight Trading Co. Ltd.
29. Sprint Trading Co. Ltd.
30. Star Paper Mills Ltd.
31. Stone India Ltd.
32. Stone International Pvt. Ltd.
33. India Ltd.