Mar 31, 2010
1. CONTINGENT LIABILITIES:
i) Custom Duty Demand (other than Penalty if any, 36,812 36,812
which is not quantifiable at this stage)*
ii) Custom Duty Demand (other than i above) 3,103 3,103
iii) Consequent to facts stated in note no. 4(b) 34,320 -
in respect of dues of foreign financial institution
*The Company had procured technical know-how and front-end engineering package from its technical collaborator for setting up PET Resin plant at Kurkumbh. The Company had paid Income Tax and other duties applicable on the same. Subsequently, a custom duty demand amounting to Rs. 41,812 Thousands had been received from Customs Authorities on the entire consideration paid by the Company. The Company paid a deposit of Rs.5,000 Thousands to custom authorities, under protest. The Customs Excise and Gold Appellate Tribunal (CEGAT) had upheld the Companys appeal against the same. The Custom Authorities had filed an appeal against decision of CEGAT with Supreme Court of India. Subsequently, the Supreme Court of India has set aside the order passed by CEGAT and the matter is referred back to The Central Excise and Service tax Appellate Tribunal (CESTAT) for reconsideration in accordance with law. Pending finalisation of the above mentioned matter the deposit of Rs, 5,000 Thousand has been provided for. During the current year there is no movement in this provision.
2. In view of losses, no dividend is proposed on 0.01% redeemable preference shares. The arrears of dividend as at year end is Rs. 49 Thousands (Previous year Rs. 42 Thousands).
3. Estimated amount of contracts remaining to be executed as on March 31, 2010 was Rs. 4,894 Thousands net of advance of Rs. 12,606 Thousands (Previous Year -Rs. 4,894 Thousands, net of advance of Rs. 12,606 Thousands).
4. a). Term Loan with Banks/Financial Institutions, are secured by the whole of the movable properties of the Company including its movable plant & machinery, machinery spares, tools & accessories and other movables, both present and future, (save and except book debts), whether installed or not and whether now lying loose or in cases or which are now lying or stored in or about or shall hereafter from time to time during the continuance of the security of these present, be brought into or upon or be stored or be in or about the Companys factory premises and godowns situated at D 17, M.I.D.C., Kurkumbh, District Pune, Maharashtra or wherever else the same may be or be held by any party to the order or disposition of the Company or in the course of transit or on high seas or on order or delivery, howsoever and where soever in the possession of the Company and either by way of substitution or addition. These loans are further secured by personal Guarantees of Mr. Chand Seth, Mr. Harish Seth, Directors of the Company and Mr. Krishen Seth, Promoter of the Company. Further, the above loans are secured by mortgage of the land and other immovable properties of the Company situated at D-17, MIDC Kurkumbh Industrial Area, Distt. Pune, Maharashtra together with buildings and other structures, fixed plant and machinery, fixture and fittings constructed or installed thereon.
b) The Company has been legally advised that, in view of Foreign Financial Institutions Advocate letter dated 4th October, 2006 recalling the entire outstanding loan amount under the Loan Agreement of 1993, enforcement of such recall in law could take place within 3 years of the termination of the Amended Loan Agreement of 2003 with effect from 30.09.2006. Under the circumstances, Foreign Financial Institution or its Assignee, if any, cannot enforce any outstanding against the Company in any court of law post 30.09.2009 despite the existence of debt. Accordingly interest of Rs.1,607 Thousands has not been provided in respect of above loan after 03.10.2009. Further, the outstanding by way of secured & unsecured loan and interest aggregating to Rs. 1,61,924 Thousands has been shown as "Erstwhile Loan Barred by Limitation".
5. The Company is engaged in the manufacture of PET Resin and there are no seperate reportable segments as per the Accounting Standard 17 on "Segment Reporting" notified in the Companies (Accounting Standard) Rules 2006.
6. Excise duty under the head Expenditure in Profit & Loss Account includes Rs. 2,115 Thousands (Previous year Rs. 2,169 Thousands) as incremental/(decremental) provision in respect of closing stock of finished goods.
7. As per accounting standard (AS11) on Effects of changes in foreign exchange rates notified in the Companies (Accounting Standards) Rules 2006, the Company has credited Rs. 18,492 Thousands (previous year debited Rs.33.973 Thousands), being the exchange gain on foreign currency loans borrowed to finance fixed assets to the Profit & Loss Account.
In terms of loan agreements, Banks and Foreign Financial Institutions have option to convert defaulted dues into Equity Share Capital of the Company. However, the same has not been considered as potential Equity Shares for the purposes of calculating diluted Earning Per Share, as it is not practically possible to ascertain the numbers of Potential Shares.
8. RELATED PARTIES DISCLOSURES
As per Accounting Standard 18 (AS-18) " Related Party Disclosures", notified in the Companies (Accounting Standard) Rules 2006, the disclosures in respect of related parties and transactions with the related parties carried out in the normal course of business, as identified and certified by the management, are as follows:
DETAIL OF RELATED PARTIES
i) Key Management Personnel
Mr. Chand Seth Chairman & Managing Director
Mr. Harish Seth Managing Director
ii) Key Management Personnels Relatives
Mrs. Suneeta Seth Wife of Mr. Chand Seth
Mr. Krishen Seth Brother of Mr. Chand Seth & Mr. Harish Seth
Gama Investments Pvt. Ltd.
Pearl International Tours & Travels Ltd.
Pearl Polymers Ltd.
Pearl Apartments Ltd.
22. Employee Benefits
(a) The company has, with effect from 1st April, 2007, adopted Accounting Standard (AS)-15, "Employee Benefits" notified in the Companies (Accounting Standards) Rules 2006.
9. The Adoption of Accounting Standard 28, notified in the Companies (Accounting Standard) Rules 2006, on impairment detailed in Note 1 (xii) on Schedule 18 does not have any Impact on either the loss for the year or on the net assets of the company as at the year-end.
10. The Company has taken certain office and residential premises on operating lease. Future obligations in respect of non-cancelable lease rentals are Rs. Nil.(Previous year Rs. Nil). Total operating lease rent paid during the year was Rs. 3,053 Thousands (Previous Year - Rs. 2,377 Thousands).
11. Previous years figures have been regrouped / reclassified wherever necessary to conform to current years classification.