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Notes to Accounts of PG Electroplast Ltd.

Mar 31, 2015

1. Term Loan from State Bank of India

a. WCTL from State Bank of India are secured by way of first hypothecation and mortgage charge over entire fixed assets & moveable assets present and future including Equitable Mortgage of property situated at plot no- P-4/2,4/3,4/4,4/5,4/6 site-B, Surajpur, Greater Noida of factory Land & Building of the Company & Personal guarantee of directors i.e Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Collateral Security:- Second charge on entire current assets of Unit I & II of the company and;

c. Mortgage of leasehold rights for 29 years (valid upto May 2036) of factory land measuring 11370 sq.mtr of PG Electronics( Partnership firm) & of land measuring 3390 sq mtr. of Sh. Vishal Gupta at village- Raipur, Pargana Bhagwanpur, Roorkee and;

d. Corporate Gurarantee of M/s Kushang Technologies Limited & Gurarantee of PG Electronics (Partnership Finn).

e. Outstanding working capital term loan of Rs 19,25,00,000 (previous year Rs.21,05,00,000) as on reporting date is repayable in monthly instalments @ 20,00,000 in 2015-16,® 40,00,000 in 2016-17,® 50,00,000 2017-18 & 2018-19 & balance Rs. 5,00,000 on 31.03.2019 alongwith interest at the rate of 12.85% p.a.

f. Outstanding installment of Rs. 15,00,000 due in March 2015, has been paid on 8.04.2015

2. Term Loan from Standard Chartered Bank

a. Term loans from Standard Chartered Bank are secured by way of exclusive charge over land, Building, Plant & Machinery, stocks, receivable at E-14 & E-15, Site-B, UPSIDC, Surajpur Industrial Area, Greater Noida, U.P. & at A-20/2. MIDC Supa, District- Ahmandnagar Maharastra & Personal Guarantee of directors i.e. Mr.Promod Gupta, Mr.Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Exclusive Charge on property no.office No.1, Tower A, Lobe-2, 6th floor situated at plot no. A-41, Institutional Area, Sector 62, Noida, U.P Owned by T.V. Palace (Partnership Firm).

c. Outstanding term loan of Rs 4,74,59,505 (previous year Rs 10,29,14,334 as on reporting date is repayable in 16 monthly installments alongwith interest @ 13.10% p.a. for Rs.36,45,833,13.10% p.a. for Rs 1,01,02,041, 13% p.a. for Rs 1,83,67,346,12.90% p.a. for Rs 87,45,645,13.15% p.a. for Rs 32,65,306 and 14.25% p.a. for Rs. 33,33,333.

3. Unsecured loans from directors of Rs 21,00,00,000 (previous year Rs 22,00,00,000) was given by directors on long term basis and are interest free.

4. Unsecured loans (ICD) from others(non related) of Rs Nil (previous year Rs. 2.60 Crore which carries a interest rate of interest of 13% for loan of Rs 2.40 crore &14% for loan of Rs 20 lacs).

5. Deferred payment against plant & machinery represents the outstanding amount of Rs 3,96,65,459 which is payable in 23 EMI of USD 27323 each w.e.f. 15.4.2015 in respect of plants machineries purchased on credit without interest.

6. Deferred payment against leasehold land includes (Nil (Previous year Rs 4,38,489) to UPSIDC against Plot no-P-4/6, Site- B, Surjapur Industrial Area, Greater Noida, U.P.

7. Cash Credit Limit from State Bank of India

a. Secured against first exclusive charge on the entire current assets of unit-l at Greater Noida & unit-ll at Roorkee of the company including goods in transit, debtors.

b. Collateral Security: Extention of first charge on assets mortgaged under WCTL facility from State Bank of India as per clause no 5.1(a), (c)&(d).

8. Overdraft & WCDL from Standard Chartered Bank (SCB).

9. Overdraft from State Bank of India is secured against term deposits.

10. Bill discounting from HDFC Bank are guaranteed by promoter directors i.e Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vishal Gupta & Mr. Vikas Gupta.

11. Amount due to Micro.Small & Medium Enterprises under MSMED Act, 2006 is Rs.2,30,92,574/- ( Previous year Rs.293,70,614/-). Identification of such enterprises has been made on the basis of their disclosure in correspondences, bills to the effect as mandated for them. There was neither any default nor any delay in payment made to such enterprises, credit terms where of were within period prescribed under statute.

12. Note No. 1 to 28 form integral part of the balance sheet and statement of profit and loss.


Mar 31, 2014

1 Term Loan from State Bank of India

a. Term loans & WCTL from State Bank of India are secured by way of first hypothecation and mortgage charge over entire fixed assets & moveable assets present and future including Equitable Mortgage of property situated at plot no- P-4/2, 4/3, 4/4, 4/5 site-B, Surajpur, Greater Noida of factory Land & Building of the Company & Personal guarantee of directors i.e Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Collateral Security:- Second charge on entire current assets of Unit I & II of the company and;

c. Mortgage of leasehold rights for 29 years (valid upto May 2036) of factory land measuring 11370 sq.mtr of PG Electronics ( Partnership firm) & of land measuring 3390 sq mtr. of Sh. Vishal Gupta at village- Raipur, Pargana Bhagwanpur, Roorkee and;

d. Corporate guarantee of M/s pushing Technologies Limited & guarantee of EG Electronics ( Partnership Firm).

e. Outstanding working capital term loan of Rs 2105 lacs (previous year Rs. Nil) as on reporting date is repayable in monthly instalments @ 15 lacs in 2014-15,@20 lacs in 2015-16,@40 lacs in 2016-17,@50 lacs 2017-18 6 2018-19 & balance Rs 5 lacs on 31.03.2019 (previous year: Nil) along with interest at the rate of "base rate" 5.00%. p.a.

f. Outstanding term loan of Rs. NIL (Previous year Rs 199.90 lacs) as on reporting date is repayable in 0 ( Previous year:12 ) monthly instalments upto March 2014 along with interest at the rate of "Base Rate" plus 4.10% p.a.

2 Term Loan from Standard Chartered Bank

a. Term loans from Standard Chartered Bank are secured by way of exclusive charge over land, Building, Plant & Machinery, stocks, receivable at E- 14 & E-15, Site-B, UPSIDC, Surajpur Industrial Area, Greater Noida, U.P. & at A-20/2. MIDC Supa, District-Ahmednagar Maharashtra & Personal Guarantee of directors i.e. Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Exclusive Charge on property no. office No.1, Tower A, Lobe-2, 6th floor situated at plot no. A-41, Institutional Area, Sector 62, Noida, U.P Owned by T.V. Palace (Partnership Firm).

c. Outstanding term loan of Rs 10.29 crore (previous year Rs 15.84 Crore) as on reporting date is repayable in 49 equal monthly installments commencing from the end of 12th month from disbursement alongwith interest @13.10% p.a. for Rs 0.99 crore, 13.10% p.a. for Rs 2.36 crore, 13% p.a. for Rs 4.04, 12.90% p.a. for Rs 1.75 Crore, 13.15% p.a. for Rs 0.57 crore and 14.25% p.a. for Rs. 0.58 crore.

3 Buyer''s credit for Capital Goods from Standard Chartered Bank was repayble in 8 equal instalments along with interest at the rate of LIBOR plus bank margin and is secured as mentioned in 5.2 above.

4 Unsecured loans from directors of Rs 22.00 Crore (previous year Rs 13.94 Crore) was given by directors on long term basis and are interest free.

5 Unsecured loans from others of Rs 2.60 Crore (previous year Rs. 3.40 Crore) carries a interest rate of 13%.for loan of Rs 2.40 crore & 14% for loan of Rs 20 lacs.

6 Deferred payment against leasehold land includes Rs 4.38 lacs to UPSIDC against Plot no-P-4/6, Site- B, Surjapur Industrial Area, Greater Noida, U.P. and is payable in 10 equal half yearly installments of Rs. 1.01 lac each, starting from July 2010 along with interest @ 14% p.a. The company has not paid two half yearly instalments of Rs 1.01 lacs each along with interest of Rs 1.24 lacs.

7 Overdraft 6WCDL from Standard Chartered Bank (SCB).

a. Secured against first charge on the fixed assets & current assets of Unit III at Greater Noida & Unit IV at Pune.

b. Collateral Security:- Extention of first charge on assets mortgaged under Term loan facility from Standard Chartered Bank as per Note no 5.2(a), (b) & (c).

Amount (Rs.) As at As at 8. Contingent liabilities 31st March, 2014 31st March, 2013 and Commitments

Contingent liability (to the extent not provided for)

Claims against the company not acknowledged as debts (excluding interest & penalty)

a) Central Excise (FY 2006-07 to 2013-14) 5,77,368 16,626 b) Income Tax - TDS (FY 2006-07 to 2010-11) 36,55,425 36,55,425 c) Income Tax - (FY 2009-10) 4,14,696 4,14,696 Bank Guarantees given to Customers 5,00,000 10,00,000 Bills discounted under LC with State Bank of India 93,81,703 - Bank Guarantee given to BSE - 60,32,250 Corporate Guarantee given to SBI for Bigesto Technologies Limited ( BTL) # 10,50,00,000 10,50,00,000

Total 11,95,29,192 11,61,18,997

# The contingent liability against corporate guarantee given to SB) has become NIL as on 23.05.2014, since the BTL has fully repaid the outstanding against the credit facilities given by SBI

i ) Directorate of Revenue intelligence (DPI) had conducted a search on the factory premises of the Company and the residence of the Promoters on March 08, 2011. The Company has deposited anti dumping duty on import of CPT of Rs. 14.5 Million. However, no show cause notice is received by company from DRI.

ii) The company was under process of investigation, as per SEBI ad-interim Order No. WTM/PS/IVD-ID5/42/2011 /DEC dated 28-12-2011, in exercise of powers conferred upon SEBI under section 19 of the Securities and Exchange Board of India Act, 1992 read with section 11 (1),11 (4), 11A and 11B of the said Act, SEBI has issued certain directions for the company/ directors/ other entities to comply with. However, as per SEBI Order No. WTM/PS/16/IVD/ID-5/OCT/2012 dated 31-10-2012, SEBI has revoked interim directions issued vide its order dated 28-12-2011 on all the entities except company and its promoter directors. Now the company has received the final order dated 11.03.2014 and in exercise of powers conferred under section 11 (1), 11 (4) , 11 (B) and 11 (A) of the SEBI Act, following directions has been issued by SEBI (a) Company & its promoter directors are prohibited from raising any further capital from the securities market and also prohibited from buying and selling or dealing in securities market for a period of ten years from 28.12.2011 (b) The company is directed to take urgent and effective measures to recover all moneys recoverable on account of investments in ICDs, contracts for purchase of land which have not fructified till now etc and to report the progress to SEBI on or before 10.05.2014. The company has filed the appeal with Securities Appeallate Tribunal and also submitted the progress report with SEBI. Based on progress report further directions are awaited. In view of the uncertainty of the ultimate outcome, the impact, if any, cannot be presently ascertained.

iii) The company has received show cause notice dated 11.09.2013 under rule 4 of SEBI (Procedure for holding Inquiry and Imposing penalties by Adjudicating officer ) Rule 1995 read with Section 15-1 of the SEBI Act,1992 for imposing penalty under section 15HA & 15HB. The company has filed the reply on 16.12.2013. In view of the uncertainty of the ultimate outcome, the impact, if any, cannot be presently ascertained.

Amount (Rs.)

Commitments As at As at 31st March 2014 31st March, 2013

Estimated amount of contracts remaining to be executed on Capital account and not provided for (Net of advances) 67,13,661 5,75,38,374

Other Notes on Accounts

1 The Company has not made any provision for cess payable u/s 441A of the Companies Act, 1956. The said provision shall be made as and when the requisite notification is issued by the Central Government in this regard.

2 Earnings per share (EPS) Amount (Rs.) The following reflects the profit and share data used in the basic and diluted EPS computations: As at As at Numerator for earning per share 31st March 2014 31st March, 2013 Loss before taxation (20,28,31,290) (8,79,54,143) Less : Provision for deferred tax and income tax - (3,79,82,560) Loss after tax (20,28,31,290) (4,99,71,583) Denominator for earning per share Weighted average number of equity shares outstanding during the period 1,64,14,332 1,64,14,332 Earning per share- Basic and Diluted (one equity share of Rs. 10 each) (12.36) (3.04)

3 Employee Benefits

The Company has made provisions for employee benefits in accordance with the Accounting Standard (AS) 15 "Employee Benefits". During the year, the Company has recognised the following amounts in its financial statements.

Amount (Rs.) Amount (Rs.)

Defined Contribution Plan 2013-14 2012-13

Employer''s contribution to Provident Fund 61,55,009 48,97,800

Employers contribution to Employee State Insurance Fund 18,55,089 9,40,394

Total 80,10,098 58,38,194

The estimates of future salary increases, considered in actuarial valuation, take account of inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

The rate used to discount post employment benefit obligations (both funded and unfunded) should be determined by reference to market yields at the balance sheet date on government bonds. The currency and term of the government bonds should be consistent with the currency and estimated term of the post employment benefit obligations.

4 In the opinion of the Board, any of the assets, other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

5 The Company has a system of obtaining periodic confirmations for debtors, loans & advances, current investments and creditors. Necessary entries have been passed on reconciliation of accounts wherever required.

6 The company has capitalized the following expenses of revenue nature to the cost of fixed asset/ capital work-in-progress (CWIP). Consequently, expenses disclosed under the respective notes are net of amounts capitalized by the company.

Amount (Rs.) As at As at 31st March, 2014 31st March, 201 3

Salaries, wages and bonus, Gratuity 2,63,866 Consumption of stores and spares, tools etc - -

Total - 2,63,866

7 Related party disclosures (as identified and certified by the management)

Pursuant to compliance of Accounting Standard (AS) 18 "Related Party Disclosures", the relevant information is provided here below:

(a) Related Party where control exists

i) Mr. Promod Gupta, Chairman & Managing Director (Key Management Person)

ii) Wholly Owned Subsidiary - Diamond Mattress Company Private Limited

(b) The Details of related parties with whom transactions have taken place during the year:

i) Wholly Owned Subsidiary (Group A)

-Diamond Mattress Company Private Limited (DMCPL)_

ii) Associate & Joint Venture (Group B) NIL

iii) Key Management Personnel (Group C)

- Mr. Promod Gupta, Chairman & Managing Director (PG) - Mr. Vishal Gupta, Executive Director (VSG) - Mr. Vikas Gupta, Executive Director (VKG) - Mr. Anurag Gupta, Executive Director (AG)_

iv) Relatives of Key Management Personnel (Group D)

- Mrs. Sarika Gupta ( SG Wife of Mr. Vishal Gupta) - Mrs. Nitasha Gupta (NTG Wife of Mr. Vikas Gupta) - Mrs. Neelu Gupta ( NLG Wife of Mr. Anurag Gupta) - Mrs. Sudesh Gupta (SG1 - Wife of Mr. Promod Gupta) - Promod Gupta & Sons (HUF) - Legal heirs of late Smt. Amarwati Aggarawal (AA Mother of Mr. Promod Gupta)

Companies/ Parties in which Key Management Personnel or their relatives have substantial interest / significant influence (Group

v) E)

S.No. Name of the party S.No. Name of the party 1 M/s Promod Gupta -Proprietor 5 PG Electronics 2 Bigesto Technolgies Limited 6 Clearvision Industries 3 PG International 4 J. B. Electronics

8 Utilization of money raised through public issue

During the year ended 31st March, 2012, the company has raised Rs.1206,45 million through public issue, specifically to meet its share in the cost of setting-up a new manufacturing facility at Supa-district Ahamednagar, G.Noida, repayment of term loan, working capital & general corporate expenses. Given below are the details of utilization of proceeds raised through public issue.

The funds has been temporarily deployed as an interim measure to earn interest pending deployment towards the object of the issue. As per directions of SEBI, the company has issued notice to all the above parties for calling back ICD of Rs. 3100 lacs, out of which Rs. 150 lacs, Rs 334 lacs and Rs 81 lacs had been received during financial year 2011-12,2012-13 and 2013-14 respectively. Out of balance amount the company has received Rs 1176 lacs has been received till 27.05.2014. The balance amount of Rs 1359 lacs is yet to be received by the company.

The company was under process of investigation, as per SEBI ad-interim Order No. WTM/PS/IVD-ID5/42/2011/DEC dated 28-12-2011, in exercise of powers conferred upon SEBI under section 19 of the Securities and Exchange Board of India Act, 1992 read with section 11(1), 11(4), 11A and 11B of the said Act, SEBI has issued certain directions for the company/ directors/ other entities to comply with. However, as per SEBI Order No. WTM/PS/16/IVD/1D-5/OCT/2012 dated 31-10-2012, SEBI has revoked interim directions issued vide its order dated 28-12- 2011 on all the entities except company and its promoter directors. Now the company has received the final order dated 11.03.2014 and in exercise of powers conferred under section 11 (1), 11 (4), 11 (B) and 11 (A) of the SEBI Act, following directions has been issued by SEBI. (i) Company & its promoter directors are prohibited from raising any further capital from the securities market and also prohibited from buying and selling or dealing in securities market for a period of ten years from 28.12.2011 (ii) The company is directed to take urgent and effective measures to recover all moneys recoverable on account of investments in ICDs, contracts for purchase of land which have not fructified till now etc and to report the progress to SEBI on or before 10.05.2014. The company has filed the appeal with Securities Appeallate Tribunal and also submitted the progress report with SEBI . Based on progress report further directions are awaited.

The company has received show cause notice dated 11.09.2013 under rule 4 of SEBI (Procedure for holding Inquiry and Imposing penalties by Adjudicating officer) Rule 1995 read with Section 15-I of the SEBI Act, 1992 for imposing penalty under section 15HA & 15HB. The company has filed the reply on 16.12.2013. In view of the uncertainty of the ultimate outcome, the impact, if any, cannot be presently ascertained.

9 The Company is under process of compiling the additional information required to be disclosed under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with interest paid/payable under this Act & as required by Schedule VI of Companies Act, 1956 have not been given.


Mar 31, 2013

1 Background

PG Electroplast Limited is an Electronic Manufacturing Services (EMS) provider for original Equipment Manfacturers (OEMs) of consumer electronic products in India. The Company manufacture and / or assemble a comprehensive range of consumer electronic components and finished products such as colour television (CTV) sets & components, air conditioners (ACs) sub- assemblies, DVD players, water purifiers and compact Fluorescent Lamps (CFL), Washing Machine for third parties. As backward integration, the company also do plastic injection moulding and manufacture Printed Circuit Boards (PCB) assemblies for CTVs, DVD players and CFL.

2 The Company has a system of obtaining periodic confirmations for deb ion, loans & advances, current Investments and creditors. Necessary entries have been passed on reconciliation of account* wherever required.

3 The company hu capitalized the following expenses of revenue nature to the cost of fixed ass*Rs.tV capital work-fn-progress (CW1PJ. Consequently, expenses disclosed under th« respective notes are net of amounts capitalized by the company.

4 Related party disclosures (as identified and certified by the management) Pursuant to compliance of Accounting Standard (AS) 18 "Related Party Disclosures", the relevent information is provided here below:

(a) Related Party where control exists

i) Mr. Promod Gupta, Chairman Et Managing Director (Key Management Person) ii) Wholly Owned Subsidiary

Diamond Mattress Company Private Limited

(b) The Details of related parties with whom transactions have taken place during the year: i) Wholly Owned Subsidiary (Group A)

Diamond Mattress Company Private Limited (DMCPL)

ii) Associate & Joint Venture (Group B) NIL

iii) Key Management Personnel (Group C)

Mr. Promod Gupta, Chairman & Managing Director (PG)

- Mr. Vishal Gupta, Executive Director (VSG) Mr. Vikas Gupta, Executive Director (VKG) Mr. Anurag Gupta, Executive Director (AG)

iv) Relatives of Key Management Personnel (Group D) Mrs. Neetu Gupta ( NLG Wife of Mr. Anurag Gupta)

- Mrs. Sarika Gupta ( 5G Wife of Mr. Vishal Gupta)

- Mrs. Nitasha Gupta (NTG Wife of Mr. Vikas Gupta) Mrs. Sudesh Gupta (SG1 - Wife of Mr. Promod Gupta)

Legal heirs of late Smt. Amarwati Aggarawal (AA Mother of Mr. Promod Gupta) Promod Gupta & Sons (HUF)

5 The Company has not received informal Ion (mm vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amounts unpaid as at the year end together with Interest paid/payable under this Act & as required hy Schedule VI of Companies Act, 1956 have not been given.

6 Note No. 110 IS form Integral part of the balance sheet and statement of profit and loss.


Mar 31, 2012

1. Background PG Electroplast Limited is an Electronic Manufacturing Services (EMS) provider for original Equipment manufacturers (OEMS) of consumer electronic products in India. The Company manufacture and/or assemble a comprehensive range of consumer electronic components and finished products such as colour television (CTV) sets & components, air conditioners(ACs) sub-assemblies, DVD players, water purifiers and compact Florescent Lamps (CFL) for third parties. As backward integration, we also do plastic injection molding and manufacture Printed Circuit Boards (PCB) assemblies for CTVs, DVD players and CFL.

2.1 Terms/rights attached to equity shares

The company has only one class of equity shares having a per value of Rs. 10 per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation of the company, the equity shareholders are eligible to receive the remaining assets of the company after distribution of all preferential amounts, in proportion to their shareholding.

3 Long-term borrowings

3.1 a Term loans from State Bank of India are secured by way of first hypothecation and mortgage charge over entire fixed assets & moveable assets present and future including Equitable Mortgage of property situated at plot no-P-4/2, 4/3, 4/4, 4/5 site-B, Surajpur, Greater Noida of factory Land & Building of the Company & Personal guarantee of directors i.e Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Collateral Security:- Second charge on entire current assets of Unit I & II of the company and;

c Mortgage of leasehold rights for 29 years (valid upto May 2036) of factory of land measuring 11370 sq.mtr of PG Electronics (Partnership firm) & of land measuring 3390 sq mtr. of Sh. Vishal Gupta at Raipur, Paragna Bhagwanpur, Roorkee and;

d. Corporate Guarantee of M/s Kushang Technologies Limited & Guarantee of PG Electronics (Partnership Firm).

e. Outstanding term loan of Rs. 10.197 million as on reporting date is repayable in 80 monthly installments form the date of lease which commence from April 2008 to March 2013 & Outstanding term loan of Rs. 27.984 million as on reporting date is repayable in 50 monthly installments which commence from Oct 2010 to Nov 2014 alongwith interest at the rate of "base rate" 4.25% p.a.

Term Loan from Standard Chartered Bank

3.2 a. Term loans from Standard Chartered Bank are secured by way of exclusive charge over Land, Building, Plant & Machinery, stocks, receivable at E-14 & E-15, Site-B, UPSIDC, Surajpur Industrial Area, Greater Noida, UP. & at A-20/2. MIDC Supa, District - Ahmandnagar Maharastra & Personal Guarantee of directors i.e. Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vikas Gupta and Mr. Vishal Gupta and;

b. Exclusive Charge on property no. D-37, Hosiery Complex, Phase - II, Noida, U.P. owned by Hansall Import (P) Ltd & Unit-II, Tower A, Lobe-2, 2nd floor, Unit-I Tower A Lobe - 1, 6th floor & Unit-II Tower A Lobe-1, 6th floor situated at plot no. A-41, Institutional Area, Sector 62, Noida, U.P Owned by T.V. Palace (Partnership Firm)).

c. Corporate Guarantee of M/s Kushang Technologies Limited & Guarantee of PG Electronics (Partnership Firm).

d. Outstanding term loan of Rs. 222.396 million as on reporting date is repayable in 49 equal monthly Installments commencing from the end of 12th month from disbursement alongwith interest @ 11.25% p.a. for Rs. 22.396 million, 11.85% p.a. for Rs 50.51 minion, 13% p.a. for Rs. 84.49 million, 12.90% p.a. for Rs. 35.00 million, 13.15% p.a. for Rs. 10.00 million and 12% p.a. for Rs. 20 million."

3.3 Buyer's Credit for capital goods from Standard Chartered Bank is repayable in 8 equal quarterly installments along with interest at the of LIBOR plus bank margin and is secured as mentioned in 5.2 above.

3.4 Buyer's Credit for capital goods from State Bank of India is repayable in single installment after six month from the date of buyer's credit along with interest at the rate of LIBOR plus bank margin.

Buyer's Credit for capital goods from State Bank of India is secured as follows:

a. Secured against first exclusive charge on the entire current assets of unit I at Greater Noida & unit II at Roorkee of the company including goods in transit, debtors but excluding specific Stock and receivables pertaining to Elcot order.

b. Extension of first charge on assets mortgaged under Term loan facility from State Bank of India as per clause no. 5.1(a), (c) & (d).

3.5 Unsecured loans from directors of Rs.69.30 million represent loans given by directors as per commitment given to Banks and interest free.

3.6 Deferred payment against land includes Rs. 0.64 million to UPSIDC Plot no. P-4/6 Site-B Surajpur and is payable in 10 equal half yearly installments of Rs. 0.101 million each, starting from July 2010 along with interest @ 16% p.a.

Deferred payment include Rs. 4.52 million payable to New Okhis industrial Development Authority against Plot no. A-147, Sector-138, Noida and is payable in 14 equal half yearly installments of Rs. 0.348 million each, starting from Sept-2011 along with interest @ 10% p.a.

4 Short-term borrowings

4.1 Cash Credit Limit from State Bank of India

a. Secured against first exclusive change on the entire current assets of unit-I at Greater Noida & unit-II at Roorkee of the company including goods in transit, debtors but excluding specific Stock and receivables pertaining to Elcot order.

b. Extension of first charge on assets mortgaged under Term loan facility from State Bank of India as per clause no 5.1(a), (c) & (d).

4.2 Overdraft from Standard Chartered Bank (SCB).

a. Secured against first charge on the fixed assets & current assets of Unit III at Greater Noida & Unit IV at Pune.

b. Extension of first charge on assets mortgaged under Term loan facility from Standard Chartered Bank as per Note no 5.2(a), (b) & (c).

4.3 Buyer's Credit are secured against same securities as mentioned at note no. 8.1 (a) & (b) above.

4.4 Bill discounting from HDFC Bank and Standard Chartered Bank are guaranteed by promoter directors i.e. Mr. Promod Gupta, Mr. Anurag Gupta, Mr. Vishal Gupta & Mr. Vikas Gupta.

Amount(Rs.) As at As at

5. Contingent Liabilities and 31st March, 31st March, Commitments 2012 2011

A. contingent liability (to the Extent not provided for) claims against the company not acknowledged as debts a)Sales Tax Demand (FY 2006-07) - -

b)Central Excise (FY 2006-07) 16,626.00 16,626.00 c) Income Tax (FY 2006-2007) - 56.671.00

d) Income Tax (FY 2006-07 3.655,425 1,000,000.00

Bank Guarantees given to Customers a) Bark Guarantees given In favour of LG. Electronics (P) Ltd. 1 ,000,000.00 1,000,000.00

b) Bank Guarantee for ELCOT 103,170,900.00 149,444,020.00

Bank Guarantee given to BSE 6,032,250,00 -

LC Utilized Limits- Acceptance not given 6,431,952.4 7,463,000.00

Total 120,307,153.46 161,537.208.00

B Commitments

Estimated amount of contracts remaining to be executed on Capital account and not provided 75,329,742,00 60,345,461.06 for (Net of advances)

i. For F.Y 2006-07, the Sales Tax Department raising a demand For Rs. 3,596 million toward CST paid @ 2% instead of 4%. On CTV-Plastics Parts. The company has been contesting this claim and was of the view that the demand raised by the Sales Tax department was not tenable. To support its view, the company hail filed an appeal at Additional Commissioner VAT (Appeal). The Company had deposited 50% of the above demand against the stay Order passed by the above mentioned Authority. The Additional Commissioner VAT (Appeal) had passed an order during the year in favour of the company, hence all deposit amount was refunded by Sales Tax Department.

ii. For the F.Y 2006-07, the Central Excise Department raised a show cause Notice demanding for Rs.0.017 million toward convent credit of SAD taken on the basis of Supplementary invoice issued by the M/s LG Electronics India Pvt.Ltd. The company has been contesting this claim and was of the view that the demand raised by the excise department was not tenable. To support it a view, the company had also obtained legal opinion. Hence, it had not created provision toward this liability in the year ended 31 March 2012.

iii. The company had received three show cause notice on 31/03/08, 01/05/2008 & 24/10/2008 raising a aggregate demand of Rs. 0.435 million from assistant commissioner. Central Excise, division-V, Nokia. The issue involved was availment and utilisation of CENVAT credit of service tax paid on outward freight. The company has paid the said demand by debiting the CENVAT account under protest.

iv. Income tax demand for F.Y. 2008-07 has been settled during the F.Y. 2011-12 by the Commissioner Appeals. New Delhi allowing partly the appeal. No demand is pending on reporting date.

v. Directorate of Revenue intelligence(DRI) had conducted a search on the factory premises of the Company and the residence of the Promoters on March 08, 2011.The Company has deposited and dumping duty on import of CPT of Rs. 14.6 million. However, no show cause notice is received by company from DRI.

6 Other Notes on Accounts

1 In the opinion of the Board, any of the assets, other than fixed assets and non-current investments have a value on realization in the ordinary course of business at least equal to the amount at which they are stated and provision for all known liabilities have been made.

2 The Company has a system of obtaining periodic confirmations from debtors and creditors. Necessary entries have been passed on reconciliation of accounts wherever required.

3 Related party disclosures (as identified and certified by the management)

Pursuant to compliance of Accounting Standard (AS) 18 "Related Party Disclosures", the relevant information is provided here below:

(a) Related Party where control exists

i) Mr. Promod Gupta, Chairman & Managing Director (Key Management Person)

ii) Wholly Owned Subsidiary

Diamond Mattress Company Private Limited

(b) The Details of related parties with whom transactions have taken place during the year:

I) Wholly Owned Subsidiary (Group A)

- Diamond Mattress Company Private Limited (DMCPL)

II) Associate & Joint Venture (Group B) NIL

III) Key Management Personnel (Group C)

- Mr. Promod Gupta, Chairman & Managing Director (PG)

- Mr. Vishal Gupta, Executive Director (VSG)

- Mr. Vikas Gupta, Executive Director (VKG)

- Mr. Anurag Gupta, Executive Director (AG)

IV) Relatives of Key Management Personnel (Group D)

- Mrs. Natasha Gupta (NTG Wife of Mr. Anurag Gupta)

- Mrs. Sarika Gupta (SG Wife of Mr. Vishal Gupta)

- Mrs. Neelu Gupta (NLG Wife of Mr. Vikas Gupta)

- Mrs. Sudesh Gupta (SG1 - Wife of Mr. Promod Gupta)

- Legal heirs of late Smt. Amarwati Aggarawal (AA Mother of Mr. Promod Gupta)

v) Companies/Parties in which Key Management Personnel or their relatives have substantial interest/significant influence (Group E)

S. No. Name of Parties

1 Bigesto Technologies Limited

2 Kushang Appearels Limited

3 PG International

4 J. B. Electronics

5 PG Electronics

6 Clearvision Industries

7 TV Palace

8 M/s Promod Gupta - Proprietor

 
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