Mar 31, 2012
(a) Terms/rights attached to Equity Shares
The Company has only one class of Equity Shares having a par value of Rs.107- per share.Each holder of equity shares is entitled to one vote per share.
In the event of the liquidation of the company, the holders of equity shares will be entitled to receive remaining assets of the company after distribution of all preferential amount. The distribution will be in proportion to the number of equity shares held by the shareholders.
(b) Terms of conversion/ redemption of CCPS
20% Cumulative Convertible Preference Shares (CCPS) allotted on 23.07.97 to be converted into Equity Shares after 18 months from the date of allotment at a discount of 25% on the then prevailing market price arrived at on the basis of average of weekly high/low quotes for the last 26 weeks preceding to the date of conversion is yet to be converted. However, the option for the conversion of the preference shares within the stipulated period of 18 months, could not be availed in view of the applicability of provisions of Sec. 79 of the Companies Act, 1956 requiring approval of Central Government for issuance of shares at discount.
a Cash Credit facilities from M/s. International Asset Reconstruction Company Pvt Ltd (IARC - Assignee of debts of Allahabad Bank) and State Bank of Hyderabad have been secured by hypothecation of Inventories, Book Debts etc. and personal guarantees of two Directors of the company. Second charge on fixed assets of the company in favour of the bankers and or their assignee(s) could not be created in absence of NOC from the term lenders. The credit facility availed from State Bank of Hyderabad is also partly secured by a Corporate guarantee of Rs. 460 lacs executed by M/S Polar Industries Ltd, the promoter company.The Company has received a letter dated 27.06.2012 from Phoenix ARC Private Limited acting in capacity as Trustee of Phoenix ARF Scheme 9, intimating about assignment of debts payable by the Company to Industrial Investment Bank of India Ltd (IIBI).
The cash credit is repayable on demand & carries interest @ 14% p.a.
b Term loans obtained from Financial Institutions are secured by first charge on all the immovable properties and hypothecation of all movable assets pertaining to the Company, present and future, ranking pari-passu with the charges created on the said assets, except on the machineries /equipments procured under exclusive charge of Allahabad Bank/ IARC and subject to the prior charges of the company's bankers for working capita! on specified movables and personal guarantees of two Directors of the Company and also Corporate guarantee executed by M/s Polar Industries Ltd, a promoter company.
The Loan has become repayable on demand as the company has not paid the dues in time as per OTS sanction dtd. 28.07.2005.
c The Company has not paid principal & interest on revocation of OTS vide letter dtd. 13.04.2009 granted by SASF in 2005-06.
d Unsecured loan from bodies corporate is repayable on demand and carries interest @ 12% p.a except one party having interest rate of 20% p.a.
e Unsecured loan from Director is repayable on demand and carries no interest.
1 ADDITIONAL NOTES TO FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH.2012
1.1 Disclosure regarding MSMED Act' 2006. The company is in the process of compiling information with regard to suppliers covered under Micro,Small and Medium Enterprises Development Act, 2006. In absence of detailed information from the vendors the disclosure as required in Sec 22 of said Act could not be given in these accounts.
1.2 Advances, Sundry Debtors and Creditors are subject to confirmation.
1.3 As a measure of prudence, the Company has decided not to recognise any deferred tax assets due to substantial unabsorbed depreciation and brought forward lossess.
1.4 Board for Industrial and Financial Reconstruction (BIFR), New Delhi in the hearing held on 12.04.2012 has observed that the Draft Rehabilitation Scheme (DRS) submitted to the Operating Agency (OA) viz, IDBI, BIFR Cell, Delhi is not a fully tied up scheme & two of the secured lenders did not agree to the settlement terms envisaged in the scheme.
Therefore, Hon'ble BIFR with a view to revive the company has directed the OA to issue an advertisement for change of management of the Company. The Company has preferred an appeal to Appellate Authority for Industrial and Financial Reconstruction (AAIFR), New Delhi in May'2012 for setting aside the order dated 12.04.12 passed by the BIFR & remanding the matter to the BIFR for considering the DRS submitted by the Company.
1.5 As the investment made by the Company in overseas subsidiary has been fully provided for in view of its full diminution in value, there is no need to consolidate the accounts and as such provision of Section 212 of the Companies Act, 1956 are also not required to be complied with.
1.6 In view of the mandatory applicability of Accounting Standard 15 (Revised) "Employee Benefits" (AS 15) to the Company has been provided for as per the acturial valuation done by an approved actuary using the projected unit credit method.
Relatives of Key Managerial Personnel having transactions with the reporting enterprise during the relevant financial year
Mr Achintya Agarwal (Vice President - Marketing) Son of Vice Chairman
Miss Mansi Agarwal (Vice President - Business Development) Daughter of Vice Chairman Enterprises over which the Key Managerial Personnel can exercise significant influence and which had transactions with the reporting enterprise during the relevant financial year. M/s. Polar Industries Ltd. M/s. Polaron Marketing Ltd
1.7 Previous year's figures have been regrouped/rearranged/reclassified to confirm to the presentation under Revised Schedule VI.
Mar 31, 2010
1. The factory of the company situated at Balasore is under temporary closure w.e.f. 09.11.2008 and there has been no production thereafter. The management is in the process of ascertaining impairment of its assets owing to the closure of the factory and such impairment, if any will be recognized after completion of the exercise.
In the opinion of the management, there is no impairment of assets as on 31st March2010. No salary & wages being payable to the employees & workers at the factory for the period of temporary closure and hence the same has not been accounted for.
2. Contingent Liabilities 31.03.2010 31.03.2009
a) Bank Guarantee 8,587,283 8,587,283
b) Entry Tax demand disputed in appeal 219,525 219,525
c) Rent differential demand by IDCO disputed 472,161 472,161
d) Pending legal Cases 580,873 580,873
e) Consumer Claims - 100,000
f) Sales Tax Demand 1,791,357 400,000
On the basis of the current status of the individual cases and as per the legal advice obtained by the Company wherever applicable the company is confident that no provison is required to be made in respect of these cases at this point of time.
3. Disclosure regarding MSMED Act 2006. The company is in the process of compiling information with regard to suppliers covered under Micro,Small and Medium Enterprises Development Act, 2006. In absence of detailed information from the vendors the disclosure as required in Sec 22 of said Act could not be given in these accounts.
4. Advances, Sundry Debtors and Creditors are subject to confirmation.
5. i) The Company had submitted an application for revised Negotiated Settlement to Industrial Investment Bank of India (IIBI) on 21.07.06 which has not yet been disposed off.
ii) The Company has been providing interest @ 11.5 % p.a. on the loan due from IIBI in terms of the sanction letter dated 26.2.2002. However, as per notice received in an earlier year, IIBI had also claimed payment of liquidated damages, penal interest and additional interest amounting to Rs 116.33 lacs. Pending disposal of the application such amounts have not been provided in the books. No further notice has been received from IIBI for the claims of liquidated damages & penal interest during the year.
6. The Debts both against working capital facilities & also against term loan owed by the Company to Allahabad Bank has been assigned by the Bank to International Asset Reconstruction Company Pvt Ltd (IARC), Unit no 306, Block-B, 3rd Floor, Millennium Plaza, Sector-27, Gurgaon, Haryana-122002. The charges registered in favour of the Bank are yet to be modified in favour of IARC.
7. As a measure of prudence, from this year, the Company has decided not to recognise any deferred tax assets due to substantial unabsorbed depreciation and brought forward lossess.
8. In view of detonation in the quality of finished goods & Work in process due to efflux of time both being not saleable/usable, the same have been valued as scrap at estimated realisable value.
9. The company has submitted a reference u/s 15(1) of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) to Board for Industrial and Financial Reconstruction, New Delhi. In the hearing held on 21.01.2010 after considering the facts on records and the submissions made in the hearing, the BIFR observed that there are no valid objections to the companys sickness from the parties present in the hearing. Considering that the company fulfilled the various criteria for sickness under SICA, the Bench was satisfied that the company had become a sick industrial company in terms of section 3(1) (o) of the Act. BIFR has appointed Stressed Assets Stabilization Fund (SASF), Mumbai as the Operating Agency with directions to submit a revival scheme for the company.
10 Related Party Disclosures :
a. Key Managerial Personnel
Anil Agarwal - Chairman & Managing Director
Sunil Agarwal - Whole time Director designated as Vice Chairman
b. Relatives of Key Managerial Personnel having transactions with the reporting enterprise during the relevant financial year
c. Enterprises over which the Key Managerial Personnel can exercise significant influence and which had transactions with the reporting enterprise during the relevant financial year.
M/s. Polar Industries Ltd.
d. Name of the Subsidiary Company
Polar LLC,Virginia , USA
e. Disclosures of Transactions between the Company and Related Parties/key Managerial Personnel during the year ended 31.03.2010
Name of the Related Party Nature of Transactions
Polar Industries Ltd. 1) The Company has paid Rs 14.93 lacs (Previous year Rs 9.20 lacs) on account of Electricity charges, Travelling, Conveyance, Printing & Stationary, maintenance charges & Other Expenses.
2) It has rendered services for Rs 0.05 lacs (Previous year Rs 2.16 lacs) on account of Service charges and others
Anil Agarwal Remuneration paid Rs 10.08 lacs. (Previous year Rs 10.08 lacs)
Sunil Agarwal Remuneration paid Rs 32.46. lacs (Previous year Rs 32.67 lacs)
11 Previous years figures have been regrouped/rearranged, wherever considered necessary.