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Notes to Accounts of Unimers India Ltd.

Mar 31, 2015

1. Rights of Equity Shareholders

The Company has only one class of equity shares having par value of Rs.10 each. Each holder of equity shares is entitled to one vote per share.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 holders of equity shares will be entitled to receive any of the remaining assets of the Company, after distribution of all prefrential amounts including in respect of prefrence shares issued.The distribution will be in proportion to the number of Equity Shares held by the shareholders.

2. Debentures - from public [refer note 6 (1)(b)(i) abovel

(a) These are secured by a second, subservient and subordinate charge on the Company's immovable properties, both present and future and a second subservient charge by way of hypothecation of the Company's movable assets (save and except book debts) subject to prior charges created in favour of the Company's bankers / assignees on the Company's stocks of raw materials, semi-finished and finished goods, consumable stores, spares and such other movables for working capital requirements.

3. Term Loans and Zero Coupon Non-convertible Debentures - [refer note 6 (1Hb)(ii) and (ill) abovel

These are secured by a first charge on the Company's immovable properties, both present and future and a second charge by way of hypothecation of the Company's movable assets (save and except book debts) subject to prior charges created in favour of the Company's bankers / assignees on the Company's stocks of raw materials, semi-finished and finished goods, consumable stores, spares and such other movables for working capital requirements.

4. Borrowings from Banks - [refer note 6 (1)(b)(iv) abovel

These are secured by a first charge on the Company's book debts, stocks of raw materials, semi-finished and finished goods, consumable stores and spares and a second charge on the movable and immovable properties of the Company both present and future in favour of the banks / assignees, subject to prior charges created in favor of Term Lenders and ZCNCD holders or their assignees.

5. Although the accumulated losses as at the year-end amounted to Rs.9482.77 Lacs (Previous Year Rs.9199.73 Lacs) as against the paid up share capital of Rs.2670.20 Lacs (Previous Year Rs.2670.20 Lacs), pending the finalization and adoption of the business re-engineering plans[refer Note 17(c)(iii) below], these financial statements have been prepared on a 'goingconcern'basis and impairment loss, if any, will be accounted for as and when the business re-engineering plans are implemented.

6. In view of the accumulated losses, no transfer has been made to the Debenture Redemption Reserve in respect of secured and unsecured Non-Convertible Debentures.

7. Restructuring and Net Worth Status:

i. The Net Worth of the Company has been fully eroded and is negative as on March 31, 2015. The management had been advised that since certain conditions as per the Sick Industrial Companies (Special Provisions) Act, 1985 were not being met, the Company was not eligible to a make reference to BIFR. In the event of any change in the status inter alia arising out of developments in the pending legal case [refer Note (ii) below], appropriate steps will be taken in this regard.

ii. The validity of the closure declared by the Company with effect from June 26, 2008, under the relevant provisions of The Industrial Disputes Act, 1947, has been challenged before the Industrial Court by the employees' union and the matter is pending before the Hon'ble Court.

iii. The management has been exploring various options for restructuring the business and finances of the Company, including the recommencement / relocation of its manufacturing operations.

iv. As part of restructuring, the Company had earlier entered into an arrangement for the assignment of the leasehold rights of its land. However, certain issues have affected its implementation and the management is pursuing the matter.The advance received has however been utilized, inter alia, to settle certain liabilities of the Company.

v. During the year interest liability on all borrowings including debentures, excluding inter-corporate deposits (refer note 4), has not been provided since revised terms are in the process of being negotiated with the lenders and the management estimates that the liabilities already being carried are adequate.

vi. The Zero Coupon NCDs issued to and the Term Loans from IFCI Ltd. were assigned to a third party by IFCI Ltd. The assignment has been challenged by the Company and the matter is pending before the Hon'ble Delhi High Court.

8. Revaluation

i. The Company had revalued the land, building and certain plant and machinery as on April1, 1996 based on the valuation made by M/s PC. Gandhi &Associates, an independent firm of consulting Engineers, Surveyors and GovernmentApproved Valuers vide their report dated 30th April, 1997. Accordingly, the original costs of the above assets as on April 1, 1996 have been restated at estimated market value arrived at after adjusting the depreciation on the estimated replacement cost. The resultant increase in net book value arising on revaluation amounting to Rs. 4285.93 Lacs was transferred to Revaluation Reserve Account during the period ended 31st August, 1997. The following re-valued amounts remain substituted for the historical cost in the gross block of fixed assets:

ii. Revaluation Reserve amounting to Rs.4285.93 Lacs had been adjusted against the then accumulated losses pursuant to the scheme of restructuring approved by the Hon'ble High Court of Bombay vide its order dated April 23, 2001. Depreciation is, however, being provided on the revalued amounts.

9. Contingent Liabilities have not been provided for in respect of:

Rs Lacs

Particulars Year ended Year ended 31st March, 2015 31st March, 2014

i. Claims against the Company which are disputed relating to (including interest or penalty upto the date of demand) Excise Duty 62.26 62.26

Customs Duty - -

Sales Tax 31.40 31.40

Cess Liability 28.35 28.35

MIDC Charges 108.32 108.32

NMMC Property Tax 14.72 14.72

Suppliers

ii Arrears of Fixed Preference 74.94 68.66 Dividend (Including Dividend Tax)

iii Liability as may arise in respect of matters referred to in Note 17(c) above and further interest / liability / penalty if any as may arise in respect of matters referred to in Note 17(e)(i) and on delays/defaults in payments to lenders, amounts whereof is presently not ascertainable.

10. (i) In the opinion of the management, Current and Non-Current Assets, Long Term and Short Term Loans and Advances are realizable at a value, in the ordinary course of business,which isatleast equal to the amount at which these are stated, and provisions for all known and determined liabilities are adequate and not in excess of the amounts stated.

(ii) The accounts of certain Trade Receivables, Trade Payables, Loans andAdvancesand Lendersare however subject to formal confirmation/reconciliationand consequent adjustments, if any. The management does not expect any material difference affecting the current year's financial statements on such reconciliation / confirmation.

11. Deferred Tax Asset/Liability:

No current tax provision has been made in the absence of taxable profits and also no deferred tax asset is being recognized.

12. 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:

(i) Key Management Personnel-Mr. S. P. Gupta, Wholetime Director (till 29.03.2013)

(ii) Associates with whom transaction have been entered into: - ISG Traders Limited; Kavita Marketing Pvt. Ltd.; Shubh Shanti Services Ltd.

(iii) The following transactions were carried out with each type of the above related parties in the ordinary course of business and at arm's length:

13. Notes: Figures inbrackets relate to Previous Year.

14. Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

The Company has not received any intimation from its vendors regarding their status under Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure, if any, required under the said Act, have not been made.

15. Pursuant to enactment of the Companies Act 2013 (the Act), the Company has , effective IstApril 2014, reviewed and revised the estimated useful life of certain fixed assets, in accordance with the Schedule II of the Act. Accordingly, the Company has given impact of Rs. 145.81 (net of deferred tax of Rs. Nil ) on account of assets whose useful life was already exhausted on 1st April, 2014 to Retained Earnings. As a result of the change, the depreciation charged to the statement of Profit and Loss for for the year is lower by Rs. 24.74 lacs.

16. After the resignation of the Company Secretary w.e.f. June 30, 2007, the Company continues to make concerted efforts to appoint fill up the vacancy as required under Section 203 of the Companies Act, 2013.

17. Amount overdue to be credited to Investor Education Protection Fund is Rs.164.59Lacs (previous year Rs 164.59 Lacs).

18. The Company is primarily engaged in one segment i.e. EPDM Rubber. In view of the same, both primary and secondary reporting disclosures for business/geographical segment as envisaged in AS-17 are not applicable to the Company.

19. The previous year's figures have been re-grouped and/or re-arranged wherever necessary to conform to the current year's presentation.


Mar 31, 2014

NOTE 1 - NOTES FORMING PART OF THE FINANCIAL STATEMENTS

a. Although the accumulated losses as at the year-end amounted to Rs.9199.73 Lacs (Previous Year Rs.8969.69 Lacs) as against the paid up share capital of Rs.2670.20 Lacs (Previous Year Rs.2670.20 Lacs), pending the finalization and adoption of the business re-engineering plans[refer Note 17(c)(iii) below], in these financial statements have been prepared on a''going concern'' basis and impairment loss, if any, will be accounted for as and when the business re-engineering plans are implemented.

b. In view of the accumulated losses, no transfer has been made to the Debenture Redemption Reserve in respect of secured and unsecured Non-Convertible Debentures.

c. Restructuring and Net Worth Status:

i. The Net Worth of the Company has been fully eroded and is negative as on March 31, 2014. The management had been advised that since certain conditions as per the Sick Industrial Companies (Special Provisions) Act, 1985 were not being met, the Company was not eligible to a make reference to BIFR. In the event of any change in the status inter alia arising out of developments in the pending legal case [refer Note (ii) below], appropriate steps will be taken in this regard.

ii. The validity of the closure declared by the Company with effect from June 26, 2008, under the relevant provisions of The Industrial Disputes Act, 1947, has been challenged before the Industrial Court by the employees'' union and the matter is pending before the Hon''ble Court.

iii. The management has been exploring various options for restructuring the business and finances of the Company, including the recommencement / relocation of its manufacturing operations.

iv. As part of restructuring, the Company had earlier entered into an arrangement for the assignment of the leasehold rights of its land. However, certain issues have affected its implementation and the management is pursuing the matter.The advance received has however been utilized, inter alia, to settle certain liabilities of the Company.

v. During the year interest liability on all borrowings including debentures has not been provided since revised terms are in the process of being negotiated with the lenders and the management estimates that the liabilities already being carried are adequate.

vi. The Zero Coupon NCDs issued to and the Term Loans from IFCI Ltd. were assigned to a third party by IFCI Ltd. The assignment has been challenged by the Company and the matter is pending before the Hon''bleDelhi High Court.

d. Revaluation

i. The Company had revalued the land, building and certain plant and machinery as on April1, 1996 based on the valuation made by M/s P.C. Gandhi & Associates, an independent firm of consulting Engineers, Surveyors and Government Approved Valuers vide their report dated 30th April, 1997. Accordingly, the original costs of the above assets as on April 1, 1996 have been restated at estimated market value arrived at after adjusting the depreciation on the estimated replacement cost. The resultant increase in net book value arising on revaluation amounting to Rs. 4285.93 Lacs was transferred to Revaluation Reserve Account during the period ended 31st August, 1997. The following re-valued amounts remain substituted for the historical cost in the gross block of fixed assets:

ii. Revaluation Reserve amounting to Rs.4285.93 Lacs had been adjusted against the then accumulated losses pursuant to the scheme of restructuring approved by the Hon''ble High Court of Bombay vide its order dated April 23, 2001. Depreciation is, however, being provided on the revalued amounts.

e. Contingent Liabilities have not been provided for in respect of:

Rs Lacs Particulars Year ended Year ended 31st March, 2014 31st March,2013

i. Claims against the Company which are disputed relating to (including interest or penalty upto the date of demand) Excise Duty 62.26 62.26

Customs Duty - 1.25

Sales Tax 31.40 31.40

Cess Liability 28.35 28.35

MIDC Charges 108.32 108.32

NMMC Property Tax - 72.13

Suppliers 14.72 14.72

ii Arrears of Fixed Preference Dividend (Including Dividend Tax) 68.66 62.34

iii Liability as may arise in respect of matters referred to in Note 17(c) above and further interest / liability / penalty if any as may arise in respect of matters referred to in Note 17(e)(i) above - amounts not ascertainable

f. (i) In the opinion of the management, Current and Non-Current Assets, Long Term and Short Term Loans and Advances are realizable at a value, in the ordinary course of business,which isatleast equal to the amount at which these are stated, and provisions for all known and determined liabilities are adequate and not in excess of the amounts stated.

(ii) The accounts of certain Trade Receivables, Trade Payables, Loans and Advances and Lenders are however subject to formal confirmations/reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation / confirmation.

g. Deferred Tax Asset/Liability:

No current tax provision has been made in the absence of taxable profits and also no deferred tax asset is being recognized.

h. 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:

(i) Key Management Personnel-Mr. S. P Gupta, Wholetime Director (till 29.03.2013)

(ii) Associates - ISG Traders Limited; Kavita Marketing Pvt. Ltd.; Shubh Shanti Services Ltd.

(iii) The following transactions were carried out with each type of the above related parties in the ordinary course of business and at arm''s length:

Notes: Figures in brackets relate to Previous Year.

(iv) Managing/Wholetime Director''s remuneration:

Company did not have any managing Director or Whole-time Director during the year.

(*) The Company had applied to the Central Government for necessary approval as per Schedule XIII of the Companies Act, 1956 towards managerial remuneration and the same is awaited. The application includes an amount of Rs 20.98 Lacs (relating to the financial years 2009-10 and 2010-11) paid in excess and provided for in earlier years and Rs 30 lacs pertaining to the financial years 2007- 08, 2008-09 and 2009-10 also provided for in the previous year/s.

i. Disclosure in accordance with Section 22 of the Micro, Small and Medium Enterprises Development Act, 2006.

(*)Amounts not determined

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 Enterprise or its registration under the Micro, Small and Medium Enterprises Development Act, 2006.

j. After the resignation of the Company Secretary w.e.f. June 30, 2007, the Company continues to make concerted efforts to appoint a Company Secretary as required under Section 383A of the Companies Act, 1956.

k. Amount overdue to be credited to Investor Education Protection Fund is Rs.164.59 Lacs (previous year Rs 164.59 Lacs).

Notes:

(i) The above Cash Flow Statement has been prepared under the indirect method set out in AS-3 issued by the Institute of Chartered Accountants of India.

(ii) Figures in brackets indicate cash outflow.

(iii) Previous year''s figures have been regrouped/reclassified wherever applicable.


Mar 31, 2013

A. Although the accumulated losses as at the year-end amounted to Rs. 8969.70 Lacs (Previous Year Rs.8575.15 Lacs) as against the paid up share capital of Rs.2670.20 Lacs (Previous Year Rs.2670.20 Lacs), pending the finalization and adoption of the business re-engineering plans [refer Note 19(c)(iir) below], these financial statements have been prepared on agoing concern basis and impairment loss, if any, will be accounted for as and when the business re-engineering plans are implemented.

b. In view of the accumulated losses, no transfer has been made to the Debenture Redemption Reserve in respect of secured and unsecured Non-Convertible Debentures.

c. Restructuring and Net Worth Status:

i. The Net Worth of the Company has been fully eroded and is negative as on March 31, 2013. The management had been advised that since certain conditions as per the Sick Industrial Companies (Special Provisions) Act, 1985 were not being met, the Company was not eligible to a make reference to BIFR. In the event of any change in the status inter alia arising out of developments in the pending legal case [refer Note (ii) below], appropriate steps will be taken in this regard.

ii. The validity of the closure declared by the Company with effect from June 26, 2008, under the relevant provisions of The Industrial Disputes Act, 1947, has been challenged before the Industrial. Court by the employees'' union and the matter is pending before the Hon''ble Court

iii. The management has been exploring various options for restructuring the business and finances of the Company, including the recommencement / relocation of its manufacturing operations.

iv. As part of restructuring, the Company had earlier entered into an arrangement for the assignment of the leasehold rights of its land. However, certain issues have affected its implementation and the management is pursuing the matter.The advance received has however been utilized, inter alia, to settle certain liabilities of the Company.

v. During the year interest liability on all borrowings including debentures has not been provided since revised terms are in the process of being negotiated with the lenders and the management estimates that the liabilities already being earned are adequate.

vi. The Zero Coupon NCDs issued to and the Term Loans from IFCI Ltd. were assigned to a third party by IFCI Ltd. The assignment has been challenged by the Company and the matter is pending before the Delhi High Court.

d. Revaluation

i. The Company had revalued the land, building and certain plant and machinery as on ApriH, 1996 based on the valuation made by M/s P.C. Gandhi & Associates, an independent firm of consulting Engineers, Surveyors and Government Approved Valuers vide their report dated 30" April, 1997. Accordingly, the original costs of the above assets as on April 1, 1996 have been restated at estimated market value arrived at after adjusting the depreciation on the estimated replacement cost. The resultant increase in net book value arising on revaluation amounting to Rs. 4285.93 Lacs was transferred to Revaluation Reserve Account during the period ended 31" August, 1997. The following re-valued amounts remain substituted for the historical cost in the gross block of fixed assets:

ii. Revaluation Reserve amounting to Rs.4285.93 Lacs had been adjusted against the then accumulated losses pursuant to the scheme of restructuring approved by the Hon''ble High Court of Bombay vide , its order dated April 23, 2001. Depreciation is, however, being provided on the revalued amounts.

e. Contingent Liabilities have not been provided for in respect of:

f. (i) In the opinion of the management, Current and Non-Current Assets, Long Term and Short Term Loans and Advances are realizable at a value, in the ordinary course of business.which is atleast equal to the amount at which these are stated, and provisions for all known and determined liabilities are adequate and not in excess of the amounts stated.

ii) The accounts of certain Trade Receivables, Trade Payables, Loans and Advancesand Lendersare however subject to formal confirmations/reconciliationsand consequent adjustments, if any. The management does not expect any material difference affecting the current year''s financial statements on such reconciliation / confirmation.

g. Deferred Tax Asset/Liability:

No current tax provision has been made in the absence of taxable profits and also no deferred tax asset is being recognized.

h. 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:

(i) Key Management Personnel - Wholetime Director Mr. §, P. Gupta

(ii) Associates - ISG Traders Limited;Kavita Marketing Pvt. Ltd.;Shubh Shanti Services Ltd..

(iii) The following transactions were carried out with each type of the above related jrartiesin the ordinary course of business and at arm''s length:

(i) After the resignation of the Company Secretary w.e.f. June 30, 2007, the Company continues to make concerted efforts to appoint a Company Secretary as requiredunder Section 383A of the Companies Act 1956.

(j) Amount overdue to be credited to Investor Education Protection Fund is Rs.164.59 Lacs.

(k) The previous year''s figures have been re-grouped and/or re-arranged wherever necessary to conform to the current year''s presentation.


Mar 31, 2012

(1) These are secured by a second, subservient and subordinate 'charge on the Company's immovable properties, both present and future and a second subservient charge by way of hypothecation of the Company's movable assets (save and except book debts) subject to prior charges created in favour of the Company's bankers on the Company's stocks of raw materials, semi-finished and finished goods, consumable stores, spares and such other movables for 'working capital' requirements.

Term Loans and Zero Coupon Non-convertible Debentures - [refer note 6 (1)(b)(ii) and (Hi) above]

(2) These are secured by a first charge on the Company's immovable properties, both present and future and a second charge by way of hypothecation of the Company's movable assets (save and except book debts) subject to prior charges created in favour of the Company's bankers on the Company's stocks of raw materials, semi-finished and finished goods, consumable stores, spares and such other movables for 'working capital' requirements.

Borrowings from Banks - [refer note 6 (1)(b)(iv) above]

(3) These are secured by a first charge on the Company's book debts, stocks of raw materials, semi-finished and finished goods, consumable stores and spares and a second charge on the movable and immovable properties of the Company both present and future, subject to prior charges created in favor of Term Lenders and ZCNCD holders.

a. Although the accumulated losses as at the year-end amounted to Rs.8575.15 Lacs (Previous Year Rs.5285.37 Lacs) as against the paid up share capital of Rs.2670.19 Lacs (Previous Year Rs.2670.19 Lacs), pending the finalization and adoption of the business re-engineering plans [refer Note 21(c)(iii) below], these financial statements have been prepared on a going concern basis and impairment loss, if any, will be accounted for as and when the business re- engineering plans are implemented.

b. In view of the accumulated losses, no transfer has been made to the Debenture Redemption Reserve in respect of secured and unsecured Non-Convertible Debentures.

c. Restructuring and Net Worth Status:

i. The Net Worth of the Company has been fully eroded and is negative as on March 31, 2012. The management had been advised that since certain conditions as per the Sick Industrial Companies (Special Provisions) Act, 1985 were not being met, the Company was not eligible to a make reference to BIFR. In the event of any change in the status inter alia arising out of developments in the pending legal case [refer Note (ii) below], appropriate steps will be taken in this regard.

ii. The validity of the closure declared by the Company with effect from June 26, 2008, under the relevant provisions of The Industrial Disputes Act, 1947, has been challenged before the Industrial Court by the employees' union and the matter is pending before the Hon'ble Court.

iii. The management has been exploring various options for restructuring the business and finances of the Company, including the recommencement / relocation of its manufacturing operations. During the year, the Company has been able to settle the debts of certain parties, mainly working capital lenders and the management is exploring various options for settlement of the balance debt.

iv. As part of restructuring, the Company had earlier entered into an arrangement for the assignment of the leasehold rights of its land. However, certain issues have affected its implementation and the management is pursuing the matter. The advance received has however been utilized, inter alia, to settle certain liabilities of the Company.

v. A promoter group company has given corporate guarantees and a Director of the Company has given personal guarantees in favor of the Banks / their Assignees. Amount due to Banks is Rs. NIL (Previous Year Rs. 886.70 Lacs) and amount due to Assignee is Rs 508.14 Lacs (Previous Year Rs.508.14 Lacs).

vi. During the year interest liability on all borrowings including debentures has not been provided since revised terms are in the process of being negotiated with the lenders and the management expects that the liabilities already being carried are adequate.

vii. The Zero Coupon NCDs issued to and the Term Loans from IFCI Ltd. as mentioned in Note 6(b)(iii) - "Other Current Liabilities" were assigned to a third party by IFCI Ltd. The assignment has been challenged by the Company and the matter is pending before the Delhi High Court.

d. Revaluation

i. The Company had revalued the land, building and certain plant and machinery as on April 1, 1996 based on the valuation made by M/s P.C. Gandhi & Associates, an independent firm of consulting Engineers, Surveyors and Government Approved Valuers vide their report dated 30th April, 1997. Accordingly, the original costs of the above assets as on April 1, 1996 have been restated at estimated market value arrived at after adjusting the depreciation on the estimated replacement cost. The resultant increase in net book value arising on revaluation amounting to Rs. 4285.93 Lacs was transferred to Revaluation Reserve Account during the period ended 31st August, 1997. The following re-valued amounts remain substituted for the historical cost in the gross block of fixed assets:

ii. Revaluation Reserve amounting to Rs. 4285.93 Lacs had been adjusted against the then accumulated losses pursuant to the scheme of restructuring approved by the Hon'ble High Court of Bombay vide its order dated April 23, 2001. Depreciation is, however, being provided on the revalued amounts.

ii Arrears of Fixed Preference Dividend (Including Dividend Tax) 56.07 49.79

iii Liability as may arise in respect of matters referred to in Note 21(c) above and further interest / liability / penalty if any as may arise in respect of matters referred to in Note 21 (e){i) above - amounts not ascertainable

e. i) In the opinion of the management, Current and Non-current Assets, Long Term and Short Term Loans and Advances

are realizable at a value, in the ordinary course of business, which is atleast equal to the amount at which these are stated, and provisions for all known and determined liabilities are adequate and not in excess of the amounts stated.

ii) The accounts of certain Trade Receivables, Trade Payables, Loans and Advances and Lenders are however subject to formal confirmations / reconciliations and consequent adjustments, if any. The management does not expect any material difference affecting the current year's financial statements on such reconciliation / confirmation.

f. 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:

(i) Key Management Personnel - Wholetime Director : Mr. S. P. Gupta

(ii) Associates - ISG Traders Limited, Kavita Marketing Pvt. Ltd. and Shubh Shanti Services Ltd.

g. After the resignation of the Company Secretary w.e.f. June 30, 2007, the Company continues to make concerted efforts to appoint a Company Secretary as required under Section 383A of the Companies Act, 1956.

h. Amount overdue to be credited to Investor Education Protection Fund is Rs. 164.69 Lacs. The above excludes Rs. 57.67 Lacs interest on Debentures being unfunded.

i. The Company was using the pre-revised Schedule VI to the Companies Act 1956 for the preparation and presentation of its financial statements upto the year ended 31st March 2011. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act 1956 has become applicable to the Company. The Company has reclassified the previous year's figures to confirm to this year's classification. The adoption of the revised Schedule VI does not impact revenue recognition and measurement principles followed for the preparation of the financial statements


Mar 31, 2010

1. Although the accumulated losses as at the year end amounted to Rs.360,406,682 (Previous Year Rs.250,216,183) as against paid up share capital of Rs.267,019,990, (Previous Year Rs.267,019,990) these financial statements have been prepared by the Management on a "going concern" basis taking into account the financial support of promoters/ shareholders and the various revival / restructuring options being actively pursued by the management, including relocation of manufacturing operations.

2. There was a fire on October 24, 2006 in the finishing area of the plant resulting in destruction of fixed assets. The amount spent in respect of repair / replacement of the damaged / destroyed fixed assets, which was disclosed under the head Capital Work In Progress during 2007-08, has been adjusted against final settlement of the insurance claims in the previous year.

3. In view of accumulated losses, no transfer has been made to the Debenture Redemption Reserve in respect of secured and unsecured Non Convertible Debentures.

4. Restructuring and networth status

a) After the CDR Rework proposal was rejected by the lenders, the Company had declared formal closure of its manufacturing operations with effect from June 26, 2008 as per the relevant provisions of The Industrial Disputes Act, 1947. The legal dues and compensation payable to the workmen affected by the closure have been duly provided for in the accounts for the previous year. The employees union had preferred to move the Industrial Court on the issue and the matter is still pending before the Honble Court.

b) Interest liability has not been provided on assigned loans and debentures as revised terms are in the process of being negotiated and in the opinion of the management, no further liability is expected.

c) During the year ended March 31, 2009 the Company had obtained the approval of shareholders through postal ballot for a resolution proposed as per Sec 293 (1) (a) of The Companies Act, 1956. A shareholder had filed a petition before the Honble Company Law Board opposing the postal ballot exercise carried out by the Company. The Honble CLB, while allowing the postal ballot process to be completed and results to be declared, restrained the Company from disposing of any of its fixed assets and subjected the result of the postal ballot to the final outcome of the petition. The petition is still pending before the Honble CLB Bench.

d) The Company continues to actively pursue the possibility of establishing manufacturingoperations at another site offering better competitive advantages in terms of supply chain logistics, input availability and cost. The Management expects to arrive at some preliminary conclusions on this option during the year.

e) As part of restructuring, during 2008-09 the Company had also entered into an arrangement for assignment of lease hold rights of its land and part advance received has been utilised, inter alia, to settle certain liabilities of the company.

f) The networth of the company as fuUy eroded during the year ended March 31, 2010. However, the management as received legal opinion to the effect that no reference need to be made BIFR as certain conditions required for the same as per the Sick Industrial Companies (Special Provisions) Act, 1985 are not applicable to the Company under the present circumstances.

5. Revaluation

(a) The Company had revalued the land, building and certain plant and machinery as on April 1, 1996 based on the valuation made by M/s P.C. Gandhi & Associates, an independent firm of consulting Engineers, Surveyors and Government Approved Valuers vide their report dated 30*" April, 1997. Accordingly, the original costs of the above assets as on April 1, 1996 have been restated at estimated market value arrived after adjusting the depreciation on the estimated replacement cost. The resultant increase in net book value arising on revaluation amounting Rs. 428,593,000 was transferred to Revaluation Reserve Account during the period ended 31 st August, 1997. The following re-valued amounts remain substituted for the historical cost in the gross block of fixed assets:

6. Contingent Liabilities not provided for in respect of:

Year ended Year ended

31 st March, 2010 31 st March, 2009

Rupees Rupees

a) Outstanding Guarantees given by banks 1,084,000 - 1,084,000

b) Claims against the Company relating to (including interest or penalty upto the date of demands- Excise Duty 6,226,499 6,226,499 Sales Tax 5,437,647 5,437,647 Cess Liability 2,835,224 2,835,224 MIDC Charges 25,524,142 25,524,142 Suppliers 1,681,414 1,681,414

c) Other Matters 125,000 125,000

d) Arrears of Fixed Preference Dividend (Including Dividend Tax) 4,351,430 3,728,000

e) Liability as may arise in respect of matter as referred in 4(a) above and further interest liability/penalty if any as may arise jn the matters mentioned in para 6(b) above, amount not ascertainable.

7. (a) Duncans Industries Limited has given corporate guarantees favoring consortium banks for Rs. 154,100,000

(Previous year Rs.154,100,000) for Companys working capital facilities and amount due to the banks/other is Rs.88,988,010 (Previous year Rs. 88,919,146) including FITL Rs.11,611,718 (Previous year Rs.11,611,718) Letters of Credit and Bank Guarantees Rs. 1,084,000 (Previous year Rs. 1,084,000).

(b) All the Bank Working Capital Loans (including interest accrued and due) have been / are being personally guaranteed by a director of the Company.

8. (a) In the opinion of management, Current Assets, Loans and Advances have a value on realization in the ordinary course of business at least equal to the amount at which they are stated.

(b) The accounts of certain Sundry Debtors, Sundry Creditors, Banks, Advances and Lenders are subject to confirmation/reconciliations and adjustments, if any. The Management does not expect any material difference affecting the current years financial statements.

9. a) Deferred Tax Asset/Liability

The Company has recognize the revised net deferred tax asset in accordance with Accounting Standard 22 - "Accounting for Taxes on Income" issued by The Institute of Chartered Accountants of India on the basis of virtual certainty. The Management is of the opinion that there will be sufficient future income against which such deferred tax assets will be fully realised.

10. Disclosures as required by Accounting Standard 19 "Leases" a) Finance Lease where Company is a lessee

The Company has entered into lease arrangement for vehicles with banks. The lease arrangements are non- cancelable finance leases.

11. 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:

(1) Key Management Personnel:

Whole Time Director Mr. S. P. Gupta

(2) Associates/ Group Companies with whom the company has entered into the transaction during the year: ISG Traders Limited, Shubh Shanti Services Limited

12. After the resignation of Company Secretary w.e.f June 30, 2007, the Company is making concerted efforts to appoint a Company Secretary required to be appointed under Section 383A of the Companies Act, 1956.

13. Amount outstanding to be credited to Investor Education Protection Fund is Rs.7,520,885. Further based on a legal opinion obtained by the Company, interest on debentures outstanding for more than 7 years aggregating to Rs. 8,948,469 (Previous Year Rs. 8,330,424) has not been included in the aforesaid amount as the Debenture Holders have rescheduled the payment of the abovementioned amount vide resolutions passed in Debenture Holders General Meetings tlated August 4, 2003 and June 15, 2006.

14. The Company is primarily engaged hi one Segment i.e. EPDM rubber.

15. (a) Raw Materials and Packing Materials Consumed, Consumption of indigenous and imported raw material and packing materials, Consumption of indigenous and imported stores:

16. Figures of the previous year have been re-grouped/re-arranged wherever necessary to conform to current years presentation.

 
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