Notes to Accounts of JCT Electronics Ltd.
Mar 31, 2015
1 Term loans (secured) from the Financial Institutions and Indian
Banks are secured by an equitable mortgage on all the immovable
properties at Mohali & Vadodara and hypothecation of the movable assets
of the company, present and future, save and except prior charges on
specified movables in favour of the bankers for working capital
requirements.
2 Working Capital term loans from Indian Banks and working capital
facilities from foreign banks are secured by first charge by way of
hypothecation of raw materials, goods-in-process, finished goods,
stores and spares, book debts and receivables of the Company, present
and future and second charge on the immovable properties at Mohali and
Vadodara.
3 In terms of the BIFR sanctioned scheme, outstanding principal amount
of the working capital facilities from banks (other than banks covered
under OTS as per sanctioned scheme) as on 31st March, 2007 have been
converted into working capital term loans. These will additionaly be
covered by a pari-pasu charge on the fixed assets along with the term
lenders, after completion of documentation in this regard.
4 Principal amount of working capital from banks covered under OTS
have been shown under working capital facilities. As mentioned in the
sanctioned scheme [Refer note no. 27(A) (c)] foreign banks are to be
paid by way of one time settelment (OTS)
5. CONTINGENT LIABILITIES & COMMITMENTS Rs. in Lacs
Sr. Particulars As at As at
No. 31.03.2015 31.03.2014
1. Contigent Liabilities
a) Claims against the company
not acknowledged as debts 2,573.30 5,905.90
2. Capital Commitments
Estimated amount of contracts
remaining to be executed on - -
capital account and not provided for
Claims against the company not acknowledged as debt s includes the
payment demanded by Income Tax, Central Excise, Labour Law, PF and ESI
Authorities, Punjab State Electricity Board, amounts to workers where
appeals are pending before the respective authorities or courts for
disposal.
6. The Board for Industrial and Financial Reconstruction (BIFR)
declared the company as a sick company vide its order dated 12th
December, 2005 under the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA). BIFR passed an order under section 17(3) of SICA &
sanctioned a rehabilitation scheme vide its order dated 12th March,
2007 with the cut off date fixed as 31st March, 2007, which was further
amended vide order dated 25th May, 2007. The scheme came into effect
from the date of issue of the sanctioned scheme and its provisions are
binding on all concerned. Relevant extracts from the sanctioned scheme
are given below:-
A. REHABILITATION SCHEME
(A) CONTOURS
Sr. Parameter Particulars
No.
1. Cut off date 31 -March-2007
2. Waivers (upto cut off date) Waiver of past interest /CI/LD/
penal interest, etc.
3. Shifting of Plant & The entire plant at Mohali
Machinery unit will be shifted to Vadodara
as new line-III for the of
Mohali plant to Vadodara
manufacture of 21" True Flat
Tubes. The land & building at
the Mohali unit will be sold
at an expected price of Rs. 11,900
lakhs. Workers at the Mohali
plant will be given employment
at the Vadodara plant and in the
event of any worker not opting
for shifting, he/she would be
paid their legal dues as per
the settlement.
4. Utilisation of sale proceeds Sale of Land & Building at and
of Land & Building utilization of the proceeds
Mohali Unit (expected at Land & Building
at Mohali Unit about Rs.11,900
lakhs) towards payment of
workers' dues (about Rs. 1,000
lakhs), payment of foreign
banks towards settlement of
their liabilities (Rs. 3,000
lakhs) and payment of balance
amount of Rs.7,900 lakhs to
lenders in the ratio of
outstanding dues for FIs &
core irregularities for the
banks. In case the realization
from sale of Land & Building
at Mohali unit falls below
Rs. 11,900 lakhs, then the
promoters will meet the
shortfall. In case proceeds
are more than Rs. 11,900 lakhs,
the appropriation shall be as
under
i) Upto Rs.3,000 lakhs -
Increase to be paid to secured
lenders after paying
crystallized workers dues.
ii) Beyond Rs.3,000 lakhs - To
be utilized by the company for
adding capacities with prior
approval of BIFR.
5. Future Interest Rate Interest @ 6% p.a. for term
loans/working capital term
loans w.e.f 1.10.2008 & there
will be no running cash credit
working capital facility with
banks.
6. Conversion of Principal Term Conversion of 15% of principal
loans / WCTL into Equity outstanding of Term Loans/WCTL
(Rs.5,400 lakhs) into equity
shares of the company after
reduction of existing equity
by 90%.
7. Promoters' contribution Equity : Rs. 2,500 lakh
(Rs. 750 lakhs towards upfront
payment Rs. 1,750 lakhs
towards capital expenditure for
setting up facilities of 14" CPT
and captive power generation),
In addition, the company will
also convert share application
money into equity at par after
write down of existing equity.
8. Sanction of need based Non Fund Based Limit - Need
(L/C / LG limits) based 2007-08 : Rs.5,054 lakhs
additional
9. Security 1. Pledge of entire share
holding of promoters post
restructuring (after equity w/
off, conversion & fresh
induction).
2. Personal Guarantee of
Sh. Arjun Thapar on the entire
Loans of FIs & Banks.
3. Ceding of pari-passu charge
to working capital banks for
their WCTL exposure.
4. Opening of Trust & Retention
Account with lead bank.
10. Capital Reduction To write down existing paid up
equity share capital
(Rs. 3,450 lakhs) by 90%.
11. Workers' dues JCTEL/promoters to settle the
workers past liability at
Rs. 1,000 lakhs (as estimated)
to be paid out of sale proceeds
of Mohali Unit, as per
appropriation proposed in
Item No.4.
b) REPAYMENT SCHEDULE
Sr. Parameter Particulars
No.
1. Repayment of balance In 33 quarterly instalments
principal-Term Loans & commencing from Dec, 2008
working capital term loans to Mar, 2017.
c) ONE TIME SETTLEMENT PROPOSAL FOR FOREIGN BANKS
Sr. Parameter Particulars
No.
1. OTS PROPOSAL One time settlement of dues with foreign
banks towards settlement of their entire
liabilities for Rs. 3,000 lakhs (36.36% of
principal) payable out of the Mohali
sale proceeds.
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and machinery to
Vadodara and utilizing the sale proceeds for meeting the liabilities of
the secured lenders and workers.
D. RELIEFS & CONCESSIONS:
FIs & Banks
* To waive past interest/compound interest/LD/penal damages etc. from
the date of the first default to respective institutions and banks and
to agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in annexure III to the
scheme.
* To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into Term Loan.
* Conversion of Working Capital limits into WCTL by Bankers.
* Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
* Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
* Banks to provide need based LC/LG facilities from time to time
assessed at Rs.5,054 Lakh for the year 2007-08.
* Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
* Write down of existing equity by 90%, immediately after sanction of
the Scheme.
* Promoters to convert Share Application Money into equity capital as
per SEBI formula.
* Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
* Promoters to bring in Rs. 25 crores as promoters' contribution in the
shape of equity.
* Pledge of entire Promoter's Shareholding (post rehabilitation) with
FIs and Banks.
* Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/banks and settling workers'
liability.
* To continue to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
* The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
* To agree to shift to Vadodara on the terms and conditions as
applicable to the employees at Vadodara in the event of their giving
consent to shift to Vadodara works.
* Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law.
* To withdraw the legal cases pending with various courts filed by them
upon receiving the terminal dues.
Government of Punjab
* To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are nonoperational since 1991; and
* To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non-operational periods and refund of security
deposit.
* Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
* The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
* Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
* Exemption of Octroi duty for a period of 10 years;
* Exemption from payment of Electricity Duty for a period of 10 years;
Central Government
* Withdrawal of demand notices for PF contribution on wages/salaries
during the lock out period.
* Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
* Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
* Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
* The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E. OTHER STIPULATIONS
If the company commits default towards repayment of principal
instalments as per the sanctioned scheme or any combination, FIs /
Banks reserves the right to charge interest on the defaulted amount at
top of the band together with liquidated damages of 2% p.a. thereon
till the date of clearance of default or FIs / Banks shall have the
right to convert its entire overdue into fully paid up equity shares of
JCTEL during the currency of the loans as per SEBI guidelines, or
otherwise but with the permission of Hon'ble BIFR, FIs / Banks also
reserves the right to revoke the package of rehabilitation with the
prior approval of BIFR and in such event of revocation, the decision of
FIs / Banks shall be final and binding on the borrower and/or
guarantors. In case of FIs / Banks exercise the right of revocation,
the financial rehabilitation sanctioned or granted to JCTEL shall be
treated as withdrawn and the terms and the conditions of the original
loan agreements or documents shall come into force as if no such
financial rehabilitation were ever granted to JCTEL. Further, FIs /
Banks shall have the right to adjust payment received under the present
package of financial rehabilitation against outstanding dues in terms
of the original loan agreements/documents.
7 The impact of the scheme approved by the Hon'ble BIFR, on the
accounts of the company for the year under review for which appropriate
effect was required to be given are as follows :-
(a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1, 2008. The company has started
accruing interest @ 6% per annum on Term Loans & Working Capital Term
Loans outstanding from 1st October, 2008.
(b) However, the Hon'ble BIFR vide order dated 12th November, 2008, has
stipulated that FI(s)/banks would neither raise any claim for payment
of interest w.e.f. 1st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The due installment's of
the balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions. Since Bank of
Baroda and Indian Overseas Bank have opted for OTS, they have not been
paid installments towards balance principal outstanding.
Starting from the quarter January to March 2009, the company started
paying the balance principal outstanding of Term loans & Working
Capital Term Loan after adjusting the amount converted to equity shares
and upfront payment already made, on a deferral basis (over a period of
33 quarterly installments), except payment to Vijaya Bank as the said
bank had not sent confirmation to the rehabilitation scheme approved by
the Hon'ble BIFR on 12th March, 2007 till the end of 31st March, 2015.
However, the Company has defaulted in payment of principal amount of
Loans of Rs 10,670.42 (Previous year - Rs 6,977.43 Lacs) to Banks /
Financial Institutions for sixteen quarters starting from 1st April,
2011 to 31st March, 2015. The Company was unable to meet its
obligations towards repayment of quarterly installments due in respect
of term/working capital term loans as per BIFR sanctioned scheme, due
to non availability of working capital limits as envisaged in the
sanctioned scheme and sluggish market conditions during the year.
In the event the company defaults in its obligations towards repayment
of quarterly installments, the banks/ FIs reserve the rights given in
the sanctioned scheme as mentioned in Para E of Note 27.
However the Company approached the IFCI (i.e. The Operating Agency
hereinafter referred as OA) and the lenders whose interest were
affected pursuant to which a meeting of secured lenders was held in the
month of April, 2012 where consent for the proposed Modified Debt
Restructuring Scheme (MDRS) which envisaged sale of certain additional
surplus assets was obtained . The OA, thereafter submitted the MDRS to
the Hon'ble BIFR in the month of October, 2012 which envisages besides
sale of surplus assets such as Plant & Machinery along-with Other
Miscellaneous Assets and Flats, sale/mortgage of vacant land at
Vadodara and also re-schedulement of repayment of secured loan and
interest thereon within the scheme period. The amount collected from
disposal of such surplus assets are to be used to address the dues of
secured lenders as per original sanctioned scheme and dues of workers
as per Memorandum of Settlement. The Hon'ble BIFR, after hearing all
concerned parties vide its interim order dated 29.01.2013, approved the
sale of surplus assets as envisaged in MDRS namely 168 workers flats at
Mohali, idle Plant & Machinery at Mohali which is no longer required to
be relocated to Vadodara and also the surplus land up to 175 acres at
the company's unit at Vadodara through the Asset Sale Committee (ASC)
already constituted and keeping the sale proceeds in a no lien account
( NLA ) with the OA and utilized as decided by BIFR. The matter
regarding re-schedulement of repayment of secured loan within the
scheme period as envisaged in proposed Modified Debt Restructuring
Scheme (MDRS) is under consideration of BIFR as at 31st March, 2015.
During the financial year ended 31st March, 2015 the BIFR bench which
was monitoring the case, referred the matter to a larger bench to be
headed by the Chairman, BIFR.
(c) During the year ended 31st March, 2014, the idle Plant & Machinery
including Electrical Installation, Storage & Water System, Office
Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc and
few workers flats were sold by the ASC and the proceeds were deposited
in the No Lien Account with Operating Agency. The sale of remaining
worker's flats is in progress & will be made as per BIFR Interim Order.
Bids for the sale of surplus land at Vadodara were invited by the Asset
Sale Committee.
During the year ended 31st March, 2015 one conditional bid was received
requesting for waiver of the conditions stipulated in the guidelines
which was rejected by BIFR and no sale could be concluded till 31st
March, 2015. Efforts are on to sell the assets.
(d) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41(1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
(e) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
(f) The Company had entered into a Memorandum of Settlement with the
worker's unions at Mohali, Punjab crystallizing their dues at Rs 40
Crores as directed by BIFR. The Settlement has been registered before
the concerned authorities and submitted to BIFR and forms part of the
MDRS. Since the crystallized dues were to be settled out of the sale
proceeds of the Mohali assets as per the sanctioned scheme, no
provision for the same was made till last year. However in view of the
objections raised by Statutory Auditors along-with SEBI/Stock Exchanges
and to comply with the SEBI directives provision for the said amount of
Rs. 40 Crores has been made in the current year and has been shown as
exceptional item in the profit and loss statement.
(g) In view of the proposed introduction of GST, extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years has
not been extended & approved by the Gujarat Govt and accordingly VAT is
being paid on goods sold locally and CST on goods sold in an interstate
transaction. Further input tax credit is being claimed on VAT paid.
(h) The Scheme granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the Gujarat
Government & is being borne by the Company.
8 The impact of the scheme approved by the Hon'ble BIFR, on the
accounts of the company for the previous years for which
appropriate effect was required to be given are as follows
(a) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
were assigned to Asset Reconstruction Company (India) Limited (ARCIL)
in the financial year 2009-2010, their loans have also been converted
into WCTL.
(b) Indian Overseas Bank and Bank of Baroda had not been issued equity
equivalent to 15% of principal outstanding as on the cut-off date as
per the BIFR sanctioned scheme in the FY 07-08 as they had opted for
OTS.
(c) Out of total Debentures of Rs 500 Lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs
75 Lacs has been converted into equity shares in the financial year
2009-2010. The balance amount of Rs.425 lacs have been shown as Term
Loan from the financial year 2009-2010 onwards in terms of Sanctioned
Scheme. The security created in favour of Debenture Trustees through
Trust Deed has not yet been released as at 31st March, 2015.
(d) Similarly, Debentures of Rs 3,000 Lacs issued under Series II &
Series III to IFCI have been shown as Term Loan from the financial year
2009-2010 onwards in terms of Sanctioned Scheme. The security created
in favour of Debenture Trustees through Trust Deed has not yet been
released as on 31st March, 2015.
(e) As per BIFR sanctioned scheme, the share capital of Rs. 7,502.26
lacs was allotted to the promoters/FIs/Banks in the financial year
2007-2008. Further during the year 2009-10, share capital of Rs.34.78
lacs was allotted to ARCIL pursuant to BIFR order, since SBI & SBICI
had assigned their debt to aRcIL.
9 As per BIFR Sanctioned Scheme, the revival of the company is
dependant on sale of land and building at Mohali. As envisaged in
sanctioned scheme, the company's net worth could not turn positive in
the 4th year of its implementation due to delay in sale of land &
building at Mohali. Due to this delay in the sale of the land and
building at Mohali, the company offered some surplus assets for sale
which was agreed in the meeting of the joint lenders and thereafter
BIFR also gave its consent to the sale through the ASC. While some of
these assets have been sold, the sale of surplus land at Vadodara could
not be concluded for reasons explained above. The process for
re-running the sale is on. Management is hopeful that its request for
Modified Debt Restructuring Scheme (MDRS) would be accepted by Hon'ble
BIFR & Company would be able to arrange requisite working capital for
importing critical raw materials to start its production lines. On the
assumption that the revival of the company will take place in near
future, the accounts of the company have been prepared on a "going
concern" basis and on the assumption made by the management that
adequate finances would be available after the sale of surplus assets
to enable the company to operate on a profitable basis. Accordingly,
the company has been treated as a going concern. Further with the
release of Working Capital as envisaged in the Sanctioned Scheme the
company would like to take up assembly of LCD/LED modules which is also
in the same space and having same customer base.
10 (a) In terms of the sanctioned scheme passed by BIFR in 2007 and
interim order of BIFR dated 29.01.2013, the Mohali Assets which includes
Land, Building, Plant & Machinery including Electrical Installation,
Storage & Water System, Office Equipment, Factory Equipment, Furniture &
Fittings, Vehicles and Worker's Flat in its entirety are to be sold on
"As is where is" and "As is what is basis" through the Asset Sale
Committee. The BIFR also permitted sale of surplus land at Vadodara
through the Asset Sale Committee. During the year ended 31st March,
2014, few Worker's Flats, Idle Plant & Machinery including Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles etc were sold by the Asset
Sale Committee and the proceeds were deposited with the Operating
Agency.The carrying value assets as at 31-March, 2015 consist of Lease
hold Land & Building. Being operations at Mohali has been discontinued,
the same are held for sale on 31-March-2015. In view of above, no
provision for impairment of remaining Fixed Assets at Mohali is
required.
(b) The Fixed Assets at Mohali as at 31st March, 2015 consist of Land,
Building and remaining Workers Flats which have been retired from
active use and held for disposal and are shown separately in Note No.
10.1 i.e. Schedule of fixed assets pertaining to discontinued
operations in financial statements.
(c) During the financial year ended 31st March, 2015, Company has made
a provision for impairment of inventory at Mohali to the extent of Rs
61.57 Lacs thereby reducing the value of Inventory to zero. Similarly
the Company has made a provision for impairment of Inventory at
Vadodara of Rs 253.10 Lacs reducing the value of Inventory thereto Rs
359.62 Lacs.
(d) No provision for impairment of the fixed assets at Vadodara Unit
has been made as the Vadodara unit is temporarily not in operation and
would commence production no sooner the surplus assets are sold and
thereafter working capital is made available as stipulated in the
sanctioned scheme. Further the assets have not completed their useful
life and are in good working condition. Besides there is lot of
appreciation in the value of the land bank available at Vadodara.
31 The Company estimates the deferred tax (charge) / credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs.15,822.97 Lacs (Previous
year Rs. 17,235.36 lacs) has not been recognized.
11 EMPLOYEE BENEFITS:
(a) Defined Contribution Plans
The Company has recognized the contribution/liability in the Statement
of Profit & Loss for the financial year 2014-15.
(b) Defined Benefit Plans & Other Long Term Benefits:
The following disclosures are made in accordance with AS 15 (Revised)
pertaining to Defined Benefit Plans and Other Long Term Benefits:-
12 BALANCE CONFIRMATION
(a) In the opinion of the management, Sundry Debtors & 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 in the
Balance sheet. Margin Money Balances, Trade Receivables, Trade Payables
and other receivables /payables have been shown as per values appearing
in the books of accounts and have been treated as good for
recovery/payment unless specifically provided for.
(b) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Hon'ble BIFR and
these balances are after accounting for 15% equity share allotment made
to them in the financial year 2007-08 and 2009-10, upfront payment and
installments paid up to financial year ending 31st March, 2015. There
is no change in the bank balances of those banks which have not yet
sent the confirmation to the sanctioned scheme or those which have
opted for OTS.
13. RELATED PARTY DISCLOSURES:
Names of related parties and description of relationship
(a) Related parties where significant influence exist : India
International Airways Limited
(b) Associates : JCT Limited
(c) Key Management Personnel : Mr Arjun Thapar
(d) Relative of Key Management Personnel :
Mrs. Nayantara Thapar, Ms. Shivani Thapar
(e) Companies over which persons described in
(c) & (d) are able to exercise significant influence : Team Plus
Securities Limited
APJ Financial Services Private Limited
14 The Company has taken certain commercial premises under cancellable
operating lease arrangements. The total aggregate Lease Rentals
recognized as expense in the Statement of profit & loss under
cancellable operating lease was Rs. 27.80 Lacs (Previous Period: Rs
68.77 Lacs).
15 INFORMATION ON SEGMENT RESULTS:
The company is engaged in the manufacture of Colour Picture Tubes &
Deflection Yoke which is in the context of Accounting Standard 17 on
Segment Reporting, issued by the Institute of Chartered Accountants of
India is considered as the only business segment. Presently company has
one plant designed to manufacture Color Picture Tube & Deflection Yoke
which is situated at Vadodara. Plant & Machinery including Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles etc. of two Plants situated
at Mohali has been disposed off during the year ended 31st March, 2014.
Being having one business entity, there is no reportable business as
well as geographical segments.
16. Team Plus Securities Limited being the promoter and holding company
had advanced an interest free loan of Rs 50 lacs to the company in the
beginning of FY 2011/12 towards meeting the short fall in the resources
available with the company at that time for servicing the secured
debts. In terms of BIFR order the promoters are to meet any shortfall
in the fund requirements of the company for servicing the debts of the
secured creditors. Mr Arjun Thapar is a director of Team Plus
Securities Limited, the promoter and holding company, and the Managing
Director of JCT Electronics Limited, its subsidiary. The said loan of
Rs 50 lacs is still outstanding and has not been returned by the
company as the same cannot be repaid without the prior written approval
of the secured lenders. Further no interest is payable on such loans
without the approval of the lenders. The Sick Industrial Companies
(Special Provisions) Act, 1985 stipulates that the provisions of this
act and rules made there under shall have effect notwithstanding
anything inconsistent therewith contained in any other law for the time
being in force or in the Memorandum or Articles of Association of an
industrial company. As such the orders of BIFR prevail and override the
provisions contained in the Companies Act. Further Team Plus Securities
Limited is an NBFC and is authorized to give loans as per its objects
and such loans are exempted from the applicability of the provisions of
Section 185 of the Companies Act , 2013 .
17. DISCONTINUING OPERATIONS
(a) Description of Discontinuing Operations
(i) Company had set-up a manufacturing plant at A-32, Industrial Area,
Phase - VIII, Mohali for manufacture of Color Picture Tubes. The
installed capacity of this plant was 10 Lacs units per annum. Company
also had manufacturing plant for manufacture of Deflection Yokes unit
at A-27, Industrial Area, Phase - VII, Mohali.
(ii) The Company started incurring losses from the year 1997-98 due to
non-availability of working capital resulting in low capacity
utilization. Further the decline in prices of colour picture tubes on
account of cheap imports, also contributed to the losses. This resulted
in both the plants at Mohali shutting down active production in 2001. A
reference was made by the Company to the Hon'ble BIFR under the
relevant provisions of Sick Industrial Companies (Special Provisions)
Act, 1985 ('SICA') in 2002, when the accumulated losses exceeded its
net worth as on 31st March, 2002. The Company was declared a sick
industrial company within the meaning of SICA by the Hon'ble BIFR vide
its order dated 12.12.2005. Thereafter, the Company submitted its
proposal for revival and rehabilitation and sanction was accorded to
the scheme vide order dated 12.03.2007 passed by the Hon'ble BIFR
(Sanctioned Scheme).
(iii) In terms of the Sanctioned Scheme the land & building at both the
plants at Mohali was to be sold and the plant & machinery shifted to
Vadodara. Subsequently the Hon'ble BIFR allowed sale of the idle plant
& machinery including Electrical Installation, Storage & Water System,
Office Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc
at Mohali Unit and it was no longer required to be shifted as proposed
in the MDRS submitted to BIFR by the OA.
(iv) During the year ended 31st March, 2014, the Asset Sale Committee
sold the Idle Plant & Machinery including Electrical Installation,
Storage & Water System, Office Equipment, Factory Equipment, Furniture
& Fittings, Vehicles etc. as also few workers flats and the proceeds
were deposited in the no lien account with the Operating Agency. The
land, building, and remaining workers flats at Mohali have been retired
from the above assets and are held for disposal and the same are shown
separately in Note No. 10.1 i.e. Schedule of fixed assets pertaining to
discontinued operations.
(v) During the year ended 31st March, 2015, no sale could be transacted
for the land, building, and remaining workers flats at Mohali.
(b) Business or Geographical Segment.
(i) Company is engaged only in manufacture of Color Picture Tube, and
Deflection Yoke. This is the only Business Segment of the Company.
(ii) In the previous year's company had three plants designed to
manufacture Color Picture Tube & Deflection Yoke. Plant & Machinery
including Electrical Installation, Storage & Water System, Office
Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc of two
Plants situated at Mohali were disposed off during the year ended 31st
, March 2014 . The remaining one plant is situated at Baroda Unit,
Gujarat. These have not been categorized under Accounting Standard 17
on Segment Reporting, issued by Ministry of Corporate Affairs as
reportable geographical segments. However for limited purpose of
categorization under discontinuing operations, Vadodara Plant & Mohali
Plant were considered as two geographical segments.
(c) Date & Nature of Initial Disclosure
The date & nature of such disclosure is described as under:-
(i) The Asset Sale Committee (ASC) initiated action to sell the Land &
Building at Mohali, consisting of two plots i.e. at A-32, Industrial
Area, Phase - VIII and A-27, Industrial Area, Phase-VII, Mohali as per
the Sanctioned Scheme of BIFR by releasing advertisements in the months
of December, 2011, September, 2012 and February, 2013 in response to
which no bids were received at the Reserve Price fixed by Asset Sale
Committee (ASC).
(ii) The Plant & Machinery, including Electrical Installation, Storage
& Water System, Office Equipment, Factory Equipment, Furniture &
Fittings, Vehicles etc & few workers flats at Mohali were sold by the
ASC pursuant to order of BIFR dated 29th Jan, 2013 and the proceeds
were deposited in the No Lien Account with Operating Agency.
(iii) Till the year ended 31st March, 2015, the Company has not yet
entered into any binding agreement for sale of Land and Building
attributable to the discontinuing operation with any party. The
decision to sell Land & Building, Plant & Machinery, including
Electrical Installation, Storage & Water System, Office Equipment,
Factory Equipment, Furniture & Fittings, Vehicles etc & Flats and its
acceptance by Board of directors and secured lenders, is sufficient to
disclose it as discontinuing operations.
(d) Date or period in which the discontinuance is expected to be
completed if known or determinable
The ASC has already initiated steps towards sale. However the date or
period in which the discontinuation is expected to be completed is not
determinable as on date as the process for sale has not been completed
in respect of the land & building and few workers flats at Mohali till
31st March, 2015.
18. Provisions related to Corporate Social Responsibility (CSR) as
defined and prescribed under section 135 of the Companies Act, 2013,
deses not apply to Company during the financial year ended 31st March,
2015
19. COMPARATIVE FIGURES
Figures for the previous year have been regrouped/reclassified wherever
necessary to make them comparable with those of the current year.
Mar 31, 2014
S No. Particulars As at As at
31.03.2014 31.03.2013
Rs in Lacs Rs in Lacs
1.1 Contigent Liabilities
a) Claims against the company not acknowledged 5,905.90 5,331.60
as debts
b) Bills discounted - 249.80
1.2 Capital Commitments
Estimated amount of contracts remaining to be executed - 5.52
on capital account and not provided for
2. The Board for Industrial and Financial Reconstruction (BIFR)
declared the company as a sick company vide its order dated 12th
December, 2005 under the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA). BIFR passed an order under section 17(3) of SICA &
sanctioned a rehabilitation scheme vide its order dated 12th March,
2007 with the cut off date fixed as 31st March, 2007, which was further
amended vide order dated 25 th May, 2007. The scheme came into effect
from the date of issue of the sanctioned scheme and its provisions are
binding on all concerned. Relevant extracts from the sanctioned scheme
are given below:-
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and
machinery to Vadodara and utilizing the sale proceeds for meeting the
liabilities of the secured lenders and workers.
D. RELIEFS & CONCESSIONS:
FIs & Banks
- To waive past interest/compound interest/LD/penal damages etc. from
the date of the first default to respective institutions and banks and
to agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in annexure III to the
scheme.
- To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into Term Loan.
- Conversion of Working Capital limits into WCTL by Bankers.
- Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
- Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
- Banks to provide need based LC/LG facilities from time to time
assessed at Rs.5,054 Lakh for the year 2007-08.
- Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
- Write down of existing equity by 90%, immediately after sanction of
the Scheme.
- Promoters to convert Share Application Money into equity capital as
per SEBI formula.
- Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
- Promoters to bring in Rs. 25 crores as promoters'' contribution in the
shape of equity.
- Pledge of entire Promoter''s Shareholding (post rehabilitation) with
FIs and Banks.
- Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/banks and settling workers''
liability.
- To continue to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
- The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
- To agree to shift to Vadodara on the terms and conditions as
applicable to the employees at Vadodara in the event of their giving
consent to shift to Vadodara works.
- Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law.
- To withdraw the legal cases pending with various courts filed by them
upon receiving the terminal dues.
Government of Punjab
- To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are non- operational since 1991; and
- To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non-operational periods and refund of security
deposit.
- Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
- The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
- Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
- Exemption of Octroi duty for a period of 10 years;
- Exemption from payment of Electricity Duty for a period of 10 years;
Central Government
- Withdrawal of demand notices for PF contribution on wages/salaries
during the lock out period.
- Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
- Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
- Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
- The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E. OTHER STIPULATIONS
If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs / Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs / Banks
shall have the right to convert its entire overdue into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon''ble BIFR, FIs /
Banks also reserves the right to revoke the package of rehabilitation
with the prior approval of BIFR and in such event of revocation, the
decision of FIs / Banks shall be final and binding on the borrower
and/or guarantors. In case of FIs / Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further, FIs
/ Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents.
3 A The impact of the scheme approved by the Hon''ble BIFR, on the
accounts of the company for the year under review for which appropriate
effect was required to be given are as follows :-
a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1,2008.
The company has started accruing interest @ 6% per annum on Term Loans
& Working Capital Term Loans outstanding from 1st October, 2008.
b) However, the Hon''ble BIFR vide order dated 12th November, 2008, has
stipulated that FI(s)/banks would neither raise any claim for payment
of interest w.e.f. 1 st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The installment''s of the
balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions. Since Bank of
Baroda and Indian Overseas Bank have opted for OTS, they have not been
paid installments towards balance principal outstanding.
Starting from the quarter January to March 2009, the company started
paying the balance principal outstanding of Term loans & Working
Capital Term Loan after adjusting the amount converted to equity shares
and upfront payment already made, on a deferral basis (over a period of
33 quarterly installments), except payment to Vijaya Bank as the said
bank had not sent confirmation to the rehabilitation scheme approved by
the Hon''ble BIFR on 12th March, 2007 till the end of 31st March, 2014.
However, the Company has defaulted in payment of principal amount of
Loans of Rs 6977.43 Lacs (Previous year 4105.33 Lacs) to Banks /
Financial Institutions for twelve quarters starting from 1st April,
2011 to 31st March, 2014. The Company was unable to meet its
obligations towards repayment of quarterly installments due in respect
of term/working capital term loans as per BIFR sanctioned scheme, due
to non availability of working capital limits as envisaged in the
sanctioned scheme and sluggish market conditions during the year.
In the event the company defaults in its obligations towards repayment
of quarterly installments, the banks /FIs reserve the rights given in
the sanctioned scheme as mentioned in Para E of Note 27.
The Company approached the IFCI (i.e. The Operating Agency hereinafter
referred as OA) and the lenders whose interest were affected pursuant
to which a meeting of secured lenders was held in the month of April,
2012 where consent for the proposed Modified Debt Restructuring Scheme
(MDRS) which envisaged sale of certain additional surplus assets was
obtained . The OA , thereafter submitted the MDRS to the Hon''ble BIFR
in the month of October, 2012 which envisages besides sale of surplus
assets such as Plant & Machinery along-with Other Miscellaneous Assets
and Flats, sale/mortgage of vacant land at Vadodara and also re-sched
-ulement of repayment of secured loan and interest thereon within the
scheme period. The amount collected from disposal of such surplus
assets are to be used to address the dues of secured lenders as per
original sanctioned scheme and dues of workers as per Memorandum of
Settlement.
The Hon''ble BIFR ,after hearing all concerned parties vide its interim
order dated 29.01.2013, approved the sale of surplus assets as
envisaged in MDRS namely 168 workers flats at Mohali, idle Plant
& Machinery at Mohali which is no longer required to be relocated to
Vadodara and also the surplus land up to 175 acres at the company''s
unit at Vadodara through the Asset Sale Committee (ASC) already
constituted and keeping the sale proceeds in a no lien account ( NLA )
with the OA and utilized as decided by BIFR. The matter regarding re-
schedulement of repayment of secured loan within the scheme period as
envisaged in proposed Modified Debt Restructuring Scheme (MDRS) is
pending before BIFR as at 31st March, 2014.
c) During the year the idle Plant & Machinery including Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles etc and few workers flats
were sold by the ASC and the proceeds were deposited in the No Lien
Account with Operating Agency. The sale of remaining worker''s flats is
in progress & will be made as per BIFR Interim Order. Bids for the sale
of surplus land at Vadodara were invited by the Asset Sale Committee.
As one of the bid selected was conditional, the matter has been
referred to BIFR which is under consideration of BIFR as at 31st March,
2014.
d) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41(1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
e) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
f) The Company entered into a Memorandum of Settlement with the
worker''s unions at Mohali, Punjab crystallizing their dues at Rs 40
Crores. The Settlement has been registered before the concerned
authorities and submitted to BIFR. Since the crystallized dues of
workers/staff are to be settled out of the sale proceeds of the Mohali
assets as per the sanctioned scheme, hence no provision for the dues to
workers/staff has been made in the current year ended 31st March, 2014.
The same shall be provided upon sale of Mohali Assets.
g) In view of the proposed introduction of GST, extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years has
not been extended & approved by the Gujarat Govt and accordingly VAT is
being paid on goods sold locally and CST on goods sold in an interstate
transaction. Further input tax credit is being claimed on VAT paid.
h) The Scheme granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the Gujarat
Government & is being borne by the Company.
28 B The impact of the scheme approved by the Hon''ble BIFR, on the
accounts of the company for the previous years for which
appropriate effect was required to be given are as follows :-
a) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
were assigned to Asset Reconstruction Company (India) Limited (ARCIL)
in the financial year 2009-2010, their loans have also been converted
into WCTL.
b) Indian Overseas Bank and Bank of Baroda had not been issued equity
equivalent to 15% of principal outstanding as on the cut-off date as
per the BIFR sanctioned scheme in the FY 07-08 as they had opted for
OTS.
c) Out of total Debentures of Rs 500 Lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs
75 Lacs has been converted into equity shares in the financial year
2009-2010. The balance amount of Rs.425 lacs have been shown as Term
Loan from the financial year 2009-2010 in terms of Sanctioned Scheme.
The security created in favour of Debenture T rustees through Trust
Deed is in the process of being released. The save is not yet released
as at 31.03.2014.
d) Similarly, Debentures of Rs 3,000 Lacs issued under Series II &
Series III to IFCI have been shown as Term Loan from the financial year
2009-2010 onwards in terms of Sanctioned Scheme. The security created
in favour of Debenture Trustees through Trust Deed is in the process of
being released.
e) As per BIFR sanctioned scheme, the share capital of Rs. 7,502.26
lacs was allotted to the promoters/FIs/Banks in the financial year
2007-2008. Further during the year 2009-10, the share capital of
Rs.34.78 lacs was allotted to ARCIL pursuant to BIFR order, since SBI &
SBICI have assigned their debt to ARCIL.
29 As per Sanctioned BIFR Scheme, the revival of the company is
dependant on sale of land and building at Mohali. As envisaged in
sanctioned scheme, the company''s net worth could not turn positive in
the 4th year of its implementation due to delay in sale of land &
building.
On the assumption that the revival of the company will take place in
near future, the accounts of the company have been prepared on a
"going concern" basis on an assumption made by the management that
adequate finances and opportunities would be available in the
foreseeable future to enable the company to operate on a profitable
basis. Accordingly, the company has been treated as a going concern.
30 a) In terms of the orders of BIFR, the Mohali Assets which includes
Land, Building, Plant & Machinery, including Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles and Worker''s Flat in its
entirety are to be sold on "As is where is" and "As is what is basis".
The Hon''ble BIFR vide its interim order dated 29.01.2013, approved the
sale of surplus assets as envisaged in Modified Debt Restructuring
Scheme (MDRS) namely 168 workers flats at Mohali, idle Plant &
Machinery including Electrical Installation, Storage & Water System,
Office Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc
which is no longer required to be relocated to Vadodara through the
Asset Sale Committee. The Hon''ble BIFR also permitted sale of surplus
land at Vadodara in terms of the MDRS through the Asset Sale Committee.
During the year ended 31st March, 2014, few Worker''s Flats, Idle Plant
& Machinery including Electrical Installation, Storage & Water System,
Office Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc
were sold by the Asset Sale Committee and the proceeds were deposited
with IFCI (i.e. The Operating Agency). No provision for impairment of
remaining Fixed Assets at Mohali has been considered necessary by the
management as it expects that expected realisable value as per last
advertisement the minimum reserve price was Rs.180 crores, which is
higher than carrying value as at 31st March, 2014. The Fixed Assets at
Mohali as at 31st March, 2014 consist of Land, Building & remaining
Worker''s Flats.
b) The Fixed Assets at Mohali i.e. Land, Building and remaining Workers
Flats, have been retired from active use and held for disposal and are
shown separately in Note no. 10 i.e. Schedule of fixed assets of
financial statements.
c) As the inventory at Mohali unit, aggregating to Rs. 1,376.44 lacs,
which has to be transferred to the Vadodara unit as per the scheme
contains a substantial loss on impairment, necessary provision
considering diminution in value has been made. During the financial
year ended 31st March, 2014, Company has made a provision for
impairment of Rs. 1,219.96 Lacs on such Inventory, reducing the value
of working progress/finished goods by Rs.32.25 lacs and 62.66 Lacs has
been adjusted against corresponding provision/liability. The balance of
Rs 61.57 lacs is estimated to be net realizable value.
31 The Company estimates the deferred tax (charge) / credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs. 17,235.36 Lacs (Previous
year Rs. 16,441.58 lacs) has not been recognized.
32 EMPLOYEE BENEFITS:
a) Defined Contribution Plans
The Company has recognized the contribution/liability in the Statement
of Profit & Loss for the financial year 2013-14.
b) Defined Benefit Plans & Other Long Term Benefits:
The following disclosures are made in accordance with AS 15 (Revised)
pertaining to Defined Benefit Plans and Other Long Term Benefits :-
Notes:
a) The estimates of future salary increases, considered in actuarial
valuation, takes into account the inflation, seniority, promotion and
other relevant factors.
b) The company has a fund with the Life Insurance Corporation under the
Employees Gratuity Scheme and the fund value as on 31st March 2014 was
Rs. 170.84 lacs (Previous year Rs. 408.50 lacs).
c) As per valuation by Actuary liability towards Gratuity recognized in
the Balance Sheet as on 31st March 2014 is Rs. 761.53 lacs (Previous
year Rs. 621.84 lacs).
33. BALANCE CONFIRMATION
a) In the opinion of the management, Sundry Debtors & 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 in the
Balance sheet. During the Financial year ended 31st March 2014
confirmatory letters have been sent to the sundry debtors, requesting
them to confirm the account balances as on 31st March, 2014. Lot of
parties has not yet confirmed the balances as on the date of signing
the financials. Accordingly creditors, other receivables/payables and
debtors are subject to confirmation and have been shown as per values
appearing in the books of accounts and have been treated as good for
recovery/payment unless specifically provided for.
b) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Hon''ble BIFR
and these balances are after accounting for 15% equity share allotment
made to them in the financial year 2007-08 and 2009-10, upfront payment
and installments paid up to financial year ending 31st March, 2014.
There is no change in the bank balances of those banks which have not
yet sent the confirmation to the sanctioned scheme or those which have
opted for OTS.
35. RELATED PARTY DISCLOSURES:
Names of related parties and description of relationship
a) Related parties where significant influence exist : India
International Airways Limited
b) Associates : JCT Limited
c) Key Management Personnel : Mr Arjun Thapar
d) Relative of Key Management Personnel : Mrs. Nayantara Thapar, Ms.
Shivani Thapar
e) Companies over which persons described in
(c) & (d) are able to exercise significant influence : APJ Financial
Services Private Limited
Team Plus Securities Limited
36. The Company has taken certain commercial premises under cancellable
operating lease arrangements. The lease period varies from two to three
years with the option to extend the same with mutual consent. The total
aggregate Lease Rentals recognized as expense in the Statement of
profit & loss under cancellable operating lease was Rs. 66.87 Lacs
(Previous Period : Rs 131.96 Lacs).
37. The gross carrying amount of product development under progress of
Rs 140.95 Lacs has been transferred to Intangible and the same has been
written off during the same financial year ended 31st March, 2014 as
Company did not expect any commercial use. The Company has not incurred
any expenditure towards product development falling under the
definition of Intangible Assets as per the Accounting Standard-26 as on
31st March, 2014.
38. INFORMATION ON SEGMENT RESULTS
The company is engaged in the manufacture of Colour Picture Tubes &
Deflection Yoke which is in the context of Accounting Standard 17 on
Segment Reporting, issued by the Institute of Chartered Accountants of
India is considered as the only business segment. Presently company has
one plant designed to manufacture Color Picture Tube & Deflection Yoke
which is situated at Vadodara. Plant & Machinery including Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles etc of Two Plants situated at
Mohali has been disposed off during the year ended 31st March, 2014.
Being having one business entity, there are no reportable business as
well as geographical segments.
39. DISCONTINUING OPERATIONS
a) Description of Discontinuing Operations
(i) Company had set-up a manufacturing plant at A-32, Industrial Area,
Phase-VIII, Mohali for manufacture of Color Picture Tubes. The
installed capacity of this plant was 10 Lacs units per annum. Company
also had manufacturing plant for manufacture of Deflection Yokes unit
at A-27, Industrial Area, Phase-VII , Mohali.
(ii) The Company started incurring losses from the year 1997-98 due to
non-availability of working capital resulting in low capacity
utilization. Further the decline in prices of colour picture tubes on
account of cheap imports, also contributed to the losses. This resulted
in both the plants at Mohali shutting down active production in 2001. A
reference was made by the Company to the Hon''ble BIFR under the
relevant provisions of Sick Industrial Companies (Special Provisions)
Act, 1985 (''SICA'') in 2002, when the accumulated losses exceeded
its net worth as on 31st March, 2002. The Company was declared a sick
industrial company within the meaning of SICA by the Hon''ble BIFR
vide its order dated 12.12.2005. Thereafter, the Company submitted its
proposal for revival and rehabilitation and sanction was accorded to
the scheme vide order dated 12.03.2007 passed by the Hon''ble BIFR
(Sanctioned Scheme).
(iii) In terms of the Sanctioned Scheme the land & building at both the
plants at Mohali are to be sold and the plant & machinery shifted to
Vadodara. Subsequently the Hon''ble BIFR also allowed sale of the idle
plant & machinery including Electrical Installation, Storage & Water
System, Office Equipment, Factory Equipment, Furniture & Fittings,
Vehicles etc at Mohali Unit no longer required to be shifted as
proposed in the MDRS submitted to BIFR by the OA.
(iv) During the year ended 31st March, 2014, the Asset Sale Committee
has already initiated steps towards sale and accordingly few Worker''s
Flats, Idle Plant & Machinery including Electrical Installation,
Storage & Water System, Office Equipment, Factory Equipment, Furniture
& Fittings, Vehicles etc were sold and the proceeds were deposited with
IFCI (i.e. The Operating Agency). The land, building and remaining
workers flats at Mohali have been retired from the above assets and are
held for disposal and the same are shown separately in Note no.10 i.e.
Schedule of fixed assets of Financial Statements.
b) Business or Geographical Segment
(i) Company is engaged only in manufacture of Color Picture Tube and
Deflection Yoke. This is the only Business Segment of the Company.
(ii) In the previous year company had three plants designed to
manufacture Color Picture Tube & Deflection Yoke. Plant & Machinery
including Electrical Installation, Storage & Water System, Office
Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc of Two
Plants situated at Mohali has been disposed off during the year. The
remaining one plant is situated at Baroda Unit, Gujarat. These have not
been categorized under Accounting Standard 17 on Segment Reporting,
issued by Ministry of Corporate Affairs as reportable geographical
segments. However for limited purpose of categorization under
discontinuing operations,
Vadodara Plant & Mohali Plant were considered as two geographical
segments. As per BIFR Scheme, during the financial year ended 31st
March, 2014, Company has disposed-off Few Workers Flats, Plant &
Machinery including Electrical Installation, Storage & Water System,
Office Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc
of at both plants at Mohali which we categorized as one identifiable
geographical segment during the financial year ended 31st March, 2014.
c) Date & Nature of Initial Disclosure
The date & nature of such disclosure is described as under :-
(i) The Asset Sale Committee (ASC) initiated action to sell the Land &
Building at Mohali, consisting of two plots
i.e. at A-32, Industrial Area, Phase - VIII and A-27, Industrial Area,
Phase-VII, Mohali as per the Sanctioned Scheme of BIFR by releasing
advertisements in the months of December, 2011, September, 2012 and
February, 2013 in response to which no bids were received at the
Reserve Price fixed by Asset Sale Committee (ASC).
(ii) The Secured Lenders on the request of the company agreed to sell
the Plant & Machinery, including Electrical Installation, Storage &
Water System, Office Equipment, Factory Equipment, Furniture &
Fittings, Vehicles etc & Few Flats at Mohali. Accordingly the MDRS was
filed by Operating Agency (IFCI) with Hon''ble BIFR in the month of
October, 2012, which included sale of the aforesaid assets. The
Hon''ble BIFR on the request of the Lenders allowed sale of the said
assets vide its order dated 29th January, 2013 . During the year the
idle Plant & Machinery including Electrical Installation, Storage &
Water System, Office Equipment, Factory Equipment, Furniture &
Fittings, Vehicles etc and few workers flats were sold by the Asset
Sale Committee (ASC)and the proceeds were deposited in the No Lien
Account with Operating Agency.
(iii) In terms of the MDRS, the Hon''ble BIFR also permitted sale of
the surplus land up to 175 acres at the company''s unit at Vadodara.
The Asset Sale Committee (ASC) thereafter started the process of sale
by realizing advertisements.. Bids for the sale of surplus land at
Vadodara were invited by the ASC. As one of the bid selected was
conditional, the matter has been referred to BIFR which is under
consideration of BIFR as at 31st March, 2014.
(iv) During the previous year ended 31st March, 2013, the Company has
not yet entered into any binding agreement for sale of substantial
assets attributable to the discontinuing operation with any party. The
decision to sell Land & Building, Plant & Machinery, including
Electrical Installation, Storage & Water System, Office Equipment,
Factory Equipment, Furniture & Fittings, Vehicles etc & Flats and its
acceptance by Board of directors and secured lenders, is sufficient to
disclose it as discontinuing operations. During the year ended 31st
March, 2014, Asset Sale Committee (ASC) disposed off the Plant &
Machinery including Electrical Installation, Storage & Water System,
Office Equipment, Factory Equipment, Furniture & Fittings, Vehicles etc
& Few Flats at Mohali.
d) Date or period in which the discontinuance is expected to be
completed if known or determinable
The ASC has already initiated steps towards sale. However the date or
period in which the discontinuation is expected to be completed is not
determinable as on date as the process for sale has not been completed
in respect of the land & building , workers flats at Mohlai and surplus
land at Vadodara .
e) Carrying amounts, as of the balance sheet date, of the total assets
and total liabilities are as under:
(g) Details of assets against which the company has entered one or more
binding agreements as on 31st March, 2014. Details are as under :
1. Net selling price or range of price (of 5 Workers Flats) : Rs.
109.49 Lacs.
2. Expected timing of receipt of cash flows : During the financial year
2014-15
3. Carrying amount of such assets : Rs. 4.50 Lacs
(h) Amounts of net cash flows attributable to the operating, investing
and financing activities of the discontinuing operation during the
current financial reporting period
The same has been disclosed in Cash Flow Statement.
Mar 31, 2013
As at 31.03.2013 As at 31.03.2012
Rs. in Lacs Rs. in Lacs
1. CONTINGENT LIABILITIES &
COMMITMENTS
1.1 Contigent Liabilities
a) Claims against the company not 5,331.60 1,835.59
acknowledged as debts
b) Bills discounted 249.80 1,643.13
1.2 Capital Commitments
Estimated amount of contracts
remaining to 5.52 21.33
be executed on capital account
and not provided for
2. The Board for Industrial and Financial Reconstruction (BIFR)
declared the company as a sick company vide its order dated 12th
December, 2005 under the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA). BIFR passed an order under section 17(3) of SICA &
sanctioned a rehabilitation scheme vide its order dated 12,h March,
2007 with the cut off date fixed as 31st March, 2007, which was further
amended vide order dated 25th May, 2007. The scheme came into effect
from the date of issue of the sanctioned scheme and its provisions are
binding on all concerned. Relevant extracts from the sanctioned scheme
are given below:-
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and machinery to
Vadodara and utilizing the sale proceeds for meeting the liabilities of
the secured lenders and workers.
D. RELIEFS & CONCESSIONS: FIs & Banks
To waive past interest/compound interest/LD/penal damages etc. from the
date of the first default to respective institutions and banks and to
agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in annexure III to the
scheme.
To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into Term Loan.
Conversion of Working Capital limits into WCTL by Bankers.
Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
Banks to provide need based LC/LG facilities from time to time assessed
at Rs.5,054 Lakh for the year 2007-08.
Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
Write down of existing equity by 90%, immediately after sanction of the
Scheme.
Promoters to convert Share Application Money into equity capital as per
SEBI formula.
Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
Promoters to bring in Rs. 25 crores as promoters'' contribution in the
shape of equity.
Pledge of entire Promoter''s Shareholding (post rehabilitation) with FIs
and Banks.
Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/banks and settling workers''
liability.
To continue to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
To agree to shift to Vadodara on the terms and conditions as applicable
to the employees at Vadodara in the event of their giving consent to
shift to Vadodara works.
Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law.
To withdraw the legal cases pending with various courts filed by them
upon receiving the terminal dues.
Government of Punjab
To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are non- operational since 1991; and
To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non-operational periods and refund of security
deposit.
Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
Exemption of Octroi duty for a period of 10 years;
Exemption from payment of Electricity Duty for a period of 10 years;
Central Government
Withdrawal of demand notices for PF contribution on wages/salaries
during the lock out period.
Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E. OTHER STIPULATIONS
If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs / Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs / Banks
shall have the right to convert its entire overdue into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon''ble BIFR, FIs /
Banks also reserves the right to revoke the package of rehabilitation
with the prior approval of BIFR and in such event of revocation, the
decision of FIs / Banks shall be final and binding on the borrower
and/or guarantors. In case of FIs / Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further, FIs
/ Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents.
3 A. The impact of the scheme approved by the Hon''ble BIFR, on the
accounts of the company for the year under review for which appropriate
effect was required to be given are as follows :-
(a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1,2008.
The company has started accruing interest @ 6% per annum on Term Loans
& Working Capital Term Loans outstanding from 1st October, 2008.
(b) However, the Hon''ble BIFR vide order dated 12th November, 2008, has
stipulated that Fl(s)/banks would neither raise any claim for payment
of interest w.e.f. 1 st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The installment''s of the
balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions. Since Bank of
Baroda and Indian Overseas Bank have opted for OTS, they have not been
paid installments towards balance principal outstanding.
Starting from the quarter January to March 2009, the company started
paying the balance principal outstanding of Term loans & Working
Capital Term Loan after adjusting the amount converted to equity shares
and upfront payment already made, on a deferral basis (over a period of
33 quarterly installments), except payment to Vijaya Bank as the said
bank had not sent confirmation to the rehabilitation scheme approved by
the Hon''ble BIFR on 12th March, 2007 till the end of 31st March, 2013.
However, the Company has defaulted in payment of principal amount of
Loans of Rs 4105.33 Lacs to Banks / Financial Institutions for eight
quarters starting from 1st April, 2011 to 31st March, 2013. This is in
contravention of rehabilitation scheme announced by Board for
Industrial and Financial Reconstruction (BIFR) vide its order dated
12th March, 2007. The Company was unable to meet its obligations
towards repayment of quarterly installments due in respect of
term/working capital term loans as per BIFR sanctioned scheme, due to
non availability of working capital limits as envisaged in the
sanctioned scheme and sluggish market conditions during the year.
The relevant extract of such scheme, in case Company commits default,
is re-produced as under: -
"If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs / Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs / Banks
shall have the right to convert its entire overdue into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon''ble BIFR, FIs /
Banks also reserves the right to revoke the package of rehabilitation
with the prior approval of BIFR and in such event of revocation, the
decision of FIs / Banks shall be final and binding on the borrower
and/or guarantors. In case FIs / Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further, FIs
/ Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents."
The Company has approached IFCI-The Operating Agency with Modified Debt
Restructuring Scheme (MDRS) in the month of February, 2012. A meeting
of secured lenders was held in the month of April, 2012 & secured
lenders whose interest is being affected have given their consent for
the proposed Modified Debt Restructuring Scheme (MDRS). IFCI-The
Operating Agency has submitted the aforesaid Modified Debt
Restructuring Scheme (MDRS) to the Hon''ble BIFR in the month of
October, 2012. Besides sale of Land & Building, MDRS envisages sale of
surplus assets such as Plant & Machinery along- with Other
Miscellaneous Assets and Flats, and sale/mortgage of vacant land at
Vadodara, also contains re-schedulement of repayment of secured loan
and interest thereon within the scheme period. The amount collected
from disposal of such surplus assets shall be used to address the dues
of secured lenders as per original sanctioned scheme and dues of
workers as per Memorandum of Settlement. Hon''ble BIFR after hearing all
concerned parties vide its interim order dated 29.01.2013, has approved
the sale of surplus assets as envisaged in MDRS namely 168 workers
flats at Mohali, idle Plant & Machinery at Mohali which is no longer
required to be relocated to Vadodara and also the surplus land up to
175 acres at the company''s unit at Vadodara. Assets Sale Committee
(ASC) has been entrusted and authorized to work on the modalities for
conducting sale of aforesaid surplus assets. The matter of
re-schedulement of repayment of secured loan and interest thereon is
under consideration of Hon''ble BIFR. It was not feasible to determine
the area & relevant value of Surplus Land at Vadodara. Accordingly the
same is shown as part of Fixed Assets.
(c) An Asset Sale Committee which was constituted in earlier years for
the sale of land and building of the Mohali unit, is evaluating all
options to sell the land and there is no change in status of same as at
31 st March, 2013. As decided, before finalizing the sale, permission
from the Hon''ble BIFR will be taken. As decided and approved by Hon''ble
BIFR, the sale proceeds will be kept in a no lien interest bearing
account with the Scheduled Bank, and its utilization will be decided by
the Hon''ble BIFR. The Trust and Retention already opened with the
Allahabad Bank.
(d) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41 (1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
(e) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
(f) The Company entered into a Memorandum of Settlement with the
worker''s unions at Mohali, Punjab, towards crystallizing their dues in
the month of May, 2011 and the compensation amount had been settled at
Rs 40 Crores. An application for modification of BIFR scheme was
submitted before Board for Industrial & Financial Reconstruction.
Crystallized dues of workers/staff will be settled out of the sale
proceeds of assets at Mohali units as per the sanctioned scheme along
with the surplus assets and hence no provision for the dues to
workers/staff has been made in the current year ended 31 st March,
2013.
(g) In view of the proposed introduction of GST, extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years which
has expired in May, 2006, is not likely to come. However, after changes
in Sales Tax laws, the same has not been extended & approved by the
Gujarat Govt accordingly VAT is being paid on goods sold locally and
CST on goods sold in an interstate transaction. Further input tax
credit is being claimed on VAT paid.
(h) The Scheme has granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the Gujarat
Government & it is being borne by the Company. 29 B. The impact of the
scheme approved by the Hon''ble BIFR, on the accounts of the company for
the previous years for which appropriate effect was required to be
given are as follows :-
(a) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
were assigned to Asset Reconstruction Company (India) Limited (ARCIL)
in the financial year 2009-2010, their loans have also been converted
into WCTL.
(b) Indian Overseas Bank and Bank of Baroda had not been issued equity
equivalent to 15% of principal outstanding as on the cut-off date as
per the BIFR sanctioned scheme in the FY 07-08 as they had opted for
OTS.
(c) Out of total Debentures of Rs 500 Lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs
75 Lacs has been converted into equity shares in the financial year
2009-2010. The balance amount of Rs.425 lacs have been shown as Term
Loan from the financial year 2009-2010 in terms of Sanctioned Scheme.
The security created in favour of Debenture Trustees through Trust Deed
is in the process of being released.
(d) Similarly, Debentures of Rs 3,000 Lacs issued under Series II &
Series III to IFCI have been shown as Term Loan from the financial year
2009-2010 in terms of Sanctioned Scheme. The security created in favour
of Debenture Trustees through Trust Deed is in the process of being
released.
(e) As per BIFR sanctioned scheme, the share capital of Rs. 7,502.26
lacs has been allotted to the promoters/Fls/Banks in the financial year
2007-2008. During the year 2009-10, the share capital of Rs.34.78 lacs
has been allotted to ARCIL pursuant to BIFR order, since SBI & SBICI
have assigned their debt to ARCIL.
4. As per Sanctioned BIFR Scheme, the revival of the company is
dependant on sale of land and building at Mohali. As envisaged in
sanctioned scheme, the company''s net worth could not turn positive in
the 4th year of its implementation due to delay in sale of land &
building.
On the assumption that the revival of the company will take place in
near future, the accounts of the company have been prepared on a "going
concern" basis on an assumption made by the management that adequate
finances and opportunities '' would be available in the foreseeable
future to enable the company to operate on a profitable basis.
Accordingly, the company has been treated as a going concern.
5. (a) The company propose to sell the Mohali Assets which includes
Land, Building, Plant & Machinery, Other Miscellaneous Assets and Flat
in its entirety on "As is where is" and "As is what is basis". The
Company has estimated that all such Assets will fetch a value in excess
of book value of Fixed Assets of Rs. 2,122.91 Lacs and capital work in
progress of Rs. 26.98 Lacs at Mohali at 31 st March, 2013. Accordingly
no provision for impairment of Fixed Assets at Mohali has been
considered necessary by the management. The Fixed Assets at Mohali
consist of Land, Factory Building, Plant & Machinery, Electrical
Installation, Storage & Water System, Office Equipment, Factory
Equipment, Furniture & Fittings, Vehicles, and Flats.
(b) Considering above, Fixed Assets at Mohali i.e. Land, Factory
Building, Plant & Machinery, Electrical Installation, Storage & Water
System, Office Equipment, Factory Equipment, Furniture & Fittings,
Vehicles & Flats, have been retired from Fixed Assets category & has
been shown under the head "Othei Non Current Assets". This is in
compliance with Accounting Standard -10 on Fixed Assets issued by
Ministry of Corporate Affairs, Government of India which requires
disclosures of assets retired and held for sale separately.
(Please Refer Note No. -13)
(c) It is estimated that inventory at Mohali unit which has to be
transferred to the Vadodara unit as per the scheme aggregating to Rs.
1,376.44 Lacs contains a substantial loss on impairment which will be
estimated and provided for only after these have been shifted to
Vadodara Unit. The financial impact of this is not ascertainable. The
losses are understated to this extent.
6. The Company estimates the deferred tax (charge) / credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs. 16,441.58 Lacs (Previous
year Rs. 15,586.57 lacs) has not been recognized.
7. Balance Confirmation:
(a) In the opinion of the management, Sundry Debtors & 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 in the
Balance sheet. During the Financial year ended 31 st March 2013
confirmatory letters have been sent to the parties, requesting them to
confirm the account balances as on 31 st March, 2013. Lot of parties
has not yet confirmed the balances as on the date of signing the f
inancials. Accordingly Sundry debtors and creditors balances and other
receivables/payables are subject to confirmation and have been shown as
per values appearing in the books of accounts and have been treated as
good for recovery/payment unless specifically provided for.
(b) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Hon''ble Bl FR and
these balances are after accounting for 15% equity share allotment made
to them in the financial year 2007-08 and 2009-10, upfront payment and
installments paid up to finance! year ending 31 st March, 2013. There
is no change in the bank balances of those banks which have not yet
sent the confirmation to the sanctioned scheme or those which have
opted for OTS.
8. Related party disclosures:
Names of related parties and description of relationship
a) Related party where significant influence exist: India International
Airways Limited
b) Associates : JCT Limited
c) Key Management Personnel: Mr Arjun Thapar
d) Relative of Key Management Personnel: Mrs. Nayantara Thapar, Ms.
Shivani Thapar
e) Companies over which persons described in
(c) & (d) are able to exercise significant influence : APJ Financial
Services Private Limited
Team Plus Securities Limited
9. The Company has taken certain commercial premises and vehicles
under cancellable operating lease arrangements. The lease period varies
from two to three years with the option to extend the same with mutual
consent. The total aggregate Lease Rentals recognized as expense in the
Statement of profit & loss under cancellable operating lease was Rs.
131.96 Lacs (Previous Period: Rs. 129.23 Lacs).
10. The Company has incurred as on 31 st March, 2013, Rs. 140.95 lacs
towards product development falling under the definition of Intangible
Assets as per the Accounting Standard-26. The product is still under
development stage. The same is expected to be capitalized during the
financial year 2013-2014. The gross carrying amount of such product
development under progress as at 31 st March, 2013 is Rs 140.95 Lacs.
Such product development expenditure shall be amortised over 120 months
on straight line basis starting from the month subsequent to the month
of its activation for commercial use.
11. Information on Segment Results:
The company is engaged in the manufacture of Colour Picture Tubes &
Deflection Yoke which is in the context of Accounting Standard 17 on
Segment Reporting, issued by the Institute of Chartered Accountants of
India is considered as the only business segment. Presently company has
three plants designed to manufacture Color Picture Tube & Deflection
Yoke. Two Plants are situated at Mohali & one plant is situated at
Baroda. There is no production activity in Mohali Plants & considering
on the basis of deployed Assets, such plant is not covered under the
definition of reportable geographical segment. Accord- ingly, there are
no reportable geographical segments.
12. Discontinuing Operations:
(a) Description of Discontinuing Operations
(i) Company had set-up a manufacturing plant at A-32, Industrial Area,
Phase - VIII, Mohali for manufacture of Color Picture Tubes. The
installed capacity of this plant was 10 Lacs units per annum. Company
also had manufacturing plant for manufacture of Deflection Yokes unit
at A-27, Industrial Area, Phase-VII, Mohali.
(ii) The Company started incurring losses from the year 1997-98 due to
non-availability of working capital resulting in low capacity
utilization. Further the decline in prices of colour picture tubes on
account of cheap imports, also contributed to the losses. A reference
was made by the Company to this Hon''ble Board under the relevant
provisions of Sick Industrial Companies (Special Provisions) Act, 1985
(''SICA'') in 2002, when the accumulated losses exceeded its net worth as
on 31 st March, 2002. The JCTEL was declared a sick industrial company
within the meaning of SICA by this Hon''ble Board vide its order dated
12.12.2005. Thereafter, the JCTEL submitted its proposal for revival
and rehabilitation and sanction was accorded to the scheme formulated
by the Company vide order dated 12.03.2007 passed by this Hon''ble Board
(''Sanctioned Scheme'').
(iii) Both plants stopped active production in the year 2001.
(iv) As per the BIFR sanctioned scheme, the revival of the company is
dependant on the sale of land and building at Mohali. The plant and
machinery were proposed to be shifted to Baroda Unit. The Company has
approached IFCI-The Operating Agency with Modified Debt Restructuring
Scheme (MDRS) in the month of February, 2012. A meeting of secured
lenders was held in the month of April, 2012 & secured lenders whose
interest is being affected have given their consent for the proposed
Modified Debt Restructuring Scheme (MDRS). IFCI-The Operating Agency
has submitted the aforesaid Modified Debt Re- structuring Scheme (MDRS)
to the Hon''ble BIFR in the month of October, 2012. Besides sale of Land
& Building, MDRS envisages sale of surplus assets such as Plant &
Machinery along-with Other Miscellaneous Assets and Flats, and sale/
mortgage of vacant land at Vadodara, also contains re-schedulement of
repayment of secured loan and interest thereon within the scheme
period. Hon''ble BIFR after hearing all concerned parties vide its
interim order dated 29.01.2013, has approved the sale of surplus assets
as envisaged in MDRS namely 168 flats at Mohali, idle Plant & Machinery
at Mohali which is no longer required to be relocated to Vadodara and
also the surplus land up to 175 acres at the company''s unit at
Vadodara. Assets Sale Committee (ASC) has been entrusted and
authorized to work on the modalities for conducting sale of aforesaid
surplus assets. It was not feasible to determine the area & relevant
value of Surplus Land at Vadodara. Accordingly the same is shown as
part of Fixed Assets.
(b) Business or Geographical Segment.
(i) Company is engaged only in manufacture of Color Picture Tube, and
Deflection Yoke. This is the only Business Segment of the Company.
(ii) Presently company has three plants designed to manufacture Color
Picture Tube & Deflection Yoke. Two Plants are situated at Mohali & one
plant is situated at Baroda. These have not been categorized under
Accounting Standard 17 on Segment Reporting, issued by Ministry of
Corporate Affairs as reportable geographical segments. However for
limited purpose of categorization under discontinuing operations Baroda
Plant & Mohali Plant can be considered as two geographical segments. As
per BIFR Scheme, Company has to sell its Assets at both plants at
Mohali which we can categorize as one the identifiable geographical
segment.
(c) Date & Nature of Initial Disclosure
The date & nature of such disclosure is described as under :-
(i) During the year ended 31 st March 2012, the Asset Sale Committee
(ASC) initiated an action by advertising to sell the Land & Building at
Mohali, consisting of two plots i.e. at A-32, Industrial Area, Phase -
VIII and A-27, Industrial Area, Phase-VII, Mohali as per the Sanctioned
Scheme of BIFR. The advertisement was issued in the month of December,
2011 & September, 2012. The sale constituted only of Land & Building
at Mohali.
(ii) Board of Directors of the Company in its meeting held in the month
of February, 2012 recommended to sell Plant & Machinery, Other
Miscellaneous Assets & Flats at Mohali. Secured Lenders accorded their
approval for said proposal. MDRS has been filed by Operating Agency
(IFCI) with Hon''ble BIFR in the month of October, 2012, which includes
the aforesaid assets. (iii) The Asset Sale Committee had released the
advertisement in the month of December, 2011 & September, 2012,
detailing the formal plan for sale of land & building at Mohali. The
Sanctioned Scheme envisaged sale of only Land & Building at Mohali.
The Plant & Machinery was to be shifted to Baroda to augment production
capacity. The board of directors recommended sale of other Assets which
include Plant & Machinery, Other Miscellaneous Assets & Flats, since
the production capacity at Vadodara plant has already been enhanced.
The same has been accepted by secured lenders & MDRS has been submitted
by IFCI-The Operating Agency with Hon''ble BIFR for its sanction which
is under consideration. Hon''ble BIFR after hearing all concerned
parties vide its interim order dated 29.01.2013, has approved the sale
of surplus assets as envisaged in MDRS namely 168 workers flats at
Mohali, idle Plant & Machinery at Mohali which is no longer required to
be relocated to Vadodara and also the surplus land up to 175 acres at
the company''s unit at Vadodara. Assets Sale Committee (ASC) has been
entrusted and authorized to work on the modalities for conducting sale
of aforesaid surplus assets. It was not feasible to determine the area
& relevant value of Surplus Land at Vadodara. Accordingly the same is
shown as part of Fixed Assets.
(iv) The Company has not yet entered into any binding agreement for
sale of substantial assets attributable to the discontinu- ing
operation with any party. The decision to sell Land & Building with
proposal to sell of Plant & Machinery, Other Miscellaneous Assets &
Flats and its acceptance by board of directors and secured lenders, is
sufficient to disclose it as discontinuing operations.
(d) Date or period in which the discontinuance is expected to be
completed if known or determinable
Since MDRS has been submitted with Hon''ble BIFR & is under
consideration, the date or period in which the discontinuation is
expected to be completed is not determinable as on date. Assets sale
committee shall act upon the guidelines of BIFR and the procedure of
sale of assets shall start thereafter.
13. Comparative Figures
Figures for the previous year have been regrouped/reclassified wherever
necessary to make them comparable with those of the current year.
Mar 31, 2012
Note-1.1
a) Equity Shares : The company has only one class of equity shares
having face value of Rs. 1/- each. Each holder of equity share is
entitled to one vote per share.
b) Share holders are entitled to dividend, if any, declared by the
company. The dividend is payable in Indian rupees. The dividend. If
any, declared by the Board of Directors is subject to the approval of
the shareholders in the ensuing Annual General Meeting.
c) Re-payment of equity share capital shall be made at the time of
winding-up of the company. The company can also partly buy back equity
as and when decided by the company in accordance with the provisions of
The Companies Act, 1956.
Note -2.1: Securities given to secured lenders
a) Term loans from the financial institutions and indian Banks are
secured by an equitable mortgage on all the immovable properties at
Mohali & Vadodara and hypothecation of the movable assets of the
company, present and future, save and except prior charges on specified
movables in favour of the bankers for working capital requirements.
b) Working Capital term loans from Indian Banks and working capital
facilities from foreign banks are secured by first charge by way of
hypothecation of raw materials, goods in process, finished goods,
stores and spares, book debts and receivables of the Company, present
and future and second charge on the immovable proper-ties at Mohali
and Vadodara.
c) In terms of the BIFR sanctioned scheme, outstanding principal amount
of the working capital facilities from banks (other than banks covered
under OTS as per sanctioned scheme) as on 31st March, 2007 have been
converted into working capital term loans. These will additionally be
covered by a pari-pasu charge on the fixed assets along with the term
lenders, after completion of documentation in this regard.
d) Principal amount of working capital from banks covered under OTS
have been shown under working capital facilities. As mentioned in the
sanctioned scheme (Refer note no. 28(A) (c)) foreign banks are to be
paid by way of one time settlement (OTS)
Note - 2.2 : Terms of repayment
a) Rate of Interest
As per BIFR sanctioned scheme interest rate of 6% p.a. is payable to
Financial Institutions and Indian Banks referred to in Note No. 3.2
above starting from 1.10.2008.
b) Repayment
i) Secured loans from Financial Institutions and Indian Banks are
repayable in 33 quarterly instalments starting from Dec, 2008 to Mar,
2017 (Refer Note No. 28A (b))
ii) Foreign banks referred to in Note No. 3(1 )(c) and 3(iii)(a) are to
be settled by way of OTS to be paid out of the sale proceeds of land &
building at Mohali, which is yet to materialize.
Note - 2.3
An amount of Rs. 750 lacs was paid to IFCI, Operating Agency for
distribution among Financial Institutions and Indian Banks as per BIFR
orders. A sum of Rs. 27.99 lacs is still lying with the Operating
Agency as undistributed amount and the same has been reduced from the
amount of term loans and working capital term loans.
Note-2.4
As per BIFR orders no interest is being provided on the ICD. Interest
accrued and due on ICD represents balance as on 31.03.2007. These ICDs
are payable alongwith interested accued & due after the scheme period.
Note - 2.5
Non Convertible Debentures subscribed by M/s Escort Mutual Fund on
18.11.1996 for a period of 17 months and 30 days @ 21.5% p.a. which
were redeemable on 23.11.99, will be now paid as per terms of the
sanctioned scheme. As per BIFR order, no interest is being provided on
these NCDs. Interest accrued and due on NCDs represents balance as on
31.03.2007. These NCDs are payable alongwith interest accrued & due
after the scheme period.
Note- 3.1
As per BIFR Order, dues shown under "Other Long Terms Liabilities" are
to be settled partly over the scheme period and the balance thereafter.
No interest is payable to unsecured creditors on their dues.
The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. During the year ended 31st
March, 2012, company has not received any confirmation or intimation
from any party that it is covered under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED).
Rs. 20.49 lacs are payable to two parties namely M/s. H.K. Industries
and M/s Royal Pack Industries. These two parties are registered under
the said Act to whom the company owes an amount for more than 45 days
as at the Balance Sheet date which are carrying since 31st March, 2007.
Dues of the creditors as at 31st March, 2007 are to be addressed as per
terms of BIFR sanctioned scheme. However, in respect of balances
outstanding as at 31st March, 2007, no provision for interest has been
made in view of the BIFR order passed under the Sick Industrial
Companies (Special Provisions) Act, 1985 (SICA), wherein it is stated
that no interest on outstanding amounts due to creditors standing as on
the cut off date i.e. 31st March, 2007, shall be payable. Besides,
there are no transactions with these parties in the reporting year. In
view of above, the information required under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED), has not been furnished.
NOTE -4 : LONG TERM LOANS & ADVANCES
The Board of Directors of the Company in their meeting held in the
month of Feb., 2012 recommended to sell the Plant & Machinery, Other
Miscellaneous Assets & Flats at Mohali, besides Land & Building.
Secured Lenders have given their approval for said proposal.
Subsequently Modified Debt Restructring Scheme (MDRS) has been filed by
Operating Agency (IFCI) with BIFR in the month of June, 2012.
Considering the above, Fixed Assets at Mohali i.e. Land, Factory
Building, Plant & Machinery, Electrical Istallation, Storage & Water
System, Office Equipment, Factory Equipment, Furniture & Fittings,
Vehicles & Flats, have been retired from Fixed Assets category & have
been shown under the head Other Non Current Assets. This is in
compliance with Accounting Standard-10 on Fixed Assets issued by
Ministry of Corporate Affairs, Government of India which requires
disclosures of assets retired and held for sale separately. Since the
sale of such assets is not expected to be consummated in the next 12
months, such assets have been categorized under Non Current Category.
Note -4.1: Inventory valuation method
a) Finished goods have been valued at lower of cost or net realizable
value. In the case of finished goods, cost is determined by taking
material, labour and related factory overheads including depreciation,
excise duly and fixed production overheads arrived at by the cost sheet
of the last month of the financial year. Fixed overheads are allocated
for inclusion in the cost of conversion on the basis of normal levels
of production capacity or actual production whichever is higher.
b) Raw materials, stores and spares have been valued at cost by using
weighted average basis.
c) Goods in process have been valued at raw material cost incurred up
to the stage of production plus conversion cost apportioned on the
basis of raw material cost of goods in process.
d) Loose tools and stock in transit have been valued at cost.
e) As per past practice, no value is placed on stock of scrap since its
estimated net realizable/usable value is not accurately ascertainable.
As at 31.03.2012 As at 31.03.2011
Rs. in Lacs Rs. in Lacs
NOTE - 5 -:CONTINGENT
LIABILITIES & COMMITMENTS
Note - 5.1: Contingent
Liabilities
a) Claims against the company
not acknowledged as debts 1,835.59 1,878.68
b) Bills discounted 1,643.13 745.96
Note - 5.2 : Capital Commitments
Estimated amount of contracts
remaining to be executed on capital 21.33 3.21
account and not provided for
NOTE - 6
The Board for Industrial and Financial Reconstruction (BIFR) declared
the company as a sick company vide its order dated 12th December, 2005
under the Sick Industrial Companies (Special Provisions) Act, 1985
(SICA). BIFR passed an order under section 17(3) of SICA & sanctioned a
rehabilitation scheme vide its order dated 12th March, 2007 with the
cut off date fixed as 31st March, 2007, which was further amended vide
order dated 25th May, 2007. The scheme came into effect from the date
of issue of the sanctioned scheme and its provisions are binding on all
concerned. Relevant extracts from the sanctioned scheme are given
below:-
A REHABILITATION SCHEME (a) CONTOURS
Sr. Parameter Particulars
No.
1. Cut off date 31 -March-2007
2. Waivers (upto cut off date) Waiver of past interest /CI/LD/
penai interest, etc.
3. Shifting of Plant & The entire plant at Mohali unit
Machinery of Mohali plant will be shifted to Vadodara as
to Vadodara new line-III for the manufacture
of 21st True Flat Tubes. The land
& building at the Mohali unit
will be sold at an expected price
of Rs. 11,900 lakhs. Workers
at the Mohali plant will be given
employment at the Vadodara plant
and in the event of any worker
not opting for shifting, he/she
would be paid their legal dues as
per the settlement.
4. Utilisation of sale Sale of Land & Building at Mohali
proceeds of Land & Unit and utilization of the
Building at Mohali Unit proceeds (expected at about Rs.
11,900 lakhs) towards payment of
workers'dues (about Rs. 1,000
lakhs), payment of foreign banks
towards settlement of their
liabilities (Rs. 3,000 lakhs) and
payment of balance amount of Rs.
7,900 lakhs to lenders in the
ratio of outstanding dues for FIs
& core irregularities for the
banks. In case the realization
from sale of Land & Building at
Mohali unit falls below Rs.
11,900 lakhs, then the promoters
will meet the shortfall. In case
proceeds are more than Rs. 11,900
lakhs, the appropriation shall be
as under i) Upto Rs. 3,000 lakhs
- Increase to be paid to secured
lenders after paying crystallized
workers dues.ii) Beyond Rs. 3,000
lakhs - To be utilized by the
company for adding capacities
with prior approval of BIFR.
5. Future Interest Rate Interest @ 6% p.a. for term
loans/working capital term loans
w.e.f 1.10.2008 & there will be
no running cash credit working
capital facility with banks.
6. Conversion of Principal Conversion of 15% of principal
Term loans/WCTL into outstanding of Term Loans/WCTL
Equity (Rs. 5,400 lakhs) into equity
shares of the company after
reduction of existing equity by
90%.
7. Promoters' contribution Equity : Rs. 2,500 lakh (Rs. 750
lakhs towards upfront payment
Rs. 1,750 lakhs towards capital
expenditure for setting up
facilities of 14th CPT and
captive power generation),
In addition, the company will
also convert share application
money into equity at par after
write down of existing equity.
8. Sanction of need based Non Fund Based Limit - Need based
additional (L/C/LG limits) 2007-08 : Rs. 5,054 lakhs
9. Security 1. Pledge of entire share holding
of promoters post restructuring
(after equity w/off, conversion &
fresh induction).
2. Personal Guarantee of Sh.
Arjun Thapar on the entire Loans
of FIs & Banks.
3. Ceding of pari-passu charge to
working capital banks for their
WCTL exposure.
4. Opening of Trust & Retention
Account with lead bank.
10. Capital Reduction To write down existing paid up
equity share capital (Rs. 3,450
lakhs) by 90%.
11. Workers' dues JCTEL/promoters to settle the
workers past liability at Rs.
1,000 lakhs (as estimated) to
be paid out of sale proceeds of
Mohali Unit, as per appropriation
proposed in Item No.4.
(b) REPAYMENT SCHEDULE
Sr.No. Parameter Particulars
1. Repayment of balance In 33 quarterly instalments
principal-Term Loans & commencing from Dec, 2008 to Mar,
working capital term 2017.
loans
(c) ONE TIME SETTLEMENT PROPOSAL FOR FOREIGN BANKS
Sr.No Parameter Particulars
1. OTS PROPOSAL One time settlement of dues with
foreign banks towards settlement of
their entire liabilities for Rs.
3,000 lakhs (36.36% of principal)
payable out of the Mohali sale
proceeds.
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and machinery to
Vadodara and utilizing the sale proceeds for meeting the liabilities of
the secured lenders and workers.
D. RELIEFS & CONCESSIONS: FIs & Banks
- To waive past interest/compound interest/LD/penal damages etc. from
the date of the first default to respective institutions and banks and
to agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in Annexure III to the
scheme.
- To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into term loan.
- Conversion of Working Capital limits into WCTL by Bankers.
- Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
- Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
- Banks to provide need based LC/LG facilities from time to time
assessed at Rs. 5,054 lakhs for the year 2007-08.
- Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
- Write down of existing equity by 90%, immediately after sanction of
the Scheme.
- Promoters to convert Share Application Money into equity capital as
per SEBI formula.
- Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
- Promoters to bring in Rs. 25 crores as promoters' contribution in the
shape of equity.
- Pledge of entire Promoter's Shareholding (post rehabilitation) with
FIs and Banks.
- Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/banks and settling workers'
liability.
- To continue to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
- The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
- To agree to shift to Vadodara on the terms and conditions as
applicable to the employees at Vadodara in the event of their giving
consent to shift to Vadodara works.
- Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law.
- To withdraw the legal cases pending with various courts filed by them
upon receiving the terminal dues. Government of Punjab
- To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are non-operational since 1991; and
- To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non-operational periods and refund of security
deposit.
- Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
- The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
- Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
- Exemption of Octroi duty for a period of 10 years;
- Exemption from payment of Electricity Duty for a period of 10 years;
Central Government
- Withdrawal of demand notices for PF contribution on wages/salaries
during the lock out period.
- Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
- Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
- Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
- The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E. OTHER STIPULATIONS
If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs/Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs/Banks
shall have the right to convert its entire overdues into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon'ble BIFR,
FIs/Banks also reserves the right to revoke the package of
rehabilitation with the prior approval of BIFR and in such event of
revocation, the decision of FIs/Banks shall be final and binding on the
borrower and/or guarantors. In case FIs/Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further,
FIs/Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents.
NOTE-7
The impact of the scheme approved by the Hon'ble BIFR, on the accounts
of the company for the year under review for which appropriate effect
was required to be given are as follows :-
(a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1,2008 and the company has started
accruing interest @ 6% per annum on Term Loans & Working Capital Term
Loans outstanding.
(b) However, the Hon'ble BIFR vide order dated 12th November, 2008, has
stipulated that Fl(s)/banks would neither raise any claim for payment
of interest w.e.f. 1st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The installment's of the
balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions. Since Bank of
Baroda and Indian Overseas Bank have opted for OTS, they have not been
paid installments towards balance principal outstanding.
Starting from the quarter January to March 2009, the company has
started paying the balance principal outstanding of Term loans &
Working Capital Term Loan after adjusting the amount converted to
equity shares and upfront payment already made, on a deferral basis
(over a period of 33 quarterly installments), except payment to Vijaya
Bank as the said bank had not sent confirmation to the rehabilitation
scheme approved by the Hon'ble BIFR on 12th March, 2007 till the end of
31st March, 2012.
The Company has defaulted in payment of principal amount of Loans of
Rs. 1846.49 Lacs to Banks & Financial Institutions for four quarters
starting from 1st April, 2011 to 31st March, 2012. This is in
contravention of rehabilitation scheme approved by Board for Industrial
and Financial Reconstruction (BIFR) vide its order dated 12th March,
2007. The Company was unable to meet its obligations towards repayment
of quarterly installments due in respect of term/working capital term
loans as per BIFR sanctioned scheme, due to non availability of working
capital limits as envisaged in the sanctioned scheme and sluggish
market conditions during the year.
The relevant extract of such scheme, in case Company commits default,
is re-produced as under:-
"If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs/Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs/Banks
shall have the right to convert its entire overdue into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon'ble BIFR,
FIs/Banks also reserves the right to revoke the package of
rehabilitation with the prior approval of BIFR and in such event of
revocation, the decision of FIs/Banks shall be final and binding on the
borrower and/or guarantors. In case of FIs/Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further,
FIs/Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents."
The Company has approached IFCI-The Operating Agency with Modified Debt
Restructuring Scheme (MDRS) in the month of February, 2012. A meeting
of secured lenders was held in the month of April, 2012 & secured
lenders whose interest is being affected have given their consent for
the proposed Modified Debt Restructuring Scheme (MDRS). IFCI- The
Operating Agency has submitted the aforesaid Modified Debt
Restructuring Scheme (MDRS) to the Hon'ble BIFR in the month of June,
2012 and the same is under consideration.
(c) (i)An Asset Sale Committee has already been constituted for the
sale of land and building of the Mohali unit but before finalizing the
sale, permission from the Hon'ble BIFR will be taken. The sale proceeds
will be kept in a no lien interest bearing account with the Scheduled
Bank, and its utilization will be decided by the Hon'ble BIFR.
Accordingly Trust and Retention account has been opened with the
Allahabad Bank.
(ii) Conversion of leasehold land to freehold land is still pending.
(d) Changes effected in previous years
(i) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
were assigned to Asset Reconstruction Company (India) Limited (ARCIL)
in the financial year 2009-2010, their loans have also been converted
into WCTL.
(ii) Indian Overseas Bank and Bank of Baroda had not been issued equity
equivalent to 15% of principal outstanding as on the cut-off date as
per the BIFR sanctioned scheme in the FY 07-08 as they had opted for
OTS.
(iii) Out of total Debentures of Rs. 500 lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs.
75 lacs has been converted into equity shares in the financial year
2009-2010. The balance amount of Rs. 425 lacs have been shown as Term
Loan from the financial year 2009-2010 in terms of Sanctioned Scheme.
The security created in favour of Debenture Trustees through Trust Deed
is in the process of being released.
(iv) Similarly, Debentures of Rs. 3,000 lacs issued under Series II &
Series III to IFCI have been shown as Term Loan from the financial year
2009-2010 in terms of Sanctioned Scheme. The security created in favour
of Debenture Trustees through Trust Deed is in the process of being
released.
(v) As per BIFR sanctioned scheme, the share capital of Rs. 7,502.26
lacs has been allotted to the promoters/Fls/Banks in the financial year
2006-2007. During the year 2009-10, the share capital of Rs. 34.78 lacs
has been allotted to ARCIL pursuant to BIFR order, since SBI & SBICI
have assigned their debt to ARCIL.
(e) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41 (1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
(f) For continuing uninterrupted supplies/services, in addition to
payment against current dues of unsecured creditors, some of the
payments against the past dues have also been made, and the gross
amount paid during the year does not exceed the overall limits
prescribed under the sanctioned scheme.
(g) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
(h) The Company has entered into a Memorandum of Settlement with the
worker's unions at Mohali, Punjab, towards crystallizing their dues in
the month of May, 2011. The compensation amount has been settled at Rs
40 Crores. An application for modification of BIFR scheme has been
submitted before Board for Industrial & Financial Reconstruction.
Crystallized dues of workers/staff will be settled out of the sale
proceeds of the Mohali units as per the sanctioned scheme and hence no
provision for the dues to workers/staff has been made in the current
year.
(i) In view of the proposed introduction of GST, extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years which
has expired in May, 2006, is not likely to come. However, after changes
in Sales Tax laws, the same has not been extended & approved by the
Gujarat Govt accordingly VAT is being paid on goods sold locally and
CST on goods sold in an interstate transaction. Further input tax
credit is being claimed on VAT paid.
(j) The Scheme has granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the Gujarat
Government & it is being borne by the Company.
NOTE -8
As per Sanctioned BIFR Scheme, the revival of the company is dependant
on sale of land and building at Mohali. As envisaged in sanctioned
scheme, the company's net worth could not turn positive in the 4th year
of its implementation due to delay in sale of land & building.
On the assumption that the revival of the company will take place in
near future, the accounts of the company have been prepared on a "going
concern" basis on an assumption made by the management that adequate
finances and opportunities would be available in the foreseeable future
to enable the company to operate on a profitable basis. Accordingly,
the company has been treated as a going concern.
NOTE-9
(a) After obtaining consent of all secured lenders whose interests are
being affected, IFCI-The Operating Agency has submitted Modified Debt
Restructuring Scheme (MDRS) to the Hon'ble BIFR in the month of June,
2012 and the same is under consideration. Besides Land & Building, MDRS
envisages sale of Plant & Machinery along-with Other Miscellaneous
Assets and Flats. The amount collected from disposal of such additional
assets shall be used to address the dues of secured lenders as per
original sanctioned scheme and dues of workers as per Memorandum of
Settlement.
The company proposes to sell in entirety "As is where is and as is what
is basis" the Mohali Assets which includes Land, Building, Plant &
Machinery, Other Miscellaneous Assets and Flats. The Company has
estimated that all such Assets will fetch a value in excess of book
value of Fixed Assets of Rs. 2122.62 lacs and capita! work in progress
of Rs. 33.19 lacs at Mohali at 31st March, 2012. Accordingly no
provision for impairment of Fixed Assets at Mohali has been considered
necessary by the management. The Fixed Assets at Mohali consist of
Land, Factory Building, Plant & Machinery, Electrical Installation,
Storage & Water System, Office Equipment, Factory Equipment, Furniture
& Fittings, Vehicles, and Flats.
(b) Considering above, Fixed Assets at Mohali i.e. Land, Factory
Building, Plant & Machinery, Electrical Installation, Storage & Water
System, Office Equipment, Factory Equipment, Furniture & Fittings,
Vehicles & Flats, have been retired from Fixed Assets category & has
been shown under the head "Other Non Current Assets". This is in
compliance with Accounting Standard -10 on Fixed Assets issued by
Ministry of Corporate Affairs, Government of India which requires
disclosures of assets retired and held for sale separately.
(Please Refer Note No. -13)
(c) It is estimated that inventory at Mohali unit which has to be
transferred to the Vadodara unit as per the scheme aggregating to Rs.
1,376.44 lacs contains a substantial loss on impairment which will be
estimated and provided for only after these have been shifted to
Vadodara Unit. The financial impact of this is not ascertainable. The
losses are understated to this extent.
NOTE-10
The Company estimates the deferred tax (charge)/credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs. 15,586.57 lacs (Previous
year Rs. 14,491.20 lacs) has not been recognized.
Notes :
(a) The estimates of future salary increases, considered in actuarial
valuation, takes into account the inflation, seniority, promotion and
other relevant factors.
(b) The company has a fund with the Life Insurance Corporation under
the Employees Gratuity Scheme and the fund value as on 31st March 2012
was Rs. 400.60 lacs (Previous Year Rs. 395.24 lacs).
(c) As per valuation by Actuary liability towards Gratuity recognized
in the Balance Sheet as on 31st March 2012 was Rs. 586.62 lacs
(Previous Year Rs. 580.35 lacs).
NOTE - 11: BALANCE CONFIRMATION
(a) Debtors and creditors balances and other receivables/payables are
subject to confirmation and have been shown as per values appearing in
the books of accounts and have been treated as good for
recovery/payment unless specifically provided for.
(b) Debits to parties account include Rs. 1,244.14 lacs for the
recovery of CST from various parties which have been incorporated on
the basis of an understanding with the party for which credit notes are
anticipated to be received by the management. The financial impact of
same is not ascertainable.
(c) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Hon'ble BIFR and
these balances are after accounting for 15% equity share allotment made
to them in the financial year 2007-08 and 2009-10, upfront payment and
installments paid upto financial year ending 31st March, 2012. There is
no change in the bank balances of those banks which have not yet sent
the confirmation to the sanctioned scheme or those which have opted for
OTS.
NOTE - 12 : RELATED PARTY DISCLOSURES:
Names of related parties and description of relationship
a) Related parties where significant influence exist : India
International Airways Limited
b) Associates : JCT Limited
c) Key Management Personnel: Mr Arjun Thapar
d) Relative of Key Management Personnel : Mrs. Nayantara Thapar
e) Companies over which persons described in
(c) & (d) are able to exercise significant influence : APJ Financial
Services Private Limited
Team Plus Securities Limited
NOTE-13
The Company has taken certain commercial premises and vehicles under
cancellable operating lease arrangements. The lease period varies from
two to three years with the option to extend the same with mutual
consent. The total aggregate Lease Rentals recognized as expense in the
statement of profit & loss under cancellable operating lease was Rs.
129.23 lacs (Previous Period: Rs. 128.70 lacs).
NOTE-14
The Company has incurred as on 31st March, 2012, Rs. 245.05 lacs
towards product development falling under the definition of Intangible
Assets as per the Accounting Standard-26. The product is still under
development stage. The same is expected to be capitalized during the
financial year 2012-2013. The gross carrying amount of such product
development under progress as at 31st March, 2012 is Rs. 245.05 Lacs.
Such product development expenditure shall be amortised over 120 months
on straight line basis starting from the month subsequent to the month
of its activation for commercial use.
NOTE -15
Information on Segment Results:
The company is engaged in the manufacture of Colour Picture Tubes &
Deflection Yokes which in the context of Accounting Standard 17 on
Segment Reporting, issued by the Institute of Chartered Accountants of
India is considered as the only business segment. Presently company has
three plants designed to manufacture Colour Picture Tube & Deflection
Yoke. Two Plants are situated at Mohali & one plant is situated at
Baroda. There is no production activity in Mohali plants & considering
on the basis of deployed assets, such plant is not covered under the
definition of reportable geographical segment. Accordingly, there are
no reportable geographical segments.
NOTE - 16 : DISCONTINUING OPERATIONS
(a) Description of Discontinuing Operations
(i) Company had set-up a manufacturing plant at A-32, Industrial Area,
Phase - VIII, Mohali for manufacture of Color Picture Tubes. The
installed capacity of this plant was 10 Lacs units per annum. Company
also had manufacturing plant for manufacture of Deflection Yokes unit
at A-27, Industrial Area, Phase - VII, Mohali.
(ii) The Company started incurring losses from the year 1997-98 due to
non-availability of working capital resulting in low capacity
utilization. Further the decline in prices of colour picture tubes on
account of cheap imports, also contributed to the losses. A reference
was made by the Company to this Hon'ble Board under the relevant
provisions of Sick Industrial Companies (Special Provisions) Act, 1985
('SICA') in 2002, when the accumulated losses exceeded its net worth as
on 31st March, 2002. The JCTEL was declared a sick industrial company
within the meaning of SICA by this Hon'ble Board vide its order dated
12.12.2005. Thereafter, the JCTEL submitted its proposal for revival
and rehabilitation and sanction was accorded to the scheme formulated
by the Company vide order dated 12.03.2007 passed by this Hon'ble Board
('Sanctioned Scheme').
(iii) Both plants stopped active production in the year 2001.
(iv) As per the BIFR sanctioned scheme, the revival of the company is
dependant on the sale of land and building at Mohali. The plant and
machinery were proposed to be shifted to Baroda Unit. Company has
approached IFCI- The Operating Agency with Modified Debt Restructuring
Scheme (MDRS) in the month of February, 2012.
A meeting of secured lenders was held in the month of April, 2012 &
secured lenders whose interests are being affected have given their
consent for the proposed Modified Debt Restructuring Scheme (MDRS).
IFCI-The Operating Agency has submitted the aforesaid Modified Debt
Restructuring Scheme (MDRS) to the Hon'ble BIFR in the month of June,
2012 and the same is under consideration. Besides Land & Building, MDRS
envisages sale of Plant & Machinery along-with Other Miscellaneous
Assets and Flats. Such Assets consist of Fixed Assets at Mohali i.e.
Land, Factory Building, Plant & Machinery, Electrical Installation,
Storage & Water System, Office Equipment, Factory Equipment, Furniture
& Fittings, Vehicles & Flats. The company propose to sell all the above
assets in its entirety on "As is where is" and "as is what is" basis.
(b) Business or Geographical Segment.
(i) Company is engaged only in manufacture of Color Picture Tube, and
Deflection Yoke. This is the only Business Segment of the Company.
(ii) Presently company has three plants designed to manufacture Colour
Picture Tube & Deflection Yoke. Two Plants are situated at Mohali & one
plant is situated at Baroda. There is no production activity in Mohali
plants & considering on the basis of deployed assets, such plant is not
covered under the definition of reportable geographical segment.
Accordingly, there are no reportable geographical segments. As per BIFR
sanctioned scheme, Company has to sell its Assets at both plants at
Mohali which we can categorise as one of the identifiable geographical
segment.
(c) Date & Nature of Initial Disclosure
The date & nature of such disclosure is described as under :-
(i) During the year, the Asset Sale Committee (ASC) has initiated an
action by advertising to sell the Land & Building at Mohali, consisting
of two plots i.e. at A-32, Industrial Area, Phase - VIII and A-27,
Industrial Area, Phase-VII, Mohali as per the Sanctioned Scheme of
BIFR. The advertisement was issued in the month of December, 2011. The
sale constituted only of Land & Building at Mohali.
(ii) Board of Directors of the Company in its meeting held in the month
of February, 2012 recommended to sell Plant & Machinery, Other
Miscellaneous Assets & Flats at Mohali. Secured Lenders accorded their
approval for said proposal. MDRS has been filed by Operating Agency
(IFCI) with Hon'ble BIFR in the month of June, 2012, which includes the
aforesaid assets.
(iii) The Asset Sale Committee had released the advertisement in the
month of December, 2011 detailing the formal plan for sale of land &
building at Mohali. The Sanctioned Scheme envisaged sale of only Land &
Building at Mohali. The Plant & Machinery was to be shifted to Baroda
to augment production capacity. The board of directors recommended sale
of other Assets which include Plant & Machinery, Other Miscellaneous
Assets & Flats, since the production capacity at Vadodara plant has
already been enhanced. The same has been accepted by secured lenders &
MDRS has been submitted by IFCI - The Operating Agency with Hon'ble
BIFR for its sanction which is under consideration.
(iv) The Company has not yet entered into any binding agreement for
sale of substantial assets attributable to the discontinuing operation
with any party. The decision to sell Land & Building with proposal to
sell of Plant & Machinery, Other Miscellaneous Assets & Flats and its
acceptance by Board of Directors and secured lenders, is sufficient to
disclose it as discontinuing operations.
(d) Date or period in which the discontinuance is expected to be
completed if known or determinable Since MDRS has been submitted with
Hon'ble BIFR & is under consideration, the date or period in which the
discontinuation is expected to be completed is not determinable as on
date. Assets sale committee shall act upon the guidelines of BIFR and
the procedure of sale of assets shall start thereafter.
(g) Amount of pre-tax profit or loss from ordinary activities
attributable to the discounting operation during the current financial
reporting period, and the income tax expenses related thereto Pre-tax
profit/(Loss) (303.37)
Income Tax on such Profit/Loss Nil
(h) Amounts of net cash flows attributable to the operating, investing,
and financing activities of the discontinuing operation during the
current financial reporting period The same has been disclosed in Cash
Flow Statement.
(i)_ Previous Period Figures
Since the decision to sell Plant & Machinery & other Misc. Assets &
Flats relating to discontinued operations has been taken in the
financial year 2011 -2012, the previous period figures has not been
furnished.
Mar 31, 2011
As at 31.03.2011 As at 31.03.2010
Rs. in Lacs Rs. in Lacs
1. CONTINGENT LIABILITIES :
a) Claims against the Company not
acknowledged as debts 1,878.68 1,880.18
b) Bills discounted 745.96 4,728.17
2. EXCHANGE FLUCTUATION:
Exchange differences arising on foreign currency transactions relating
to revenue items have been recognised as income or expense in the
period in which they arise. During the current year, there was a gain
of Rs. 14.18 lacs (Previous year gain of Rs. 74.16 lacs) which has been
shown as part of other income.
3. The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. During the year ended 31st
March, 2011, company has not received any confirmation or intimation
from any party that it is covered under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED).
M/s. H.K. Industries and M/s Royal Pack Industries are two parties
registered under the said Act to whom the company owes an amount for
more than 45 days as at the Balance Sheet date which are carrying since
31st March, 2007. Dues of the creditors as at 31s1 March, 2007 are to
be addressed as per terms of sanctioned scheme of BIFR. However, in
respect of balances outstanding as at 31st March, 2007, no provision
for interest has been made in view of the BIFR order passed under the
Sick Industrial Companies (Special Provisions) Act, 1985 (SICA),
wherein it is stated that no interest on outstanding amounts due to
creditors standing as on the cut off date i.e. 31st March, 2007, shall
be payable. Besides, there are no transactions with these parties in
the reporting year. In view of above, the information required under
the Micro, Small & Medium Enterprises Development Act, 2006 (MSMED),
has not been furnished.
4. The Board for Industrial and Financial Reconstruction (BIFR)
declared the company as a sick company vide its order dated 12th
December, 2005 under the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA). BIFR passed an order under section 17(3) of SICA &
sanctioned a rehabilitation scheme vide its order dated 12th March,
2007 with the cut off date fixed as 31s1 March, 2007, which was further
amended vide order dated 25th May, 2007. The scheme came into effect
from the date of issue of the sanctioned scheme and its provisions are
binding on all concerned. Relevant extracts from the sanctioned scheme
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and machinery to
Vadodara and utilizing the sale proceeds for meeting the liabilities of
the secured lenders and workers.
D. RELIEFS & CONCESSIONS:
FIs & Banks
To waive past interest/compound interest/LD/penal damages etc. from the
date of the first default to respective institutions and banks and to
agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in annexure III to the
scheme.
To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into Term Loan.
Conversion of Working Capital limits into WCTL by Bankers.
Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
Banks to provide need based LC/LG facilities from time to time assessed
at Rs. 5,054 lacs for the year 2007-08.
Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
Write down of existing equity by 90%, immediately after sanction of the
Scheme.
Promoters to convert Share Application Money into equity capital as per
SEBI formula.
Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
Promoters to bring in Rs. 25 crores as promoters' contribution in the
shape of equity.
Pledge of entire Promoter's Shareholding (post rehabilitation) with FIs
and Banks.
Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/banks and settling workers'
liability.
To continue to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
To agree to shift to Vadodara on the terms and conditions as applicable
to the employees at Vadodara in the event of their giving consent to
shift to Vadodara works.
Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law. To withdraw the legal cases
pending with various courts filed by them upon receiving the terminal
dues.
Government of Punjab
To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are non- operational since 1991; and
To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non-operational periods and refund of security
deposit.
Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
Exemption of Octroi duty for a period of 10 years;
Exemption from payment of Electricity Duty for a period of 10 years;
Central Government
Withdrawal of demand notices for PF contribution on wages/salaries
during the lock out period.
Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E OTHER STIPULATIONS
If the company commits default towards repayment of principal
installments or payment of interest as per the sanctioned scheme or any
combination, FIs / Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs / Banks
shall have the right to convert its entire over dues into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Hon'ble BIFR, FIs /
Banks also reserves the right to revoke the package of rehabilitation
with the prior approval of BIFR and in such event of revocation, the
decision of FIs / Banks shall be final and binding on the borrower
and/or guarantors. In case of FIs / Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further, FIs
/ Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents.
5. The impact of the scheme approved by the Hon'ble BIFR, on the
accounts of the company for the year under review for which appropriate
effect was required to be given are as follows :-
(a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1, 2008.
The company from 1st October, 2008 has started accruing interest @ 6%
per annum on Term Loans & Working Capital Term Loans outstanding.
(b) However, the Hon'ble BIFR vide order dated 12th November, 2008, has
stipulated that Fl(s)/banks would neither raise any claim for payment
of interest w.e.f. 1st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The installment's of the
balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions. Since Bank of
Baroda and Indian Overseas Bank have opted for OTS, they have not been
paid installments towards balance principal outstanding.
Starting from the quarter January to March 2009, the company has
started paying the balance principal outstanding of Term loans &
Working Capital Term Loan after adjusting the amount converted to
equity shares and upfront payment, on a deferral basis (over a period
of 33 quarterly installments), except payment to Vijaya Bank as the
said bank had not sent confirmation to the rehabilitation scheme
approved by the Hon'ble BIFR on 12th March, 2007 till the end of this
financial year. Amount of Rs. 1,580.14 lacs has been repaid during the
year.
(c) (i) An Asset Sale Committee has been constituted for the sale of
land and building of the Mohali unit but before finalizing the sale,
permission from the Hon'ble BIFR will be taken. The sale proceeds will
be kept in a no lien interest bearing account with the Scheduled Bank,
and its utilization will be decided by the Hon'ble BIFR.
(ii) Conversion of leasehold land to freehold land is pending.
(iii) Trust and Retention Bank A/c required to be opened with
Scheduled Bank, shall be opened upon sale of Mohali Plant.
(d) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
were assigned to Asset Reconstruction Company (India) Limited (ARCIL)
in the financial year 2009 -2010, their loans have also been converted
into WCTL.
(e) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41(1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
(f) For continuing uninterrupted supplies/services, in addition to
payment against current dues of unsecured creditors, some of the
payments against the past dues have also been made and the gross amount
paid during the year does not exceed the overall limits prescribed
under the sanctioned scheme.
(g) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
(h) The Company has entered into a Memorandum of Settlement with the
worker's unions at Mohali, Punjab, towards crystallizing their dues in
the month of May, 2011. The compensation has been increased from Rs. 10
crores to Rs. 40 crores. An application for modification of BIFR scheme
has been submitted before Board for Industrial & Financial
Reconstruction. Crystallized dues of workers/staff will be settled out
of the sale proceeds of the Mohali units as per the sanctioned scheme
and hence no provision for the dues to workers/staff has been made in
the current year.
(i) Out of total Debentures of Rs. 500 lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs.
75 lacs has been converted into equity shares in the financial year
2009- 2010. The balance amount of Rs. 425 lacs which was appearing as
Debentures under the Schedule C 'Secured Loans', till the financial
year ending 31st March, 2009 have been shown as Term Loan in the
financial year 2009-2010 in terms of Sanctioned Scheme. The security
created in favour of Debenture Trustees through Trust Deed is in the
process of being released.
(j) Similarly, Debentures of Rs. 3,000 lacs issued under Series II &
Series III to IFCI which was appearing as Debentures under the Schedule
C 'Secured Loans', till the financial year ended 31st March, 2009 have
been shown as Term Loan in the financial year 2009-2010 in terms of
Sanctioned Scheme. The security created in favour of Debenture Trustees
through Trust Deed is in the process of being released.
(k) Indian Overseas Bank and Bank of Baroda had not been issued equity
equivalent to 15% of principal outstanding as on the cut-off date as
per the BIFR sanctioned scheme in the FY 07-08 as they had opted
for OTS.
(l) In view of the proposed introduction of GST, Extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years which
has expired in May, 2006, is not likely to come. However, after changes
in Sales Tax laws, the same has not been extended & approved by the
Gujarat Govt accordingly VAT is being paid on goods sold locally and
CST on goods sold in an interstate transaction. Further input tax
credit is being claimed on VAT paid.
(m) The Scheme has granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the Gujarat
Government & it is being borne by the Company.
6. As per BIFR sanctioned scheme, the share capital of Rs. 7,502.26
lacs has been allotted to the promoters/FIs/ Banks in the financial
year 2006-2007. During the year 2009-10, the share capital of Rs. 34.78
lacs has been allotted to ARCIL pursuant to BIFR order, since SBI &
SBICI have assigned their debt to ARCIL. The revival of the company is
dependant on sale of land and building at Mohali, shifting of plant and
machinery and repayment of dues to various banks and financial
institutions. Assuming that this takes place as anticipated in the
sanctioned revival scheme, the company's net worth could not turn
positive in the 4th year of its implementation due to delay in sale of
Mohali Assets. On the assumption that the revival of the company will
take place as anticipated, the accounts of the company have been
prepared on a "going concern" basis on an assumption made by the
management that adequate finances and opportunities would be available
in the foreseeable future to enable the company to operate on a
profitable basis. Accordingly, the company has been treated as a going
concern.
7. (a) As per the sanctioned scheme and assumption by the management
that the sale of land & building at Mohali will fetch a value in excess
of book value of Fixed Assets of Rs. 2250 lacs and capital work in
progress of Rs. 33.20 lacs at Mohali at 31st March, 2011, no provision
for impairment of Fixed Assets at Mohali has been considered necessary
by the management. The Fixed Assets at Mohali consist of Land, Factory
Building, Plant & Machinery, Electrical Installation, Storage & Water
System, Office Equipment, Factory Equipment, Furniture & Fittings,
Vehicles.
(b) It is estimated that inventory at Mohali unit which has to be
transferred to the Vadodara unit as per the scheme aggregating to
Rs.1,376.44 lacs contains a substantial loss on impairment which will
be estimated and provided for only after these have been shifted to
Vadodara Unit. The financial impact of same is not ascertainable. The
losses are understated to this extent.
8. The Company estimates the deferred tax (charge) / credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs. 14,491.20 lacs (Previous
year Rs. 14,442.51 lacs) has not been recognized.
9. Employee Benefits:
(a) Defined Contribution Plans
The Company has recognized the contribution/liability in the Profit &
Loss Account for the financial year 2010-11.
10. Balance confirmation
(a) Debtors and creditors balances and other receivables/payables are
subject to confirmation and have been shown as per values appearing in
the books of accounts and have been treated as good for
recovery/payment unless specifically provided for.
(b) Debits to a party's account include Rs. 3,563.35 lacs for the
recovery of CST from various parties which have been incorporated on
the basis of an understanding with the party for which credit notes are
anticipated to be received by the management. The financial impact of
same is not ascertainable.
(c) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Hon'ble BIFR and
these balances are after accounting for 15% equity share allotment made
to them in the financial year 2007-08 and 2009-10, upfront payment and
installments paid upto financial year ending 31st March, 2011. There is
no change in the bank balances of those banks which have not yet sent
the confirmation to the sanctioned scheme or those which have opted for
OTS.
11. Related party disclosures:
Names of related parties and description of relationship
a) Related parties where significant influence exist : India
International Airways Limited
b) Associates : JCT Limited
c) Key Management Personnel: Mr Arjun Thapar
d) Relative of Key Management Personnel: Mrs. Nayantara Thapar
e) Companies over which persons described in APJ Financial Services
Private Limited (c) & (d) are able to exercise significant influence :
Team Plus Securities Limited
12. The Company has taken certain commercial premises and vehicles
under cancellable operating lease arrangements. The lease period varies
from two to three years with the option to extend the same with mutual
consent. The total aggregate Lease Rentals recognized as expense in the
profit & loss account under cancellable operating lease was Rs. 128.70
lacs (Previous Period : Rs. 112.82 lacs).
13. During the financial year ended 31st March, 2011, the Company has
incurred Rs. 114.81 lacs towards product development falling under the
definition of Intangible Assets as per the Accounting Standard-26. The
product is still under development stage. The same is expected to be
capitalized during the financial year 2011-2012. The gross carrying
amount of such product development under progress as at 31st March,
2011 is Rs. 114.81 lacs. Such product development expenditure shall be
amortised over 120 months on straight line basis starting from the
month subsequent to the month of its activation for commercial use.
14. During the year ended 31st March, 2011, Company has been assessed
Fringe Benefit Tax (FBT) of Rs. 52.65 lacs for the financial year
2006-2007 & 2007-2008. The same has been shown in the Profit & Loss
Account as tax adjustments of previous years. The Income Tax Department
of the opinion that the same is payable as FBT is not a tax on Income
and department did not consider the application of its exemption under
BIFR Scheme.
15. Information on Segment Results:
The company is engaged in the manufacture of Colour Picture Tubes which
in the context of Accounting Standard 17 on Segment Reporting, issued
by the Institute of Chartered Accountants of India is considered as the
only business segment. There are no geographical segments.
16. Comparative Figures:
Figures for the previous year have been regrouped/reclassified wherever
necessary to make them comparable with those of the current year.
17. Sales include sale of scraps and sale of goods purchased for
trading.
Mar 31, 2010
1. CONTINGENT LIABILITIES :
a) Claims against the Company not
acknowledged as debts 1,880.18 1,927.92
b) Bills discounted 4,728.17 1,298.01
2. EXCHANGE FLUCTUATION:
Exchange differences arising on foreign currency transactions relating
to revenue items have been recognised as income or expense in the
period in which they arise. During the current year, there was a gain
of Rs. 74.16 lacs (Previous year loss of Rs. 294.81 lacs) which has
been adjusted under appropriate heads to which the transactions relate.
Exchange differences on capital account are also adjusted in the profit
and loss account.
3. The information required to be disclosed under the Micro, Small &
Medium Enterprises Development Act, 2006 (MSMED), has been determined
to the extent such parties have been identified on the basis of
information available with the company. M/s. H.K. Industries and M/s
Royal Pack Industries are two parties registered under the said Act to
whom the company owes an amount for more than 45 days as at the Balance
Sheet date. However, in respect of balances outstanding as at 31st
March, 2007, no provision for interest has been made in view of the
BIFR order passed under the Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA), wherein it is stated that no interest on
outstanding amounts due to creditors standing as on the cut off date
i.e. 31st March, 2007, shall be payable. The aforesaid parties were
among the creditors as at 31st March, 2007. Besides, there are no
transactions with these parties in the reporting year. In view of
above, the information required under the Micro, Small & Medium
Enterprises Development Act, 2006 (MSMED), has not been furnished.
4. The Board for Industrial and Financial Reconstruction (BIFR)
declared the company as a sick company vide its order dated 12th
December, 2005 under the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA). BIFR passed an order under section 17(3) of SICA &
sanctioned a rehabilitation scheme vide its order dated 12th March,
2007 with the cut off date fixed as 31st March, 2007, which was further
amended vide order dated 25th May, 2007. The scheme came into effect
from the date of issue of the sanctioned scheme and its provisions are
binding on all concerned. Relevant extracts from the sanctioned scheme
are given below:-
A REHABILITATION SCHEME (a) Contours
Sr.
No Parameter Particulars
1. Cut off date 31-March-2007
2. Waivers (upto
cut off date) Waiver of past interest /CI/LD/penal
interest, etc.
3. Shifting of Plant & The entire plant at Mohali unit will be
shifted to Vadodara as new line-Ill Machinery
of Mohali plant for the manufacture of 21"
True Flat Tubes. The land & building at the to
Vadodara Mohali unit will be sold at an expe-
cted price of Rs. 11,900 lacs. Workers at the
Mohali plant will be given employment at the
Vadodara plant and in the event of any worker
not opting for shifting, he/she would be
paid their legal dues as per the settlement.
4. Utilisation of sale Sale of Land & Building at Mohali Unit and
utilization of the proceeds proceeds of Land
& (expected at about Rs.11,900 lakh) towards
payment of workersdues Building at Mohali
Unit (about Rs. 1,000 lakh), payment of fore-
ign banks towards settlement of their liabil-
ities (Rs. 3,000 lakh) and payment of balance
amount of Rs.7,900 lakh to lenders in the
ratio of outstanding dues for FIs & core
irregularities for the banks. In case the
realization from sale of Land & Building at
Mohali unit falls below Rs. 11,900 lakh, then
the promoters will meet the shortfall. In case
proceeds are more than Rs. 11,900 lakh, the
appropriation shall be as under
i) Upto Rs.3,000 lakh - Increase to be paid to
secured lenders after paying crystallized
workers dues.
ii) Beyond Rs.3,000 lakh - To be utilized by
the company for adding capacities with prior
approval of BIFR.
5. Future Interest Rate Interest @ 6% p.a. for term loans/working
capital term loans w.e.f 1.10.2008 & there
will be no running cash credit working capital
facility with banks.
6. Conversion of
Principal Conversion of 15% of principal outstanding
of Term Loans/WCfL Term loans / WCTL into
(Rs.5,400 lakh) into equity shares of the
company after reduction of Equity existing
equity by 90%.
7 Promoters contribution Equity : Rs. 2,500 lakh (Rs. 750 lakh towards
upfront payment + Rs. 1,750 lakh towards
capital expenditure for setting up facilities
of 14" CPT and captive power generation),
In addition, the company will also convert
share application money into equity at par
after write down of existing equity.
8.Sanction of need based Non Fund Based Limit - Need based 2007-08 :
Rs.5,054 lakh
additional (L/C/LG
limits)
9.Security 1.Pledge of entire share holding of promoters
post restructuring (after equity w/off,
conversion & fresh induction).
2.Personal Guarantee of Sh. Arjun Thapar on
the entire Loans of FIs & Banks.
3.Ceding of pari-passu charge to working
capital banks for their WCTL exposure.
4. Opening of Trust & Retention Account with
lead bank.
10. Capital Reduction To write down existing paid up equity share
capital (Rs. 3,450 lakh) by 90%.
11 Workers dues JCTEL/promoters to settle the workers past
liability at Rs. 1,000 lakh (as estimated)
to be paid out of sale proceeds of Mohali
Unit, as per appropriation proposed in
Item No.4.
(b) REPAYMENT SCHEDULE
Sr.
No Parameter Particulars
1. Repayment of balance In 33 quarterly instalments commencing from
Dec, 2008 to Mar, 2017. principal-Term Loans
& working Capital term Loans
c) ONE TIME SETTLEMENT PROPOSAL FOR FOREIGN BANKS
Sr.
No Parameter Particulars
1. OTS PROPOSAL One time settlement of dues with foreign banks
towards settlement of their entire liabilities
for Rs. 3,000 lakh (36.36% of principal)
payable out of the Mohali sale proceeds.
No separate provision for contingencies is made as it would be met by
the promoters upon crystallizing.
C. SALE OF MOHALI ASSETS
The scheme envisages sale of land and building and other infrastructure
of the Mohali unit (Punjab) and shifting of the plant and machinery to
Vadodara and utilizing the sale proceeds for meeting the liabilities of
the secured lenders and workers.
D. RELIEFS & CONCESSIONS:
FIs & Banks
To waive past interest/compound interest/LD/penal damages etc. from the
date of the first default to respective institutions and banks and to
agree to collect the principal outstanding as on the cut-off-date in
instalments as shown in the cash flow statement, starting from December
2008. The default date for this purpose of waiver for all institutions
and banks from which relief is sought is listed in annexure III to the
scheme.
To agree to levy 6% per annum interest from 1.10.2008 until the dues
are paid and to convert the debentures into Term Loan.
Conversion of Working Capital limits into WCTL by Bankers.
Conversion of part principal into equity, as per SEBI
guidelines/pricing formula.
Reschedule payment of principal so that it is repaid in 33 quarterly
instalments starting from December, 2008.
Banks to provide need based LC/LG facilities from time to time assessed
at Rs.5,054 lakh for the year 2007-08.
Ceding of pari-passu charge in favour of Working Capital Bankers to
secure their WCTL, exposure.
Promoters/Shareholders/JCTEL
Write down of existing equity by 90%, immediately after sanction of the
Scheme.
Promoters to convert Share Application Money into equity capital as per
SEBI formula.
Personal Guarantee of Shri Arjun Thapar, MD to the exposure of FIs &
Banks.
Promoters to bring in Rs. 25 crores as promoters contribution in the
shape of equity.
Pledge of entire Promoters Shareholding (post rehabilitation) with FIs
and Banks.
Sale of Mohali land and building and utilization of proceeds thereof
for reduction of debt of institutions/ banks and settling workers
liability.
To continue, to induct nominees of lead bank and lead FIs on the board
of company.
Workers (Mohali Plant)
The workers shall extend full cooperation for sale of land and
buildings to the company at Mohali and for shifting the plant and
machinery to Vadodara.
To agree to shift to Vadodara on the terms and conditions as applicable
to the employees at Vadodara in the event of their giving consent to
shift to Vadodara works.
Those not willing to get shifted, to collect their payments etc. in
arrears in accordance with the law. To withdraw the legal cases
pending with various courts filed by them upon receiving the terminal
dues.
Government of Punjab
To consider to grant permission for closure of Black & White Picture
Tube plant and Watch unit as these are non-operational since 1991; and
To consider waiver of minimum demand charges, interest etc. from PSEB
during lock out and non- operational periods and refund of security
deposit.
Government to consider permitting sale and conversion of end use of
land of industrial plots at A-32, Indl. Phase-VIII, Mohali and A-27,
Phase-VII, Mohali.
The Sales Tax Deptt. of Punjab has not raised any demand whatsoever.
With the sale of land and building of the Mohali unit & shifting of
Plant, the Sales tax liability, if any, shall be deemed to have been
extinguished. As no liability has arisen the assessments pending, if
any, shall be deemed to have been completed.
Government of Gujarat
Extension of Sales Tax (CST & VAT) concession/exemption expiring in
May, 2006 for a further period of 10 years;
Exemption of Octroi duty for a period of 10 years;
Exemption from payment of Electricity Duty for a period of 10 years;
Central Government Withdrawal of demand notices for PF contribution on
wages/salaries during the lock out period.
Waiver of interest, liquidated damages and penal interest on delayed
payments of Provident Fund.
Exemption from SEBI guidelines for reduction/de-rating of equity;
allotment of equity shares to promoters and associates on a
preferential basis as envisaged in the Scheme.
Income Tax Department to consider exempting the company from the
provisions of section 115JB & Fringe Benefit Tax and capital gains tax
on sale of Mohali assets under the Income Tax Act during the period of
rehabilitation.
The Ministry of Commerce, (Director General Foreign Trade) to extend
the Export Obligation (EO) period under EPCG scheme for a further
period of 5 years from the cut off date (31.3.2007).
E. OTHER STIPULATIONS
If the company commits default towards repayment of principal
instalments or payment of interest as per the sanctioned scheme or any
combination, FIs / Banks reserves the right to charge interest on the
defaulted amount at top of the band together with liquidated damages of
2% p.a. thereon till the date of clearance of default or FIs / Banks
shall have the right to convert its entire overdues into fully paid up
equity shares of JCTEL during the currency of the loans as per SEBI
guidelines, or otherwise but with the permission of Honble BIFR, FIs /
Banks also reserves the right to revoke the package of rehabilitation
with the prior approval of BIFR and in such event of revocation, the
decision of FIs / Banks shall be final and binding on the borrower
and/or. guarantors. In case of FIs / Banks exercise the right of
revocation, the financial rehabilitation sanctioned or granted to JCTEL
shall be treated as withdrawn and the terms and the conditions of the
original loan agreements or documents shall come into force as if no
such financial rehabilitation were ever granted to JCTEL. Further, FIs
/ Banks shall have the right to adjust payment received under the
present package of financial rehabilitation against outstanding dues in
terms of the original loan agreements/documents.
5. The impact of the scheme approved by the Honble BIFR, on the
accounts of the company for the year under review for which appropriate
effect was required to be given are as follows:-
(a) As per the scheme, interest is to be provided @ 6% p.a. on loans
from banks and FIs w.e.f. October 1, 2008.
The company from 1st October, 2008 has started accruing interest @ 6%
per annum on Term Loans & Working Capital Term Loans outstanding.
(b) However, the Honble BIFR vide order dated 12th November, 2008, has
stipulated that Fl(s)/banks would neither raise any claim for payment
of interest w.e.f. 1st October, 2008 in respect of installments, as
envisaged in the sanctioned scheme to be read along-with the cash flow
statement, nor would they take coercive action in this regard, until
issuance of further direction(s) by the Board. The installments of the
balance principal outstanding has been released to Banks/Financial
Institutions who have communicated their sanctions.
Starting from the quarter January to March 2009, the company has
started paying, the balance principal outstanding of Term loans &
Working Capital Term Loan after adjusting the amount converted to
equity shares and upfront payment, on a deferral basis (over a period
of 33 quarterly installments), except payment to Vijaya Bank as the
said bank had not sent confirmation to the rehabilitation scheme
approved by the Honble BIFR on 12th March, 2007 till the end of
this financial year.
During the current year, the installments of the balance principal
outstanding of Term Loan and WCTL of Allahabad Bank and UCO Bank have
been released after their confirmation/sanction as per the Sanctioned
Scheme.
(c) (i) An Asset Sale Committee has been constituted for the sale of
land and building of the Mohali unit but before finalizing the sale,
permission from the Honble BIFR will be taken. The sale proceeds will
be kept in a no lien interest bearing account with the Scheduled
Bank, and its utilization will be decided by the Honble BIFR.
(ii) Conversion of leasehold land to freehold land is pending. The
shifting of Mohali Plant will be taken up after entering an agreement
with the workers regarding settlement of their dues.
(iii) Trust and Retention Bank a/c required to be opened with Scheduled
Bank, shall be opened upon sale of Mohali Plant.
(d) The working capital facilities from the banks (other than banks
covered under OTS as per the sanctioned scheme) have been converted
into working capital term loan as per the sanctioned scheme. Since the
working capital loans of SBI & SBICI, who had earlier opted for OTS,
have now been assigned to Asset Reconstruction Company (India) Ltd.
(ARCIL), their loans have also been converted into WCTL.
(e) In view of the deemed sanction of the Income Tax Department, as per
section 19(2) of SICA, no provision for Minimum Alternate Tax is
required to be made nor is the remission or cessation of interest
liability subject to tax under section 41(1) of The Income Tax Act,
1961 since reliefs/concessions provided in the sanctioned scheme under
section 17(3) have an over riding effect on the provisions of the
Income Tax Act, 1961.
(f) For continuing uninterrupted supplies/services, in addition to
payment against current dues of unsecured creditors, some of the
payments against the past dues have also been made, and the gross
amount paid during the year does not exceed the overall limits
prescribed under the sanctioned scheme.
(g) No interest has been provided on the unsecured loans as per the
sanctioned scheme.
(h) Negotiation with the worker unions is in progress to crystallize
their past dues. Crystallized dues of workers/staff will be settled out
of the sale proceeds of the Mohali units as per the sanctioned scheme
and hence no provision for the dues to workers/staff has been made in
the current year.
(i) Out of total Debentures of Rs 500 lacs issued under Series I to
Vijaya Bank, 15% of the aforesaid amount of debentures amounting to Rs
75 lacs has been converted into equity shares. The balance amount of
Rs.425 lacs which was appearing as Debentures under the Schedule C
Secured Loans, till the financial year ending 31st March, 2009 have
been shown as Term Loan in the current year. The security created in
favour of Debenture Trustees through Trust Deed is in the process of
being released.
(j) Similarly, Debentures of Rs 3,000 Lacs issued under Series II &
Series ///to IFCI which was appearing as Debentures under the Schedule
C Secured Loans, till the financial year ended 31st March, 2009 have
been shown as Term Loan in the current year. The security created in
favour of Debenture Trustees through Trust Deed is in the process of
being released.
(k) Indian Overseas Bank, Bank of Baroda, SBI and SBICI had not been
issued equity equivalent to 15% of principal outstanding as on the
cut-off date as per the BIFR sanctioned scheme in the FY 07-08, since
they had opted for OTS. During the current year Equity shares have been
issued to ARCIL equivalent to 15% of principal outstanding of SBI &
SBICI as on the cut-off date as per the BIFR order, since SBI & SBICI
have assigned their debt to ARCIL, who have conveyed their acceptance
to the Scheme approved by the Honble BIFR.
(l) In view of the proposed introduction of GST, Extension of Sales Tax
(CST & VAT) concession/exemption for a further period of 10 years which
has expired in May, 2006 , is not likely to come. However, after
changes in Sales Tax laws, the same has not been extended & approved by
the Gujarat Govt accordingly VAT is being paid on goods sold locally
and CST on goods sold in an interstate transaction. Further input tax
credit is being claimed on VAT paid.
(m) The Scheme has granted exemption of octroi & electricity duty for a
period of 10 years but the same has not been approved by the, Gujarat
Government & it is being borne by the Company.
As per sanctioned scheme, the share capital of Rs. 7,502.26 lacs has
been allotted to the promoters/FIs/ Banks in the financial year
2006-07. During the year 2009-10, the share capital of Rs.34.78 lacs
has been allotted to ARCIL pursuant to BIFR order, since SBI & SBICI
have assigned their debt to ARCIL. The revival of
the company is dependant on sale of land and building at Mohali,
shifting of plant and machinery and repayment of dues to various banks
and financial* institutions. Assuming that this takes place as
anticipated in the sanctioned revival scheme, the companys net worth
is expected to turn positive in the 4th year of its implementation. On
the assumption that the revival of the company will take place as
anticipated the company has been treated as a going concern.
7. (a) As per the sanctioned scheme and assumption by the management
that the sale of land & building at Mohali will fetch a value in excess
of its book value, no provision for impairment of Mohali assets has
been considered necessary by the management.
(b) It is estimated that inventory at Mohali unit which has to be
transferred to the Vadodara unit as per the scheme aggregating to
Rs. 1380.34 lacs contains a substantial loss on impairment which will
be estimated and provided for only after these have been shifted to
Vadodara Unit. The losses are understated to this extent.
8. The Company estimates the deferred tax (charge) / credit using the
applicable rate of taxation based on the impact of timing differences
between financial statements and estimated taxable income for the
current period. Since there is no reasonable virtual certainty of
realisation, deferred tax asset (Net) of Rs. 14,442.51 lacs (Previous
year Rs. 14207.86 lacs) has not been recognized.
9. Employee Benefits:
(a) Defined Contribution Plans
The Company has recognized the contribution/liability in the Profit &
Loss Account for the financial year 2009-10.
Notes:
(a) The estimates of future salary increases, considered in actuarial
valuation, takes into account the inflation, seniority, promotion and
other relevant factors.
(b) The company has a fund with the Life Insurance Corporation under
the Employees Gratuity Scheme and the fund value as on 31st March 2010
was Rs.204.92 lacs (Previous Year Rs 99.14 lacs).
10. Balance confirmation
(a) Debtors and creditors balances and other receivables/payables are
subject to confirmation and have been shown as per values appearing in
the books of accounts and have been treated as good for recovery/
payment unless specifically provided for.
(b) Debits to a partys account include Rs. 4,184.61 lacs for the
recovery of CST from various parties which have been incorporated on
the basis of an understanding with the party for which credit notes are
anticipated to be received by the management.
(c) Balance of Banks and FIs as appearing in the books of accounts are
as mentioned in the sanctioned scheme approved by the Honble BIFR and
these balances are after accounting for 15% equity share allotment made
to them in the financial year 2007-08 and 2009-10, and installments
paid upto financial year ending 31 st March, 2010. There is no change
in the bank balances of those banks which have not yet sent the
confirmation to the sanctioned scheme or those which have opted for
OTS.
11. Related party disclosures:
Names of related parties and description of relationship
a) Related parties where significant influence exist : India
International Airways Limited
b) Associates : JCT Limited
c) Key Management Personnel: Mr Arjun Thapar
d) Relative of Key Management Personnel : Mrs. Nayantara Thapar
e) Companies over which persons described in APJ Financial Services
Private Limited (c) & (d) are able to exercise significant influence :
Team Plus Securities Limited
12. The Company has taken certain commercial premises under
cancellable operating lease arrangements. The lease period varies from
two to three years with the option to extend the same with mutual
consent. The total aggregate Lease Rentals recognized as expense in the
profit & loss account under cancellable operating lease was Rs. 112.82
lacs (Previous Period : Rs. 116.51 lacs).
13. Information on Segment Results :
The company is engaged in the manufacture of Colour Picture Tubes which
in the context of Accounting Standard 17 on Segment Reporting, issued
by the Institute of Chartered Accountants of India is considered as the
only business segment. There are no geographical segments.
14. Comparative Figures:
Figures for the previous year have been regrouped/reclassified wherever
necessary to make them comparable with those of the current year.
15. Sales include sale of scraps and sale of goods purchased for
trading.
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