Notes to Accounts of LML Ltd.
Mar 31, 2016
1. (Note [7.2] of Standalone Financial Statement)
The Company is in default in respect to the repayments long term debts of Principal and Interest as under:
2. (Note [7.3] of Standalone Financial Statement)
The Company is in default in the payment of interest to Foreign Currency Convertible Bonds holders:
3. (Note [25] of Standalone Financial Statement)
Contingent Liabilities & Commitments (to the extent not provided for)
a. Income-tax, Sales-tax, Customs and Excise Duty matters pending in appeals etc. Rs.17013.71 lakhs (Previous year Rs. 16991.80 lakhs) (net of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year Rs. 3.00 lakhs)
b. Outstanding guarantees furnished by Bankers Rs.6.15 lakhs (Previous year Rs.6.15 lakhs).
c. Claims against the Company not acknowledged as debts Rs.20880.52 lakhs
(Previous year Rs. 18601.44 lakhs).
d. Unexecuted capital commitments (net of advances) Rs.18.76 lakhs (Previous year Rs. 150.77 lakhs)
(i) The Company''s pending litigations comprise of claims against the Company and proceedings pending with Tax Authorities. The Company has reviewed all its pending litigations and proceedings and has made adequate provisions, wherever required and disclosed the contingent liabilities, wherever applicable, in its financial statements. The Company does not expect the outcome of these proceedings to have a material impact on its financial position.
(ii) The Company periodically reviews all its long term contracts to assess for any material foreseeable losses. Based on such review wherever applicable, the Company has made adequate provisions for these long term contracts in the books of account as required under any applicable law/accounting standard.
(iii) The Company neither entered into any derivative contracts during the year nor have any outstanding derivative contract at year end.
4. (Note [26] of Standalone Financial Statement)
Balances of some of the Trade Receivables, Trade Payable, Lenders, loans and advances are subject to confirmation from the respective parties and consequential adjustments arising from reconciliation, if any. The management however is of the view that there will be no material adjustment in this regard.
5. (Note [27] of Standalone Financial Statement)
The Company is in the process of restructuring/revival of its business under the aegis of BIFR which inter alia includes finalization of the product plan. The process of possible utilization of slow / non-moving items of inventory will be undertaken upon - finalization of the product plan, approval and implementation of the restructuring/revival scheme. Pending such ascertainment/ determination the management has considered the inventories except finished goods at cost. Requisite accounting effect, if any, will be given upon such ascertainment/ determination, approval and implementation of the revival scheme.
6. (Note [30] of Standalone Financial Statement)
The Company became a Sick Industrial Company within the meaning of Section 3(1)(O) of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) due to erosion of its net worth and the Company -was declared a Sick Industrial Company by BIFR on 8th May, 2007. The Company resumed operations in a small way from April, 2007 and is working inter-alia on the development of various new products and technologies and production of new generation vehicles. The Company had earlier submitted its draft revival scheme to BIFR. As directed by BIFR, the Company had since submitted the updated revival scheme. In view of this, the accounts have been prepared on the basis of going concern.
7. (Note [31] of Standalone Financial Statement) Settlement of dues
a) The Company had executed a Multipartite Agreement on 28th March, 2005 (MPA) with all its Secured Lenders (SL). The Company is in default in re-payment of principal and payment of interest to its SL. The draft Revival Scheme submitted to BIFR inter-alia takes into consideration the matter relating to the dues of SL.
b) The Company has obtained approval(s) from SL (representing 96.69% by value) regarding the settlement of their dues, which will come into effect from the date of sanction of its Revival Scheme by BIFR. Upon approval of the Revival Scheme by BIFR, the approvals of the SL will form an integral part of the MPA and accordingly the MPA shall stand modified / amended to that extent. Pending approval of the Revival Scheme by BIFR, applicable interest has been provided on the defaulted amount for the year.
8. (Note [32] of Standalone Financial Statement) Deferred Taxation:
In terms of Para 26 of AS-22 "Accounting for Taxes on Income" issued by the Institute of Chartered Accountants of India, the Company has reviewed the Deferred Tax Assets (DTA), recognized as on 31st March, 2016 at the Balance Sheet date. In the context of - uncertainty of generation of profits in near future, Deferred Tax Assets has not been recognized.
11. (Note [34] of Standalone Financial Statement)
Earnings Per Share (EPS) computed in accordance with Accounting Standard 20 issued by The Institute of Chartered Accountants of India.
Shri R K Srivastava - Whole-time Director, Shri Khushahal Chand Agarwal - Sr. President (Commercial) & Company Secretary and
Shri Mahesh Kumar Kanodia - Chief Financial Officer.
(i-c) Enterprises over which Directors and their relatives are able to exercise significant influence:
Smart Chips Limited, Suryodaya Investment
& Trading. Co. Limited, Mahalaxmi Holdings Limited, Payal Investments & Trading LTD, Mimosa Finance & Trading Limited, Bina Fininvest P. Limited, Ginideep Finance & Investments P. Limited, Gold Rock Investments Limited, Gold Rock Metals Limited, Gold Rock World Trade Limited, Blue Point Leasing Limited, Gold Rock Agro-Trading Limited, Tridhar Finance & Trading Limited, Picanova Investments P. Limited, Inlac Granston Limited, Shree Dhan Sharda Mercantile P Limited, B.S. Infotech P. Ltd, Ind Hi-Tech Enterprises Pvt. Limited, Saryu Investment & Trading P. Limited, Panki Roadlines Pvt. Limited, Sugata Investment Limited, Gold Rock Agrotech Limited, Syscom Corporation Limited, Seattle Ontime P. Limited
[ii] There is no provision for doubtful debts or amounts written off or written back during the year in respect of dues from or to related parties.
[iii] Summary of Transactions with related parties:
9. (Note [36] of Standalone Financial Statement)
In the absence of information from Trade Payable regarding status under The Micro, Small and Medium Enterprises Development Act, 2006, liability of interest if any cannot be reliably estimated, nor required disclosures can be made.
10. (Note [37] of Standalone Financial Statement)
Related Party Disclosures:
(i-a) Associate : VCCL Limited (i-b) Key Management Personnel
Shri Deepak Kumar Singhania - Chairman & Managing Director,
Shri. Lalit Kumar Singhania - Whole-time Director,
Shri Anurag Kumar Singhania - Whole-time Director,
Details of related parties transactions:
Associate: All transactions and outstanding balance are with VCCL Limited.
Key Management Personnel: Remuneration to Shri Deepak Kumar Singhania Rs.17.96 lakhs (Previous year Rs. 17.76 lakhs), Shri. Lalit Kumar Singhania Rs.17.75 lakhs(*) (Previous year Rs. 9.51 lakhs), Shri Sanjeev Shriya Rs.Nil (Previous year Rs. 1.89 lakh*), Shri Anurag Kumar Singhania Rs.17.89 lakhs (Previous year Rs. 9.84 lakhs) and Shri R K Srivastava Rs. 18.00 lakhs (Previous year Rs. 18.00 lakhs), Shri Khushahal Chand Agarwal Rs. 41.75 lakhs (Previous year Rs.41.86 lakhs), Shri Mahesh Kumar Kanodia Rs. 21.95 lakhs (Previous year Rs.21.93 lakhs).
* During the previous year up to 17/07/2014
(*) Company''s application for re-appointment and payment of remuneration is pending with Ministry of Corporate affairs w.e.f.28.03.2016.
Enterprises over which Directors & their Relatives are able to exercise significant influence: Mimosa Finance & Trading Limited Rs. Nil (Previous year Rs.2.40 lakhs), B.S. Infotech P. Limited Rs. nil (Previous year Rs.0.33 lakh). Others less than 10% Rs. Nil (Previous year Rs.0.13 lakh).
11 (Note [38] of Standalone Financial Statement)
Business Segment :
(a) Primary (Business) Segment
The operations of the Company relate to only one segment viz. Motorized Two-Wheelers.
(b) Secondary (Geographical) Segment
12. Secondary segment reporting is on the basis of geographical location of the customers. The Company''s revenue during the year by geographical markets are : Domestic Sales Rs.1781.80 lakhs (Previous year Rs. 4782.86 lakhs) and Export sales Rs.13534.87 lakhs (Previous year Rs.15151.37 lakhs)
13. Geographical segment wise loss and capital employed are not given since the production unit and administrative expenses are common.
14 (Note [39] of Standalone Financial Statement)
The Company has carried out impairment test on its Fixed Assets as on 31.03.2016 and the Management is of the opinion that there is no asset for which impairment is required to be made as per Accounting Standard-28 on Impairment of Assets issued by ICAI.
15. (Note [47] of Standalone Financial Statement)
Figures of the previous year have been regrouped and recanted wherever necessary to make them comparable.
Mar 31, 2015
1 Notes: (i) 460000 Equity Shares were allotted as fully paid-up Bonus
Shares on 3rd October, 1979 by capitalisation of General Reserve.
(ii) 5314116 Equity Shares were allotted as fully paid-up on conversion
of Debentures (Series I, II & III).
(iii) 3162000 Equity Shares were allotted as fully paid-up to Financial
Institutions pursuant to the convertibility clause in the relevant
Rupee Loan Agreement.
(iv) 785423 Equity Shares were allotted to Banks & Financial
Institutions on 29th March, 2005 as per terms & conditions of the
Negotiated Settlement.
(v) 11842519 Non cumulative Redeemable Preference Shares were allotted
to Banks & Financial Institutions on 29th March, 2005 as per terms &
conditions of the Negotiated Settlement and redeemable in three annual
instalments due on 29th March, 2015, 29th March, 2016 and 29th March,
2017.
In respect of the outstanding Redeemable Preference Shares (RPS) as at
31 .03.2015, redemption of Rs.3947.51 lacs was due on the first tranche
date of 29.03.2015. In view of the adverse financial position of the
Company, the same has not been effected. The RPS holders represting
96.90% of issued and paid up Preference Capital have given written
approvals, extending the redemption dates to December, 2024 & December,
2025 payable in two equal instalments, which is forming part of the DRS
and is under consideration of BIFR, in terms of section 18 of SICA.
BIFR is empowered under the provisions of SICA to take decisions on all
matters affecting the revival of the Company, the redemption dates of
RPS will be as per the DRS to be approved by BIFR.
(vi) 819723 Equity Shares were allotted to specified lenders on 16th
November, 2005 as per terms & conditions of the Negotiated Settlement.
(vii) 32223538 Equity Shares were allotted on conversion of FCCB series
A & B during the period from 24.08.2005 to 31.07.2009
(viii) Shareholders holding more than 5 percent shares:
2 Long Term Debts Secured by:
(a) Term Loans from Banks and Financial Institutions included above,
except Industrial Investment Bank of India and Bank of Baroda,
represent the settled amounts outstanding as on 31.03.2015.In terms of
Multi Partite Agreement executed between all the Lenders and the
Company on 28th March, 2005 (MPA) reached with these Lenders. These are
secured by (i) a First mortgage and charge on the immovable properties
consisting of Land, Buildings, Fixed Plant and Machinery, Furniture and
Fixtures of the Company existing as on 31.03.2005 (save and except Land
and property situated at Plot No. C-3 & 4, Site - I, Panki Industrial
Estate, Kanpur) and (ii) first charge by way of hypothecation of all
movable assets of the Company (save and except Stocks of Raw Materials,
Components, Stores & Spares, Work-in-process, Finished Goods, Book
Debts etc), including movable machinery, tools, accessories, etc.,
existing as on 31.03.2005, subject however, to the prior charges
created in favour of (a) banks/others over certain specified equipment
purchased by the Company on Hire Purchase basis,(b) SASF over the
specified equipment acquired out of its erstwhile EFS Loan, (c) Exim
Bank over the specified equipment acquired by the Company out of its
erstwhile Rupee Loan under PEFP, (d) IIBI over the specified equipment
acquired out of its erstwhile Rupee Loan under ACS. The aforesaid first
mortgage and charges rank pari-passu, inter-se,in all respects amongst
the aforesaid Financial Institution/Banks. These Loans are further
secured by Personal Guarantee (s) of three Directors of the Company.
Equitable Mortgage on some of the properties is yet to be created.
(b) Term Loans against erstwhile Rupee Loan from IDBI under EFS,
erstwhile Rupee Loan from Exim Bank under PEFP and erstwhile Rupee Loan
from IIBI under ACS, included in Serial Number (i) represent the
settled amounts outstanding as on 31.03.2015 under the MPA. These Loans
are secured by (i) an exclusive first charge by way of hypothecation of
specified equipments acquired out of the said erstwhile loans and (ii)
Personal Guarantee(s) of three Directors of the Company.
(c) Export Import Bank of India (Exim Bank) have informed the Company
that they have assigned their dues to Edelweiss Asset Reconstruction
Company Limited (ARC). The Company has disputed the assignment
inter-alia due to major discrepancies in the Assignment Agreement
executed between Exim Bank and ARC. The name of the ARC can be
substituted only after resolution of dispute and approval of BIFR. In
the view of the Company, this has no effect on the Balance Sheet or
Profit & Loss Account of the Company.
(d) Phoenix ARC Private Limited (Phoenix) has informed the Company
about the assignment of the dues by IIBI Ltd., to them. The Company
has disputed the assignment inter-alia due to major discrepancies in
the assignment between Phoenix and IIBI. The name of the Phoenix can be
substituted only after resolution of dispute and approval of BIFR. In
the view of the Company, this has no effect on the Balance Sheet or
Profit & Loss account of the Company.
(e) Amounts outstanding against erstwhile working capital facilities
from SBI, BOI and BOB included in Serial Number (i) above represent the
settled amounts outstanding as on 31.03.2015 under the MPA with these
Banks. These Loans are secured by (i) a first charge on the land and
property situated at Plot No. C-3 & 4, Site - I, Panki Industrial
Estate, Kanpur by way of Equitable Mortgage, ranking pari passu,
inter-se, in all respects amongst these Banks and (ii) Personal
Guarantee(s) of three Directors of the Company. These are further
secured by a Second Charge on the immovable properties consisting of
Land, Buildings, Fixed Plant and Machinery, Furniture and Fixtures of
the Company existing as on 31.03.2005 (save and except Land and property
situated at Plot No. C-3 & 4, Site - I, Panki Industrial Estate, Kanpur
). Certain charges in respect of 1(a) and 1(c) are yet to be modified /
created.
(f) Fixed Assets purchased under Hire Purchase arrangement are secured
by hypothecation of respective assets.
(g) Rate of interest - for the period from April 2009 to March 2013, on
ballooning basis, so as to gives yield of 6.5% per annum (YTM), w.e.f.
April, 2013 since the entire Principal is in default, interest @ 12.5%
has been provided
3. Contingent Liabilities & Commitments (to the extent not provided
for)
(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs.16991.80 lakhs (Previous year Rs. 18267.29 lakhs) (net
of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year
Rs. 3.00 lakhs)
(b) Outstanding guarantees furnished by Bankers Rs. 6.15 lakhs
(Previous year Rs.11.65 lakhs).
(c) Claims against the Company not acknowledged as debts Rs.18601.44
lakhs (Previous year Rs. 16720.85 lakhs).
(d) Unexecuted capital commitments (net of advances) Rs. 150.77 lakhs
(Previous year Rs. 22.53 lakhs)
(i) The Company's pending litigations comprise of claims against the
Company and proceedings pending with Tax Authorities. The Company has
reviewed all its pending litigations and proceedings and has made
adequate provisions, wherever required and disclosed the contingent
liabilities, wherever applicable, in its financial statements. The
Company does not expect the outcome of these proceedings to have a
material impact on its financial position.
(ii) The Company periodically reviews all its long term contracts to
assess for any material foreseeable losses. Based on such review
wherever applicable, the Company has made adequate provisions for these
long term contracts in the books of account as required under any
applicable law/ accounting standard.
(iii) The Company neither entered into any derivative contracts during
the year nor have any outstanding derivative contract at year end..
4. Balances of some of the Trade Receivables, Trade Payable, Lenders,
loans and advances are subject to confirmation from the respective
parties and consequential adjustments arising from reconciliation, if
any. The management however is of the view that there will be no
material adjustment in this regard.
5. The Company is in the process of restructuring/revival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of possible utilization of slow /
non-moving items of inventory will be undertaken upon - finalization of
the product plan, approval and implementation of the
restructuring/revival scheme. Pending such ascertainment/
determination the management has considered the inventories except
finished goods at cost. Requisite accounting effect, if any, will be
given upon such ascertainment/ determination, approval and
implementation of the revival scheme.
6. Interest in respect of Long Term Loans/Debentures/ Deferred
Credits (for acquisition of Fixed Assets) availed / issued during the
financial years 1982-83 to 1984-85 had been capitalised for the full
period of Long Term Loans/ Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such capitalisation
has since been made. In view of such capitalisation, the charge to
Profit and Loss Account on account of depreciation is higher by Rs. Nil
(previous year Rs. 6.49 lakhs).
7. Expenditure on Research & Development Activities during the year
amounted to Rs.510.65 lakhs (previous year Rs. 485.89 lakhs) has been
charged to P&L Account.
8. The Company became a Sick Industrial Company within the meaning of
Section 3(1)(O) of Sick Industrial Companies (Special Provisions) Act,
1985 (SICA) due to erosion of its net worth and the Company -was
declared a Sick Industrial Company by BIFR on 8th May, 2007. The
Company resumed operations in a small way from April, 2007 and is
working inter-alia on the development of various new products and
technologies and production of new generation vehicles. The Company
had earlier submitted its draft revival scheme to BIFR. As directed by
BIFR, the Company has since submitted the updated revival scheme. In
view of this, the accounts have been prepared on the basis of going
concern.
9. To aid and support the revival of the Company, including continuity
of operations and other related activities such as product development,
the Company had to meet capital expenditure (including capital work in
progress and capital advances) by way of increase in current
liabilities to the extent of Rs.207.06 lakhs. (previous year Rs.135.85
lakhs).
10. Restructuring of Loans
a) The Company had executed a Multipartite Agreement on 28th March,
2005 (MPA) with all its Secured Lenders (SL). The Company is in
default in re-payment of principal and payment of interest to its SL.
The draft Revival Scheme submitted to BIFR inter-alia takes into
consideration the matter relating to the dues of SL.
b) The Company has obtained approval(s) from SL (representing 96.69% by
value) regarding their dues, which will come into effect from the date
of sanction of its Revival Scheme by BIFR. Upon approval of the Revival
Scheme by BIFR, the approvals of the SL will form an integral part of
the MPA and accordingly the MPA shall stand modified / amended to that
extent. Pending approval of the Revival Scheme by BIFR, applicable
interest has been provided on the defaulted amount for the year.
11. Deferred Taxation:
In terms of Para 26 of AS-22 "Accounting for Taxes on Income" issued by
the Institute of Chartered Accountants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 31st March,
2015 at the Balance Sheet date. In the context of - uncertainty of
generation of profits in near future, Deferred Tax Assets has not been
recognized.
12. Disclosure in pursuance of Accounting Standard 15 (Revised)
"Employees Benefit" issued by the ICAI
During the year, Company has recognized the following amounts in the
financial statements:
Defined Benefit Plan
The employees gratuity fund is partly managed by Life Insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity:
13. In the absence of information from Trade Payable regarding status
under The Micro, Small and Medium Enterprises Development Act, 2006,
liability of interest if any can not be reliably estimated, nor
required disclosures can be made.
14. Related Party Disclosures:
(i-a) Associate
VCCL Limited
(i-b) Key Management Personnel
Shri Deepak Kumar Singhania - Chairman & Managing Director, Shri. Lalit
Kumar Singhania - Whole-time Director, Shri Sanjeev Shriya - Whole-time
Director (up to 17/07/2014), Shri Anurag Kumar Singhania - Whole-time
Director, Shri R K Srivastava - Whole-time Director, Shri Khushal Chand
Agarwal - Sr. President (Commercial) & Company Secretary
(w.e.f.24/05/2014) and *Shri Mahesh Kumar Kanodia - Chief Financial
Officer (w.e.f. 24/05/2014).
(i-c) Enterprises over which Directors and their relatives are able to
exercise significant influence:
Smart Chips Limited, Suryodaya Investment & Trading. Co. Limited,
Mahalaxmi Holdings Limited, Payal Investments & Trading Limited, Mimosa
Finance & Trading Limited, Bina Fininvest P. Limited, Ginideep Finance
& Investments P. Limited, Gold Rock Investments Limited, Gold Rock
Metals Limited, Gold Rock World Trade Limited, Blue Point Leasing
Limited, Gold Rock Agro-Trading Limited, Tridhar Finance & Trading
Limited, Picanova Investments P. Limited, Inlac Granston Limited, Shree
Dhan Sharda Mercantile P Limited, B.S. Infotech P. Limited, Ind Hi-Tech
Enterprises Pvt. Limited, Saryu Investment & Trading P. Limited, Panki
Roadlines Pvt. Limited, Sugata Investment Limited, Gold Rock Agrotech
Limited, Syscom Corporation Limited, Seattle Ontime P. Limited
[ii] There is no provision for doubtful debts or amounts written off or
written back during the year in respect of dues from or to related
parties.
15. Business Segment :
(a) Primary (Business) Segment
The operations of the Company relate to only one segment viz. Motorized
Two-Wheelers.
(b) Secondary (Geographical) Segment
1 . Secondary segment reporting is on the basis of geographical
location of the customers. The Company's revenue during the year by
geographical markets are :
Domestic Sales Rs.4782.86 lakhs (Previous year Rs. 7432.98 lakhs) and
Export sales Rs.15151.37 lakhs (Previous year Rs.18211.65 lakhs)
2. Geographical segment wise loss and capital employed are not given
since the production unit and administrative expenses are common.
16. The Company has carried out impairment test on its Fixed Assets as
on 31 .03.2015 and the Management is of the opinion that there is no
asset for which impairment is required to be made as per Accounting
Standard-28 on Impairment of Assets issued by ICAI.
17. Pursuant to requirements of Schedule II of the Companies Act, 2013
(the 'Act') Company has revised the depreciation rates as prescribed
under the Schedule II of the Act w.e.f.1st April, 2014. In case of
fixed assets where the useful life was nil as at 01.04. 2014, the
Company has adjusted the net residual value aggregating to Rs.507.97
lacs from Reserve & Surplus. Further due to change in life of the
assets according to Schedule II of the Act, the depreciation for the
year is higher and profit for the year is lower by Rs.127.06 lacs.
18. Remuneration to Auditors
(a) Statutory Audit Fee Rs.9.00 lakhs (Previous year Rs. 9.00 lakhs)
(b) Tax Audit Fee Rs.0.80 lakh (Previous year Rs. 0.80 lakh).
(c) Other Services - Certification and other Jobs Rs.6.00 lakhs
(Previous year Rs. 6.00 lakhs).
20. Remuneration to Cost Auditors
Audit Fee Nil (previous year Rs. 0.35 lakh).
21. Remittance in Foreign Currency on Account of Dividend
Amount remitted
22. Figures of the previous year have been regrouped and recasted
wherever necessary to make them comparable. Notes 1 to 51 form an
integral part of the Balance Sheet and Profit and Loss Account
Mar 31, 2014
1.SHARE CAPITAL
Nots:
(i) 460000 Equity Shares were allotted as fully paid-up Bonus
Shares on 3rd October, 1979 by capitalisation of
General Reserve.
(ii) 5314116 Equity Shares were allotted as fully paid-up on
conversion of Debentures (Series I, II & III).
(iii) 3162000 Equity Shares were allotted as fully paid-up to
Financial Institutions pursuant to the convert-
ibility clause in the relevant Rupee Loan Agreement.
(iv) 785423 Equity Shares were allotted to Banks & Financial
Institutions on 29th March, 2005 as perterms & condi-
tions of the Negotiated Settlement.
(v) 11842519 Non cumulative Redeemable Preference Shares were allo-
tted to Banks & Financial Institutions on 29th March,
2005 as per terms & conditions of the Negotiated Sett-
lement and redeemable in three annual instalments due
on 29th March, 2015, 29th March, 2016 and 29th March,
2017.
(vi) 819723 Equity Shares were allotted to specified lendors on
16th November, 2005 as per terms & conditions of the
Negotiated Settlement.
(vii) 32223538 Equity Shares were allotted on conversion of FCCB
series A & B during the period from 24.08.2005 to
31.07.2009
(viii) Shareholders holding more than 5 percent shares:
2. OTHER CURRENT LIABILITIES
1 Long Term Debts Secured by:
(a) Term Loans from Banks and Financial Institutions included above,
except Industrial Investment Bank of India and Bank of Baroda,
represent the settled amounts outstanding as on 31.03.2014.In terms of
Multi Partite Agreement executed between all the Lenders and the
Company on 28th March, 2005 (MPA) reached with these Lenders. These are
secured by (i) a First mortgage and charge on the immovable properties
consisting of Land, Buildings, Fixed Plant and Machinery, Furniture and
Fixtures of the Company existing as on 31.03.2005 (save and except Land
and property situated at Plot No. C-3 & 4, Site - I, Panki Industrial
Estate, Kanpur) and (ii) first charge by way of hypothecation of all
movable assets of the Company (save and except Stocks of Raw Materials,
Components, Stores & Spares, Work-in-process, Finished Goods, Book
Debts etc), including movable machinery, tools, accessories, etc.,
existing as on 31.03.2005, subject however, to the prior charges
created in favour of (a) banks/others over certain specified equipment
purchased by the Company on Hire Purchase basis,(b) SASF over the
specified equipment acquired out of its erstwhile EFS Loan, (c) Exim
Bank over the specified equipment acquired by the Company out of its
erstwhile Rupee Loan under PEFP, (d) IIBI over the specified equipment
acquired out of its erstwhile Rupee Loan under ACS. The aforesaid first
mortgage and charges rank pari-passu, inter-se,in all respects amongst
the aforesaid Financial Institution/Banks. These Loans are further
secured by Personal Guarantee (s) of three Directors of the Company.
Equitable Mortgage on some of the properties is yet to be created.
(b) Term Loans against erstwhile Rupee Loan from IDBI under EFS,
erstwhile Rupee Loan from Exim Bank under PEFP and erstwhile Rupee Loan
from IIBI under ACS, included in Serial Number (i) represent the
settled amounts outstanding as on 31.03.2014 under the MPA. These Loans
are secured by (i) an exclusive first charge by way of hypothecation of
specified equipments acquired out of the said erstwhile loans and (ii)
Personal Guarantee(s) of three Directors of the Company.
(c) Export Import Bank of India (Exim Bank) have informed the Company
that they have assigned their dues recoverable from the Company to an
Asset Reconstruction Company (ARC). The effect of the same shall be
given after receipt of necessary documents including the Deed of
Assignment executed by Exim Bank. In view of the Company, the same will
not have any effect on the Balance Sheet or Profit & Loss account of
the Company.
(d) Phoenix ARC has informed the Company about the assignment of the
dues recoverable from the Company by IIBI Ltd., to them. The Company
has disputed the assignment due to discrepancy in security assigned to
Phoenix ARC by IIBI. Effect of the same shall be given after resolution
of dispute with them. In view of the Company, the same will not have
any effect on the Balance Sheet or Profit & Loss account of the
Company.
(e) Amounts outstanding against erstwhile working capital facilities
from SBI, BOI and BOB included in Serial Number (i) above represent the
settled amounts outstanding as on 31.03.2014 under the MPA with these
Banks. These Loans are secured by (i) a first charge on the land and
property situated at Plot No. C-3 & 4, Site I, Panki Industrial Estate,
Kanpur by way of Equitable Mortgage, ranking pari passu, inter-se, in
all respects amongst these Banks and (ii) Personal Guarantee(s) of
three Directors of the Company. These are further secured by a Second
Charge on the immovable properties consisting of Land, Buildings, Fixed
Plant and Machinery, Furniture and Fixtures of the Company existing as
on 31.03.2005 (save and except Land and property situated at Plot No.
C-3 & 4, Site - I, Panki Industrial Estate, Kanpur). Certain charges in
respect of 1(a) and 1(c) are yet to be modified / created.
(f) Fixed Assets purchased under Hire Purchase arrangement are secured
by hypothecation of respective assets.
(g) Rate of interest - for the period from April 2009 to March 2013, on
ballooning basis, so as to gives yield of 6.5% per annum (YTM), w.e.f.
April, 2013 since the entire Principal is in default, interest @ 12.5%
has been provided.
3.Contingent Liabilities & Commitments (to the extent not provided for)
(A) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs.18267.29 lakhs (Previous year Rs. 17925.16 lakhs) (net
of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year
Rs. 3.00 lakhs)
(B) Outstanding guarantees furnished by Bankers Rs. 11.65 lakhs
(Previous year Rs.11.65 lakhs).
(C) Claims against the Company not acknowledged as debts Rs.16720.85
lakhs (Previous year Rs. 13921.55 lakhs).
(D) Unexecuted capital commitments (net of advances) Rs. 22.53 lakhs
(Previous year Rs. 6.71 lakhs)
4. Balances of some of the Trade Receivables, Trade Payable, lenders,
loans and advances are subject to confirmation from the respective
parties and consequential adjustments arising from reconciliation, if
any. The management however is of the view that there will be no
material adjustment in this regard.
5. The Company is in the process of restructuring/revival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of possible utilization of slow /
non-moving items of inventory will be undertaken upon - finalization of
the product plan and the restructuring/revival plan. Pending such
ascertainment/ determination the management has considered the
inventories except finished goods at cost. Requisite accounting effect,
if any, will be given upon such ascertainment/ determination and
approval of revival plan
6. Interest in respect of Long Term Loans/Debentures/Deferred Credits
(for acquisition of Fixed Assets) availed / issued during the financial
years 1982-83 to 1984-85 had been capitalised for the full period of
Long Term Loans/Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such capitalisation
has since been made. In view of such capitalisation, the charge to
Profit and Loss Account on account of depreciation is higher by Rs.
6.49 lakhs (previous year Rs. 6.49 lakhs).
7. Remuneration to Chairman & Managing Director and Whole-time
Directors:
(Rs. in lakhs)
2013-14 2012-13
Salary 12.75 12.75
Contribution to
Provident Fund 0.88 0.88
Perquisites 60.59 59.79
Total 74.22 73.42
8. Expenditure on Research & Development Activities during the year
amounted to Rs.485.89 lakhs (previous year Rs. 416.34 lakhs) has been
charged to P&L Account.
9. The Company became a Sick Industrial Company within the meaning of
Section 3(1)(O) of Sick Industrial Companies (Special Provisions) Act,
1985 (SICA) due to erosion of its net worth and the Company -was
declared a Sick Industrial Company by BIFR on 8th May, 2007. The
Company resumed operations in a small way from April, 2007 and is
working on the development of various new products and technologies and
production of new generation 4-stroke Automatic Gearless Scooter (CVT)
has since commenced. The Company had earlier submitted its draft
revival scheme to BIFR. As directed by BIFR, the Company has since
submitted the updated revival scheme. In view of this, the accounts
have been prepared on the basis of going concern.
10. To aid and support the revival of the Company, including continuity
of operations and other related activities such as product development,
the Company had to meet capital expenditure (including capital work in
progress and capital advances) by way of increase in current
liabilities to the extent of Rs. 135.85 lakhs. (previous year
Rs.259.09 lakhs).
11. Restructuring of Loans
a) The Company had executed a Multipartite Agreement on 28th March,
2005 with all its Secured Lenders (MPA). The Company is in default in
re-payment of principal and interest payment. The draft Revival Scheme
submitted to BIFR inter-alia takes into consideration the dues of
Secured Lenders (SL).
b) The Company has obtained approval(s) from SL (representing 96.69% by
value) regarding their dues, which will come into effect from the date
of sanction of its Revival Scheme by BIFR. Upon approval of the Revival
Scheme by BIFR, the approvals of the SL will form an integral part of
the MPA and accordingly the MPA shall stand modified / amended to that
extent. Pending approval of the Revival Scheme by BIFR, applicable
interest has been provided on the defaulted amount for the year.
12. Deferred Taxation:
In terms of Para 26 of AS-22 "Accounting for Taxes on Income " issued
by the Institute of Chartered Accountants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 31st March,
2014 at the Balance Sheet date. In the context of - uncertainty of
generation of profits in near future, Deferred Tax Assets has not been
recognized.
13.Disclosure in pursuance of Accounting Standard 15 (Revised)
"Employees Benefit " issued by the ICAI
During the year, Company has recognized the following amounts in the
financial statements:
Defined Contribution Plan
Contribution to Defined Contribution Plan, maintained under the
Employees Provident Fund Scheme by the Central Government, is charged
to Profit and Loss Account.
Defined Benefit Plan
The employees gratuity fund is partly managed by Life Insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity.
The estimates of rate of escalation in salary considered in actuarial
valuation, take into account inflation, seniority, promotion and other
relevant factors including supply and demand in the employment market.
The above information is certified by the actuary.
14. The Company has carried out impairment test on its Fixed Assets as
on 31.03.2014 and the Impairment loss of Rs.260.42 lacs has been
debited to Profit & Loss Account.
15. Leases:
Operating Leases: The Company has taken various residential/ commercial
premises and Plant and Machinery under operating leases. These lease
arrangements are normally renewed on expiry.
The rental expenses in respect of operating leases Rs.140.59 Lakhs
16. In the absence of information from Trade Payable regarding status
under The Micro, Small and Medium Enterprises Development Act, 2006,
liability of interest if any can not be reliably estimated, nor
required disclosures can be made.
17. Related Party Disclosures:
(i-a) Associates
VCCL Limited
(i-b) Key Management Personnel
Shri Deepak Kumar Singhania - Chairman & Managing Director, Shri. Lalit
Kumar Singhania - Whole-time Director, Shri Sanjeev Shriya - Whole-time
Director,Shri Anurag Kumar Singhania - Whole-time Director, Shri R K
Srivastava - Whole-time Director (i-c) Companies controlled by
Directors/Relatives Smart Chips Limited, Suryodaya Investment &
Trading. Co. Limited, Mahalaxmi Holdings Limited, Payal Investments &
Trading Limited, Mimosa Finance & Trading Limited, Bina Fininvest P.
Limited, Ginideep Finance & Investments P. Limited, Gold Rock
Investments Limited, Gold Rock Metals Limited, Gold Rock World Trade
Limited, Blue Point Leasing Limited, Gold Rock Agro-Trading Limited,
Tridhar Finance & Trading Limited, Picanova Investments P. Limited,
Inlac Granston Limited, Shree Dhan Sharda Mercantile P Limited, B.S.
Infotech P. Limited, Ind Hi-Tech Enterprises Pvt. Limited, Saryu
Investment & Trading P. Limited, Panki Roadlines Pvt. Limited, Sugata
Investment Limited, Gold Rock Agrotech Limited, Syscom Corporation
Limited, Seattle Ontime P. Limited
[ii] There is no provision for doubtful debts or amounts written off or
written back during the year in respect of dues from or to related
parties.
Details of related parties transactions:
Associates: All the transactions and outstanding balance are with VCCL
Limited.
Key Management Personnel: Remuneration to Shri Deepak Kumar Singhania
Rs.19.44 lakhs (Previous year Rs. 21.38 lakhs), Shri. Lalit Kumar
Singhania Rs. 11.99 lakhs (Previous year Rs. 9.15 lakhs), Shri Sanjeev
Shriya Rs.15.35 lakhs (Previous year Rs. 15.41 lakhs), Shri Anurag
Kumar Singhania Rs.9.44 lakhs (Previous year Rs. 9.48 lacs) and Shri R
K Srivastava Rs. 18.00 lakhs (Previous year Rs. 18.00 lakhs).
18. Business Segment :
(a) Primary (Business) Segment
The operations of the Company relate to only one seg ment viz.
Motorized Two-Wheelers.
(b) Secondary (Geographical) Segment
1. Secondary segment reporting is on the basis of geographical location
of the customers. The Company''s revenue during the year by geographical
markets are :
Domestic Sales Rs.7432.98 lakhs (Previous year Rs. 8588.17 lakhs) and
Export sales Rs.18211.65 lakhs (Previous year Rs. 15066.65 lakhs)
2. Geographical segment wise loss and capital employed are not given
since the production unit and administrative expenses are common.
19. CASH PROFIT FROM OPERATING ACTIVITIES
Profit (Loss)before Tax
1. The Cash Flow statement has been prepared under the indirect method
as set out in the Accounting Standard - 3 on Cash Flow statement issued
by The Institute of Chartered Accountants of India.
2. Figures in bracket indicate cash outflow.
3. Previous year figures have been re-grouped and recasted wherever
necessary to conform to current year classification.
Mar 31, 2013
1. Contingent Liabilities & Commitments (to the extent not provided
for)
(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs.17925.16 lakhs (Previous year Rs. 17174.46 lakhs) (net
of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year
Rs. 3.00 lakhs)
(b) Outstanding guarantees furnished by Bankers Rs. 11.65 lakhs
(Previous year Rs.11.65 lakhs).
(c) Claims against the Company not acknowledged as debts Rs.13921.55
lakhs (Previous year Rs. 13671.08 lakhs).
(d) Unexecuted capital commitments (net of advances) Rs. 6.71 lakhs
(Previous year Rs. 9.12 lakhs)
2. Balances of some of the Trade Receivables, Trade Payable, lenders,
loans and advances are subject to confirmation from the respective
parties and consequential adjustments arising from reconciliation, if
any. The management however is of the view that there will be no
material adjustment in this regard.
3. The Company is in the process of restructuring/revival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of possible utilization of slow /
non-moving items of inventory will be undertaken upon - finalization of
the product plan and the restructuring/revival plan. Pending such
ascertainment/ determination the management has considered the
inventories except finished goods at cost. Requisite accounting effect,
if any, will be given upon such ascertainment/ determination and
approval of revival plan.
4. Interest in respect of Long Term Loans/Debentures/ Deferred
Credits (for acquisition of Fixed Assets) availed / issued during the
financial years 1982-83 to 1984-85 had been capitalised for the full
period of Long Term Loans/Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such capitalisation
has since been made. In view of such capitalisation, the charge to
Profit and Loss Account on account of depreciation is higher by Rs.
6.49 lakhs (Previous year Rs. 6.49 lakhs).
5. Remuneration to Chairman & Managing Director and - Whole-time
Directors:
(Rs. in lakhs)
2012-13 2011-12
Salary 12.75 8.44
Contribution to:
Provident Fund 0.88 0.48
Perquisites 59.79 58.40
Total 73.42 67.32
6. Expenditure on Research & Development Activities during the year
amounted to Rs. 416.34 lakhs (previous year Rs. 328.40 lakhs) has been
charged to P&LAccount.
7. The Company became a Sick Industrial Company within the meaning of
Section 3(1 )(0) of Sick Industrial Companies (Special Provisions) Act,
1985 (SICA) due to erosion of its net worth and the Company -was
declared a Sick Industrial Company by BIFR on 8th May, 2007. The
Company which restarted its operations from April, 2007 is working on
the development of various new products and technologies and production
of new generation 4-stroke Automatic Gearless Scooter (CVT) has since
commenced. The Company has already submitted its draft revival scheme
to BIFR and as directed by BIFR, Company is in process of submitting
updated revival scheme. In view of this, the accounts have been
prepared on the basis of going concern.
8. To aid and support the revival of the Company, including
continuity of operations and other related activities such as product
development, the Company had to meet urgent capital expenditure
(including capital work in progress and capital advances) by way of
increase in current liabilities to the extent of Rs. 259.09 lakhs.
(Previous year Rs.297.19 lakhs).
9. Restructuring of Loans
(a) The Company has executed with the Secured Lenders (SL) on 28th
March, 2005 a Multipartite Agreement (MPA). The Company is in default
towards payment of interest since December 2006. Applicable penal
interest has been provided on the above over dues. The Draft Revival
Scheme submitted to BIFR inter-alia takes into consideration the dues
of the_SL.
(b) In terms of the MPA the outstanding amounts are repayable to the SL
as per the repayment schedule over eight years along with interest at
increasing rate (on yield to maturity basis). Accordingly. the Company
has provided interest at the rate specified for the financial period in
the MPA and not at the Yield to Maturity (YTM) rate. The amount of
interest so provided for the financial year ended 31st March, 2013
amounts to Rs.2383.18 lakhs as compared to YTM rate. There is excess
provision of Rs.35.30 lakhs for the year, which is equivalent to
cumulative short provisions in earlier years.
10. Deferred Taxation:
In terms of Para 26 of AS-22 "Accounting for Taxes on Income" issued by
the Institute of Chartered Accountants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 31st March,
2013 at the Balance Sheet date. In the context of - uncertainty of
generation of profits in near future, Deferred Tax Assets has not been
recognized.
11. Disclosure in pursuance of Accounting Standard 15 (Revised)
"Employees Benefit" issued by the ICAI During the year, Company has
recognized the following amounts in the financial statements:
Defined Contribution Plan
Contribution to Defined Contribution Plan, maintained under the
Employees Provident Fund Scheme by the Central Government, is charged
to Profit and Loss Account as under:
Amount (Rs. in Lakhs)
2012-13 2011-12
Employer''s Contribution to
Provident Fund 55.13 50.27
Employer''s Contribution to
Pension Scheme 46.67 46.04
Defined Benefit Plan
The employees gratuity fund is partly managed by Life Insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity.
Note: The estimates of rate of escalation in salary considered in
actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market. The above information is certified by the actuary.
12. The Company has carried out impairment test on its Fixed Assets as
on 31.03.2013 and the Management is of the opinion that there is no
asset for which impairment required to be made as per Accounting
Standard-28 on Impairment of Assets issued by ICAI.
13. Earning Per Share (EPS) computed in accordance with Accounting
Standard 20 issued by The Institute of Chartered Accountants of India.
14. Leases:
(a) Operating Leases:
The Company has taken various residential/ commercial premises and
Plant and Machinery under operating leases. These lease arrangements
are normally renewed on expiry. The future minimum lease payments in
respect of the aforesaid leases are as follows:
The rental expenses in respect of operating leases Rs. 164.22 lakhs
(b) Finance Leases:
The minimum lease payment in respect of assets taken on lease on or
after 01.04.2001 and the present value thereof in respect of assets
acquired under finance leases are as follows:
15. In the absence of information from Trade Payable regarding status
under The Micro, Small and Medium Enterprises Development Act, 2006,
liability of interest if any can not be reliably estimated, nor
required disclosures can be made.
16. Related Party Disclosures: (i-a) Associates/ Joint Venture
VCCL Limited, Trident Auto Components (P) Ltd. (i-b) Key Management
Personnel
Shri Deepak Kumar Singhania - Chairman & Managing Director, Shri Lalit
Kumar Singhania
- Whole-time Director, Shri Sanjeev Shriya
- Whole-time Director, Shri Anurag Kumar Singhania - Whole-time
Director, Shri Ram Kumar Srivastava - Whole-time Director
(i-c) Companies controlled by Directors/Relatives Smart Chips'' Limited,
Suryodaya Investment & Trading. Co. Limited, Mahalaxmi Holdings
Limited, Payal Investments & Trading Limited, Mimosa Finance & Trading
Limited, Bina Fininvest P. Limited, Ginideep Finance & Investments P.
Limited, Gold Rock Investments Limited, Gold Rock Metals Limited, Gold
Rock World Trade Limited, Blue Point Leasing Limited, Gold Rock
Agro-Trading Limited, Tridhar Finance & Trading Limited, Picanova
Investments P. Limited, Inlac Granston Limited, Shree Dhan Sharda
Mercantile P Limited, B.S. Infotech P. Limited, Ind Hi-Tech Enterprises
Pvt. Limited, Saryu Investment & Trading P. Limited, Panki Roadlines
Pvt. Limited, Sugata Investment Limited, Gold Rock Agrotech Limited,
Syscom Corporation Limited, Seattle Ontime P. Limited
[ii] There is no provision for doubtful debts or amounts written off or
written back during the year in respect of dues from or to related
parties.
[iii] Summary of Transactions with related parties:
Details of related parties transactions:
Associates/Joint Ventures: All the transactions and outstanding balance
are with VCCL Limited except Rs.8.04 lacs payable to Trident Auto
Components Pvt. Ltd.
Key Management Personnel: Remuneration to Shri Deepak Kumar Singhania
Rs. 21.38 lakhs (Previous year Rs. 22.23 lakhs), Shri Lalit Kumar
Singhania Rs. 9.15 lakhs (Previous year Rs. 4.16 lakhs), Shri Sanjeev
Shriya Rs. 15.41 lakhs (Previous year Rs. 16.65 lakhs), Shri Anurag
Kumar Singhania Rs. 9.48 lakhs (Previous year Rs. 11.83 lacs) and Shri
Ram Kumar Srivastava Rs. 18.00 lakhs (Previous year Rs. 12.45 lakhs).
40. Business Segment:
(a) Primary (Business) Segment
The operations of the Company relate to only one segment viz. Motorized
Two-Wheelers.
(b) Secondary (Geographical) Segment
1. Secondary segment reporting is on the basis of geographical
location of the customers. The Company''s revenue during the year by
geographical markets are:
Domestic Sales Rs. 8588.17 lakhs (Previous year Rs. 12381.30 lakhs) and
Export sales Rs. 15066.65 lakhs (Previous year Rs. 17326.31 lakhs)
2. Geographical segment wise loss and capital employed are not given
since the production unit and administrative expenses are common.
17. As required by Accounting Standard - 29 " Provisions, Contingent
Liabilities and Contingent Assets" issued by the Institute of Chartered
Accountants of India, the disclosure with respect to provisions of
warranty expenses are as follows:
18. Remuneration to Auditors
(a) Statutory Audit Fee Rs. 9.00 lakhs (Previous year Rs. 9.00 lakhs)
(b) Tax Audit Fee Rs. 0.80 lakh (Previous year Rs. 0.80 lakh).
(c) Other Services - Certification and other Jobs Rs.7.00 lakhs
(Previous year Rs. 7.00 lakhs).
19. Remuneration to Cost Auditors
Audit Fee Rs. 0.35 lakh (Previous year Rs. 0.35 lakh).
20. C.I.F.Value of Imports
21. Figures of the previous year have been regrouped and recasted
wherever necessary to make them comparable. Notes 1 to 49 form an
integral part of the Balance Sheet and Profit and Loss Account
Mar 31, 2012
Notes:
(i) 460000 Equity Shares were allotted as fully paid-up Bonus Shares on
3rd October, 1979 by capitalisation of General reserve.
(ii) 5314116 Equity Shares were allotted as fully paid-up on conversion
of Debentures (Series I, II & III).
(iii) 3162000 Equity Shares were allotted as fully paid-up to Financial
Institutions pursuant to the convertibility clause in the relevant
Rupee Loan Agreement.
(iv) 785423 Equity Shares were allotted to Banks & Financial
Institutions on 29th March, 2005 as per terms & conditions of the
Negotiated Settlement.
(v) 11842519 Non cumulative Redeemable Preference Shares were allotted
to Banks & Financial Institutions on 29th March, 2005 as per terms &
conditions of the Negotiated Settlement and redeemable in three annual
instalments due on 29th March, 2015, 29th March, 2016 and 29th March,
2017
(vi) 819723 Equity Shares were allotted to specified lendors on 16th
November. 2005 as psr terms & conditions of the Negotiated Settlement.
(vii) 32223538 Equity Shares were allotted on conversion of FCCB series
A & B during the period from 24.08.2005 to 31.07.2009.
1. Long Term Debts Secured by:
(a) Term Loans from Banks and Financial Institutions included above,
except Industrial Investment Bank of India and Bank of Baroda,
represent the settled amounts outstanding as on 31.03.2012 under the
Negotiated Settlement reached with these Lenders. These are secured by
(i) a First mortgage and charge on the immovable properties consisting
of Land, Buildings, Fixed Plant and Machinery, Furniture and Fixtures
of the Company existing as on 31.03.2005 (save and except Land and
property situated at Plot No. C-3 & 4, Site I, Panki Industrial
Estate, Kanpur) and (ii) first charge by way of hypothecation of all
movable assets of the Company (save and except Stocks of Raw Materials,
Components, Stores & Spares, Work-in-process, Finished Goods, Book
Debts etc), including movable machinery, tools, accessories, etc.,
existing as on 31.03.2005, subject however, to the prior charges
created in favour of (a) banks/others over certain specified equipment
purchased by the Company on Hire Purchase basis,(b) SASF over the
specified equipment acquired out of its erstwhile EFS Loan, (c) Exim
Bank over the specified equipment acquired by the Company out of its
erstwhile Rupee Loan under PEFP, (d) IIBI over the specified equipment
acquired out of its erstwhile Rupee Loan under ACS. The aforesaid first
mortgage and charges rank pari-passu. inter-se.in all respects amongst
the aforesaid Financial Institution/Banks. These Loans are further
secured by Personal Guarantee (s) of three Directors of the Company.
Equitable Mortgage on some of the properties is yet to be created.
(b) Term Loans against erstwhile Rupee Loan from IDBI under EFS,
erstwhile Rupee Loan from Exim Bank under PEFP and erstwhile Rupee Loan
from IIBI under ACS, included in Serial Number (i) represent the
settled amounts outstanding as on 31.03.2012 under the Negotiated
Settlement reached with these Lenders. These Loans are secured by (i)
an exclusive first charge by way of hypothecation of specified
equipments acquired out of the said erstwhile loans and (ii) Personal
Guarantee(s) of three Directors of the Company.
(c) Amounts outstanding against erstwhile working capital facilities
from SBI, BOI and BOB included in Serial Number
(i) above represent the settled amounts outstanding as on 31.03.2012
under the Negotiated Settlement reached with these Banks. These Loans
are secured by (i) a first charge on the land and property situated at
Plot No. C-3 & 4, Site I, Panki Industrial Estate, Kanpur by way of
Equitable Mortgage, ranking pari passu, inter-se, in all respects
amongst these Banks and (ii) Personal Guarantee(s) of three Directors
of the Company. These are further secured by a Second Charge on the
immovable properties consisting of Land, Buildings, Fixed Plant and
Machinery, Furniture and Fixtures of the Company existing as on
31.03.2005 (save and except Land and property situated at Plot No. C-3
& 4, Site I. Panki Industrial Estate, Kanpur). Certain charges in
respect of 1(a) and 1(c) are yet to be modified / created.
(d) Fixed Assets purchased under Hire Purchase arrangement are secured
by hypothecation of respective assets.
Other Notes on Accounts
2. Contingent Liabilities & Commitments (to the extent not provided
for)
(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs. 17174.46 lakhs (Previous period Rs. 16840.23 lakhs)
(net of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous
period Rs. 3.00 lakhs)
(b) Outstanding guarantees furnished by Bankers Rs. 11.65 lakhs
(Previous period Rs.10.64 lakhs).
(c) Claims against the Company not acknowledged as debts Rs. 13671.08
lakhs (Previous period Rs. 12919.22 lakhs).
(d) Unexecuted capita! commitments (net of advances) Rs.9.12 Lakhs
(Previous period Rs. 51.35 lakhs)
3. Balances of some of the sundry debtors, creditors, lenders.
loans and advances are subject to confirmation from the respective
parties and consequential adjustments arising from reconciliation, if
any. The management however is of the view that there will be no
material adjustment in this regard.
4. The Company is in the process of restructuring/revival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of possible utilization of slow /
non-moving items of inventory will be undertaken upon finalization
of the product plan and the restructuring/revival plan. Pending such
ascertainment/ determination the management has considered the
inventories except finished goods at cost of Rs. 8446.54 lakhs.
Requisite accounting effect, if any. will be given upon such
ascertainment/ determination and approval of revival plan
5. Interest in respect of Long Term Loans/Debentures/Deferred
Credits (for acquisition of Fixed Assets) availed / issued during the
financial years 1982-83 to 1984-85 had been capitalised for the full
period of Long Term Loans/ Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such capitalisation
has since been made, in view of such capitalisation, the charge to
Profit and Loss Account on account of depreciation is higher by Rs.
6.49 lakhs (Previous period Rs. 9.74 lakhs).
6. Expenditure on Research & Development Activities during the period
amounted to Rs.328.40 lakhs (previous period Rs. 410.07 lakhs) has
been charged to P&L Account.
7. The Company became a Sick Industrial Company within the meaning of
Section 3(1 )(0) of Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA) due to erosion of its net worth and the Company -was
declared a Sick Industrial Company by BIFR on 8th May. 2007. The
Company which restarted its operations from April. 2007 is working on
the development of various new products and technologies and production
of new generation 4-stroke scooter has since commenced. The Company has
already submitted its Draft Revival Scheme to BIFR. In view of this,
the accounts have been prepared on the basis of going concern.
8. To aid and support the revival of the Company, including
continuity of operations and other related activities such as product
development, the Company had to meet urgent capita! expenditure
(including capital work in progress and capital advances) by way of
increase in current liabilities to the extent of Rs. 297.19 lakhs.
9 Restructuring of Loans
(a) The Company has executed with the Secured Lenders (SL) on 28th
March, 2005 a Multipartite Agreement (MPA). The Company is in default
towards payment of interest since December 2006 and principal amount
since March 2007 to the SL. Applicable penal interest has been provided
on the above over dues. The Draft Revival Scheme submitted to BIFR
inter-alia takes into consideration the dues of the SL.
(b) In terms of the MPA the outstanding amounts are repayable to the
SL as per the repayment schedule over eight years along with interest
at increasing rate (on yield to maturity basis). Accordingly, the
Company has provided interest at the rate specified for the financial
year in the MPA and not at the Yield to Maturity (YTM) rate. The amount
of interest so provided for the financial year ended 31st March, 2012
amounts to Rs 2077.25 lakhs. As compared to the YTM rate, there is a
excess provision of Rs. 90.04 lakhs for the year (cumulative short
provision Rs. 35.30 lakhs)
10. Deferred Taxation:
In terms of Para 26 of AS-22 "Accounting for Taxes on Income" issued by
the Institute of Chartered Accountants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 31st March,
2012 at the Balance Sheet date. In the context of uncertainty of
generation of profits in near future, Deferred Tax Assets has not been
recognized.
11 Disclosure in pursuance of Accounting Standard 15 (Revised)
"Employees Benefit" issued by the ICAI During the year, Company has
recognized the following amounts in the financial statements:
Defined Contribution Plan
Contribution to Defined Contribution Plan, maintained under the
Employees Provident Fund Scheme by the Central Government, is charged
to Profit and Loss Account as under:
Defined Benefit Plan
The employees gratuity fund is partly managed by Life Insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity.
Note: The estimates of rate of escalation in salary considered in
actuarial valuation, take into account inflation, seniority,
promotion and other relevant factors including supply and demand in the
employment market. The above information is certified by the actuary,
12. The Company has carried out impairment test on its Fixed Assets as
on 31.03.2012 and the Management is of the opinion that there is no
asset for which impairment required to be made as per Accounting
Standard-28 on Impairment of Assets issued by ICAI.
The rental expenses in respect of operating leases Rs. 150.69 lakhs
(b) Finance Leases:
The minimum lease payment in respect of assets taken on lease on or
after 01.04.2001 and the present value thereof in respect of assets
acquired under finance leases are as follows:
13. In the absence of information from Sundry Creditors regarding
status under The Micro, Small and Medium Enterprises Development Act,
2006, the liability of interest cannot be reliably estimated, nor
required disclosures can be made.
14 Related Party Disclosures (i-a) Associates/ Joint Venture
VCCL Limited, Trident Auto Components (P) Ltd. (i-b) Key Management
Personnel
Shn Deepak Kumar Singhania Chairman & Managing Director, Shri Lalit
Kumar Singhania
Whole-time Director. Shri Sanjeev Shriya Whole-time Director, Shri
Anurag kumar Singhania
Whole-time Director, Shri R K Srivastava Whole-time Director
(i-c) Companies controlled by Directors/Relatives Smart Chips Limited,
Suryodaya Investment & Trading. Co. Limited, Mahalaxmi Holdings
Limited, Payal Investments & Trading Limited. Mimosa Finance & Trading
Limited, Bina Fininvest P. Limited, Gimdeep Finance & Investments P.
Limited, Gold Rock Investments Limited, Gold Rock Metals Limited, Gold
Rock World Trade Limited, Blue Point Leasing Limited, Gold Rock
Agro-Trading Limited, Tridhar Finance & Trading Limited, Picanova
Investments P. Limited, Inlac Granston Limited, Shree Dhan Sharda
Mercantile P Limited, B.S, Infotech P. Limited, Ind Hi-Tech Enterprises
Pvt. Limited, Saryu Investment & Trading P. Limited, Panki Roadlines
Pvt. Limited, Sugata Investment Limited, Gold Rock Agrotech Limited,
Syscom Corporation Limited, Seattle Ontime P. Limited
(ii) There is no provision for doubtful debts or amounts written off or
written back during the year in respect of dues from or to related
parties.
(iii) Summary of Transactions with related parties:
Details of related parties transactions:
Associates/Joint Ventures: All the transactions and outstanding
balance are with VCCL Limited except Rs.8.04 lacs payable to Trident
Auto Components Pvt.Ltd.
Key Management Personnel: Remuneration paid to Shri Deepak Kumar
Singhania Rs. 22.23 lakhs (Previous period Rs. 34.61 lakhs), Shri Lalit
Kumar Singhania Rs. 4.16 lakhs (Previous period Rs. 4.88 lakhs), Shri
Sanjeev Shriya Rs. 16.65 lakhs (Previous period Rs. 29.19 lakhs), Shri
Anurag kumar Singhania Rs. 11.83 lakhs (Previous period Rs. 16.00
lacs) and Shri R K Srivastava Rs. 12.45 lakhs (Previous period Rs.
15.90 lakhs).
15 Business Segment:
(a) Primary (Business) Segment
The operations of the Company relate to only one segment viz. Motorized
Two-Wheelers.
(b) Secondary (Geographical) Segment
1. Secondary segment reporting is on the basis of geographical
location of the customers. The Company's revenue during the year by
geographical markets are :
Domestic Sales Rs.12381.30 lakhs (Previous period Rs. 13853.54 lakhs)
and Export sales Rs.17326.31 lakhs (Previous period Rs. 20652.30 lakhs)
2. Geographical segment wise loss and capital employed are not given
since the production unit and administrative expenses are common.
16. Remuneration to Auditors
(a) Statutory Audit Fee Rs. 9.00 lakhs (Previous period Rs. 13.50
lakhs)
(b) Tax Audit Fee Rs. 0.80 lakh (Previous period Rs. 0.80 lakh).
(c) Other Services Certification and other Jobs Rs.7.00 lakhs
(Previous pericd Rs. 9.50 lakhs).
17. Remuneration to Cost Auditors
Audit Fee Rs. 0.35 lakh (Previous period Rs. 0.52 lakh).
18. Figures of this year and previous period are twelve months and
eighteen months respectively and hence they are not comparable hgures
for the previous period have been regrouped and recasted wherever
necessary to make them comparable
Notes 1 to 50 form an integral part of the Balance Sheet and Profit and
Loss Account
Mar 31, 2011
1. Contingent Liabilities
(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs. 16840.23 lakhs (Previous year Rs. 16831.09 lakhs) (net
of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year
Rs. 3.00 lakhs)
(b) Outstanding guarantees furnished by Bankers Rs. 10.64. lakhs
(Previous year Rs.10.64 lakhs).
(c) Claims against the Company not acknowledged as debts Rs. 12919.22
lakhs (Previous year Rs. 6853.22 lakhs).
2. Unexecuted capital commitments (net of advances) Rs. 51.35 lakhs
(Previous year Rs. 1160.58 lakhs).
3. Balances of some of the sundry debtors, creditors, lenders, loans
and advances are subject to confir- mation from the respective parties
and consequen- tial adjustments arising from reconciliation, if any.
The management however is of the view that there will be no material
adjustment in this regard.
4. The Company is in the process of restructuring/re- vival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of possible utilization of slow /
non-moving items of inventory will be undertaken upon - finaliza- tion
of the product plan and the restructuring/revival plan. Pending such
ascertainment/ determination the management has considered the
inventories except finished goods at cost of Rs. 8322.94 lakhs. Requi-
site accounting effect, if any, will be given upon such ascertainment/
determination and approval of revival plan.
5. Interest in respect of Long Term Loans/Debentures/ Deferred Credits
(for acquisition of Fixed Assets) availed / issued during the financial
years 1982-83 to 1984-85 had been capitalised for the full period of
Long Term Loans/Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such
capitalisation has since been made. In view of such capitalisation, the
charge to Profit and Loss Account on account of depreciation is higher
by Rs. 9.74 lakhs (Previous Year Rs. 6.49 lakhs).
6. Expenditure on Research & Development Activities during the period
amounted to Rs. 410.07 lakhs (pre- vious year Rs. 211.66 lakhs) has
been charged to P&L Account.
7. The Company became a Sick Industrial Company within the meaning of
Section 3(1)(O) of Sick Indus- trial Companies (Special Provisions)
Act, 1985 (SICA) due to erosion of its net worth and the Company - was
declared a Sick Industrial Company by BIFR on 8th May, 2007.The Company
which restarted its op- erations from April, 2007 is working on the
develop- ment of various new products and technologies and production
of new generation 4-stroke scooter has since commenced. During the year
the Company has also submitted its Draft Revival Scheme to BIFR. In
view of this, the accounts have been prepared on the basis of going
concern.
8. A. In respect of Rs. 945 lakhs recoverable by the
Company from Esslon Synthetics Limited (ESL) against the sale
consideration for transfer of undertakings, other debts and amounts, no
pay- ment has been received. The said sum of Rs. 945 lakhs was to be
received by the Company on or before 31.03.1992 which was guaranteed by
Saraswati Trading Company Limited (STCO).
Considering the settlement reached with STCO and the decree of the
Hon'ble High Court of Delhi dated 23.02.2011, Rs 746.44 lakhs (previous
year à Nil) has been written off.
B. The outstanding dues / advances (Net) due from VCCL Ltd. (promoted
by the Company) is Rs. 1525.08 lakhs. Based on the available assets
with VCCL and considering the possible recov- ery therefrom, Rs.
1320.15 lakhs (previous year à Nil) has been provided for.
C. Miscellaneous loans and advances (doubtful of recovery) amounting
to Rs. 612.09 lakhs (previ- ous year à Nil) written off.
D. Provision for amount of Rs. 12.00 lakhs (previous
year à Nil) due from Shri Sita Ram Singhania (in litigation for around
15 years).
9. Restructuring of Loans
(a) The Company has executed with the Secured Lenders (SL) on 28th
March, 2005 a Multipartite Agreement (MPA). The Company is in default
towards payment of interest since December 2006 and principal amount
since March 2007 to the SL. Applicable penal interest has been pro-
vided on the above overdues. The Draft Revival Scheme submitted to BIFR
inter-alia takes into consideration the dues of the SL.
(b) In terms of the MPA the outstanding amounts are repayable to the SL
as per the repayment schedule over eight years alongwith interest at
increasing rate (on yield to maturity basis). Ac- cordingly, the
Company has provided interest at the rate specified for the financial
period in the MPA and not at the Yield to Maturity (YTM) rate. The
amount of interest so provided for the fi- nancial period ended 31st
March, 2011 amounts to Rs 2590.73 lakhs. As compared to the YTM rate,
there is an excess provision of Rs. 239.20 lakhs for the year
(cumulative short provision Rs. 125.34 lakhs)
10. Deferred Taxation
In terms of para 26 of AS-22 "Accounting for Taxes on Income" issued by
the Institute of Chartered Accountants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 31st March,
2011 at the Balance Sheet date. In the context of - uncertainty of
generation of profits in near future, Deferred Tax Assets has not been
recognized.
11. Disclosure in pursuance of Accounting Standard 15 (Revised)
"Employees Benefit" issued by the ICAI During the year, Company has
recognized the fol- lowing amounts in the financial statements:
Defined Benefit Plan
The employees gratuity fund is partly managed by Life Insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit en- titlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity.
Note : The estimates of rate of escalation in salary considered in
actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market. The above information is certified by the actuary.
12. The Company had made an assessment as at 31st March 2011 for any
indication of impairment in the carrying amount of the Company's fixed
assets and Capital Work in Progress. The impairment loss of Rs. 435.37
lakhs has been debited to profit and loss account.
13. In the absence of information from Sundry Creditors regarding
status under The Micro, Small and Medium Enterprises Development Act,
2006, the liability of interest cannot be reliably estimated, nor
required disclosures can be made.
14. Related Party Disclosures
(i-a) Associates/ Joint Venture
VCCL Limited, Trident Auto Components (P) Ltd.
(i-b) Key Management Personnel
Shri Deepak Singhania - Chairman & Managing Director,
Shri. L K Singhania - Wholetime Director,
Shri Sanjeev Shriya - Wholetime Director,
Shri Anurag Singhania - Wholetime Director,
Shri R K Srivastava - Wholetime Director.
(i-c) Companies controlled by Directors/ Relatives
Smart Chips Limited, Suryodaya Investment & Trading. Co. Limited,
Mahalaxmi Holdings Limited, Payal Investments & Trading Limited, Mimosa
Finance & Trading Limited, Bina Fininvest P. Limited, Ginideep Finance
& Investments P. Limited, Gold Rock Investments Limited, Gold Rock
Metals Limited, Gold Rock World Trade Limited, Blue Point Leasing
Limited, Gold Rock Agro-Trading Limited, Tridhar Finance & Trading
Limited, Picanova Investments P. Limited, Inlac Granston Limited,
Shree Dhan Sharda Mercantile P Limited, B.S. Infotech P. Limited, Ind
Hi-Tech Enterprises Pvt. Limited, R.S. Softech (I) Limited, Saryu
Investment & Trading P. Limited, Panki Roadlines Pvt. Limited, Sugata
Investment Limited, Inlac Trading & Agencies P. Limited, Gold Rock
Agrotech Limited, Syscom Corporation Limited, Seattle Ontime P. Limited
(ii) There is no provision for doubtful debts or amounts written off or
written back during the period in respect of dues from or to related
parties, except amounting to Rs. 1320.15 lakhs from VCCL Limited has
been provided.
15. Business Segment
(a) Primary (Business) Segment
The operations of the Company relate to only one segment viz. Motorized
Two-Wheelers.
(b) Secondary (Geographical) Segment
1. Secondary segment reporting is on the basis of geographical
location of the customers. The Company's revenue during the period by
geo- graphical markets are :
Domestic Sales Rs. 13853.54 lakhs (Previous Year Rs. 5457.15 lakhs)
and Export sales Rs. 20652.30 lakhs (Previous Year Rs. 10155.88 lakhs)
2. Geographical segmentwise loss and capital employed are not given
since the production unit and administrative expenses are common.
16. Remuneration to Auditors
(a) Statutory Audit Fee Rs. 13.50 lakhs (Previous Year Rs. 8.0 lakhs)
(b) Tax Audit Fee Rs. 0.80 lakh (Previous Year Rs. 0.80 lakh).
(c) Other Services à Certification and other Jobs Rs. 9.50 lakhs
(Previous Year Rs. 9.00 lakhs).
17. Remuneration to Cost Auditors
Audit Fee Rs. 0.48 lakh (Previous Year Rs. 0.32 lakh).
18. Information pursuant to the provisions of paragraphs 3, 4C and 4D
of Part II of Schedule VI to the Companies Act, 1956.
19. Figures of this period and previous year are eighteen months and
twelve months respectively and hence they are not comparable. Figures
for the previous year have been regrouped and wherever necessary to
make them comparable.
20. Figures in brackets pertain to previous year.
Sep 30, 2009
1. Contingent Liabilities
(a) Income-tax, Sales-tax, Customs and Excise Duty matters pending in
appeals etc. Rs.16831.09 lakhs (Previous year Rs. 12934.46 lakhs) (net
of Bank Guarantee of Rs 3.00 lakhs included in (b) below (Previous year
Rs. 3.00 lakhs)
(b) Outstanding guarantees furnished by Bankers Rs. 10.64. lakhs
(Previous year Rs.10.64 lakhs).
(c) Claims against the Company not acknowledged as debts Rs. 6853.22
lakhs (Previous year Rs. 4064.75 lakhs).
2. Unexecuted capital commitments (net of advances) Rs. 1160.58 lakhs
(Previous year Rs. 1160.58 lakhs)
3. Balances of some of the sundry debtors, creditors, lenders, loans
and advances are subject to confir- mation from the respective parties
and consequen- tial adjustments arising from reconciliation, if any.
The management however is of the view that there will be no material
adjustment in this regard.
4. The Company is in the process of restructuring/re- vival of its
business under the aegis of BIFR which inter alia includes finalization
of the product plan. The process of ascertaining slow/non
moving/obsolete items of inventory and possible utilization/realization
thereof will be undertaken upon - finalization of the product plan and
the restructuring/revival plan. Pend- ing such ascertainment/
determination the manage- ment has considered the inventories except
finished goods at cost of Rs. 8082.10 lakhs. Requisite ac- counting
effect, if any, will be given upon such ascer- tainment/determination
and approval of revival plan.
5. During the year, the Company has relinquished its title on imported
goods lying in CWC bonded ware- house, to Government of India (Custom).
Accordingly loss of Rs. 1316.55 lakhs (Previous year Nil) has been
charged to Profit and Loss Account, net of provision of Custom Duty &
interest there on.
6. Interest in respect of Long Term Loans/Debentures/ Deferred Credits
(for acquisition of Fixed Assets) availed / issued during the financial
years 1982-83 to 1984-85 had been capitalised for the full period of
Long Term Loans/Debentures/Deferred Credits in the year of
availment/issue as per practice prevailing then. No such
capitalisation has since been made. In view of such capitalisation, the
charge to Profit and Loss Account on account of depreciation is higher
by Rs. 6.49 lakhs (Previous Year Rs. 6.49 lakhs).
7. Expenditure on Research & Development Activities during the year
amounted to Rs.211.66 lakhs (previous year Rs. 154.72 lakhs) has been
charged to P&L Account.
8. In respect of Rs. 945 lakhs recoverable by the Company from Esslon
Synthetics Limited (ESL) against the sale consideration for transfer of
undertakings, other debts and amounts, no payment has been re ceived.
The said sum of Rs. 945 lakhs was to be received by the Company on or
before 31.03.1992 which was guaranteed by Saraswati Trading Company
Limited (STCO).
The Company has made an application in the Honble Delhi High Court u/s
20 of the Arbitration Act, 1940 for appointment of Arbitrators,
recovery of dues from ESL and also to adjudicate upon other related mat
ters. The Honble Delhi High Court has disposed of the petition with
the observation that same may be revived as and when permission of
Company Court, Allahabad High Court which is dealing with liquida tion
of ESL is obtained to pursue the matter.
The winding up process of ESL pursuant to the order of the Honble
Allahabad High Court on the recom mendation of BIFR is in progress.
In respect of the overdue unpaid sale consideration of Rs. 945 lakhs,
the Company alongwith its Manag ing Director and one Whole-time
Director has filed a suit in Honble Delhi High Court invoking the
guaran tee given by STCO whereupon the Honble High Court has confirmed
the order of injunction which was passed earlier restraining STCO and
its Director Late Shri IP. Shroff from transferring, creating any
charge, encumbering or exercising any voting rights in respect of
2728706 Equity Shares of the Company held by STCO other than in favour
of Promoters. STCO has filed an appeal against the order before Honble
Delhi High Court which is pending adjudication.
Considering the aforementioned guarantee of STCO and the confirmation
of order of injunction by Honble Delhi High Court and pending outcome
of the case, the sum of Rs. 945 lakhs (included in Loans & Ad vance in
Schedule 6) is considered good. Adjustment of loss, if any, which may
arise in respect of the said outstanding will he made on final judicial
adjudica- tion of the matter.
9. Loans and Advances include a sum of Rs. 12 lakhs (Previous year
Rs. 12 lakhs) due from Mr. Sitaram Singhania, Promoter and erstwhile
Managing Direc tor of Esslon Synthetics Ltd. (ESL) on account of shares
of ESL sold by the Company to him in the financial year ended 3.1st
March, 1991. The Com pany has filed a suit in the Honble Delhi High
Court for recovery of the said sum from Mr. Sitaram Singhania together
with interest thereon. The case has been transferred to the District
Court and the matter is sub-judice.
10. The Company is promoter of VCCL Limited. The out standing
debts/advances (Net) due from VCCL Lim ited as on 30.09.2009 is Rs.
1516.52 lakhs (As at 30.09.2008 Rs. 1514.26 lakhs). As per the latest
available audited accounts, the net worth of VCCL Limited is
negative and the said Companys manufacturing operations continued to
be suspended as in the past. The management is pursuing the matter of
re- covery of above dues from VCCL Limited, inter alia, by way of start
up/use/ acquisition/disposal of its assets. Adjustment for loss, if
any, which may arise in respect of the said outstanding will be made on
its determination.
11. FCCB Series B
On 31.08.2005, Company had issued 6000 Foreign
Currency Convertible Bonds (FCCB) Series B of US$ 1000 each redeemable
at par on 30:08.2010. 5000 FCCBs had already been converted in earlier
period and the balance 1000 FCCBs have been converted into 1631657
Equity Shares at the conversion price of Rs. 26.66 per share on
31.07.2009.
12. Restructuring of Loans
(a) The Company has executed with the Secured Lenders (SL) on 28th
March, 2005 a Multipartite Agreement (MPA). The Company is in default
towards payment of interest since December 2006 and principal amount
since March 2007 to the SL. The restructuring / revival plan would
interalia take into consideration the overdues of the SL. However,
applicable penal interest has been provided on the above overdues.
(b) In terms of the MPA the outstanding amounts are repayable to the SL
as per the repayment schedule over eight years alongwith interest at
increasing rate (on yield to maturity basis). Accordingly, the
Company has provided interest at the rate specified for the financial
period in the MPA and not at the Yield to Maturity. (YTM) rate. The
amount of interest so provided for the financial year ended 30th
September, 2009 amounts to Rs 1384.00 lakhs. As compared to the YTM
rate, there is a excess provision of Rs. 193.93 lakhs for the year
(cumulative short pro- vision Rs.253.15 lakhs)
13. Deferred Taxation :
in terms of para 26 of AS-22 "Accounting for Taxes on Income" issued by
the Institute of Chartered Ac countants of India, the Company has
reviewed the Deferred Tax Assets (DTA), recognized as on 30th
September,2009 at the Balance Sheet date. In the context of uncertainty
of generation of profits in near future, Deferred Tax Assets has been
not been rec ognized.
Defined Benefit Plan
The employees gratuity fund is partly managed by Life insurance
Corporation is a defined benefit plan. The present value of obligation
is determined based on actuarial valuation using the Projected Unit
Credit Method, which recognises each period of service as giving rise
to additional unit of employee benefit entitlement and measures each
unit separately to build up the final obligation. The obligation for
leave encashment is recognized in the same manner as gratuity.
Note : The estimates of rate of escalation in salary considered in
actuarial valuation, take into account inflation, seniority, promotion
and other relevant factors including supply and demand in the
employment market. The above information is certified by the actuary.
14. Accounting Standard 28 (AS- 28), Impairment of Assets issued by
The Institute of Chartered Accountants of India has become applicable
to the Company from 1st April, 2005. The Company is in process of
restructuring / revival of its business under the aegis of BIFR which,
inter alia, includes finalization of the product plan. The process of
determining the impairment of loss, if any, on its assets including
capital work in progress will be undertaken upon finalization of the
product plan and the restructuring / revival plan. Requisite accounting
effect, if any, will be given upon such ascertainment / determination
and approval of revival plan.
15. The Company has become a Sick Industrial Com pany within the
meaning of Section 3(1 )(0) of Sick Industrial Companies (Special
Provisions) Act, 1985 (SICA) due to erosion of its net worth. In view
of the aforesaid, the Company has made reference to Board for
Industrial and Financial Reconstruction (BIFR) under provision of
Section 15.(1) of the said Act and the Company has since been declared
a Sick Indus trial Company by BIFR. The Company is working on the
development of various new products and tech nologies and production of
new generation 4-stroke scooter has since commenced. The Company is
working for formulation of a Draft Revival Scheme for consideration by
BIFR.
16. The Company has restarted its operations from April, 2007 and is
in the process of restructuring / revival of its business. The Company
is also working for for mulation of a Draft Revival Scheme for
consideration by BIFR and in view of this Accounts have been pre pared
on the basis of going concern.
17. Leases:
(a) Operating Leases :
The Company has taken various residential/ commercial premises and
Plant and Machinery under operating leases. These lease arrange
18. In the absence of information from Sundry Creditors regarding
status under The Micro, Small and Medium Enterprises Development Act,
2006, the liability of interest cannot be reliably estimated, nor
required disclosures can be made.
19. Related Party Disclosures
(i-a) Associates/ Joint Venture
VCCL Limited, Trident Auto Components (P) Ltd.
(i-b) Key Management Personnel
Shri Deepak Singhania - Chairman & Manag-
ing Director, Shri. L K Singhania - Wholetime
Director, Shri Sanjeev Shriya -Wholetime
Director, Shri Anurag Singhania - Wholetime
Director, Shri R K Srivastava - Wholetime
Director.
(i-c) Companies controlled by Directors/ Relatives
Smart Chips Limited, Suryodaya Investment & Trading. Co. Limited,
Mahalaxmi Holdings Limited, Payal Investments & Trading Limited, Mimosa
Finance & Trading Limited, Bina Fininvest P. Limited, Ginideep Finance
& Investments P. Limited, Gold Rock Investments Limited, Gold Rock
Metals Limited, Gold Rock World Trade Limited, Blue Point Leasing
Limited, Gold RockAgro-Trading Limited, Tridhar Finance & Trading
Limited, Picanova Investments P. Limited, Inlac Granston Limited,
Shree Dhan Sharda Mercantile P Limited, B.S. Infotech P. Limited, Ind
Hi-Tech Enterprises Pvt. Limited, R.S. Softech (I) Limited, Saryu
Investment & Trading P. Limited, Panki Roadlines Pvt. Limited, Sugata
Investment Limited, Inlac Trading & Agencies P. Limited, Gold Rock
Agrotech Limited, Syscom Corporation Limited, Seattle Ontime P.
Limited.
(ii) There is no provision for doubtful debts or amounts written off or
written back during the period in respect of dues from or to related
parties.
20. Business Segment
The operations of the Company relate to only one segment viz.
Motorized Two-Wheelers.
21. Remuneration to Auditors
(a) Statutory Audit Fee Rs. 8.00 lakhs (Previous Year Rs. 8.0 lakhs)
(b) Tax Audit Fee Rs. 0.80 lakh (Previous Year Rs. 0.80 lakh).
(c) Other Services - Certification and other Jobs Rs. 9.00 lakhs
(Previous Year Rs. 8.13 lakhs).
22. Remuneration to Cost Auditors
Audit Fee Rs. 0.32 lakh (Previous Year Rs. 0.32 lakh).
23. Information pursuant to the provisions of paragraphs 3, 4C and 4D
of Part II of Schedule VI to the Companies Act, 1956.
24. Figures of the previous year have been regrouped and recasted
wherever necessary to make them comparable.
25. Figures in brackets pertain to previous year.
Disclaimer: This is 3rd Party content/feed, viewers are requested to use their discretion and conduct proper diligence before investing, GoodReturns does not take any liability on the genuineness and correctness of the information in this article
More Information on LML Ltd.
-
LML Ltd. Tools
- Bulk Deals
-
LML Ltd. Company Details
- Company Profile
- Company History
- Management Team
- Capital Structure
- Product Mix
- Banker/Auditor/Registrar
-
Company History
- Bonus
- BSE Price History
- NSE Price History
-
LML Ltd. Key Financial Ratios
- Ratios
-
LML Ltd. Results
- Quarterly Results
- Half Yearly Results
- Nine Months Results
- Annual Results
-
LML Ltd. Financial Data
- Audited Results
- Cash Flow
- Balance Sheet
-
LML Ltd. Reports
- Accounting Policies
- Auditors Report
- Directors Report
- Notes To Account
-
LML Ltd. Corporate Announcements
- Book Closure
- Dividend
- Board Meetings
