Mar 31, 2015
1. Contingent Liabilities:
The following contingent liability existed as on 31-03-2015 for which
no provision has been made:
A penalty up to Rs 4 Lakhs (Previous year -Rs.4 Lakhs) which could be
levied by a Court for lapses under the Negotiable Instruments Act.
2. Rehabilitation Scheme 2002/2003 of BIFR:
a) Supply of power at a concessional rate:
The Company had recognized the claims made by the GEB towards
electricity supply to the Company in excess of Rs.2.84 per unit
(inclusive of energy & demand charges) as refundable by the GEB in line
with the tariff approved vide order dated 28.08.2000 and its extension
for a period of 5 years as further rehabilitation scheme sanctioned by
BIFR. However, the State Govt. / GEB have not extended the same till
date. In the meanwhile the Company is in the process of finalizing its
MDRS envisaging various reliefs and concessions from the State Govt. of
Goa which is currently pending before the Govt. of Goa/BIFR. In the
circumstances and pending revised MDRS to be sanctioned by BIFR duly
supported by the Govt. of Goa, the provision of Rs.1717.45 lakhs
relating to the past period is in the opinion of the management not
enforceable and hence written off during the year as advances no longer
recoverable.
b) Extension of CST exemption and Exemption from payment of Entry Tax:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 21st November 2002; with a view for the long term
sustenance had granted Extension of CST exemption from July 2005 up to
2012 and Exemption from payment of Entry Tax from September 2000.
Accordingly, a liability of Rs.490 lakhs and Rs.1711.96 lakhs (previous
year - Rs. 490 lakhs and Rs. 1711.96 lakhs) has not been provided
towards CST and Entry Tax respectively.
3. Advances no longer recoverable:
The advances no longer recoverable and written off during the year by
the Company amounting to Rs.1978.45 lakhs include; apart from
Rs.1717.45 lakhs as mentioned at Note-28 (a) above, Rs.243.23 lakhs
towards advances made to suppliers which in the opinion of the
management have become bad and not realizable and Rs.17.76 lakhs
towards excess provision of fire insurance claim.
4. Bad debts:
The Company has also during the year written off as bad debts an amount
of Rs.2076.09 lakhs towards Sundry Debtors pertaining to the disputed
billing during 2008-09 on account of sudden fall in prices of shredded
scrap from USD 690 PMT to USD 220 PMT and selling prices from
Rs.60,000/- PMT to Rs.32,000/- PMT as a result of the Global economic
crisis which in the opinion of the management have become bad and
irrecoverable.
5. Excise duty liability:
In respect of manufactured goods held in stock, excise duty at 12.36%
is estimated at Rs. 3.87 Lakhs (Prev. year Rs. 3.87 Lakhs @ 12.36%).
The same has not been provided in the books as per the policy of the
Company except on stock at depots and stock sent to converters on which
duty already paid has been included in the valuation. This does not
affect the profits made by the Company.
6. Claims against the Company not acknowledged as debts:
PARTICULARS REMARKS
Authority / Department Goa Electricity Board (GEB)
Amount Due Rs.87.84 crores; comprising of
Rs.2.16 crores principal and
Rs.85.68 crores delayed payment
charges (DPC) @ 2% per month
compounded
Period for which it is related to December 1991 to November 1996
Dispute involved Granting of 25% rebate for 3.5
years instead of 5 years and
levy of DPC @2% per month
compounded
Before which authority Hon'ble Supreme Court of India
7. Central Sales Tax payable and Electricity charges payable:
During the year eligible VAT input credit of Rs.719.04 lakhs for the
period 01.04.2005 to 31.03.2015 has been set off against the Central
Sales Tax payable for the period 01.04.2005 to 31.03.2015. Further, a
sum of Rs.212.99 lakhs being the old electricity rebate claim provided
as advances recoverable in cash or kind or for value to be received and
also provided as electricity charges payable has been set off during
the year.
8. Other Income:
Other income (refer Note-20) includes write back of Rs.1157.44 lakhs
being liability to Unsecured Loan from Rukmani Finance Pvt. Ltd. who
have waived the same keeping in view the proposed rehabilitation
programme.
9. The balances of Loans & Advances under Current Assets, Sundry
Debtors & Sundry Creditors are subject to confirmation / reconciliation.
10. The Board is of the opinion that the Current Assets, Loans and
Advances have, in the ordinary course of business, value at least equal
to the amount at which they are stated in the Balance Sheet.
11. Figures for the previous year have been regrouped to conform to
those of the current year.
Mar 31, 2014
Note - 1
Contingent Liabilities:
The following contingent liability existed as on 31-03-2014 for which
no provision has been made: A penalty up to Rs 4 Lakhs (Previous year
-Rs.4 Lakhs) which could be levied by a Court for lapses under the
Negotiable Instruments Act.
Rehabilitation Scheme of BIFR:
a) Supply of power at a concessional rate:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 26th June 2009, had once again affirmed that the
sanction scheme dated 21st November 2002 pronounced by the BIFR was
not appealed against by the Government of Goa (GOG) before the AAIFR
or any other superior legal forum, challenging the prescribed
provisions of the said scheme, and therefore the said provisions
attained finality, and consequently, the same is legally binding for
implementation by GOG for granting relief to the Company ( MSL ) in
terms of Para 8(c) of the order dated 21st November 2002 passed by the
BIFR. On the basis of the two above mentioned orders and on account of
the fact that the Government of Goa has appointed a committee of four
persons to address the sickness of all micro, small, medium and large
industries under the Goa Sick Industrial Units Rehabilitation Scheme
for recommending necessary steps to be taken by the Government for
their revival, your company had recomputed individually in the five
years ending 31st March 2012, the amount recoverable from the
Electricity Department at the rate of 16 paise per unit of electricity
consumed in each of the year. The aggregate charges so reversed upto
31st march 2012 amounted to Rs.1,718 Lakhs (previous year Rs. 1,718
Lakhs).
The committee appointed to look into the above mentioned issue
prepared its report at the end of January, 2012 and had put the same
for Government approval. However, no action was taken by the
Government since from February 2012, the code of conduct for elections
came into force followed by elections, and later on formation of the
new Government. When the representation was made to the present
Government, the company was informed to get fresh directions from the
Hon''ble BIFR as the last directions had been given in July 2010.
The aforesaid facts were placed before the Hon''ble BIFR vide the
company''s letter dated 07-052012. In response, the Hon''ble BIFR was
pleased to fix a review hearing on 06-06-2012. In that hearing, the
Monitoring Agency (MA) IFCI was directed to write to the Government to
expedite the process of implementation of the sanctioned scheme within
30 days. The case was posted for next hearing on 16th April 2013.
At the review hearing held on 16.04.2013 and during the course of the
subsequent review hearings held on 04.06.13 and 1.08.13 respectively,
the Bench reiterated its directions to the Government to expedite the
grant of reliefs and concessions in a time bound manner. Vide their
Orders; the Bench also directed the Banks i.e. Bank of Maharashtra and
Union Bank of India to continue to lend need based working capital
support. At the hearing held on 01.08.2013, considering the financial
status of the Company, the Bench observed that the Company should
explore alternate remedies including that of filing a Modified Draft
Rehabilitation Scheme (MDRS) considering the latest financial status
of the Company and posted the next review hearing on 12.09.13.
During the course of review hearing held on 12.09.13, the Company had
placed before the bench the financial status and the effect of the
delay in implementation of the sanctioned scheme by Goa Government
coupled with the global economic recession during the year 2008-2009
and also the recent banning of iron ore mining, which had reduced the
capacity utilization of the Company considerably. It was submitted
that due to this the Company had been incurring losses for the past
3-4 years and that the entire working capital had eroded. It was also
submitted that the non- release of need based working capital limits by
the Bank(s) had brought the entire operations to a standstill compelling
the Company to suspend its operation from June 2013. Based on the
submissions made by the Company, the Bench directed the Company to
submit to MA (IFCI) a fully tied-up MDRS by taking cut-off date as
30.09.13 within six weeks.
The Company submitted the MDRS to MA (IFCI) on 06.12.13. Thereafter at
the hearing held on 10.12.13, the Bench directed the MA (IFCI) to
examine the MDRS filed by the Company, to circulate the same to all
concerned and to convene a joint meeting of all concerned in order to
submit the fully tied-up DRS along with minutes of the joint meeting,
within a period of six weeks. The reliefs and concessions envisaged in
the MDRS are:
1. Restructuring of accounts and working capital support by Banks.
2. Infusion of funds
3. Reliefs and concessions from the Government of Goa which include:
Commercial tax department:
- Extension of the Sales Tax exemption from 2005 to 2016
- Exemption from payment of Entry Tax from September, 2000.
Electricity department:
- Concessional supply of power at actual NTPC cost with no demand
charges and no duty for 5 years.
A joint meeting of all concerned was convened by MA (IFCI) on 18.01.14
and minutes of the said meeting were filed before the Hon''ble BIFR on
07.02.14. During the course of the hearing held on 11.02.14, based on
the submissions of MA (IFCI) and the Company; the Bench passed
following directions:
i. MA (IFCI) to convene another joint meeting of all the stake holders
and Government Agencies to consider the MDRS and submit the fully
tied-up MDRS along with minutes of joint meeting, within a period of
eight weeks.
ii. In the mean time, all the Govt. Departments from whom the company
has sought reliefs and concession in the MDRS to submit their stand to
MA(IFCI) with in a period of four weeks.
iii. Both the Banks i.e. Bank of Maharashtra and Union Bank of India
to consider the request of the company sympathetically for
restructuring and rehabilitation proposal of the company and to extend
all cooperation to charge interest at base rate, during the
rehabilitation period.
iv. Both the Banks i.e. Bank of Maharashtra and Union Bank of India to
issue necessary ÂNo Objection Certificate'' to the company to take up
job-work for conversion prevailing upon the company to take
appropriate measures to identify storage separately of the stock
supply by the other / third party.
The next date of hearing was fixed on 21.04.14 which was later
postponed to 23.07.14. The MA (IFCI) has written twice to the
stakeholders/Government agencies concerned to revert with their say on
the MDRS.There has been continuous follow up with the Banks to give
effect to the directions dated 11.02.14 of the Bench.
Simultaneously Company is pursuing with the Goa Government for
sanction of the necessary reliefs. The Chief of the State has assured
to address the issue of the Company within the month of September
2014.
b) Extension of CST exemption and Exemption from payment of Entry Tax:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 21st November 2002, with a view for the long term
sustenance had granted Extension of CST exemption from July 2005 up to
2012 and Exemption from payment of Entry Tax from September 2000.
Accordingly, a liability of Rs.490 lakhs and Rs.1711.96 lakhs
(previous year - Rs. 490 lakhs and Rs. 1709.59 lakhs) has not been
provided towards CST and Entry Tax respectively.
Note - 2
Excise duty liability:
In respect of manufactured goods held in stock, excise duty at 12.36%
is estimated at Rs. 3.87 Lakhs (Prev. year Rs. 31.59 Lakhs @ 12.36%).
The same has not been provided in the books as per the policy of the
Company except on stock at depots and stock sent to converters on
which duty already paid has been included in the valuation. This does
not affect the profits made by the Company.
Note - 3
Claims against the Company not acknowledged as debts:
Penal interest was being charged by the Electricity Department for
late payment of bills for the period December 1991 to November 1996.
The Company was entitled during the said years for 25% rebate on the
power tariff. However, no such reduction was given by the Department.
The Company started paying only 75% of the monthly bill as per the
Government Notification in view of 25% rebate entitlement. However,
the balance 25% of the bill was taken as non-payment and penal
interest was levied at 2% per month on the rebate for which the
company was entitled but not given by the Department.
By an order of the Chief Electrical Engineer, Government of Goa, dated
31.03.1998, the disbursement of rebate benefit in installment (which
was started from Sept. 1996 onwards) to the company was suspended
unilaterally, against which the company preferred a Writ Petition in
the High Court of Mumbai, Panaji Bench, Goa, which was disposed of in
favour of the company and was further upheld by the Hon''ble Supreme
Court of India on an appeal preferred by the Department.
The Chief Electrical Engineer, Government of Goa has, through a
revised bill issued to the Company, communicated the interpretation of
the Court Order by the Department. The same was not agreeable to the
Company. As per the computation of the department, the Company was
allegedly liable to pay a sum of Rs. 8,633 lakhs.
The Company preferred a Writ Petition to the High Court of Mumbai,
Panaji Bench, Goa, on the issue. The Hon''ble High Court directed that
the matter be referred to the Billing Disputes Redressal Committee of
the Government of Goa. Submissions have been made to the said
Committee in several Hearings which have taken place. In the last
Hearing of the committee held on 5th October 2010, a chart alleging
that the Company has to pay Rs. 8,784 Lakhs comprising of Rs. 216
Lakhs as the principal amount of the demand and Rs. 8,568 Lakhs for
delayed payment of charges calculated at 24% p.a. compounded. The said
computation was arrived at by granting 25% rebate for 3.5 years
instead of 5 years and then charging the delayed charges at 24% p.a.
compounded.
As per a fresh Demand notice dated 3rd March 2011, a sum of Rs. 152
Lakhs was reduced from the aforesaid principal of Rs. 216 Lakhs
resulting in a net demand of Rs. 8,568 Lakhs as delayed payment
charges, arriving at the aggregate demand of Rs. 8,633 Lakhs. As per
the computation made by your Company, a sum of Rs. 15,300 Lakhs
comprising of Rs. 400 Lakhs as the principal amount and Rs. 14,900
Lakhs as the interest at 24% p.a. is receivable as on 1st October 2010
calculated by applying the Law of Equity.
In the meanwhile, the Hon''ble High Court also held as illegal the
disconnection of power made by the Department during the months of
June, July and August 1998 and the demand charges levied on the
company was not in order. Accordingly, through a letter dated
11.03.2010, the Executive Engineer Margao agreed to refund a sum of
Rs. 32.92 Lakhs paid and collected by the Dept. for the said
disconnection period.
The Demand Notice dated 03-03-2011 was challenged before the Hon''ble
High Court of Bombay at Goa vide W.P.240/2011. The Hon''ble High Court
disposed of this petition with a direction to the company to appear
and represent before the Billing Dispute Redressal Committee on the
aspect of delayed payment charges within two weeks from the date of
the order and the committee was directed to calculate the actual
delay, if any, within four weeks thereon.
The company filed its representation on the issue of delayed payment
charges before the committ within two weeks as directed.
Simultaneously, the company filed a Special Leave Petition before t
Hon''ble Supreme Court challenging the Order passed in Writ Petition
240/2011, seeking clarification
The said Special Leave Petition came up for hearing before the Hon''ble
Supreme Court on 19-11-20 wherein after arguments, the Hon''ble Supreme
Court ordered that the amount due may be collect by the Department in
accordance with law subject to the final decision of the Supreme
Court. In t meanwhile the demand has been kept in abeyance pending
final decision by the court.
Having due regard to the past judgments given by the Hon''ble Bombay
High Court, your Company confident of getting the demand quashed.
Note - 4
The balances of Loans & Advances under Current Assets, Sundry Debtors
& Sundry Creditors a subject to confirmation / reconciliation.
Note - 5
The Board is of the opinion that the Current Assets, Loans and
Advances have, in the ordinary course of business, value at least
equal to the amount at which they are stated in the Balance Sheet,
except Trade Receivables of Rs.2159.51 lakhs which is disputed by the
Debtors.
Note - 6
Figures for the previous year have been regrouped to conform to those
of the current year.
Mar 31, 2013
Note - 1
Contingent Liabilities:
The following contingent liabilities existed as on 31-03-2013 for which
no provision has been made:
a) Bills of Exchange from Debtors discounted with banks - Rs. 1,599.11
Lakhs (Previous year -Rs. 2,259.68 Lakhs)
b) Penalty upto Rs. 4 Lakhs (Previous year -Rs.4 Lakhs) which could be
levied by a Court for lapses under the Negotiable Instruments Act.
Note - 2
Rehabilitation Scheme of BIFR:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 26th June 2009, had once again affirmed that the
sanction scheme dated 21st November 2002 pronounced by the BIFR was not
appealed against by the Government of Goa (GOG) before the AAIFR or any
other superior legal forum, challenging the prescribed provisions of
the said scheme, and therefore the said provisions attained finality,
and consequently, the same is legally binding for implementation by GOG
for granting relief to the Company ( MSL ) in terms of Para 8(c) of the
order dated 21st November 2002 passed by the BIFR. On the basis of the
two above mentioned orders and on account of the fact that the
Government of Goa has appointed a committee of four persons to address
the sickness of all micro, small, medium and large industries under the
Goa Sick Industrial Units Rehabilitation Scheme for recommending
necessary steps to be taken by the Government for their revival, your
company had recomputed individually in the five yea rs ending 31st
March 2012, the amount recoverable from the Electricity Department at
the rate of 16 paise per unit of electricity consumed in each of the
year. The aggregate charges so reversed upto 31st March 2012 amounted
to Rs.1,718 Lakhs (previous year Rs. 1,718 Lakhs).
The committee appointed to look into the above mentioned issue prepared
its report at the end of January, 2012 and had put the same for
Government approval. However, no action was taken by the Government
since from February 2012, the code of conduct for elections came into
force followed by elections, and later on formation of the new
Government. When the representation was made to the present Government,
the company was informed to get fresh directions from the Hon''ble BIFR
as the last directions had been given in July 2010.
The aforesaid facts were placed before the Hon''ble BIFR vide the
company''s letter dated 07-05-2012. In response, the Hon''ble BIFR was
pleased to fix a review hearing on 06-06-2012. In that hearing, the
Monitoring Agency (MA) IFCI was directed to write to the Government to
expedite the process of implementation of the sanctioned scheme within
30 days. The case was posted for next hearing on 16th April 2013. The
case has been heard and the order is yet to be received.
Note - 3
Excise duty liability:
In respect of manufactured goods held in stock, excise duty at 12.36%
is estimated at Rs 31.59 Lakhs (Prev. year Rs 70.95 Lakhs @ 12.36%).
The same has not been provided in the books as per the policy of the
Company except on stock at depots and stock sent to converters on which
duty already paid has been included in the valuation. This does not
affect the profits made by the Company.
Note - 4
Claims against the Company not acknowledged as debts:
Penal interest was being charged by the Electricity Department for late
payment of bills for the period December 1991 to November 1996. The
Company was entitled during the said years for 25% rebate on the power
tariff. However, no such reduction was given by the Department. The
Company started paying only 75% of the monthly bill as per the
Government Notification in view of 25% rebate entitlement. However, the
balance 25% of the bill was taken as non-payment and penal interest was
levied at 2% per month on the rebate for which the company was entitled
but not given by the Department. By an order of the Chief Electrical
Engineer, Government of Goa, dated 31.03.1998, the disbursement of
rebate benefit in installment (which was started from Sept. 1996
onwards) to the company was suspended unilaterally, against which the
company preferred a Writ Petition in the High Court of Mumbai, Panaji
Bench, Goa, which was disposed of in favour of the company and was
further upheld by the Hon''ble Supreme Court of India on an appeal
preferred by the Department. The Chief Electrical Engineer, Government
of Goa has, through a revised bill issued to the Company, communicated
the interpretation of the Court Order by the Department. The same was
not agreeable to the Company. As per the computation of the department,
the Company was allegedly liable to pay a sum of Rs. 8,633 lakhs.
The Company preferred a Writ Petition to the High Court of Mumbai,
Panaji Bench, Goa, on the issue. The Hon''ble High Court directed that
the matter be referred to the Billing Disputes Redressal Committee of
the Government of Goa. Submissions have been made to the said Committee
in several Hearings which have taken place. In the last Hearing of the
committee held on 5th October 2010, a chart alleging that the Company
has to pay Rs. 8,784 Lakhs comprising of Rs. 216 Lakhs as the principal
amount of the demand and Rs. 8,568 Lakhs for delayed payment of charges
calculated at 24% p.a. compounded. The said computation was arrived at
by granting 25% rebate for 3.5 years instead of 5 years and then
charging the delayed charges at 24% p.a. compounded.
As per a fresh Demand notice dated 3rd March 2011, a sum of Rs. 152
Lakhs was reduced from the aforesaid principal of Rs. 216 Lakhs
resulting in a net demand of Rs. 8,568 Lakhs as delayed payment
charges, arriving at the aggregate demand of Rs. 8,633 Lakhs. As per
the computation made by your Company, a sum of Rs. 15,300 Lakhs
comprising of Rs. 400 Lakhs as the principal amount and Rs. 14,900
Lakhs as the interest at 24% p.a. is receivable as on 1st October 2010
calculated by applying the Law of Equity. In the meanwhile, the Hon''ble
High Court also held as illegal the disconnection of power made by the
Department during the months of June, July and August 1998 and the
demand charges levied on the company was not in order. Accordingly,
through a letter dated 11.03.2010, the Executive Engineer Margao agreed
to refund a sum of Rs. 32.92 Lakhs paid and collected by the Dept. for
the said disconnection period.
The Demand Notice dated 03-03-2011 was challenged before the Hon''ble
High Court of Bombay at Goa vide W.P.240/2011. The Hon''ble High Court
disposed of this petition with a direction to the company to appear and
represent before the Billing Dispute Redressal Committee on the aspect
of delayed payment charges within two weeks from the date of the order
and the committee was directed to calculate the actual delay, if any,
within four weeks thereon.
The company filed its representation on the issue of delayed payment
charges before the committee within two weeks as directed.
Simultaneously, the company filed a Special Leave Petition before the
Hon''ble Supreme Court challenging the Order passed in Writ Petition
240/2011, seeking clarification.
The said Special Leave Petition came up for hearing before the Hon''ble
Supreme Court on 19-11-2012 wherein after arguments, the Hon''ble
Supreme Court ordered that the amount due may be collected by the
Department in accordance with law subject to the final decision of the
Supreme Court. In the meanwhile the demand has been kept in abeyance
pending final decision by the court.
Having due regard to the past judgments given by the Hon''ble Bombay
High Court, your Company is confident of getting the demand quashed.
Note - 5
The balances of Loans & Advances under Current Assets, Sundry Debtors &
Sundry Creditors are subject to confirmation / reconciliation.
Note - 6
The Board is of the opinion that the Current Assets, Loans and Advances
have, in the ordinary course of business, value at least equal to the
amount at which they are stated in the Balance Sheet.
Mar 31, 2012
Note - 1
Contingent Liabilities:
The following contingent liabilities existed as on 31-03-2012 for which
no provision has been made:
a) Bills of Exchange from Debtors discounted with banks - Rs. 2259.68
Lakhs (Previous year - Rs. 4736 Lakhs)
b) Penalty upto Rs 4 Lakhs (Previous year -Rs. 4 Lakhs) which could be
levied by a Court for lapses under the Negotiable Instruments Act.
Note - 2
Rehabilitation Scheme of BIFR:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 26,h June 2009, had once again affirmed that the
sanction scheme dated 21s' November 2002 pronounced by the BIFR was not
appealed against by the Government of Goa (GOG) before the AAIFR or any
other superior legal forum, challenging the prescribed provisions of
the said scheme, and therefore the said provisions attained finality,
and consequently, the same is legally binding for implementation by GOG
for granting relief to the Company (MSL) in terms of para 8(c) of the
order dated 21st November 2002 passed by the BIFR. On the basis of the
two above mentioned orders and on account of the fact that the
Government of Goa has appointed a committee of four persons to address
the sickness of all micro, small, medium and large industries under the
Goa Sick Industrial Units Rehabilitation Scheme for recommending
necessary steps to be taken by the Government for their revival, your
Company has recomputed for the year ending 31s1 March 2012 the
Electricity Charges payable at Rs. 2.84 per unit in the place of Rs. 3
per unit charged. Accordingly, the electricity charges account has been
credited with a sum of Rs. 385.74 Lakhs as was done in the preceding
year. The aggregate charges so reversed as on 31î March 2012 amounted
to Rs. 1718 Lakhs (previous year Rs. 1332 Lakhs). -
The committee appointed to look into the above mentioned issue prepared
its report at the end of January, 2012 and had put the same for
Government approval. However, no action was taken by the Government
since* from February 2012, the code of conduct for elections came into
force followed by elections, and later on formation of the new
Government. When the representation was made to the present Government,
the company was informed to get fresh directions from the Hon'ble BIFR
as the last directions had been given in July 2010.
The aforesaid facts were placed before the Hon'ble BIFR vide the
company's letter dated 07-05-2012. In response, the Hon'ble BIFR was
pleased to fix a review hearing on 06-06-2012. At that hearing, the
Monitoring Agency (MA) IFCI was directed to write to the Government to
expedite the process of implementation of the sanctioned scheme within
30 days. The said order dated 06-06-2012 of the Hon'ble BIFR is
awaited.
Note - 3
Excise dutv liability.
In respect of manufactured goods held in stock, excise duty at 12.36%
is estimated at Rs. 70.95 Lakhs (Prev. year Rs. 78.11 Lakhs at
10.30%).The same has not been provided in the books as per the policy
of the Company except on stock at depots and stock sent to converters
on which duty already paid has been included in the valuation. This
does not affect the profits made by the Company.
Note - 4
Claims against the Company not acknowledged as debts:
Penal interest was being charged by the Electricity Department for late
payment of bills for the period December 1991 to November 1996. The
Company was entitled during the said years for 25% rebate on the power
tariff. However, no such reduction was given by the Department. The
Company started paying only 75% of the monthly bill as per the
Government Notification in view of 25% rebate entitlement. However,
the balance 25% of the bill was taken as non-payment and penal interest
was levied at 2% per month on the rebate for which the company was
entitled but not given by the Department. By an order of the Chief
Electrical Engineer, Government of Goa, dated 31.03.1998, the
disbursement of rebate benefit in installment (which was started from
Sept. 1996 onwards) to the company was suspended unilaterally, against
which the company preferred a Writ Petition in the High Court of
Mumbai, Panaji Bench, Goa, which was disposed of in favour of the
company and was further upheld by the Hon'ble Supreme Court of India on
an appeal preferred by the Department. The Chief Electrical Engineer,
Government of Goa has, through a revised bill issued to the Company,
communicated the interpretation of the Court Order by the Department.
The same was not agreeable to the Company. As per the computation of
the department, the Company was allegedly liable to pay a sum of Rs.
8136 lakhs as on July 2008, frozen on that day.
The Company preferred a Writ Petition to the High Court of Mumbai,
Panaji Bench, Goa, on the issue. The Hon'ble High Court directed that
the matter be referred to the Billing Disputes Redressal Committee of
the Government of Goa. Submissions have been made to the said Committee
in several Hearings which have taken place. In the last Hearing of the
committee held on 5,h October 2010, a chart alleging that the Company
has to pay Rs. 8784 Lakhs comprising of Rs. 216 Lakhs as the principal
amount of the demand and Rs. 8568 Lakhs for delayed payment of charges
calculated at 24% p.a. compounded. The said computation was arrived at
by granting 25% rebate for 3.5 years instead of 5 years and then
charging the delayed charges at 24% p.a. compounded.
As per a fresh Demand notice dated 3* March 2011, a sum of Rs. 152
Lakhs was reduced from the aforesaid principal of Rs. 216 Lakhs
resulting in a net demand of Rs. 8568 Lakhs as delayed payment charges,
arriving at the aggregate demand of Rs. 8632 Lakhs. As per the
computation made by your Company, a sum of Rs. 15300 Lakhs comprising
of Rs. 400 Lakhs as the principal amount and Rs. 14900 Lakhs as the
interest at 24% p.a. is receivable as on 1st October 2010 calculated by
applying the Law of Equity. In the meanwhile, the Hon'ble High Court
also held that the disconnection of power made by the Department during
the months of June, July and August 1998 as illegal and the demand
charges levied on the company was not in order. Accordingly, through a
letter dated 11.03.2010, the Executive Engineer Margao has agreed to
refund a sum of Rs. 32.92 Lakhs paid and collected by the Dept. for the
said disconnection period.
The Demand Notice dated 03-03-2011 was challenged before the Hon'ble
High Court of Bombay at Goa vide W.P.240/2011. The Hon'ble High Court
disposed of this petition with a direction to the company to appear and
represent before the Billing Dispute Redressal Committee on the aspect
of delayed payment charges within two weeks from the date of the order
and ttû,e committee was directed to calculate the actual delay, if
any, within four weeks thereon.
The company filed its representation on the issue of delayed payment
charges before the committee within two weeks as directed.
Simultaneously, the company has filed a Special Leave Petition before
the Hon'ble Supreme Court challenging the Order passed in Writ Petition
240/2011, seeking clarification. ,
The said Special Leave Petition came up for hearing before the Hon'ble
Supreme Court on 11-11-2011 wherein after arguments, due notice was
issued to the State/Electricity Department for their reply. Presently
it is posted on 24-07-2012 for their reply.
The committee in view of the notice from the Hon'ble Supreme Court has
kept the matter in abeyance pending final decision on the Special Leave
Petition.
Having due regard to the past judgments given by the Hon'ble Bombay
High Court, your Company is confident of getting the demand quashed.
Note - 5
The balances of Loans & Advances under Current Assets, Sundry Debtors &
Sundry Creditors are subject to confirmation / reconciliation.
Note - 6
The Board is of the opinion that the Current Assets, Loans and Advances
have, in the ordinary course of business, value at least equal to the
amount at which they are stated in the Balance Sheet.
Note - 7
Figures for the previous year have been regrouped to conform to those
of the current year.
Mar 31, 2010
1) Rehabilitation Scheme of BIFR:
The Board for Industrial and Financial Reconstruction (BIFR) through
its order dated 26lh June 2009, has once again affirmed that the
sanction scheme dated 21s1 November 2002 pronounced by the
BIFR was not appealed against by the Government of Goa (GOG) before the
AAIFR or any other superior legal forum, challenging the prescribed
provisions of the said scheme, and therefore the said provisions
attained finality, and consequently, the same is legally binding for
implementation by GOG for granting relief to the Company ( MSL) in
terms of para 8(c) of the order dated 21st November 2002 passed by the
BIFR. On the basis of the two above mentioned orders and on account of
the fact that the Government of Goa has appointed a committee of four
persons to address the sickness of all micro, small, medium and large
industries under the Goa Sick Industrial Units Rehabilitation Scheme
for recommending necessary steps to the Government for their revival,
your Company has recomputed for the months of November 2007 to March
2009, the Electricity Charges payable at Rs. 2.84 per unit in the place
of Rs. 3 per unit charged by the Electricity Board and arrived at the
figure of Rs. 5,33,63,814. Out of this, a sum of Rs. 145 lakhs was
credited to the Profit and Loss Account under the head Prior Period
Adjustments & the balance sum of Rs. 389 lakhs was credited to Power
Charges.During the year under consideration, the above mentioned
committee met several times and the proceedings were recorded. The
company has hopes that a reduction would be granted by the GOG.
Accordingly, the electricity charges account has been credited with a
sum of Rs. 393 lakhs by taking the electricity charges payable as Rs.
2.84/- per unit in the place of Rs. 3/- charged as was done in the
preeciding year. The aggregate charges to reverse as on 31s1 march 2010
amount to Rs.927 lakhs.
2) Excise duty liability:
In respect of manufactured goods held in stock, excise duty at 10.30%
is estimated at Rs 35.13 Lakhs (Prev. year Rs 76.89 lakhs at 8.24%)
.The same has not been provided in the books as per the policy of the
Company except on stock at depots and stock sent to converters on which
duty already paid has been included in the valuation. This does not
affect the profits made by the Company.
3) Contingent Liabilities:
The following contingent liabilities existed as on 31-03-2010 for which
no provision has been made:
a) Bills of Exchange from Debtors discounted with banks - Rs 38.12
Crores (Previous year - Rs 30.83 Crores)
b) Penalty upto Rs 4 Lakhs (Previous year -Rs.4 Lakhs) which could be
levied by a Court for lapses under the Negotiable Instruments Act.
4) Claims against the Company not acknowledged as debts:
Penal interest was being charged by the Electricity Department for late
payment of bills for the period December 1991 to November 1996. The
Company was entitled during the said years for 25% rebate on the power
tariff. However, no such reduction was given by the Department. The
Company started paying only 75% of the monthly bill as per the
Government Notification in view of 25% rebate entitlement. However, the
balance 25% of the bill was taken as non payment and penal interest was
levied at 2% per month on the rebate for which the company was entitled
but not given by the Department. By an order of the Chief Electrical
Engineer, Government of Goa, dated 31.03.1998, the disbursement of.
rebate benefit in instalment (which was started to from Sept. 1996
onwards) to the company was suspended unilaterally, against which the
company preferred a Writ Petition in the High Court of Mumbai, Panaji
Bench, Goa, which was disposed of in favour of the company and was
further upheld by the Honble Supreme Court of India on an appeal
preferred by the Department.
The Chief Electrical Engineer, Government of Goa has, through a revised
bill issued to the Company, communicated the interpretation of the
Court Order by the Department. The same was not agreeable to the
Company. As per the computation of the department, the Company was
allegedly liable to pay a sum of Rs. 81.36 Crores as. on July 2008,
frozen on that day.
The Company preferred a Writ Petition to the High Court of Mumbai,
Panaji Bench, Goa, on the issue. The Honble High Court directed that
the matter be referred to the Billing Disputes Redressal Committee of
the Government of Goa Submissions have been made to the said Committee
in 3 Hearings which have taken place. The Dept. issued a revised chart
of computation of alleged arrears according to which the alleged
arrears which was frozen at Rs. 81.36 Crores now stands reduced to Rs.
61.34 Crores. As per the computation made by your company, a sum of Rs.
125.39 Crores was due to the company from the Dept. up to 31st January
2010. In the meanwhile, the Honble High Court also held that the
disconnection of power made by the Department during the months of
June, July and August 1998 as illegal and the demand .charges levied on
the company was not in order. Accordingly, through a letter dated
11.03.2010, the Executive Engineer Margao has agreed to refund a sum of
Rs. 31,96,978 paid and collected by the Dept. for the said
disconnection period.
Taking into account the overall view of the entire matter, the Company
is hopeful of receiving favourable orders from the Billing Dispute
Redressal Committee.
5) Under the head Current Liabilities in the balance sheet, the names
of the Small Scale Industrial undertakings to whom the Company owes
sums exceeding Rs 1.00 Lakh, which is outstanding for more than 30
days, as also the bifurcation of liabilities between total outstanding
dues of Small Scale Industrial Undertakings and the total outstanding
dues of creditors other than Small Scale Industrial Undertaking is
required to be disclosed. This has not been disclosed for want of
information for identifying Small Scale Industrial Undertaking from
amongst the creditors.
6) The balances of Loans & Advances under Current Assets, Sundry
Debtors & Sundry Creditors are subject to confirmation /
reconciliation.
7) The Board is of the opinion that the Current Assets, Loans and
Advances have, in the ordinary course of business, value at least equal
to the amount at which they are stated in the Balance Sheet.
8) Figures for the previous year have been regrouped to conform to
those of the current year.
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