Koluthara Exports Ltd. के अकाउंट के लिये नोट

Mar 31, 2010

1) Contingent liabilities not provided for :

As at As at 31.03.2010 31.03.2009

(i) Demand from Central Excise Dept. on Rs. Rs. account of withdrawal of customs duty exemption availed on imported capital 22,42,000.00 22,42,000.00 goods, disputed by the company. The appeals were decided against the company by CCE (Appeals) and the company has filed second appeal before CESTAT

(ii) On account of arrears of dues and 20,40,880.00 16, 18,552.00 penal interest from ESI Authorities disputed by the Company

(iii) Demand for Service Tax for 80,75,238.00 49, 64,308.00 the period 16.6.05 to 31.05.08 disputed by company on legal advice. For Rs.2334795.00, Rs.1612373.00 and Rs.1017140.00 the Company has filed appeal before the Commissioner of Central Excise (Appeals), Kochi and for Rs.1459557.00 And Rs.1651373.00reply to the Show cause notice is given to Joint CCE, Kochi.

2. (i) SECURED LOANS :

a) Term loans from Kerala State Industrial Development Corporation Ltd and Kerala Financial Corporation are secured by first mortgage of all the immovable properties both present and future and hypothecation of movables (save and except book debts and assets specifically hypothecated) including machinery, spares, tools and accessories and subject to the prior charge created in favour of bankers, on stock of raw materials, goods in process and finished goods, consumables, stores and book debts. The mortgages and charges shall rank paripasu. The term loans are also secured by the personal guarantee of Managing Director.

b) The uncovered portion of secured loan has been treated as unsecured to the extent of the value of hypothecated/mortgaged assets are not sufficient to cover the balance of the loans. Accordingly an amount of Rs.1237.28 lakhs from secured loan has been shown under unsecured loan.

(3) UNSECURED LOAN:

a) The Working Capital loans from Banks have become unsecured as the Company does not have hypothecated stock of raw materials, finished goods, packing materials etc. The State Bank of India and the ING Vysya Bank Ltd, had filed cases for the recovery of these amounts before Hon. DRT, Ernakulam which were decreed against the company. Since the Company is already declared as Sick by BIFR, DRT will not be able to proceed further in the matter. Any how interest on these loans as per the sanction letter from Banks, including penal rate has been provided for in the accounts.

b) i) The Company had issued 2 cheques of Rs.50 lakhs each as security to HMT(I) Ltd. for an unsecured loan of Rs.100 lakhs, which were presented by the later and returned by the bankers as request for Stop Payment of Cheques was issued by the Company on account of disputes in the agreement. There-after HMT(I) Ltd had issued legal notices to the Company and Directors for offence under the Negotiable Instrument Act, 1881. The Company invoked the Arbitration clause in the Agreement entered into with them and the Arbitrator has decided the case directing the company to pay Rs.116.03 lakhs against which the Company had filed a case before Hon. City Civil Judge, Bangalore, which was dismissed and thereafter the Company has filed Appeal before the Hon. High Court of Karnataka. The main dispute raised is against the allowance of 50% share to HMT (I) Ltd from Export House premium of Rs.39.00 lakhs due to the Company.

(ii) HMT (I) Ltd had also filed criminal cases both against the Company and Directors and in the SLP filed by the Company before Hon. Apex Court against the order of Hon. High Court of Karnataka. The Hon. Apex Court has discharged all the accused persons except the Company, Managing Director and another Director and the case been remanded to lower Court. The lower court has once again decided the case against the Company, Managing Director and the Director and an appeal has been filed before the Sessions Court, Bangalore, which is pending.

c) The Company had raised a loan of Rs.15 lakhs from a party on a promissory note. The Company had also issued a Cheque towards repayment of the loan. Subsequently it was known that the amount was involved in a fraud and accordingly a stop payment order was issued to the Bankers. Later on at the insistence of the Bank Rs.9.00 lakhs was deposited in the name of the Party. The Company had also given Rs.1.00 lakh as intended commission to the Party. After adjusting these amounts Rs.5 lakhs is shown as balance payable in the account of the party. The case was referred to CBI and after initial investigation they filed a case before the Hon. Chief Judicial Magistrate Court at Ernakulam. The exact legal implications and liability cannot be ascertained at this stage. As per the legal opinion received, since the Company had issued a cheque for the full amount within the time prescribed under Section 58A of the Act and Rules there under, there will not be any violation of these provisions.

4 (i) The Company has received Rs.24.31 lakhs from Marine Products Export Development Authority (MPEDA) out of which Rs.9.31 lakhs is as pre-processing plant subsidy. Under the conditions, the amount will have to be repaid if the company ceases to carry on business within a period of 5 years of the receipt of the same. The Company has already become sick and due to financial difficulties, it is having own operations in a very limited scale. However the company is undertaking job work for other Exporters. The Directors are also taking steps to revive the Company and restart the operations and hence do not anticipate any liability on this account.

(ii) In terms of an agreement entered into with MPEDA and promoters during 1991, the Authority had invested Rs.2.90 lakhs towards the capital of the Company. As per the Conditions, the Authority has the right to sell their shares to the promoters at an agreed price. The authority has exercised this option and demanded the repurchase of shares by promoters at Rs.8.18, lakhs for which a legal notice was issued. The MPEDA has adjusted a subsidy of Rs.4.14 lakhs against the same which was recovered from the Directors. The Directors consider that there will not be any liability for the Company on this account.

5 (a) The Company could not deposit Employees’ State Insurance dues to the extent of Rs.1.34 lakhs as regular contributions and Rs.20.41 lakhs on omitted wages and interest due to shortage of funds, as there are no adequate processing operations. The Company has received notices for contributions and penal interest for delay in remittance of contribution from the authorities and the Company has requested for the waiver of the same. The Cases are pending and the amount is disclosed as contingent liability.

(b) The Provident Fund Authorities recovered Rs.4.89 lakhs as damages in August 2005 from the auctioned amount of the land attached by them. The company has filed a petition before the Hon.P .F Appellate Tribunal for the refund of the same. The case is pending before the P.F Appellate Tribunal.

6. The Sundry Debtors, Creditors, Loans and Advances are all subject to confirmation. The total amount outstanding in Sundry Debtors and Loans and Advances for more than 3 years is Rs.33.26 Lakhs and more than one year is Rs.0.16 Lakhs and efforts are being taken to recover these amounts and the Directors are hopeful of recovering major amounts after the revival.

7. Remuneration to Managing Director as approved by share holders.

i) Salaries Rs.1, 80,000/- (P.Y. Rs. 1, 80,000/-)

ii) P.F. contribution Rs. 21,600/- (P.Y. Rs. 21,600/-)

iii) Provision for Gratuity Rs. 8,653/- (P.Y. Rs. 8,653/-)

8. (i) The Income Tax Department had disallowed claims for Rs.46.57 lakhs during the Assessment year 1994-95 and this had reduced the Carry Forward Loss to this extent. The matter was taken in appeal before higher authorities, which were dismissed.

(ii) For the assessment year 1995-96 the Department has disallowed certain expenses and claims and had raised a demand of Rs.44.50 lakhs. The matter was taken in appeal before the higher authorities and the appeal was dismissed. The Company has remitted Rs.2 lakhs against the demand and no provision for the balance amount has been made in the accounts. The Income Tax Department has not issued refund for TDS amount on certificates submitted by the Company and have already adjusted an amount of Rs.20.17 lakhs against the demand. So the Company is a Sick Unit, has objected to the adjustment.

9 The Honorable Supreme Court had set aside the decision of the Honorable High Court of Kerala, against the constitutional validity of the Kerala Fishermen Welfare Fund Act 1985. Accordingly the amount of Rs.16.69 lakhs deposited with the Board as per the direction of the Apex Court for admission of the Appeal is refundable by them to the Company.

10. The Sales Tax assessments of the Company are completed up to 2004-05 and are pending for the subsequent years. The company has filed appeals against the assessments for the years 1987-88, 1999-00 and 2003-04 before the Appellate Tribunal and Deputy Commissioner (Appeals) and accordingly no provision is made in the accounts for the demand of Rs.6.90 lakhs. As such there will be consequential effect on the financial results depending upon the outcome of these appeals and pending assessments.

11. The company has challenged the demand from the Additional Commissioner, Central Excise, Customs & Service Tax, Cochin Commissionerate for Rs.49.64 lakh being the Service Tax as BAS category for the period 16.06.05 to 31.08.08, before the Commissioner of Service Tax (Appeal) which is pending. The Company had received demand notices for Rs.31.11 lakhs for the period 01.06.08 to 31.05.09 which has been replied and no further action taken by the Department.

12. The company has been declared as a sick unit by BIFR and the present nature of Business does not give scope for a detailed internal audit system. Under such circumstances along with financial difficulties no internal auditors were appointed, as in earlier years.

13. (a) The Small Scale Industrial under takings to whom amounts are outstanding exceeding Rs. 1 lakh for more than 30 days are as follows:

(b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

14 .Key Management Personnel -:

i) Antony Varghese Koluthara - Managing Director

ii) Managerial Remuneration - Rs.2.10 lakhs

iii) Loan Repayments - Nil

15. "Accounting for taxes on Income":-

In accordance with the Accounting Standard (AS-22) issued by the Institute of Chartered Accountants of India, the Company has not accounted for deferred tax asset in view of history of continuing losses and uncertainty of utilization of the deferred tax assets.

16. Figures for the previous year have been re-grouped wherever necessary to conform to the classification for the current year.

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Mar 31, 2009

1) Contingent liabilitiesnot provided for:

As at 31.03.2009 As at 31.03.2008

i) Demand from Central Excise Dept. on account of Rs Rs withdrawal of customs duty exem ption availed on imported capital goods, disputed by the 22,42,000.00 22,42,000.00 company. The appeals were decided against the company by CCE (Appe als) and the company has filed second appeal before CESTAT

ii) On account of arrears of dues and penal interest 16,18,55200 11,51,446.00 from ESI Authorities disputed by the Company

[iii) Demand for Service Tax for the period 16.6.05 to 30.09.07 disputed by company on legal advice. For Rs.2334795.00 and Rs. 1017140/- the 49,64,308.00 49,64,308.00 Company has filed appeal before the Commissioner of Central Excise (Appeals), Kochi and for Rs. 1612373.00 reply to the Show cause notice is given to Joint CCE, Kochi.

2) (i) SECURED LOANS:

a) Term loans from Kerala State Industrial Development Corporation Ltd and Kerala Financial Corpora tionare secured by first mortgage of all the immovable properties both present and future and hypothecation of movables (save and except book debts and assets specifically hypothecated) including machinery, spares, tools and accessories and subject to the prior charge created in favour of bankers on stock of raw materials goods in process and finished goods, consumables, stores and book debts. The mortgages and charges shall rank paripasu. The term loans are also secured by the personal guarantee of Managing Director.

b) The uncovered portion of secured loan has been treated as unsecured to the extent of the value of hypothecated/mortgaged assets are not sufficient to cover the balance of the loans. Accordingly an amount of Rs.988.32 lakhs from secured loan has been shown under unsecured loan.

3) UNSECURED LOAN:

a) The Working Capital loans from Banks have become unsecured as the Company does not have hypothecated stock of raw materials, finished goods, packing materials etc. The State Bank of India and the ING Vysya Bank Ltd, had filed cases for the recovery of these amounts before Hon. DRT, Ernakulam which were decreed against the company. Since the Company is already declared as Sick by BIFR, DRT will not be able to proceed further in the matter. Any how interest on these loans as per the sanction letter from Banks including penal rate has been provided for the year.

b) i) The Company had issued 2 cheques of Rs.50 lakhs each as security to HMT(I) Ltd. for an unsecured loan of Rs.100 lakhs, which were presented by the later and returned by the bankers as request for Stop Payment of Cheques was issued by the Company on account of disputes in the agreement. There-after HMT(I) Ltd had issued legal notices to the Company and Directors for offence under the Negotiable Instrument Act, 1881. The Company invoked the Arbitration clause in the Agreement entered into with them and the Arbitrator has decided the case directing the company to pay Rs.116.03 lakhs against which the Company had hied a case before Hon. City Civil Judge, Bangalore, which was dismissed and the Company has filed Appeal before the Hon. High Court of Karnataka. Since Arbitrator allowed Export House Premium at 3% of the export turn over given (Rs.39.00 Lakhs), no interest provision has been made for the loan from 2007-08 onwards.

(ii) HMT (1) Ltd had also filed criminal cases both against the Company and Directors and in the SLP filed by the Company against the order of Hon. High Court of Karnataka. The Hon. Apex Court has discharged all the accused persons except the Company, Managing Director and another Director and the case remanded to lower Court. The Order of the lower court is not in favour of the Company, Managing Director and the director. Hence an appeal is given in the Sessions Court, Bangalore. The case is pending.

c) The Company had raised a loan of Rs.15 lakhs from a party on a promissory note. The Company had also issued a Cheque towards repayment of the loan. Subsequently it was known that the amount was involved in a fraud and accordingly a stop payment order was issued to the Bankers. Later on at the insistence of the Bank Rs.9.00 lakhs was deposited in the name of the Party. The Company had also given Rs.1.00 lakh as intended commission to the Party. After adjusting these amounts Rs.5 lakhs is shown as balance payable in the account of the party. The case was referred to CBI and after initial investigation they filed a case before the Hon. Chief Judicial Magistrate Court at Ernakulam. The exact legal implications and liability cannot be ascertained at this stage. As per the legal opinion received, since the Company had issued a cheque for the full amount within the time prescribed under Section 58A of the Act and Rules there under, there will not be any violation of these provisions.

4) (i) The Company has received Rs.24.31 lakhs from Marine Products Export Development Authority (MPEDA) out of which Rs.9.31 lakhs is as pre-processing plant subsidy. Under the conditions, the amount will have to be repaid if the company ceases to carry on business within a period of 5 years of the receipt of the same. The Company has already become sick and due to financial difficulties it is doing own operations in a very limited scale. However the company is undertaking job work for other Exporters. The Directors are also taking steps to revive the Company and restart the operations and hence do not anticipate any liability on this account.

(ii) In terms of an agreement entered into with MPEDA and promoters during 1991, the Authority had invested Rs.2.90 lakhs towards the capital of the Company. As per the Conditions, the Authority has the right to sell their shares to the promoters at an agreed price. The authority has exercised this option and demanded the repurchase of shares by promoters at Rs.8.18 lakhs for which a legal notice was issued. The MPEDA has adjusted a subsidy of Rs.4.14 lakhs against the same which was recovered from the Directors. The Directors consider that there will not be any liability for the Company on this account.

5) (a) The Company could not deposit Employees State Insurance dues to the extent of Rs.3.00 lakhs as regular contributions and Rs.13.19 lakhs on omitted wages due to shortage of funds, as there are no adequate processing operations. The Company has received notices for contributions and penal interest for delay in remittance of contribution from the authorities and the Company has requested for the waiver of the same. The Cases are pending and the amount is disclosed as contingent liability.

b) The Provident Fund Authorities recovered Rs.4.89 lakhs as damages in August 2005 from the auctioned amount of the land attached by them. The company has filed a petition before the Hon.P .F Appellate Tribunal to adjust the arrear amount of Rs.1.31 lakhs against the damages already recovered. The case is pending before the P.F Appellate Tribunal.

6) The Sundry Debtors, Creditors, Loans and Advances are all subject to confirmation. The total amount outstanding in Sundry Debtors and Loans and Advances for more than 3 years is Rs.35.56 Lakhs and more than one year is Rs...0.13 Lakhs and efforts are being taken to recover these amounts and the Directors are hopeful of recovering major amounts after the revival.

7) (i) The Income Tax Department had disallowed claims for Rs.46.57 lakhs during the Assessment year 1994-95 and this had reduced the Carry Forward Loss to this extent. The matter was taken in appeal before higher authorities, which were dismissed.

(ii) For the assessment year 1995-96 the Department has disallowed certain expenses and claims and had raised a demand of Rs.44.50 lakhs. The matter was taken in appeal before the higher authorities and the appeal were dismissed. The Company has remitted Rs.2 lakhs against the demand and no provision for the balance amount has been made in the accounts. The Income Tax Department has not issued refund for TDS amount on certificates submitted by the Company and have adjusted the amount of Rs.15.50 lakhs against the demand. Since the Company is being a Sick Unit has objected to the adjustment.

8) The Honorable Supreme Court has set aside the decision of the Honorable High Court of Kerala, which upheld the constitutional validity of the Kerala Fishermen Welfare Fund Act 1985. Accordingly the amount of Rs.16.69 lakhs deposited with the Board as per the direction of the Apex Court for admission of the Appeal is refundable by them to the Company.

9) The Sales Tax assessments of the Company are completed up to 2004-05 and are pending for the subsequent years. The company has filed appeals against the assessments for the years 1987-88, 1999-00 and 2003-04 before the Appellate Tribunal and Deputy Commissioner (Appeals) and accordingly no provision is made in the accounts for the demand of Rs.6.90 lakhs. As such there will be consequential effect on the financial results depending upon the outcome of these appeals and pending assessments.

10) The company has challenged the demand from the Additional Commissioner, Central Excise, Customs & Service Tax, Cochin Commissioner re for Rs.33,51,935.00 being the Service Tax as BAS category for the period 16.06.05 to 30.09.07, before the Commissioner of Service Tax (Appeal) which is pending. The Company has replied for the demand notice or Service Tax for Rs.16,12,3 73.00 for the period 01.02.07 to 30.09.07 issued by Joint Commissioner, Service Tax.

11) The company has been declared as sick unit by BIFR and the present nature of Business does not give scope for a detailed internal audit system. Under such circumstances along with financial difficulties no internal auditors were appointed as in earlier years.

12)(a) The Small Scale Industrial under takings to whom amounts are outstanding exceeding Rs. 1 lakh for more than 30 days are as follows:

(b) The Company has not received any intimation from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act 2006 and hence disclosures, if any, relating to amounts unpaid as at the year end together with interest paid/payable as required under the said Act have not been given.

13) Segment Reporting:-

The company has only a single reportable segment in terms of the requirement of Accounting Standard -17 issued by the Institute of Charted Accountants of India and the total business is as follows:

14) " Accounting for taxes on Income " :-

In accordance with the AccountingStandard (AS-22) issued by the Institute of Chartered Accountants of India, the Company has not accounted for deferred tax asset in view of history of continuing losses and uncertainty of utilization of the deferred tax assets.

15) Earnings per Share as per the Accounting Standard (AS-20) issued by the Institute of Chartered Accountants of India.

16) Figures for the previous year have been re-grouped wherever necessary to conform to the classification for the current year.

17) Information pursuant to the provision of Para 3.4c and 4d of Part II of the Schedule VI to Companies Act. 1956.