Modern Syntex (India) Ltd. के अकाउंट के लिये नोट

Mar 31, 2014

1. Related Party Diciouser as per Accounting Standard 18: (i) Related Party Relationships:

(a) Where Control exists: NIL

(b) Key Management Personnel:

Shri Kama! Ranka: Chairman and Managing Director

Shri S. N. Sharma: Whole Time Director & CEO (Upto 24di April'' 13)

(c) Relative of Key Management Personnel with whom transactions have been entered Shri Kanishk Ranka

M/s. Shubham Corporate Advisory Services Pvt. Ltd

2. Deferred Tax Asset

2.1 Provision for Income Tax has not been made for the year in view of the past accumulated losses.

2.2 The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However, based on present scenario, the company is not certain of earning sufficient profits to utilize these carried forward losses and unabsorbed depreciation in future and accordingly the Company has recognized deferred tax assets only to the extent there is deferred tax liability, considering the principal of virtual certainty as stated in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India. The major components of deferred tax assets and liabilities on account of timing differences are as given below:

3. Additional Information to the financial statements

3.1 The net worth of the company has been fully eroded as on 31st March, 2000 as per the provisions of the Sick Industrial Companies (Special Provision) Act, 1985 (SICA).The Board of Industrial and Financial Reconstruction (BIFR) has declared the company as Sick on the basis of fresh reference filed as per audited accounts for the year ended 31 st March, 2010 and IFCI has been appointed as operating agency. Company has filed draft rehabilitation scheme with operating agency and the same is under examination / circulation. Company has also entered into settlement with various lenders and payments are being made. Accordingly, pending approval of rehabilitation scheme, the accounts of the company have been prepared on going concern basis.

3.2 Contingent Liabilities not provided for:

3.2.1 Bank Gurantees and Letter of Credit Outstanding Rs. 834.79 Lacs (Previous Year Rs. 834.79 Lacs).

3.2.2 Claims and Liabilities against the company not acknowledged as debts 7 190.25 Lacs (Previous Year 7221.13 Lacs).

3.2.3 Excise Duty demand disputed by the company Rs. 768.19 Lacs (Previous YearRs. 742.94 Lacs).

3.2.4 Fuel Surcharge, Octroi Duty etc. disputed by the company Rs. 4.20 Lacs (Previous Year 7 4.20 Lacs).

3.2.5 Disputed demand of Sales TaxRs. 316.83 Lacs (Previous Year 7 316.83 Lacs).

3.3 POY Division of the company has been temporary locked out from 14th Novemebr, 2012.

3.4 a) Balances of Debtors, Creditors, Advances, etc. have been taken as per books of account and are subject to reconciliation / confirmation and consequential adjustments thereof. b) Balances of Secured and Unsecured lenders have been taken as per books of accounts and are subject to reconciliation / confirmation, pending settlement with respective lenders. Adjustment of the same, if any, would be accounted for as and when ascertained.

3.5 In the opinion of the Board of Directors; Current Assets, Loans and Advances (including capital advances) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Adequate provisions have been made in accounts for all the known liabilities.

3.6 Penal interest, compound interest and liquidated damages on dues of Financial Institutions, Banks and others wherever applicable have not been provided, pending reconciliation (amount not ascertained). The company expects waiver / relief on sanction of rehabilitation scheme by BIFR.

3.7 The Hon''ble Company Law Board had passed an order on 23/01/2002 that "The repayment of Fixed Deposit shall be made by the company in accordance with the revival scheme as and when approved by the BIFR under the provision of SICA". In view of above, die company has been advised mat as the repayment of the matured fixed deposits are covered by the above referred order and the DRS is pending for consideration before the Hon''ble BIFR, the same are not remained unclaimed and unpaid within the meaning of section 205 C of the Companies Act, 1956 and as such no amounts are required to be transferred to the Investor Education and Protection Fund. However payments on compassionate ground are being made continuously by the company as per the decision of the committee formed by the Hon''ble CLB for this purpose.

3.8 The company is under Rehabilitation with Hon''ble BIFR under provisions of "SICA" 1985. The company has filed Draft Revival Scheme (DRS) with Hon''ble BIFR and same is pending for consideration and also for its approval to make the payment to public debentures holders as mentioned in DRS in full and final settlement of their entire outstanding dues to surrender of original debentures certificate to die company. In view of above the company has been advised mat Company is not required to deposit unclaimed and unpaid redemption amount of debentures and accrued interest thereon to investors education and protection fund under section 205C of the Companies Act, 1956.

3.9 Previous year figures have been regrouped and rearranged wherever cons idered necessary.

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Mar 31, 2013

1. Related Party Diclouser as per Accounting Standard 18

(i)'' Related Party Relationships :

(a) Where Control exists : NIL

(b) Key Management Personnel :

Shri Kama! Ranka: Chairman and Managing Director Shri S. N. Sharma : Whole Time Director & CEO *

(c) Relative of Key Management Personnel with whom transactions have been entered during the year :

Shri Kanishk Ranka -

M/s. Shubhain Corporate Advisory Services Pvt. Ltd

(ii) Transaction with related parties and outstanding at the end of the year :

2. Deferred Tax Asset

2.1 Provision for Income Tax has not been made for the year in view of the past accumulated losses.

2.2 The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However, based on present scenario, the company is not certain of earning sufficient profits to utilize these carried forward losses and unabsorbed depreciation in future and accordingly the Company has recognized deferred tax assets only to the extent there is deferred tax liability, considering the principal of virtual certainty as stated in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India. The, major components of deferred tax assets and liabilities on account of timing differences are as eiven below:

The net deferred tax assets ofRs. 15.991.74 Lacs (Previous year T 14,635.94 lacs) have not been recognized in accounts due to the reasons as mentioned above,

3. Additional Information to the financial statements

3.1 The net worth of the company has been fully eroded as on 31st March, 2000 as per the provisions of the Sick Industrial Companies (Special Provision) Act, 1985 (SICA).The Board

of Industrial and Financial Reconstruction (BIFR) has declared th$ company as Sick on the basis of fresh reference filed as per audited accounts for the year ended 31st March, 2010 ,

and IFCI has been appointed as operating agency. Company has filed draft rehabilitation scheme with operating agency and the same is under examination / circulation. Company . has also entered into settlement with various lenders and payments are being made. Accordingly, pending approval of rehabilitation scheme, the accounts of the company have been prepared on going concern basis, , . .

3.2 Contingent Liabilities not provided for:

3.2.1 Bank Gurantees and Letter of Credit Outstanding X 834.79 Lacs (Previous year X 834.79 Lacs). *

3.2.2 Claims and Liabilities against the company not acknowledged as debts Rs. 221.13 Lacs (Previous year Rs. 220.21 Lacs)

3.2.3 Excise Duty demand disputed by the company X 742.94 Lacs (Previous Year X 742.94 Lacs).

3.2.4 Fuel Surcharge, Octroi Duty etc. disputed by the company X 4.20 Lacs (Previous Year X 4.20 Lacs)

3.2.5 Disputed demand of Sales Tax X 316.83 Lacs (Previous year Rs. 313.36 Lacs).

3.3 POY Division of the company has been temporary lock out from 14th Nov emebr, 2012. 30.4 a) Balances of Debtors, Creditors, Advances, etc. have been taken as per books of account and are subject to reconciliation / confirmation and consequential adjustments thereof, b) Balances of Secured and Unsecured lenders have been taken as per books of accounts and are subject to reconciliation / confirmation, pending settlement with respective lenders.

Adjustment of the same, if any, would be accounted for as and when ascertained.

3.4 In the opinion of the Board of Directors; Current Assets, Loans and Advances (including capital advances) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Adequate provisions have been made in accounts for all the known liabilities.

3.5 Penal interest, compound interest and liquidated damages on dues of Financial Institutions, Banks and others wherever applicable have not been provided, pending reconciliation (amount not ascertained). The company expects waiver / relief on sanction of rehabilitation scheme by BIFR. *

3.6 Provision for interest amounting to X 227.54 Lacs (including for the year X 22.75 Lacs) on public fixed deposits and X 596.28 Lacs (Including for the year Rs. 73.15 Lacs) on retail non convertible debentures have not been made since 1st October, 2002 as the company expects waiver/relief on sanction of rehabilitation scheme by BIFR,

3.7 The Hon''ble Company Law Board had passed an order on 23/01/2002 that "The repayment of Fixed Deposit shall be made by the company in accordance with the revival scheme as and when approved by the BIFR under the provision of SICA". In view of above, the company has been advised that as the repayment of the matured fixed deposits are covered

by the above referred order and the DRS is pending for consideration before the Hon''ble BIFR, the same are not remained unclaimed and unpaid within the raeanmg of section 205 .

C of the Companies Act, 1956 and as such no amounts are required to be transferred to the Investor Education and Protection Fund. However payments on compassionate ground are being made continuously by the company as per the decision of the committee formed by the Hon''ble CLB for this purpose.

3.8 The company is under Rehabilitation with Hon''ble BIFR under provisions of "SICA" 1985. The company has filed Draft Revival Scheme (DRS) with Hon''ble BIFR and same is pending for consideration and also for its approval to make the payment to public debentures holders as mentioned in DRS in full and final settlement of their entire outstanding dues to surrender of original debentures certificate to the company. In view of above the company has been advised that Company is not required to deposit unclaimed and unpaid redemption amount of debentures and accrued interest thereon to investors education and protection fond under section 205C of the Companies Act, 1956. . "

3.9 Previous year''s figures have been regrouped and rearrange wherever considered necessary.

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Mar 31, 2012

1.1 Preference shares of Rs. 250 Lacs, Rs. 590 Lacs & Rs. 210 Lacs respectively were redeemable from December 05, March 06 & April 06 respectively in 28 equal quarterly installments without any past & future dividend as per settlement terms with the preference share holders. Preference Shares of Rs. 450 Lacs were to be redeemed at Rs. 45 Lacs as per settlement terms. Final redemption of Preference Shares will be on sanction of rehabilitation scheme by BIFR. Pending fulfillment of various terms & conditions of restructuring/settlement & sanction of rehabilitation scheme by BIFR, Rs. 991.94 Lacs paid (previous year Rs. 864.96 Lacs) to Preference Shareholders has been shown as other current assets.

1.2 Calls in arrears accounts are subject to confirmation and reconciliation.

1.3 The details of shareholders holding more than 5% shares: Equity Share Capital

1.4 The company has two class of shares namely equity shares having at par value of Rs. 10 per share and preference share having at par value of Rs. 100. Each holder of equity share is entitled to one vote per share and each holder of preference share is entitled to ten vote per share. In the event of liquidation of the company, the preference share holders shall get priority on proportionate basis towards payments and the holders of the equity shares will be entitled to receive remaining asset of the company in proportion to the number of equity shares held.

2.1 In view of the losses, Debentures and Preference Shares redemption reserve has not been created during the year and in earlier years also since 1997-98.

2.2 Calls in arrears accounts are subject to confirmation and reconciliation.

3.1 Equity Share application money represents subscription received pursuant to the restructuring/settlement scheme. Instruments will be issued on sanction of rehabilitation scheme by BIFR. Necessary increase in authorised share capital will be done at appropriate time. The company does not envisage any refund out of share application money.

3.2 The company has received amount of Rs. 4500 Lacs towards share application in the period 2003-04 to 2009-10 pending allotted subject to sanction of rehabilitation scheme by BIFR.

4.1 Debentures, Rupee Term Loans (including Working capital term loan) and interest accrued and due thereon are secured/to be secured by first charge against all existing and future immovable properties, hypothecation of all movable assets of the Company by way of joint equitable mortgage and hypothecation (save and except book debts) created/to be created in favour of the financial institutions/banks ranking pari passu and personal guarantees of some of the directors subject to prior charge in favour of the company's bankers on stock of raw materials, semi finished 7 finished goods, stores and book debts for working capital.

4.2 Foreign Currency Loans from Hypo Vereinsbank including funded interest and interest accrued and due is secured by corporate guarantee from Modem Terry Towels Limited.

5.3 Terms of redemption of Non Convertible Debentures based on restructuring/settlement wherever carried out is as under:

a) Rs 60 Lacs are redeemable during 2013-14

b) Rs 60 Lacs redeemable in 28 quarterly installments commencing from 30th June, 2006 (The payment of Rs. 52.80 Lacs made towards settlement is shown as other current assets) expected to be fully paid by March' 2013.

c) Rs 120 Lacs redeemable in 28 quarterly installments commencing from 31st March, 2006 (The payment of Rs. 107.12 Lacs made towards settlement is shown as other current assets) expected to be fully paid by January' 2013.

d) Rs 45 Lacs redeemable in 28 quarterly installments commencing from 4th January, 2006 (The payment of Rs. 40.77 Lacs made towards settlement is shown as other current assets) expected to be fully raid by December' 2012.

e) Rs 75 Lacs redeemable in 28 quarterly installments commencing from 31st December, 2005 (The payment of Rs. 70.44 Lacs made towards settlement is shown as other current assets) expected to be fully paid by September' 2012.

f) Rs 240 Lacs were to be redeemed on or before 31st March, 2009 (The payment of Rs. 240 Lacs made towards settlement is shown as other current assets and Company is renegotiating the terms of balance payment).

g) Rs 20 Lacs were redeemable by 15th November, 2008 (The payment of Rs 20 Lacs made towards settlement is shown as other current assets).

h) Rs 4900 Lacs, out of which Rs 500 Lacs were redeemable by March' 2008 and Rs 4400 Lacs were redeemable by 30th September, 2008 (The payment of Rs. 4900 Lacs made towards settlement is shown as other current assets).

i) Rs 2355 Lacs were redeemable in 28 staggered quarterly installments from 30th September, 2004 (The payment of Rs. 2355 Lacs made towards settlement is shown as other current assets).

j) Rs 97.67 Lacs of suiting division were redeemable by 2010-11 (The payment of Rs 97.67 Lacs made towards settlement is shown as other current assets).

k) Rs. 50 Lacs were redeemable in August' 2003 (The payment of Rs.50 Lacs made towards settlement is shown as other current assets).

4.4 Pending fulfillment of various terms and conditions of restructuring/settlement and/or satisfaction of charge, payment of Rs. 6889.59 lacs towards Rupee Term Loan (including working capital term loan) and Rs. 7933.79 lacs towards Non Convertible Debentures to various lenders has been shown as other current assets.

4.5 a) The company has defaulted in repayment of foreign currency loan from Hypo Vereinsbank of Rs. 8148.42 Lacs since 1997-98 along with interest on the same.

b) Exchange Fluctuation on foreign currency loan availed in DM currency to acquire Plant & Machinery has not been provided since 1st April. 2001 due to conversion of currency from DM to Euro, as there is no currency conversion clause in the agreement. Accordingly, foreign currency loan and interest thereon is stated in books at exchange rates prevailing on 31st March, 2001. In case, the liability is accounted for based on the exchange rate of Euro as on the Balance sheet date, the liability in respect of principal amount and interest would have been higher by Rs. 6426.28 Lacs and Rs. 2356.58 Lacs respectively (Previous year Rs. 5289.63 Lacs and Rs. 1725.73 Lacs).

c) Interest on above loan has been provided at fixed rate of 2.74% p.a. rather than a floating interest rate based on 6-months-DM-Libor plus a margin of 0.80% p.a., impact of which is not ascertainable.

5.1 Security of Debentures and interest accrued and due thereon are mentioned in para 5.1 of Note 5.

5.2 Unsecured Non Convertible Redeemable Debentures (Retail) initially when issued were secured by way of second charge on fixed assets of Yarn Division of the Company, subsequently assets of Yarn Division have been sold, hence the same is considered as unsecured debentures. The said debentures were to be redeemed in installments before 30th November, 2002 as per the resolution passed in the meeting of debenture holders held on 25th October, 1999, which is not paid and shall now be redeemed as per rehabilitation scheme to be sanctioned.

5.3 In respect of restructured debts, future payment obligation is to be fulfilled as stipulated, failing which the original liability will fall back with interest and panel interest, amount of which is not ascertainable. However, SUUTI has restored the total liabilities due to default in payment of OTS amount and have intimated me outstanding dues of Rs. 111 3.82 crores including unsecured debts of Rs 7 Crores, dues of UTI MF, overdue & penal interest etc. as per their records as on 31st March, 2012. The company has disputed the entire dues of UTI MF and is in the process of renegotiating the OTS proposal with them and SUUTI, pending which, unpaid liability of Rs. 13.60 crores as per earlier settlement terms is kept in books of accounts.

6.1 Plant and Machinery include 24 looms having WDV of Rs. 36.46 Lacs, pertaining to closed suiting division lying in the premises of third party. The company has filed legal suit for recovery of these machineries.

6.2 In pursuant to Accounting Standard 28 issued by The Institute of Chartered Accountants of India on "Impairment of Assets", the company has made necessary provisions during 2005-06 for the impairment loss in respect of its Petrifies division. There are no primary indications thereafter that the recoverable amount of cash generating unit is less than its carrying cost. Accordingly, no further detailed exercise has been done to calculate the amount of impairment loss.

6.3 Depreciation for the year against plant and machinery is net of Rs. 369.76 Lacs towards reversal of excess depreciation provided in previous year.

6.4 Deductions in Plant and Machineries pertains to items discarded.

7.1 Pending fulfillment of various terms and conditions of restructuring/settlement and/or satisfaction of charge Rs. 991.94 Lacs towards preference share capital and Rs. 14823.38 Lacs towards borrowings (including Rs. 126.98 towards preference share capital and Rs. 99.05 Lacs towards borrowings paid during the year) to various lenders has been shown as payments to Financial Institutions and Banks in "Other current assets".

8. Related Party Disclosure as per Accounting Standard 18

(i) Related Party Relationships :

(a) Where Control exists : NIL

(b) Key Management Personnel :

Shri Kamal Ranka: Chairman and Managing Director

Shri S. N. Sharma : Whole Time Director & CEO

(c) Relative of Key Management Personnel with whom transactions have been entered during the year :

Shri Kanishk Ranka

M/s. Shubham Corporate Advisory Services Pvt. Ltd

9. Defferred Tax Assets

9.1 Provision for Income Tax has not been made for the year in view of the past accumulated losses.

10. Additional Information to the financial statements

10.1 The net worth of the company has been fully eroded as on 31st March, 2000 as per the provisions of the Sick Industrial Companies (Special Provision) Act 1985 (SICA).The Board of industrial and Financial Reconstruction (BIFR) has declared the company as Sick on the basis of fresh reference filed as per audited accounts for the year ended 31st March, 2010 and IFCI has been appointed as operating agency. Company has also filed draft rehabilitation scheme with operating agency and the same is under examination/circulation. Company has also entered into settlement with various lenders and payments are being made. Accordingly, pending approval of rehabilitation scheme, the accounts of the company have been prepared on going concern basis.

10.2 Contingent Liabilities not provided for :

10.2.1 Bank Guarantees and Letter of Credit Outstanding Rs. 822.99 Lacs (Previous year Rs. 822.99 Lacs).

10.2.2 Claims and Liabilities against the company not acknowledged as debts Rs. 220.21 Lacs excluding interest, penalty etc. which is not ascertainable. (Previous year Rs. 216.91 Lacs)

10.2.3 Excise Duty demand disputed by the company Rs. 742.94 Lacs (Previous Year Rs. 591.67 Lacs).

10.2.4 Fuel Surcharge, Octroi Duty etc. disputed by the company Rs. 4.20 Lacs (Previous Year Rs. 4.20 Lacs)

10.2.5 Disputed demand of Sales Tax Rs. 313.36 Lacs (Previous year Rs. 312.48 Lacs).

10.3 a) Balances of Debtors, Creditors, Advances, etc. have been taken as per books of account and are subject to reconciliation/ confirmation and consequential adjustments thereof.

b) Balances of Secured and Unsecured lenders have been taken as per books of accounts and are subject to reconciliation/ confirmation, pending settlement with respective lenders. Adjustment of the same, if any, would be accounted for as and when ascertained.

10.4 In the opinion of the Board of Directors; Current Assets, Loans and Advances (including capital advances) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Adequate provisions have been made in accounts for all the known liabilities.

10.5 Penal interest, compound interest and liquidated damages on dues of Financial Institutions, Banks and others wherever applicable have not been provided, pending reconciliation (amount not ascertained). The company expects waiver/relief on sanction of rehabilitation scheme by BIFR.

10.6 Provision for interest amounting to Rs. 204.79 Lacs (including for the year Rs. 55.75 Lacs) on public fixed deposits and Rs. 523.13 Lacs (Including for the year Rs. 80.28 Lacs) on retail non convertible debentures have not been made since 1st October, 2002 as the company expects waiver/relief on sanction of rehabilitation scheme by BIFR.

11.". The Hon'ble Company Law Board had passed an order on 23/01/2002 that "The repayment of Fixed Deposit shall be made by the company in accordance with the revival scheme as and when approved by the BIFR under the provision of SICA". In view of above, the company has been advised that as the repayment of the matured fixed deposits are covered by the above referred order and the DRS is pending for consideration before the Hon'ble BIFR, the same are not remained unclaimed and unpaid within the meaning of section 205 C of the Companies Act, 1956 and as such no amounts are required to be transferred to the Investor Education and Protection Fund. However payments on compassionate ground are being made continuously by the company as per the decision of die committee formed by the Hon'ble CLB for this purpose.

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Mar 31, 2011

1. The net worth of the company has been fully eroded as on 31.03.2000 as per the provisions of me Sick Industrial Companies (Special Provision) Act, 1985 (SICA).The Board of Industrial and Financial Reconstruction (BIFR) has declared me company as Sick on the basis of fresh reference filed as per audited accounts for the year ended 31st March, 2010 and IFCI has been appointed as operating agency. Company has also filed draft rehabilitation scheme with operating agency and the same is under examination / circulation. Company has also entered into settlement with various lenders and payments are being made. Accordingly, pending approval of rehabilitation scheme, me accounts of me company have been prepared on going concern basis.

2. Contingent liabilities not provided for:

2.1 Bank Guarantees and Letters of Credit outstanding Rs.822.99 Lacs (Previous year Rs.822.99 Lacs).

2.2 Claims and liabilities against the company not acknowledged as debts Rs. 216.91 Lacs excluding interest, penalty etc. which is not ascertainable. (Previous year Rs.209.91 Lacs)

2.3 Excise duty demand disputed by the company Rs. 591.67 Lacs (Previous year Rs.542.96 Lacs)

2.4 Fuel surcharge, Octroi Duty etc. disputed by the Company Rs.4.20 Lacs (Previous year Rs.4.20 Lacs).

2.5 Disputed demand of Sales Tax Rs.312.48 Lacs (Previous year Rs.298.91 Lacs).

2.6 In respect of restructured debts, future payment obligation is to be fulfilled as stipulated, failing which me original liability will fall back with interest and panel interest, amount of which is not ascertainable. However, SUUTI has restored the total liabilities due to default in payment of OTS amount and have intimated me outstanding dues of Rs. 914.92 crores including unsecured debts, dues of UTI MF, overdue & penal interest etc. as per their records as on 31st March, 2011. The company has disputed the entire dues of UTI MF and is in die process of renegotiating the OTS proposal with them, pending which, unpaid liability of Rs.13.60 crores is kept in books of accounts as per settlement terms.

a) Balances of Debtors, Creditors, Advances etc. have been taken as per books of account and are subject to reconciliation / confirmation and consequential adjustments thereof.

b) Balances of Secured and Unsecured lenders have been taken as per books of accounts and are subject to reconciliation / confirmation, pending settlement with respective lenders. Adjustment of the same, if any, would be accounted for as and when ascertained.

3. Pending fulfillment of various terms & conditions of restructuring / settlement & sanction of rehabilitation scheme by BIFR.Rs. 864.96 lacs paid (including Rs. 126.98 lacs paid during the year) to various Preference Share holders has been shown as advance recoverable in cash or kind or for value to be received and Preference Share capital amount has been disclosed accordingly.

4. Pending fulfillment of various terms & conditions of restructuring / settlement and / or satisfaction of charge Rs. 15161.33 lacs paid (including Rs. 287.30 lacs paid during die year) to various lenders has been shown as advance recoverable in cash orin kind or for value to be received & secured loan amount has been disclosed accordingly. 6. Penal interest, compound interest and liquidated damages on dues of Financial Institutions, Banks and others wherever applicable have not been provided, pending reconciliation (amount not ascertained). The company expects waiver / relief on sanction of rehabilitation scheme by BIFR.

7. In view of the losses, Debenture and Preference Share redemption reserve has not been created during the year and in earlier periods since 1997-98.

8. Calls in arrears accounts are subject to confirmation and reconciliation, if any.

9. In me opinion of the Board of Directors; Current Assets, Loans and Advances (including capital advances) have a value on realization in me ordinary course of business at least equal to the amount at which they are stated. Adequate provisions have been made in accounts for all the known liabilities.

10. a) Exchange Fluctuation on foreign currency loan availed in DM currency to acquire Plant & Machinery has not been provided since 01.04.2001 due to conversion of currency from DM to Euro, as mere is no currency conversion clause in the agreement. Accordingly, foreign currency loan and interest thereon is stated in books at exchange rates prevailing on 31st March, 2001. In case, the liability is accounted for based on the exchange rate of Euro as on the Balance sheet date, the liability in respect of principal amount and interest would have been higher by Rs. 5289.63 Lacs and Rs. 1722.73 Lacs respectively (Previous year Rs. 4196.95 Lacs and Rs. 1862.78 Lacs).

b) Interest on above loan has been provided at fixed rate of 2.74% p.a. rather than a floating interest rate based on 6-months-DM-Libor plus a margin of 0.80% p.a., impact of which is not ascertainable.

11. Effect of restructuring / reschedulement of debts, liabilities and preference shares capital as per the restructuring scheme considered by financial institutions during March 1998 had been given in accounts in that year though that scheme could not be implemented fully. In some cases instruments are yet to be issued pending approvals/ .documentations / reconciliation.

12. Exceptional items consist of:

13. The Company has not received information from vendors regarding their status under me Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year end together with interest payable, if any, under this Act have not been given.

14. Provision for interest amounting to Rs. 601.92 Lacs (including for the year Rs. 57.73 Lacs) on Public fixed deposits and Rs. 862.67 Lacs (including for the year Rs. 80.96 Lacs) on Retail Non Convertible Debentures have not been made since 01.10.2002 as the Company expects waiver / relief on sanction of rehabilitation scheme by BIFR.

15. Plant and machinery include 24 looms having net WDV of Rs. 64.35 lacs, pertaining to closed suitings division lying in the premises of third party.

16. The Hon'ble Company Law Board had passed an order on 23/01/2002 mat "The repayment of Fixed Deposit shall be made by me company in accordance with the revival scheme as and when approved by the BIFR under the provision of SICA". In view of above, the company has been advised that as the repayment of the matured fixed deposits are covered by the above referred order and the DRS is pending for consideration before the Hon'ble BIFR, the same are not remained unclaimed and unpaid within the meaning of section 205 C of the Companies Act, 1956 and as such no amounts are required to be transferred to the Investor Education and Protection Fund. However payments on compassionate ground are being made continuously by the company as per me decision of the committee formed by the Hon'ble CLB for this purpose.

17. Provision for Income Tax has not been made for the year in view of me past accumulated losses.

18. The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However, based on present scenario, the company is not certain of earning sufficient profits to utilize these carried forward losses and unabsorbed depreciation in future and accordingly the Company has recognized deferred tax assets only to me extent there is deferred tax liability, considering the principal of virtual certainty as stated in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India. The major components of deferred tax assets and liabilities on account of timing differences are as given below:

The net deferred tax assets of Rs. 4151.32 Lacs (Previous year Rs.5077.96 lacs) have not been recognized in accounts due to the reasons as mentioned above.

22. Related Party Disclosure as per Accounting Standard 18:

(i) Related Party Relationships:

(a) Where Control exists: NIL

(b) Key Management Personnel:

Shri Kamal Ranka: Chairman and Managing Director Shri P.D. Rami: Executive Director(upto 31/10/2009)

(c) Relative of Key Management Personnel:

Shri Kanishk Ranka

M/s. Shubham Corporate Advisory Services Pvt. Ltd.

24. In pursuance to Accounting Standard 28 issued by The Institute of Chartered Accountants of India on "Impairment of Assets", the company has made necessary provisions during 2005-06 for the impairment loss in respect of its Petrofils division. There are no primary indications thereafter that the recoverable amount of cash generating unit is less than its carrying cost Accordingly, no further detailed exercise has been done to calculate the amount of impairment loss.

25. Figures of previous year are rearranged / regrouped wherever considered necessary to make them comparable.

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Mar 31, 2010

1. Estimated amount of contracts remaining to be executed on capital account, not provided for (net of advances) Rs. NIL (Previous year Rs. NIL)

2. Contingent liabilities not provided for:

2.1 Bank Guarantees and Letters of Credit outstanding Rs.822.99 Lacs (Previous year Rs.1423.18 Lacs).

2.2 Bills discounted with banks Rs. NIL (Previous year Rs.83.83 Lacs)

2.3 Claims and liabilities against the company not acknowledged as debts Rs. 209.91 Lacs excluding interest, penalty, etc which is not ascertainable. (Previous year Rs.205.44 Lacs)

2.4 Excise duty demand disputed by the company Rs.542.96 Lacs (Previous year Rs.515.48Lacs)

2.5 Fuel surcharge, Octroi Duty etc. disputed by the Company Rs.4.20 Lacs (Previous year Rs.4.20 Lacs).

2.6 Disputed demand of Sales Tax Rs.298.91 Lacs (Previous year Rs.298.9J Lacs).

2.7 In respect of restructured debts, future payment obligation is to be fulfilled as stipulated, failing which the original liability will fall back with interest and penal interest, amount of which is not ascertainable.

3. a) Balances of Debtors, Creditors, Advances etc. are subject to reconciliation / confirmation and consequential adjustments thereof. b) Balances of Secured and Unsecured lenders have been taken as per books of accounts and are subject to reconciliation / confirmation, pending settlement with respective lenders, Adjustment of the same, if any, would be accounted for as and when ascertained.

4. Pending fulfillment of various terms and conditions of restructuring / settlement and redemption and sanction of rehabilitation scheme by BIFR, Rs.737.98 lacs paid (including Rs.171.98 lacs paid during the year) to various Preference Share holders has been shown as Advances recoverable in cash or in kind or for value to be received and Preference Share Capital amount has been disclosed accordingly.

5. Pending fulfillment of various terms and conditions of restructuring / settlement and / or satisfaction of charge, Rs. 18960.32 lacs paid (including Rs.5161.72 lacs paid during the year) to various lenders has been shown as Advances recoverable in cash or in kind or for value to be received and secured loan amount has been disclosed accordingly.

6. Penal interest, compound interest and liquidated damages on dues of Financial Institutions, Banks and others wherever applicable have not been provided (amount not ascertained). The company expects waiver / relief on sanction of rehabilitation scheme by BIFR.

7. In view of the losses, Debenture and Preference Share redemption reserve has not been created during the year and in earlier periods since 1997-98.

8. Calls in arrears accounts are subject to confirmation and reconciliation, if any.

9. In the opinion of the Board of Directors; Current Assets, Loans and Advances (including capital advances) have a value on realization in the ordinary course of business at least equal to the amount at which they are stated. Adequate provisions have been made in accounts for all the known liabilities.

10. Exchange Fluctuation on foreign currency loan availed in DM currency to acquire Plant & Machinery has not been provided since 01.04.2001 due to conversion of currency from DM to Euro, as there is no currency conversion clause in the agreement. Accordingly, foreign currency loan and interest thereon is stated in books at exchange rates prevailing on 31 st March 2001. In case, the liability is accounted for based on the exchange rate of Euro as on the Balance sheet date, the liability in respect of principal amount and interest would have been higher by Rs.4J96.95 Lacs and Rs. 1862.78 Lacs respectively (Previous year Rs.5725.12 Lacs and Rs.2387.32 Lacs)

11. Effect of restructuring / reschedulement of debts, liabilities and preference shares capital as per the restructuring scheme considered by financial institutions during March 1998 had been given in accounts in that year though that scheme could not be implemented fully. In some cases instruments are yet to be issued pending approvals / documentations / reconciliation.

12. In view of insufficient information from suppliers regarding their status as SSI units, the name of such small-scale undertakings could not be ascertained and accordingly could not be disclosed.

13. The Company has not received information from vendors regarding their status under the Micro, Small & Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year end together with interest payable, if any, under this Act have not been given.

14. Provision for interest amounting to Rs.544.19 Lacs (including for the year Rs.59.67 Lacs) on Public fixed deposits and Rs.781.71 Lacs (including for the year Rs.81.37 Lacs) on Retail Non Convertible Debentures have not been made as the Company expects waiver / relief on sanction of rehabilitation scheme by BIFR.

15. In one case, the company has defaulted in fulfilling the payment obligations of restructured debts as per schedule. However, liability is kept according to settlement terms and interest and charges against the same are not provided as the company is in negotiation with the lender.

16. The net worth of the company has been fully eroded as on 31.03.2000 as per the provisions of the Sick Industrial Companies (Special Provision) Act 1985 (SICA). The company has also filed fresh reference with Board of Industrial and Financial Reconstruction (BIFR) based on audited accounts for the financial period ended 31.03.2004. BIFR has declared the company as "SICK" and IFCI Limited has been appointed as Operating Agency (OA). Company has also submitted Draft Rehabilitation Scheme (DRS) to the OA and OA has filed the DRS in BIFR after examination for further necessary action. Accordingly, pending approval of rehabilitation scheme, the accounts of the company have been prepared on going concern basis.

17. The Company Law Board (CLB) has passed an order on 23.1.2002 that "The repayment of fixed deposits shall be made by the Company in accordance with the revival scheme as and when approved by BIFR under provisions of SICA". However payment on compassionate ground are continued to be made as per the decision of the committee formed by Honble Company Law Board for this purpose.

18. Provision for Income Tax has not been made for the year in view of the past accumulated losses. No provision towards Minimum Alternate Tax is made as the company is in BIFR and has accumulated losses.

19. The Company is entitled for set off of carried forward losses and unabsorbed depreciation against the future income under the Income Tax Act. However, based on present scenario, the company is not certain of earning sufficient profits to utilize these carried forward losses and unabsorbed depreciation in future and accordingly the Company has recognized deferred tax assets only to the extent there is deferred tax liability, considering the principal of virtual certainty as stated in the Accounting Standard 22 issued by The Institute of Chartered Accountants of India. The major components of deferred tax assets and liabilities on account of timing differences are The net deferred tax assets of Rs.5077.96 Lacs (Previous year Rs.11652.14 lacs) have not been recognized in accounts due to the reasons as mentioned above.

The fixed assets relating to Spun Yarn/Fabric divisions have been sold during the year. B) Secondary segment reporting (By Geographical Segment) - The analysis of Geographical segment is based on geographical location of the customers, which is domestic and export. As the companys export revenue is less than 10% of the total turnover, the reporting under geographical segment is not applicable.

20. Related Party Disclosure as per Accounting Standard 18:

(i) Related Party Relationships:

(a) Where Control exists : NIL

(b) Key Management Personnel:

Shri Kamal Ranka: Chairman and Managing Director

Shri P.D. Rathi: Executive Director (upto 31/10/2009)

(c) Relative of Key Management Personnel with whom transactions are entered:

Shri Kanishk Ranka

(d) Other Associates with whom transactions are entered:

M/s Shubham Corporate Advisory Services Pvt. Ltd.

M/s Rapid Investment Ltd.

21. In pursuance to Accounting Standard 28 issued by The Institute of Chartered Accountants of India on "Impairment of Assets", the company has made necessary provisions during 2005 - 06 for the impairment loss in respect of its Petrofils division. There are no primary indications thereafter that the recoverable amount of cash generating unit is less than its carrying cost. Accordingly, no further detailed exercise has been done to calculate the amount of impairment loss.

22. Figures of previous year are rearranged / regrouped wherever considered necessary to make them comparable.