| 1.1 Secured lenders had taken custody of all the assets of the Company
on 17-10-2006 under Securitisation Act and sold the same by public
auction on 8-2-2007 for a consideration of Rs. 3,500.00 Lakhs which was
distributed amongst the lenders. The outstanding amount is reflected
net of pro-rata consideration received by Bank of Baroda.
1.2 In O. A No. 44/2008 filed by Bank of Baroda before Debt Recovery
Tribunal (DRT), Mumbai under RDB Act, DRT had issued notice for
recovery of the dues of Rs. 785.92 Lacs. Based on One Time Settlement
(OTS) of rest of the 5 secured lenders, the Company had made an offer
for OTS to Bank of Baroda, the outcome of which is awaited and pending
which no provision is made for the differential liability of
Rs 339 69 lacs
1.3 In the absence of any security available the dues have been
reflected under current liability.
1.4 Other payables includes Rs. 113.60 Lacs towards Electricity Duty on
Captive Power Generation and Dividend of Rs. 33.50 Lacs received in
1998 and 1999 in respect of 10 (Ten) Lacs units of US-64 Scheme of Unit
Trust of India (UTI) [since converted into 6.75% Tax-free US 64 Bonds
upon termination of US 64 Scheme] and which were sold in 1992-93. Also
refer Note No. 5.1
1.5 There are no amounts outstanding in respect of Principal or
Interest due to Micro, Small and Medium Enterprises.
1.6 UTI had filed a suit in Bombay High Court for claim of Rs. 307.66
Lacs comprising of net dividend of Rs. 120.06 Lacs paid by it relating
to the period 1992-93 to 1998-99, T.D.S. of Rs. 31.44 Lacs thereof and
Re-purchase of Bonus Units of Rs. 14.65 Lacs allotted thereon alongwith
interest thereon. The said suit which had been transferred to Debt
Recovery Tribunal (DRT), Mumbai (bearing O.A. No. 41 of 2005), is
pending
The Company had in turn filed a Suit in Hon'ble Bombay High Court
(bearing OOCJ Suit No. 423 of 2003) against UTI for putting 'Stop
Transfer Mark' on the other units held by the Company and reflected as
Non Current Investments, non-payment of Dividend thereon and non-issue
of 6.75% Tax-free US-64 Bonds for the Units converted upon termination
of US-64 Scheme. The said matter is also pending. Also refer Note No.
4.6
2 Segment Reporting : The Company's operations relate only to Textile
Segment and hence has only single reportable segment.
3 Related Party Disclosures :
Nature of related parties and relationship :
a) Key Management Personnel : Kantilal K. Sheth
Chairman & Managing Director
b) Associates Resons Investments Pvt. Ltd.
Udaysons Investments Pvt. Ltd.
4 Contingent Liabilities not provided for in respect of :
a) Bank Guarantees outstanding Rs. 0.95 Lacs (Rs. 0.95 Lacs)
b) Counter guarantee issued by the Company to Shri K. K. Sheth
(Managing Director) having given personal guarantee for Company's
borrowings fom Bank & Financial Institutions to the extent of Rs.
4,775.00 Lacs (Rs.4,775.00 Lacs)
c) Claims against the Company not acknowledged as Debt
(i) Outstanding dues of Rs. 96,823/-claimed by Mahanagar Telephone
Nigam Limited, Mumbai.
(ii) Outstanding Annual Listing Fees amounting to Rs. 1,22,062/-
claimed by Ahmedabad Stock Exchange Limited.
5 Income-tax assessments of the Company have been completed upto Asst.
Year 2011-12. As reported earlier, pursuant to re-opening of
assessments u/s 147 for Asst. Years 2007-08 in respect of set-off of
allowances for unabsorbed depreciation and business losses claimed
against gains arising on account of sale procceds for disposal of
assets of the Company by secured lenders under Securitisation Act.
Re-assessment Order was passed U/s 143(3) r.w.s. 147 and a demand of
Rs. 999.21 Lacs was raised which was contested in Appeal before C.I.T.
(Appeals) but dismissed and against which the Company has preferred
second appeal before ITAT, Rajkot.
The Company had also filed an application for rectification U/s. 154 to
adjust disallowance unabsorbed depreciaton against capital gain.
However the said application was rejected against which the Company has
preferred an appeal before CIT, Appeals which is pending.
The Company envisages substantial relief and reduction in tax liability
as such no provision is made in respect thereof.
6 The Sales-tax department of Mumbai had passed 'ex parte' orders for
F.Y. 2004-05 and raised demand of Rs. 38.38 Lacs against which the
Company had preferred an appeal. Revised order was passed by the
appellate authority whereby the demand was reduced to Rs. 14.03 Lacs.
Against the said order, the Company has filed a Restoration Application
whch is pending.
7 The development referred to above vide note 4.2 amounts to disposal
of practically entire undertaking. The Company has no manufacturing
activity or any business activity. However, the accounts for the
current year too have been prepared on the basis of 'going concern' as
followed hithereto.
8 The Company does not have the practice to call for balance
confirmation in respect of Loans & Advances, Deposits, Sundry Debtors
and Sundry Creditors. In view of substantial outstanding in accounts of
borrowings from Bank and other scattered dormant bank accounts, it is
not possible to obtain balance confirmation in respect thereof. Hence
balances in these accounts are shown as per the books of accounts and
are subject to confirmation or reconciliation, if any.
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