| 1. CONTINGENT LIABILITIES:
2010-11 2009-10
(Rs.'000) (Rs.'000)
i) Custom Duty Demand (other
than Penalty if any, 36,812 36,812
which is not quantifiable
at this stage)*
ii) Custom Duty Demand (other than i
above) 3,103 3,103
iii) Consequent to facts stated in
note no. 4(b) 32,610 34,320
in respect of dues of foreign
financial institution
*The Company had procured technical know-how and front-end engineering
package from its technical collaborator for setting up PET Resin plant
at Kurkumbh. The Company had paid Income Tax and other duties
applicable on the same. Subsequently, a custom duty demand amounting to
Rs. 41,812 Thousands had been received from Customs Authorities on the
entire consideration paid by the Company. The Company paid a deposit of
Rs.5,000 Thousands to custom authorities, under protest. The Customs
Excise and Gold Appellate Tribunal (CEGAT) had upheld the Company's
appeal against the same. The Custom Authorities had filed an appeal
against decision of CEGAT with Supreme Court of India. Subsequently,
the Supreme Court of India has set aside the order passed by CEGAT and
the matter is referred back to The Central Excise and Service tax
Appellate Tribunal (CESTAT) for reconsideration in accordance with law.
Pending finalisation of the above mentioned matter the deposit of Rs,
5,000 Thousand has been provided for. During the current year there is
no movement in this provision.
2. As on 31st March 2011, accumulated losses of the Company have
exceeded 50% of its net worth. In view of abnormal market conditions &
price volatility, in addition to financial liquidity constraints, the
Company had to temporarily shut down the plant in the month of
March'2011. However, the Company is making efforts to resume the
production & improve the future viability of the plant. In the opinion
of the management, the financial statements have been prepared on going
concern basis on the strength of management's plan of revival including
reorganization of business.
3. Estimated amount of contracts remaining to be executed as on March
31, 2011 was Rs. 335 Thousands net of advance of Rs. 250 Thousands
(Previous Year -Rs. 4,894 Thousands, net of advance of Rs. 12,606
Thousands)).
4. a). Term Loan with Banks/Financial Institutions, are secured by the
whole of the movable properties of the Company including its movable
plant & machinery, machinery spares, tools & accessories and other
movables, both present and future, (save and except book debts),
whether installed or not and whether now lying loose or in cases or
which are now lying or stored in or about or shall hereafter from time
to time during the continuance of the security of these present, be
brought into or upon or be stored or be in or about the Company's
factory premises and godowns situated at D 17, M.I.D.C., Kurkumbh,
District Pune, Maharashtra or wherever else the same may be or be held
by any party to the order or disposition of the Company or in the
course of transit or on high seas or on order or delivery, howsoever
and where so ever in the possession of the Company and either by way of
substitution or addition. These loans are further secured by personal
Guarantees of Mr. Harish Seth, Director of the Company and Mr. Chand
Seth and Mr. Krishen Seth, Promoters of the Company. Further, the above
loans are secured by mortgage of the land and other immovable
properties of the Company situated at D-17, MIDC Kurkumbh Industrial
Area, Distt. Pune, Maharashtra together with buildings and other
structures, fixed plant and machinery, fixture and fittings constructed
or installed thereon.
b) The Company has been legally advised that, in view of Foreign
Financial Institution's Advocate letter dated 4th October, 2006
recalling the entire outstanding loan amount under the Loan Agreement
of 1993, enforcement of such recall in law could take place within 3
years of the termination of the Amended Loan Agreement of 2003 with
effect from 30.09.2006. Under the circumstances, Foreign Financial
Institution or its Assignee, if any, cannot enforce any outstanding
against the Company in any court of law post 30.09.2009 despite the
existence of debt. Accordingly interest of Rs.5,054 Thousands has not
been provided in respect of above loan after 03.10.2009. Further, the
outstanding by way of secured & unsecured loan and interest aggregating
to Rs. 1,61,924 Thousands was shown as "Erstwhile Loan Barred by
Limitation" in the previous year. There is no change in the current
year.
7. The Company is engaged in the manufacture of PET Resin and there are
no seperate reportable segments as per the Accounting Standard 17 on
"Segment Reporting" notified in the Companies (Accounting Standard)
Rules 2006.
8. The breakup of deferred tax assets / liabilities are provided
below:
9. Excise duty under the head Expenditure in Profit & Loss Account
includes Rs.(2,335) Thousands (Previous year Rs. 2,115 Thousands) as
incremental/(decremental) provision in respect of closing stock of
finished goods.
18. As per accounting standard (AS11) on Effects of changes in foreign
exchange rates notified in the Companies (Accounting Standards) Rules
2006, the Company has accounted Rs. NIL (previous year credited
Rs.18,492 Thousands), being the exchange gain on foreign currency loans
borrowed to finance fixed assets, to the Profit & Loss Account.
21. RELATED PARTIES DISCLOSURES
As per Accounting Standard 18 (AS-18) "Related Party Disclosures",
notified in the Companies (Accounting Standard) Rules 2006, the
disclosures in respect of related parties and transactions with the
related parties carried out in the normal course of business, as
identified and certified by the management, are as follows:
DETAIL OF RELATED PARTIES i) Key Management Personnel
Mr. Chand Seth Chairman & Managing Director (Resigned w.e.f. 24th
February, 2011)
Mr. Harish Seth Managing Director
ii) Key Management Personnel's Relatives
Mrs. Suneeta Seth Wife of Mr. Chand Seth
Mr. Krishen Seth Brother of Mr. Chand Seth & Mr. Harish Seth
iii) Associates
Gama Investments Pvt. Ltd.
Pearl International Tours & Travels Ltd.
Pearl Polymers Ltd.
Pearl Apartments Ltd.
23. The Adoption of Accounting Standard 28, notified in the Companies
(Accounting Standard) Rules 2006, on impairment detailed in Note 1
(xii) on Schedule 18 does not have any Impact on either the loss for
the year or on the net assets of the company as at the year-end.
24. The Company has taken certain office and residential premises on
operating lease. Future obligations in respect of non-cancelable lease
rentals are Rs. Nil.(Previous year Rs. Nil). Total operating lease rent
paid during the year was Rs. 3,190 Thousands (Previous Year - Rs. 3,053
Thousands).
25. Previous year's figures have been regrouped / reclassified
wherever necessary to conform to current year's classification.
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