| 1. In terms of the Scheme of Compromise or Arrangement under Sec.391
of the Companies Act 1956 with its Secured Creditors, Unsecured
Creditors and Equity Shareholders which had been approved by Hon. High
Court of Gujarat in their Order dated 16.05.2008 during the financial
year 2008-09:
a) The Company has paid Rs.20,000,000/- to the Financial Institutions
and Bank as full and final Settlement of their claims which includes
Rs.5,141,000/- deposited with the Hon. High Court of Gujarat in respect
of one of them arising out of securitisation of assets.
b) The Company has reduced the face value of the Equity share of
Rs.10/- to Rs.1/- and has subsequently issued 1 (One) Equity Share
(new) of Rs.10/- each as fully paid up against 10 (Ten) shares of Rs.1/
- each.
c) The Company has issued New Equity Shares of Rs.10/- at a premium of
Rs.740/- per Equity share to few unsecured creditors in full and final
settlement of their claims.
d) The Company is in the process of paying 25% of dues of other
unsecured creditors within a period of 60 months in full and final
settlement of their claims and balance 75% of their dues is accounted
under Business Restructuring Account.
Meanwhile, the party referred to in (a) above in respect of
Rs.5,141,000 filed an appeal against the above Order before a Division
Bench of the Hon. High Court of Gujarat claiming additional amount for
the same matter is still pending.
2. Contingent Liabilities not provided for:
a) Disputed Sales Tax liabilities Rs. 6,075,000/- (P. Y. Rs.
6,075,000/-)
b) In the settlement with the secured creditors a larger share is
claimed by a party (as mentioned in Note No.20 above) by filing a suit
in Honourable High Court of Gujarat. The Amount for the same is not
ascertainable.
c) Interest on disputed liability to creditors, the amount is not
ascertainable as there is a counter claim by the Company and the matter
is pending with the Hon. Bombay High Court. The Management is of the
opinion that no provision is required for interest, in terms of the
Order of the Hon. High Court of Gujarat dated 16.05.2008 mentioned in
Note No.20 above. The Amount for the same is not ascertainable.
Interest and penalty on the net sales tax payable to government is
treated as nil as subsequent to year end an order has been received
from Government of Gujarat for waiver of the same.
3. Security given by the Company for the Secured loans Rs Nil (P.Y.
Rs. Nil) from Financial Institutions and Bank, ranking pari passu, by
first charge over the immovable properties, present and future and a
first charge by way of hypothecation of all movable (save and except
stocks and book debts charged only in favour of bank) present and
future, and personal guarantees of a Director and another share holder
is still pending for removal of charge by one of the secured creditors.
4. Going Concern:
The Company has incurred losses in the past which has resulted into
erosion of more than 50% of their net worth. Consequently the company
was registered as a sick company under the Sick Industrial Companies
Act, 1985 The accounts of the Company have been prepared on going
concern basis in spite of erosion of net worth and order of the Board
for Industrial and Financial Reconstruction (BIFR) in its order dated
1.9.2000 it is stated that prima facie the Company was not likely to
make up its net worth within a reasonable time while meeting all its
financial obligations and was not likely to become viable in future and
hence it was just, equitable and in public interest that it should be
wound up. Company had filed an application to the Honourable Gujarat
High Court for a Scheme of Compromise or Arrangement u/s 391 of
Companies Act 1956 with its Secured Creditors, Unsecured Creditors and
Equity Shareholders. The company has received an order from High Court
of Gujarat dated 16.05.2008 and is under process of implementation.
Also in Financial Year 2009-10 the company has leased out its Plant &
Machinery and land & building. The lease duration for the same is 99
years as per the agreement. According to the Management, the company is
Going concern and the accounts have been prepared on Going Concern
basis.
5. Taxation:
Income Tax Assessments have been completed up to the Assessment Year
2008-09. Provision for Income Tax and MAT has not been made considering
the negative profits and carry forward losses. Also, as the Company
continues to be a sick in terms of Sick Industrial Companies Act 1985
and Net Worth still remains to be negative, the MAT provision as per
Income Tax Act 1961 has not been made.
6. Related Party Disclosures as required by Accounting Standard-18 are
as follows:
I Related parties in which the Company has control - Nil.
II Other Related Parties
* Subsidiaries - Nil
* Associates - M. L. Mansukhani & Co Pvt
Ltd
* Key Management Personnel - Shri Kantilal. B .Patel
- Shri Dharamshi .J. Patel
* Enterprises owned or significantly
Influenced by key management
Personnel/Directors or their
relatives - Shree Narmada
Architectural Systems Ltd
7. Disclosure under Micro Small and Medium Enterprises Act
The information regarding Small Scale Industrial Undertakings has been
determined to the extent such parties have been identified on the basis
of information available with the Company.
The Principal amount due to Small Scale Industrial Undertakings to whom
the Company owes a sum exceeding Rs.1,00,000 and/or which are
outstanding for more than 45 days and interest thereon is as follows.
8. Income and Expenditure in Foreign Currency during the year is Rs
NIL (Previous year Rs NIL)
9. Company being a sick unit could not obtain the services of full
time Company Secretary in spite of its best efforts. However, the
Company has engaged a Company Secretary in practice throughout the year
10. The balances relating to Trade receivables and Trade payables are
subject to reconciliation and confirmations with respective parties.
The Company has written back creditors amounting to Rs 51,15,902.81
during the year, as there is no claim from the creditor for more than 3
years.
11. Interest for MSMED has not been provided since the all the dues to
the party have been paid off and there is no balance outstanding at
year end. Consequentially there is no qualification as compared to
previous year.
12. The company has provided for gratuity and leave encashment on the
basis of actuarial valuation for the year 2012 -2013 as well as for the
current financial year ended 2013- 2014. Consequentially there is no
qualification as compared to previous year.
13. Previous year figures have been regrouped / rearranged/ recasted
wherever necessary to make them comparable with the current year
figures.
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