1. a. The company has suspended all its operations and activities
April, 1996, yet the accounts have been prepared to taking into
consideration the going concern method.
b. Union Bank of India only bank to the company filed a civil suit for
recovery of their dues at Bombay High Court against the Company.
Subsequent to the arguments by plaintiff and defendant (i.e. the
company), the court as appointed a Receiver to take possession of the
factory and take necessary steps for execution of the order by the
court. Accordingly the Receiver took possession of the factory on
13.7.98 in presence of Mr.Atul N.Modi and Mr.Robert, representative of
the Company authorised to hand over the possession.
2. Contingent Liabilities
a) Counter Guarantees given by the Company to the bankers against
guarantees given by it on behalf of the Company Rs. 17,800/- (Previous
year Rs. 17,800/-).
b) Estimated claims against the Company, not accepted as debts Rs.
55,80,678/- (Previous year Rs. 55,80,678/-).
c) Corporate Guarantees given by the Company to Banks/Institutions on
behalf of other Companies Rs. 51,46,39,447/- (Previous Year Rs.
d) Provision for interest accrued and due for Secured Term Loan and
Funded Loan from UBI has been made by the management on the basis of
its estimated liability for payment of such interest as no
communication of the Amount of interest payable has been received from
the bankers in view of the litigation pending before Bombay High Court.
e) Provision for interest towards Cash Credit A/C of industrial Bank
has been made on an estimated basis though the bank has claimed
interest at a higher rate as per their letter letter Dated 22/12/97
which is disputed by the Company and not provided for.
f) The Company has received cash subsidy of Rs. 25,00,000/- upto 31st
March 1996 under the special Capital incentive 1988 Scheme. The same
has been added to Capital Reserve. This subsidy is granted on
fulfillment of certain usual condition imposed by the Maharashtra State
Government under the above named scheme. The Capital Subsidy becomes
repayable to the government of Maharashtra as such conditions are
breached. However no such claim has been made by the Government of
Maharashtra as yet.
3. The Company has not accounted the following on accrual basis.
a) Interest on loans given as per Schedule H to the Balance Sheet.
The effect there of cannot be ascertained.
b) Insurance has not been taken for the Fixed assets as per the loan
agreement with bank any loss accounted of non-insurance cannot be
c) Provision for Electricity charges are made upto October 1996 only.
d) Provision for rates and taxes payable on vehicles.
4. No tax provision has been made in view of there being carried
5. Unclaimed `Share Application monies Rs. 6,07,60.20 are still lying
in the Share Application Refund a/c as on date.
6. Balance on Debtors, Creditors, Acceptance, Loans, Advances and with
the scheduled banks on share application money account are subject to
confirmation & reconciliation, if any.