1) Unredeemed First Preference Shares:
The Redeemable Cumulative First Preference Shares remain unclaimed
aggregating to Rs.1.92 lacs (Rs.1.94 lacs). The payments against said
shares are being made as and when claimed. The Company has been legally
advised that in the absence of profits up to the date of redemption
(i.e. 15th June, 1993), it has no obligation to pay any dividend on the
said preference shares.
2) Secured Loans (Schedule C) :
i) OCD-A, OCD-B and NCD under I(a) and Term Loan under II are secured
by first charge by way of mortgage on immovable properties and
hypothecation of all movable properties, machinery, machinery spares,
tools and accessories, present and future, and second charge on current
assets including inventories, stores and spares, book debts, operating
cash flows, receivables, etc. Further secured by first charge on Trust
and Retention Account, Debt Service Reserve Account and other reserve
relating to the project, pledge of 1,11,85,802 equity shares of the
Company held by the promoters and personal guarantee of the Chairman.
ii) Debentures under I(b) are secured to the extent of Rs196.06 lacs
against deposit in a separate bank account with lien thereon in favor
of Debenture Trustee. As per MS-08, principal amount is payable as and
when claimed by the debenture holders after adjusting the repayments
made earlier, if any.
iii) Working Capital Loans under III are secured by first charge by way
of hypothecation of inventories and book debts and second charge on
fixed assets of the Company. Further secured by corporate guarantee of
Duncan’s Industries Ltd and personal guarantee of the chairman.
iv) Terms of redemption/conversion of OCD-A, OCD-B and NCD :
a. The holders have the right to convert, the whole or part of the
OCDs/NCD into fully paid-up equity shares of the Company at any time
before the expiry of 18 months from the date of allotment i.e. from 9th
b. The holders have the right to convert the whole or part of the
OCD-B into fully paid up equity share capital of the Company at the end
of 12th, 15th and 18th month from the date of allotment i.e. from 9th
c. The Company has the right to prepay OCD-B, in full and not in Part
with internal accruals or any additional borrowings at the end of 12th,
15th and 18th month from the date of allotment by giving at least 21
days prior notice.
d. The holders have the right to convert, in the event of default
committed by the Company, at its option the whole or part of the any
unconverted OCDs/NCD into fully paid-up equity shares of the Company,
at a price per equity share determined in accordance with the
appropriate Regulatory framework (SEBI regulations) extant at the time
of such default.
e. The outstanding OCDs/NCD, if conversion option not exercised/
prepaid, shall be redeemed in 24 equal quarterly installments
commencing from April 15, 2012.
v) In the event of default in compliance of loan agreement by the
Company, the lenders have right to convert 100% of the defaulted amount
into fully paid up equity shares of the Company at any time during the
tenure of loan at a price determined in accordance with the appropriate
Regulatory framework (SEBI regulations).
3. In order to discharge company’s obligations for repayment of the
dues of the term lenders, shares of the Company pledged by other
companies against these dues have been transferred in favour of lenders
and Rs.3314.77 lacs being the amount so appropriated against said dues
have been shown as loan from companies.
4. The DCW plant of the Company was in production primarily till the
end of the first quarter of the period and production at VCW plant
could not be continued from the beginning of September, 2010 due to
disruptions by labor. The production activities remained suspended
thereafter and could not have since been resumed. Consequent to this,
the Company is facing severe liquidity crisis leading to stoppage of
supply of material and services, disconnection of power and termination
of agreement thereof, non-payment of employee related costs, statutory
and other obligations and thereby, affecting the business operation of
5 (a) In view of the above, there being limitation and constrains to
certain extent, account closing exercises including with respect to the
following have been undertaken as follows:
(i) Confirmation of various debit and credit balances including with
respect to loan and advances, deposits, liabilities, debtors could not
be obtained and consequential reconciliation/ adjustments, if any,
could not be given effect to in the accounts.
(ii) Physical verification of fixed assets and reconciliation thereof
with the records containing individual assets could not be carried out.
(iii) Physical verification of Stores and Spares and adjustments on
account of discrepancies, obsolescence if any etc. could not be
(iv)To the extent information were available with the Company, there
were no outstanding as at the end of the period to the parties
registered under the Micro, Small & Medium Enterprises Development Act,
(b) Further, for the purpose of these accounts:
(i) Advance-Project includes Rs.2795 lacs given for various Project
supplies and related services, etc, status of which pending completion
of the project is presently not ascertainable. Certain such parties
have intimated to forfeit the amounts lying with them and/or made
claims for charges and compensations etc on account of delay in
completion of projects. Further, Advance Recoverable includes Rs.324
lacs which even though are outstanding for long pending steps for
recovery since been taken has been considered good and recoverable.
Adjustment with respect to the above will be given effect to on final
settlement with the parties.
(ii) In respect of balances of the sundry debtors lying outstanding at
the end of the period pending necessary confirmation, etc. the amount
finally recoverable there against is presently not ascertainable.
Necessary legal and other steps to be taken in this respect are being
examined and as such no provision there against has been considered
(iii) Liabilities for energy charges have been provided till the date
of termination of the agreement by the respective power supply
companies. Pending negotiation and determination of amount thereof,
additional charges etc on reconnection of power and fixation of rates,
levy of fuel surcharge etc have not been given effect to in these
(iv)Claim for interest and other charges amounting to Rs.413.20 lacs
relating to the project to the extent ascertained from available
information have not been accounted for pending finalization of amount
(v) Various claims including interest, penal and additional charges on
statutory and other liabilities pending final negotiation, etc. and
ascertainment of amount thereof has not been recognized in these
6 (a) In order to overcome the liquidity crises as given in Note no.
20 and to revive the production of the Company, the promoter of the
Company has since entered into an agreement on 15th November, 2011 to
transfer the controlling stake to Jaypee Development Corporation
Limited (JDCL), a company belonging to Jaypee Group. JDCL has also
agreed to subscribe for 14,75,00,000 equity shares of Rs.10/- each of
the Company at a premium of Rs.2/- per share aggregating to Rs.177
crores on preferential basis and the same will be utilized for
reviving, restructuring and meeting the requirements of the Company’s
business. Necessary board resolution for giving effect to said
arrangement has been passed on 15th November, 2011 and steps for making
the consequential Open Offer etc. in this respect have since been
taken. In view of this and considering the business prospects, the
accounts of the Company have been prepared on going concern basis.
(b) In terms of the agreement, mentioned hereinabove, Rs.7,509 lacs
payable to various promoter and other companies in respect of money
advanced by them preceding the date of agreement will be settled for
Rs.2,000 lacs. Consequential adjustments arising in this respect will
be given effect to on conclusion of preferential allotment and
consequential steps and procedures in terms of the agreement.
7 (a) In respect of up gradation-cum-expansion project undertaken by
the Company to increase its production capacity, even though
substantial progress have been made, the same is yet to be completed
and implemented. Although physical progress slowed down during the
period, the Company has undertaken technical assessment and certain
administrative activities to achieve the desired results including
engagement of reputed technical consultant for the purpose. Pending
completion of the project, the following pre-operative expenses
including interest on the borrowing have been capitalised and shown
under Capital Work in Progress:
Balance brought forward 10,710.02 5,900.69
Salaries 5.92 90.34
Interest and upfront fees 5,979.30 4,392.14
Consultancy Charges - 258.48
Others 79.26 68.37
Total 16,774.50 10,710.02
Necessary allocation/adjustment with respect to above including as
required in terms of Accounting Standard 16 on Borrowing Costs shall be
carried out on ascertainment of amount thereof on completion of
(b) Capital Work in Progress does not include Rs.2017.98 lacs in
respect of claims made/ bills raised towards cost of civil and other
services and supplies pending complete documentation, negotiation, etc.
These as dealt with in the Accounting Standard 10 on Accounting for
Fixed Assets, shall be accounted for on finalization of amount payable
with the respective parties.
8. Pending resumption of normal production and in the absence of
finalization/settlement of amount payable, employees’ and other
personnel expenses (including retirement and other benefits) as dealt
with in Accounting Standard 15 on Employee Benefits have not been
provided. In the normal course, the estimated liability would have been
Rs.2390 lacs and will be given effect to in the accounts on
determination of the amount thereof on conclusion of negotiations with
9 (a) Sundry creditors include Rs.96.15 lacs being arrears of AP VAT
(including interest thereon) for the year 2010-11 for which recovery
proceedings as arrears of Land Revenue have been initiated and
direction has been issued in this respect to one of the bank to pay the
same from the cash credit facility provided by them.
(b) The claims made by creditors, employees include matters which are
pending before various courts. In one of the litigation by a creditor,
the Company has been restrained from alienating any of its assets or
creating encumbrances over the same pending disposal of the matter by
the relevant court.
10. The Company has export obligation in connection with import of
machineries under Export Promotion Capital Goods Scheme (EPCG). In the
event of non-fulfillment of the export obligation, the company may be
held liable for differential custom duty of Rs.838.16 lacs
(approximately) and interest thereon.
11. The Company has not created a Debenture Redemption Reserve to the
extent of Rs 120.97 lacs due to non-availability of profits during the
12. Remuneration amounting to Rs.39.51 lacs (including Rs.34.77 lacs
for the period) to ex-Whole time Directors and ex-Managing Director are
pending approval of Central Government.
13. Considering the proposed recommencement of production on
completion of expansion scheme, as given in Note 22(a), in view of the
management, no material loss necessitating adjustment in terms of
Accounting Standard 28 on Impairment of Assets, in respect of
impairment in the value of the fixed assets is required to be carried
out in the accounts.
14. Some of the records of the company like agreements with
suppliers/agents, statements of Bank Accounts including those at some
of the branches/depots have still not been restored by the erstwhile
promoters/ management. The matter being pending since considerably long
time, no material adjustment, in this respect, is likely to arise.
15 (a) The Hon’ble BIFR has discharged the Company from the purview of
Sick Industrial Companies (Special Provisions) Act, 1985 vide its Order
dated 22nd January 2010. In terms of the said Order, the unimplemented
provisions of MS-08 (Modified Rehabilitation Scheme sanctioned by BIFR
vide its Order dated 21st July 2008) would be implemented by the
(b) In terms of MS-08, 13.5% Secured Redeemable Debentures are required
to be settled by payment of principal amount only and interest stand
waived. The Company has deposited an amount equivalent to the principal
amount of these debentures marking a lien in favor of the Debenture
Trustees. The unclaimed debentures at period end are continued to be
shown as liability.
(c) Since the repayment of the matured fixed deposits and debentures
are covered by MS-08, the provisions of Section 205 (C) of the
Companies Act 1956 requiring transfer to Investor Education and
Protection Fund, do not apply to the said amount. In terms of the said
Scheme, the fixed deposit holders are to accept outstanding principal
amount in four annual installments commencing from financial year
2007-08 onwards, on interest-free basis.
16 (a) The Company does not have any outstanding derivative contract as
on 30th June, 2011 (PY Rs. NIL)
(b) Unhedged foreign currency exposures of the company as on 30th June,
2011 are as follows
Nature 30.06.2011 31.03.2010
Creditors (Import) Rs. 63.04 Lacs Rs. 43.22 Lacs
17. The Company has certain cancellable operating lease arrangement
for office accommodation taken/given on lease with a lease period of up
to 3 year further extendable with mutual consent and agreement. The
lease agreement can be terminated after giving notice as per terms of
the lease by either of the party. Terms of certain lease arrangement
include clauses relating to deposit/refund of security deposit etc.
18. As the Company is engaged in the manufacture of cement within
India only, it operates in single primary business segment and single
secondary geographical segment and therefore disclosure requirement of
Accounting Standard 17 on Segment Reporting are not applicable to it.
19. Related Parties and transactions with them, as identified by the
management in accordance with the Accounting Standard 18, as notified
by the Companies Accounting Standard Rules, 2006, are as follows:
1.Key Managerial Personnel Shri P.C. Nalwaya, Managing Director
(Up to 26.03.2010)
Shri P.K. Goyenka Executive Director
(w.e.f. 05.04.2010 to 27.07.2010)
Shri Shrivardhan Goenka, Executive
Director (up to 08.10.2010)
2.Relatives of Key Managerial
Personnel Shri G.P. Goenka, Father of
Shrivardhan Goenka, Executive Director
Smt. Indu Goenka, Mother of
Shri Shrivardhan Goenka, Executive Director
3.Holding Company/ Associate ISG Traders Ltd (Up to 31.05.2011) and
became associate thereafter
4. Fellow Subsidiary Company
/ Associate Boydell Media Pvt. Ltd (Up to
31.05.2011) and became associate thereafter
5. Enterprise over which,
persons stated Orchard Holdings Pvt. Ltd., in
which at S.No. (1) and (2) above have Shri G.P Goenka has substantial
interest significant influence.
M/s. ISG Traders Ltd., in which Smt.
Indu Goenka is Whole Time
Director and Shri Shrivardhan Goenka is Director.
Boydell Media Pvt. Ltd., being subsidiary of
M/s. ISG Traders Ltd
Kavita Marketing Pvt. Ltd., in which Smt.
Indu Goenka has substantial interest
20. The Company has not made any loans or advances in the nature of
loans whose particulars are required to be disclosed in terms of clause
32 of the listing agreement.
21. Working for the earnings per share in terms of AS 20 – “Earnings
22. Keeping in view the proposed recommencement of production of the
Company as per note 22(a) above and emerging certainty with respect to
the profitability of the Company and considering that time limit for
carry forward of losses in case of Company has been extended in terms
of the Scheme sanctioned by BIFR, the Deferred Tax Asset in respect of
the carry forward business losses and depreciation has been continued
to be recognized during the period. The details in this respect as
required in terms of the Accounting Standard 22 on Accounting for Taxes
on Income, are as follows:
23. Employee Benefit:
The disclosures as required by Accounting Standard 15 relating to
employees benefits notified in the Companies (Accounting Standards)
Rules 2006 (Other than the period of disruption of operations as given
in note 20 above) are given below: Defined contribution Scheme
Defined benefit Scheme:
The employees Gratuity scheme are defined benefit plans. The present
value of obligation are determined based on actuarial valuation using
Projected Unit Credit method, which recognizes each period of services
as giving rise to additional unit of employee benefit entitlement and
measures each unit separately to build up the final obligation. The
obligation for compensated absence is recognized in the same manner as
Disclosure for defined benefit plan based on actuarial reports as on
31st March, 2010 is as follows. Details with respect to the current
period in view of Note no 24 could not be compiled and disclosed.
The employees benefit liability of the company is not funded.
Accordingly disclosures related to return on planned assets and fair
value thereof is not applicable.
Notes: Assumptions relating to future salary increases, attrition,
interest rate for discount have been considered based on relevant
economic factors such as inflation, market growth & other factors
applicable to the period over which the obligation is expected to be
24. Current year figures relate to the period of fifteen months from
1st April 2010 to 30th June 2011 and therefore corresponding previous
year''s figures as such are not comparable.
25. All amounts in the financial statements are presented in Rupees in
Lacs except per share data and as other wise stated. Figures in
brackets represent corresponding previous year figures in respect of
Profit and Loss items, and in respect of Balance Sheet items as on the
Balance Sheet date of the previous year. Figures for the previous year
have been regrouped /rearranged wherever considered necessary to
conform to the figures presented in the current year.