1 General Information
Gwalior PoJyPipes Limited was incorporated on October 19, 1982 and is
engaged in the manufacturing of Rigid PVC Pipes & Fittings and PVC and
HDPE Corrugated Pipes & Fittings.
2 Additional Notes To Financials statements
2.1 Reference to BIFRand appelastoAAIFR
The Company was declared as a sick industrial company in terms of
Section 3(1 )(o) of the Sick Industrial Companies (Special Provisions)
Act, 1985 (SICA) vide BIFR order dated September 9, 2009. IFCI was
appointed as the Operating Agency for formulating the scheme of
rehabilitation. Subsequently, BIFR vide its order dated October 11,
2010 had ordered for issue of an advertisement for change of management
of the Company, against which the Company preferred an Appeal with
Appellate Authority for Industrial and Financial Reconstruction
In the meantime, BIFR passed an order dated March 15,2012 that since
Kotak Mahjndra Bank Ltd. has taken symbolic possession of the factories
of the Company under section 13 (4) of SARFAESI Act, 2002, the
Company''s reference No. 02/2008 stands under third proviso to the
sub-section (1) of section 15 of SICA. Consequently, the Appeal with
AAIFR became infructuous and dismissed vide AAIFR order dated March
22,2013. The Company has filed a writ petition before the Hon''ble M.P.
High Court against the abatement of reference by BIFR/AAIFR.
2.2 Unsecured Loans
Working Capital facilities were originally sanctioned by State Bank of
India (SBI), Gwalior. The said loans were secured by a first charge on
the current assets of the company anda personal guarantee by Managing
Director, Whole time Director & two former Directors of the Company.
The said working capital facilities were further secured by mortgage of
land, building and plant & machinery of the units of the Company.
During August 2003, SBI had cancelled the limits and recalled the loans
and filed a suit before Debt Recovery Tribunal (DRT), Jabalpur for
recovery of the amount due. Subsequently, SBI had assigned the said
loan to Kotak Mahindra Bank Limited (KMBL), pursuant to the execution
of a deed of assignment on January 16,2006.
The loan payable to KMBL has been consistently considered as unsecured,
as no charge on the assets has ever been created / registered in their
favour. KMBL had issued a notice dated July 6, 2007 to the Company u/s
13 (2) of SARFAESI Act, 2002, despite being an unsecured creditor,
against which the Company filed a Writ Petition before the Hon''ble High
Court qf Judicature Jabalpur Bench at Gwalior on the ground that the
bank being assignee of the debt is not a secured creditor and hence can
not take action under SARFAESI Act, 2002. During the pendency of the
case for final hearing, KMBL took an action on 28th and 29th November
20.11 purportedly u/s 13(4) SARFAESI Act, 2002 and took the symbolic
possession of the assets of the Company.
On being approached by the Company against the said action of KMBL, an
order dated December 7,2011 was passed by the Hon''ble High Court of
Madhya Pradesh-directing KMBL that no coercive action be taken against
the Company. Later, the Hon''ble High Court of Madhya Pradesh directed
the Company to file appropriate application before the Debt Recovery
Tribunal (DRT), against the action of KMBL taken under SARFAESI Act,
2002. The Company has filed the Application before the DRT Jabalpur,
which is being heard.
Interest on unsecured loans payable to KMBL has not been provided for
the year as the liability amount and transfer of security interest with
KMBL has been disputed. Further, the Directors are of the view that the
existing provision in the books made earlier as a matter of prudence,
is considered sufficient to cover the interest liability, if held
otherwise, and the shortfall, if any, shall be dealt with on cash basis
at the time of settlement.
No provision of interest on various overdue outstanding liabilities on
account of Sales Tax/VAT/CST/Entry Tax aggregating to Rs. 121.05 Lac
(including that disputed amounting Rs.90.55 Lac) has been made in the
accounts as the management is hopeful of getting the waiver of interest
in full or in part at the time of the settlement of the dues
particularly in vjew of the huge losses suffered by the Company in the
past and hence the liability is not expected to be material and shall
be dealt with on cash basis.
2.4 Fixed Assets
The Sales Tax Authorities of M.P. at Gwalior had attached and sealed
the company''s manufacturing unit at Malanpur and attached its Kota unit
for realization of its dues. The company had disputed the action of
sales tax authorities before Hon''ble High Court of Madhya Pradesh,
Gwalior Bench. The matter is sub-judice.
As stated above, KMBL took symbolic possession of factories of the
company under section 13 (4) of SARFAESI Act, 2002, on 28th and 29th
November, 2011. The matter is under adjudication before the DRT,
Jabalpur, as directed by the Hon''ble High Court of Madhya Pradesh.
2.5 Current assets, loans & advances
In the opinion of the board, current assets, loans and advances have a
value on realisation in the ordinary course of business, at least equal
to the amount at which they are stated. No provision has been made
against the dues of Rs. 65.9 Lacs from Mr. H.K. Sahu, ex Managing
Director of the company, A criminal suit has been filed against him for
recovery of this amount, which is pending in the couri.
Letter of confirmation of balances have not been received and hence the
balances (debit/credit) are subject to adjustments, if any, on
reconciliation/settlement of accounts.
2.6 Accounts Payable
The Company is in the process of identification of Micro and Medium
suppliers as defined in and for the purpose of payment of interest on
overdues to them as required by The Micro, Small and Medium Enterprises
Development Act, 2006. Responses from suppliers are awaited till the
time of preparation of these accounts and therefore, prescribed
disclosures under Section - 22 of the Act could not be given.
b. Terms/rights attached to equity shares
The company has only one class of shares referred to as equity shares
having par value of Rs. 10 each. Each holder of equity shares is
entitled to one vote per fully paid up share held. The dividend
proposed, if any, by the Board of Directors is subject to approval of
the shareholders in the ensuing Annual General Meeting, except in case
of interim dividend. In the event of liquidation, the equity
shareholders are eligible to receive the remaining assets of the
company after distribution of all preferential amounts, in proportion
to their shareholding.
Note 3 Previous year''s figures
Previous year figures have been regrouped and re-arranged so as to
confirm to current year''s classification.