1. a) Due to disconnection of power and shortage of raw material,
coupled with management dispute, liquidity and labour problems, the
operation of the factory at Sohana are under suspension w.e.f.
01-01-2001 with labour laid off.
b) In view of above physical verification of inventory and fixed assets
could not be carried out during the year and is as per stores records
and subject to reconciliation.
c) Due to the inherent nature of the product, usability and
realisability of Work-in-progriss can be determined only when the
factory resumes production. Hence no provision has been made/considered
2. Accumulated losses of the company had exceeded its net worth and
presently production facility are under suspension w.e.f. 01.01.2001
but the company has no intention to close down the same. Consequently,
these accounts has been prepared on the basis of going concern
concept. As per the provisions of clause (0) of sub-section (1) of
Section 3 of Sick Industrial Companies (Special Provision) Act, 1985
reference has been made to BIFR.
3. Oriental Bank of Commerce Greater Kailash II has filed a suit
before the Debt Recover) Tribunal (DRT) DELHI for recovery of their
dues, which is still pending.
4. CONTINGENT LIABILITIES NOT PROVIDED FOR.
a) Guarantee executed in favour of office of DETC-Sales-Tax, Gurgaon
Rs.50,000/-(P.Y.Rs. 50,000/- against which margin of Rs.50,000/-(P.Y.
Rs.50,000/-) kept with a Schedule Bank.
b) Notice has been received from Sales Tax Department, Gurgaon
regarding imposition of penalty for non-deduction of Sales Tax @2% on
payments made to contractors in the financial year 1993-94 and
1995-96. The claim is still being disputed before the Sales Tax
c) Demand/Penalty amounting to Rs. 881850/- deposited under protest
with the Excise Department in pursuance of a raid conducted by them on
21.09.1998 is still unascertained and disputed.
d) Further Demand penalty amounting to Rs. 88,31,026-as per order
dated 24.08.2000 in pursuance of a raid conducted by them on 23rd
September 1998 received from Excise Department not acknowledged as
debts and is being disputed in appeal.
e) Claim in respect of restatement of one employee whose services were
terminated by the Company is under adjudication before the Labour Court
Gurgaon (Amount not ascertainable)
f) No provision for workers lay-off compensation has been provided as
no claim has been made by any of the exemployee.
g) Winding up petition was filed by M.S Sakhi Engineering Pvt. Ltd. in
December, 1994 for recovery of Rs.12.5 Lacs along with interest @18%
p.a. The case is presently adjourned sine-die, as the company has filed
a reference with the Honble BIFR.
5. As agreed by the depositors, no interest has been provided on Inter
Corporate Deposit arid Loans.
6. MANAGERIAL REMUNERATION. 2004-05 2005-04
Salary & perquisite NIL NIL
7. PAYMENT TO AUDITORS.
Audit Fees (including Service Tax) 10,800 10.800
8. SEGMENT REPORTING.
As there has been no business activity during the year, the disclosure
requirements of Accounting Standards (AS 17) Segment Reporting,
issued by the Institute of Chartered Accountants of India, are not
9. RELATED PARTY DISCLOSURE.
Disclosure as required by Accounting Standard on Related Party
Disclosures (AS 18) issued by the Institute of Chartered Accountants
of India are given here under :-
A. RELATED PARTIES NIL
B. ASSOCIATES NIL
C. KEY MANAGEMENT PERSONNEL
MRS KAMINT KHANNA
SH. SK. LAIN (NOMINEE HFC)
SH. V.K. CHADHA
SH PREM SHANK.ER
SH. PREM BALLABH
D. TRANSACTIONS WITH RELATED PARTIES: NIL
10. EAR1NGING PER SHARE (EPS) (4.57)
11. Since the manufactring operation of the company remain closed
during the year, depreciation on fixed assets amounting to Rs.24.45
(P.Y. 27.75 lacs) and till date Rs. 105.89 lacs has not been provided.
12. DEFERRED TAX LIABILITY
As required by Accounting Standard on Accounting for taxes on income
(As 22) issued by the Institute of Chartered Accountants of India,
provision for defered tax liability has not been made as the management
does not foresee any immediate revival of operations/earnings in the
near future where the deferred tax assets can be realized against
future taxable income. Therefore. the accounting of deferred taxes has
not been done.
13. Earning in Foreign Currency YEAR ENDED YEAR ENDED
Export Sales NIL NIL
14. Value of Imports Calculated on NIL NIL
CIF basis Raw Material-Chemicals
15. Debit and Credit balance are subject to confirmation/reconciliation
16. Interest on loans from financial institutions and banks is being
provided for on estimate basis in the absence of statements and
confirmations from banks/financial institutions.
17. Previous years figures have been re-grouped/re-arranged wherever
considered necessary, to make them comparable with those of the current
18. The schedule referred to in Balance Sheet and Profit & loss
account form an integral part of accounts.