1.1 Preference shares of Rs. 250 Lacs, Rs. 590 Lacs & Rs. 210 Lacs
respectively were redeemable from December 05, March 06 & April 06
respectively in 28 equal quarterly installments without any past &
future dividend as per settlement terms with the preference share
holders. Preference Shares of Rs. 450 Lacs were to be redeemed at Rs. 45
Lacs as per settlement terms. Final redemption of Preference Shares
will be on sanction of rehabilitation scheme by BIFR. Pending
fulfillment of various terms & conditions of restructuring/settlement &
sanction of rehabilitation scheme by BIFR, Rs. 991.94 Lacs paid (previous
year Rs. 864.96 Lacs) to Preference Shareholders has been shown as
other current assets.
1.2 Calls in arrears accounts are subject to confirmation and
1.3 The details of shareholders holding more than 5% shares: Equity
1.4 The company has two class of shares namely equity shares having at
par value of Rs. 10 per share and preference share having at par value of
Rs. 100. Each holder of equity share is entitled to one vote per share
and each holder of preference share is entitled to ten vote per share.
In the event of liquidation of the company, the preference share
holders shall get priority on proportionate basis towards payments and
the holders of the equity shares will be entitled to receive remaining
asset of the company in proportion to the number of equity shares held.
2.1 In view of the losses, Debentures and Preference Shares redemption
reserve has not been created during the year and in earlier years also
2.2 Calls in arrears accounts are subject to confirmation and
3.1 Equity Share application money represents subscription received
pursuant to the restructuring/settlement scheme. Instruments will be
issued on sanction of rehabilitation scheme by BIFR. Necessary increase
in authorised share capital will be done at appropriate time. The
company does not envisage any refund out of share application money.
3.2 The company has received amount of Rs. 4500 Lacs towards share
application in the period 2003-04 to 2009-10 pending allotted subject
to sanction of rehabilitation scheme by BIFR.
4.1 Debentures, Rupee Term Loans (including Working capital term loan)
and interest accrued and due thereon are secured/to be secured by
first charge against all existing and future immovable properties,
hypothecation of all movable assets of the Company by way of joint
equitable mortgage and hypothecation (save and except book debts)
created/to be created in favour of the financial institutions/banks
ranking pari passu and personal guarantees of some of the directors
subject to prior charge in favour of the company''s bankers on stock of
raw materials, semi finished 7 finished goods, stores and book debts for
4.2 Foreign Currency Loans from Hypo Vereinsbank including funded
interest and interest accrued and due is secured by corporate guarantee
from Modem Terry Towels Limited.
5.3 Terms of redemption of Non Convertible Debentures based on
restructuring/settlement wherever carried out is as under:
a) Rs 60 Lacs are redeemable during 2013-14
b) Rs 60 Lacs redeemable in 28 quarterly installments commencing from
30th June, 2006 (The payment of Rs. 52.80 Lacs made towards settlement
is shown as other current assets) expected to be fully paid by March''
c) Rs 120 Lacs redeemable in 28 quarterly installments commencing from
31st March, 2006 (The payment of Rs. 107.12 Lacs made towards settlement
is shown as other current assets) expected to be fully paid by January''
d) Rs 45 Lacs redeemable in 28 quarterly installments commencing from
4th January, 2006 (The payment of Rs. 40.77 Lacs made towards
settlement is shown as other current assets) expected to be fully raid
by December'' 2012.
e) Rs 75 Lacs redeemable in 28 quarterly installments commencing from
31st December, 2005 (The payment of Rs. 70.44 Lacs made towards
settlement is shown as other current assets) expected to be fully paid
by September'' 2012.
f) Rs 240 Lacs were to be redeemed on or before 31st March, 2009 (The
payment of Rs. 240 Lacs made towards settlement is shown as other current
assets and Company is renegotiating the terms of balance payment).
g) Rs 20 Lacs were redeemable by 15th November, 2008 (The payment of Rs
20 Lacs made towards settlement is shown as other current assets).
h) Rs 4900 Lacs, out of which Rs 500 Lacs were redeemable by March''
2008 and Rs 4400 Lacs were redeemable by 30th September, 2008 (The
payment of Rs. 4900 Lacs made towards settlement is shown as other
i) Rs 2355 Lacs were redeemable in 28 staggered quarterly installments
from 30th September, 2004 (The payment of Rs. 2355 Lacs made towards
settlement is shown as other current assets).
j) Rs 97.67 Lacs of suiting division were redeemable by 2010-11 (The
payment of Rs 97.67 Lacs made towards settlement is shown as other
k) Rs. 50 Lacs were redeemable in August'' 2003 (The payment of Rs.50
Lacs made towards settlement is shown as other current assets).
4.4 Pending fulfillment of various terms and conditions of
restructuring/settlement and/or satisfaction of charge, payment of Rs.
6889.59 lacs towards Rupee Term Loan (including working capital term
loan) and Rs. 7933.79 lacs towards Non Convertible Debentures to various
lenders has been shown as other current assets.
4.5 a) The company has defaulted in repayment of foreign currency loan
from Hypo Vereinsbank of Rs. 8148.42 Lacs since 1997-98 along with
interest on the same.
b) Exchange Fluctuation on foreign currency loan availed in DM currency
to acquire Plant & Machinery has not been provided since 1st April.
2001 due to conversion of currency from DM to Euro, as there is no
currency conversion clause in the agreement. Accordingly, foreign
currency loan and interest thereon is stated in books at exchange rates
prevailing on 31st March, 2001. In case, the liability is accounted for
based on the exchange rate of Euro as on the Balance sheet date, the
liability in respect of principal amount and interest would have been
higher by Rs. 6426.28 Lacs and Rs. 2356.58 Lacs respectively (Previous year
Rs. 5289.63 Lacs and Rs. 1725.73 Lacs).
c) Interest on above loan has been provided at fixed rate of 2.74% p.a.
rather than a floating interest rate based on 6-months-DM-Libor plus a
margin of 0.80% p.a., impact of which is not ascertainable.
5.1 Security of Debentures and interest accrued and due thereon are
mentioned in para 5.1 of Note 5.
5.2 Unsecured Non Convertible Redeemable Debentures (Retail) initially
when issued were secured by way of second charge on fixed assets of
Yarn Division of the Company, subsequently assets of Yarn Division have
been sold, hence the same is considered as unsecured debentures. The
said debentures were to be redeemed in installments before 30th
November, 2002 as per the resolution passed in the meeting of debenture
holders held on 25th October, 1999, which is not paid and shall now be
redeemed as per rehabilitation scheme to be sanctioned.
5.3 In respect of restructured debts, future payment obligation is to
be fulfilled as stipulated, failing which the original liability will
fall back with interest and panel interest, amount of which is not
ascertainable. However, SUUTI has restored the total liabilities due to
default in payment of OTS amount and have intimated me outstanding dues
of Rs. 111 3.82 crores including unsecured debts of Rs 7 Crores, dues
of UTI MF, overdue & penal interest etc. as per their records as on
31st March, 2012. The company has disputed the entire dues of UTI MF
and is in the process of renegotiating the OTS proposal with them and
SUUTI, pending which, unpaid liability of Rs. 13.60 crores as per
earlier settlement terms is kept in books of accounts.
6.1 Plant and Machinery include 24 looms having WDV of Rs. 36.46 Lacs,
pertaining to closed suiting division lying in the premises of third
party. The company has filed legal suit for recovery of these
6.2 In pursuant to Accounting Standard 28 issued by The Institute of
Chartered Accountants of India on Impairment of Assets, the company
has made necessary provisions during 2005-06 for the impairment loss in
respect of its Petrifies division. There are no primary indications
thereafter that the recoverable amount of cash generating unit is less
than its carrying cost. Accordingly, no further detailed exercise has
been done to calculate the amount of impairment loss.
6.3 Depreciation for the year against plant and machinery is net of
Rs. 369.76 Lacs towards reversal of excess depreciation provided in
6.4 Deductions in Plant and Machineries pertains to items discarded.
7.1 Pending fulfillment of various terms and conditions of
restructuring/settlement and/or satisfaction of charge Rs. 991.94 Lacs
towards preference share capital and Rs. 14823.38 Lacs towards
borrowings (including Rs. 126.98 towards preference share capital and
Rs. 99.05 Lacs towards borrowings paid during the year) to various
lenders has been shown as payments to Financial Institutions and Banks
in Other current assets.
8. Related Party Disclosure as per Accounting Standard 18
(i) Related Party Relationships :
(a) Where Control exists : NIL
(b) Key Management Personnel :
Shri Kamal Ranka: Chairman and Managing Director
Shri S. N. Sharma : Whole Time Director & CEO
(c) Relative of Key Management Personnel with whom transactions have
been entered during the year :
Shri Kanishk Ranka
M/s. Shubham Corporate Advisory Services Pvt. Ltd
9. Defferred Tax Assets
9.1 Provision for Income Tax has not been made for the year in view of
the past accumulated losses.
10. Additional Information to the financial statements
10.1 The net worth of the company has been fully eroded as on 31st
March, 2000 as per the provisions of the Sick Industrial Companies
(Special Provision) Act 1985 (SICA).The Board of industrial and
Financial Reconstruction (BIFR) has declared the company as Sick on the
basis of fresh reference filed as per audited accounts for the year
ended 31st March, 2010 and IFCI has been appointed as operating agency.
Company has also filed draft rehabilitation scheme with operating
agency and the same is under examination/circulation. Company has
also entered into settlement with various lenders and payments are
being made. Accordingly, pending approval of rehabilitation scheme, the
accounts of the company have been prepared on going concern basis.
10.2 Contingent Liabilities not provided for :
10.2.1 Bank Guarantees and Letter of Credit Outstanding Rs. 822.99 Lacs
(Previous year Rs. 822.99 Lacs).
10.2.2 Claims and Liabilities against the company not acknowledged as
debts Rs. 220.21 Lacs excluding interest, penalty etc. which is not
ascertainable. (Previous year Rs. 216.91 Lacs)
10.2.3 Excise Duty demand disputed by the company Rs. 742.94 Lacs
(Previous Year Rs. 591.67 Lacs).
10.2.4 Fuel Surcharge, Octroi Duty etc. disputed by the company Rs.
4.20 Lacs (Previous Year Rs. 4.20 Lacs)
10.2.5 Disputed demand of Sales Tax Rs. 313.36 Lacs (Previous year Rs.
10.3 a) Balances of Debtors, Creditors, Advances, etc. have been taken
as per books of account and are subject to reconciliation/
confirmation and consequential adjustments thereof.
b) Balances of Secured and Unsecured lenders have
been taken as per books of accounts and are subject to reconciliation/
confirmation, pending settlement with respective lenders. Adjustment of
the same, if any, would be accounted for as and when ascertained.
10.4 In the opinion of the Board of Directors; Current Assets, Loans
and Advances (including capital advances) have a value on realization
in the ordinary course of business at least equal to the amount at
which they are stated. Adequate provisions have been made in accounts
for all the known liabilities.
10.5 Penal interest, compound interest and liquidated damages on dues
of Financial Institutions, Banks and others wherever applicable have
not been provided, pending reconciliation (amount not ascertained). The
company expects waiver/relief on sanction of rehabilitation scheme by
10.6 Provision for interest amounting to Rs. 204.79 Lacs (including for
the year Rs. 55.75 Lacs) on public fixed deposits and Rs. 523.13 Lacs
(Including for the year Rs. 80.28 Lacs) on retail non convertible
debentures have not been made since 1st October, 2002 as the company
expects waiver/relief on sanction of rehabilitation scheme by BIFR.
11.. The Hon''ble Company Law Board had passed an order on 23/01/2002
that The repayment of Fixed Deposit shall be made by the company in
accordance with the revival scheme as and when approved by the BIFR
under the provision of SICA. In view of above, the company has been
advised that as the repayment of the matured fixed deposits are covered
by the above referred order and the DRS is pending for consideration
before the Hon''ble BIFR, the same are not remained unclaimed and unpaid
within the meaning of section 205 C of the Companies Act, 1956 and as
such no amounts are required to be transferred to the Investor
Education and Protection Fund. However payments on compassionate ground
are being made continuously by the company as per the decision of die
committee formed by the Hon''ble CLB for this purpose.