Terms/ rights attached to equity shares
Each holder of equity shares is entitled to one vote per share. In the
event of liquidation of the company, the holders of equity shares will
be entitled to receive remaining assets of the company, after
distribution of all preferential amount. The distribution will be in
proportion of the number of equity shares held by the shareholders.
There is no restriction on distribution of dividend. However, same is
subject to the approval of the shareholders in the Annual General
Terms/ rights attached to preference shares
The Company has alloted 14% Redeemable Cumulative Preference Shares
having a value of Rs. 100 per shares. The Preference Shareholders enjoy
a preferential right in the payment of dividend at a fixed rate of 14%
p.a. and repayment of capital in case of winding up. Such shareholders
are not entitled for any voting right except in case of nonpayment of
dividend for continuous period of 3 years. CCPS shall rank senior to
all present and future preference shares and /or equity shares issued
by the Company and their rights, references and restrictions are
governed by / in terms of their issue under the provisions of the
Companies Act, 1956.
14% Redeemable Cumulative Preference Shares were due for redemption
during 24.01.1999 to 24.01.2002. However, during previous period
company has applied with General Insurance Corporation of India and its
subsidiaries for one time settlement of principal amount to be repaid
with in three months from the date of sanction and waiver of
outstanding dividend as on date for which decision is awaiting. As on
31.03.2012 Rs. 44,62,500 (previous period Rs. 41,12,500) were the
arrears of divided @ 14% on above preference shares.
NOTES ON THE ACCOUNTS 31.03.3011 31.03.3012
1) Contingent Liabilities not provided for
in respect of: (other than
as disclosed in notes
no 2, 10 & 14 below)
a) Demand from Central Excise, sales Tax etc.
disputed by the Company** 95017523 95017523
**Amount deposited Rs.3141733
(previous year Rs 3141733)
b) Interest on delayed payments to suppliers
not provided in accounts** NIL Nil
**As on date the extent of uncertainties
involved, cannot be determined, hence not
2)(a)In earlier years, the company has given corporate gurantees to
banks and financial institutions on behalf of such bodies corporate &
others on account of credit facilities provided by such banks and
financial institutions to them and to Government Departments against
their disputed demands, Based on the informations submitted by the such
bodies corporate & others, following amounts were overdue as on 31 st
March 2012 Due to financial constraints all parties have suspended
their operations. As on 31st March 2012 corporate gaurantees given by
the company have not been invoked by the lenders & the Government
Departments. Therefore the company continue to consider obligations
under these gurantees as contingent liability and not provided for the
same. However the company holds counter gurantees from the Chairman and
Managing Director to reimburse the outgo, if any, on these accounts.
b) In earlier years the company has given a corporate guarantee to a
financial institution for buy back of share of a body corporate at
agreed rate within agreed time frame. The agreed time has been expired
and said financial institution has not invoked the guarantee till date.
As on 31.03.2012 the company has considered the estimated liability of
Rs 16,28,07,234 (previous year Rs13,79,72,232) on this account as
contingent liability. However the company holds the counter guarantee
by the Chairman & Managing Director to reimburse the outgo, if any, on
c) Above guarantees are in excess of Rs 52,63,05,201 ( previous year Rs
52,63,05,201 )of the approved limit by the shareholders.Increase in
dues of M/s Polar Pharma India Limited to bank and financial
institutions from initial Rs 19.60,00,000 to Rs 96,86,96,025 arised due
to non compliance of terms of OTS by PPIL resulting thereby increase in
their loan laibiliities and consquent impact on the corporate guarantee
furnished by the company.
d) The Company has given Corporate guarantee for Rs 9,00,00,000 to a
Co-Operative Bank on behalf of Polaron Marketing Limited for credit
facility for which approval of shareholders has been taken.
3. Debentures, Rupee Term Loans, Funded Interest Term Loans (including
the loans acquired by ARCIL and NBFC) are secured/to be secured by
first pari passu charge on all fixed assets and second charge on the
current assets of the company. Working capital loans acquired by ARCIL
are secured / to be secured by first charge on the current assets and
second charge on the fixed assets. ARCIL''s loan will be further secured
by pledge of equity shares of the company by the promoters to bring
ARCIL voting rights to a level of 51% post restructuring, including the
including the shares allotted to ARCIL. Term Loans are also Guaranteed
by Chairman & Managing Director and one of the Directors of the
company. Also these are further secured by shares pledged by third
parties as Collateral Security.
4.a) In earlier years Asset Reconstruction Company (India) Ltd and a
NBFC have restructure secured debts under CDR Mechanism aggregating to
Rs. 32.00,00,000 at Rs. 62,07.43,000 to be repaid by issue of 3074300
Nos equity at par for Rs. 30743000 and the balance debts of Rs.
59,00,00,000 to be repaid over a period of 5 years without any interest
ARCIL & NBFC had acquired the debts including debenture on the basis of
individual sanction from all but one lender.
b) As per the sanction of ARCIL & NBFC restructuring would become
effective affter compliance of certain conditions as mentioned in the
sanction letter of ARCIL dated 31.03.2008
c) In the earlier years the company has issued 3074300 equity shares of
Rs. 10 each at par aggregating Rs. 3,07,43,000.
d) ARCIL has issued a notice dated 05.05.2009 u/s 13(2) of the
Securitisation and Reconstruction of Financial Assets and Enforcement
of Security Interest Act 2002 (SARFASI) for recalling of the its loan
and interest thereon & others charges aggregating Rs. 92,17,81,197.
e) Thereafter ARCIL has taken the possession of residential property
located at Maharani Bagh New Delhi having book value Rs. 3,86,14,213
(WDV Rs. 2,78,83,502) & disposed off the same at undisclosed amount
Despite repeated request by the company ARCIL has not provided about
the details of the amount realised on sale of property. Pending receipt
of information from ARCIL the Company has considered minimum reserve
price of Rs. 27,50,00,000 for the purpose of provisional adjustment in
insured loan due as on 31.03.2012 and Fixed Assets of apearing the
books of accouts. Final adjustment will be carried out on receipt of
detail information from ARCIL.
f) ARCIL has further issued noticed dated 26.11.2009 under section
13(2) of the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act 2002 (SARFASI) for demanding
payment of Rs. 73,84,91,390 together with further interest and other
amount at document rate from 27.11.2009 till repayment.
g) Subsequently ARCIL has taken the possession of one of the property
located at Noida having book value or Rs. 1,56,47,141 (WDV Rs.
41,34,662) which was already seized by the UP Sale Tax Department. The
Company has disputed such position by ARCIL. Pending settlement, on
accounting adjustment has been carried out.
5) The Stock of Finished goods Rs 86,40,825 under the custom bonded
Godown is relating to one business segment,the operation of which has
been suspended, The stock has been valued at lower of Cost or Net
Relisable Value. In the opinion of the management these stocks are
expected to realise the value at which they have been stated, The
company has not provided interest, demurrange charges etc on above
material lying in custom bonded warehouse. Amount not ascertained
6) The net worth of the company became negative due to continuous loss
incurred by the company and provisions made for doubtful recovery.ln
view of restructuring/acquisition of loans by ARCIL and its likely
impact on the networth, the company is hopeful of recovery, hence
account has been prepared on Going Concern basis.
7) The Management is taking necessary step to recover advances/due
aggregating Rs 2,23,09,160 ( Previous year 2,14,74,831) from various
parties and ex- employees, Pending recovery same have been considered
8) Loans, Advances, Sundry Debtors,and Creditors are subject to
reconciliation & confirmations . Adjustment, if any, will be carried
out on completion of reconcilations & confirmations. The Management do
not expect any material adjustment on this account.
9) As a measure of prudence, the company has decided not to recognise
any deferred tax assets due to substantial unabsorbed depreciation and
brought forward losses under the Income Tax Act.
10) In the opinion of the management value of Current Assets and other
loans and advances, considered good, will be realised at not less than
their stated value in the ordinary course of business.
11) The Company had executed agreement, jointly with other promoters of
Polar Marmo Agglomerates Ltd (PMAL) to buyback 1,85,000 EquityShares of
PMAL, subscribed, by Rajasthan State Industrial & Investment
Corporation Limited (RIICO). RIICO has initiated legal action in the
Hon''ble High Court at Kolkata for the enforcement of buyback clause.
Against the decision of single bench judgement, company has gone into
appeal before the full bench of High Court, Kolkata. In terms of the
Hon''ble High Courts order, the Company has advanced/deposited a sum of
Rs. 5,00,000 to a third party who is acting as a custodian.The company
has also pledged 5,000 equity shares of PMAL with RIICO as per the Buy
back agreement. Shares of PMAL has been written off in the books of
12) Based on the insurance claim filed by the owner of Custom
warehouse, the Company has accounted for insurance claim of Rs
6,76,27,254 in the earlier year. The insurance company has declined the
claim against which the Company has filed the petition in the National
Consumer Forum Delhi, pending decision of the Forum the company has
considered above claim as good for recovery. Further custom duty Rs.
1,58,10,965 on above stock remains unprovided and unpaid as the company
has applied for the remission of the same.
13) The Company has Mortgaged Land & Building at value of Rs
2,47.26,244/- (WDV Rs 2,31,04,394) SIDCUL Haridwar with one of the
secured lender of Polaron Marketing Limited.
14) a) In earlier years the sales tax authorities had disallowed
certain transactions of the sale by a Branch and raised
demand of Rs. 1,48,56,050 The company has filed a writ petition against
the order in the Hon''ble High Court of Rajasthan. The Hon''ble High
Court had remanded back to the assessing authority for fresh hearing,
but the Sales Tax Department had filed revision petition before the
Hon''ble High Court against the remand order The management is of the
opinion that there would not be any liability in this case and
therefore, no provision is made in the books of accounts.
b) In one of the unit, the company has disputed the basis of
determination of the assessable value for payment of excise duty on
post manufacturing expenses for the period from 01.04.1981 to
30.09.1984 and preferred an appeal with the Appellate Authorities. The
said appeal has yet to be disposed off and in the absence of the
decision of Appellate Authorities, it is difficult to ascertain the
Excise Duty liability, if any.
c) In two unit of the company demand arising from the order of the
Central Excise Authorities passed on 02.05.2002 in pursuance of show
cause notice recived in the year 1999-2000 was set aside in appeal by
CEGAT with direction to recompute the duty demand for the period within
the permissible time limit U/s 11A of the Act. Pending receipt of the
final order recomputing such demand from the Central Excise
Authorities, an amount Rs. 1,33,652 was provided in earlier year and
d) The Central Excise Department has rasied demand and penalty of Rs
8,52,792 on the unit as per objection raised by CERA against which
company has already filed an appeal to Commisioner on 25.05.2009. Based
on legal opinion management was of the opinion that there will not be
any liability against this demand. Order of the Excise Commis ; sioner
Dt. 15.02.2010 received by company whereby the stay and waiver of
predeposit was rejected. The Company has filed a Misc. Application on
26.02.2010 for waiver stating financial constraint and BIFR status of
e) The Central Excise Department has raised demand and penalty of Rs
74,73,404 for the period 01.10.2001 to 09.02.2005 against which the
company has filed an appeal with CESTAT The unit has paid Rs. 10,01,000
against the said demand which has been disclosed under Loan & Advance.
f) In the previous year the Commercial Tax Department UP has raised the
demand of Rs7,32,86,106 for the period 2006- 07 to 2007-08 against
which the Company has filed an appeal disputing demand.
15) No forward contracts/ hedging instruments are outstanding at the
Balance Sheet date. As on the Balance Sheet date amount payable for
unhedged foreign currency exposures was Rs.25,56,31,102 (previous year
16) In Earlier year the Company has applied to the Central Govermment
for approval of Rs 12,07,480 paid to the Ex- executive director
(finance and corporate affairs). In the previous year the Company has
received approval of Rs 7,95,346. The Company intend to apply to the
Central Govermment for waiver of Rs 4,12,134. Pending approval no
adjustment has been made in the books of accunts.
17) Company has not provided penalties on various outstanding statutory
dues except interest on Sale tax / VAT, Amount not ascertained.
18) Being not material, the Company has provided Rs NIL for the year (
previous year 68,417) liabilities under Define benfit (Gratuity) on
Actual basis instead of acturial valuation basis. In the current year
Company has not provided gratutiy provision as per AS -15.
19) The segment reporting of the Company has been prepared in
accordance with Accounting Standard (AS-17), Account- ing for Segment
Reporting notified under Accounting Standard Rules 2006.
20(a) List of Related Parties (To the extend identified by the Company)
Enterprises owned or significantly influenced by key Management
Personnel & their relatives
1. Sheffield Appliances Ltd
2. Polar Pharma India Ltd
3. S.A.Engineering Works
4. Vinsa Electricals (P) Limited
6. Polaron Marketing Limited
7. Koyo Tech Electro Pvt Limited
8. Vishva Electotech Limited
9 Human Sales Pvt. Ltd.
(b) Co-promoters & Associates
1. Polar Marmo Agglomerates Ltd
2. Heynen India Ltd
(c) Key Management Personnel
Mr. Anil Kumar Agarwal Chairman & Managing Director
Mr.Sunil Agarwal Director
(d) Relatives of Key Management Personnel
Mrs. Savitri Devi Agarwal Mother of Mr.Anil Kumar
Agarwal Agarwal and Mr.Sunil
Mrs. Shailja Agarwal Wife of Mr.Anil Kumar Agarwal
Mrs. Vinita Agarwal Wife of Mr.Sunil Agarwal
Mr. Viraj Agarwal Son of Mr.Anil Kumar Agarwal
Mr. Achintya Agarwal Son of Mr.Sunil Agarwal
Ms. Mansi Agarwal Daughter of Mr.Sunil Agarwal
21) Previous year figures have been re