1. Contingent Liabilities:
DLF Universal Limited (Formerly known as DLF Industries Limited) (here
in referred to as DLF) had filed a claim of Rs. 500 Lacs and the matter
has been under Arbitration. During 2006-07, the Company had entered
into a Memorandum of Understanding with the DLF in the terms of which
DLF has agreed to sale/ transfer the machineries to the Company and/or
its nominees which are in its possession or to be dispatched by the
foreign supplier. The Company has agreed to make payment of Rs. 250
Lacs exclusive of Sales Tax, Freight and Insurance to be borne by. the
Company for the machineries, which are in possession of DLF. The
Company has also agreed to open confirmed Letter of Credit in favor of
KONCAR for shipment of the remaining machineries. The Company has made
the payment of Rs.50 Lacs to DLF.
DLF has filed Statement of Claim before the Arbitral Forum inter alia
for breach of terms of Memorandum of Understanding on the part of the
Company. The Company has made a counter claim for financial losses,
damages, costs and claims against DLF for non-fulfillment of
contractual obligations. The matter is pending for hearing.
2. Disputed liabilities not provided for:
2.1. ESIC Kerala had made a demand of Rs.9.21 Lacs during 2009-2010 and
the same has been stayed by Hon''ble High Court. This has been charged
to revenue after adjusting the provision of Rs.2.4 Lacs available in
2.2. Disputed power charges to KSEB and arrears:
After a prolonged discussions and requests with various Authorities,
the long pending KSEB arrears was crystallized and the Company has paid
Rupees Ten Crores during the year against final settlement. However,
thereafter, the Board unilaterally demanded Rs.4,75,58,345/- as further
dues, which the Company has challenged before the Hon''ble High Court
of Kerala. The Court stayed the same and directed the Government to
re-examine and consider the Company''s representation for waiver of the
MD charges for the period when the Company was closed and no
electricity was consumed. The Company is hopeful of a favorable
decision and hence this liability is not provided in Books of Account.
2.3. Central excise Refund
As per the order of the Asst. Commissioner of Central Excise, Kottayam
Division, Kottayam dated 23.12.1998 holding that Calcium Carbide
manufactured and used captive consumption in the manufacture of
acetylene black within the factory is not liable for levy of excise
duty, the company is entitled to a refund of excise duty of
Rs.82,89,691/- in respect of the period from April 1978to July, 1983.
This was confirmed by the Hon''ble CEGAT, New Delhi as per the order
No.A/1076/02 NB (D) dated 24.10.2002. Based on the above order the
company filed a refund claim for Rs.82,86,691/- before the Deputy
Commissioner of Central Excise, Kottayam Division on 30.01.2003.
However the Deputy Commissioner allowed only Rs.37,99,198/- as refund
and the same was recognized as income in the Profit & Loss account in
the year 2002-2003. The claim for the balance amount of Rs.44,86,993/-
was rejected by the Excise authorities for want of proof for payment of
- Against this order the company had filed an appeal before the
Commissioner of Central Excise and Customs (Appeals) Cochin on
22-10-2003 and the appeal was disposed of in favour of the Company.
The Department has gone in Appeal. In view of the above, the claim for
the refund of the balance amount of Rs. 44,86,993/- has not been
recognized in the accounts. Company has also filed appeal before CEGAT,
New Delhi for release of balance amount, which is pending for disposal.
3. Contingent Liabilities:
During the year the Company has made payment of statutory dues,
retrenchment compensation etc. amounting to Rs.473.41 Lakhs in
aggregate to the remaining 261 employees of the Company who have
submitted their resignation pursuant to a settlement agreement signed
between the Company and the Trade Unions in the presence of Labour
Commissioner, Trivandrum. Consequent upon this, the entire labour
issues / industrial disputes stand settled once for all.
4. Due to Small Scale Industrial undertakings. -
On verification of invoices issued by the suppliers of the company
there is no Small Scale industry as defined under the Interest on
Delayed Payments of Small Scale and Ancillary Industrial Undertaking
Ad, 1933 and section 3(i) of the Industrial (Development and
Regulation) Act, 1951, having total amount outstanding exceeding Rs.
1,00,000 to each unit.
5 Loans and Advances include amount of Rs.31,40,000/- (Rs. Nil) dues to
6. Fixed Assets.
During the financial year, the entire Plants and Machineries,
equipments and other old movables at Chingavanam (Dist - Kottayam) were
7. Current Assets
7.1. As the Company has been under Lock -out since July 1999, dues
under the heads Sundry Debtors, Loans and Advances and Current
Liabilities including Sundry Creditors are subject to confirmation.
7.2. Sundry Debtors include an amount of Rs.1,35,31,446/-
(Rs.1,35,31,446/-) due for a period exceeding three years against which
full Provision of Rs.1,35,31,446/- has been made towards Doubtful
Debts. The Company has filed suits before different judicial
authorities against certain debtors for recovery of dues amounting to
Against some of these suits decrees were awarded in favour of the
Company for an amount of Rs.23,11,610/- (Rs.23,11,610/-), which are in
process of execution.
7.3. Advance against purchases include an amount of Rs.8,36,990/-
(Rs.836990/-) due for a period exceeding three years for which
provision for doubtful advance has been made.
Fundamental accounting assumption regarding Going Concern.
8. As pending issues inter-alia resumption of power supply, grant of
Financial Assistance and other incentives from State Government and
other concerned Authorities remain unresolved, the chances of early
resumption of manufacturing activities of viable plants receded. The
Company has disposed off its Factory buildings, Plant and machineries
etc., at Chingavanam during the year. The above conditions indicate the
existence of a material uncertainty that may cast significant doubt
about the Company''s ability to continue as a going concern.
9. Capital Commitments
Estimated amount of contracts remaining to be executed on capital
accounts Rs.86,64,839/- (Rs. 86,64,839/-).
10. The Companies in which the Directors are associated have filed the
Annual Returns and did not make any default in the repayment of
deposits if any fallen out. On the basis of representations received
from the Directors, none of the Directors attract disqualifications
under section 274(1 )(g) of the Companies Act, 1956.
11. The Company had no full time Company Secretary as required u/s
383Aof the Companies Act, 1956 during the year under report due to
layoff / lock out.
12.1. Basic earnings per Equity Share and Diluted earnings per Equity
Share have been computed by dividing net profit by the weighted average
number of equity shares outstanding for the year.
12.2. Calculation of basic Earnings per share
12.3. The Sundry Debtors, Sundry Creditors and Loans and Advances are
subject to confirmation, reconciliation, and adjustments. The
Management is of the opinion that such reconciliation or adjustments if
any will not materially affect the accounts.
12.4. Traveling Expenses include foreign travel expenses of Directors,
which are incurred for purposes other than business.
12.5. In view of the accumulated losses, the Management has not
provided deferred tax assets as well as deferred tax liabilities. Hence
the disclosure in respect of accounting of taxes on income as required
under Accounting Standard 22 issued by ICAI is not done.
12.6. Figures are given in thousands unless otherwise stated
12.7. Figures for the previous year have been regrouped / rearranged
wherever necessary and are given in bracket unless otherwise specified.
12.8. The Financial statements for the year ended 31.03.2011 had been
prepared as per the then applicable pre-revised Schedule VI of the
Companies Act, 1956. Consequent to the notification of Revised Schedule
VI under the Companies Act, 1956, the Financial Statements for the year
ended 31.03.2012 are prepared as per revised Schedule VI. Accordingly,
the previous year figures have also been re-classified to conform to
this year''s classification. The adoption of Revised Schedule VI for
previous year figures does not impact recognition and measurement
principles followed for preparation of financial statements.