| 1 In view of Losses, the Company has not created the Debenture
Redemption Reserve.
2 No provision for Income Tax is considered necessary in the absence of
taxable profit for the current year.
3 In the opinion of the Board of Directors, the Current Assets of the
Company have a value equivalent to the amount as shown in the Balance
Sheet of the Company and provision has been made for all the known
liabilities of the Company.
4 In view of the Accounting Standard - 2 on Valuation of-Inventories
issued by The Institute of Chartered Accountants of India, the Company
has changed its method of valuation of Raw Materials and
Work-in-progress to cost or net realizable whichever is lower as
against at cost. Had the Company countinued with the earlier method of
valuation, the loss for the year would have been lower by Rs.206.74
Lac.
5 An appeal has been preferred against the Sales Tax dues amounting to
Rs.76.31 Lac. Provision, if any, would be made in the year in which the
appeal is decided.
6 Debit and Credit balances outstanding in the Balance Sheet as on
30.09.2000 are subject to reconciliation/ confirmation from the
respective parties. The impact of the reconciliation of the same, if
any, will be accounted for as and when ascertained.
7 Loans and Advances include amount of Rs.493.76 Lac (previous period
Rs. 493.24 Lac) due from Electrex Robin Industries Limited, a Company
in which Directors are interested. The maximum outstanding during the
year ended 30.09.2000 with the Company was Rs.493.76 Lac (Previous year
Rs.493.24 Lac). This amount mainly represents investment in Electrex
Robin Industries Limited as a part of the Joint Venture with Fuji Heavy
Industries Limited.
8 Due to dishonour of certain cheques issued by the Company for want of
funds as well as for non-payment of its dues to creditors, Company and
its Directors are facing proceedings under section 138 of the
Negotiable Instruments Act, 1881 and Section 433 of the Companies Act,
1956. Court cases under Section 433 of the Companies Act, 1956 are
stayed in view of the Companys registration with the BIFR. The outcome
of the above cases and the resultant liability, if any, at present is
not ascertainable.
9 In many cases, in the absence of availability of loan / lease / hire
purchase documents, etc, the Company has provided finance charges
(including interest, lease rental, discounting charges, etc.) on the
amounts borrowed from NBFCs / private parties on an adhoc basis, based
on the managements perception. The impact of the above on the accounts
is not ascertainable at present.
10 The net worth of the Company has been fully eroded as on 30.09.2000.
However, the Company is confident to meet its liabilites over a time
bound manner despite the winding up and other litigation cases pending
in the various squrts and accordingly the accounts of the Company have
been prepared on going concern basis.
11 There are various legal suits filed by the lenders / parties against
the Company. Many of the suits have been withdrawn by the lenders in
view of the settlement terms arrived with them. Further, in many of the
cases.the negotiation is in process with these parties for
One-Time-Settlement (OTS) / Reschedulement of their total outstanding
and for withdrawing the suits in the various criminal and civil courts.
The outcome of these cases in not determinable at present and
accordingly, any additional liability or gain that may rise in this
respect on final settlement is currently unascertainable and has
accordingly not been accounted for.
12 Till date, Preference shareholders to the extent of Rs. 1100 Lac
have exercised their put option, which has remained unpaid due to
liquidity crunch.
13 The Company has defaulted in repayment of the principal and interest
of fixed deposit amount in view of the liquidity cruch being faced by
the Company. As per clause (g) of sub-section (1) of Section 274 of the
Companies Act, 1956, the Directors of the Company are disqualified from
being appointed as Directors if the Company is under default. We are
however advised that the provisions of Sec. 274 (1) (g) will have
application after one year from the date of commencement of the
Companies (Amendment) Act, 2000. Accordingly the Directors are eligible
for re-appointment at the ensuing Annua! Genera! Meeting.
14 Figures of the current year are for a period of twelve months, while
those of the previous period are for eighteen months, and hence not
comparable. Previous years figures have been regrouped and rearranged
wherever necessary to correspond to current years figures.
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