| SHARE CAPITAL
12,00,000 Equity shares of Rs. 10 each were allotted as fully paid up
Bonus shares by capitalisation of Reserves.
OTHER NOTES
31.3.2001 31.3.2000
Rs. Rs.
1. Contingent Liabilities
(i) Estimated amount of contracts remaining
to be executed on Capital account not
provided for 1,66,13,187 1.66,13,187
(ii) Letter of Credit opened and remained
unpaid 6,75,85,272 6.75,85,272
(iii) Amount of Lease Rentals payable for
next one year NIL 3,56,370
2. Depreciation has been calculated on the rate specified in Schedule
XIV of the said act as amended by the Circular No. 14 dt. 16.12.1993 by
the Department of Company affairs on straight line method on all
assets.
a) Written down value method on all assets upto 31/3/90. Straight line
method on all assets from 1/4/90 and onward.
b) For Machinery and Electrical Machinery depreciation has been
provided at the rate applicable to continuous process plant as per
Schedule XIV of the Companies Act, 1956.
c) In respect of all assets purchased during the year, depreciation has
been provided on the above rates on Prorata basis from the date of
purchase.
d) In respect of all asset sales during the year depreciation has not
been provided at the above rates on Prorata basis upto the date of
sale.
3. Income tax assessment for the Assessment years 1998-99 and 1999-2000
are pending. There is a demand of Rs. 2,79,917/- for the Assessment
year 1995-96. The Company has not accepted the demand and gone for
appeal against the order and hence no provision is made in the
accounts.
4. The allotment money of Rs. 5,07,000/- due on the equity shares held
in Industrial Development Bank of India remains unpaid as on 31st
March. 2001.
5. Amount of Sales tax collected on sale of Rs. 25,147/- and Excise
duty of Rs. 71.137/- payable/Paid has not been included in the turnover
of the Company.
6. a) Based on information available with the Company regarding the
status of suppliers defined under the interest on delayed payments to
small scale ancillary industrial undertaking act 1993. there were no
amounts over due and remaining unpaid to small scale and or ancillary
industrial suppliers on account of principle and interest as at the
close of the year is nil.
b) Amount due to small scale industrial units more than 30 days and
exceeding Rs. 1,00,000/- is NIL.
7. In the opinion of Directors, Current Assets, Loans and Advances have
the value at which they are stated in the Balance Sheet if realised in
the ordinary course of business.
8. Balances of Financial Institutions. Sundry Debtors, loans and
advances and Sundry Creditors are subject to
Confirmation/Reconciliation. Confirmation letters are being sent to all
of them and the same will be reconciled and due provision for Bad and
Doubtful debts and Advances, if any, will be made as soon as the same
have been received.
9. No provision has been made in the accounts on the penal interest,
compound interest and the charges if any in respect of loan from
financial institution as the Company has requested for waiver of
interest on the funded interest and amount not ascertained. The
deviation in respect of non provision is not ascertainable and non
quantifiable.
10. Due to loss the Managing Director waived his remuneration for the
year ended 31.3.2001.
11. During the year 3,300 equity shares of 10/- each has been sold at
par as per Board Resolution and the same has not been accounted. There
is a dispute in the selling price which has been stated to be at Rs.
91,410/- as per statement filed in the court by the finance Company.
The difference of Rs. 2,38,590/- if necessary will be accounted when
the dispute is settled.
12. During the year "Cholamandalam Investment and Finance Company
Limited" had appropriated the personal house property of the Chairman
who has given personal Guarantee for the H. P & lease loan taken by the
Company. There is a dispute in value and transfer of the above
property. Hence no entry has been passed in the books.
13. Sitting fees waived by the Directors.
14. No provision was made for doubtful debts and advances amounting to
Rs. 2,78,06,916/- and Rs. 60,92,721/- respectively on account of losses
incurred by the Company.
15. The Company has adopted Group Gratuity Scheme of LIC. Premium of
Rs. 5,00,778/- for 31.3.2000 and Rs. 4,60,979/- for 31.3.2001 being
annual contribution have not been provided in the accounts, payments
could not be made due to financial difficulty.
16. No provision has been made on minimum bonus for the year ended
31.3.2000 amounting to Rs. 14,96,027/- and for the year ended 31.3.2001
amounting to Rs. 19,29,793/- on account of losses incurred by the
company.
17. Interest on Hire Purchase loans for the year ended 31.3.2000
amounting to Rs. 34,06,646/- and for the year ended 31.3.2001 amounting
to Rs. 3,91,732/- has not been provided in the books in respect of
Machinery hire purchase on account of losses incurred by the Company.
18. Interest for the year ended 31.3.2000 amounting to Rs.
2,62,87,931/- and for the year ended 31.3.2001 amounting to Rs.
2,95,99,267/- on term loans and secured loans from financial
institutions and bank has not been provided in the books on account of
losses incurred by the Company.
19. Interest for the year ended 31.3.2000 amounting to Rs. 77,35,147/-
and for the year ended 31.3.2001 amounting to Rs. 77,86,962/- on
unsecured loans from Companies, Directors loans, Trade deposit and
Fixed Deposit has not been provided in the books on account of losses
incurred by the Company.
20. Carrying charges and interest for the year ended 31:3.2000
amounting to Rs. 75,96,348/- claimed by cotton parties for the supply
of cotton has not been provided in the accounts as the same is disputed
by the Company.
The effect of the deviation for the year ended 31.3.2001 is that the
loss for the year as disclosed in the Profit and Loss account is less
by Rs. 7,36,76,638/- and the assets as disclosed in the balance sheet
is lower to the same extent.
21. The company has entered into an agreement into parties for the sale
of machinery and Motor Vehicles belong to be company for Rs.
42,97,615/- and Rs. 4,60,000/- respectively prior to the filing of the
petition with the BIFR and the respective charge holders and hence not
obtained the prior approval.
22. A sum of Rs 51,13,846/- has been incurred towards Public issue
expenses. This is proposed to be absorbed over a period of 5 years
during which the benefit is expected to accured to me company.
Accordingly. 1/5th amount (including prior year) of Rs. 40,91,076/- has
been charged to the Profit and Loss Account and the amount of Rs.
10,22,770/- is being carried forward under the deterred revenue
expenditure.
23. The Company continues to value its process stock at cost. However,
the basis of accounting cost has been modified during the year in
accordance with the Mandatory Accounting Standard AS2 (Valuation of
inventories - revised), thereby contain elements of costs including
depreciation on productive assets has been considered. Due to this
change the process stock is lower by Rs. 12,83,720/- with the similar
impact on the loss of the Company.
24. Due to the Textile crisis the Company has been adversely affected.
The Company has become sick as per the provisions of Section 3(1)(O)
of the "Sick Industrial Companies (Special Provisions) Act, 1985" and
the reference before the BIFR was not considered by the Bench. The
Company is taking steps to go on appeal. The accounts has been prepared
as a going concern only.
25. The Company has not paid for the year ended 31.3.99 to 31.3.2001 on
amount of Rs. 1,20,62,618/- and Rs. 34,10,467/- respectively towards
contribution due to Provident Fund and Employees State Insurance
Corporation because of its liquidity crunch.
26. The following expenditure charged under Profit & Loss Account below
the line Interest receivable reversed for prior year - Rs.
1,69,87,385/-.
27. Amounts recovered from workers wages amounting to Rs. 56,24,535/-
which has turned out to be wrongly recovered, has been kept under the
head "Workers Collection Account".
28. There is no closing Stock of finished goods for the year ended
31.3.2001. Revised accounting Standard 2 valuation of inventories does
not applicable to the company.
29. Figures have been rounded off to the nearest rupee and previous
year figures are regrouped and reclassified wherever necessary.
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