(a) There have been delays in filing of returns and documents with
Regulatory Authorities and in some instances documents fled/ required
to be fled are not traceable with the Company. The liability, if any,
in this regard is not ascertainable.
(b) Matter in regard to dishonor of cherubs issued by the Company
during the financial period is pending. The liability, if any, in this
regard is not ascertainable.
(c) As regards cultivation & maintenance of Jatropha plantation by the
Company, one of the conditions in FIPB approval has put restrictions on
such activity. The liability if any is not ascertainable. The Company
has undertaken such activity in financial year 2008-09 and as stated by
the management the company has not extended it further and only
maintain the same.
(d) In respect of remuneration of Rs. 96 lacs paid in financial year
2010-11(fifteen months ended as on 30.06.11) which was in excess of
ceiling prescribed under schedule XIII of the companies Act, 1956. The
Company has not yet obtained approval of the central government, the
liability if any is not ascertainable.
Note:
1 Amounts aggregating Rs. 213 Lacs and Rs. 212 Lacs are deposited as
appeal advance as on March 31, 2015 and March 31, 2014 respectively
against Excise & Custom matters and Sales tax matters.
2 Payment of redemption premium @ 64% of preference share (face value
of Rs. 10/- each)is subject to the condition to that the same is being
paid out from the cash balance is available with Company in excess of
Rs. 7500 Lacs.
Note 1 : Search Operation
Search Operation was conducted by Income Tax Department on Company and
promoters on March11, 2010 and various documents and materials were
seized by the Department during the search proceedings. The Company in
order to have early resolution of matter preferred application before
The Hon'ble Settlement Commission in previous year. The Hon'ble
Settlement Commission, Mumbai Bench vide its order dated 24th June,
2013 has settled all the cases of the Company from FY 2003-04 to FY
2010-11. However Income tax department filled an appeal before hon'ble
Bench of High court at Gwalior. The matter is still pending for
consideration.
Note 2 : Corporate Debt Restructuring:
a) The restructuring package was approved by CDR empowered group on
20th December, 2011. The Master Restructuring Agreement has also been
signed with the lenders participating in the CDR package ('CDR
Lenders') on 14th March, 2012.
b) However the Company has not been able to service its repayment
obligations as sanctioned under CDR scheme and have been made delays
and defaults in repayment obligations. Such delays and defaults have
consequential impact on the financial statements in terms of approved
CDR Scheme and the CDR Scheme has been called off by the CDR Empowered
Group in a meeting held in July 2013.
c) Subsequent to above, the Group of Lenders have issued Demand notice
U/s 13(2) of the Securitization and Reconstruction of Financial Assets
and Enforcement of security Interest Act, 2002 for calling of the
entire loan amount including interest due thereon for Wind Energy
Business and Edible Oil Business dated 26th Dec 2013 & 4th March 2014
respectively. By virtue of above notices, the Company has to repay the
entire outstanding loan amount to the lenders within 60 days from the
date of notice. However it could not be done.
d) Lenders have sold of 82 windmills of 67.2 MW out of total 92
windmills of 78 MW to different buyers between the periods from January
2015 to March 2015 through a separate bidding process for Rs 176.84 Cr.
The sales proceed shall be utilized for repayment of outstanding loan
liability of windmill division as the fund lying with bankers.
Note 3: Interest on Borrowing and Finance Charges
The Company had been served demand notice under section 13(2) of the
Securitization and Reconstruction of Financial Assets and Enforcement
of Security Interest Act (SERFAESI), 2002 on dated 26th Dec, 2013 for
Wind Energy Business and dated 4th March, 2014 for Edible Oil Business
respectively for payment of outstanding principal amount including
interest etc. Total outstanding loan up to date of serving of SERFAESI
Notice was Rs.3535.14 Cr as against Rs. 2886.10 Cr appearing in books
of accounts. Due to Pending details such as overdue interest,
penalties, damages, cost etc. as considered by lenders in SARFAESI
notices, the Company is not able to quantify the Shortfall in interest
and financial charges to be provided in books of accounts. Further the
Company has not provided any interest liability for the current period
due to non charging of interest by majority of banks and non
availability of their statements of accounts.
Note 4: Agricultural Activity
During the Financial Year 2008-2009, Government of Madhya Pradesh has
allotted a land admeasuring 2,000 hectares to the Company on a license
basis for no consideration, for carrying out the agricultural activity
for a period of two years; consequently this has not been recognized as
a grant.
Note 5: Variance in Cost and Sales Margin
Though the quantity of production has changed as compared with those
for the earlier periods, the change in relevant expenses is not in the
same proportion. This was mainly on account of plant efficiency and
cost control measures. Further, there have been fluctuations in average
realization of sales price during this period. This was on account of
market conditions and quality of goods.
Note 6: Inventory Verification
The management of the Company confirms that they have carried out
physical verification of inventory at the end of the year. However the
statutory auditors could not carryout or associate for physical
verification as they were appointed on 17th march 2015.
Note 7: Going Concern
During the financial period the Company has incurred loss of Rs 22987
Lacs and its net worth has been completely eroded. Paucity of adequate
working capital has also affected the operations, resulting in partial
running of plants on job work basis or closure of plants. Company is in
the process of restructuring its business; hive off whole or part of
core and non-core assets for reducing debt burden. Resulting of the
same during the year some portion of the noncore assets (windmill
division) have been sold. To deal with the above situation, the Company
is actively pursuing option of re-organization of existing business
and/or enters into some strategic alliance or introduces any potential
investor. This would enable the Company to ease its continuing
financial burden and ensure smoother running of its plants. To
implement such strategy the Company and lenders consortium have
appointed a reputed consultancy frm to look into the possible
alternatives and suggest plan to be implemented for restructuring
including sale of whole or part of Edible Oil business, which is in
progress. Under the circumstances, the financial statements have been
prepared on Going Concern basis and in the opinion of the management no
adjustments are considered necessary to the carrying value of its
assets and liabilities.
Note 8: Preferential issue of equity shares and warrants:
a) In order to meet the fund requirement of the Company for its (i)
Expansion of fernery in India along with other allied expenditure (ii)
Investment in its overseas subsidiaries for development of Greenfield
palm plantations and acquisition of mature palm plantations and / or
CPO mills, all in Indonesia, the Company has come out with preferential
allotment of Equity Shares and Warrants to the promoters & other
foreign Investors in July, 2009 at an issue price calculated under SEBI
(DIP) Guidelines, 2000 on preferential basis duly approved by
Shareholders and Board of Directors of the Company.
b) The entire proceeds received towards the warrants have been utilized
for the purpose of expansion of fernery in India along with other
allied expenditure and for investment in its subsidiaries, except
Rs.5065 Lacs. Such unutilized funds of preferential issue which were
kept in FD's with the banks in previous periods, except for FD's
aggregating Rs. 1117 lacs, balance amount of Rs 3948 lacs have been
utilized for the working capital of the company instead of for
expansion work in foreign business, which was the primary object of
raising funds.
Note 9: Non Transfer of Dividends:
Company recommended dividend in FY2009-10 of Rs 858 lacs (Rs 0.18 per
share) (inclusive of Dividend Distribution Tax of Rs 122 lacs). Out of
the dividend so declared, an amount of Rs 90 lacs remains unpaid.
Due to severe liquidity crunch, the promoters opted to waive off the
receipt of their part of dividend. For the same reasons the company has
not transferred un- paid dividend to a separate Bank account in terms
of the requirement of Sec. 205 of the Companies Act, 1956.
Note 10: AGM and Results:
The Company has made an application to the Registrar of Companies (ROC)
vide letter dated September 22, 2015 for extension of holding 29th AGM
of the company for further 3 months according to the provisions of the
Companies Act, 2013 the Company was required to hold the AGM within the
six months from the close of financial year but due to the most of the
key personnel's have left the Company and consolidation of the foreign
subsidiaries accounts, the company has not finalized and get audited
the accounts within the stipulated time.
Note 11 : Derivatives
a) Derivative Instruments
There are no yearend foreign currency exposure that have been hedged by
derivative instrument
b) The yearend foreign currency exposures that have not been hedged by
a derivative instrument or otherwise are given below:
Note 12 : Related Party Disclosures
a) Transactions with Related Parties as specified under Accounting
Standard-18
Subsidiary K.S. Natural Resources Pte Ltd.,
Fellow Subsidiaries Singapore
K. S.Oils SDN.BHD, Malaysia
K.S.Agri Resources Pte Ltd.,
Singapore
PT Buana Mega Sentosa Plantation,
Indonesia
PT Mega Artha Peresada, Indonesia
PT Biodiesel Jambi, Indonesia
PT Tunas Bersusun Abadi, Indonesia
PT Luvang Urip, Indonesia
Enterprises over which Key K.S.Food Products Managerial Personnel K.S
Enterprises
exercises significant influence Ramesh Chand Sourabh Kumar
HUF
Sourabh Garg HUF Neiil Education Pvt. Ltd. KS Oils Ltd. Group Gratuity
Scheme Garg Family Trust
Key Managerial Personnel on the Board
Mr. Ramesh Chand Garg Chairman and Managing Director
Mr. Davesh Agarwal Whole time Director
Relatives of Key Managerial Personnel
Mr. Sourabh Garg Son of CMD
Mrs. Sheela Devi Garg Spouse of the CMD
Mrs. Meeta Garg Spouse of Son (Mr. Sourabh Garg)
Mr. Shyam Kumar Garg Brother of CMD
Mr.Om Prakash Garg Brother of CMD
Mr.Mohan Lal Garg Brother of CMD
Note: Rental cost is annually escalated between seven and twenty
percentage. Annual escalation for every transaction is considered from
the effective date of rent agreement. Except in case of some agreement
where the escalation is effective after the execution of the rent
agreement.
On expiration of the above stated lease agreements, the same can be
renewed on the basis of mutual consent of the lessor and lessee.
Additional amount of service tax will be paid on the above stated lease
rental amount according to the rates applicable at the time of
respective lease rental payments.
Total lease rental cost recognized in the financial statement is of Rs
41 Lacs (previous year Rs. 112 Lacs).
Note 13: Earning Per Share
In determining earnings per share, the Company considers the net profit
after tax and includes the post tax effect of any extra- ordinary /
exceptional item. The numbers of shares in computing basic earnings per
share is the weighted average numbers of shares outstanding during the
period. The numbers of shares used in computing diluted earnings per
share comprises weighted averages shares considered for deriving basic
earnings per share, and also the weighted average number of equity
shares that could have been issued on the conversion of all dilutive
potential equity shares. The diluted potential equity shares are
adjusted for the proceeds receivable, had the shares been actually
issued at fair value (i.e. the average market value of outstanding
shares). Statement showing the computation of EPS is as under:
Note 14: Discontinuing Operation as per AS-24
Pursuant to the note 32 (a) & (b), The Company proposes to sell whole
or part of the Edible Oil Assets & Windmill Energy Assets of the
Company to a buyer identify in accordance with the sale process to be
undertaken by State Bank of India (acting on behalf of lenders) to
repay the outstanding debt including interest of the Company. The sale
of the above assets are subject to approval of shareholders u/s 293 (1)
(a) of the Companies Act, 1956 through postal Ballot.
In order to above, an ordinary resolution has been passed by the
shareholders of the Company u/s 293 (1)(a) on dated 7th September, 2013
through postal ballot.
(A) In accordance with the disclosure requirement of Accounting
Standard - 24 "Discontinuing Operations", following disclosures are
made as under for windmill Assets:
a) Company had several windmills in the various states of the country
through which it generates power.
b) Operations of windmill activity are shown as a part of Business
Segment in accordance with the requirement of AS - 17 "Segment
Reporting".
c) Assets related Windmill Energy Business is required to be sold off
on priority basis.
d) Carrying amount of fixed assets is shown under note no- 11 "Fixed
assets" and for assets and liabilities refer note no. 43 "Segment
reporting" under consolidated financial statement.
e) Revenue and Expenditure in respect to ordinary activities
attributable to Windmill Energy Business are shown in note no. 43
"Segment reporting" under consolidated financial Statement.
B) In accordance with the disclosure requirement of Accounting Standard
- 24 "Discontinuing Operations", following disclosures are made as
under for Edible Oil Business:
a) Company has five manufacturing units in the various states of the
country through which it manufacture edible oil.
b) Operations of Edible Oil activity are shown as a part of Business
Segment in accordance with the requirement of AS - 17 "Segment
Reporting".
c) Assets related Edible oil Business is required to be sold off on
priority basis.
d) Carrying amount of fixed assets is shown under note no- 11 "Fixed
assets" and for assets and liabilities refer note no. 43 "Segment
reporting" under consolidated financial statement.
e) Revenue and Expenditure in respect to ordinary activities
attributable to Edible Oil Business are shown in note no. 43 "Segment
reporting" under consolidated financial Statement.
Note 15 : Comparatives Figures
The current financial statements is prepared for twelve months period
ended March 31, 2015, hence figures for the same are not comparable
with that of previous financial statements, which was prepared for the
fifteen months period ended March 31, 2014.
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