1. Share Capital
Terms / Rights attached to Equity Shares
The Company has only one class of equity shares having a par value of
Rs. 10/- per share. Each holder of equity shares is entitled to one
vote per share. No dividends were proposed by the Board of Directors
for the financial year 2014-2015. In the event of liquidation of the
company, equity shareholders will be entitled to receive remaining
assets in proportion to the number of shares held by them.
Terms / Rights attached to Preference Shares
The Company has only one class of preference shares having a par value
of Rs. 100/- per share. No preference shares have been issued by the
Company.
2. Related Party Transactions
Related parties during the year March 31, 2015 :
(a) Directors
(1) Rajababu Kalla
[2] Mr.Anish Shah
[3] Mr.Hansraj Gala
[4] Mr.Sanjay Nandu
[5] Mrs.Forum Shah
(b) Key Managerial Personnel
(1) Rajababu Kalla
[2] Hitesh Shah (CFO)
(c) Relatives of Directors/ Key Managerial Personnel
(1) Shantilal L Shah (5) Dhaval Shah - HUF
(2) Sonalben S Shah (6) Dhaval S Shah
(3) Manjari H Shah (7) Forum D Shah
(4) Hitesh S Shah - HUF (8) Sushila H. Gala
(d) Enterprise Having common Key Management Personnel and/or their
relatives as the Reporting Enterprises
[1] Neelam Metal & Hardware
[2] Gurukul Enterprises Private Limited
[3] Euro Decor Private Limited
[4] Kanch Ghar
[5] Disti Multimedia & Communications Pvt Ltd
[6] Zenith Corporation
[7] Monex Stationers
3. During the years 2011-2012 and 2012-2013, the Company had incurred
significant losses which had resulted in erosion of its net worth. The
severe fall in the prices of Solar Photovoltaic cells globally is on
account of reduced demand which resulted in large inventory at reduced
prices, leading to necessity for booking losses and thereby depleting
working capital. During the year 2011-2012, there was default in the
repayment obligations to banks and the relevant loan accounts viz. Term
Loans, Cash Credit Accounts and revolvement of letters of credit.
Consequently, the Company received summons/ notice from the office of
Debt Recovery Tribunal-II, Ahmedabad, Gujarat in response to the
application filed by State Bank of India Baroda, Gujarat vide O.A. No.
56/2012 for the recovery of their loan under Section 19 of the Recovery
of Debts due to Banks and Financial Institutions Act, 1993. The
hearings of the said case is in process.
The Company has received notices u/s 13(2) of Securitization &
Reconstruction of Financial Assets & Enforcement of Security Interest
Act, 2002 from the Cosmos Co-op Bank Ltd and the State Bank of India
for recovery of its outstanding dues towards various credit facilities
extended to the Company from time to time. Further, State Bank of India
has taken symbolic possession of immovable property of Optical Disc and
Solar Photovoltaic Cells Unit under the Securitization & Reconstruction
of Financial Assets & Enforcement of Security (Second) Interest Act,
2002 and in exercise of the powers under Section 13(4) of the said Act
read with rule 8 of the security Interest (Enforcement) Rules 2002.
Further, vide an order dated 4th March 2014, issued by Zilla Magistrate
(Kutch-Bhuj) directing local Mamlatdar to take physical possesion of
the said factory premises and to handover the same to State Bank of
India. In response to the said order the Company has filed a writ
petition with the Supreme Court of India and obtained a stay order
stating that the respondent bank shall be restrained from proceeding
further under the provisions of the Securitization and Reconstruction
of Financial Assets and Enforcement of Security Interest Act, 2002.
In the financial year 2012-2013, the Company on the basis of the
audited accounts for the financial year ended March 31, 2012, and being
mandatory, filed the reference u/s 15(1) of Sick Industrial Companies
(Special Provisions) Act, 1985 before the Hon'ble Board for Industrial
& Financial Reconstruction (BIFR). The above reference has duly been
registered by the learned Registrar of Hon'ble BIFR and hearings of
which are in the process for determination of sickness.
4. Going Concern
The years 2011-2012 to 2014-2015 have been challenging for the global
solar cell manufacturers as well as the Indian manufacturers; which on
the one hand witnessed steep fall in solar cell prices and on the other
hand market flooded with products from Chinese and Taiwanese
manufacturers which led to the growth of large Chinese manufacturers.
The Governments in India and other countries are eager to increase the
overall share of solar energy by concurrently improving infrastructural
conditions, especially through solar parks and schemes like
'development of solar cities', energy efficient green buildings',
generation-based incentives, and subsidies and promotion for solar PV
devices that are also encouraging PV installation. Recently, in India,
it was made mandatory to have domestic content requirement for cell and
module for crystalline silicon based plant in all the projects granted
under JNNSM Phase1, batch II. Individual states in India, are also
adopting policies and programs to promote the expansion of solar power.
Further, the Indian Government is considering safeguarding its own
industry by some regulation such as anti-dumping for Solar Cells.
In the present situation, the Company is now considering sustainable
business model with the various options to restructure the capital base
including but not limited to approaching the lender banks for
arbitraging the partial debt with equity, concessions and / or waiver
in the interest along with haircuts in certain debt portion with an
objective to bring it at a serviceable level. Considering the changed
and new developments taking place in the Solar Industry and as detailed
in the management discussion analysis, the financial statements have
been prepared on the basis that the Company is a going concern.
5. Figures of previous year have been regrouped / reclassified wherever
necessary.
6. Contingent Liabilities not provided for
(a) The Company for its Optical Disc's manufacturing unit, has imported
various Capital Goods under the Export Promotion Capital goods Scheme
(EPCG), of the Government of India, through various licenses, at
concessional rates of Custom Duty on an undertaking to fulfill
quantified exports within a period of eight years from the date of
respective licenses. The custom Duties so saved amounts to Rs.
25,38,56,218/- and the corresponding Export obligation as on 31st March
2015 to be fulfilled is Rs. 191,21,59,657/-. If the said Export is not
made within the stipulated time period; the company is required to pay
the said saved Custom Duty together with interest @ 15% p.a.The Company
has filled a reference with hon'ble BIFR petitioning a relief from
export obligation of the Company.Furthet the Company has provided in
the past bank guarantees in favor of custom authorities amounting
cumulatively to Rs. 508,76,000 towards payment of custom duty on
account of failure to satisfy such an export obligation.
(b) The Company's Solar Photovoltaic Cells manufacturing unit is
located in self owned sector specific Special Economic Zone. According
to the SEZ Act, the units should have positive Net Foreign Exchange
Earning (NFE), which shall be calculated as per applicable rules in
cumulative blocks of five years, starting from the commencement of
production. In case the unit does not achieve positive Net Foreign
Exchange, the SEZ shall be subject to penalty, that may be imposed by
the adjudicating authority.
* Note:- The Company falls under 1st Schedule to Central Excise Tariff
Act, 1985 (5 of 1985). The unit was set up after 31-07-2001 and hence
eligible for Excise Refund benefit envisaged in Notification
No:39/2001-CE dated 31- 07-2001 as amended. The Company also duly
applied to Central Excise Department for availing benefit under the
said notification and the Department approved the same. The Company
commenced commercial production of its first phase on 04-04-2005 with
five manufacturing lines and doubled its capacity in January 2007 by
adding five more manufacturing lines. The Department took the stand
that the eligibility is only for the first phase and will not be
applicable for the expansion phase. The Company was duly in receipt of
Excise Refund on the first five lines till the financial year
2007-2008, however from financial year 2008-2009 onwards the Department
rejected the Excise Refund claim even for the first five lines.
The company, while taking stand that the excise benefit should be made
available for the second phase as well, provided for excise refund on
the first phase on proportionate basis. Currently the matter is pending
with CESTAT (Ahmedabad). The Company had recognised Excise Refund
amount of Rs. 63,41,853/- in the year 2008-2009 and Rs. 86,67,688/- in
the year 2009-201* on this account, of which the company had received
Rs. 1,14,31,016/- as excise refund from the Central Excise Department
and Rs. 16,42,522/- were declared as non refundable by the Central
Excise Department. Thus for the balance amount of excise refund
recognised during the year 2009-1* of Rs. 19,36,003/- will not
materialise if the appeal is not disposed of in favour of the company
and the same amount continues for the current financial year also.
(d) Claims against the Company not Acknowledged as Debts as on 31st
March 2015 amounting to Rs. Nil.
7. Secured loans from the banks are subject to confirmation.
8. The following bank loan and cash credit accounts are subject to
confirmation:-
Bank Name & Address Account No.
State Bank of India, Stressed Assets Term Loan A/c No.
Management Branch, ''Paramsiddhi Complex, 30081317216
2nd Floor, Opp. V.S. Hospital,
Ellisbridge, Ahmedabad 380 006, Gujarat
State Bank of India, Stressed Assets Term Loan A/c No.
Management Branch, "Paramsiddhi Complex, 31083458260
2nd Floor, Opp. V.S. Hospital,
Ellisbridge, Ahmedabad 380 006, Gujarat
State Bank of India, Stressed Assets Cash Credit A/c No.
Management Branch, "Paramsiddhi Complex, 30105861083
2nd Floor, Opp. V.S. Hospital,
Ellisbridge, Ahmedabad 380 006, Gujarat
9. The Company has given fixed deposit receipts to the Cosmos & SBI
bank as LC margin and bank gaurantee amounting to Rs. 2,77,36,000/-
which are subject to confirmation.
10. Sundry Debtors and Creditors balances are subject to confirmation.
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