| BACK GROUND
The Company is engaged in manufacturing and mixing of fertilisers and
has a network of distributors in the southern states and has developed
a brand value recognised in the market place. The company has planned
to develop a Container Terminal at Ennore.
1
The Company presently is facing certain difficulty in servicing debt
and repayment on time of loans, due to insufficient cash flow from
operations. The Company's SSP plant has not been put in operation
since May '14. The Company has business plans to utilize the full
capacity of super phosphate factory in the coming financial year which
would significantly improve profitability. Besides optimum utilization
of additional land available at Ennore for certain specified
diversified business activity would also ensure additional cash
inflows. Further the Company is contemplating to dispose off certain
small parcels of land not useful to the Company to settle certain
creditors.
Taking all the above developments which would significantly improve
the profitability and net worth of the Company, the financial
statements have been prepared on the principles applicable to going
concern.
2 Additional Disclosures
Out of the Paid-up Capital
(i) 22,25,850 Equity Shares of Rs.10/- each were allotted as fully
paid on amalgamation in
February 1972 for consideration other than cash.
(ii) 8,29,760 Equity Shares of Rs.10/- each fully paid were allotted
for consideration other than cash
to certain financial institutions on conversion of part of secured
loans, in the year 1981.
(iii) 20,00,000 Equity Shares of Rs.10/- each fully paid were allotted
for consideration other than cash on 01.10.1983 as per the terms of
issue to the holders of 13.5% Convertible Secured Debentures issued to
the Public.
(iv) 45,68,200 Equity Shares of Rs.10/- each were allotted on 25.08.93
as fully paid on part conversion of 16% Secured Partly convertible
Redeemable Debentures allotted on 25.02.93.
(v) The consent terms filed on 05.03.2000 with the Supreme Court and
decreed by the said Court in the matter of share allotment and sale of
5.33 grounds of land effects of the decree has not been considered in
the books of accounts of the company, since the consent decree terms
are yet to be implemented. A suit has since been filed in Madras High
Court for implementation of the scheme.
3 Loans and advances from banks are secured on immovable properties
and current assets of the Company and guaranteed in certain cases by
the promoter. Negotiations have reached a final stage with respect to
loans due and payable by the Company to a Bank. Secured loans from a
Company and an individual respectively are secured by equitable charge
on certain properties of the Company.
4 The Company's liability towards Gratuity to employees has been
provided on reasonable basis but not on actuarial basis. The company
has taken steps to determine the liability in accordance with the
Accounting Standard No.15 on "Retirement Benefits" and adjust the
provision accordingly, however in the opinin of the management the
incremental adjustment would not be material.
5 The issue of transfer of unclaimed/unencashed dividends of Rs.6.98
lakhs upto 1981-82 to Government is pending before the High Court of
Judicature at Madras.
Rupees in Lacs March 31, 2014 March 31, 2013
6 Contingent liabilities and commitments (to the extent not provided
for)
Contingent liabilities
(a) Claims against the company not
acknowledged as debt
* Disputed sales tax demands under appeal
including stay of recovery granted
for Rs.854.65 lakhs (Rs.20.50 lakhs paid
under protest included under advances)
(Based on another Supreme Court order and legal
Opinion such demands may not be sustainable) 876.89 876.89
* Others(Exclusive of Interest) 145.00 145.00
Guarantees 7.00 7.00
Other money for which the company is
contingently liable
* Differential Customs Duty on Import machinery
availed under export obligation scheme 117.00 84.07
* Duty on non-fulfilment of Export Obligations 153.00 153.00
* Interest if any, on Mortgage Loan of is
45000000.00 under negotiation along with other
connected issues and the rate of interest and
quantum thereof, if any, and is presently under
negotiation and pending resolution and
quantification of the liability, if any,
has not recognized in the accounts
(b) (i) With regard to interest of Rs.161.33
lakhs claimed by an trade creditor, the
company has since disputed the basis of the
claim and the company proposes to settle the
matter through negotiation.
(ii) With regard to another creditor who has
claimed an interest of Rs.74.39 lakhs, there
is disagreement with respect to the rate of
interest and this matter is expected to be
resolved shortly.
(iii) The claim of interest from Bank i.e.,
State Bank of India (assignee Kotak
Mahindra Bank Ltd) on the principal amount
outstanding is subject of reference to Debt
Recovery Tribunal (DRT) and pending direction
from the Recovery Authority, the loan interest
is not quantifiable at present.
26 Related Parties Disclosure:
(i) Name of the Key Management Personnel:
Mr. Pradip D. Kothari - Chairman and Managing Director No remuneration
was paid to the Managing Director during the year.
(ii) Mrs.Surekha P Kothari, W/o.Chairman & Managing Director has
joined the Board of the company on 19.09.2011.
(iii) Mrs.Antara Pandit, D/o.Chairman and Managing Director has been
working in the company as Vice President (Business Development).
(iv) Name of the transacting related party & description of the
relationship between the parties: Associate Companies/Firms Kothari
(Madras) International Limited
(v) Particulars of Transactions
Nature of Transaction Amount (Rs. in lakhs)
Purchase of Raw Materials & finished goods 1,921.68
Amount of Rs. 63.12 lakhs is outstanding as on
31st March, 2014 from M/s. Kothari (Madras)
International Ltd Remuneration paid to
Mrs.Antara Kothari Rs.3.30 Lacs
7 Earnings /(Loss) per Share - Calculation of weighted average number
of Equity Shares of Rs. 5 each:
March 31, 2014 March 31, 2013
Number of shares of Rs.5/- each 12,483,885 12,483,885
Basic & Diluted Earnings
(in Rupees) per Share (6.91) (168)
8 As per the records and information available with the company there
are no amounts outstanding as on 31st March, 2014 payable to :
(i) Small Scale Industries
(ii) Micro, Small and Medium Enterprises
9 With regard to the pending winding up petition before the Hon'ble
High Court of Judicature at Madras, the Company is under negotiation
with the petitioner for withdrawal of the case
10 The figures in brackets relate to Previous year and regrouped /
reclassified to confirm to the requirements of schedule VI (as
amended) of the companies act 1956.
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