| 1. The company was referred to the Board for Industrial & Financial
Reconstruction which had declared the Company as a Sick Company under
the provisions of Sick Industrial Companies (Special Provisions) Act,
1985, and appointed IDBI as Operating Agency (OA) for determination of
the measures to be adopted with respect to the company. The proposal
submitted by the company provided for closure of unviable Pozhal unit,
settlement of dues to the financial institutions and banks, workers'
dues and dues to suppliers and running the company with viable
Pondicherry unit. BIFR issued orders for winding up of the company in
September 2003. Against the orders of BIFR, the company had gone on
appeal to AAIFR to rescind the BIFR order. The Company's appeal to
AAIFR against BIFR order for winding up was admitted on 22.9.2005 along
with our revised proposal.
BIFR on 05.08.2010 abated the reference of the company in view of the
third proviso to section 15 (1) of SICA on the ground that the State
Bank of India (SBI) has taken action under Section 13 (4) of the
SARFAESI ACT by taking possession of the charged assets of the Company
and the DRT has upheld the possession of the SBI and has only
restrained the Bank from putting the property to auction. Therefore a
request was made by the SBI to the BIFR to abate the reference and
accordingly the BIFR passed the impugned order dt., 20th June 2010
abating the reference and this was further confirmed by AAIFR in their
order dt. 20.10.2010. The Company appealed to High Court to quash the
AAIFR and DRT orders and the Hon'ble Court set aside the orders dated
June, 2011 and directed DRT to look into the matter of possession by
the banks. Against this Order the Company filed Review Petition in the
Hon'ble High Court and the Court by its order dated October, 2011
directed BIFR to continue the proceedings and decide the matter of
abatement. The matter is now being heard before BIFR.
Meanwhile the company has identified an Investor who is willing to
provide funds to settle the dues of all the creditors and restart the
company. The investor has already brought in part of the funds. The
Company has made one time settlement offer to three of the banks and
financial institutions. The company has come to the settlement with
IDBI during 2012. The company has also reached one time settlement with
State Bank of India, Catholic Syrian Bank and Indian Bank between
February 2013 to July 2013. The Entire OTS amount has been paid with
funds provided by the Investor and all banks have issued No Due
Certificate. The company has filed copies of the settlement with BIFR
and the Hon'ble Bench on 24th July 2013 directed the company to submit
the revival scheme to the OA within 60 days and the OAto prepare the
draft rehabilitation scheme and submit the same to BIFR within 30 days
for their approval. The company will submit the scheme for revival of
the company along with reliefs and concessions based on the final
accounts for the year ended 30th September 2013 to the OA providing for
the net worth of the company to turn positive, wipe out accumulated
losses over a time period and ensure long term viability. The next
hearing will be on 24th October 2013.
2. Contingent Liabilities
Particulars 2012-2013 2011-12
a) Income tax and Sales
tax demands under 22,79,963 22,79,963
which dispute in respect of appeals are pending
3. The Pozhal unit where Operation stands suspended is proposed to be
restarted as per the Revival Scheme under consideration. Negotiated
settlement with the Workers Union has been reached for the Payment of
the Legal dues before the Labour Authorities. An amount of Rs. 5.65
Crores has been provided for in the books of accounts.
4. Loans & Advances include:
a. Balance with Excise authorities Rs.9,78,507/- of Pozhal and
Perungudi units hich has not been reconciled with Excise records.
b. Advance given to staff of Pozhal unit Rs.38,09,130/- which is to be
adjusted against final settlement.
5. Unsecured Loan of Rs. 3.56 Crores represents amount payable to
Estate of Mr. V. Chidambaram towards settlement of Inter Corporate
Deposits accepted from various parties and settled by him. No interest
has been provided for in the books of accounts.
6. Interest has not been provided during the year on Secured Term Loan
taken from Pondicherry Industrial Promotion Development and Investment
Corporation Ltd. as these accounts have become NPA.
7. During the year, the company has settled the entire loan due to
State Bank of India, Indian Bank and- Catholic Syrian Bank under One
Time Settlement scheme. The impact on sacrifice made by banks has been
taken to Profit and Loss Account.
8. The post of the Secretary has not been filled up as required under
section 383Aof the Companies Act, 1956.
9. There being only one line of activity during the year namely
'assembly and testing of thermostats', segment reporting is not
considered necessary.
10. Related party disclosures:
Related Parties wherein there exists control: Estate of Late V.
Chidambaram Related Party Transactions
Unsecured loan from Late V. Chidambaram and Mrs. Seetha Chidambaram -
O/s. as on 30th September 2013 Rs. 3.56 Crores.
11. Income Tax expense is accounted in accordance with AS 22 -
"Accounting for taxes on Income" which includes current taxes and
deferred taxes. Deferred taxes reflect the impact of current year
timing difference between taxable income and accounting income for the
year and reversal of timing differences of earlier years. Deferred tax
assets are recognized only to the extent that there is reasonable
certainty that sufficient future taxable income will be available.
12. Previous period figures have been regrouped / reclassified wherever
necessary.
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