| 1. Secured Loans
(a) 150000, 17.5% Privately Placed Optionally Fully Convertible
Debentures - These Debentures are secured by a first charge by way of
hypothecation in favour of the Trustees of all the company's movables
(save & except books debts) including movable machinery, machinery's
spare, tools and accessories, present and future, subject to prior
charges created/or to be created in favour of the Company's Banker or
the Company's Stocks of Raw material, Semi-finished and finished goods,
consumable stores and such other movable as may be agreed to by the
Trustees for securing the borrowings for Working Capital requirement in
the ordinary course of business. The Mortgage and Charges referred to
herein above shall rank paripassu with the mortgage and charges created
in favour of IDBI for its foreign currency loan and is guaranteed by
Promoter Directors.
These Debentures of Rs. 100 each are redeemable at par in two annual
instalments of Rs. 75 Lacs each repayable on 31st March, 2004 and 31st
March, 2005.
(b) Term loan from Financial Institutions are secured by First charge/
mortgage of all the immovable properties & movable properties (save and
except book debts) both present and future subject to prior charge in
favour of Bankers by way of security for borrowings for working capital.
The mortgage & charges referred to herein above shall rank paripassu with the Mortgage & Charges created in favour of IDBI for its foreign
currency loan and is guaranteed by Promoter Directors.
(c) Working Capital Loans from Banks are secured by way of first charge
on stock, book debts and all other Current Assets and second charge on
Fixed Assets and personal guarantee of Promoter Directors.
(d) Loan from others are secured by hypothecation of Vehicles.
2. (a) During the year Company has written back an amount of Rs.
2830630/-as interest charged on increased liabilities of Foreign
Currency Loan due to fluctuation in foreign exchange rate by crediting
to interest on secured loan and decided to treat the amount as deferred
revenue expenditure, to be written off equally over a period of five
years. This has resulted in overstating the profit by Rs. 2264504/-
(afterwriting off 1/5th Rs. 5,66,126).
(b) During the year Company has changed the accounting policy relating
to commission on sale from accural basis to cash basis, the impact on
profits due to the change is not ascertained.
3. The Company has changed the rates of depreciation in the year 1998
in respect of Plant and Machinery from shiftwise basis to continuous
process plant with retrospective effect.
4. In the absence of profits no transfer has been made to the
Debenture Redemption Reserve.
5. Stock of Raw Materials include Rs. 440833/- (Previous year Rs.
440833/-) worths of cotton affected by fire.
6. Fixed Deposits are under Bank lien.
7. Investments purchases during the year NIL. (Previous year 345 Equity Shares of State Bank of Bikaner & Jaipur face value of Rs. 100/- per share cost Rs. 186300/-)
8. Instalments of Term Loan Due within one year are Rs. 1,42,87,753.50
(Previous year Rs. 24,00,000/-)
9. In view of the multiplicity and identification of accounts relating
to Small Scale Industrial undertakings, information for determining the
particulars relating to current indebtness to such undertakings as
required under schedule VI to the Companies Act 1956 are not readily
available.
10. Deferred revenue expenditure represents unamortised portion of
interest on increased liability of Foreign Currency Loan due to foreign
exchange fluctuation.
11. In the opinion of the Board, all current assets, loans and advances and other receivables are approximately of the value stated, if realised in the ordinary course of business.
12. Prior Period items represents : Rs. 1865392.50. Out of which Rs.
980800/- due to cancellation of forward exchange booking, which bank has debited during the year. Rs. 888380/- deducted by Sundry debtor and written off during the year.
13. Estimated amount of Contract remaining to be executed on Capital
Account and not provided for ..Nil (Previous Year - Rs. 20 lacs).
14. Contingent Liabilities not provided for :
Amount (Rs.) Previous Year (Rs.)
Bank Guarantees 19477488 19477488
Bills Discounted 18098171 16003980
15. No provision for taxation has been made as there are no taxable
profits.
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