| 1. In the opinion of the Board the current assets, loans and advances
are approximately of the value stated, if realised in the ordinary
course of business. The provisions for all the known liabilities and
depreciation are adequate.
2. Balances of sundry debtors, sundry creditors, loans and advances,
unsecured loans and other balances are subject to confirmation /
reconciliation and consequential adjustments.
3. Contingent liabilities not provided for an additional bill of Rs.
4945448.60 issued by Gujarat Electricity Board which the Company has
challenged legality in the Court of Law as per provisions and got
immediate partial relief of Rs. 797653/- from the High Court of Gujarat
and the trial of challenge is in progress and in the meantime for
challenging the legality, the company had to deposit with Gujarat
Electricity Board Rs. 1307860/- and in the Supreme Court Rs.
1139935.60, the matter is still under trail.
4. The company has, in the earlier years, on the basis of technical
opinion and continuous operations in three shifts throughout the year
of the texturising plant & machinery and also plant & machinery of
process house, treated the same as "continuous process plants" for the
purpose of computation of depreciation which however is not consistent
with the recommendation of Institute of Chartered Accountants of India,
as a result, up to date depreciation charge was lower by Rs. Nil lacs
net of Rs 10.91 lacs for the year under review. Had this practice not
been followed, the opening block of plant & machineries of Vapi unit
would have fully depreciated.
5. The Income Tax assessment of the company has been completed up to
Assessment year 2005- 2006. No provision for Income Tax has been made
for the financial year 2006-2007, as according to the company, there is
no assessable income for the year.
6. Due to non-availability of the information with the company the
creditors registered as Micro, Small or Medium enterprises under the
Micro, Small and Medium Enterprises Development Act 2006, the quantum
of the amount due to such creditors and name(s) of the same to whom
company owes a sum could not be determined. Further interest provision,
if any, on such creditors also could not be ascertained.
7. Figures for the previous year have been regrouped, rearranged and
recasted wherever necessary to make them comparable with the figures of
the current year.
8. No provision has been made in respect of interest accrued and due
on the unpaid installments which have already become due Rs. 54.82 lacs
(Rs. 34.61 lacs) pertaining to Sales Tax Incentives received in the
form of unsecured loans in the absence of proper information available
with the company.
9. Provision for liability, if any, on account of gratuity and bonus
payable to the employees of the company for the earlier years will be
made as and when the liability arises.
10. The company has, in the earlier years, invested Rs. 28.69 lacs in
the equity shares of Adhunik Synthetics Limited, which is a sick
industrial undertaking within the meaning of section 3 (1) (o) of the
SICA, 1985 and Rs. 1.94 lacs in the equity shares of Adhunik Fintrade
Limited, which is also a substantial loss making company, no provision
has been made for diminution in the value of these investments, as in
the opinion of the management, it is due to temporary factors.
11. The company was declared sick industrial company by the BIFR in
terms of section 3(1 )(o) of the Act. The Bench further directed to
explore the possibility of change of management but no concrete offer
was received. Therefore in view of explored and exhausted all
possibilities to rehabilitate the company, the Board formed, on prima
facie, an opinion, that the company be wound up u/s 20(1) of the Act
and forwarded the matter with concerned High Court, Mumbai. In the
meantime, the company has reached OTS with Bank of Baroda and IDBI.
With the permission of the DRT, company has already sold substantial
fixed assets of both the units of the company to pay off to secured
creditors. In line with this, the company has cleared the dues of all
secured creditors. The company has received no dues certificates
from said secured creditors.
Even though the manufacturing operations were discontinued as
substantia) part of fixed assets of both the units were sold and
accumulated loss exceeded the net worth, the financial statement has
been prepared on the concept that company will continue as going
concern.
12. The company has discharged all the dues of secured creditors
namely Bank of Baroda, IDBI and SICOM and obtained "no dues
certificates", however the relevant forms for satisfaction of charges
of the such secured creditors are still to be filed with Registrar of
Companies, Maharashtra.
13. No provision has been made for listing fees since 2001-2002 for
Madras Stock Exchange, as the information to ascertain of amount of
liability is not available with the company.
14. Sundry debtors Rs 18.62 lacs exceeding six months and loans "and
advance to the extent of Rs. 118.93 lacs, including disputed deposits
and debit balance of suppliers, are outstanding since long. No
provision has been made there against since the management is hopeful
of recovering the same. Efforts for recovery of these accounts are
being made and provision for losses, if any, will be made after
ascertaining the irrecoverable amounts.
15. Contrary to AS-2, the company continued to value the inventories
as given in point no. 5 of Schedule 16 of significant accounting
policies. Since the total valuation of all the inventories as on
31.03.2008 is only Rs. 2.80 lacs (Rs. 12.55 lacs), it may not have
material impact on the loss of the year.
16. The office of the company secretary has been vacant since 1995-96.
In the circumstances authentication by Company Secretary does not
appear in the Accounts.
17. Due to heavy losses continuously incurred in the past, the company
is not in the position to have the fair value, determined, of its
assets as compared to the carrying amount of such assets as required by
AS-28 for impairment of assets.
18. In respect of Taxes On Income:
The ICAI issued AS-22 "Accounting for Taxes On Income" w.e.f.
01.04.2001 .As the company has incurred substantial losses in past
several years and total net worth of the company has eroded by
31.03.1999, though the company has huge carried forward losses and
depreciation as per the returns of income filed with the Income Tax
Department but as a prudent policy and due to uncertainty in availing
the future taxable income, no deferred tax assets has been recognized
as on 31.03.2008.
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