| 1. There is no contract remaining to be executed on capital account as
at March 31, 2008.
2. Contingent liabilities not provided for:
(Rupees in lacs)
As at As at
Mar. 31, 08 Mar. 31, 07
(i) In respect of bills of
exchange discounted 2.14 8.62
(ii) In respect of guarantees
given by companys bankers on
behalf of the company - 14.98
(iii) In respect of guarantees
given by the company to banks
and financial institutions on
behalf of Ashima Dyecot Limited 16,000.00 16,000.00
(iv) In respect of disputed
sales tax demand 27.77 27.77
(v) In respect of disputed
income-tax demand not acknowledged
by the company 11.79 11.32
(vi) In respect of disputed
demand of central excise not
acknowledged by the company 1,162.13 1,162.13
3. Sundry debtors as appearing in the balance sheet include Rs.2.06
lacs (Previous year Rs.4.43 lacs) due from company in which a director
of the company is director.
4. Central excise authorities had issued show cause cum demand notice
of Rs. 1,162.13 lacs (Previous year Rs. 1,162.13 lacs) for excise duty
on knitted fabrics processed during the period from March 1, 2002 to
January 31, 2003, on a premise that the processed fabric has been
manufactured from duty-free raw material namely grey cotton knitted
fabrics. The company has disputed this demand.
5. During the year under review, due to loss the company has not
provided for income tax for the Assessment Year (A.Y.) 2008-09
(Previous Year Rs. NIL).
As regards deferred tax as per Accounting Standard - 22 (AS-22) on
"Accounting for Taxes on Income" issued by The Institute of Chartered
Accountants of India, there is a net deferred tax asset for the past
years and for the current year after adjusting unabsarbed and carried
forward losses of the past years. Considering the provisions of the
AS-22 and as a matter of pruded the company has not recognized the said
deferred tax asset while preparing the accounts for year under review.
The income tax assessments of the company are completed up to A. Y.
2005-06.
6. Names of the small scale industrial undertakings in whose account
any amount was outstanding more than 30 days are as under:
Krupa Printers, Mascot Industries, Hydro Flex Hose Industries, Jade
Knits, Sapphire. Harion Industries.
The company has provided for interest of Rs.0.18 lacs on outstanding
for more than 45 days payable to micro, small and medium enterprises.
The total amount due to these parties is Rs.4.22 lacs as a the balance
sheet date. This information has been determined to the extent such
parties have been identified on the basis of information available with
the company. This has been relied upon by the auditors.
7. The debt-restructuring package sanctioned by corporate debt
restructuring (CDR) cell is withdrawn. The company has not provided
for unpaid interest amounting to Rs.283.12 lacs for the year and
Rs.493.13 lacs upto March 31,2008 on secured loans from banks and
financial institutions in terms of CDR package. Further, additional
liability of Rs.2,679.65 lacs due to withdrawal of CDR package in
respect of term loans and working capital facilities from some of the
lenders has not been provided. The additional liability due to
withdrawal of CDR package in case of IIBI is unascertainable. hence not
quantified. To that extent the amount of the loss and secured loans are
understated.
8. The company has an investment of Rs.1,250 lacs in Ashima Dyecot
Limited. The accumulated loss as at March 31,2008 has exceeded the net
worth of the said company. However, having regard to the prospects of
long-term revival of the company, no provision is considered necessary
on this account.
Decline in value of the investments in Ashima Limited is not provided
for since the decline, in the opinion of the company, is not of a
permanent nature.
9. Exceptional and extraordinary items include Rs. 1,353.08 lacs
written off relating to dues from a debtor upon Gujarat High Court
passing order for winding up of the company and Rs.631.77 lacs
provision for doubtful debtors relating to dues from a debtor against
which the company has filed winding up petition with Bombay High Court.
10. The net worth of the company has eroded. However, the company
expects to revive its financial position in view of the ongoing debt
restructuring and good prospects of improvement in its operational
performance in future. Considering these facts, the accounts of the
company are prepared on going concern basis.
11. Retirement Benefits (Accounting 9tandard -15):
Provision for Gratuity
The following table sets out the status of the gratuity plan as
required under AS 15 on "Employee Benefits*
12. Segment Reporting (Accounting Standard-17)
The companys operations relate only to manufacture and sale of textile
and related products, and accordingly, primary reporting disclosures
for business segments, as envisaged in Accounting Standard 17 on
Segment Reporting (AS-17) issued by The Institute of Chartered
Accountants of India, is not applicable.
The company sells goods in domestic market and also exports them to
various countries. Accordingly, secondary segment reporting has been
confined to sales in India and exports outside India.
Disclosure has been made relating to debtors only, as other assets and
liabilities are used interchangeably between the segments and hence
cannot be allocated to segments.
13. In accordance with the provisions of Accounting Standard - 28 on
"Impairment of Assets" issued by The Institute of Chartered Accountants
of India, the company has provided for the impairment loss of Rs.627
lacs at the year-end.
14. The company has made a reference to DIFR under Sick Industrial
Companies (Special Provisions) Act, 1985. In this connection, the
company has received letter no. F.3 (N-2)/BC/2007 dated 12.10.2007 from
the Registrar, B1FR. staling that the companys reference has been
registered as case no.64/2007.
15. Previous years figures have been regrouped/ rearranged wherever
necessary to conform to this years figures.
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