1. Contingent Liabilities not provided for in respect of:
a) Guarantees given to banks against Credit Facilities availed by an
associate Company of Rs. 2,65,12,00,000.(Previous period Rs. Nil).
b) Entry Tax demands of Rs. 5,76,968 (Previous Period 7 5,76,968) against
which amount deposited Rs. 1,66)000 (Previous Period Rs. 1,66,000).
c) The Assistant Commissioner of Central Excise, Bhopal ("ACCE")
issued following two show cause notices to the Company in relation to
availment and utilization of CENVAT Credit amounts under rule 14 of
CENVAT Credit Rules, 2004 read with section 11A of Central Excise Act,
1944 and the Company has raised the objection before ACCE.
d) Regional Provident Fund Commissioner, Gwalior has lodged the case
under section 7Aof the "Employees' Provident Fund and Miscellaneous
Provisions Act, 1952", ("PF Act") for the recovery against
provident fund amount from April, 2008 to December, 2010 and passed an
order under section 8F of PF Act vide order
no.EPF/MP/SRO/GWL/ENFORCEMENT/8F dated December 04,2013, for recovery
of Rs. 2,157,618 (Previous Period Rs. 2,157,618). The Company has disputed
the amount and filed an Appeal before Provident Fund Tribunal, New
Delhi against which the PF Commissioner has recovered Rs. 1,074,351
(Previous Period Rs. 1,074,351) from the Company's bank account.
2. The Company has given corporate guarantees to Banks on behalf of
Wearit Global Limited, an associate company for the various credit
facilities availed by them during the year. However, the Corporate
Guarantee limit as sanctioned by the shareholders has exceeded by Rs.
15,12,00,000 and the Company is taking necessary steps to ratify the
same in ensuing Annual General Meeting of the shareholders.
3. Capital Reserve - others of Rs. 17,93,09,492 represents remission of
liability on account of Principal by the Secured Creditors.
4. Sales is net of return of Rs. 15,51,961 (Previous PeriodRs. Nil).
5. Certain Trade Receivables, Trade Payables, Other Current
Liabilities, Claim Receivables are subject to confirmation by the
parties and include some old items pending reconciliation and
adjustment to appropriate accounts. However, letter for balance
confirmation were used during the year but confirmations are yet to be
received.
6. The Company has adopted Schedule II of The Companies Act, 2013, for
providing depreciation from 1st April, 2014. According to paragraph 3
of part 3 of Schedule II the useful life of assets shall not ordinarily
be different from the useful life specified in Part C of the schedule
provided that where a Company adopts a useful life different from what
is specified in Part C of the schedule, the financial statements shall
disclose such difference and provide justification in this behalf duly
supported by technical advise. The Company has adopted different useful
life from what is specified in Part C of the schedule. M/S Mahesh
Agrawal and Associates, a government approved chartered engineer
certified the remaining useful life as on 01/04/2014 regarding the
assets of the Company.
Re-estimation of useful life of fixed assets resulted in adjustment of
Rs. 3,26,159 in opening balance of retained earnings accounted in
accordance with the change in useful life of assets. Due to change in
the method of providing depreciation as per schedule II of the
Companies Act, 2013, depreciation provided during the year is lower by
Rs. 84,27,506 having consequential impact on the profit for the year.
7. Provision for Employee Benefits:
Accounting Standard-15 ("AS-15") on "Employees Benefits" requires
an enterprise to recognize its obligation and employee benefits cost
under defined benefit plans such as gratuity and compensated absences,
based on an actuarial valuation. The obligation and employee benefits
cost are to be reflected in the Balance Sheet and the Statement of
Profit and Loss, respectively.
Gratuity:
As regards Gratuity, the Company is under "The Employee Group
Gratuity Scheme" of the LIC for meeting its obligation under post
employment benefits and the Company has no obligation to pay benefits
to the employee and insurer has the sole responsibility for paying the
post employment benefits.
As per LIC's renewal intimation, the Company has contributed a sum of
Rs. 2,19,930. In accordance with the provisions of AS-15 on "Employee
Benefits", the contribution so made is charged to the Statement of
Profit and Loss.
Leave Encashment:
As per Actuarial Valuation as on March 31,2015 and recognized in the
financial statements in respect of Employee Benefit Schemes:
8. The Company is primarily engaged in the business of manufacturing
and selling of yarn and is managed organizationally as a single unit.
Accordingly, the Company is a single business segment company, which as
per Accounting Standard -17 is considered the only reportable business
segment. The geographical segmentation is not relevant, as the Company
did not have any overseas operations during the year.
9. Disclosure in respect of related parties as defined in Accounting
Standard 18 are given below:-
A. Key Managerial Personnel and Relatives
a. Mr. Manish Kumar, Director
b. Mr. Vilas Agarwal, Whole time Director
c. Mr. Balesh Kumar Bagree, Chief Financial Officer
d. Mrs. Nidhi Binani, Company Secretary ,
B. Associates
a. Wearit Global Limited
b. Ritspin Synthetics Limited
c. Dhanterash Sale Private Limited
10. The timing difference relating mainly to depreciation and
unabsorbed losses result in net deferred tax credit as per Accounting
Standard 22 "Accounting for Taxes on Income". As a prudent measure
the net deferred tax assets relating to the above have not been
recognised in the Financial Statements.
11. 100% of indigenous Raw Materials and Stores & Spare parts consumed
during the year
12. The figures of the current year are for twelve months hence, not
comparable with the previous period figures of six months. However, the
previous period figures, wherever necessary, have been regrouped,
reclassified and recasted.
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