Mar 31, 2013
1.1 Basis of Preparation :
The Financial statements have been prepared to comply in at! material
respects with the notified Accounting standards issued by the Institute
of Chartered Accountants of India and the relevant provisions of Ihe
Companies Act, 1956. The Financial Statements have been prepared tinder
the historical cost convention on an accrual basis. The accounting
policies have been consistently applied by ihe Company and are
consistent with those applied in She previous year.
1.2 Fixed assets :
Fixed assets are stated ai Cost less accumulated depreciation, if any.
Cost comprises purchase price and any other attributable cost of
bringing (he assets to its working condition tor its intended use.
1.3 Depreciation :
Depreciation is provided on straight line method at the rates
prescribed in schedule XIV of the Companies Act. 1956. While providing
depreciation it is assumed that on day of the receipt of assets ihey
are put to use.
1.4 Inventories :
Stock in Frade comprising of Raw Material, Component and Semi-finished
goods are stated at cost (arrived at on the first in first out method
with the inclusion of appropriate manufacturing overheads where
applicable) or net realizable value whichever is less. Finished Goods
are valued at cost or market value whichever is lower.
1.5 Unsecured Loans :
It comprises of Business. Loans taken Jrom members The said loans are
as such not secured hence the same are shown under the head Unsecured
Loans.
1.6 Revenue Recognition ;
Revenue is recognized to ihe extent that it is portable lhat the
economies benefits will flow to the company and the revenue can be
reliably measured.
1.7 Retirement and other Employee benefits:
a. Retirement Benefits in the form of Provident Fund are charged to the
profit and loss account of the period when the contributions to the
respective funds are due and thereafter ihe same are deposited under
the scheme framed under the Employees Provident Fund and .Misc.
Provision Act, 1952. There are no obligations other then contribution
payable to the respective fund.
b. Gratuity- the company follows cash system of accounting of gratuity
and leave encashment and has not obtained actuarial valuation ot the
present value of gratuity liability & unutilized leave benefit, I lence
Liability for the same is not quantified and provided for.
1.8 Income Taxes :
i i) Income Tax: Tax expenses comprise of Current Tax and are measured
at the amount expected to be paid to The las authorities in accordance
with the income Tax Act. J 961.
fii) Deferred Taxes : As per the requirements of the Accounting
Standard 22 on "Accounting for Taxes, on income" issued by the
Institute of Chartered Accountants of India, the Asset is created for
the excess amount to be deferred. Deferred income taxes reflects the
impact of current year timing differences between taxable income and
accounting income for the year and reversal of timing differences of
earlier years, if any.
1.9 Provisions :
A. provision is recognized when an enterprise has a obligation as a
result of past events and its probable that an outflow of resources
wili be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present values and are determined based on best estimate required to
settle the obligations at the balance sheet date. These are reviewed at
each balance sheer date and adjusted to reflect the current management
estimates.
1.10 Contingent Liabilities:
We have been informed by the management that, their banker namely
Madhavpura Mercantile Co- operative Bank Ltd. has gone into
liquidation. TheMMCB Ltd had offered the settlement under OTS for an
amount of Rs.4.75 Crores {against outstanding of the Term. Loan
facility amounting to Rs. 4J9 Ci. and Cash Credit facility of Rs. 2.22
Cr.i The matter is under re-consideration by the bank. The management
has provided for interest based on communication iram Bank dated
04/01/2012. Based on legal opinions taken by the Company''s Lr.
Solicitors the Company believes that it has good cases in respect of
the settlement of account under OTS offered in 2008-2009. To the extent
of un-providcd interest the Losses arc under stated. The portion of
un-providcd interest Liability shall stand as contingent liability.
1.11 Cash and Cash Equivalents :
Cash and Cash Equivalent comprises of Cash on hand. Cash at Bank and
Cheques in Hand.
1.12 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006 :
Micro, Small
1.13 Secured loans;
We have been informed by the management that, their bankers namely
Madhavpura Mercantile Co- operative bank ltd lias gone into
liquidation. Due to hod - availability of foreign L.C, facilities and
additional working capital facility from this bank, the company had
incurred huge losses oa account of cancellation of export sales.
Company had filed suit against the Rank. The management has requested
to revalidate earlier offered OTS Scheme. The matter is under
consideration by the bank, The management has provided for interest
partly taking the base of communication received from Bank as referred
in Audit Report.
The accounts have been prepared «n "Going concern Concept". Since, the
company do not have intention, to.,su*>pcrtC the operational
activities.
Mar 31, 2012
1.1 Baste of Preparation:
The Financial statements have been prepared to comply in all material
respects with the notified Accounting standards issued by the Institute
of Chartered Accountants of India and the relevant provisions of the
Companies Act, 1956. The Financial Statements have been prepared under
the historical cost convention on an accrual basis. The accounting
policies have been consistently applied by the Company and are
consistent with those applied in the previous year.
1.2 Fixed assets:
Fixed assets are stated at Cost less accumulated depreciation, if any.
Cost comprises purchase price and any other attributable cost of
bringing the assets to its working condition for its intended use.
1.3 Depreciation :
Depreciation is provided on straight line method at the rates
prescribed in schedule XIV of the Companies Act, 1956. While providing
depreciation it is assumed that on day of the receipt of assets they
are put to use.
1.4 Inventories:
Stock in Trade comprising of Raw Material, Component and Semi-finished
goods are stated at cost (arrived at on the first in first out method
with the inclusion of appropriate manufacturing overheads where
applicable) or net realizable value whichever is less. Finished Goods
are valued at cost or market value whichever is lower.
1.5 Unsecured Loans:
It comprises of Business, Loans taken from members The said loans are
as such not secured hence die same are shown under the head Unsecured
Loans.
1.6 Revenue Recognition :
Revenue is recognized to the extent that it is portable that the
economies benefits will flow to the company and the revenue can be
reliably measured.
1.7 Retirement and other Employee benefits :
a. Retirement Benefits in the form of Provident Fund are charged to the
profit and loss account of the period when the contributions to the
respective funds are due and thereafter the same are deposited under
the scheme framed under the Employees Provident Fund and Misc.
Provision Act, 1952. There are no obligations other then contribution
payable to the respective fund.
b. Gratuity- the company follows cash system of accounting of gratuity
and leave encashment and has not obtained actuarial valuation of the
present value of gratuity liability & unutilized leave benefit Hence
Liability for the same is not quantified and provided for.
1.8 Income Taxes:
(i) Income Tax.: Tax expenses comprise of Cuirent Tax and are measured
at the amount expected to be paid to the tax authorities in accordance
with the income Tax Act, 1961.
(ii) Deferred Taxes : As per the requirements of the Accounting
Standard 22 on "Accounting for Taxes on Income" issued by the Institute
of Chartered Accountants of India, the Asset is created for the excess
amount to be deferred. Deferred income taxes reflects the impact of
current year timing differences between taxable income and accounting
income for the year and reversal of timing differences of earlier
years, if any.
1.9 Provisions :
A provision is recognized when an enterprise has a obligation as a
result of past events and its probable that an outflow of resources
will be required to settle the obligation, in respect of which a
reliable estimate can be made. Provisions are not discounted to its
present values and are determined based on best estimate required to
settle the obligations at the balance sheet date. These are reviewed at
each balance sheet date and adjusted to reflect the current management
estimates.
1.10 Contingent Liabilities:
We have been informed by the management that, their banker namely
Madhavpura Mercantile Co- operative Bank Ltd.is Non - Functioning
since, March, 2001. The MMCB Ltd had offered the settlement under OTS
for an amount of Rs.4.75 Crores (against outstanding of the Term Loan
facility amounting to Rs. 4.19 Cr.and Cash Credit facility of Rs. 2.22
Cr.) The matter is under consideration by the bank. The management has
not provided for interest since 1999-2000. Based on legal opinions
taken by the Company's Lr. Solicitors the Company believes that it has
good cases in respect of the settlement of account under OTS offered in
2008-2009. The portion of unprovided Liability shall stand as
contingent liability.
1.11 Cash and Cash Equivalents :
Cash and Cash Equivalent comprises of Cash on hand. Cash at Bank and
Cheques in Hand.
1.12 Disclosures required under Section 22 of the Micro, Small and
Medium Enterprises Development Act, 2006:
Micro, Small & Medium Enterprise on Terms & Section 22 of the Micro,
Small and Medium enterprise development Act, 2006 have been determined
to the exiting parties have been identified on the basis of information
available with the company and relied upon by the auditors, the company
has not received information from the suppliers regarding the status
under the Micro, Small and Medium Enterprise Development Act 2006 and
hence Disclosure if any relating to amount unpaid as the year and
together with interest payable as required under the said act hence not
been given.
1.13 Secured loans;
We have been informed by the management that, their bankers namely
Madhavpura Mercantile Co- operative bank ltd. is facing severe
financial crisis and it is not functioning since March, 2001. The said
bank is seeking assistance of fellow Co-operative banks, State
Government & Central Government. Due to non - availability of foreign
L.C. facilities and additional working capital facility from this bank,
the company had incurred huge losses on account of cancellation of
export sales. The management have offered to settle the account under
OTS Scheme. The matter is under consideration by the bank. The
management has not provided for interest since 1999-2000.
The accounts have been prepared on "Going concern Concept". Since, the
company do not have intention to suspend the operational activities.