Notes to Accounts of Gujarat Raffia Industries Ltd.

Mar 31, 2015

1. SHARE CAPITAL

A. Terms/rights attached to equity shares :

The company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share The company declares and pays dividends in Indian rupees. The Dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of Interim dividend. The equity shares rank parri passu and carry equal rights with respect to voting and dividend. In the event of liquidation of the Company, the equity shareholders shall be entitled to proportionate share of their holding in the assets remained after distribution of all preferential amounts.

B. The Equity Share Capital of the Company had been reduced from 10,21,87,000 comprising of 1,02,18,700 shares of Rs.10/- per share fully 99,89,550 equity shares of Rs.5/- each fully paid up. The reduction in capital had been approved under section 100 of the Companies Act 1956 by the High Court Of Gujarat vide its order dated Sept.21,2007. The company then converted its reduced face value of shares from Rs 5 each to Rs 10 each vide special resolution passed in Extra-ordinary General Meeting dated October 15, 2007.

2. Contingent Liabilities and commitment [to the extent not provided for] :

Contingent Liabilities :

a Claims against the Company not acknowledged as debts :

i) Labour Matters 435000 435000

b In respect of guarantees given by Banks and/or counter guarantees given by the Company 250000 2349779

c Other money for which the company is contingent liable :

i) Letters of Credit for Imports 22864000 3664452

3. Derivative Financial Instruments :

A. The Company has not entered into any forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee.

4. Seament Information :

Based on the guiding principal given in Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company's primary business is manufacturing of PE, Tarpaulin, HDPE/PP Woven sacks and fabrics, which has similar risks and returns, accordingly there are no separate reportable segment as far as primary segment is concerned.

The operations of the company are in India and all assets and liabilities are located in India except export debtors and import creditors. The secondary business segment by geographical market is given below.

5. Related Party Transactions :

A. Name of the Related Party and Nature of the Related Party Relationship :

a) Directors and their relatives :

Mr. Pradeep kumar Bhutoria Executive Director

Mrs. Sushma Bhutoria Executive Director

Mr. Abhishek Bhutoria Son of Director

Mr. Alpesh Tripathi Director

Mr. Prakash Ramnani Director (*) Resigned

Mr. Dipen M Shah Director

b) Enterprises significantly influenced by Directors and/or their relatives :

Asian Gases Limited

Bangal Business Limited

Mahanagar Realestate Pvt. Ltd.

Related party relationship is as identified by the Company and relied upon by the Auditors.

6. During the year 2013-2014, company has imported capital goods under EPCG License Scheme and availed custom duty benefit of Rs. 211.32 lacs against which company has export obligation of Rs. Rs. 1785.24 lacs, which is to be completed within six years of import. The company has fulfilled its obligation during the year.

7. The Company has worked out deferred tax liabilities/assets at March 31, 2015. In view of unabsorbed depreciation and business losses under tax laws, net result of computation is net deferred tax assets, which are not recognised as a matter of prudence and in absence of virtual certainty as to its realization.

8. Confirmation letters have not been obtained from some of the Debtors Creditors, and Loans & Advances.

Hence the, balances of these accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

9. Previous period's figures have been regrouped/ reclassified wherever necessary to correspond with the current period's classifications/ disclosure.

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Mar 31, 2014

1. A Terms/rights attached to equity shares :

The company has only one class of equity shares having par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share The company declares and pays dividends in Indian rupees. The Dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of Interim dividend. The equity shares rank parri passu and carry equal rights with respect to voting and dividend. In the event of liquidation of the Company, the equity shareholders shall be entitled to proportionate share of their holding in the assets remained after distribution of all preferential amounts.

B The Equity Share Capital of the Company had been reduced from 10,21,87,000 comprising of 1,02,18,700 shares of Rs.10/- per share fully 99,89,550 equity shares of Rs.5/- each fully paid up. The reduction in capital had been approved under section 100 of the Companies Act 1956 by the High Court Of Gujarat vide its order dated Sept.21,2007. The company then converted its reduced face value of shares from Rs 5 each to Rs 10 each vide special resolution passed in Extra-ordinary General Meeting dated October 15, 2007.

2. A Securities and Terms of Repayment for Secured Long Term Borrowings :

a Finance Lease obligations is secured by hypothecation of assets taken on lease.

b Term Loan from Bank

* Secured against entire stock of Raw Material (imported / indigenous ), semi-finished goods, Finished Goods, Book Debts and collateral Security of Factory Land and Building and Plant and Machinery.

* Secured loan amounting to Rs. 312635/- ( P.Y. Rs. 255584/-) is secured by hypothecation of vehicle.

B Terms of Repayment for Secured Long Term Borrowings:

a Financce lease obligations are repayable in equal monthly installments along with interest for the period.

c There is no continious default in repayment of Loan and interest their on as on March 31st, 2014 for any loans under this head.

NOTE : 3 - CONTINGENT LIABILITIES AND COMMITMENT [TO THE EXTENT NOT PROVIDED FOR] :

Contingent Liabilities :

a Claims against the Company not acknowledged as debts

i) Labour Matters 435000 235000

b In respect of guarantees given by Banks and/or counter guarantees given by the Company 2349779 160000

c Other money for which the company is contingent liable:

i) Letters of Credit for Imports 3664452 8328104

NOTE : 4 - SEGMENT INFORMATION :

Based on the guiding principal given in Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company''s primary business is manufacturing of PE, Tarpaulin, HDPE/PP Woven sacks and fabrics, which has similar risks and returns, accordingly there are no separate reportable segment as far as primary segment is concerned.

The operations of the company are in India and all assets and liabilities are located in India except export debtors and import creditors. The secondary business segment by geographical market is given below.

Note : 5 During the year company has imported capiotal goods under EPCG License Scheme and availed custom duty benefit of Rs. 211.32 lacs against which company has export obligation of Rs. Rs. 1785.24 lacs, which is to be completed within six years of import. Till the year ended 31.03.2014 company has exported goods amounting to Rs. 502.28 Lacs. If company fails to do meet the export obligation then it will be liable to pay custom duty saved alongwith interest and penalty thereon.

Note : 6 :- The Company has worked out deferred tax liabilities/assets as at March 31,2014. In view of unabsorbed depreciation and business losses under tax laws, net result of computation is net deferred tax assets, which are not recognised as a matter of prudence and in absence of virtual certainty as to its realization.

Note : 7 :- Confirmation letters have not been obtained from some of the Debtors, Creditors, and Loans & Advances. Hence the, balances of these accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

Note : 8 :- Previous period''s figures have been regrouped/ reclassified wherever necessary to correspond with the current period''s classifications/ disclosure.

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Mar 31, 2013

NOTE : 1 - DERIVATIVE FINANCIAL INSTRUMENTS :

A The Company has not entered into any forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee.

NOTE: 2 -SEGMENT INFORMATION:

Based on the guiding principal given in Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company''s primary business is manufacturing of PE, Tarpaulin, HDPE/PP Woven sacks and fabrics, which has similar risks and returns, accordingly there are no separate reportable segment as far as primary segment is concerned.

The operations of the company are in India and all assets and liabilities are located in India except export debtors and import creditors. The secondary business segment by geographical market is given below.

NOTE: 3 -RELATED PARTY TRANSACTIONS:

A Name of the Related Party and Nature of the Related Party Relationship:

a) Directors and their relatives:

Mr. Pradeepkumar Bhutoria Executive Director

Mrs. Sushma Bhutoria Executive Director

Mr. Abhishek Bhutoria Son of Director

Mr. Alpesh Tripathi Director

Mr. Prakash ramnani Director

Mr. Dipen M Shah Director

b) Enterprises significantly influenced by Directors and/or their relatives:

Asian Gases Limited Bangal Business Limited Mahanagar Realestate Pvt. Ltd.

Related party relationship is as identified by the Company and relied upon by the Auditors.

NOTE: 4

The Company has worked out deferred tax liabilities/assets as at March 31, 2013. In view of unabsorbed depreciation and business losses under tax laws, net result of computation is net deferred tax assets, which are not recognised as a matter of prudence and in absence of virtual certainty as to its realization.

NOTE: 5

Confirmation letters have not been obtained from some of the Debtors, Creditors, and Loans & Advances. Hence the, balances of these accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

NOTE: 6

Previous period''s figures have been regrouped/ reclassified wherever necessary to correspond with the current period''s classifications/ disclosure.

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Mar 31, 2012

A Terms/rights attached to equity shares:

The company has only one class of equity shares having par value of Rs. 10/- per share.

Each holder of equity shares is entitled to one vote per share The company declares and pays dividends in Indian rupees. The Dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of Interim dividend. The equity shares rank parri passu and carry equal rights with respect to voting and dividend. In the event of liquidation of the Company, the equity shareholders shall be entitled to proportionate share of their holding in the assets remained after distribution of all preferential amounts.

As per records of the company, Including iits register of shareholers/members and declaration received from the shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownershipsof shares.

B The Equity Share Capital of the Company had been reduced from 10,21,87,000 comprising of 1,02,18,700 shares of Rs.10/- per share fully 99,89,550 equity shares of Rs.5/- each fully paid up. The reduction in capital had been approved under section 100 of the Companies Act, 1961 by the High Court Of Gujarat vide its order dated Sept.21,2007. The company then converted its reduced face value of shares from Rs 5 each to Rs 10 each vide special resolution passed in Extra-ordinary General Meeting dated October 15, 2007.

A Securities and Terms of Repayment for Secured Long Term Borrowings:

a Finance Lease obligations is secured by hypothecation of assets taken on lease.

B Terms of Repayment for Unsecured Long Term Borrowings:

a Financce lease obligations are repayable in equal monthly installments along with interest for the period.

C There is no continious default in repayment of Loan and interest their on as on March 31st, 2012 for any Loans under this head.

NOTE: 1-CONTINGENT LIABILITIES AND COMMITMENT [TOTHE EXTENT NOT PROVIDED FOR]:

A Contingent Liabilities:

a Claims against the Company not acknowledged as debts

i) Labour Matters 1200000 1200000

b In respect of guarantees given by Banks and/or counter

guarantees given by the Company 0 150000

c Other money for which the company is contingent liable:

i) Letters of Credit for Imports 0 1348083

NOTE: 2-SEGMENT INFORMATION:

Based on the guiding principal given in Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company's primary business is manufacturing of PE, Tarpaulin, HDPE/PP Woven sacks and fabrics, which has similar risks and returns, accordingly there are no separate reportable segment as far as primary segment is concerned.

The operations of the company are in India and all assets and liabilities are located in India except export debtors and import creditors. The secondary business segment by geographical market is given below.

NOTE: 3

Confirmation letters have not been obtained from some of the Debtors, Creditors, and Loans & Advances. Hence the, balances of these accounts are subject to confirmation, reconciliation and consequent adjustments, if any.

NOTE: 4

The Revised Schedule VI has become effective from April 1, 2011 for the preparation of financial statements. This has significantly impacted the disclosure and presentation made in the financial statements. Previous period's figures have been regrouped/ reclassified wherever necessary to correspond with the current period's classifications/ disclosure.

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Mar 31, 2010

1. Contingent Liabilities

As on 31st March As on 31st December 2010 2008

1. Bank Guarantee 5,00,000 11,77,000

2. Letters of Credit Outstanding 12,51,280 -

3. Claims against the company not acknowledged as debts:

Labour Matters 5,00,000 -

ESIC 7,00,000 -

2. The previous period's figures have been regrouped wherever necessary.

3. The company has not received information from suppliers regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006. Here disclosures, if any, relating to amounts unpaid as at the year-end together with interest paid/payable as required under the said Act have not been made.

4. As per Accounting Standard 15 "Employee Benefits", the disclosures of Employee benefits as defined in the Accounting Standard are given below.

Defined Benefit Plan:

The employees' gratuity fund scheme managed by a Trust is a defined benefit plan. The present value of obligation is determined based on actuarial valuation using the projected Unit Credit Method, which recognized each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation.

The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market. The above information is certified by the actuary.

The expected rate of return on plan assets is determined considering several applicable factors, mainly the composition of plan assets held, assessed risks, historical results of return on plan assets and the company's policy for plan assets management.

No provision for Leave encashment benefits has been made during the year.

5. Derivative Instruments:

a) The Company has not entered into any forward contracts to offset foreign currency risks arising from the amounts denominated in currencies other than the Indian Rupee.

b) Foreign Currency exposure at the year end not hedged by derivative instruments.

6. Segment Information:

Based on the guiding principle given in Accounting Standard-17 on segment Reporting issued by the Institute of Chartered Accountants of India. the Company's primary business is manufacturing of P.E.Tarpaulin. H.D.P.E/P.P. Woven Sacks. Fabrics which has similar risks and returns accordingly there are no separate reportable segment as far as primary segment is concerned.

7. As the Company does not anticipate taxable profit in near future, so to comply with the Accounting Standard-22 issued by the Institute of Chartered Accountants of India. The Provision for deferred tax liabilities has not been made during the year.