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Notes to Accounts of Rushil Decor Ltd.

Mar 31, 2015

Note:1

Term loan from Bank of Baroda

Secured by way of hypothecation of raw material, stocks, book debt, movable assets of the company and also secured by way of equitable mortgage of a) land and building and plant and machinery of the company b) office premises situated at flat no 1 & 2 krinkal apartment, paldi, ahmedabad belonging to the company c) residential bunglow situated 4, pushpa dhanwa owners association, vastrapur, ahmedabad belonging to Shri Ghanshyambhai Thakkar d) plot stiuated at lati bazar, ahmedabad in the name of Shri Ghanshyambhai Thakkar e) Pledge of fixed deposit of '' 0.73 crore f) Pledge of fixed deposit of '' 0.20 crore and also secured by way of personal guarantee of Shri Ghanshyambhai Thakkar and Shri Krupeshbhai Thakkar.

Term of Repayment

Working Capital facility from Bank of Baroda

Secured by way of hypothecation of raw material, stocks, book debt, movable assets of the company and also secured by way of equitable mortgage of a) land and building and plant and machinery of the company b) office premises situated at flat no 1 & 2 krinkal apartment, paldi, ahmedabad belonging to the comapny c) residential bunglow situated 4, pushpa dhanwa owners association, vastrapur, ahmedabad belonging to Shri Ghanshyambhai Thakkar d) plot stiuated at lati bazar, ahmedabad in the name of Shri Ghanshyambhai Thakkar e) Pledge of fixed deposit of Rs. 0.73 crore f) Pledge of fixed deposit of Rs. 0.20 crore and also secured by way of personal guarantee of Shri Ghanshyambhai Thakkar and Shri Krupeshbhai Thakkar.

2. Capital Commitments and Contingent Liabilites:

a. Contingent liabilities :

(1) Claims against the Company not acknowledged as debts

(i) Disputed Income Tax Demand Matter under Appeal Rs. 39,50,870 (P.Y Rs. 12,56,878)

(ii) Disputed Sales Tax Demand Matter under Appeal Rs. 6,81,63,402 (P.Y Rs. NIL)

(iii) Suit filed against the company u/s 92 of the Factories Act, 1948 and u/s 304A of the Indian Penal Code with respect to an accident which took place at the medium density fibre board manufacturing plant, Chikmagalur in the state of Karnataka with Additional Civil Judge, Senior Division, Chikmagalur, Karnataka [ (Amount Rs. NIL)(P.Y amount Unascertainable)]

(iv) Suit filed against the company under the Factories Act, 1948 with respect to particle board manufacturing plant, Navalgadh, Gujarat, with Judicial Magistrate (First Class) Court, Dhrangadhra,Gujarat [( Amount Unascertainable)(P.Y Amount Unascertainable)]

Note:

(a) It is not practicable for the company to estimate the timings of cash outflows, if any, in respect of the above,pending resolution of the respective proceedings as it is determinable only on receipt of judgements/ decisions pending with various forums/ authorities.

b) The Company has reviewed all its pending litigations and proceedings and has adequately provided for where provisions are required and disclosed as contingent liabilities where applicable, in its financial statements.The Company does not expect the outcome of these proceedings to have a materially adverse effect on its financial results.

(2) Outstanding Letters of Credit Rs. 2,68,26,028 (P.Y Rs. 60,29,033)

b. Commitments:

Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances, Rs. Nil/- (previous year Rs. 2,38,10,646/-)

3. During the year under review, the company has sold sizable fixed assets of its Navalgadh Unit resulted in loss of Rs. 601.91 lacs. The said loss is reflected under the extraordinary item in the statement of Profit & Loss.

4. Financial and derivative instruments

Derivative Contracts entered into by the company and outstanding as at March 31, 2015.

(a) For hedging currency

5. Pursuant to the requirement of the Companies Act, 2013, effective from 1st April, 2014 the company has reassessed remaining useful life of the fixed assets, prescribed by Schedule II of the act, or actual useful life of the asset which ever is lower. In case of any asset whose useful life has completed as above, the carrying value (net of residual value) of Rs. 19.17 lakh (net of deferred tax credit of Rs. 9.21 lakhs) has been adjusted in the opening balance of retained earnings as on 01- 4-2014 and in other cases the carrying value has been depreciated over the remaining of the revised life of the asset and recognized in the statement of Profit and loss.

6. The Previous year''s figures have been regrouped reworked, rearranged and reclassified wherever necessary to make them comparable with current year figures.

7. Balances of Unsecured Loans, Trade Receivables, Payables and Loans and Advances are subject to Confirmation from respective parties

8. Segment Reporting:

Primary

The primary segment of the Company, comprising of ''Decorative Laminates'' , ''Particle Board'' and ''Medium Density Fiber Board''.

9. Related Party transaction:

(a) Names of related parties and description of relationship:

Nature of Relationship

1 Associate Companies/Enterprise

Rushil International

Vertex Laminate Pvt. Ltd.

Decoply Agency

Shri Krupa Decorative Veneer Pvt. Ltd.

Ghanshyam Sales Agency Vir Studdio Pvt. Ltd.

Ratnatej Infrastructure Pvt. Ltd.

Ghanshyam Forwarders Pvt Ltd

(Previously known as Vertex Laminate Pvt Ltd)

2 Key Management Person

Ghanshyambhai A. Thakkar

Krupeshbhai G. Thakkar

Kaushikbhai J. Thakkar

Krupaben K Thakkar

Keyurbhai Gajjar

Rushil K. Thakkar

Vipul S Vora

Hasmukh Modi

3 Relative of key management person

Ghanshyambhai A. Thakkar HUF

Krupeshbhai G. Thakkar HUF

Saraswatiben N. Thakkar

Dinuben G. Thakkar

Alka G. Thakkar

Ambalal D. Thakkar HUF

Aditi V. Thakkar

Dhara V. Thakkar

Dhvanil V. Thakkar

Mrunal Keyur Gajjar

Manthan K. Thakkar

Snehal K Thakkar HUF

Alpa S Thakkar

Precision Engineering & Fabrication

(i) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.

(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation. Defined Benefit Obligation for the year ended 31st March, 2015 amounted to Rs. 81,60,115/- out of which company has paid Rs. 25,00,000/- so outstanding balance in the books Rs. 56,60,115/- (Previous year Rs. 61,39,162/-)

(iii) Actuarial assumptions :

Retirement Age to be assumed at 58 Rate of Discounting (p.a.) 7.92%

Future Salary rise (p.a.) 8.00%

Attrition Rates (p.a.) For ages 40 yrs & Below 5.00 % p.a. & For ages 41 yrs and above 1.00 % p.a.

Mortality Table Indian Assured Lives Mortality (2006-08) Ultimate

Vesting Period 5 Years

(iv) 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.

(v) The above details are certified by the actuary.

(vi) Para 132 of Accounting Standard 15 (revised 2005) does not require any specific disclosure except where expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 15 or Accounting Standard 18. In the opinion of the management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

10. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

11. Inventories are as taken, valued and certified by the management.

12. In absence of the complete information regarding the status of the suppliers as micro, small or medium enterprise as per the micro, small and medium enterprise development act, 2006 the information regarding the amount due to such parties as on the balance sheet date and provision for interest if any required by the said act is not been made.


Mar 31, 2014

1. Capital Commitments and Contingent Liabilities:

a. Contingent liabilities :

PARTICULARS As At As At 31st March, 2014 31st March, 2013 (in Rs.) (in Rs.)

Outstanding Letter of Credit 6029033 28221500

Disputed Income Tax Demand- Matter under Appeal 1256878 1256878

There is a case u/s.92 of the Factories Act,1948 as well as u/s. 304A of 100000 100000 the Indian Penal Code for accidents at Chikmagalur, Medium density fiber board manufacturing plant. The case is at additional Civil Judge, Senior Division, Chikmagalur. The matter is pending for decision by court.

There is a case of the Factories Act,1948 for accidents at Navalgadh, 100000 - Particle board manufacturing plant. The case is at Judicial Magistrate (first class) court,Dhrangadhra. The matter is pending for decision by court.

Theft of Cash ( Also refer note no 32 of Notes on Financial Statements) 600000 -

b. Commitments:

(i) Estimated amount of contracts remaining to be executed on capital account and not provided for net of advances, Rs. 2,38,10,646/- (previous year Rs. NIL)

2. The Previous year’s figures have been regrouped reworked, rearranged and reclassified wherever necessary to make them comparable with current year figures.

3. Balances of Unsecured Loans, Trade Receivables, Payables and Loans and Advances are subject to Confirmation.

4. A theft of Rs.6 lacs while carrying the cash from the bank account had taken place during the year under review. The company has lodged First Information Report with the Police authorities as well as lodged the claim with the insurance company for the same. Pending the settlement of the claim, no entry for the loss on account of theft of cash has been made in the books of accounts.

5. During the year under review, the company has discontinued its particle board manufacturing activities at its Navalgadh Unit with effect from 22.02.2014. The company has also surrendered necessary licenses under excise authorities and with effect from 01.03.2014 the said Navalgadh unit has been leased out to third party for carrying out the operations.

6. Segment Reporting:

Primary

The primary segment of the Company, comprising of ‘Decorative Laminates’ , ‘Particle Board’ and ‘Medium Density Fiber Board’.

7. Related Party transaction:

(a) Names of related parties and description of relationship:

Sr. No Nature of Relationship Name of Related Parties

1 Associate Companies/Enterprise Rushil International

Vertex Laminate Pvt. Ltd.

Decoply Agency

Shri Krupa Decorative Veneer Pvt. Ltd.

Ghanshyam Sales Agency

Vir Studdio Pvt. Ltd.

Ratnatej Infrastructure Pvt. Ltd.

2 Key Management Person Ghanshyambhai A. Thakkar

Krupeshbhai G. Thakkar

Kaushikbhai J. Thakkar

Krupaben K Thakkar

Keyurbhai Gajjar

Rushil K. Thakkar

3 Relative of key management Ghanshyambhai A. Thakkar HUF person Krupeshbhai G. Thakkar HUF

Saraswatiben N. Thakkar

Dinuben G. Thakkar

Rushil K. Thakkar

Alka G. Thakkar

Ambalal D. Thakkar HUF

Aditi V. Thakkar

Dhara V. Thakkar

Dhvanil V. Thakkar

Mrunal Keyur Gajjar

Manthan K. Thakkar

(i) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.

(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation. Defined Benefit Obligation for the year ended 31st March, 2014 amounted to Rs. 61,39,162/- (Previous year Rs. 41,71,447/-)

(iii) Actuarial assumptions :

Retirement Age to be assumed at 58

Rate of Discounting (p.a.) 9.25%

Future Salary rise (p.a.) 8.00%

Attrition Rates (p.a.) For ages 40 yrs & Below 5.00 % p.a. & For ages 41 yrs and above 1.00 % p.a.

Mortality Table Indian Assured Lives Mortality (2006-08) Ultimate Vesting Period 5 Years

(iv) 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.

(v) The above details are certified by the actuary.

(vi) Para 132 of Accounting Standard 15 (revised 2005) does not require any specific disclosure except where expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 15 or Accounting Standard 18. In the opinion of the management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

8. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

9. Inventories are as taken, valued and certified by the management.

10. In absence of the complete information regarding the status of the suppliers as micro, small or medium enterprise as per the micro, small and medium enterprise development act, 2006 the information regarding the amount due to such parties as on the balance sheet date and provision for interest if any required by the said act is not been made.

11. As per the practice consistently followed, Cenvat Duty on finished goods lying in the plants at the end of the period is neither included in expenditure nor valued in such stock, but is accounted for upon clearance of goods.


Mar 31, 2013

1. Capital Commitments and Contingent Liabilities:

a. Contingent liabilities :

PARTICULARS As At As At 31st March, 2013 31st March, 2012 (in Rs.) (in Rs.)

Corporate Guarantee given by the company NIL 20055357 for loan taken by Vertex Laminate Pvt. Ltd.

Outstanding Letter of Credit 28221500 16759603

Disputed Income Tax Demand 1256878 NIL

- Matter under Appeal

Disputed Custom Duty 770000 770000

b. Commitments:

(i) Estimated amount of contracts remaining to be execu ted on capital account and not provided for net of advances, Rs. NIL/- (previous year Rs. 54,89,869/-)

2. The expenses in connection with the issue of equity shares amounting to Rs. 33,02,627/- has been adjusted against Security Premium account.

3. The Previous year''s figures have been regrouped reworked, rearranged and reclassified wherever necessary to make them comparable with current year figures.

4. Balances of Unsecured Loans, Trade Receivables, Payables and Loans and Advances are subject to Confirmation.

5. Disclosures Regarding Employee Benefits

As per Accounting Standard 15 " Employee Benefits" the disclosures are given below :

Defined Contribution Plan

Contribution to defined contribution plan, recognized as expense for the year is as under :

(i) Defined Contribution Plan: Employee benefits in the form of Provident Fund are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act, 1948, respectively, are charged to the profit and loss account of the year when the contributions to the respective funds are due.

(ii) Defined Benefit Plan: Retirement benefits in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation. Defined Benefit Obligation for the year ended 31st March, 2013 amounted to Rs. 41,71,447/- (Previous year Rs. 32,12,844/-)

(iii) Actuarial assumptions :

Mortality Table (LIC) LIC 1994-1996

Discount Rate (per annum) 8

Expected rate of return on plan assets (per annum) -

Rate of escalation in salary (per annum) 6

(iv) 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.

(v) The above details are certified by the actuary.

(vi) Para 132 of Accounting Standard 15 (revised 2005) does not require any specific disclosure except where expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 15 or Accounting Standard 18. In the opinion of the management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

6. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

7. Inventories are as taken, valued and certified by the management.

8. In absence of the complete information regarding the status of the suppliers as micro, small or medium enterprise as per the micro, small and medium enterprise development act, 2006 the information regarding the amount due to such parties as on the balance sheet date and provision for interest if any required by the said act is not been made.

9. As per the practice consistently followed, Cenvat Duty on finished goods lying in the plants at the end of the period is neither included in expenditure nor valued in such stock, but is accounted for upon clearance of goods.


Mar 31, 2012

1. Capital Commitments and Contingent Liabilities:

a) Contingent liabilities :

(i) Corporate Guarantee of Rs. 2,00,55,357 (P.Y Rs. 6,00,00,000/-) Given by company for loan taken by Vertex Laminates Pvt ltd

(ii) Outstanding Letter of Credit Rs. 1,67,59,603/- (Previous Year Rs. 2,03,00,014 /-)

(iii) Custom Duty of Rs. 7.70 lakh (Rs. 3.85 lakh each for Unit MRPL and Unit RHPL) demanded by the Central Excise and Customs Authority being disputed by the company, has not been accounted for. The company has deposited Rs. 4.08 lakh ( Rs. 2.04 lakh each for Unit MRPL and Unit RHPL) under protest till the date of our audit and the same has been clubbed under the head Loans & Advances.

b) Commitments:

(i) Estimated account of contracts remaining to be executed on capital account and not provided for net of advances, Rs. 54,89,869/- (previous year Rs. 2,38,64,322/-)

2. During the year the Company has came out with its Initial Public Offering (IPO) Comprising of 56,43,750 Equity shares of Rs. 10/-each as at a premium of Rs. 62/- per share aggregating to Rs. 5,64,37,500/-.The Security premium of Rs.62/- per share amounting to Rs. 34,99,12,500/- has been credited to Security Premium account. The expenses in connection with issue of Equity Shares amounting to Rs. 1,94,62,774 /- has been adjusted against Securities Premium account. The Funds raised though Initial Public Offering have been utilized as under:

3. Financial and derivative instruments

Derivative Contract enter into by the company and outstanding as at March 31, 2012

(a) For hedging currency

(b) The Company uses forward contracts to hedge its risk associated with foreign currency fluctuation. The Company does not use forward contracts for speculative purposes.

4. The Previous year's figures have been regrouped reworked, rearranged and reclassified wherever necessary to make them comparable with current year figures.

5. Balances of Trade Receivables ,Trade Payables ,Unsecured loans and Loans and Advances are subject to Confirmation from Respective parties.

6. Segment Reporting:

Primary

The primary segment of the Company, comprising of 'Decorative, Laminates' and 'Particle Board'.

Segment wise Revenue, Results and capital employed

Primary business segments - Revenue by nature of products:

7. Disclosures Regarding Employee Benefits

As per Accounting Standard 15 " Employee Benefits" the disclose of employee benefits as defined in the Accounting Standard are given below :

Defined Contribution Plan

: (i) Defined Contribution Plan : Employee benefits in the form of Provident Fund and ESIC are considered as defined contribution plan and the contributions to Employees Provident Fund Organization established under The Employees Provident Fund and Miscellaneous Provisions Act 1952 and Employees State Insurance Act,1948,respectively,are charged to the profit and loss account of the year when the contributions to the respective funds are due.

(ii) Defined Benefit Plan : Retirement benefit in the form of Gratuity are considered as defined benefit obligation and are provided for on the basis of third party actuarial valuation, using the projected unit credit method, as at the date of the Balance Sheet. As the Company has not funded its liability, it has nothing to disclose regarding plan assets and its reconciliation. Defined Benefit Obligation for the year ended 31st March, 2012 amounted to Rs. 32,12,844/- (Previous year Rs. 22,54,241/-)

(iv) 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.

(v) The above information is certified by the actuary.

(vi) Para 132 of Accounting Standard 15 (revised 2005) does not require any specific disclosure except where expense resulting from compensated absence is of such size, nature or incidence that its disclosure is relevant under Accounting Standard 15 or Accounting Standard 18. In the opinion of the management the expense resulting from compensated absence is not significant and hence no disclosures are prepared under various paragraphs of AS 15 (revised 2005).

8. In the opinion of the Board of Directors, the current assets, loans and advances are approximately of the value stated, if realized in the ordinary course of business and the provisions for depreciation and all known and ascertained liabilities are adequate and not in excess of the amounts reasonably necessary.

9. Inventories are as taken, valued and certified by a Director.

10. In absence of the complete information regarding the status of the suppliers as micro, small or medium enterprise as per the micro, small and medium enterprise development act, 2006 the information regarding the amount due to such parties as on the balance sheet date and provision for interest if any required by the said act is not been made.

11. As per the practice consistently followed, Cenvat Duty on finished goods lying in the plants at the end of the period is neither included in expenditure nor valued in such stock, but is accounted for upon clearance of goods. This has no effect on profit/loss for the period.


Mar 31, 2009

1. Estimated account of contracts remaining to be executed on capital account and not provided for net of advances, Rs. 7,26,96,199/- (previous year Rs. NIL)

2. Contingent Liability:

Claim against the Company not acknowledged as debts for L.C. issued by bank Rs. 1,31,71,807/- (Previous Year Rs. 3,25,30,685/-)

3. The Previous year's figures have been regrouped reworked, rearranged and reclassified wherever necessary to make them comparable with current year figures.

5. Managerial Remuneration: Rs. 42,83,734/-. (Previous Year Rs. 41,00,000/-)

6. Confirmation of balances received I to be received from debtors, creditors, consignment agents and advances are required to be reconciled whenever necessary and suitably adjusted.

7. Sundry debtors considered good include Rs. 16.59 lakhs for the recovery of which the Company has initiated legal actions.

8. As information and explanation given to us, Company has started installation of Plant and Machineries for the production of Particle Board at Navalgadh, Dhangadhra, which is under process. For said purpose company has obtained Term Loan from Allahabad Bank which is under process. All the expenditure including interest incurred till the last day of the year are capitalized under the head "Pre-Operative Expenditure".

9. Based on the guiding principles given in the Accounting Standard on Segment Reporting (AS 17) the Company is primarily in the business of manufacture and sale of Laminated Sheets which mainly have similar risk and returns. The Company's business activity falls within a single geographical business segment (Laminated Sheet), hence it has no primary reportable segments.

10. Figures have been rounded to the nearest rupee value.

11. Trade deposit received from Dealers/Customers, consignment agents are clubbed under unsecured loans Received From Others.

12. Commission income received during the year Rs. 26.50 lakhs are clubbed with miscellaneous income under the head other income. (Previous Year Rs. 118 Lakhs)

13. All items of inventories as on 31st March, 2009 is taken as inventories taken, valued and certified by management of the company.

14. Deferred Tax:

a) Consequent to the issuance of Accounting Standard 22 ' Accounting for Taxes on Income' the Institute of Chartered Accountants of India, the Company has recognized the deferred tax liability aggregating to Rs 19,13,524/- in the profit and loss account in the current year.

b) Break up of Deferred Tax Liabilities and Deferred Tax Assets into major components of the respective balances are as under:

15. Sundry creditors includes Rs. 11,38,499 due to Small Scale & Ancillary industrial unit which is outstanding for more than 30 days as at the Balance Sheet date. (Previous year Rs. 23,30,506/-) This disclosure is based on the information available with the company, regarding the status of the suppliers.

16. As per the practice consistently followed, Cenvat Duty on finished goods lying in the plants at the end of the year is neither included in expenditure nor valued in such stock, but is accounted for on clearance of goods. This has no effect on profit/loss for the year.

 
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