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Notes to Accounts of Banaras Beads Ltd.

Mar 31, 2018

1. Disclosure related to Provisions, Contingent Liabilities/Assets pursuant to Ind AS 37:

(i) Letter of credit opened with Banks : Rs. NIL (Previous year: Rs. NIL)

(ii) Bank Guarantees outstanding : Rs. NIL (Previous Year-Rs. NIL)

2. Disclosure of Related Party Transaction pursuant to Ind AS 24:

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made. All the transactions have been made at Arm’s Length Basis (where ever applicable).

3. Expenditure on Corporate Social Responsibility:

The company paid Rs. 8.51 lacs (previous year - nil)) during the year as expense under Corporate Social Responsibility (CSR) which is shown in note-29.

4. Disclosure related to Lease pursuant to Ind As 17:

The company has not given any of its assets on Lease, hence disclosure as Lessor is not required.

The company has acquired Leasehold Land from Industry Department of Uttar Pradesh Government through transfer for which Rs. 29843 is paid for premium and capitalised. No amount is payable to the Lessor.

5. Disclosure related to Non Current Assets held for Sale pursuant to Ind As 105:

The company is not having any non current asset for the purpose of sale and hence no disclosure is required.

6. Disclosure related to Financial Instruments :

The company recognized financial assets and financial liabilities when it becomes a party to the contractual provisions of the instruments. All financial assets and liabilities are initially measured at transaction price. Transaction cost that are directly attributable to the acquisition or issue of financial assets and financial liability, which are not at fair value through profit or loss, are added to the fair value on initial recognition. Regular way purchase and sale of financial assets are accounted for at trade date.

i) Foreign exchange rate risk:

In general, the company is a net receiver of foreign currency. Accordingly, changes in exchange rates, and in particular a strengthening of the Indian Rupee, will negatively affect the Company’s net sales and gross margins as expressed in Indian Rupee. There is a risk that the Company may have to adjust local currency product pricing due to competitive pressures when there have been significant volatility in foreign currency exchange rates.

ii) Interest rate risk:

The Company’s exposure to changes in interest rates relates primarily to the Company’s outstanding floating rate debt. The Company’s outstanding debt in local currency is on floating rate. There is a portion of debt that is linked to international interest rate benchmarks like LIBOR. Since the borrowings are small in comparison to total investments and interest expenditure is very small in comparison to total expenditure, the company does not foresee any material risk due to change in interest rate in future.

iii) Liquidity risk management:

The Company manages liquidity risk by maintaining sufficient cash and marketable securities and by having access to funding through an adequate amount of committed credit lines. Given the need to fund diverse businesses, the Company maintains flexibility in funding by maintaining availability under committed credit lines to meet obligations when due. Management regularly monitors the position of cash and cash equivalents vis-a-vis projections. Assessment of maturity profiles of financial assets and financial liabilities including debt financing plans and maintenance of Balance Sheet liquidity ratios are considered while reviewing the liquidity position.

iv) Credit risk management:

The Company’s customer profile includes large number of Foreign Customers and some indigenous Customers. Hence the company is having vast customer base thus Company’s customer credit risk is low. General payment terms include mobilisation advance and part is on credit to be realiasable within 12 months. The Company has a detailed review mechanism of overdue customer receivables at various levels within organisation to ensure proper attention and focus for realisation.

v) No material amount of financial assets or liabilities are written off during the period.

vi) The contractual maturities of significant financial assets and liabilities outstanding as at 31st March, 2018 is one year.

* All the investments are stated in the Financial Statement at cost.

* Market value of shares are taken at last available rate on Stock Exchange.

* In respect of stock not traded on Stock Exchanges, the cost value is taken as market value.

7. Disclosure related to Operating Segment pursuant to Ind As 108:

The company main business is manufacturing and export of Handicrafts items like Glass and other Beads, Necklaces, Imitation Jewelry etc. All those items form just one segment. All other revenues are not significant to be considered as separate segments. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not done. The company has received more than 10% of its revenue from one customer amounting to Rs. 281.48 lacs (previous year Rs. 603.72 lacs from one customer).

8. Disclosure related to Employees Benefit pursuant to Ind As 19:

(i) Employee benefits such as salaries, wages, short term compensated absences, expected cost of bonus, ex-gratia scheme, performance-linked reward falling due to wholly within twelve month of rendering services are recognized in the period in which the employee renders the related services.

(ii) Company''s contribution to Provident Fund, Family Pension Fund, ESI etc. are charged to Profit & Loss Account on accrual basis.

(ii) Liability for gratuity in respect of employees is covered under the Group Gratuity Policy taken by the company from Life Insurance Corporation of India. The premium payable under the Policy, are charged to Profit & Loss Account. The short fall in the Fund amounting to Rs. 1397300 is provided for by the Company as gratuity liability as on reporting date.

9. Earnings per share:

Basic and diluted earnings per share pursuant to Ind As 33 are calculated by dividing the net profit for the year attributable to equity shareholders by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequently the basic and diluted earnings per share remain the same.

10. Separate Financial Statements:

The company is not having any Subsidiary Company, Joint Venture Company and associates and hence no separate disclosure pursuant to Ind AS 27 is made.

11. Disclosure pursuant to Ind AS 101 First Time Adoption of Indian Accounting Standards :

a. For Transition to Ins AS, the company has elected to adopt as deemed cost, the carrying value of Property, Plant and Equipment (PPE) measured as per I-GAAP less accumulated depreciation on the transition date of April 1, 2016.

b. Deferred tax under Ind AS has been recognized on temporary difference between the caring amount of assets and liabilities in the Company’s Financial Statements and the corresponding tax bases used in computation of taxable profit and quantify using the tax rate and laws enacted or substantively enacted as on the balance sheet date. Under I-GAAP the deferred tax was accounted for based on timing differences impacting the Statement of Profit and Loss for the period.

c. Under Ind AS the final dividend including related tax is recognized in the period in which the obligation to pay is established on its approval, post reporting of financial statements. Under I-GAAP a provision was required to be made in the financial statements for the proposed final dividend in the period to which the liability related.

12. The export sales include Goods dispatched but under shipment upto 31.3.2018 amounting to Rs. 620847. Prior to introduction of Goods & Service Tax Act Goods under shipment was not treated as Export (Sale), but as per requirement of Goods & Service Tax Act this change in accounting principle was made. However there is no impact on profitability of the company due to this change.

13. Amount of closing balance as per bank in dedicated dividend payable account has been taken as unclaimed dividend of Rs. 4117773 (previous year Rs. 5424858). The amount does not include amount of demand drafts issued but not en cashed by the shareholders.

14. Rs.1594355 paid to suppliers as advance has been shown as doubtful assets. No provision against the outstanding is made as in the opinion of the management, amount will be recovered in full.

15. 2.51 Hectare land of the company situated at Village Kama Dandi and Bairion, near Tandia, Varanasi have been acquired by Varanasi Development Authorities in Transport Nagar Scheme and the company has challenged the Acquision order before Hon’able Allahabad High Court and Status Quo has been ordered by the Hon’able High Court. The company is still in possession of the land.

16. SETTLEMENT OF MANAGEMENT DISPUTES:

The Special Leave Petition vide no. 25165-25166/2007 filed by Shri Ajit Kumar Gupta and others against Hon’ble CLB order dt. 04.07.2007 and 03.08.2007 in the matter of C.P. No. 14/99, CP No. 14/111/1999, 15/111/1999 and 1/111/2001. The said SLP finally has been decided by Hon’ble Supreme Court on 11.04.2018. The Hon’ble Supreme Court has dismissed the appeals filed by Mr. Ajit Kumar Gupta and others group of small shareholders without any direction, the content of said order is as under –

ORDER

“We have heard learned council for the parties and perused the record. We do not find any merit in these appeals which are here by dismissed. ”

By said order of Supreme Court, the two decade old disputes between the management has finally legally resolved. There is no financial impact of said present order of Hon’ble Supreme Court to the company.

17. MISCELLANEOUS NOTES ON ACCOUNTS:

i) There are no small scale industrial undertakings ( who has informed there SME status to the company) to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 30 days during the year.

ii) The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Ind AS -2 pertaining to valuation of inventories.

iii) There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

iv) Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

v) In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

vi) The Calls in arrears of Share Capital amounting to Rs.223500 and of Share Premium amounting to Rs. 1554900 are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

vii) Previous year''s figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2016

1. Earnings per share:

Basic and diluted earnings per share are calculated by diverting the net profit for the reliable to equity shareholders by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequence diluted earnings per share remain the same.

2. The company had participated in auction as made by Hariyan Un Development Authority (HUDA) on 07.11.2007 and was allotted hotel sit at Gurgaon in Sector Ainder auction of Rs. 3.49 Crores The company has paid total Rs.3. 49 Crores against the said allotment But after repeated request HUDA did not issue possession certificate the company is having no option and decider take refund of total amount paid to HUDA of Rs.3.49 Crore with interest without any deduction But HUDA: refunded only Rs. 11.88 Crores on 30.06. 2012 by deducting 0%. Of amount paid The Company has filed writ petition vide no 9181 of 2011 against HUDA and others for illegal deduction of 0 % and repayment of interest. The Hon’ble High Court has given the verdict in favour of the company and HUDA has refunded the amount deducted and interest amounting to Rs.476.52 Lakhs which has been shown as Extra ordinary Income in the Profit & Loss account.

3. 251 Hectare land of the company situated at Village Karna dandi and Bairnon Tadia, Varanas have been acquired by Vranas Development Authorities in Transport agar Scheme and the company has challenged the Aquarian order before Houn’able Allahabad High Court and Status has been ordered the Houn’able High Court The company is still in possession of the land.

4. Income Tax Refunds of various yeas accounting to Rs. 07.89 Lakh share due to be received from Income tax Authorities. The amount Refunds and interest due on them are being determined by the Income Tax Authorities. Accounting for interest credited will be made as and when determined by the Income T ax Department and derived by the company

5. Details of pending liability of Income Tax and Service Tax:

As on date there is no liability against assessment made by the authorities. For service T ax please refer to point to 26.

6. SETTLEMENT OF MANAGEMENT DISPUTES:

As already reported that the decade old disputes between the two Groups of Shareholders namely Raj Kumar Gupta Group: Kishor Gupta Group state resolved by order dated 04.07.2007 read with order dated 03.08.2007 passed by the Hon’ble Company Law Board in C.P. No. M/99. The directions given by the CLB vide the aforesaid two orders were implemented and communicated to the pager of Annual Report forming part of published Accounts for the F.Y-2Ql^nd onwards. However in this regard the Special Leave Petition vide no. 2565 -25166/2007filed by Shri Ajit Kumar Gupta and others is still pending before Hon’ble Supreme Court for appropriate order. The Management does not reasonably expect that {Special Leave Petition when ultimately concluded and determined, will have a material and adverse effect on the Company’s results of operations or financial condition.

7. NOTING RELATED TO DEPRECIATION

Pursuant to the enactment of Companies Act 2013, the company has applied the estimated unfavorable individual value as specified in Schedule II. Accordingly than amortized carrying value less residual values being depreciated amortized over the revised remaining useful lives..

8. MISCELLANEOUS NOTES ON ACCOUNTS:

9. The Company’s main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces Imitation Jewellary etc. all those items form just one Segment. The sale of commitments such as carpets is less 13% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not r required.

10. There are no small scale industrial undertakings to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 130 days during the year

11. The Management has on ducted physical verification of stocks at reasonable intervals and description do not such verification have been properly dealt with as Accounting Standards pertaining to valuation of inventories issued by Ministry of Corporate Affairs.

12. There is an adequate internal control procedure and internal audit system ensure that with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view of business and experience gained

13. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

14. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which course of business, will not be less than the figure stated in the books of accounts.

15. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education fund, Employees’ State Insurance, Income T ax, Sales T ax, Wealth tax, Service T ax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

16. The Calls in arrears of Share Capital amounting Rs. 224500. and of Share Premium amounting to Rs. 605700 /- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit:

17. Previous year''s figures have been regrouped! ranged/ reclassified wherever necessary to make them comparable with the figures of the current year .


Mar 31, 2015

1. Contingent Liabilities not provided for:

(i) Letter of credit opened with Banks : Rs. NIL (Previous year: Rs. NIL)

(ii) Bank Guarantees outstanding : Rs. NIL (Previous Year -Rs. NIL)

(iii) For Managing Director Remuneration : Rs. 26.88 Lakhs

(The company has not paid any remuneration to Sri Ashok Kumar Gupta, Chairman and managing director for want of approval of Ministry of Corporate Affairs and if the approval is granted from the date of re appointment, then the company will have to pay remuneration of Rs 24.00 Lakhs and provident fund contribution amounting to 2.88 Lakhs)

(iv) Contingent Liabilities of : The company is having following Taxes and Duties contingent liability

Nature of Amount in Remarks Liability Lakhs

Service Tax 7.63 Appeal is pending with Commissioner Appeals, Allahabad against order made by Assistant commissioner, Varanasi. No provision has been made against this demand. The management has been advised that it has strong case and the demand is likely to be set aside in appeal.

Service Tax 0.99 The Department of Service Tax have filed an appeal with the Commissioner Appeals against the Review order made by the Commissioner, Allahabad. No demand has yet been raised on the company.

2. Related Party Disclosures:

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made. All the transactions have been made at Arm''s Length Basis.

3. Earning per share:

Basic and diluted earnings per share are calculated by diverting the net profit for the year attributable to equity shareholders by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequently the basic and diluted earnings per share remain the same.

4. The company had participated in auction as made by Hariyan Urban Development Authority (HUDA) on 07.11.2007 and was allotted hotel site at Gurgaon in Sector 10A under auction of Rs. 16.05 Crores. The company has paid total Rs. 13.49 Crores against the said allotment. But after repeated request, HUDA did not issue possession certificate, resultantly the company is having no option and decided to take refund of total amount paid to HUDA of Rs.13.49 Crore with interest without any deduction. But HUDA refunded only Rs. 11.88 Crores on 30.05.2012 by deducting 10%. Of amount paid The Company has filed writ petition vide no 9181 of 2014 against HUDA and others for illegal deduction of 10 % and nonpayment of interest. The matter is still pending. The management has been advised that it has strong case and the amount deducted is likely to be paid by HUDA, hence no provision for this doubtful receivables has been made in the accounts. Accounting for Interest Claimed will be made as and when the matter is finalised.

5. Details of pending liability of Income Tax and Service Tax:

As on date there is no liability against assessment made by the Income Tax authorities. For service Tax please refer to point no 26.

6. SETTLEMENT OF MANAGEMENT DISPUTES:

As already reported that the decade old disputes between the two Groups of Shareholders namely Raj Kumar Gupta Group and Ashok Kumar Gupta Group stands resolved by order dated 04.07.2007 read with order dated 03.08.2007 passed by the Hon''ble Company Law Board in C.P. No. 14/99. The directions given by the CLB vide the aforesaid two orders were implemented and communicated to the Shareholders as part of Annual Report forming part of published Accounts for the F.Y.2006-2007 and onwards. However in this regard the Special Leave Petition vide no. 25165-25166/2007filed by Shri Ajit Kumar Gupta and others is still pending before Hon''ble Supreme Court for appropriate order. The Management does not reasonably expect that the Special Leave Petition, when ultimately concluded and determined, will have a material and adverse effect on the Company''s results of operations or financial condition.

7. NOTING RELATED TO DEPRECIATION

Pursuant to the enactment of Companies Act 2013, the company has applied the estimated useful lives and residual value as specified in Schedule II. Accordingly the unamortised carrying value less residual value is being depreciated / amortised over the revised remaining useful lives. The written down value of fixed Assets whose lives have expired as at 1st April 2014 have been adjusted net of tax, in the opening balance of Profit and Loss Account amounting to Rs.9.47 Lakhs.

8. MISCELLANEOUS NOTES ON ACCOUNTS:

1. SEGMENT:

The Company''s main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces, Imitation Jewellary etc. all those items form just one Segment. The sell of minor items such as carpets is less then 10% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.

2 There are no small scale industrial undertakings to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 30 days during the year.

3. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Ministry of Corporate Affairs.

4. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

5. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

6. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

7. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

8. The Calls in arrears of Share Capital amounting to Rs.227500 and of Share Premium amounting to Rs. 1760750/- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

9. Previous year''s figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2013

1. Contingent Liabilities not provided for:

(i) Letter of credit opened with Banks : Rs. NIL (Previous year: Rs. NIL)

(ii) Bank Guarantees outstanding : Rs. NIL (Previous Year-Rs. NIL)

(iii) Contingent Liabilities of Taxes and Duties

The company is not having any contingent liability except the appeals pending before CIT (Appeals)-Varanasi and Commisioner of Customs against various orders of Officers. Details of appeals pending are as under:

For A.Y. 2001-2002 – A demand of Rs. 15.00 lacs was raised by the Assessing Officer under section 271 (1) © of Income Tax Act''1961 vide order dated 29.01.2013 against which an appeal was filed by the company before the CIT (Appeals)-Varanasi on 28.02.2013. The appeal is still pending. No provision has been made against this demand. The management has been advised that it has strong case and the demand is likely to be set aside in appeal.

For A.Y. 2010-2011 – A demand of Rs. 76.02 lacs (MAT) was raised by the Assessing Officer under section 143(3) of Income Tax Act''1961 vide order dated 28.01.2013 against which an appeal was filed by the company before the CIT (Appeals)-Varanasi on 27.02.2013. The appeal is still pending. Amount of refund of Rs. 51.44 lacs pertaining to A.Y.1997-98 has been adjusted against the said demand by the Income Tax Department. No provision has been made against the remaining demand of Rs. 24.58 lacs. The management has been advised that it has strong case and the total demand is likely to be set aside in appeal.

Redemption fine of Rs. 4.00 lacs and penalty of Rs. 0.19 lacs has been imposed by Additional Commissioners of Customs against classification of goods exportedvide order dated 23.01.2013 against which an appeal was filed by the company before Commissioners of Customs. The appeal is still pending. No provision has been made against this demand. The management has been advised that it has strong case and the demand is likely to be set aside in appeal

2. Earning per share:

Basic and diluted earnings per share are calculated by diverting the net profit for the year attributable to equity shareholders by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequently the basic and diluted earnings per share remain the same.

3. The company had participated in auction as made by Hariyan Urban Development Authority (HUDA) on 07.11.2007 and was allotted hotel site at Gurgaon in Sector 10A under auction of Rs. 16.05 Crores. The company has paid total Rs. 13.49 Crores against the said allotment. But after repeated request, HUDA did not issue possession certificate, resultantly the company is having no option and decided to take refund of total amount paid to HUDA of Rs.13.49 Crore with interest without any deduction. But HUDA refunded only Rs. 11.88 Crores on 30.05.2012 by deducting 10%. Of amount paid The company has sent legal notice to HUDA against illegal deduction of 10 % and non payment of interest . The matter is still pending. The management has been advised that it has strong case and the amount deducted is likely to be paid by HUDA, hence no provision for this doubtful receivables has been made in the accounts. Accounting for Interest Claimed will be made as and when the matter is finalised.

A. MISCELLANEOUS NOTES ON ACCOUNTS:

1. SEGMENT:

The Company''s main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces, Imitation Jewellary etc. all those items form just one Segment. The sell of minor items such as carpets is less then 10% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.

2 There are no small scale industrial undertakings to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 30 days during the year.

3. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Institute of Chartered Accountants of India.

4. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

5. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

6. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

7. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

8. The Calls in arrears of Share Capital amounting to Rs.227500 and of Share Premium amounting to Rs. 1851750/- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

9. Previous year''s figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2012

1. The pending appeals pertaining to Assessment Year 1996-97 and 1997-98 have been decided by the Income Tax Appellate Tribunal, Delhi Vide order dated 04.04.2008. Pursuant to such orders the company is Entitled to get refund of approximately Rs. 28.77 Lakhs including interest. The refunds are yet to be received hence not accounted for in the Accounts.

2. SEGMENT:

The Company's main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces, Imitation Jewellary etc. all those items form just one Segment. The sell of minor items such as carpets is less then 10% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.

3. There are no small scale industrial undertakings to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 30 days during the year.

4. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Institute of Chartered Accountants of India.

5. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

6. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

7. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

8. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

9. The Calls in arrears of Share Capital amounting to Rs.227500 and of Share Premium amounting to Rs. 2033750/- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

10. Previous year's figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2011

1. Contingent Liabilities not provided for:

(i) Letter of credit opened with Banks : Rs. NIL (Previous year: Rs. NIL)

(ii) Bank Guarantees outstanding : Rs. NIL (Previous Year-Rs. NIL)

2. The pending appeals pertaining to Assessment Year 1996-97 and 1997-98 have been decided by the Income Tax Appellate Tribunal, Delhi vide order dated 04.04.2008. Pursuant to such orders the company is entitled to get refund of approximately Rs. 28.77 Lakhs including interest. The refunds are yet to be received hence not accounted for in the Accounts.

3. Related Party Disclosures:

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made.

5. SEGMENT:

The Company's main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces, Imitation Jewellary etc. all those items form just one Segment. The sell of minor items such as carpets is less then 10% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.

7. Earning per share:

Basic and diluted earnings per share are calculated by diverting the net profit for the year attributable to equity shareholders by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequently the basic and diluted earnings per share remain the same.

8. There are no small scale industrial undertakings to whom the Company owes a sum exceeding Rs. one lac which is outstanding for more than 30 days during the year.

10. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Institute of Chartered Accountants of India.

11. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

12. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

13. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

14. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

15. The Calls in arrears of Share Capital amounting to Rs.232500 and of Share Premium amounting to Rs. 2206675/- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

16. Previous year's figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2010

1. Contingent Liabilities not provided for:

(i) Letter of credit opened with Banks Rs. NIL (Previous year: Rs. NIL)

(ii) Bank Guarantees outstanding Rs. NIL {Previous Year-Rs. NIL)

2. The pending appeals pertaining to Assessment Year 1996-97 and 1997-98 have been decided by the Income Tax Appellate Tribunal, Delhi vide order dated 04.04.2008. Pursuant to such orders the company is entitled to get refund of approximately Rs. 28.77 Lakhs including interest. The refunds are yet to be received hence not accounted for in the Accounts.

3. Related Party Disclosures:

The Company has identified all related parties and details of transactions are given below. No provision for doubtful debts or advances is made.

4. SEGMENT:

The Companys main business is Manufacturing and export of Handicraft items like Glass Beads; Necklaces, Imitation Jewellary etc. all those items form just one Segment. The sell of miner items such as carpets is less then 10% of total sales. As the company has its commercial activity mainly at Varanasi, hence separate geographical segment wise reporting is not required.

ii) No provision for deferred tax asset has been made in respect of un-assessed accumulated unabsorbed loss and depreciation in view of uncertainty of their allowance by the Tax Authority due to delayed submission of Accounts.

5. Earning per share:

Basic and diluted earnings per share are calculated by diverting the net profit for the year attributable to equity shareholders, by the weighted average number by equity shares. The Company does not have any outstanding diluted potential equity shares. Consequently the basic and diluted earnings per share remain the same.

6. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Institute of Chartered Accountants of India.

7. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

8. Balance of Sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

9. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value, which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

10. The Company has been generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund. Employees State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax Customs Duty, Excise Duty, Cess and any other statutory dues, where applicable with the appropriate authorities.

11. The Calls in arrears of Share Capital amounting to Rs.232500 and of Share Premium amounting to Rs. 2206675/- are outstanding since long. None of these amounts relate to the directors or their relatives. The Management has decided not to forfeit such shares for the time being.

12. Previous years figures have been regrouped/ rearranged/ reclassified wherever necessary to make them comparable with the figures of the current year.


Mar 31, 2000

1. Contingent Liabilities not provided for :

(i) Letter of credit opened with Bankers Rs. NIL (Previous year : Rs. NIL )

(ii) Bank Guarantees outstanding : Rs. 26,46,000 (Previous Year-Rs.25,07,500)

(iii) No provision has been made for the demands of Trade Tax aggregating to Rs. 1,24,181 as the same are disputed and appeals have been filed by the company. The Appeals are pending before the Trade Tax Tribunal. The Management has been advised that it has a strong case and the demand are likely to be set aside in appeal.

(iv) Demand of Rs. 31250 for upfront fee etc. of PICUP, is disputed hence no provision has been made.

2. Income Tax assessments have been completed upto assessment year 1998-99. The Income Tax Department has raised demands of Rs. 9835310 for A.Y. 1996-97 and Rs. 6584762 for A.Y. 1997-98, against which the Company has filed appeals before the Appellate Authorities. The appeals are still pending. No provision has been made against these demands. The Management has been advised that it has a strong case and the demands are likely to be set aside in appeal.

3. There are some disputes between the two groups of shareholders of the Company One Shri Ashok Kumar Gupta (Chairman & Managing Director) and the other represented by Shri Raj Kumar Gupta, Executive Director of the Company. The disputes primarily pertain to the management of the Company. With the consent of the parties, the disputes were referred for arbitration to Honble Justice Mr. A.N. Gupta. The Honble Arbitrator gave his Award on 01.11.98. The Award was challenged by Shri Raj Kumar Gupta in the court of District Judge Varanasi. However the application filed by Shri Raj Kumar Gupta was dismissed by the Honble District Judge and the Award was confirmed. Shri Raj Kumar Gupta has filed appeal in the High Court against the above Order, which is still pending. The Board of Directors of the Company have accepted the Award and promoted a new company and approved a Scheme of Arrangement for division of the company as per the terms of the Award. The Scheme of Arrangement has been approved by the Shareholders and the Creditors of the Company by overwhelming majority at their respective meetings duly convened and held as per the directions of the Honble Allahabad High Court. The Scheme of Arrangement is now pending for sanction before the Honble High Court.

Shri Raj Kumar Gupta and his family members have also filed a Petition alleging opresion and mismanagement against fhe Company,Shri Ashok Kumar Gupta, other directors, Companys Bankers namely State Bank of India and M/s R.P. Pandey & Co., the then Statutory Auditors. The said petition is pending before the Honble Company Law Board.

All expenses incurred in connection with the aforesaid Arbitration and for defending the Award in subsequent proceedings before the District Judge and the High Court, for defending the cases before the Company Law Board, and for incorporation of a new Company and to get the Scheme of Arrangement sanctioned by Honble High Court, etc. have been debited in the books of the Company as in the opinion of the Director, such expenses directly relate to the smooth management and operation of the Company.

4. Out of Rs. 12,32,500 shown as Share Application in "Schedule 6 : Other Current Assets", refund of Rs. 12,10,000 has been received in full from the Company, concerned in the subsequent financial year.

5. The Management has conducted physical verification of stocks at reasonable intervals and discrepancies noticed on such verification have been properly dealt with as per Accounting Standards-2 pertaining to valuation of inventories issued by the Institute of Chartered Accountants of India.

6. Against the insurance claim of Rs.69,23,815/-lodged by the Delhi Office on account of Loss of stocks in fire the Insurance Company has assessed loss of Rs.480487/- only. The balance claim has been rejected. The company has disputed the action of the Insurance Company: The matter is pending in the Court.

7. During the year Shri Raj Kumar Gupta, Executive Director and Incharge of the Delhi Units of the Company, has given loans to Reliance Precitonce Jwellers in which Shri Raj Kumar Gupta was a shareholder / director at the time when the said loans were given, without the approval of the Board of Directors.

9. The account of Shri Raj Kumar Gupta, Executive Director of the Company reflects a debit balance of Rs. 538745 as on 31.3.2000 on account of various expenses of personal nature which were paid by Delhi office and debited to his personal account as per decision of the Board of Directors.

12. There is an adequate internal control procedure and internal audit system commensurate with the size of the company and the nature of its business. The Directors have been making consistent efforts to improve such procedures and systems keeping in view the needs of business and experience gained.

13. Balance of sundry Debtors, Creditors and Loans and Advances shown in the accounts are subject to confirmation by the parties concern.

14. In the opinion of the Directors, Currents Assets, and Loans and Advances are approximately of the value which, if realised, in the ordinary course of business, will not be less than the figure stated in the books of accounts.

15. No undisputed amounts payable in respect of Income Tax, Wealth Tax, Trade Tax/Sales Tax, Customs Duty and Excise Duty were outstanding as at the last date of the Financial Year for a period more than six months from the date they became payable.

16. Previous years figures have been regrouped/rearranged/reclassified wherever necessary to make them comparable with the figures of the current year.

17. The Accounts for the year are subject to approval and adoption of Accounts for the F.Y. 1998-99 by the Shareholders of the Company. Due to the dispute among two groups of shareholders are explained in point No. 3 the accounts could not be finalised and audited. Now with the intervantion of Honble Company Law Board, accounts of all pending years have been finalised and audited and being put before the shareholders for their adoption and approval.

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