Mar 31, 2014
A. Basis of preparation of financial statements-
The financial statements of the Company have been prepared in
accordance with the Generally Accepted Accounting Principles in India (
Indian GAAP) to comply with the Accounting Standards notified under the
Companies ( Accounting Standards) Rules, 2006 ( as amended) and the
relevant provisions of the Companies Act, 1956. The financial
statements have been prepared on accrual basis under the historical
cost convention except for gratuity, leave encashment and bonus, which
are charged to profit & loss account on cash basis and that is contrary
to the specific provisions of the Companies Act, 1956 and also contrary
to the Accounting Standard 15 issued by the Institute of Chartered
Accountants of India. The accounting policies adopted in the
preparation of the financial statements are consistent with those
followed in the previous year.
b. Going concern -
Despite the facts as mentioned herein below, accounts are continued to
be prepared on ''Going Concern Basis'', in the absence of adequate
essentia I data and information for compilation on an alternative
basis.
The operations of Agro Division of the Company have been suspended
since 1998.
The Company having incurred net losses during the current year and
continuously incurring net losses/ cash losses for last several years
The Net Worth of the Company has been eroded completely based on the
audited Annual Financial Statements of the Company, since the year
ended on 31stMarch, 1998.
The Accumulated Losses of the Company as at the end of the financial
year, are far exceeding the entire Net Worth of the Company The BIFR
and the Appellate Authority AAlFR have held that the Company should be
wound up u/s 20(1) of SICA, 1985 vide order dt. 14-09-2006 and
dt.06-12-2010 respectively. Consequently, no adjustments are made in
the accounts for compilation of Accounts on an alternative basis
relating to the recoverability of recorded asset amounts and in respect
of likely devolvement of recorded liabilities''and contingent
liabilities
b. Use of estimates -
The preparation of financial statements in conformity with Indian GAAP
requires the management to make estimates and assumptions which are
considered in the reported amounts of assets and liabilities and
disclosure of contingent liabilities as of the date of financial
statements and the reported amounts'' of income and expenses for the
financial period. The management believes that the estimates used in
preparation of financial statements are prudent and reasonable. Future
results could differ due to these estimates and differences between the
actual results and the estimates are recognized in the periods in which
the results are known /materialize.
c. Fixed assets -
Fixed assets are valued at cost of acquisition or construction. They
are stated on historical cost basis less accumulated depreciation.
d. Depreciation -
Depreciation on fixed assets is provided on pro rata basis on straight
line method at the rates prescribed under the Companies Act, 1956.
e. Inventories -
Inventories are valued at cost or market value, whichever is less.
f. Revenue recognition -
Revenue is recognized to the extent that it is probable that the
economic ''benefits will flow to the company and the revenue can be
reliably measured .
Sales are recognized, net of returns and trade disc ounts, on transfer
of significant risks and rewards of ownership to the buyer, which
generally coincides with the delivery of goods to customers. Sales
exclude VAT.
The purchases and sales are shown after making adjustments for claims,
rebates, rate difference, discounts, etc. received/paid as per the
practice prevailing in the trade. Necessary adjustments for the same
are done either by passing journal entry or rectifying the original
invoice of purchase/sales and accounting the same in subsidiary books
etc. with amount.NET RECEIVED or NET PAID for the particular invoice.
g. Foreign Currency Transactions -
Foreign currency transactions entered into by the Company are accounted
at the exchange rate prevailing on the date of the transaction or at
rat e that closely approximate the rate at the date of the transaction.
Foreign currency monetary items outstanding at the Balance Sheet date
are restated at the year-end rate.
-h. Earnings per share ( EPS) -
Basic earnings per share is computed by dividing the profit / (loss)
after tax attributable to the equity shareholders for the period by the
weighted averagenumber of equity shares outstanding during the
reporting period *
i.. Contingent liabilities -
A provision is recognized when the Company has a present obligation as
a result of past events and it is probable that an outflow of resources
will be required to settle the obligation in respect of whicha reliable
estimate can be made. Provisions (excluding retirement benefits) are
not discounted to their , present value and are determined based on the
best estimate required to settle the obligation at the Balance Sheet
date. These are reviewed at each Balance Sheet date and adjusted to
reflect the current best estimates. Contingent liabilities are
disclosed in the Notes.
Security -
* Consortium loans in (a) above are secured by hypothecation of all
movable current assets and further secured by first charge on
land-building, plant-machinery, etc. of Agro division at Bhavnagar
* Loan in (b) above is secured by first charge on all the immovable
properties and also by whole of movable plant-machineries, spares,
tools, accessories, both present and future, of Textile division at
Palsana
* Loans in (b) and (c) above are secured by first charge on all the
immovable properties and also by whole of movable plant-machineries,
spares, tools and accessories, both present and future, of wind farm
unit
* Loans above are further secured by personal guarantee of the
directors.
Repayment terms -
All loans have become overdue for repayment since long.
Default in repayment -
There has been a continuous default in repayment of above loans and
interest since Dec, 1998.
* Also refer Note No.- 7 for other details
Security -
* SBI-WCDL is secured by hypothecation of entire current assets
including stocks & book debts and further secured by second charge on
all the immovable properties of Textile division at Palsana
* SBI-WCDL is further secured by personal guarantee of the directors
Repayment terms - SBI-WCDL repayable on demand has become overdue for
repayment since long. Default in repayment - There has been a
continuous default in repayment of SBI- WCDL and interest since Dec,
1998. Other details -
* The Company had been held sick industrial company under the purview
of the provisions of section 3(1 )(o) of the SICA ( Special
Provisions), 1985 by the BIFR on dt.20-09-2005 and has been held to be
wound up u/s 20(1) of the said Act on dt.14-09-2006 and upheld by the
AAIFR on dt.06-12-2010. These winding up orders are challenged by the
Company, by way of civil application before the hon''ble Gujarat High
Court.
Mar 31, 2012
A. Method of accounting -
The financial statements are prepared under the historical cost
convention and in accordance with the Generally Accepted Accounting
Principles. The Company has been following accrual system of accounting
both as to income and expenditure except for gratuity, leave encashment
and bonus, which are charged to profit & loss account on cash basis and
that is contrary to the specific provisions of the Companies Act, 1956
and also contrary to the Accounting Standard 15 issued by the Institute
of Chartered Accountants of India.
b. Going concern
Despite the facts as mentioned herein below, accounts are continued to
be prepared on 'Going Concern Basis', in the absence of adequate
essential data and information for compilation on an alternative basis.
- The operations of Agro division of the company have been suspended
since 1998.
- The company having incurred net losses during the current year and
continuously incurring cash losses for last several years
- The Net Worth of the Company has been eroded completely based on the
Audited Annual Financial Statements of the company since the year ended
on 31st March, 1998.
- The Accumulated Losses of the company as at the end of the financial
year, are far exceeding the entire Net Worth of the company
- The BIFR and the Appellate Authority AAIFR have held that the company
should be wound up u/s 20(1) of SICA, 1985 vide order dt. 14-09-2006
and dt.06-12-2010 respectively. (Also refer note no. 17 )
Consequently, no adjustments are made in the accounts for compilation
of Accounts on an alternative basis relating to the recoverability of
recorded asset amounts and in respect of likely development of recorded
liabilities and contingent liabilities.
c. Fixed Assets -
All fixed assets are stated at cost of acquisition or construction.
They are stated on historical cost basis less accumulated depreciation.
d. Depreciation -
Depreciation on fixed assets is provided on straight line method on pro
rata basis as per the rates prescribed under the Companies Act, 1956.
(Please also refer note no. 8)
e. Investments -
Investments are stated at cost of acquisition.
f. Inventories -
Inventories are valued at cost or market value, whichever is less.
g. Revenue Recognition -
The purchases and sales are shown after making adjustments for claims,
rebates, rate difference, discounts, etc. received/paid as per the
practice prevailing in the trade. Necessary adjustments for the same
is done either by passing journal entry or rectifying the original
invoice of purchase/sales and accounting the same in subsidiary books
etc. with amount NET RECEIVED or NET PAID for the particular invoice.
h. Contingent liabilities -
These are disclosed in the notes on accounts. Provision is made in the
accounts in respect of contingencies which are likely to materialise
into liabilities after the year till the approval of accounts by the
Board of Directors and which have material effect on the position
stated in the Balance Sheet.
Mar 31, 2010
A. Method of accounting -
The financial statements are prepared under the historical cost
convention and in accordance with the Generally Accepted Accounting
Principles. The Company has been following accrual system of accounting
both as to income and expenditure except for gratuity, leave encashment
and bonus, which are charged to profit & loss account on cash basis and
that is contrary to the specific provisions of the Companies Act, 1956
and also contrary to the Accounting Standard 15 issued by the Institute
of Chartered Accountants of India.
b. Going concern -
Despite the facts as mentioned herein below, accounts are continued to
be prepared on, Going Concern Basis, in the absence of adequate
essential data and information for compilation on an alternative basis.
- The operations of Agro division of the company have been suspended
since 1998,
- Although there has been cash profit earned during the current year,
the company had been continuously incurring cash losses for last
several years
- The Net Worth of the Company has been eroded completely based on the
Audited Annual Financial Statements of the company since the year ended
on 31st March, 1998.
- The Accumulated Losses of the company as at the end of the financial
year, are far exceeding the entire Net Worth of the company
- The BIFR has held that the company should be Wound up u/s 20(1) of
S1CA, 1985 vide order dt. 14-09-2006. (Also refer note no. 17 )
Consequently, no adjustments are made in the accounts for compilation
of Accounts on an alternative bases relating to the recoverability of
recorded asset amounts and in respect of likely devolvement of recorded
liabilities and contingent liabilities.
c. Fixed Assets -
All fixed assets are stated at cost of acquisition or construction.
They are stated on historical cost basis less accumulated depreciation.
d. Depreciation-
Depreciation on fixed assets is provided on straight line method on pro
rata basis as per the rates prescribed under the Companies Act, 1956.
(Please also refer note no. 8)
e. Investments -
Investments are stated at cost of acquisition.
f. Inventories -
Inventories are valued at cost or market value, whichever is less.
g. Revenue Recognition -
The purchases and sales are shown after making adjustments for claims,
rebates, rate difference, discounts, etc. received/paid as per the
practice prevailing in the trade. Necessary adjustments for the same
is done either by passing journal entry or rectifying the original
invoice of purchase/sales and accounting the same in subsidiary books
etc. with amount NET RECEIVED or NET PAID for the particular invoice.
h. Contingent liabilities -
These are disclosed in the notes on accounts. Provision is made in the
accounts in respect of contingencies which are likely to materialise
into liabilities after the year till the approval of accounts by the
Board of Directors and which have material effect on the position
stated in the Balance Sheet.