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Notes to Accounts of Amit Spinning Industries Ltd.

Mar 31, 2015

1. Working Capital borrowings are secured by first charge on all current assets (both present and future) of the company and second paripassu charge on fixed assets. The loans are further secured by Corporate Guarantee of its holding company, Spandex Industries Limited.

2. Short Term Loan from Bank is secured by subservient charge on all current assets (both present and future) and movable fixed assets of the company. The loans are further secured by Corporate Guarantee of its holding company, Spentex Industries Limited and personal Guarantee of Shri Mukund Choudhary & Kapil Choudhary. Loan is repayable within 6 months from date of disbursement. Interest is payable monthly @ 13.40 % p.a.

Note:

During the current financial year 2014-15, the company has revised the Depreciation rates based on the useful lives of its various fixed assets as per Part-C of Schedule-II to the Companies Act-2013 based on written down value method. As a result, opening casemated depreciation reserve as on 01.04.2014 is higher by Rs.18.70 crore which has been adjusted against the opening reserves and surplus.

The Company had provided corporate guarantee for jointly with Spentex Industries Limited for the loan given to Spentex (Netherlands), B.V. by Lehman Brothers and SBI for assets of its subsidiary Spentex Tashkent Toyepa LLC (STTL). In accordance with the decision of the Tashkent Economic Court, dated 25.09.2013, the assets of STTL were transferred in settlement of the loan availed from Lehman Brothers and SBI. In view of these developments, the management of the opinion that guarantee is longer enforceable as the loan availed is completely settled.

As certified by the management based on the available information. Note

Note No.3.

The Sundry Debtors include export receivables of Rs. 1027.38 lakhs and Loans and advances include advances of Rs.92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India (RBI) through its authorized dealer to write off these debts. However, pending approval from RBI, the management has decided not to write off the said amounts from books of account.

Note No.4

The outstanding balance as on March 31, 2015 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising therefrom, if any. The management, however, does not expect any material variations.

Note No.5

The Loans and Advances of the Company include a sum of Rs.1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has earlier filed an application with the office of DGFT for the claim and made significant efforts for receiving the claim. The company has also filed claim against Jak Traders Private Limited for recovery of the claims.

Note No.6

As on March 31, 2015, the accumulated losses of the Company have far exceeded its net worth. In the opinion of the management, the Company's operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 for determination of sickness and measures to be adopted for rehabilitation. The BIFR, vide its order, dated 18.07.2012 declared the Company as sick under section 3(1)(o) of SICA, 1985 and appointed UCO Bank as Operating Agency (OA) under section 17(3) to prepare Rehabilitation Scheme for the Company. However, on the strength of management's plan of revival including reorganization of business, these financial statements are prepared on a going concern basis.

Note No. 7

Segmental Reporting

In accordance with Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company has identified two business segments viz. Textile Manufacturing and Textile Trading. Further, two geographical segments by location of customers have been considered as secondary segments viz, Within India and Outside India .The segment wise disclosure are as follows:

Deferred tax asset amounting to Rs.8,78,24,766 has been recognized until 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognize any further deferred tax asset on prudence consideration and has fully written off the same during the current year.

Note No. 8:

Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard 'AS-18' Issued by the Institute of Chartered Accountants of India.

Relationships:

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Spentex (Netherlands), B.V.

Note :

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

Note No. 9

Employee Benefits

Consequent upon the adoption of Accounting Standard on Employee Benefits AS-15 (Revised) Issued by the Institute of Chartered Accountants of India, as required by the Standard the following disclosures are made:


Mar 31, 2014

Note No.1

The Sundry Debtors include export receivables of Rs. 1027.38 lakhs and Loans and advances include advances of Rs.92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India (RBI) through its authorized dealer to write off these debts. However, pending approval from RBI, the management has decided not to write off the said amounts from books of account.

Note No.2

The outstanding balance as on March 31, 2014 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising therefrom, if any. The management, however, does not expect any material variations.

Note No.3

The Loans and Advances of the Company include a sum of Rs.1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has earlier filed an application with the office of DGFT for the claim and made significant efforts for receiving the claim. The company has filed claim against Jak Traders Private Limited for recovery of the claims.

Note No.4

As on March 31, 2014, the accumulated losses of the Company have far exceeded its net worth. In the opinion of the management, the Company''s operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 for determination of sickness and measures to be adopted for rehabilitation. The BIFR, vide its order, dated 18.07.2012 declared the Company as sick under section 3(1)(o) of SICA, 1985 and appointed UCO Bank as Operating Agency (OA) under section 17(3) to prepare Rehabilitation Scheme for the Company. Further, due to shortage of capital, the company has worked on job-work basis only during the current year. However, on the strength of management''s plan of revival including reorganization of business, these financial statements are prepared on a going concern basis.

Deferred tax asset amounting to Rs.8,78,24,766 has been recognised uptil 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognise any further deferred tax asset on prudence consideration. The management expects that the company will turn around after revival scheme is sanctioned by BIFR and shall start earning taxable profits and realizing the Deferred Tax Asset already recognized in the balance sheet.

Note No.5: Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard ''AS-18'' Issued by the Institute of Chartered Accountants of India.

Relationships:

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Spentex (Netherlands), B.V.

c. Key Management Personnel Mr. S.P. Setia- Chairman

Note No.6 Employee Benefits

Consequent upon the adoption of Accounting Standard on Employee Benefits AS-15 (Revised) Issued by the Institute of Chartered Accountants of India, as required by the Standard the following disclosures are made:

The estimates of future salary increase, considered in actuarial assumptions take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Note No.7

Previous period figures given in brackets have been regrouped and restated wherever considered necessary.


Mar 31, 2013

Note No. 1: Contingent Liabilities

Contingent Liabilities not provided for in respect of -

a. The following guarantees provided by/ on behalf of the company:

(Figures in Rs.)

S. No. Particulars As at 31.03.13 As at 31.03.12

1. Corporate guarantee given to Lehman Brothers Commercial Corporation 58,75,81,000 54,12,50,000

Asia Limited, Hongkong (Lehman) and State Bank of India, Tokyo Branch (SBI) for loan extended to Spentex (Netherlands), B.V. USD 10.825 millions (previous year USD 10.825 millions)

Total 58,75,81,000 54,12,50,000

The Company has provided corporate guarantee for jointly with Spentex Industries Limited for the loan given to Spentex (Netherlands), B.V. by Lehman and SBI. The company believes that guarantee given to Lehman is no longer valid as Lehman did not comply with the terms and conditions of the loan agreement based on which guarantee was given. Accordingly, the figures for current and previous year do not include the portion of the guarantee relating to the loan from Lehman Brothers.

Note No.2

The Sundry Debtors include export receivables of Rs. 1027.38 lakhs and Loans and advances include advances of Rs.92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India (RBI) through its authorized dealer to write off these debts. However, pending approval from RBI, the management has decided not to write off the said amounts from books of account.

Note No.3

The outstanding balance as on 31st March 2013 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising there from, if any. The management, however, does not expect any material variations.

Note No.4

Schoeller Litvinov k.s (SLKS), a fellow subsidiary of the Company, had registered losses during the year and earlier financial years due to economic slowdown. This fellow subsidiary had submitted a re-organization plan, dated 13.11.2009, seeking deferment of payment to Secured Creditors, and proportionate waiver of unsecured liabilities which has now been approved by the court. Subsequently, in another reorganization plan, the court has ordered to substantially write off the unsecured creditors including the liability towards to the company. Accordingly, the company has made a provision for bad debt for Rs.5,44,23,615, due from SLKS as an exceptional item during 2011-12. However, pending approval from RBI, the management has decided not to write off the said amounts from books of account.

Note No.5

The Loans and Advances of the Company include a sum of Rs.1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has earlier filed an application with the office of DGFT for the claim and made significant efforts for receiving the claim. The company has filed claim against Jak Traders Private Limited for recovery of the claims.

Note No.6

As on 31st March 2013, the accumulated losses of the Company have exceeded its net worth. In the opinion of the management, the Company''s operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 15 of Sick Industrial Companies (Special Provisions) Act, 1985 for determination of sickness and measures to be adopted for rehabilitation. The BIFR, vide its order, declared the Company as sick under section 3(1)(o) of SICA, 1985 and appointed UCO Bank as Operating Agency (OA) under section 17(3) to prepare Rehabilitation Scheme for the Company. Further, due to shortage of capital, the company has worked on job-work basis only during the current year. However, on the strength of an undertaking from Board of Directors to turn around the financial position of the Company, these financial statements are prepared on a going concern basis.

Note No. 7: Segmental Reporting

In accordance with Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company has identified two business segments viz. Textile Manufacturing and Textile Trading. Further, two geographical segments by location of customers have been considered as secondary segments viz, Within India and Outside India .The segment wise disclosure are as follows:

Deferred tax asset amounting to Rs.8,78,24,766 has been recognized uptil 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognize any further deferred tax asset on prudence consideration.

Note No.8: Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard ''AS-18'' Issued by the Institute of Chartered Accountants of India.

Relationships:

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Spentex (Netherlands), B.V.

c. Key Management Personnel Mr. S.P. Setia- Chairman


Mar 31, 2012

Note No. 1: Contingent Liabilities

Contingent Liabilities not provided for in respect of –

a. The following guarantees provided by the company: Nil

The Company has provided corporate guarantee for jointly with Spentex Industries Limited for the loan given to Spentex (Netherlands), B.V. by Lehman and SBI. The company believes that guarantee given to Lehman is no longer valid as Lehman did not comply with the terms and conditions of the loan agreement based on which guarantee was given. Accordingly, the figures for current and previous year do not include the portion of the guarantee relating to the loan from Lehman Brothers.

b. Claims against company not acknowledged as debts:

(Figures in Rs)

S.No. Description As at 31.03.12 As at 31.03.11

1. Electricity duty by 1,43,55,000 1,43,55,000 Maharashtra State Government on units generated through captive power plant between the period Apr-2000 to Apr-2005 (petition pending before the Supreme Court)

2. Demands from MSEDCL under 5,82,32,830 5,24,63,369 appeal (including interest of Rs. 2,37,73,251,previous year Rs. 2,02,38,387)

3. Demands from Excise 64,09,046 80,408 Departments under appeal/ revision

4. Demands from Maharashtra 10,44,000 - Sales Tax Authorities under appeal for FY 2004-05 not provided for.

5. Demands from EPF Department 15,94,349 - for the period 02/2003 to 11/2006

Total 8,16,35,225 7,46,73,018

Note No.2

The Sundry Debtors include export receivables of Rs. 1027.38 lakhs and Loans and advances include advances of Rs. 92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India (RBI) through its authorized dealer to write off these debts. However, pending approval from RBI, the management has decided not to write off the said amounts from books of account.

Note No.3

The outstanding balance as on March 31, 2012 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising there from, if any. The management, however, does not expect any material variations.

Note No.4

Schoeller Litvinov k.s (SLKS), a fellow subsidiary of the Company, had registered losses during the year and earlier financial years due to economic slowdown. This fellow subsidiary had submitted a re-organization plan, dated 13.11.2009, seeking deferment of payment to Secured Creditors, and proportionate waiver of unsecured liabilities which has now been approved by the court. Subsequently, in another reorganization plan, the court has ordered to substantially write off the unsecured creditors including the liability towards to the company. Accordingly, the company has decided to write off Rs. 5,44,23,615, due from SLKS as an exceptional item.

Note No.5

The Loans and Advances of the Company include a sum of Rs. 1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has filed an application with the office of DGFT for the claim and on the basis of legal advice obtained, is sanguine of receiving the claim.

Note No.6

As on March 31, 2012, the accumulated losses of the Company have exceeded its net worth. In the opinion of the management, the Company's operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 15(1) and 15(2) of Sick Industrial Companies (Special Provisions) Act, 1985 for determination of sickness and measures to be adopted for rehabilitation.. However, based on recent performance and trends of the company and overall industry outlook, the management believes that losses incurred in past would be made good. The financial statements have been prepared on a going concern basis on the strength of management's plan of revival including reorganization of business and restructuring of loan facilities under Corporate Debt Restructuring scheme.

Note No. 7:

Segmental Reporting

In accordance with Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company has identified two business segments viz. Textile Manufacturing and Textile Trading. Further, two geographical segments by location of customers have been considered as secondary segments viz, Within India and Outside India. The segment wise disclosure are as follows:

Note No. 8

Deferred tax asset amounting to Rs. 8,78,24,766 has been recognised uptil 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognise any further deferred tax asset.

Note No.9: Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard 'AS-18' Issued by the Institute of Chartered Accountants of India.

Relationships:

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Scholler Litinov, K.S.

c. Key Management Personnel Mr. R. Sampath- erstwhile Managing Director

Note No.10 Employee Benefits

Consequent upon the adoption of Accounting Standard on Employee Benefits AS-15 (Revised) Issued by the Institute of Chartered Accountants of India, as required by the Standard the following disclosures are made:


Mar 31, 2011

1. The Sundry Debtors include export receivables of Rs. 314.09 lakhs and Loans and advances include advances of Rs.92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India through its authorized dealer to write off these debts.

2. The outstanding balance as on March 31, 2011 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising there from, if any. The management, however, does not expect any material variations.

3. Schoeller Litvinov k.s (SLKS), a fellow subsidiary of the Company, had registered losses during the year and earlier financial years due to economic slowdown. This fellow subsidiary had submitted a re-organization plan, dated 13.11.2009, seeking deferment of payment to Secured Creditors, and proportionate waiver of unsecured liabilities which has now been approved by the court. The Company believes that the reorganization plan, considering improvement in the global textile market, will turn around this subsidiary, so as to make good its losses in a foreseeable period of time and will also place this subsidiary in a position to repay the liabilities in due course. Accounts and other receivables amounting to Rs.6,01,84,142 is due from SLKS as at March 31, 2011. Accordingly, provision against these Accounts and other receivables is not considered necessary at this stage.

4. The Loans and Advances of the Company include a sum of Rs.1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has filed an application with the office of DGFT for the claim and on the basis of legal advise obtained, is sanguine of receiving the claim.

5. As on March 31, 2011, the accumulated losses of the Company have exceeded its net worth. In the opinion of the management, the Company's operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 23(1) of Sick Industrial Companies (Special Provisions) Act, 1985. However, based on recent performance and trends of the company and overall industry outlook, there is an increase in average selling prices of yarn, stability in production levels and reduction in procurement costs of raw materials. The company has started earning cash profits and the management believes that losses incurred in past would be made good. The financial statements have been prepared on a going concern basis on the strength of management's plan of revival including reorganization of business and restructuring of loan facilities under Corporate Debt Restructuring scheme.

Note:

The perquisites mentioned above include Rs.1,53,195 (previous year Rs.Nil) for leave encashment received by the directors.

6. Segment Reporting

In accordance with Accounting Standard - 17 on Segment Reporting issued by the Institute of Chartered Accountants of India, the Company has identified two business segments viz. Textile Manufacturing and Textile Trading. Further, two geographical segments by location of customers have been considered as secondary segments viz, Within India and Outside India .The segment wise disclosure are as follows:

Notes :

Deferred tax asset amounting to Rs.8,78,24,766 has been recognised uptil 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognise any further deferred tax asset.

7 Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard 'AS-18' Issued by the Institute of Chartered Accountants of India.

Relationships :

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Schoeller Litvinov, K.S., Spentex (Netherlands), B.V.

c. Key Management Personnel Mr. R. Sampath- Managing Director The estimates of future salary increase, considered in acturial assumptions take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the emplyment market.

Notes :

As per Transitional Provisions as contained in AS-15 (Revised), the Company has decided to amortize the total gratuity expenses of Rs.44.89 Lacs arising due to first time adoption of the revised accounting standard over a period not exceeding five years beginning with the year of adoption of the standard, the same is being amortized on year to year basis as 8.97 lacs per year. During the current year, the Company has written off Rs.8,97,858 and no deferred gratuity expense remains to be written off.

8. Deferred Revenue Expenditure

The Company has incurred Rs.109 lacs as deferment charges for the reschedulement of term loan during prior years; the same is being amortized over the period of nine years. Accordingly, during the year, the company has charged Rs.8.49 lacs (previous year Rs.12.60 lacs) to the statement of profit and loss account as current year charge and Rs.Nil (previous year Rs.8.49 lacs) has been carried forward to subsequent years.

9. Previous period figures given in brackets have been regrouped and restated wherever considered necessary.


Mar 31, 2010

1 Contingent Liabilities not provided for in respect of :



a The following guarantees provided by the Company :

Serial No Name of the Bank As at As at 31.03.2010 31.03.2009

1 AXIS BANK LTD 12,00,000 12,00,000

2 AXIS BANK LTD 1,90,000 1,90,000

3.* Corporate guarantee given to Lehman Brothers Commercial 48,59,34,250 47,12,00,000

Corporation Asia Limited, Hongkong (Lehman) and State Bank of India, Tokyo Branch (SBI) for loan extended to Spentex (Netherlands), B.V. USD 10.825 millions (previous year USD 10.825 millions)

Total 48,73,24,250 47,25,90,000



*The Company has provided corporate guarantee for USD 42.50 million jointly with Spentex Industries Limited for the loan given to Spentex (Netherlands), B.V. by Lehman and SBI. The company has been legally advised that guarantee given to Lehman is no longer valid as Lehman did not comply with the terms and conditions of the loan agreement based on which guarantee was given.

3. The Sundry Debtors include export receivables of Rs. 314.09 lakhs and Loans and advances include advances of Rs.92.35 lacs, for which the Company has made a provision for Doubtful Debts for the aforesaid amounts. The Company has also sought the permission of the Reserve Bank of India through its authorized dealer to write off these debts.

4. The outstanding balance as on March 31, 2010 in respect of certain Sundry debtors, Creditors, Loans & Advances and Bank and other deposits are subject to confirmation from the respective parties and consequential reconciliations/ adjustments arising there from, if any. The management, however, does not expect any material variations.

5. Schoeller Litvinov k.s (SLKS), a fellow subsidiary of the Company, had registered losses during the year and earlier financial years due to economic slowdown and restructuring costs etc. This fellow subsidiary had submitted a re-organization plan seeking deferment of payment to Secured Creditors, and proportionate waiver of unsecured liabilities which has now been approved by the court. The Company believes that the reorganization plan, considering improvement in the global textile market, will turn around this subsidiary, so as to make good its losses in a foreseeable period of time and will also place this subsidiary in a position to repay the liabilities in due course. Accounts and other receivables amounting to Rs. 7,27,88,857 is due from SLKS as at March 31, 2010. Accordingly, provision against these Accounts and other receivables is not considered necessary at this stage.

6. Loans and Advances of the Company include an amount of Rs.1,93,46,572, being an amount receivable from Customs Department as drawbacks against the export sale pertaining to the period 1993 to September, 2004 when the unit was 100% Export Oriented Unit (EOU). The company has filed a letter with the office of DGFT for the claim and on the basis of legal advise obtained, is sanguine of receiving the claiming within the year ended March 31, 2011.

7. As on March 31, 2010, accumulated losses of the Company have exceeded its net worth. In the opinion of the management, the Companys operations are affected by global business downturn which has resulted in reduction in demand, increase in input costs and shortage of working capital. The Company has also filed a reference with Board for Industrial and Financial Restructuring (BIFR) under section 23(1) of Sick Industrial Companies (Special Provisions) Act, 1985. However, based on recent performance and trends of the company and overall industry outlook, there is an increase in average selling prices of yarn, stability in production levels and reduction in procurement costs of raw materials, The management believes that losses incurred in past would be made good and the company would start earning cash profit in foreseeable future. The financial statements have been prepared on a going concern basis on the strength of managements plan of revival including reorganization of business and restructuring of loan facilities under Corporate Debt Restructuring scheme.

8. The Company has advanced certain loans to Body Corporates. On the basis of a legal opinion obtained by the Company, the management is of the view that the conditions as prescribed under section 372A of the Companies Act, 1956 are not violated.

Foot Note:

The liability in respect of gratuity and leave encashment is provided on the basis of acturial certificate computed on group basis. Separate figures for individual employees are not available and have, therefore, not been taken into account for above computation.

9 Segment Reporting

The Companys operation relates only to Textile Segment and, thus, has only one reportable segment.

Note : As informed by the management, there are no Potential Dilutive Equity Shares.

Notes :

Deferred tax asset has been recognised uptil 30th June, 2008. Afterwards, in view of brought forward losses, the Company has decided to not recognise any further deferred tax asset.

10 Related Party Disclosures

Related Party Disclosures in terms of Accounting Standard AS-18 Issued by the Institute of Chartered Accountants of India.

Relationships :

a. Holding Company Spentex Industries Limited

b. Fellow subsidiary Schoeller Litvinov, K.S., Spentex (Netherlands), B.V.

c. Key Management Personnel Mr. R. Sampath- Managing Director



Note :Related party relationship is as identified by the Company and relied upon by the auditors. * Includes interest payable

11. Employee Benefits

Consequent upon the adoption of Accounting Standard on Employee Benefits AS-15 (Revised) Issued by the Institute of Chartered Accountants of India, as required by the Standard the following disclosures are made:

The estimates of future salary increase, considered in acturial assumptions take account of inflation, seniority, promotion and other relevant factors such as supply and demand factors in the employment market.

Notes : As per Transitional Provisions as contained in AS-15 (Revised), the Company has decided to amortize the total gratuity expenses of Rs.44.89 Lacs arising due to first time adoption of the revised accounting standard over a period not exceeding five years beginning with the year of adoption of the standard, the same is being amortized on year to year basis as 8.97 lacs per year. As on 31.3.2010, a liability of Rs.8,97,858 remains to be written off.

12. Deferred Revenue Expenditure

The Company has incurred Rs.109 lacs as deferment charges for the reschedulement of term loan during prior years; the same is being amortized over the period of nine years. Accordingly, during the year, the company has charged Rs.12.60 lacs to the statement of profit and loss account as current year charge and Rs.8.49 lacs has been carried forward to subsequent years.

13. Previous period figures given in brackets have been regrouped and restated wherever considered necessary.

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