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Notes to Accounts of Arora Fibres Ltd.

Mar 31, 2015

NOTE 1: The company has not received any intimation from vendors covered under the micro, Small & medium enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

NOTE 2: Estimated amount of contracts remaining to be executed on capital account Rs.NIL. (previous year Rs.NIL)

NOTE 3: Previous year Figures have been regrouped or rearranged, wherever necessary.


Mar 31, 2014

NOTE 1: Segment Accounting

a) Primary Segment

The Company operations are predominantly related to two segments namely Textile and Futures & Options which is primary basis for segmental information.

NOTE 2: Balance of Sundry Debtors, Sundry Creditors, and Loans & Advances are subject to confirmation.

NOTE 3: CONTINGENT LIABILITIES NOT PROVIDED FOR

(a) Guarantees given by bank.

As on As on 31st March, 2014 31st March, 2013

Rs. 4,625,000/- Rs. NIL

NOTE 4: Related Parties disclosures:

a) List of related parties where control exists and related parties with whom transactions have taken place and relationships

Name of the Related Party Relationship

1.Shri Rupinder Singh Arora Key Managerial Personnel

2.Shri Surendra Gupta Key Managerial Personnel

3.Shri Navin Marwah Key Managerial Personnel

4.Shri H V Deodhar Key Managerial Personnel

5.Shri Dilawar Singh Arora Relative of Key Managerial Personnel

6.Amrita Arora Relative of Key Managerial Personnel

7.Ritika Arora Relative of Key Managerial Personnel

Disclosure in respect of Related Party Transactions during the Year :

1. Opening Balance of Unsecured Loan from Rupinder Singh Arora Rs.91,451,080/- (Previous Years Rs.12,24,85,607), Received during the year Rs.5,21,46,685/- (Previous Year Rs.129,708,712), Loan Paid Rs.11,74,27,176/- (Previous Year Rs.160,743,239), Closing Balance Rs.2,61,70,589/-(Previous Year Rs.91,451,080) .

2. Interest paid

a) Interest Paid to Rupinder Singh Arora during the year Rs.1,37,85,207/- (Previous Year Rs.1,43,42,262)

3. Rent paid to Shri Dilawar Singh Arora amounting to Rs.4,80,000 (Previous Year Rs.4,80,000).

4. Director Sitting fees paid to Shri Rupinder Singh Arora, Shri Surendra Gupta,Shri Navin Marwah and Shri Hrushikesh Deodhar amounting to Rs.26,000/- (Previous Year Rs.24,000/-)

5. Salary Paid

a) Salary Paid to Ms.Ritika Arora amounting to Rs6,00,000/- (Previous Year Rs.3,00,000)

b) Salary Paid to Ms.Amrita Arora amounting to Rs3,00,000/- (Previous Year Rs.300,000)

NOTE 5: The company has not received any intimation from vendors covered under the micro, Small & medium enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

NOTE 6: Estimated amount of contracts remaining to be executed on capital account Rs.NIL. (previous year Rs.NIL)

NOTE 7: Earning per share (EPS)

NOTE 8: Details of Raw Materials and Stores and Spares consumed

NOTE 9: Previous year Figures have been regrouped or rearranged, wherever necessary. Signatures to Notes 1 to 36 forming part of the Balance Sheet and Profit and Loss Account.


Mar 31, 2013

NOTE 1: Balance of Sundry Debtors, Sundry Creditors, and Loans & Advances are subject to confirmation.

NOTE 2: CONTINGENT LIABILITIES NOT PROVIDED FOR

(a) Guarantees given by bank.

As on As on 31st March, 2013 31st March, 2012

Rs. NIL Rs. 1,875,000/-

(Rupees)

Disclosure in respect of Related Party Transactions during the Year:

1. a) Opening Balance of Unsecured Loan from Rupinder Singh Arora Rs. 122485607/- (Previous Years Rs.3,98,66,615), Received during the yearRs. 129,708,7121- (Previous Year Rs. 18,24,78,992), Loan Paid Rs. 160,743,239/- (Previous Year Rs.9,98,60,000), Closing Balance Rs. 91,451,080/- (Previous Year Rs. 12,24,85,607) .

b) Opening Balance of Unsecured Loan from Surendra Gupta Rs. 0/- (Previous Years Rs.0), Loan Received Rs. 5000000/- (Previous Year Rs.0), Loan Paid Rs. 5000000 /- (Previous Year Rs 0), Closing Balance Rs.0/- (Previous Year Rs. 0)

c) Opening Balance Of Unsecured Loan from Deepi Arora Rs. 211,519/- (Previous YearsRs. 3,51,38,676), LoanReceivedRs.0/-(PreviousYearRs.23,69,698), Loan Paid Rs. 211,519/-(Previous ¦ Year Rs.3,72,96,855), Closing Balance Rs.0/- (Previous Year Rs.2,11,519) .

2. Interest paid

a) Interest Paid to Rupinder Singh Arora during the year Rs. 1,43,42,262/- (Previous Year Rs. 1,06,40,266)

b) Interest Paid to Deepi Arora during the year Rs.0/- (Previous Year Rs.26,32,998 /-)

3. Rent paid to ShriDilawar Singh Arora amounting to Rs.4,80,000 (Previous Year Rs.4,80,000).

4. Director Sitting fees paid to Shri Rupinder Singh Arora, Shri Surendra Gupta & .ShriNavinMarwah amounting to Rs.24,000/- (Previous Year Rs.33,000/-)

5. Salary Paid ,

a) Salary Paid to Ms.Ritika Arora amounting to Rs3,00,000/- (Previous Year Rs.3,00,000)

b) Salary Paid to Ms.Amrita Arora amounting to Rs3,00,000/- (Previous Year Rs.300,000)

6. Rent Received from Par Solar Pvt. Ltd, Amounting to Rs. 3,00,000/- (Previous Year 15,00,000)

NOTE 3: The company has not received any intimation from vendors covered under the micro, Small & medium enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

NOTE 4: Estimated amount of contracts remaining to be executed on capital account Rs.NIL. (previous year Rs.NIL)

NOTE 5: Previous year Figures have been regrouped or rearranged, wherever necessary.


Mar 31, 2012

NOTE 1: Segment Accounting

a) Primary Segment

The Company operations predominantly related to a single segment namely Textile and which is primary basis for segmental information.

NOTE 2: Balance of Sundry Debtors, Sundry Creditors, and Loans & Advances are subject to confirmation.

NOTE 3: CONTINGENT LIABILITIES NOT PROVIDED FOR

(a) Guaranties given by the bank.

As on As on 31st March, 2012 31st March, 2011 Rs. 18,75,000/- Rs.36,25,000/-

1. a) Opening Balance of Unsecured Loan from Rupinder Singh Arora Rs.3,98,66,615/- (Previous Years

Rs.5,00,31,633), Received during the year Rs. 18,24,78,992 /- (Previous Year Rs. 7,99,71,216), Loan Paid Rs.9,98,60,000 /- (Previous Year Rs. 9,01,36,234), Closing Balance Rs. 12,24,85,607 (Previous Year Rs. 3,98,66,615).

b) Opening Balance of Unsecured Loan from Deepi Arora Rs.3,51,38,676 /- (Previous YearsRs.3,55,27,625), Loan Received Rs.23,69,698 /- (Previous Year Rs. 2,11,11,051), Loan Paid Rs.3,72,96,855 /- (Previous Year Rs. 2,15,00,000), Closing Balance Rs.2,11,519(Previous Year Rs. 3,51,38,676) .

c) Export sales to Fun Apparel Inc. of Rs.2,12,74,406/-

2. Commission(Business Auxiliary services) received of Rs. 24,27,007/- from Fun Apparel Inc.

3. Interest paid

a) Interest Paid to Rupinder Singh Arora during the year Rs.1,06,40,266 (Previous Year Rs.49,46,216)

b) Interest Paid to Deepi Arora during the year Rs.26,32,998 (Previous Year Rs.36,11,051/-)

4. Rent paid to Shri Dilawar Singh Arora amounting to Rs.4,80,000 (Previous Year Rs.4,80,000).

5. Director Sitting fees paid to Shri Rupinder Singh Arora, Shri Surendra Gupta & ,Shri Navin Marwah amounting to Rs.33,000/- (Previous Year Rs.33,000/-)

6. Salary Paid

a) Salary Paid to Ms.Ritika Arora amounting to Rs3,00,000/- (Previous Year Rs.3,00,000) .

b) Salary Paid to Ms.Amrita Arora amounting to Rs3,00,000/- (Previous Year Rs.2,50,000)

7. Rent Received from Par Solar Pvt. Ltd. Amounting to Rs. 15,00,000/- (Previous Year NIL )

NOTE 4: The company has not received any intimation from vendors covered under the micro, Small & medium enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

NOTE 5: Estimated amount of contracts remaining to be executed on capital account Rs.NIL. (previous year Rs.NIL)

NOTE 6: Previous year Figures have been regrouped or rearranged, wherever necessary.


Mar 31, 2011

1. Segment Accounting

a) Primary Segment

The Company operations predominantly related to a single segment namely Textile and which is primary basis for segmental information.

2. Balance of Sundry Debtors, Sundry Creditors, and Loans & Advances are subject to confirmation.

3. CONTINGENT LIABILITIES NOT PROVIDED FOR

(a) Counter Guarantees given to bankers for guarantees by the Bankers

As on As on 31st March, 2011 31st March, 2010

Rs.36,25,000/- Rs.38,25000/-

(b) The Company has not charged Excise Duty amounting to Rs.2.49 Crores on the Polyester Staple Fibre manufactured since August, 2009 based on the decision of the Appellate authorities and the interpretations of other relevant provisions, the company has been legally advised that the levy of Excise Duty is not applicable.

4 During the year the company derecognized the Deferred tax assets amounting to Rs.1,51,55,932/- against the Deferred tax Reserve created in earlier years due to uncertainty regarding future taxable income against which such deferred tax assets can be realised.

Disclosure in respect of Related Party Transactions during the Year :

1. a) Opening Balance of Unsecured Loan from Rupinder Singh Arora Rs.5,00,31,633/- (Previous Years

Rs.6,63,66,851), Received during the year Rs.7,99,71,216/- (Previous Year Rs.2,98,44,782), Loan Paid Rs.9,01,36,234/- (Previous Year Rs.4,61,80,000), Closing Balance Rs.3,98,66,615 (Previous Year Rs.5,00,31,633) .

b) Opening Balance of Unsecured Loan from Deepi Arora Rs.3,55,27,627/- (Previous Years Rs.NIL), Loan Received Rs.2,11,11,051/- (Previous Year Rs.3,55,27,625), Loan Paid Rs.2,15,00,000/- (Previous Year Rs.NIL), Closing Balance Rs.3,51,38,676 (Previous Year Rs.3,55,27,625) .

5. Received Advance Rs.7,84,227/- from Fun Apparel Inc.

6. a) Export sales to Fun Apparel Inc. of Rs.1,32,56,852/- b) sale of polyester staple fibre of Rs. 41,87,973 /- to Arora Corporation in previous year

7. Commission (Business Auxilary services) received of Rs.44,83,327/- from Fun Apparel Inc.

8. Interest paid

a) Interest Paid to Rupinder Singh Arora during the year Rs.36,11,051 (Previous Year Rs.NIL)

b) Interest Paid to Deepi Arora during the year Rs.49,46,216 (Previous Year Rs.45,12,782/-)

9. Rent paid to Shri Dilawar Singh Arora amounting to Rs.4,80,000 (Previous Year Rs.4,80,000).

10. Director Sitting fees paid to Shri Rupinder Singh Arora, Shri Surendra Gupta & ,Shri Navin Marwah amounting to Rs.33,000/- (Previous Year Rs.24,000/-)

11. Salary Paid

a) Salary Paid to Ms.Ritika Arora amounting to Rs3,00,000/- (Previous Year Rs.NIL)

b) Salary Paid to Ms.Amrita Arora amounting to Rs2,50,000/- (Previous Year Rs.NIL)

12. The company has not received any intimation from vendors covered under the micro, Small & medium enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

13. Estimated amount of contracts remaining to be executed on capital account Rs.NIL. (previous year Rs.932.92 Lacs)

14. The BIFR vide its order dated 04.11.2010 had sanctioned revival scheme for the Company.

As per the sanctioned scheme the Company took several steps. The major steps are as follows:

(a) the company reduced its paid up capital by 90% and after reduction ten equity shares of Re.1/- each fully paid are consolidated into one equity shares of Rs. 10/- each fully paid up.

(b) the promoter inducted Rs.195.00 Lacs towards share capital and issued equity shares of Rs. 10/- each fully paid up.

(c) the promoter's unsecured loan of Rs.660.00 lacs is converted into equity share capital and issued equity shares of rs. 10/- each fully paid up.

(d) the Corporation Bank restructured Working Capital Facility of Rs.200.00 Lacs by converting Rs.70.00 Lacs into Working Capital Term Loan and balance amount of Rs.130.00 Lacs as Cash Credit Limits.

15. Previous year Figures have been regrouped or rearranged, wherever necessary.


Mar 31, 2010

Segment Accounting

(i) Primary Segment

The Company operations predominantly relate to a single segment namely Polyester Staple Fibre and which is primary basis for segmental information.

(ii) Secondary Segment

Secondary Segment is geographical, determined on the location of the customer, is classified as either domestic or overseas and the same is as under:

For the Year ended For the Year ended

31st March, 2010 31st March, 2009

(Rupees) (Rupees)

(a) Sales

Domestic 15,05,35,091 11,19,06,548

TOTAL 15,05,35,091 11,19,06,548

(b) The Companys tangible fixed assets are located entirely in India.

3. Balance of Sundry Debtors, Sundry Creditors, and Loans & Advances are subject to confirmation.

4. CONTINGENT LIABILITIES NOT PROVIDED FOR

As on As on

31st March, 2010 31st March, 2009

(Rupees) (Rupees)

(a) Counter guarantees

given to bankers for

guarantees issued by the bankers. 38,25,000 38,25,000

(b) The Settlement Commission, Customs and Central Excise, Mumbai, has decided that interest on concessional Customs duty on unfulfilled export obligation against machinery imported under EPCG Scheme is not payable.The company has paid the duty settled by The Commission asking the company to pay duty of Rs. 1,23,33,557 as settled by the Customs. The company has also received a provisional demand from D.G.F.T. Delhi for Rs. 1,50,99,960 as interest from the date of first import of machinery, i.e. 16.09.1994 to 30.10.2000 on Customs duty on unfulfilled export obligation. In the said demand notice the office of DGFT has mentioned that import licence shall not be given to the company till the demand notcie is complied with. This is also disputed on the advice of the leading solicitors that since the DGFTs claims arises out of and is dependent on the liability to pay Customs duty, it is covered by the settlement by The Settlememt Commission. The contnention of the DGFT that the liability to pay interest arises out of anindependent undertaking is hypertechnical and unsustainable. However, the customs Department, Mumbai, has in the meantime, filed a writ petition in the High Court of Mumbai to make the settlement commissions order referred above invalid. Subsequently, vide Policy circular No.25/2004-2009, dt. 30.03.2005. The DGFT has decided that the decisions of the Settlement Commission, in so far as customs duty and interest thereon are concerned may be complied with by the Licensing Authority in casess of EO default under intimation to the AdjudicatingAuthority for regular-ization purpose. The interest has already been waived by the Settlement Commission.

The Writ Petition No. 1207 of 2002 filed by the Company against the Union of India in the case of imposition of Penalty of Rs. 50 Lacs by Settlement Commissioner, the Court has allowed it in favour of the Company and the Bank Guarantee of Rs. 50 Lacs given by the Company has been returned. Similarly Writ Petition No. 1361 of 2004 filed by Customs Department for recovery of interest amounting to Rs. 1.51 Crores has been dismissed by the Bombay High Court.

(c) The Company has received a Show Cause Notice regarding utilisation of cenvat on captial goods of approx Rs.70 lacs.

5. Related Parties disclosure in accordance with Accounting Standard 18 issued by Institute of Chartered Accountants of India:

(a) Related parties and Nature of relationship:

Directors of the Company 1. Rupinder Singh Arora

Associate Companies, Firms,

Relatives of Directors 2. Deepi Arora

3. Dilawar Singh Arora

4. Arora Corporation

(Proprietor-Rupinder Singh Arora)

(b) Transactions that have taken place during the period 1st April, 2009 to 31st March, 2010 with related parties by the Company

S. No. Name of the Party Transactions during the year

1 Rupinder Singh Arora Maximum amount received at one time Rs. 6,63,66,851/-. Received Loan from time to time to meet the needs of the company. From 01.04.2009 interest @ 7% p.a. has been paid. Balance loan as on 31.03.2010 Rs. 5,00,31,633/-. (previous year Rs. 6,63,66,851/-) and Deposit for office premises Rs.11.25 lacs paid in the year 03-04.

2. Deepi Aropra Maximum amount received at one time Rs. 3,55,27,625/- Received Loan of Rs.3.5 crores on 29.12.09 to meet the needs of the company. From 29.12.09 to 31.12.09 inteterest provided @ 13%, from 01.01.10 to 31.03.10 interest provided @ 6.5% p.a. Balance loan as on 31.03.2010 3,55,27,625/- (previous year Rs. NIL).

3. Dilawar Singh Arora Office rent paid to him - Rs. 4,80,000/-. (previous year Rs. 4,80,000/-).

4. Arora Corporation Sale of Polyester Staple Fibre for an (Rupinder Singh Arora- aggregate of Rs. 41,87,973/-Proprietor) (previous year Rs. 1,21,16,020/-).



(c) Details of Remuneration to Directors is disclosed in note no. 7

6. Unsecured loans include amount due to a director Rs.5,00,31,633/- (previous year Rs.6,63,66,851/-). Maximum amount received at a time during the year Rs. 8,48,77,474/- (previous year Rs. 6,63,66,851/-). amount due to a shareholder Rs.3,55,27,625/- (previous year Rs. NIL). Maximum amount received at a time during the year Rs.3,55,27,625/- (previous year Rs. NIL).

(iii) Acturial Assumptions As at 31st March, 2010

Discount Rate 8.25%

Expected rate of salary increase 6%

Mortality LIC (1994-96)

published table of rates

Withdrawal Rates 1%

Retirement Age 58 years

Acuarial Valuation Method Projected Unit Credit Method

The Gratuity Provision is not funded

7. The Company has not received any intimation from vendors covered under the micro, Small & Medium Enterprises Development Act, 2006 and as such information in respect of those vendors is not provided.

8. TAXATION

Current Tax

In view of unabsorbed Depreciation and Losses, no provision for income tax is considered necessary.

9. Estimated amount of contracts remaining to be executed on captial account Rs. 933.92 lacs (Previous year Rs.NIL).

10. Figures are regrouped & recast wherever necessary.

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