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Notes to Accounts of Arrow Textiles Ltd.

Mar 31, 2015

1. Terms & Rights attached to Equity Shares The Company has only one class of equity shares having a par value of ` 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders

2. The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at concessional rates of custom duty.

Under the terms of the said scheme, the Company is required to earn foreign exchange value equivalent to 8 times of the CIF value of imports and / or the duty saved in respect of license where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance as applicable within a period of 8 years from date of license of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-14 as issued by the Central Government of India covers manufacturers, exports and service providers. Accordingly, in accordance with the Chapter 5 of Foreign Trade Policy -2009-14, the Company has to fulfill the specific export obligation against the said EPCG license. The pending export obligation for the year ended 31st March, 2015 is Rs. Nil and in USD Nil, [ (Previous Year Rs. Nil and in USD Nil] and further the average export obligation against the EPCG license pending for the year ended 31st March, 2015 of Rs.14,733.80 (Rs. '000) [(Previous Year of Rs.17,141.76 (Rs. "000)]

3. Segment Reporting

The Company is engaged in the business of manufacturing of textile woven labels, fabric printed labels and elastic/woven tape primarily in India. As the Company primarily operates in a single segment, the reporting requirement of primary and secondary segment disclosures prescribed by Accounting Standard - 17 (Segment Reporting) issued by the Institute of Chartered Accountants of India, have not been provided in these financial statements as it is not applicable.

4. Debit & Credit balances of various parties are subject to confirmation/reconciliation and consequent adjustments, if any. The Company is of the view that reconciliation(s), if any, arising out of final settlement of accounts with these parties is not likely to have any material impact on the accounts. Current Assets are stated in the Balance Sheet at least at the value which is reasonably certain to recover in ordinary course of business.

5. On account of change in method of providing depreciation on tangible assets to comply with provision of Schedule II of the Companies Act, 2013, the depreciation is higher by Rs.5362.51 ('000)

6. Related Party Disclosures

(1) Related parties and transactions with them during the year as identified by the Management are given below:

(i) Key Management Personnel's:

* Mr. Chand Arora (CA) - Managing Director

* Mr. Ulhas Kale (UK) - CFO

(ii) Individuals owning directly/indirectly an interest in the voting power that gives them significant influence:

* Mr. Jaydev Mody (JM) - Chairman

* Mrs. Zia Mody (ZM) - Wife of the Chairman

* Ms. Anjali Mody (AM) - Daughter of the Chairman

(iii) Enterprises over which persons or their relatives mentioned in (i) & (ii) above exercise significant influence:

* AZB & Partners (AZB)

* Freedom Registry Limited (FRL)

* Highstreet Cruises & Entertainment Private Limited (HCEPL)

* Delta Corp Ltd. (DCL)

7. Employee Benefits

Disclosure required under Accounting Standard-15 (Revised 2005) for "Employee Benefits" are as under:

8. The Company has recognized the expected liability out of the Compensated Absence and Gratuity as at 31st March, 2015 based on actuarial valuation carried out using the Project & Unit Credit Method.

9. Contingent Liabilities and Commitments (to the extent not provided for)

(Rs. in '000)

Financial Year For the year For the year 31st March, 2015 31st March, 2014

i) The contingent CST liabilities on account of non receipt of "C"& "H" Forms is as follows:

FY 2002-2003(H Forms, case in High Court pending for decision) 715.23 715.23

FY 2012-2013 - 2,041.99

FY 2013-2014 2740.97 -

ii) Income Tax

A.Y2010-2011 (Appeal Pending before CIT Appeal) 164.49 -

TOTAL 3620.69 2757.22

iii) Commitments

Estimated amount of contracts remaining to be executed on 1249.79 2921.74 capital accounts and not provided for (Net of Advances)

10 Previous Year Comparatives

The previous year's figures have been reworked, regrouped, rearranged, recasted and reclassified wherever necessary to conform to current year's classification.


Mar 31, 2014

A) The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at concessional rates of custom duty.

Under the terms of the said scheme, the Company is required to earn foreign exchange value equivalent to 8 times of the CIF value of imports and / or the duty saved in respect of license where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance as applicable within a period of 8 years from date of license of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-14 as issued by the Central Government of India covers manufacturers, exports and service providers. Accordingly, in accordance with the chapter 5 of Foreign Trade Policy – 2009-14, the Company has to fulfill the specific export obligation against the said EPCG license. The pending export obligation for the year ended 31st March, 2014 is Rs. Nil and in USD Nil, [( Previous Year Rs. 2,196.73 (,000) and in USD 48.04 (''000)] and further the average export obligation against the EPCG license pending for the year ended 31st March, 2014 is Rs. 17,141.76 (''000) [(Previous Year of Rs. 23,330 ("000)]

The Company has also obtained Advance License on 7th March, 2012 under the Foreign Trade Policy 2009-14 as issued by the Central Government of India (FTP) for importing Raw Material i.e. Polyester Satin Tape at a free of custom duty. The said license was valid till 06/03/2014 to Import Raw Material i.e. Polyester Satin Tape up to 60,000 kgs however, the Company has imported material of 57,743 Kgs. only till license validity.

Under the terms of the said scheme, the Company is required to fulfill export obligation of Rs. 4 crores and import of 60,000 kgs of Raw Material. The said import has been fixed by the order of the Director General Foreign Trade, Ministry of Finance within a period of 2 years from date of license to import of raw material. The said export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance within a period of 3 years from date of License to export the finished goods product made out of imported raw material. Accordingly, in accordance with the Chapter 3 of Foreign Trade Policy - 2009-14, the Company has to fulfill export obligation. The pending export obligation for the year ended 31st March, 2014 is Rs. Nil [(Previous Year Rs. 13,600 (''000)].

b) segment reporting

The Company is engaged in the business of manufacturing of textile woven labels, fabric printed labels and elastic/ woven tape primarily in India. As the Company primarily operates in a single segment, the reporting requirement of primarily and secondary segment disclosures prescribed by Accounting Standard – 17 (Segment Reporting) issued by the Institute of Chartered Accountants of India, have not been provided in these financial statement as it is not applicable.

(e) Debit & Credit balances of various parties are subject to confirmation/reconciliation and consequent adjustments, if any. The Company is of the view that reconciliation(s), if any, arising out of final settlement of accounts with these parties is not likely to have any material impact on the accounts. Current Assets are stated in the Balance Sheet at least at the value which is reasonably certain to recover in ordinary course of business.

(f) Related Party Disclosures

(1) Related parties and transactions with them during the year as identified by the Management are given below: (i) Key Management Personnel''s and their Relatives:

a) Mr. Chand Arora-Managing Director (CA) (ii) Individuals owning directly/indirectly an interest in the voting power that gives them significant influence:

Mr. Jaydev Mody (JM)

Mrs. Zia Mody (ZM)

(iii) Enterprises over which persons or their relatives mentioned in (i) & (ii) above exercise significant influence:

AZB & Partners (AZB)

Freedom Registry Limited (FRL)

Highstreet Cruises & Entertainment Private Limited (HCEPL)


Mar 31, 2013

(a) The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at concessional rates of custom duty.

Under the terms of respective schemes, the Company is required to earn foreign exchange value equivalent to 8 times of the CIF value of imports and / or the duty saved in respect of license where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance as applicable within a period of 8 years from date of license of capital goods. The Export Promotion Capital Goods Schemes, Foreign Trade Policy 2009-14 as issued by the Central Government of India covers manufacturers, exports and service providers. Accordingly, in accordance with the chapter 5 of Foreign Trade Policy –2009-14, the company have to fulfill export obligation pending for the year ended 31st March 2013 of Rs. 2,196.73 (''000) and in USD 48.04 (''000),[( Previous Year Rs. 21,489.40 (,000) and in USD 452.75 (''000)]

The Company has also obtained Advance License on 7th March 2012 under the Foreign Trade Policy 2009-14 as issued by the Central Government of India (FTP) for importing Raw Material ie. Polyester Satin Tape at a free of custom duty.

Under the terms of respective schemes, the Company is required to fulfill export obligation in Rs. 4 Crores. The said obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance as applicable within a period of 3 years from date of license. Accordingly, in accordance with the Chapter 3 of Foreign Trade Policy - 2009-14, the Company has to fulfill export obligation pending for the year ended 31st March, 2013 of Rs.13,600 (''000),[( Previous Year Rs. Nil (,000).]

(b) segment reporting

The Company is engaged in the business of manufacturing of textile woven labels, fabric printed labels and elastic/woven tape primarily in India. As the Company primarily operates in a single segment, the reporting requirement of primarily and secondary segment disclosures prescribed by Accounting Standard – 17 (Segment Reporting) issued by the Institute of Chartered Accountants of India, have not been provided in these financial statement as it is not applicable.

(c) Debit & Credit balances of various parties are subject to confirmation/reconciliation and consequent adjustments, if any. The Company is of the view that reconciliation(s), if any, arising out of final settlement of accounts with these parties is not likely to have any material impact on the accounts. Current Assets are stated in the Balance Sheet at least at the value which is reasonably certain to recover in ordinary course of business.

(d) related party disclosures

(1) Related parties and transactions with them during the year as identifed by the management are given below:

(i) Key Management Personnel''s and their Relatives:

Mr. Chand Arora (CA) – Managing Director (ii) Individuals owning directly/indirectly an interest in the voting power that gives them significant influence:

Mr. Jaydev Mody (JM)

Mrs. Zia Mody (ZM) (iii) Enterprises over which persons or their relatives mentioned in (i) & (ii) above exercise significant influence:

AZB & Partners (AZB)

Aarti Management Consultancy Private Limited (AMCPL)

Aditi Management Consultancy Private Limited (AMCOPL)

Freedom Registry Limited. (FRL)

(e) Employee Benefts: -

Disclosure required under Accounting Standard-15 (revised 2005) for "Employee Benefits" are as under:

i) The Company has recognized the expected liability out of the Compensated Absence and Gratuity as at 31st March, 2013 based on actuarial valuation carried out using the Project Credit Method.

ii) The below disclosure have been obtained from independent actuary. The other disclosure are made in accordance with As-15 (revised) pertaining to the Defined Benefit Plan is as given below:

(i) Note on utilization of funds raised through Right Issue of Equity Shares during the year

During the F.Y.2011-12, The Company has raised Rs. 59,852.39 (''000'') through allotment of 54,41,126 shares of Rs.10 each at a price of Rs.11 per equity share to Promoters Group. The details of utilization of the above proceeds are as under:

f) contingent liabilities

(Rs. in ''000)

particulars march 31, 2013 march 31, 2012

2009-2010 371.93

2010-2011 716.58 1548.93

2011-2012 1,781.47

ToTal 2,498.05 1920.86

(g) The Company has reversed its earlier years Income Tax provision on the basis of Supreme Court''s judgment of CIT vs. Smifs Securities Ltd., where it is held that the goodwill created on amalgamation is an intangible asset eligible for depreciation. Accordingly, the Company has claimed depreciation on the Goodwill for earlier years and the excess provision of Income Tax made in the accounts have been reversed.

h) previous year comparatives

The previous year''s figures have been reworked, regrouped, rearranged, re casted and reclassified wherever necessary to confirm to current year''s classification.


Mar 31, 2012

Note:

*Aryanish Finance and Investments Private Ltd, Bayside Property Developers Private Ltd and Delta Real Estate Consultancy Private Ltd are holding Equity shares in the capacity of trustees for Aarti J Mody Trust, Aditi J Mody Trust and Anjali J. Mody Trust, respectively.

a) Terms & Rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. This distribution will be in proportion to the number of equity shares held by the shareholders.

Provision for doubtful debts

The Company periodically evaluates all customers dues. The need for provisons is assessed based on various factors include collectivity of specific dues, risk perceptions of the industry in which customer operates, general economic factors.

(a) The Company has obtained licenses under the Export Promotion Capital Goods (EPCG) Scheme for importing capital goods at a concessional rates of custom duty against submission of bank guarantee and bonds.

Under the terms of respective schemes, the Company is required to earn foreign exchange value equivalent to, or more than, eight times the CIF value of imports in respect of certain licenses and eight times the duty saved in respect of license where export obligation has been fixed by the order of the Director General Foreign Trade, Ministry of Finance as applicable within a period of eight years from date of import of capital goods. The export Promotion Capital goods schemes, Foreign Trade Policy 2009-14 as issued by the Central Government of India covers both manufacturers, exports and service providers. Accordingly, in accordance with the chapter 5 of Foreign Trade Policy -2009-14, the Company have to full fill export obligation pending for the year ended 31 st March, 2012 of Rs. 21,489.40 ('000) and in USD 452.75 ('000),[( Previous Year Rs. 69,694.37 (,000) and in USD 1,548.76 ('000)]

(b) Segment Reporting

The Company is engaged in the business of manufacturing of textile woven labels, fabric printed labels and elastic tape primarily in India. As the Company primarily operates in a single segment, the reporting requirement of primary and secondary segment disclosures prescribed by Accounting Standard - 17 (Segment Reporting) issued by the Institute of Chartered Accountants of India, have not been provided in these financial statement as it is not applicable.

(c) Debit & Credit balances of various parties are subject to confirmation / reconciliation and consequent adjustments, if any. The Company is of the view that reconciliation(s), if any, arising out of final settlement of accounts with these parties is not likely to have any material impact on the accounts. Current Assets are stated in the Balance Sheet at the value which is reasonably certain to recover in ordinary course of business.

(d) Related party Disclosures

1) Related parties and transactions with them during the year as identified by the Management are given below:

(i) Key Management Personnel's and their Relatives:

a) Mr. Chand Arora-Managing Director (CA)

b) Mrs.Indra Arora- Wife of Managing Director (IA)

(ii) Individuals owning directly/indirectly an interest in the voting power that gives them significant influence:

a) Mr. Jaydev Mody-Chairman (JM)

b) Mrs. Zia Mody(ZM)

(iii) Enterprises over which persons or their relatives mentioned in (i) & (ii) above exercise significant influence

a) AZB & Partners (AZB)

b) Aarti Management Consultancy Private Limited (AMCPL)

c) Aditi Management Consultancy Private Limited (AMCOPL)

d) Delta Corp Ltd (DCL)

e) Lark Enterprises (LE)

f) Freedom Registry Ltd. (FRL)

(g) Employee Benefits: -

Disclosure required under Accounting standard-15 (revised 2005) for "employee benefits"are as under:

(e) The Company has recognized the expected liability out of the compensated absence and Gratuity as at 31st March, 2012 based on actuarial valuation carried out using the Project Credit Method.

(f) Details of dues to Micro and Small Enterprises as defined under the MSMED Act,2006. Company has sent letters to suppliers to confirm whether they are covered under Micro, Small and Medium Enterprises Development Act 2006 as well as they have file required memorandum with the prescribed authorities. Out of the letters sent to the parties, some confirmations have been received till the date of finalization of Balance Sheet. Based on the confirmation received the detail of outstanding are furnished in the Notes.

(g) Previous Year comparatives

As notified by Ministry of Corporate Affairs, Revised Schedule VI under the Companies Act, 1956 is applicable to the Financial Statements for the financial year commencing on or after 1st April, 2011. Accordingly, the financial statements for the year ended March 31, 2012 are prepared in accordance with the Revised Schedule VI. The amounts and disclosures included in the financial statements of the previous year have been reclassified to conform to the requirements of Revised Schedule VI.

 
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