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Notes to Accounts of Banswara Syntex Ltd.

Mar 31, 2016

1. The Board of Directors in its meeting held on 13th November, 2013 has issued 16,00,000 warrants to promoters and promoter''s group on preferential basis, convertible in equal number of equity shares at the rate of Rs, 10/- per warrant at Rs, 41.50 including premium of Rs, 31.50 per warrant. Out of these 16,00,000 warrants, the Board of Directors has converted 1,70,000 warrants in to equal number of shares, in its meeting held on 12th February, 2014. The Board in its Meeting held on 12th November, 2014 has also converted 9,20,000 warrants in equal number of shares. The balance 5,10,000 warrants were converted in equal no. of equity shares on 08th May, 2015. The above preferential issue was made as per the SEBI (ICDR) Regulations, 2009.

2. Rights, preferences and restrictions to the shareholders

3. Equity Shares :-

All equity shareholders are having right to get dividend in proportion to paid up value of the each equity share as and when declared.

No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has, and has exercised, any right of lien.

4 The Company has forfeited 27,015 number of partly paid up equity shares as was approved by the board of directors in its meeting held on 27th May, 2015. The amount originally paid up was Rs, 1.35 Lacs which has been transferred to Capital Reserve. (Refer Note no. 3)

* Reversal of previous year provision on partly paid up shares which have been forfeited during the year.

5. Capital Subsidy received under scheme of TUFS on purchase of capital items subject to fulfilling the conditions prescribed in the scheme.

6. Dividend on preference shares for the year 2014-15 was declared in AGM held on 12.09.2015 (for the period up to 12.05.2014, since the preference shares were redeemed on 13.05.2014).

7. Securities/ Guarantees

For Term Loans from Financial Institutions and Banks:

Term Loans from Financial Institutions and Banks are secured by a joint equitable mortgage and/or hypothecation charges ranking pari-passu on immovable/movable properties, present and future of the Company subject to prior charges in favour of the Bankers on specified movable properties created and/or to be created for working capital facilities and Term Loans of Rs, 2,154 Lacs (Previous Year Rs, 1,848 Lacs) are also secured by second charge on current assets.

Term Loans from Financial Institutions and Banks are guaranteed by Shri R.L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities other than Export-Import Bank of India and IDBI Bank Ltd. Term Loans outstanding of Rs, 4,796.11 Lacs (Previous Year 6,851.66 Lacs) from Export-Import Bank of India, Term Loans outstanding of Rs, 1,260 Lacs (Previous Year Rs, 1,680 Lacs) from Punjab National Bank of India, Rs, 490 Lacs from Union Bank of India (Previous Year Rs, 630 Lacs) and Rs, 245 Lacs from Bank of Baroda (Previous Year Rs, 315 Lacs) are guaranteed by both whereas term loans outstanding of Rs, NIL (Previous Year Rs, 76.40 Lacs) from Export-Import Bank of India are guaranteed only by Shri R. L. Toshniwal, Chairman.

For Fixed deposits

Fixed Deposits accepted by the Company are in accordance with the provisions of section 73(2)(a) and section 76 of the Companies Act, 2013 and rule 4(1) and 4(2) of the Companies (Acceptance of Deposits) Rules, 2014 are unsecured. Fixed Deposits are repayable within 1 to 3 years depending upon the terms of deposits.

Net deferred tax liability of Rs, 511.08 Lacs has been booked during the year, besides current tax Rs, 1917.00 Lacs as per The Income Tax Act, 1961.

Company is treating assets of Thermal Power Plant as permanent difference as profit of power plant is exempt under section 80IA of the Income Tax Act, 1961. Since Thermal Power Plant is not generating profits now and is not expected to generate in future, accordingly this permanent difference is being treated as timing difference, this has increased the deferred tax liability by Rs, 775.00 lacs.

8. Securities and Guarantees

Loans repayable on demand from banks are secured by way of hypothecation (Floating charges) of Raw material, Dyes-Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all the Fixed Assets of the Company and also guaranteed by Shri R.L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities.

@ To the extent information received for status under the Micro, Small and Medium Enterprises Development Act, 2006.

9. Special Leave Petition (SLP) has been filed before the Hon''ble Supreme Court and the Hon''ble Supreme Court passed interim order dated 12.01.2015 granting stay of 50% of arrear of demand raised up to the date of order i.e. dated 12.01.2015 under "The Rajasthan Tax on Entry of Goods into Local Area Act,1999", provision of Rs, 154.95 Lacs (Previous Year Rs, 176.88 Lacs along with interest thereon) has been made and charged to the Statement of Profit and Loss for the year in respective expenses account. The outstanding balance, after making the payment during the year, is Rs, 445.39 Lacs (Previous Year Rs, 574.90 Lacs).

10. Accounting Standard: -29 "Provisions, Contingent Liabilities and Contingent Assets": Movement in Provisions:

11. Buildings & Road includes Rs, 331.31 Lacs paid for acquiring 657 equity shares of M/s Rastogi Estate & Construction Co. (Pvt.) Ltd. attached with right of ownership and possession of office building at Mumbai and Rs, 324.01 Lacs paid for acquiring a residential flat with 5 shares of Maker Tower "J" Co-operative Housing Society Ltd. Mumbai attached with right of ownership and possession.

12. Depreciation has been charged on Straight Line Method (SLM) based on useful life of the assets as mentioned in Schedule II of the Companies Act, 2013, except in case of Plant & machinery where the useful life has been taken as ascertained by the Independent Chartered Engineer and technical experts of the Company. The useful life of the Plant & Machinery so ascertained is ranging from 10 to 18 years on triple shift basis as against the life of 15 years given in Part C of Schedule II of the Companies Act, 2013. Further, considering materiality of assets costing less than Rs, 5,000 are fully depreciated in the year of purchase/acquisition. The Company provide pro-rata depreciation from/to the date on which asset is acquired or put to use/ disposed off as appropriate.

13. Lease hold lands are amortized over the period of lease"

14 Accounting Standard 16 - "Borrowing Cost"

In terms of Accounting Policy No. 1(J) borrowing cost of Rs, NIL Lacs (Previous year Rs, NIL Lacs) have formed part of cost of relevant tangible assets.

15. Shares of Banswara Fabrics Limited were listed on Delhi Stock Exchange. Now, due to the de-listing of Delhi Stock Exchange, shares of Banswara Fabrics Limited have been categorized under Unquoted Shares.

16. Treves Banswara Private Limited (TBPL), a joint venture of the Company, has accumulated losses of Rs, 317.12 lacs as on 31 March 2016 (Previous year Rs, 315.01 lacs) as per audited accounts. Keeping in view of the ongoing efforts for revival of TBPL, no provision has been considered necessary in respect of CompanyRs,s Investment of Rs, 360 lacs (previous year Rs, 260 lacs) in TBPL, as the diminution in the value is considered as temporary.

17. Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with Guidance Note issued by the Council of the Institute of Chartered Accountants of India.

18. Subsidy received from governments has been treated as capital receipt. This has reduced tax on income, resulting in increase of MAT Credit Entitlement amounting to Rs, 764.87 lacs recognized during the year.

Cash and Cash equivalent include restricted cash and bank balance of Rs, 571.84 Lacs (Previous Year Rs, 713.88 Lacs). The restrictions are primarily on account of cash and bank balances held as margin money deposits against guarantees, Letter of Credits and unclaimed dividends.

Deposits maintained by the Company with Banks comprise of time deposits, which can be withdrawn by the Company at any point of time without prior notice with reduced rate of interest.

19. Accounting Standard: 15 "Employee Benefits", the disclosures of Employee benefits as defined in the accounting standard are given below:

20. Defined Contribution Plan

Employer''s contribution to provident fund paid Rs, 1,139.46 Lacs (Previous year Rs, 1,034.12 Lacs) has been recognized as expense for the year.

21. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Short term earned leave encased during the year charged to Statement of Profit & Loss.

Note No. ''22'' Accounting Standard 17 - "Segment Reporting"

The Company is engaged in production of textile products having integrated working and captive power generation. For management purpose, Company is organized into major operating activity of the textile products. The Company has no activity outside India except export of textile products manufactured in India. Thereby, no geographical segment and no segment wise information is reported.

Note No. ''23'' Accounting Standard 18 - "Related Party Disclosure"

The Company has identified all the related parties as per details given below:

1. Relationship:

a) Subsidiary, Joint Venture and Associate concerns :

Banswara Global Limited (formerly known as Carreman Fabrics India Ltd.) a wholly owned subsidiary Treves Banswara Private Limited (Joint Venture)

Banswara Fabrics Limited (Associate)

b) Key Management Personnel :

Shri R.L.Toshniwal Shri Ravindra Kumar Toshniwal Shri Rakesh Mehra Shri Shaleen Toshniwal Shri J.K. Jain

c) Enterprises where Key Management Personnel has control /interest:

Dhruv Impex Mehra International Lawson Trading Co. Pvt. Ltd.

Niral Trading Pvt. Ltd.

Moonfine Trading Co. Pvt. Ltd.

Speed Shore Trading Co. Pvt. Ltd.

Toshniwal Trust Lawson Corporation RR Toshniwal Enterprises Excel Pack Limited Shaleen Synthetics

d) Relative of Key Management Personnel where transactions have taken place :

Shri Rameshwar Lal Ravindra Kr Toshniwal HUF

Shri Ravindra Kumar Toshniwal HUF

Shri Dhruv Toshniwal

Shri Udit Toshniwal

Smt. Prem Toshniwal

Note No. ''24'' All assets and liabilities are presented as Current or Non-current as per the criteria set out in the Schedule III of the Companies Act, 2013. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle less than 12 months, accordingly, 12 months period has been considered for the purpose of Current/Non-current classification of assets and liabilities.

Note No. ''25''The Company has adopted a system of obtaining periodical confirmation of balances from banks and other parties. There are no unconfirmed balances in respect of any bank account, borrowing from Banks, NBFC''s etc. So far as the loans and advances, trade payables, trade receivables and other assets and liabilities are concerned, the balance confirmation letter with the negative assertion, are being send to concerned parties as referred in the Standard on Auditing (SA) 505 Revised "External Confirmation". The company has received replies from various parties confirming the balances. Certain outstanding balances got automatically confirmed on receipt/ remittance of payments from/to the parties in subsequent period.

Note No. ''26'' The Board of Directors of the Company has approved the scheme of arrangement or amalgamation of Banswara Fabrics Limited (an Associate Company) and Banswara Global Limited (a wholly owned subsidiary) with Banswara Syntex Limited w.e.f. 1st April, 2015 U/s 391 to 394 of the Companies Act, 1956 and other applicable provisions including SEBI guidelines. The equity shareholders, secured creditors and unsecured creditors had given their respective approval to the scheme in the court convened meeting held on 28th March 2016. The said scheme is subject to the approval of the Hon''ble High court of Rajasthan and such other approvals/fulfillment of conditions as per applicable statue/guidelines.

Note No. ''27'' During the year, fraud was committed on the Company by foreign entity of Bulgaria through hacking of email-ID of an India agent of the Company''s foreign supplier involving 31,000 Euro. The Company has filed an FIR and also took up the matter with concerned authorities, however so far, no recovery could be made. The Board of Directors in their meeting held on 4th November, 2015 decided to write-off the amount involved of Rs, 23.72 lacs as loss, the said sum is included in Miscellaneous expenses under Note no. 32.

Note No. ''28'' During the year, certain clarificatory changes/alterations have been made in the wording of the accounting policies including insertion of new clauses for more appropriate disclosures. Such alterations have no impact on the financial statements.

Note No. ''29'' The previous year figures have been regrouped/ reclassified wherever it found necessary to correspond with the current year''s classification/disclosure. Accordingly, amounts and other disclosures for the preceding year are included as an integral part of the current year''s financial statements and are to be read in relation to the amounts and other disclosures relating to current year.


Mar 31, 2014

1 The company has issued 6,00,000 equity shares of Rs. 10/- each at Rs. 41.50/- including a premium of Rs. 31,50/- per share to foreign company on prefential basis at the meeting of Board of Directors held on 13tn November. 2013. In the same meeting the Board of Directors has also issued 16,00,000 warrants to promoters and promoters''s group, convertable in equal number equity shares at the rate of Rs. 10/- per warrant at Rs. 41.50/- including premium of Rs. 31.50/- per warrant. Further the board in its meeting held on 12th February, 2014 has issued 1,70,000 Equity shares of Rs. 10/- each at Rs. 41.50 including a premium of Rs. 31.50/- per share, on conversion of 1,70,000 warrants out of 16,00,000 warrants. As on date 14,30,000 warrants are outstanding to be converted in equal number of equity shares upto 11.05.2015 i.e. within 18th month from the its allotment. Both the above preferential issues were made as per the SEBI (ICDR) Regulations, 2009.

2 Rights, preferences and restrictions to the shareholders.

3 Equity Shares :- all equity shareholders are having right to get dividend in proportion to paid up value of the each equity share as and when declared.

No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has, and has exercised, any right of lien.

4 Preference Shares:- The preference shares have been redeemed on 10.05.2014.

5 Details of Shareholder''s holding more than 5% of each class of shares issued by the Company-

6 Securities and Guarantees

For Term Loans from Financial Institutions and Banks:

Term Loans from Financial Institutions and Banks are secured by a joint equitable mortgage and/or hypothecation charges ranking pari-passu on immovable/movable properties, present and future of the Company subject to prior charges in favour of the Bankers on specified movable properties created and/or to be created for working capital facilities, and Term Loans of Rs. 1.920.00 Lacs are also secured by second charge on current assets.

Term Loans from Financial Institutions and Banks are guaranteed by Shri R.L. Toshniwal. Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their persona! capacities other than Export-lmport Bank of India and IDBI Bank Ltd. Term Loans outstanding of Rs. 8,141.24 Lacs (Previous Year Rs. 8,563.41 Lacs) from Export-lmport Bank of India, Term Loans outstanding of Rs. 2,100 Lacs (Previous Year Rs. Nil) from Punjab National Bank of India and Term Loan outstanding Rs. 200 Lacs (Previous year Rs. 400,00 Lacs) from IDBI Bank Ltd. are guaranteed by both whereas term loans outstanding of Rs. 236.40 Lacs (Previous Year Rs. 396.40 Lacs) from Export-lmport Bank of India are guaranteed only by Shri R. L. Toshniwal, Chairman,

For Fixed deposits

Fixed Deposits taken by the Company are Under the provision of sec. 58A of the Companies Act, 1956 and rules made there under are unsecured. Fixed Deposits are repayable within 1 to 3 year depending upon the term of deposits.

7 Securities and Guarantees

For Loans repayable on demand from banks are secured by way of hypothecation (Floating charges) of Raw material, Dyes- Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all the Fixed Assets of the Company and also guaranteed by Shri R.L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities.

(Rs. in Lacs) As at As at

31st March 31st March 2014 2013 NOTE NO. ''1'' CONTINGENT LIABILITIES

1. Contingent liabilities not provided for in respect of: -

a. Bills discounted with banks remaining outstanding

(i) Against foreign LC 5,535.50 6,930.24

(ii) Others 1,114.25 921.12

b. Letter of Credit established with banks

(i) Revenue account 648.95 163.97

(ii) Capital account 247.90 506.35

c. Guarantees given by the bankers on behalf of the company for 815.14 804.62 which FDRs Rs. 89.82 Lacs(Previous Year Rs. 83.23 Lacs) pledged with them.

d. Guarantee given by Company to Banks 1,950.00 1,950.00 for loan to Banswara Global Limited [Outstanding as on 31.03.2014 Rs. 449.88 Lacs (previous year Rs. 744.13 Lacs)]

e. Claims against the company not acknowledged as debt: -

(i) Under Tax Laws [payment made under protest Rs. 240.30 Lacs 888.29 674.59 (previous year Rs. 26.35 Lacs)]

(ii) By Others: (a) On Revenue account 6.83 6.03 (b) On Capital account Nil Nil

There is no reimbursement possible on account of contingent liabilities.

NOTE NO. ''2'' CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital account Rs. 831.70 Lacs (Previous Year Rs. 1,110.85 Lacs) and export obligation against EPCG licenses Rs. 1,059.49 Lacs (Previous Year Rs. Nil).

1. Defined Contribution Plan

Employer''s contribution to provident fund paid Rs. 923.34 Lacs (Previous year Rs. 772.15 Lacs) has been recognized as expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Short term earned leave encashed during the year charged to Statement of Profit & Loss.

Note No. ''3'' Accounting Standard : 28 "Impairment of Assets":

The Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing businesses are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

Note No. ''4'' All assets and liabilities are presented as Current or Non-current as per the criteria set out in the revised Schedule VI of the Companies Act 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle less than 12 months, accordingly 12 months period has been considered for the purpose of Current/Non current classification of assets and liabilities.

Note No. ''5'' The previous year figures have been regrouped/ reclassified wherever it found necessary to correspond with the current years classification/disclosure. Accordingly amounts and other disclosures for the preceding year are included as an integral part of the current year''s financial statements and are to be read in relation to the amounts and other disclosures relating to current year.


Mar 31, 2013

NOTE NO. ''1'' CAPITAL COMMITMENTS

Estimated amount of contracts remaining to be executed on Capital account Rs. 1,110.85 Lacs (Previous Year Rs. 1,597.45 Lacs) and export obligation against EPCG licenses Rs. Nil (Previous Year Rs. 6,699.28 Lacs).

NOTE NO. 2.1 Accounting Standard: 15 "Employee Benefits", the disclosures of Employee benefits as defined in the accounting standard are given below:

1. Defined Contribution Plan

Employer''s contribution to provident fund paid Rs. 772.15 Lacs (Previous Year Rs. 690.65 Lacs) has been recognized as expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Short term earned leave encashed during the year charged to Statement of Profit and Loss.

Note No.''3'' Accounting Standard 17 - "Segment Reporting"

The Company is engaged in production of textile products having integrated working and power generation. For management purposes, Company is organized into major operating activity of the textile products. The company has no activity outside India except export of textile products manufactured in India. Thereby no geographical segment and no segment wise information are reported.

Note No. ''4'' Accounting Standard 18 - "Related Party Disclosure"

The Company has identified all the related parties as per details given below: 1. Relationship:

a) Joint Venture and Associate concerns

Carreman Fabrics India Ltd. Banswara Fabrics Ltd. Treves Banswara Pvt. Ltd.

b) Key Management Personnel and Their Enterprises:

Shri R.L.Toshniwal

Shri Ravindra Kumar Toshniwal

Shri Rakesh Mehra

Shri Shaleen Toshniwal

c) Enterprises where Key Management Personnel has control /interest:

Dhruv Impex Mehra International Lawson Trading Co. Pvt. Ltd. Niral Trading Pvt. Ltd. Shaleen Syntex Ltd. Moonfine Trading Co. Pvt. Ltd. Speed Shore Trading Co. Pvt. Ltd. Toshniwal Trust APM Industries Ltd.

d) Relatives of Key Management Personnel and their Enterprises where transactions have taken place

Shri Rameshwar Lai Ravindra Kr Toshniwal HUF

Shri Ravindra Kumar Toshniwal HUF

Shri Dhruv Toshniwal

Shri Udit Toshniwal

Smt. Prem Toshniwal

Smt. Navneeta Mehra

Smt. Radhika Toshniwal

Smt. Sonal Toshniwal

Smt. Kavita Soni

Ms. Esha Toshniwal

Ms. Diya Toshniwal

Sarvodaya Impex Pvt. Ltd.

Note No. ''5'' Financial and Derivative Instruments

Company has entered into following foreign exchange financial instruments

a) The Company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments on forecasted transactions as approved by Board of Directors. The Company does not use forward contracts for speculation purpose. Outstanding forward exchange financial instruments entered into by the Company for hedging of export/import transaction:

b) Foreign Currency exposure that are not hedged by financial instruments or forward contracts as at 31* March, 2013 amount to US Dollar 140.29 Lacs equivalent to Rs. 7,096.25 Lacs (Previous Year US Dollar 216.47 Lacs equivalent to Rs.11,018.39 Lacs)

Note No. ''6'' Accounting Standard 27 "Financial Report of interest in Joint Venture"

a) The Company has entered into the Joint Venture with Carreman, France for 50% ownership interest in jointly controlled entity Carreman Fabrics India Ltd.

The above Joint Venture Company is incorporated in India. The Company''s share of assets and liabilities as on 316| March, 2013 and income and expenses for the year ended on that date in respect of joint venture entities as per unaudited Financial Statements is given below:

The Company has given guarantee in favour of bankers of Carreman Fabrics India Ltd. for an amount of Rs. 1,950.00 Lacs (Previous Year Rs. 1,950.00 Lacs) for term loan. [Outstanding as on 31.03.2013 Rs. 744.13 Lacs (Previous Year Rs. 1,092.00 Lacs)].

Note No. ''7'' Accounting Standard : 28 "Impairment of Assets":

The Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing businesses are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

Note No. ''8'' All assets and liabilities are presented as Current or Non-current as per the criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle less than 12 months, accordingly 12 months period has been considered for the purpose of Current/Non current classification of assets and liabilities.

Note No. ''9'' The previous year figures have been regrouped/reclassified wherever it found necessary to correspond with the current year''s classification/disclosure. Accordingly amounts and other disclosures for the preceding year are included as and integral part of the current year''s financial statements and are to be read in relation to the amounts and other disclosures relating to current year.


Mar 31, 2012

1.1 1,87,500 Equity Shares were issued as fully paid up Bonus shares in the year 2007-08 by way of capitalization of Securities Premium Account.

1.2 Rights, preferences and restrictions to the shareholders

1.2.1 Equity Shares all equity shareholders are having right to get dividend in proportion to paid up value of the each equity share as and when declared.

No member shall be entitled to exercise any voting rights either personally or by proxy at any meeting of the company in respect of any shares registered in his name on which any calls or other sums presently payable by him have not been paid or in regard to which the company has, and has exercised, any right of lien.

1.2.2 Preference Shares Preference Shares are redeemable in 2014-15 at par and having right of dividend on cumulative basis if not declared/paid.

2.1 Securities and Guarantees

For Term Loans from Financial Institutions and Banks:

Term Loans from Financial Institutions and Banks are secured by a joint equitable mortgage and/or hypothecation charges ranking paripassu on immovable/movable properties, present and future of the Company subject to prior charges in favour of the Bankers on specified movable properties created and/or to be created for working capital facilities.

Term Loans from Financial Institutions and Banks are guaranteed by Shri R. L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities other than Export-import Bank of India. Term Loans outstanding of Rs. 8,636.36 Lacs (Previous Year Rs. 12,127.49 Lacs) from Export-import Bank of India are guaranteed by both whereas term loans outstanding of Rs. 2,541.40 Lacs (Previous Year Rs. 2,641.41 Lacs) from Export-import Bank of India are guaranteed only by Shri R. L. Toshniwal, Chairman.

For Working Capital Term Loans

Working Capital Term Loan from EXIM Bank is secured by First pari passu charge on entire current assets both present and future of the company, second pari passu charge on the entire fixed assets both present and future and it is further secured by personal guarantee of Shri R. L. Toshniwal, Chairman.

For Deferred Payment Credits

Deferred payment credits under Sales Tax Deferment Scheme for Industries 1987 are secured by a joint equitable mortgage and/or hypothecation charges ranking pari-passu on immovable/movable properties procured for expansion project as prescribed under the said scheme Rs. 33.38 Lacs (Previous Year Rs. 59.10 Lacs) are payable within one year.

For Fixed deposits

Fixed Deposits taken by the Company are Under the provision of sec. 58A of the Companies Act, 1956 and rules made there under are unsecured. Fixed Deposits are repayable within 1 to 3 year depending upon the term of deposits.

3.1 Securities and Guarantees

For Loans repayable on demand from banks are secured by way of hypothecation (Floating charges) of Raw material, Dyes- Chemicals, Packing Materials, Stores & Spares, Stock-in-process, Finished goods, Book debts, Export Incentives and second charge on all the Fixed Assets of the Company and also guaranteed by Shri R. L. Toshniwal, Chairman and Shri Ravindra Kumar Toshniwal, Managing Director in their personal capacities.

4.1 In view of Stay Order dated 10.08.2006 of Hon'ble Rajasthan High Court, Jodhpur later on modified vide interim stay order dated 04.03.2011 with regards to levy of entry tax by Rajasthan Govt, under Rajasthan Entry Tax Act, 1999 with the direction to deposit the 50% of Entry Tax payable, a provision for Rs. 103.95 Lacs (Previous Year Rs. 631.56 Lacs along with interest thereon) has been made and charged to the Statement of Profit and Loss for the year in respective expenses account. The outstanding balance after making the payment during the year is Rs. 1428.93 Lacs (Previous Year Rs. 631.56 Lacs).

5.1 Accounting Standard 16 - "Borrowing Cost"

In terms of Accounting Policy No. 1 (J) borrowing cost of Rs. NIL Lacs (Previous Year Rs. 151.34 Lacs) have formed part of cost of relevant tangible assets.

6.1 Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with Guidance Note issued by the Council of the Institute of Chartered Accountants of India.

7.1 Inventories include stocks lying with third parties Rs. 1,089.07 Lacs (Previous Year Rs. 1,224.01 Lacs)

(Rs. in Lacs)

As at As at

31st March, 2012 31st March, 2011

NOTE NO. '8' Contingent Liabilities

1. Contingent liabilities not provided for in respect of:

a. Bills discounted with banks remaining outstanding

(i)Against foreign LC 5,284.22 5,412.28

(ii) Others 1,469.02 2,247.15

b. Letter of Credit established with banks :-

(i)Revenue account 298.09 720.62

(ii) Capital account 692.13 424.27

c. Guarantees given by the bankers on behalf of the company for 790.06 264.59 which FDRs Rs. 92.23 Lacs (Previous Year Rs. 30.39 Lacs) pledged with them

d. Guarantee given by Company to Banks for loan to Carreman 950.00 1,950.00 Fabrics India Ltd [Outstanding as on 31.03.2012 Rs. 1,092.00 Lacs (Previous Year Rs. 1,346.81 Lacs)]

e. Claims against the company not acknowledged as debt: -

(i)Under Tax Laws 126.49 80.60

(ii) By Others:

(a) On Revenue account 1.84 5.74

(b) On Capital account Nil Nil

There is no reimbursement possible on account of contingent liabilities.

NOTE NO. '9' Capital Commitments

Estimated amount of contracts remaining to be executed on Capital account Rs. 1,597.45 Lacs (Previous Year Rs. 1,566.08 Lacs) and export obligation against EPCG licenses Rs. 6,699.28 Lacs (Previous Year Rs. 11,020.11 Lacs). The Company has also committed to contribute Rs.25.00 Lacs to Real Estate Opportunity Portfolio-1 out of which Rs. 25.00 Lacs are paid.

NOTE NO. 10.1 Accounting Standard: 15 "Employee Benefits", the disclosures of Employee benefits as defined in the accounting standard are given below:

1. Defined Contribution Plan

Employer's contribution to provident fund paid Rs. 690.65 lacs (Previous Year Rs. 583.78 lacs) has been recognized as expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognizes each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Short term earned leave encased during the year charged to Statement of Profit and Loss.

Note No.'11' Accounting Standard 17 - "Segment Reporting"

The Company is engaged in production of textile products having integrated working and power generation. For management purposes, Company is organized into major operating activity of the textile products besides power generation. Revenue from power generation of the year is less than 10% of the total revenue. The company has no activity outside India except export of textile products manufactured in India. Thereby no geographical segment and no segment wise information are reported.

Note No. '12' Accounting Standard 18 - "Related Party Disclosure"

The company has identified all the related parties as per details given below:

1. Relationship:

a) Joint Venture and Associate concerns

Carreman Fabrics India Ltd.

Banswara Fabrics Ltd.

Treves Banswara Pvt. Ltd.

b) Key Management Personnel and Their Enterprises:

Shri R.L.Toshniwal

Shri Ravindra Kumar Toshniwal

Shri Rakesh Mehra Shri

Shaleen Toshniwal

c) Enterprises where Key Management Personnel has control /interest:

Dhruv Impex

Mehra International

Lawson Trading Co. Pvt. Ltd.

Niral Trading Pvt. Ltd.

Shaleen Syntex Ltd.

Moonfine Trading Co. Pvt. Ltd.

Speed Shore Trading Co. Pvt. Ltd.

Toshniwal Trust

d) Relatives of Key Management Personnel and their Enterprises where transactions have taken place

Shri Rameshwar Lai Ravindra Kr Toshniwal HUF

Shri Ravindra Kumar Toshniwal HUF

Shri Dhruv Toshniwal

Shri Udit Toshniwal

Smt. Prem Toshniwal

Smt. Navneeta Mehra

Smt. Radhika Toshniwal

Smt. Sonal Toshniwal

Ms. Esha Toshniwal

Ms. Diya Toshniwal

Sarvodaya Impex Pvt. Ltd.

Note: Related party relationship is as identified by the Company and relied upon by the Auditors

Note No. '13' Financial and Derivative Instruments

Company has entered into following foreign exchange financial instruments

a) The company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments on forecasted transactions as approved by Board of Directors. The company does not use forward contracts for speculation purpose.

Note No. '14' Accounting Standard: 27 " Financial Report of interest in Joint Venture"

a) The Company has entered into the Joint Venture with Carreman, France for 50% ownership interest in jointly controlled entity Carreman Fabrics India Ltd.

b) The above Joint Venture Company is incorporated in India. The company's share of assets and liabilities as on 3151 March, 2012 and income and expenses for the year ended on that date in respect of joint venture entities as per Financial Statements is given below:

The Company has given guarantee in favour of bankers of Carreman Fabrics India Ltd. for an amount of Rs. 1,950.00 Lacs (Previous Year Rs. 1,950.00 Lacs) for term loan. [Outstanding as on 31.03.2012 Rs. 1,092.00 Lacs (Previous Year Rs. 1,346.81 Lacs)].

Note No. '15' Accounting Standard : 28 "Impairment of Assets":

The Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing businesses are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is Of the view that no impairment provision is called for in these accounts.

Note No. '16' All assets and liabilities are presented as Current or Non-current as per the criteria set out in the Revised Schedule VI of the Companies Act, 1956. Based on the nature of products and the time between the acquisition of assets for processing and their realization, the Company has ascertained its operating cycle less than 12 months, accordingly 12 months period has been considered for the purpose of Current/Non current classification of assets and liabilities.

Note No. '17' The Revised Schedule VI became effective from April 1, 2011 for the preparation of Financial Statements. Hence, current year Financial Statements are prepared in accordance with Revised Schedule VI. Since Previous Year presentation was made as per Old Schedule VI, the Previous Year figures have been regrouped/ reclassified wherever necessary to correspond with the current year's classification/disclosure.


Mar 31, 2011

1. Contingent liabilities not provided for in respect of: -

(Rs. in Lacs) As at As at 31.03.2011 31.03.2010

a. Bills discounted with banks remaining outstanding

i) Against Foreign LC 5,412.26 4,615.09

ii) Others 2,247.16 1,210.28

b. Letter of Credit established with banks :-

i) Revenue account 720.62 812.51

ii) Capital account 424.27 2,723.70

c. Guaranteesgiven by the bankers on behalf ofthe company for 264.59 306.14 which FDRs Rs. 30.89 Lacs (Rs. 31.39 Lacs) pledged with them.

d. Guarantee given by Company to Banks for loan to Carreman Fabrics India Ltd. 1,950.00 1,950.00 [Outstanding as on 31.03.2011 Rs. 1,346.81 Lacs (previous year Rs. 1,592.28 Lacs)]

e. Claims against the company not acknowledged as debt: -

a) UnderTaxLaws 80.60 577.74

b) By Others:

i) On Revenue account 5.74 4.99

ii) On Capital account Nil Nil

There is no reimbursement possible on account of contingent liabilities.

2. Estimated amount of contracts remaining to be executed on Capital account Rs. 1,566.08 Lacs (Rs.6,443.46 Lacs) and export obligation against EPCG licenses Rs.11,020.11 Lacs (Previous Year Rs.14,378.00 Lacs). The Company has also committed to contribute Rs. 25.00 Lacs to Real Estate Opportunity Portfolio-1 out of which Rs.17.50 Lacs are paid.

3. Advances includes amount due from officers of the Company Rs. Nil (Nil) with maximum debit balance Rs.2.06 Lacs (Rs.2.44 Lacs). Debtors include Rs. Nil (Nil) due from directors with maximum balance of Rs. Nil (Rs. Nil). It also includes Rs. Nil (Nil) due from a partnership firm with maximum balance of Rs.28.66 Lacs (Rs.28.45 Lacs) in which directors are partners.

4. Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and difference between excise duty on opening and closing stock of finished goods.

5. In view of Stay Order dated 10.08.2006 of Hon'ble Rajasthan High Court, Jodhpur later on modified vide interim stay order dated 04.03.2011 with regards to levy of entry tax by Rajasthan Govt, under Rajasthan Entry Tax Act, 1999 with the direction to deposit the 50% of Entry Tax payable, a provision for Rs. 631.56 Lacs along with interest thereon inclusive of earlier years liability of Rs. 517.09 Lacs has been made and charged to the Profit and Loss Account for the year.

6. Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

7. Disclosures as required by Accounting Standards:

A. Accounting Standard 15-"Employee Benefits", the disclosures of Employee benefits as defined in the accounting standard are given below:

1. Defined Contribution Plan

Employer's contribution to provident fund paid Rs.583.78 Lacs (Previous Year Rs.453.03 Lacs) has been recognized as expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each unit separately to build up the final obligation. Short term earned leave encashed during the year charged to Profit & Loss Account.

B. Accounting Standard 16 - "Borrowing Cost"

In terms of Accounting Policy No. 12 borrowing cost of Rs.151.34 Lacs have formed part of cost of relevant fixed assets.

C. Accounting Standard 17 - "Segment Reporting"

The Company is engaged in production of textile products having integrated working and power generation. For management purposes, Company is organized into major operating activity of the textile products besides power generation. Revenue from power generation of the year is less than 10% of the total revenue. The company has no activity outside India except export of textile products manufactured in India. Thereby no geographical segment and no segment wise information are reported.

D. Accounting Standard 18 - "Related Party Disclosure"

The company has identified all the related parties as per details given below:

1. Relationship:

a) Joint Venture and Associate concerns Carreman Fabrics India Ltd. Banswara Fabrics Ltd.

b) Key Management Personnel and Their Enterprises:

Shri R.L.Toshniwal

Shri Ravi Toshniwal

Shri Rakesh Mehra

Shri Shaleen Toshniwal

Dhruvlmpex

Mehra International

Lawson Trading Co. Pvt. Ltd.

Niral Trading Pvt. Ltd.

Shaleen Syntex Ltd.

Moonfine Trading Co. Pvt.Ltd.

Speed Shore Trading Co. Pvt. Ltd.

Toshniwal Trust

c) Relatives of Key Management Personnel and their Enterprises where transactions have taken place

Shri RameshwarLal Ravindra Kumar Toshniwal HUF

Shri Ravindra Kumar Toshniwal HUF

Shri Dhruv Toshniwal

Smt. Prem Toshniwal

Smt. Navneeta Mehra

Smt. Radhika Toshniwal

Smt. Sonal Toshniwal

Ms. Esha Toshniwal

Ms. Diya Toshniwal

Sarvodaya Impex Pvt. Ltd.

Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

G. Accounting Standard 27 - "Financial Reporting of interest in Joint Venture"

a) The Company has entered into the Joint Venture with Carreman, France for 50% ownership interest in jointly controlled entity Carreman Fabrics India Ltd.

b) The above Joint Venture Company is incorporated in India. The company's share of assets and liabilities as on 31sl March, 2011 and income and expenses for the period ended on that date in respect of joint venture entities as per Financial Statements is given below.

H. Accounting Standard 28-"Impairment of Assets":

The Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing businesses are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

8. Financial and Derivative Instruments

Company has entered into following foreign exchange financial instruments :-

a) The company uses foreign currency forward contracts to hedge its risks associated with foreign currency fluctuations relating to certain firm commitments on forecasted transactions as approved by Board of Directors. The company does not use forward contracts for speculation purpose.

b) Foreign Currency exposure that are not hedged by financial instruments or forward contracts as at 31 st march, 2011 amount to US Dollar 197.40 Lacs (equivalent to Rs.8,802.01 Lacs) (Previous year US Dollar 95.24 Lacs equivalent to Rs.4,276.49 Lacs)

c) Extraordinary items represent write back of provision made in previous year on maturity of foreign exchange financial instruments which were recognized on mark to market basis.

9. Previous year's figures have been reworked, rearranged, regrouped and reclassified, wherever considered necessary and to make them comparable.

Note: Figures in brackets are pertaining to the previous year.


Mar 31, 2010

1.Contingent liabilities not provided (Rupees in Lacs) for in respect of:- As at As at 31.03.2010 31.03.2009

a)Bills discounted with banks remaining outstanding

i) Against foreign LC 4,615.09 5,158.54

ii) Others 1,210.28 844.05

b.Letter of Credit estabkished with banks

i) Revenue account 812.51 26.18

ii) Capital account 2,723.70 -

C.Guarantees given by the bankers on behalf of the company for 306.14 173.60 which FDRs Rs.31.39lacs(Rs.19.39 lacs) (previous year Rs.1,757.59 Lacs)

e. Claims against the company not acknowledged as debt:

a) Under Tax Laws 577.74 455.85

b) By Others:

i) On Revenue account 4.99 4.24

ii) On Capital account Nil Nil

There is no reimbursement possible on account of contingent liabilities.

2. Estimated amount of contracts remaining to be executed on Capital account Rs.6,443.46 lacs (Rs.2,486.84 lacs) and export obligation against EPCG licenses Rs.14,378.00 lacs (previous year Rs.13,141.95 lacs). The Company has also committed to contribute Rs.25.00 lacs to Real Estate Opportunity Portfolio-1 out of which Rs.5.00 lacs is paid.

3. Advances includes amount due from officers of the Company Rs. Nil (Nil) with maximum debit balance Rs.2.44 lacs (Rs.1.13 Lacs). Debtors include Rs. Nil (Nil) due from directors with maximum balance of Rs. Nil (Rs. Nil). It also includes Rs. Nil (Nil) due from a partnership firm with maximum balance of Rs. 28.45 lacs (Rs.57.32 Lacs) in which directors are partners.

4. Excise Duty shown under expenditure represents the aggregate of excise duty borne by the Company and difference between excise duty on opening and closing stock of finished goods.

5. Credit in respect of Minimum Alternative Tax under Income Tax Act 1961 (MAT Credit-Entitlement) is recognized in accordance with guidance note issued by the Council of the Institute of Chartered Accountants of India.

6. Disclosures as required by Accounting Standards:

A. Accounting Standard: 15 "Employee Benefits", the disclosures of Employee benefits as defined in the accounting standard are given below:

1. Defined Contribution Plan

Employers contribution to provident fund paid Rs.453.03 Lacs (Previous year Rs.366.72 Lacs) has been recognized as expense for the year.

2. Defined Benefit Plan

Present value of gratuity and long earned leave obligation is determined based on actuarial valuation using the projected unit credit method which recognises each period of service as giving rise to additional unit of employee benefit entitlement and measures each units separately to built up the final obligation. Short term earned leave encashed during the year charged to Profit & Loss Account.

B. Accounting Standard 17 - "Segment Reporting"

The Company is engaged in production of Textile products having integrated working and power generation. For management purposes, Company is organized into major operating activity of the textile products besides power generation. Revenue from power generation of the year is less than 10% of the total revenue. The company has no activity outside India except export of textile products manufactured in India. Thereby no geographical segment and no segment wise information is reported.

C. Accounting Standard 18 - "Related Party Disclosure"

The Company has identified all the related parties as per details given below:

1. Relationship:

a) Joint Venture and Associate concerns :

Carreman Fabrics India Ltd. Banswara Fabrics Ltd.

b) Key Management Personnel and Their Enterprises:

Shri R.L.Toshniwal Shri Ravi Toshniwal Shri Rakesh Mehra Shri Shaleen Toshniwal Dhruv Impex Mehra International

c) Relatives of Key Management Personnel and their Enterprises where transactions have taken place.:

Shri Rameshwar Lai Ravindra Kr Toshniwal HUF Shri Ravindra Kumar Toshniwal HUF Smt. Prem Toshniwal Smt. Navneeta Mehra Smt. Radhika Toshniwal Smt. Sonal Toshniwal Toshniwal Trust Ms. Esha Toshniwal Shri Dhruv Toshniwal Note: Related party relationship is as identified by the Company and relied upon by the Auditors.

In respect of the outstanding balance recoverable as at 31st March, 2010, no provision for doubtful debts is required to be made. During the year, there were no amounts written off or written back from such parties.

E. Accounting Standard - 22 "Taxes on Income"

Considering accounting procedure prescribed by the Standard, the following amounts have been worked out and provided in books:

Major components of deferred tax balances

F. Accounting Standard 27 - "Financial Report of interest in Joint Venture"

a) The Company has entered into the Joint Venture with Carreman, France for 50% ownership interest in jointly controlled entity Carreman Fabrics India Ltd.

b) The above Joint Venture Company is incorporated in India. The companys share of assets and liabilities as on 31st March, 2010 and income and expenses for the period ended on that date in respect of joint venture entities as per Financial Statements is given below:

G. Accounting Standard: -28 "Impairment of Assets":

The Company assessed potential generation of economic benefits from its business units and is of the view that assets employed in continuing businesses are capable of generating adequate returns over their useful lives in the usual course of business, there is no indication to the contrary and accordingly the management is of the view that no impairment provision is called for in these accounts.

b) Foreign Currency exposure that are not hedged by financial instruments or forward contracts as at 31st March, 2010 amount to US Dollar 95.24 lacs (equivalent to Rs.4,276.49 Lacs) (Previous year US Dollar 38.47 lacs equivalent to Rs.1,951.80 Lacs)

c) Extraordinary items represent write back of provision made in previous year on maturity of foreign exchange financial instruments which were recognized on mark to market basis.

7. Previous years figures have been reworked, rearranged, regrouped and reclassified, wherever considered necessary and to make them comparable.

Note: Figures in brackets are pertaining to the previous year.